Last Thursday, WikiLeaks released more of the negotiating text of the Transpacific Partnership Agreement (TPPA). The section released dealt with proposals to harmonise the regulatory regimes for pharmaceuticals between member states, the details of which have aggravated concerns that agencies such as Pharmac will have less power to secure the best deals for the New Zealand healthcare system. In a follow-up to his recent article on this issue, Content Contributor Jack Garden analyses recent developments.
It has been a messy week for TPPA negotiators. The deal seems as distant as ever, with negotiations struck by a document leak, and by an American political impasse that means the deadline for the agreement may have to be pushed back several more years.
The document release came from WikiLeaks, which has published leaked versions of many sections of the TPPA. The website released a confidential draft negotiating text that is just a small part of the agreement: an annex detailing “Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices”. Its stated purpose is to harmonise countries’ regulatory regimes to encourage research and allow consumers to access new health technologies more quickly, which seems an attractive goal.
However, opponents contend that this apparently benign stated purpose conceals the real aim of the Annex. In her analysis of the document, Professor Jane Kelsey claims the Annex will “erode the processes and decisions” of agencies such as Pharmac and strengthen the hand of pharmaceutical companies during negotiations for medicines, driving up prices.
This erosion would occur through the use clauses such as Paragraph X.2, “Procedural Fairness”. This section would require Pharmac to comprehensively disclose all procedural rules and reasons for their decisions, and create an independent appeal body to challenge the agency when its expert panels decline to fund a medicine. Critics believe this paragraph would allow pharmaceutical companies to bombard Pharmac with constant litigation, and harm its negotiating position with drug companies. Any new protection granted to pharmaceutical manufacturers will likely lead to their success in negotiations in the long term, and drive up the cost of funding New Zealand’s pharmaceutical schedule.
That said, making Pharmac’s expert panel decisions transparent and reviewable seems reasonable. Granting pharmaceutical companies the means to challenge decisions that might be worth tens of millions of dollars seems fair considering the costs associated with the development of medicines, and if a balanced review mechanism can be created it may be possible to achieve better outcomes for both companies and consumers. But it is significant that bracketed text indicates these paragraphs remain fiercely contested by negotiators. The Annex is clearly seen as an important battleground in the agreement which could have significant financial repercussions.
This discussion may be become a moot point if the agreement fails to materialise. The political position of the TPPA seems more precarious than ever. In Washington, House Democrats have derailed another attempt at fast-track authority, a statutory process by which the Congress gives the President extensive negotiating power in concluding international agreements. In the absence of that authority, New Zealand Trade Minister Tim Groser has said, the deal is likely to be delayed for years, according to Trade Minister Tim Groser. With the 2016 US presidential and legislative elections on the horizon, support for such a deal from Democrats is thin and this may sink the entire TPPA.
TPPA negotiations remain as chaotic and murky as ever. With shaky support for the deal at home and abroad, the contested economic and social impacts might go no further than the arguments of pundits on both sides of the debate.
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