[Ip-health] Guardian: Medicines forecast to cost taxpayers millions more in secret TPP trade deal

Thiru Balasubramaniam thiru at keionline.org
Mon Feb 23 05:46:38 PST 2015


Medicines forecast to cost taxpayers millions more in secret TPP trade deal

Leaked draft of Trans-Pacific Partnership Agreement includes patenting
standards that would delay cheaper drugs, Medical Journal of Australia

Medicines will cost Australian taxpayers hundreds of millions of dollars
more each year if measures in a leaked draft of the secretive Trans-Pacific
Partnership Agreement are implemented, a new report says.

The most recently leaked draft of the international trade deal includes
provisions proposed by the US that would further protect the monopoly
pharmaceutical companies hold over drugs, and delay cheaper versions from
entering the market, the Medical Journal of Australia report says.

The draft agreement sets in stone low patenting standards which allow drug
companies to practice “evergreening” – when a pharmaceutical company tries
to maintain its market monopoly on a drug for longer by applying for extra

This prevents other companies entering the market with cheaper versions of
the same medicine and imposes large and unnecessary costs on the health
system and consumers, the report, published on Monday, said.

The report’s authors gave the example of Efexor, produced by Pfizer, an
antidepressant which had major side effects. Pfizer subsequently developed
slow-release versions of the drug, called Efexor-XR, which significantly
reduced its side-effects and which became much more widely prescribed than

Pfizer claimed the slow-release versions were different enough from the
original to be granted new patents. Its claim was rejected, but the legal
battle delayed cheaper generic versions of the drug from entering the
market for two and half years.

“By the time this patent was eventually declared invalid, the delay to the
generic market had cost taxpayers $209m,” the authors wrote.

“The three greatest concerns for Australia in the recent draft include
provisions that would further entrench secondary patenting and
evergreening, lock in extensions to patent terms, and extend monopoly
rights over clinical trial data for certain medicines.”

The lead author of the report and a public health lecturer at La Trobe
University, Dr Deborah Gleeson, said the consequence was the extra cost of
medicines could get passed on to the consumer through increasing the
co-payment on government-subsidised drugs, or by restricting access to
expensive drugs to those who could afford them.

“For example, a new hepatitis drug is available now which is much more
effective than previous drugs, but a 12-week course costs $84,000 and for
that reason, the drug hasn’t yet been subsidised by the government through
the Pharmaceutical Benefits Scheme [PBS],” Gleeson said.

“In future we could see more expensive drugs like this not made widely
available to Australians because of an expenditure blowout, and delays
through evergreening will delay cheaper versions from entering the market.”

Provisions in the draft trade agreement would further entrench and extend
costly monopolies, with serious implications for the budget and the
sustainability of the PBS, she said.

A co-author of the report and patent expert from the Australian National
University, Dr Hazel Moir, said powerful lobbying by drug companies meant
there had been little resistance from the Australian government on patents.

Australia already granted 20-year patents, Moir said, more than enough time
for a drug company to recoup the costs of producing the drug and to make a
substantial profit.

“The patent system has been made complex, which is a standard way to
disguise rorts and rent-seeking, which means profiting beyond what you’d
get in a normal commercial market,” Moir said.

“Patent systems are also off-budget, which means they are never reviewed,
and in fact I have never found an economic review of any patent system in
the world.”

The government should urgently reconsider signing the trade deal, she said,
which would further entrench patent laws.

Evergreening could delay generic competition for up to 20 years, the report
found. In 1998 five-year delays were introduced allowing patents to be
extended. The cost of these extensions to the PBS in 2012-13 was estimated
at $480m in the long-term, the report said.

The secretive provisions within the Trans-Pacific Partnership agreement
have other health professionals concerned. Earlier this year, health
experts from around the world wrote to the Lancet
for greater transparency around the trade deal.

“Although USA-based industry advisers have been granted privileged access
to negotiating documents, health agencies have been forced to rely on leaks
for information,” the signatories wrote.

“Rising medicine costs would disproportionately affect already vulnerable
populations, obstructing efforts to improve health equity within and
between countries.”

A spokeswoman for the Department of Health
<http://www.theguardian.com/society/health> said the government could not
comment on the accuracy of the leaked draft documents referred to in the

But Australia was taking a clear position in the TPP negotiations that it
would not accept an outcome that would adversely affect the Pharmaceutical
Benefits Scheme or Australia’s health system more generally, she said.

“As is normal practice in trade negotiations, parties have agreed to keep
documents related to the negotiations, including text, confidential,” she

“The substance and text of the agreement are the subject of ongoing
negotiations, and neither has been settled yet; both are changing through
the negotiation process. The text has no status until all parties agree to

The TPP negotiations were at an advanced stage, she said, “with only the
most difficult issues yet to be resolved”.

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