Comment: Free trade agreement threatens PBS
(AAP)
The Trans-Pacific Partnership could be a bitter pill to swallow for
those who rely on subsidised prescription drugs for their health and
well-being.
For more than a year the Federal Government has been negotiating
one of the largest free trade deals in history, yet most Australians
have no idea that it will impact their most basic healthcare needs.
The Trans Pacific Partnership Agreement (TPPA) will cover twelve
Pacific Rim countries including Australia, Canada, Japan and the United
States. Negotiations are being conducted in secret - what little is
known about the deal has been gleaned from draft chapters published by
Wikileaks in late 2013.
The leaked healthcare chapter suggests that the United States is
playing hardball with Australian health subsidies. International
pharmaceutical companies have long objected to the Australian
Government’s stance on subsidized medicine and the availability of
cheaper generic medicines in the Australian market. The Pharmaceutical
Research and Manufacturers of America in particular, is lobbying the
United States Government to ensure that company profits are prioritized
in national health policy decisions.
The TPPA could impact medicine affordability through several
different routes: by delaying the availability of cheaper generic
medicines; by altering the operation of the PBS making it more difficult
to keep costs down; or by enabling pharmaceutical companies to sue the
government over its pharmaceutical companies. These changes would
increase the cost of the PBS for the government and taxpayers.
While the Australian Government has given some assurances about
maintaining PBS subsidies, its desire to push through aspects of the
deal favorable to Australian exporters mean that bargaining is
inevitable. Indeed, there have already been indications that the
government will allow state investor dispute settlement mechanisms that
would give foreign companies, including pharmaceutical manufacturers,
the right to sue the government for creating unfavorable market
conditions through policies and subsidies.
Any changes to PBS costs incurred as a result of reduced subsidies
and availability of generic medicines are likely to be passed on to the
consumer. Out-of-pocket expenses are one of the most significant
barriers to prescription use; in 2005, 22% of Australians reported
skipping a dose or not filling a prescription due to cost. If proposals
under the TPPA are accepted, these costs could soar, with families on
low incomes struggling to pay for medicines that are sorely needed.
One such family told of changes to the PBS that would radically affect their standard of living.
“As the mother of two children with chronic illnesses, any change to
the PBS, no matter how minor, will deeply and unfairly impact us and
many families who are struggling to stretch their budget to pay for
essential medicines,” said the Melbourne mother, who did not wish to be
named.
“PBS benefits assist in keeping the costs of essential medications
manageable, although it still stretches the family budget, even with a
carers allowance,” she said.
“One of my children is currently required to take ten different
medications. A number of drugs are simply a matter of trial and error -
if one doesn't work, it will need to be changed very quickly, which
again adds to the cost.”
“There are already so many costs associated with having a sick child.
We can’t afford to pay more just because a multinational wants to
increase its profits.”
The threat to the PBS is so real that Michael Moore CEO of the Public
Health Association of Australia has said “It will cost Australian lives
if we accept rules in the TPPA that prevent us from introducing
innovative public health policies in the future.”
Dr Margaret Chan, Director of the World Health Organisation, has also
expressed concern over the scale of TPPA healthcare proposals, recently
telling the sixty-seventh World Health Assembly in Geneva that foreign
investment agreements “handcuff governments and restrict their policy
space.”
She went on to say, “Some Member States have expressed concern that
trade agreements currently under negotiation could significantly reduce
access to affordable generic medicines. If these agreements open trade
yet close access to affordable medicines, we have to ask: Is this really
progress at all, especially with the costs of care soaring everywhere?”
The only way the Australian Government can truly reassure the public
and health professionals that they are not ceding control of Australian
healthcare policy is to be more transparent about the substance of TPPA
negotiations.
Control of Australian health policy and the future of the PBS should
not be traded away in a quest to increase exports and economic
development. Australian health should be put ahead of healthy profits.
Paul Ferris is Campaigns Director for SumOfUs
one of the largest free trade deals in history, yet most Australians
have no idea that it will impact their most basic healthcare needs.
The Trans Pacific Partnership Agreement (TPPA) will cover twelve
Pacific Rim countries including Australia, Canada, Japan and the United
States. Negotiations are being conducted in secret - what little is
known about the deal has been gleaned from draft chapters published by
Wikileaks in late 2013.
The leaked healthcare chapter suggests that the United States is
playing hardball with Australian health subsidies. International
pharmaceutical companies have long objected to the Australian
Government’s stance on subsidized medicine and the availability of
cheaper generic medicines in the Australian market. The Pharmaceutical
Research and Manufacturers of America in particular, is lobbying the
United States Government to ensure that company profits are prioritized
in national health policy decisions.
The TPPA could impact medicine affordability through several
different routes: by delaying the availability of cheaper generic
medicines; by altering the operation of the PBS making it more difficult
to keep costs down; or by enabling pharmaceutical companies to sue the
government over its pharmaceutical companies. These changes would
increase the cost of the PBS for the government and taxpayers.
While the Australian Government has given some assurances about
maintaining PBS subsidies, its desire to push through aspects of the
deal favorable to Australian exporters mean that bargaining is
inevitable. Indeed, there have already been indications that the
government will allow state investor dispute settlement mechanisms that
would give foreign companies, including pharmaceutical manufacturers,
the right to sue the government for creating unfavorable market
conditions through policies and subsidies.
Any changes to PBS costs incurred as a result of reduced subsidies
and availability of generic medicines are likely to be passed on to the
consumer. Out-of-pocket expenses are one of the most significant
barriers to prescription use; in 2005, 22% of Australians reported
skipping a dose or not filling a prescription due to cost. If proposals
under the TPPA are accepted, these costs could soar, with families on
low incomes struggling to pay for medicines that are sorely needed.
One such family told of changes to the PBS that would radically affect their standard of living.
“As the mother of two children with chronic illnesses, any change to
the PBS, no matter how minor, will deeply and unfairly impact us and
many families who are struggling to stretch their budget to pay for
essential medicines,” said the Melbourne mother, who did not wish to be
named.
“PBS benefits assist in keeping the costs of essential medications
manageable, although it still stretches the family budget, even with a
carers allowance,” she said.
“One of my children is currently required to take ten different
medications. A number of drugs are simply a matter of trial and error -
if one doesn't work, it will need to be changed very quickly, which
again adds to the cost.”
“There are already so many costs associated with having a sick child.
We can’t afford to pay more just because a multinational wants to
increase its profits.”
The threat to the PBS is so real that Michael Moore CEO of the Public
Health Association of Australia has said “It will cost Australian lives
if we accept rules in the TPPA that prevent us from introducing
innovative public health policies in the future.”
Dr Margaret Chan, Director of the World Health Organisation, has also
expressed concern over the scale of TPPA healthcare proposals, recently
telling the sixty-seventh World Health Assembly in Geneva that foreign
investment agreements “handcuff governments and restrict their policy
space.”
She went on to say, “Some Member States have expressed concern that
trade agreements currently under negotiation could significantly reduce
access to affordable generic medicines. If these agreements open trade
yet close access to affordable medicines, we have to ask: Is this really
progress at all, especially with the costs of care soaring everywhere?”
The only way the Australian Government can truly reassure the public
and health professionals that they are not ceding control of Australian
healthcare policy is to be more transparent about the substance of TPPA
negotiations.
Control of Australian health policy and the future of the PBS should
not be traded away in a quest to increase exports and economic
development. Australian health should be put ahead of healthy profits.
Paul Ferris is Campaigns Director for SumOfUs
