Health, Medicines and the PBS: Risks posed by the Trans Pacific Partnership Agreement and likely outcomes for the PBS

Deborah Gleeson School of Public Health and Human Biosciences,

La Trobe University

11th Annual Future of the PBS Summit

Sydney 5-6th May, 2014

Outline

• Introduction to the TPP

• Overview of health risks associated with the TPP

• Trade agreements, patents and medicines

• US proposals for pharmaceuticals in the TPP

– Intellectual property

– Pharmaceutical pricing and reimbursement

– Investor-state dispute settlement

• Australia’s position

Trans Pacific Partnership Agreement (TPP)

Currently negotiating: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, Vietnam South Korea has formally expressed interest in joining

More countries may join: Thailand, The Philippines, Taiwan, etc

Trans Pacific Partnership Agreement (TPP)

• Negotiations began 2010

• 19 negotiating rounds completed

• Now in final stages

• Agenda set primarily by the US

• Set to become a free trade zone of the Asia Pacific – and beyond

• Negotiated in secret

• Limited public health input

Photos: TPP negotiating venue, San Diego, July 2012

Overview of health risks

Chapters/annexes presenting most overt risks to health care and

public health policy:

– Intellectual Property

– Transparency Chapter Annex on Healthcare Technologies

– Investment

– Technical Barriers to trade (TBT)

• Including annexes on wine and distilled spirits;

proprietary formulas (food labelling); pharmaceuticals

and medical devices

– State-Owned Enterprises (SOEs)

– Sanitary and Phytosanitary Measures (SPS)

– Regulatory coherence

Trade agreements and medicines

• TRIPS: minimum standards for intellectual property (IP); 20

year patents; but allowed flexibilities and safeguards

• Expanding IP rights in successive US free trade agreements

• More recently, attempts to influence pharmaceutical

coverage programs (AUSFTA, KORUS)

• 2011 US TPP proposals: more extreme provisions, in a trade

agreement with developing countries

TPP: 2011 US intellectual property (IP) proposals and access to medicines

• Patent protection for new forms, uses and methods of using existing drugs

• Patenting of diagnostic, therapeutic and surgical methods

• Removal of the public right to object to patents before they are granted

• Patent term extensions to compensate for patent and regulatory ‘delays’

• Extended scope and duration of data exclusivity

• Patent linkage – linking marketing approval for generics to patent status of originator

TPP: US intellectual property (IP) proposals and access to medicines

Mechanisms

• Extend duration of patents

• Make patents easier to obtain

• Enable medical procedures to be patented

• Make patents more difficult to challenge

• Delay market entry of generic medicines

Outcomes

• Higher costs for • governments • health services • consumers

• Most affected: • vulnerable groups • developing countries

Photo: Protests at the International AIDS Conference, Washington D.C. (Public Citizen)

TPP: Intellectual property – recent developments

• Consolidated draft of IP chapter leaked Nov 2013 shows:

– US continues to pursue most extreme IP provisions*

– Continued resistance from other countries

• Developments in Dec 2013

– USTR floats proposal for transition periods for developing countries

– Unconfirmed reports that some countries may have accepted some of the US proposals

TPP: 2011 US proposals affecting schemes for subsidising medicines & medical devices

Proposed annex to ‘Transparency’ Chapter seeks to introduce:

– Wording that precludes therapeutic

reference pricing

– New independent appeals processes

to challenge recommendations for

medicines listing and pricing

– Onerous obligations for disclosure and “transparency”

– Legalisation of direct-to-consumer advertising of medicines via the internet

Photo: Global Trade Watch

TPP: 2011 US proposals affecting schemes for subsidising medicines & medical devices For Australia and New Zealand, the US proposals would mean:

– Reduced government control over medicines policy

– New avenues for pharmaceutical industry influence over decision making

– Higher costs to government and consumers OR restrictions on access

– Sustainability of the PBS/PHARMAC threatened

For developing countries

– Restrictions on their ability to introduce such schemes in future

For the US

– NO IMPACT? – US seeking to carve out its own drug programs!

