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Issue #1623      January 22, 2014

The Trans-Pacific Partnership Agreement

Don’t trade away health

The Australian government negotiating a trade agreement spanning 12 countries in the Pacific. But the deal is not about trade and poses real threats to public health.

The Trans-Pacific Partnership Agreement (TPPA) involves Australia, the US, New Zealand, Canada, Peru, Chile, Mexico, Singapore, Brunei, Malaysia, Japan and Vietnam. The negotiations are shrouded in secrecy, but limited public education and leaked documents show that the agenda on health and medicines is being set by giant US pharmaceutical and tobacco corporations, and threatens to:

  • increase patent rights leading to higher medicine prices
  • undermine our Pharmaceutical Benefits Scheme (PBS)
  • give special rights for corporations to sue governments for damages
  • restrict government public health regulations for food labelling

After three years of negotiations the pressure is on to sign the deal this year. We need to ensure that the Australian government rejects any proposals which would affect the affordability of medicines and retains the ability to regulate in the interest of public health.

Pharmaceutical companies already have patent rights to charge high monopoly prices for new medicines for 20 years before we can access cheaper generic medicines. However, US trade negotiators, on behalf of pharmaceutical companies, are demanding stronger patent rights in the TPPA.

This would further delay the availability of cheaper medicines. Australians would have to pay higher prices for medicines, and in developing countries new medicines would become unaffordable.

In the US, where there is no national system to regulate the price of medicines, the wholesale prices of new medicines are three to ten times higher than the prices in Australia. This makes retail prices even higher, and many people cannot afford to buy medicines.

Through the Australian PBS, health experts compare the price and effectiveness of new medicines with the price of cheaper generic medicines to assess their health effects. They then regulate the wholesale and retail prices of many medicines in Australia, so that pensioners pay no more than $5.90 and others no more than $36.10 for important medicines.

As well as keeping the prices of medicines low for consumers, the lower wholesale price reduces the cost to the taxpayer. This makes the PBS more sustainable in the long term.

However, US-based pharmaceutical companies argue that the PBS is a barrier to trade, and oppose these schemes because they receive a lower wholesale price for their medicines. US trade negotiators have proposed changes which would restrict price comparisons, such as those which are used in the PBS to make medicines affordable.

The Australian government should not agree to these proposals, which would lead to higher costs for both consumers and governments.

Large tobacco companies like Philip Morris are pushing for the inclusion of special rights for corporations in the TPPA which would allow foreign investors to sue governments for damages if their investments have been harmed by a particular law or policy, even if the law or policy protects public health.

Known as investor-state dispute settlement, or ISDS, disputes are heard by international investment tribunals, not domestic courts. These tribunals give priority to investor rights rather than what is in the public interest.

ISDS is already being used to undermine Australia’s democratic legislation. The Philip Morris tobacco company is trying to use an obscure 1993 Australia-Hong Kong investment agreement to sue the Australian government for millions of dollars of damages in an international tribunal over the plain packaging legislation.

The case is ongoing, despite the fact that the Australian High Court found that the law was a public health measure and companies were not entitled to compensation under Australian law.

The Abbott government’s trade policy is to negotiate on ISDS.

Take action!

The AFTINET has resources you can use to:

  • send a message to the Trade Minister
  • talk to your local Member of Parliament
  • discuss the TPPA with friends, relatives and workmates
  • hold a local meeting

* Australian Fair Trade and Investment Network

Next article – Film Review – The Wolf of Wall Street

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