Free Malaysia Today

Price of medicines may sky-rocket with FTA

By G Vinod

10 May 2011

If Malaysia signs an FTA with the European Union it may spell the end of generic drugs

PETALING JAYA: The price of medicine might be out of reach for most people if Malaysia inks an understanding with the European Union on the Free Trade Agreement.

Officials from both sides meet in Brussels next week and a major point that they will be ironing out will be the clause on intellectual property rights.

Parti Sosialis Malaysia (PSM) treasurer A Sivarajan explained what this means is that giant pharmaceutical companies’ patent rights for their medicine would be extended beyond the present 15 to 20 years.

After the current patents expire, generic drug manufacturers are then allowed to produce the same medicines at cheaper rate as it uses the same formula designed by the original manufacturer.

“This generic drugs are sold at a very minimum cost or even given free to the patients as they are subsidised by the government,” said Sivarajan.

He said with the proposed FTA, the patent rights would be extended and thus diallowing generic drugs from being used in the nations that had signed the agreement.

“And this original medicine may even cost 100% higher than the generic type. The people will have to purchase it with higher price as the government would not be able to subsidise it,” said Sivarajan.

Burden passed on consumers

Klang MP Charles Santiago said data exclusivity clause will be signed under the FTA, allowing patent rights for original medicine to be extended.

“The agreement will also compel generic medicine manufacturer to conduct the same amount of tests and experiments the original manufacturer had done to produce the medicines.

“Obviously, it would incur more costs and the burden will be passed on to the consumer,” said Santiago.

He explained that it would affect the HIV patients and those with mental illness as most require regular medications.

With FTA in effect, Santiago said, the government would not be able to institute any policy that can be assumed to affect a private entities’ profit margin as they would be bound under the Investors’ Rights clause.

He cited an example where the government may be forced to remove the health warnings on cigarette boxes in Malaysia which discourages smoking.

“With FTA in place, the cigarette companies can take the Malaysian government to court on grounds that the message is damaging their business.

“It happened in Paraguay when cigarette manufacturer, Phillip Morris took the former to court for displaying health warnings on its cigarette boxes.

“In other words, the state will be undermined by a private entity. Should the government sign the agreement at the expense of public health?” asked Santiago.