Healthy Skepticism Library item: 439

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Publication type: news

Condie .
Glaxo dismisses free trade concerns
Evening Standard 2004 Jun 14

Full text:

Drugs giant GlaxoSmithKline has dismissed as ‘fear-mongering’ Australian concerns that a proposed free trade agreement with the US – due to be debated in the Australian parliament this week – could erode the country’s subsidised pharmaceuticals scheme.

But a study commissioned by an Australian Senate committee inquiry into the free trade deal warns that prices of drugs in Australia could rise steeply.

The managing director of the Australian arm of Glaxo, Daniel Tasse, dismissed the findings, saying subsidised medicines will be protected under the agreement.

‘If you look at the FTA, it will very clearly not amount to an increase in drug prices as some fear-mongering here has suggested,’ he said.

With Glaxo and other big drugs companies locked in legal battles across the US in an attempt to limit Americans’ access to similarly subsidised drugs in Canada, the Australian agreement – which gives the companies unprecedented access to the government’s pharmaceutical procurement process – has become a test case.

The Senate report finds the patent provisions in the deal could delay the introduction of generic drugs to the Australian market and would increase drug prices in Australia as multinational pharmaceuticals companies continue to sell higher-priced proprietary products.

It is a big setback for the drug companies and is likely to increase hostility to the free trade deal among it many sceptics in the opposition Labour Party.

‘Labour has consistently said it will vote against the free trade agreement if it undermines the Pharmaceutical Benefit Scheme or increases the prices of medicines to consumers,’ Stephen Conroy, the party’s trade spokesman, warned.

Trade Minister Mark Vaile acknowledged that he is not expecting a smooth passage of the Bills needed to ratify the agreement and says it is in the hands of the Senate, the upper house controlled-by a handful of independents.

The National Prescribing Service, a pharmaceutical information body, has labelled the deal a ‘costly mistake’ while an Australian National University research team says it will force up the costs of the PBS from £2.3bn a year to £3bn. Glaxo denies this and says the new provisions will lead to more transparency.

The Australian government has already given in to demands that big pharmaceuticals companies sit in on decisions over what drugs will be listed under the PBS with a right of appeal. Australian negotiators have also given assurances that re-importation of drugs to the US would be banned.