Macro Business | 25.7.2014
AMA warns on risks lurking in TPP trade deal
By Leith van Onselen
The Australian Medical Association (AMA) has urged the Australian government to reject provisions in the Trans Pacific Partnership agreement (TPP) that “could undermine the Pharmaceutical Benefits Scheme and compromise the ability of governments to improve public health”:
The AMA Federal Council has called on the Federal Government to reject “any provisions in trade agreements that could reduce Australia’s right to develop health policy and programs according to need”.
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.
In addition, the TPP includes proposals demanding the removal of technical barriers to trade – provisions which companies have used to challenge regulations such as alcohol warning labels, alcohol excise, and front-of-packet food labelling.
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.
A resolution adopted by the AMA Federal Council said international trade agreements had the potential to hamper governments in acting to protect and promote health.
…the AMA Federal Council called for an end to… secrecy, urging the Federal Government to commit to “the utmost transparency in trade negotiations…and to consulting as fully as possible with the health sector, medical practitioners and with wider civil society organisations”.
Spot on. As I have been warning for nearly a year, 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 reportedly 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 being pursued by Philip Morris against Australia on plain packaging and graphic warnings for cigarettes.
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”.
Unfortunately for Australia, the Abbott Government continues to embrace the TPP with open arms. Trade Minister, Andrew Robb, had previously described the deal as a “platform for 21st-century trade rules”. And earlier this week in The AFR Robb hailed the TPP as “ambitious” and “reducing protection”.
We should all be concerned about the secretive sell-out that appears to be occurring under the TPP, which seeks to place US corporate interests ahead of our own.