TPP: Transparency chapter annex – recent developments

Leaks in December 2013 indicate:

• Australia worked with US and Japan on revising the healthcare transparency annex

Media reports suggest:

• Revised text may be more similar to AUSFTA Annex 2-C than the previous drafts

* Risks still remain in attempting to import Annex 2-C provisions into the TPP context

Investor State Dispute Settlement

• Potential avenue for industry to challenge:

– unfavourable formulary listing and pricing decisions (depending on regulatory and judicial frameworks)

– reforms to pharmaceutical policies and regulatory processes

– decisions regarding patents (e.g. Eli Lilly v Canada)

• The existence of the mechanism in and of itself may be sufficient to undermine evidence-based formulary decision making

Former Australian Labor Government position

• Commitments in the Trade Policy Statement, April 2011:

– To ‘preserve the right of Australian governments to

make laws in important policy areas’

– Not to accept provisions that would ‘limit its capacity to

put health warnings or plain packaging requirements on

tobacco products or its ability to continue the

Pharmaceutical Benefits Scheme.’

Current Australian Government position

• Coalition’s Policy for Trade

“The Coalition will take a pragmatic approach to trade negotiations and will consult widely with industry bodies and associations to ensure that stakeholder priorities are taken into account.

This includes remaining open to utilising investor-state dispute settlement (ISDS) clauses as part of Australia’s negotiating position.” (p. 4)

• No mention of health, medicines, PBS or tobacco plain packaging (or any health, social or environmental issues)

• Recent statements

– “…we will not entertain anything that compromises the integrity of our health system or PBS” (Andrew Robb, 11 Dec 2013, http://www.theaustralian.com.au/national-affairs/tpp-no-threat-to-medicine/story-fn59niix-1226780157587 )

– Prepared to consider ISDS

• Blocked an order by the Senate to make the text public before signing

Australian civil society action on health issues

Letter to Tony Abbott, 3 October 2013

http://www.phaa.net.au/documents/131009Letter%20to%

20Tony%20Abbott%20TPPA.pdf

– PHAA, AFTINET, AMSA, AHHA, CHA, AHPA

Submission to DFAT, 1 October 2013 on IP and medicines

http://www.dfat.gov.au/fta/tpp/subs/tpp_sub_multi_NGO

_on_IP.pdf

– PHAA, AFTINET, AMSA, AFAO, MSF Australia, APN+

Concluding points: Likely impact on the PBS

• Three areas of the TPP could compromise access to affordable medicines: – Intellectual property chapter

– Healthcare “transparency” annex

– Investor-state dispute settlement mechanism

• Outcomes may be less extreme than early draft proposals suggest

• BUT threats remain, particularly: – IP proposals for data exclusivity (up to 12 years for biologics),

wider application of patent term extension, patent linkage

– Potential for transparency annex to be AUSFTA+ in content and/or effects

– ISDS mechanism available to pharmaceutical industry

Publications – TPP and medicines Gleeson, D. and Friel, S. (2013) Emerging threats to public health from regional trade

agreements. The Lancet, Early Online Publication, 1 March 2013. http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(13)60312-8/fulltext

Lopert, R. and Gleeson, D. (2013). The high price of “free” trade: US trade agreements and access to medicines. Journal of Law, Medicine and Ethics, 41(1): 199-223. http://onlinelibrary.wiley.com/doi/10.1111/jlme.12014/pdf

Gleeson, D, Lopert, R, and Reid, P. (2013) How the Trans Pacific Partnership Agreement could undermine PHARMAC and threaten access to affordable medicines and health equity in New Zealand. Health Policy (published online 30 August 2013). http://www.sciencedirect.com/science/article/pii/S0168851013002108

Gleeson, D.H., Tienhaara, K.S. and Faunce, T.A. (2012) Challenges to Australia’s national health policy from trade and investment agreements. Med J. Aust 196(5): 354-356. https://www.mja.com.au/journal/2012/196/5/challenges-australia-s-national-health-policy-trade-and-investment-agreements

Gleeson, D. and Legge, D. (2012) Strengthening public health engagement in trade policy: PHAA’s policy on Trade Agreements and Health. Australian and New Zealand Journal of Public Health, 36(1); 7-9. http://onlinelibrary.wiley.com/doi/10.1111/j.1753-6405.2012.00823.x/abstract

Contact details

Dr Deborah Gleeson

Lecturer

School of Public Health and Human Biosciences

La Trobe University VIC 3086

Ph. +61 3 9479 3262

Email: d.gleeson@latrobe.edu.au

Twitter: @DrDebGleeson