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"We're not trying to get rid of PHARMAC," say NZ drugmakers

World News | May 14, 2012


Lynne Taylor

"We're not trying to get rid of PHARMAC," say NZ drugmakers

"Contrary to popular misconception," the pharmaceutical industry in New Zealand has no intention of using the Trans Pacific Partnership (TPP) process to get rid of the nation’s drugs-buying agency PHARMAC, an industry leader has stated.

However, "New Zealanders could have access to better and newer medicines if the system was streamlined and the broader questions relating to health policy and relative spend were addressed," added Heather Roy, chair of industry group Medicines New Zealand, speaking at TPP meetings in Dallas, USA.

"I don't accept that better access to medicines would result in a blow-out of the health budget. On the contrary, I think there are efficiencies to be gained," she said.

Ms Roy pointed to recent estimates that the TPP could add $1.7 billion to New Zealand's Gross Domestic Product (GDP) by 2025. "A good TPP will be good for New Zealand's economy, it will be positive for our exporters and importers and it will help to bring this vibrant region closer together," she said.

However, critics claim that the intellectual property rights (IPR) demands being made by the US TPP negotiators will disadvantage New Zealand, and that drugmakers want the deal to strip PHARMAC of its drug price negotiating powers.

The recently-published US 2012 Special 301 Report - the US Trade Representative (USTR)'s annual review of the state of IPR protection and enforcement of the US's trading partners around the world – pointed to industry’s "serious concerns" about the policies and operation of PHARMAC.

"Industry continues to express concerns regarding, among other things, the lack of transparency, fairness and predictability of the PHARMAC pricing and reimbursement regime, as well as the negative aspects of the overall climate for innovative medicines in New Zealand," says the Report.

In its submission to this year's Special 301 Report, the Pharmaceutical Research and Manufacturers of America (PhRMA) had called for New Zealand to be placed on the USTR’s Special 301 Priority Watch List, noting that "PHARMAC continues to impose stringent cost-containment strategies and operate in a non-transparent manner, making unpredictable funding decisions and creating an unfavourable environment for innovative medicines."

PhRMA also points out that if the draft Patent Bill - introduced into the New Zealand Parliament in July 2008 and still pending - is passed as written, it will fail to provide adequate incentives for innovation and adequate protection for intellectual property.

"This could potentially reduce New Zealand's patients' access to innovative medicines," warns PhRMA.

However, ahead of the current round of TPP talks, former New Zealand Labour Party leader Phil Goff stated that the core role of PHARMAC, "in purchasing pharmaceuticals for the lowest price it can negotiate to ensure access to free or heavily-subsidised drugs by New Zealand's consumers, must be protected."

"There is no way we will go back to paying the inflated prices as a small country before PHARMAC enabled us to negotiate on a fairer basis," he added.

And Marilyn Head, policy adviser to the New Zealand Nurses Organisation (NZNO), warned that the agreement, "currently being negotiated in secret, has the potential to limit the government's ability to make decisions that are in the best interests of the health of New Zealanders."

"We are concerned that the agreement may affect PHARMAC's pharmaceutical purchasing powers and extend patents, which would increase the cost of medicines and limit access to new medicines. New Zealand wouldn't be able to afford the most effective medicines or medical technologies," she said.

- The TPP, being negotiated by the US with Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, is a “key initiative through which the US seeks to advance the multi-faceted US trade and investment interests in the Asia-Pacific region,” says the USTR's Special 301 Report.

The agreement "will include strong standards for the protection and enforcement of IPR in the 21st century," it adds.

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