TPP threatens Australia’s affordable medicines

By Leith van Onselen

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.

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Unconventional Economist
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    • Yup – certainly wouldn’t expect our politicians to stand up for anything other than their own self interest.

  1. How could we not be reassured with Robb in charge?

    “I am not going to do something that I think is not in the public interest..”

    What are you doing then? What do we get out of this deal other than more shafting by the US? More “free trade”?

    Yippee, can’t wait to keep paying the Australia Tax on everything, get cease-and-desist notices if i ever download a movie 4 months before it comes out in Aus, pay more for medicines, have the Govt pay millions in compo to cigarette companies & all the other downsides. What exactly do we get in return? We have bugger all exports outside of mining..

    How does free trade help when you have no export industries?

    • What exactly do we get in return?

      A peace of mind that Indonesia won’t extend their teritorry south and if it does US would come to the rescue.

      • It’s a good thing that I have no say over foreign policy. Not one US serviceman’s life should be lost in defense of people who hate us.

  2. The real problem is our gutless “leaders” allowing us to become another vassal state of the USA. They are doing this all over the world. Driving a wedge btw the EU and Russia over the Ukraine issue and Russia sanctions is just another example, so that they can continue to project power in Europe.

    The TPP is a threat to our soverignty. It is not “free” trade. It is a subordination of our economy and interests to the United States.

  3. This government has shown that it puts corporate interests ahead of the people so you need to be worried about secret negotiations around the TPP. I’d be very surprised if we (the Australian people) aren’t screwed over.

    • To be fair it’s not just the current set of clowns. Labor was also engaging in the clandestine ‘negotiations’ prior to their defeat and they have been silent about the TPP. All of our political idiots want to trash this country.

      Only a nation of unenlightened half-wits led by donkeys would let themselves be subordinated to a dying empire (the US) with no reciprocal benefits. Joining the BRICS would make more sense as this does not.

      The Europeans are just as foolish as they are contemplating signing a similar trade agreement.

      • “Labor was also engaging in the clandestine ‘negotiations’ prior to their defeat and they have been silent about the TPP.”

        Not that Labor are great here, but they were at least refusing to consider ISDSes in agreements.

      • The benefit is that you get to apply more than leaches and poultices with your “free” medical services.

  4. I am tired of people here just lying down when they get raped on a mass scale and only getting fired up over inconsequential issues.

    Let’s have a massive country stopping protest. TPP and maybe even tax concessions, Housing costs that inflate everything and kill productivity, corruption (deals taht led to Pokie / East-West link payouts) etc. I’ll be there. I’ll take the day off work to be there. Our leaders should be guilty of treason at the very least. But we all know that no protests will not happen.

    If that’s the case, I hope they sign this TPP with the worst possible conditions. I hope Australians get pillaged from all angles. Only then will they MAYBE actually care about getting informed and being responsible citizens and voters. Until there is mass suffering from all these bad policies piling up and being passively endorsed then nothing will change and the house of cards will keep on getting built up.

    I am lucky to have a good job so I am relatively secure despite the hit this and other problems have and will cause me in the future. But many Australians won’t be so lucky and I am totally surprised they don’t care enough to make significant noise.

    • Mining BoganMEMBER

      March in March. It was the start. Get involved and find other associated groups.

      It’s the reason they’re so scared of social media. The more TPTB prance and sing about these movements being irrelevant, the more you know it’s gaining traction.

  5. I’m definitely not a TPP fanboi but as I see it the insurance premium for our security blanket is due, this year there is no war to “contribute too” so we’ve been given the unique opportunity to becoming a founding member of TPP, who could pass in such an opportunity.

    I can see that TPP is inevitable so we should be focused on gaining something of value instead of the usual BS concessions to allow more Aussie Agriculture products into the US. oh well that’s wishful thinking

  6. As negotiations are all behind closed doors you just know it’s not going to be good for any tax payers anywhere within the TPP.

