In an unedifying display of self-interest, Medicines Australia – the representative for the “discovery-driven pharmaceutical industry in Australia” – has penned a piece calling on Australia’s politicians to ignore “fearmongering” that the Trans-Pacific Partnership (TPP) will raise the price of drugs in Australia:
“The same fearmongering about price rises for medicines and the collapse of the Pharmaceutical Benefits Scheme happened a decade ago when Australia negotiated a Free Trade Agreement with the United States and those claims have proven to be completely false,” says Medicines Australia CEO Tim James…
“Trade deals, including the TPP, are good for the Australian economy. They open up vast new markets for Australian companies, such as the makers of innovative medicines and vaccines, because they reduce trade barriers.”
James says that at $3 billion per year, medicines are already one of Australia’s largest manufactured exports and the TPP will only see that figure grow.
“Importantly, a regional trade agreement, such as the TPP, has the potential to establish high regional standards for intellectual property protection which can help transform Australia into a leading global hub for research, development and manufacturing of the next generation of highly specialised medicines and vaccines,” James says.
“This will bring enormous benefits to the Australian people, not only through jobs and investment, it will also improve and accelerate patient access to the latest, innovative medicines.
“Australia must find ways to encourage more investment in research and development, clinical trials and the manufacturing of medicines, not give in to fear by maintaining or putting up more barriers to success.
“We shouldn’t let the alarmists derail progress on what will truly be a trade agreement for the 21st century”…
“There is always too much focus on the ‘cost’ of strengthening Australia’s IP system, and not enough on the benefits, such as job creation and investment in R&D and high-tech manufacturing,” says James.
That the major representative of the Australian pharmaceuticals industry endorses stricter intellectual property rights for its members is understandable. But let’s not kid ourselves that stronger intellectual property rights are in the best interests of Australians.
As noted on multiple occasions by the Productivity Commission, Australia is a net importer of intellectual property. Therefore, Australia would lose more than it gains by strengthening intellectual property rights.
Medicines Australia’s claim that the Australia-US FTA (AUSFTA) did not harm Australia’s pharmaceuticals industry also does not pass scrutiny.
As noted in the Government’s own Pharmaceutical Patents Review Report, the patent extensions and protections embedded in the AUSFTA were expensive for the Australian Government (read taxpayer):
“The estimate for 2012–13 is around $240 million in the medium term and, in today’s dollars, around $480 million in the longer term…
The total cost of the EOT [extension of patent] to Australia is actually about 20 per cent more than this, because the PBS is only one source of revenue for the industry.
The report also noted “that up to 70% of pharmaceutical patents expire later in Australian than in other countries”, whilst noting that generic manufacturers have missed out on an estimated $2 billion in revenue over eight years because of the patent extensions.
Finally, the report warned against implementing further copyright protections in future trade agreements, including the TPP:
In signing the Australia-United States Free Trade Agreement (AUSFTA) Australia agreed that it would preserve a further extension to patents for pharmaceuticals beyond the 20 years that it had already legislated, without careful regard to whether thus binding ourselves to this policy for the future was in our own economic interest.
In negotiating such agreements in the future, Australia needs a more active strategic engagement with the issues. While the patent system must be strong to be effective, it should also be parsimonious, avoiding restrictions on trade and innovation that are not necessary for it to deliver incentives to innovate…
There are signs that these past failures are being replicated in the current Trans-Pacific Partnership (TPP) negotiations because small, net importers of intellectual property, including Australia, have not developed a reform agenda for the patent system that reflects their own economic interests – and those of the world.
We should also not forget that the AUSFTA also extended copyright terms by 20 years, thus adding to the costs of books, music, movies and other creative content over the long-term. And the US is now seeking further copyright protections in the TPP.
In short, Australia’s politicians should ignore Medicine Australia’s pleas, which reek of self-interest trumping the public good.
