Dr Deborah Gleeson from La Trobe University, along with other academics, have warned that the Trans Pacific Partnership (TPP) agreement – the US-led regional trade pact between 12 nations (including Australia) – could force-up the cost of pharmaceuticals in Australia, placing further stress on the nation’s Budget:
Ms Gleeson says leaked drafts of part of the secretive trade deal… show that the government will find it harder to pursue patent reform in the future if it agrees to US demands.
Ms Gleeson, along with Dr Hazel Moir from the Australian National University, and Ruth Lopert from George Washington University in the United States, are urging the Abbott government to think seriously about the potential ramifications of the TPPA on Australia’s health system before signing anything.
“Three of the greatest concerns for Australia in the recent draft include provisions that would further entrench secondary patenting and evergreening, lock in extensions to patent terms, and extend monopoly rights over clinical trial data for certain medicines,” Ms Gleeson warns.
“Pharmaceutical monopoly protections already cost the Australian health system hundreds of millions of dollar each year. US ambitions … would expand and entrench costly monopolies in Australia, with no evidence of any countervailing benefit to the Australian public.”
“The government’s stated concern about the need to ensure the sustainability of the PBS can hardly be credible if it ignores this warning in the final stages of the TPPA negotiations,” she warns.
Fairfax’s Peter Martin raised similar concerns over the weekend in a wide ranging critique of the TPP:
Among Australia’s most expensive medicines are so-called biologics – drugs or vaccines made from living organisms. They are used to treat conditions including breast cancer and multiple sclerosis. To get approved in Australia the manufacturer needs to submit data from clinical trials which remains confidential for 5 years, and is then available to competitors to use in seeking approval for much cheaper versions. The US wants signatories to the TPP to lift the period of exclusivity to 12 years, which is what it is in the US. It would mean up to 7 more years of very expensive biologic medicines in Australia before the prices drop.
As has the Australian Medical Association, which last year urged the Australian government to reject provisions in the TPP that “could undermine the Pharmaceutical Benefits Scheme and compromise the ability of governments to improve public health”:
The Association said it was concerned that aspects of the proposed TPP could be used to attack key health policies and measures including the PBS and the cost of medicine, food labelling and tobacco control laws, restrictions on alcohol marketing, the operation of public hospitals and the regulation of environmental hazards…
Among the most controversial provisions are investor-state dispute settlement (ISDS) procedures that would enable corporations to mount legal action against government policies and laws they felt harmed the value of their investment or future profits…
US negotiators are also pushing hard for the TPP to include some of world’s most stringent intellectual property protections that would expand and extend patent monopolies, helping hold drug prices high and delay the introduction of generic medicines onto the market…
There are also concerns market access rules in the TPP may be used to restrict government support for public hospitals and other health services by requiring that there be competitive neutrality between such entities and private health providers.
My views on the TPP are well known after writing dozens of articles warning of its risks over the past 18 months.
In a nutshell, the TPP risks establish a US-style regional regulatory framework that meets the demands of its major export industries, including pharmaceutical and digital, but leaves Australians worse-off.
The draft chapter on intellectual property rights, revealed by WikiLeaks, included a “Christmas wishlist” for pharmaceutical companies, including the proposal to extend patent protection and strengthen monopolies on clinical data. As part of the deal, the US is seeking patents for “new forms” of known substances, as well as on new uses on old medicines – a proposal which would lead to “evergreening”, whereby patents can be renewed continuously.
It’s a huge risk to Australia’s world class public health system, which risks cost blowouts via reduced access to cheaper generic drugs and reduced rights for the government to regulate medicine prices. It also risks stifling innovation in the event that patent terms are extended too far.
The US is also seeking to insert an Investor-State Dispute Settlement (ISDS) clause into the agreement, which could give authority to major corporations to challenge laws made by governments in the national interest in international courts of arbitration. So effectively, US companies would be allowed to sue the Australian Government under international law – a move that is currently being pursued by Philip Morris against Australia on plain packaging and graphic warnings for cigarettes, under an obscure agreement signed in the early 1990s with Malaysia.
Australia’s recent approach to trade negotiations also sets a worrying precedent. The Australia-US FTA, concluded by the Howard Government, saw patent and copyright terms extended, which will increase costs for Australian consumers over the longer-term.
Indeed, according to Peter Martin, the extension of pharmaceutical patents under the Australia-US FTA, from 14 years to 20 years, has “suppressed the development of a generic drugs industry and cost the government $200 million per year by slowing the entry of cheap generic drugs into the pharmaceutical benefits scheme”. Moreover, “generic manufacturers have missed out on an estimated $2 billion over eight years” whereas “70 per cent of drug patents expire later in Australia than in other countries”.
Trade Minister, Andrew Robb, has provided little assurance that Australia’s medical system won’t be sold out by the TPP, merely noting that he would not agree to anything that was against Australia’s interests:
“Some of the assertions are ridiculous. The people making them know what the US wants because the US informs its industries, but they do not know what the US is going to get,” Mr Robb told Fairfax Media.
“A lot of the people who are agitating about health and sovereignty are doing it because those issues are politically sensitive. They’ve grabbed onto those issues because they think they can frighten people, but a lot of their agenda is anti trade.”
“I am not going to do something that I think is not in the public interest. That’s true for health and it’s true for investor-state dispute settlement procedures,” he said.
With the TPP agreement likely to be signed within the next few months, we should all be concerned about the secretive sell-out that appears to be occurring, which seeks to place US corporate interests ahead of our own.
