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New trade agreement threatens Australia’s laws on medicines and tobacco

Crikey | September 1, 2011

New trade agreement threatens Australia’s laws on medicines and tobacco

by Jennifer Doggett

Australia leads the world in many areas of public health but the Federal Government could be negotiating our achievements away, according to Dr Patricia Ranald, Convenor, Australian Fair Trade and Investment Network

The Australian Government is negotiating a Trans-Pacific Partnership free trade agreement (TPPA) with the US, New Zealand, Chile, Peru, Brunei, Singapore, Malaysia and Vietnam. The eighth round of negotiations takes place next week in Chicago behind closed doors, aiming for a framework agreement by the end of this is the year.

But the agenda on health is being set by giant US pharmaceutical and tobacco corporations.They want to use the negotiations to increase their rights at the expense of consumers and public health.

Increasing monopoly rights to charge higher prices for medicines

US pharmaceutical companies have lobbied the US government to proposeexpansion of their patent rights on medicines. Pharmaceutical companies already have rights to charge monopoly prices for medicines for 20 years. Extensions of patent periods and delays in the marketing of cheaper generic drugs benefit these companies, but disadvantage consumers, and would increase the cost of medicines to the public health system.The US proposals include:
 Lowering Australian standards to allow more patents which make only slight changes to an existing medicine, thus enabling the repeated extension or “ever-greening “ of patents
 Removal of public rights to object to new patents before they are granted, which would make it easier for unjustified patents to be granted
 Removal of current Australian flexibilityto disallow the patenting of medical procedures, which could impose huge future costs on hospitals

The pharmaceutical companies are also lobbying for elimination of Australian safeguards against patent abuse and “ever-greening” which Parliament inserted at the time of the Australia-US Free Trade Agreement in 2004.

The 2010 Productivity Commission Report on Bilateral and Regional Trade Agreements found that expansion of patent rights under the Australia-US Free Trade agreement has already caused economic losses because Australia is a net importer of patented goods. It is clearly not in Australia’s interests to agree to these proposals.

Attack on the pharmaceutical benefits scheme (PBS)

In the US where the government does not have the same control over the price of medicines as the Australian Government, the wholesale prices of medicines are three to ten times the prices paid in Australia, and many people cannot afford to buy medicines.

The Australian PBS is based on the principle that everyone should have access to affordable medicines. Under the PBS, the wholesale price of medicines is lower than in the US because health experts compare the price and effectiveness of new medicines with the price of cheaper generic medicines with the same health effects. The government then subsidises the retail price we pay at the chemist.

US proposals aim to restrict the ability of governments to regulate the price of medicines through schemes like the PBS, by removing references to affordability of medicines, giving pharmaceutical companies more rights to challenge government pricing decisions, and allowing direct advertising of medicines by drug companies to consumers, a practice which is banned in most countries, because it leads to the overprescribing of medicines.

More rights for tobacco companies to sue governments

Investor state dispute settlement processes give a single company the right to sue governments for damages if a law or policy harms their investment. Under these provisions in the North American Free Trade Agreement companies have sued governments for millions of dollars over health and environmental legislation. This gives unreasonable rights to corporations, and reduces the rights of governments to implement public interest legislation.

US companies, including tobacco companies like Philip Morris, have lobbied the US government to include this proposal in the TPPA. Philip Morris is an international company based in the United States. However, it is currently claiming to be a Swiss company in order to use a Swiss investment agreement with Uruguay to sue the Uruguayan government over restrictions on tobacco advertising. It has claimed to be a Hong Kong company in order to sue the Australian government for its proposed tobacco plain packaging legislation under an obscure 1993 Hong Kong-Australia bilateral investment treaty.

Australian Government trade policy states that Australia will not support the expansion of intellectual property rights,proposals which undermine the PBS or investor state dispute processes. But there is still a danger that these will be traded away in the negotiation under pressure from the US to make a deal. For more information on the TPPA and holding the government accountable to these policies see

 source: Crikey