Will NatLabs keep Pharmac out of US trade deal?

Green Media Release 12th June 2008

The Green Party is calling on National and Labour to guarantee that Pharmac will not be undermined or weakened in trade negotiations with the United States. This follows news that Trade Minister Phil Goff is optimistic about US trade talks after meetings in Washington over the last two days.

"National and Labour are desperate to sign a trade deal with the US - it is a bipartisan position. I challenge them to provide a public guarantee that Pharmac will not be on the negotiating table in such a trade deal," says Dr. Russel Norman, Green Co-leader.

In the negotiations for the trade deal between Australia and the United States (AUSFTA), Australia's Pharmaceutical Benefits Scheme (PBS), similar to our Pharmac, was a major target of the US negotiators. The giant US drug companies see such schemes as threats to their profitability and use trade negotiations to undermine them.

"US negotiators are determined to break or undermine schemes that bulk-buy drugs and use generics or other measures to bring down the price of pharmaceuticals. Pharmaceutical prices in New Zealand and Australia are much lower than in the US because of Pharmac and the PBS.

In negotiations with Australia, the US demanded a series of changes to rules around funding of drugs and intellectual property laws. For example, generic drug makers are now required to notify patent drug manufacturers if they planned to introduce low cost copies of patent-expired drugs. This provides an opportunity for the big drug companies to use 'evergreening' techniques to stall the generic drugs. Another example is that an appeals mechanism was introduced whereby US drug companies can appeal decisions of the PBS not to fund their drugs.

"Pharmac saves the New Zealand taxpayer many millions of dollars every year by bulk purchasing drugs and by using generic drugs. The big US pharmaceutical companies hate this practice as it costs them profits. Pharmac estimated in 2004 that the measures in the AUSFTA would cost them $30m - $40m per year if adopted in New Zealand.

The US Trade Negotiator, Robert Zoellick, was congratulated at US Senate hearings on the AUSFTA, for having 'secured an agreement that would deliver higher prices paid by the PBS for US-patented drugs'.

"Not everyone agrees with every Pharmac decision, but that is no reason to give it up to US big pharmaceutical companies in trade negotiations.

"My challenge to Labour and National is to commit to keeping Pharmac out of US trade negotiations."

ENDS

© Scoop Media