E-drug: Australian drugs scheme threatens free-trade talks
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Lancet 2004; 363(9405): 922 (24 January)
(Cpoied as feir use)
Australian drugs scheme threatens free-trade talks
Australia's Pharmaceutical Benefits Scheme (PBS) is causing problems for
US-Australia free-trade talks, which are underway in Washington this week.
The Australian government uses PBS to bulk-buy medicines and so drive down
prescription costs. The scheme covers 159 million prescriptions a year at a
cost of AUS$4�6 billion (US$3�5 billion), but it is seen as protectionist by
US pharmaceuticals lobbyists.
The Pharmaceuticals Research and Manufacturers Association (PhRMA), which
represents the major US pharmaceutical and biotech research companies,
claims that PBS restricts drug companies' access to the Australian market.
In its submission to US trade representative Robert Zoellick's annual report
on foreign trade barriers, PhRMA singled out PBS as an important issue to be
addressed during free-trade talks.
"PBS has adopted a series of increasingly draconian regulatory and budgetary
cost-control schemes", the submission stated. Pressure from the US
pharmaceuticals and farming industries has already delayed a planned signing
of the trade agreement, scheduled for before Christmas.
Australian prime minister John Howard, under fire over planned reforms to
the country's Medicare public health system, has pledged to avoid any deal
which would increase prescription costs.
"There's no way we're going to bargain away the enormous advantage that
Australian consumers now enjoy as a result of PBS", he told ABC radio.
However, several analysts believe that change is most likely to take place
through reforms of Australia's intellectual property laws to restrict the
availability of generics.
US negotiators are understood to be particularly keen to limit
"springboarding", through which manufacturers of generic drugs can use
patent-holders' safety data to obtain regulatory approval.
Richard Denniss, of the Australia Institute, claims such patent changes
could cost Australian consumers up to AUS$1 billion (US$0�8 billion).
"Without generics the PBS isn't very useful at all", he said. "If you can
manage to keep the generics out of the market, the PBS is basically a
wonderful system for comparing one expensive drug with another."
David Fickling
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