    It’s almost enough to make you start believing all those crackpots over at places like ZeroHedge that say it’s all a conspiracy of blah blah blah

    • Neoliberalism is not a CT, it is an agenda which has been forwarded since Carter in the USA, regardless of political party.

      Carter unlocked the door, Reagen opened it, Clinton kicked it in, Bush II walked thorough it and Obama lounges in the inner sanctum.

      “For the first time the UK’s consumer debt exceeds the total of its gross national product: a new report shows that we owe £1.35 trillion. Inspectors in the United States have discovered that 77,000 road bridges are in the same perilous state as the one which collapsed into the Mississippi. Two years after Hurricane Katrina struck, 120,000 people from New Orleans are still living in trailer homes and temporary lodgings. As runaway climate change approaches, governments refuse to take the necessary action. Booming inequality threatens to create the most divided societies the world has seen since before the first world war. Now a financial crisis caused by unregulated lending could turf hundreds of thousands out of their homes and trigger a cascade of economic troubles.

      These problems appear unrelated, but they all have something in common. They arise in large part from a meeting that took place 60 years ago in a Swiss spa resort. It laid the foundations for a philosophy of government that is responsible for many, perhaps most, of our contemporary crises.

      When the Mont Pelerin Society first met, in 1947, its political project did not have a name. But it knew where it was going. The society’s founder, Friedrich von Hayek, remarked that the battle for ideas would take at least a generation to win, but he knew that his intellectual army would attract powerful backers. Its philosophy, which later came to be known as neoliberalism, accorded with the interests of the ultra-rich, so the ultra-rich would pay for it.

      Neoliberalism claims that we are best served by maximum market freedom and minimum intervention by the state. The role of government should be confined to creating and defending markets, protecting private property and defending the realm. All other functions are better discharged by private enterprise, which will be prompted by the profit motive to supply essential services. By this means, enterprise is liberated, rational decisions are made and citizens are freed from the dehumanising hand of the state.

      This, at any rate, is the theory. But as David Harvey proposes in his book A Brief History of Neoliberalism, wherever the neoliberal programme has been implemented, it has caused a massive shift of wealth not just to the top 1%, but to the top tenth of the top 1%. In the US, for instance, the upper 0.1% has already regained the position it held at the beginning of the 1920s. The conditions that neoliberalism demands in order to free human beings from the slavery of the state – minimal taxes, the dismantling of public services and social security, deregulation, the breaking of the unions – just happen to be the conditions required to make the elite even richer, while leaving everyone else to sink or swim. In practice the philosophy developed at Mont Pelerin is little but an elaborate disguise for a wealth grab.

      So the question is this: given that the crises I have listed are predictable effects of the dismantling of public services and the deregulation of business and financial markets, given that it damages the interests of nearly everyone, how has neoliberalism come to dominate public life?

      Richard Nixon was once forced to concede that “we are all Keynesians now”. Even the Republicans supported the interventionist doctrines of John Maynard Keynes. But we are all neoliberals now. Margaret Thatcher kept telling us that “there is no alternative”, and by implementing her programmes Clinton, Blair, Brown and the other leaders of what were once progressive parties appear to prove her right.

      The first great advantage the neoliberals possessed was an unceasing fountain of money. US oligarchs and their foundations – Coors, Olin, Scaife, Pew and others – have poured hundreds of millions into setting up thinktanks, founding business schools and transforming university economics departments into bastions of almost totalitarian neoliberal thinking. The Heritage Foundation, the Hoover Institute, the American Enterprise Institute and many others in the US, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute in the UK, were all established to promote this project. Their purpose was to develop the ideas and the language which would mask the real intent of the programme – the restoration of the power of the elite – and package it as a proposal for the betterment of humankind.” – snip

      Philip Mirowski’s works are a good start –

      Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown

      Science-Mart: Privatizing American Science

      The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective

      Skippy… its not like people have not been observing this for decades, is just before the GFC anyone not on board the neoliberal magical mystery tour… could be shut down by pointing and in a body snatcher manner…. utter….. commie…. socialist…. lefty….