Healthy Skepticism Library item: 995

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Ranald P.
A clear choice: abandon or defend FTA
Australian Financial Review 2004 Oct 22

Full text:

The US government has been exerting pressure for the government to change the ALP amendments to the Australia-US free-trade agreement (FTA) implementing legislation designed to prevent abuse of patents and to ensure access to cheaper generic medicines. Now drug companies are also objecting to the Howard government’s own policy to cut prescription medicine prices to drug companies when cheaper generic alternatives become available (“PBS faces winds of change”, October 20).

How ironic that the government did not appear to realise that its election promise to save money using price comparisons with generic drugs could be challenged under the terms of the FTA.

This confirms the warning of many community groups and health experts that it was a huge mistake to allow any aspect of the medicines policy into the FTA. The US government now has a potential veto over any aspect of medicines policy that is contrary to the agreement. If the agreement is implemented, the US can complain to the USFTA disputes tribunal, which can order changes to laws or policies backed up by trade sanctions. This abrogates the Australian parliament’s democratic right to determine important aspects of health policy. The government has until October 30 to finally sign off on the FTA before it comes into force in January 2005. It claimed repeatedly that the FTA would not affect the price of medicines. It cannot claim a mandate to change the amendments or to abandon its own promise of lower prices.

The government now faces a clear choice. It can give into US demands and effectively abandon policies for access to affordable medicines, or it can defend them.

The opposition, minor parties and independents have the majority in the Senate until July next year. They should keep their election promises to defend Australians’ access to affordable medicines and resist changes to the amendment.

This would delay implementation of the FTA, and enable further public debate about these key issues.

Many trade economists agree that the exclusion of sugar and limited access to other US agricultural and manufacturing markets mean that the economic benefits for Australia from the FTA are questionable. Public opinion polls have shown consistently that Australians do not want an FTA that threatens their access to affordable medicines.