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TPP will not affect the cost of medicines

TPP will not affect the cost of medicines

“Despite claims to the contrary, consumers will not pay more for subsidised medicines as a result of TPP,” says Trade Minister Todd McClay.

“TPP will not change the PHARMAC model.
“PHARMAC will continue to do what it does best, prioritising its spending and negotiating the best price for medicines with suppliers.”

Some administrative changes will be required for PHARMAC to increase transparency under TPP. These include setting a timeframe for considering funding applications (which is up to New Zealand to determine), and to establish a specific review process for funding applications that PHARMAC has declined.
“But TPP has been designed in a way that ensures that PHARMAC can manage these processes,” says Mr McClay.

These are outlined in the Government’s factsheet on pharmaceutical and
medical device purchasing (reimbursement). The administrative changes are expected to involve up to $4.5 million in one-off establishment costs for PHARMAC and up to $2.2 million a year in operating costs.

“These operating costs represent less than 0.3 per cent of New Zealand’s pharmaceutical budget and need to be weighed against the $2.7 billion in GDP gains TPP is estimated to deliver New Zealand in 2030,” says Mr McClay.

A number of earlier, far-reaching proposals relating to medicines and to PHARMAC, proposed by some parties during the TPP negotiations, but rejected by New Zealand and other negotiators, were not included in the final agreement.

The TPP National Interest Analysis (NIA) concludes that TPP would have a very minimal impact on the health system in New Zealand.

Patent provisions will also have minimal effect on New Zealand. There is no change to New Zealand’s standard 20-year patent period. Given the efficiency of New Zealand’s processing times, very few unreasonable delays are expected to occur in New Zealand that would require patent term extension under TPP, and only in exceptional circumstances. While the cost of any delays would depend on the case, the average cost is estimated at NZ$1 million a year.

“These outcomes reflect the Government’s commitment throughout the TPP negotiating process to protect public health and the fundamentals of New Zealand’s health system,” says Mr McClay

The factsheets, PHARMAC costings, and NIA can be found The factsheet is also attached.


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