Trade Agreement May Undercut Importing of Inexpensive Drugs

[Guest guest]

Bush and Big Pharma want all countries to pay high

prices. Just a small sample of what these people have

in mind for the entire world. What they are doing to

the people of the US is planned for your future too.

F.

 

 

http://www.nytimes.com/2004/07/12/politics/12DRUGready.html?th

 

July 12, 2004

Trade Agreement May Undercut Importing of Inexpensive

Drugs

By ELIZABETH BECKER and ROBERT PEAR

 

WASHINGTON, July 11 — Congress is poised to approve an

international trade agreement that could have the

effect of thwarting a goal pursued by many lawmakers

of both parties: the import of inexpensive

prescription drugs to help millions of Americans

without health insurance.

 

The agreement, negotiated with Australia by the Bush

administration, would allow pharmaceutical companies

to prevent imports of drugs to the United States and

also to challenge decisions by Australia about what

drugs should be covered by the country's health plan,

the prices paid for them and how they can be used.

 

It represents the administration's model for

strengthening the protection of expensive brand-name

drugs in wealthy countries, where the biggest profits

can be made.

 

In negotiating the pact, the United States, for the

first time, challenged how a foreign industrialized

country operates its national health program to

provide inexpensive drugs to its own citizens.

Americans without insurance pay some of the world's

highest prices for brand-name prescription drugs, in

part because the United States does not have such a

plan.

 

Only in the last few weeks have lawmakers realized

that the proposed Australia trade agreement — the Bush

administration's first free trade agreement with a

developed country — could have major implications for

health policy and programs in the United States.

 

The debate over drug imports, an issue with immense

political appeal, has been raging for four years, with

little reference to the arcane details of trade

policy. Most trade agreements are so complex that

lawmakers rarely investigate all the provisions, which

typically cover such diverse areas as manufacturing,

tourism, insurance, agriculture and, increasingly,

pharmaceuticals.

 

Bush administration officials oppose legalizing

imports of inexpensive prescription drugs, citing

safety concerns. Instead, with strong backing from the

pharmaceutical industry, they have said they want to

raise the price of drugs overseas to spread the burden

of research and development that is borne

disproportionately by the United States.

 

Many Democrats, with the support of AARP, consumer

groups and a substantial number of Republicans, are

promoting legislation to lower drug costs by importing

less expensive medicines from Europe, Canada,

Australia, Japan and other countries where prices are

regulated through public health programs.

 

These two competing approaches represent very

different ways of helping Americans who typically pay

much more for brand-name prescription drugs than

people in the rest of the industrialized world.

 

Leaders in both houses of Congress hope to approve the

free trade agreement in the next week or two. Last

Thursday, the House Ways and Means Committee endorsed

the pact, which promises to increase American

manufacturing exports by as much as $2 billion a year

and preserve jobs here.

 

Health advocates and officials in developing countries

have intensely debated the effects of trade deals on

the ability of poor nations to provide inexpensive

generic drugs to their citizens, especially those with

AIDS.

 

But in Congress, the significance of the agreement for

health policy has generally been lost in the trade

debate.

 

The chief sponsor of the Senate bill, Senator Byron L.

Dorgan, Democrat of North Dakota, said: " This

administration opposes re-importation even to the

extent of writing barriers to it into its trade

agreements. I don't understand why our trade

ambassador is inserting this prohibition into trade

agreements before Congress settles the issue. "

 

Senator John McCain, an author of the drug-import

bill, sees the agreement with Australia as hampering

consumers' access to drugs from other countries. His

spokesman said the senator worried that " it only

protects powerful special interests. "

 

Gary C. Hufbauer, a senior analyst at the Institute

for International Economics, said " the Australia free

trade agreement is a skirmish in a larger war " over

how to reduce the huge difference in prices paid for

drugs in the United States and the rest of the

industrialized world.

 

Kevin Outterson, an associate law professor at West

Virginia University, agreed.

 

" The United States has put a marker down and is now

using trade agreements to tell countries how they can

reimburse their own citizens for prescription drugs, "

he said.

 

The United States does not import any significant

amount of low-cost prescription drugs from Australia,

in part because federal laws effectively prohibit such

imports. But a number of states are considering

imports from Australia and Canada, as a way to save

money, and American officials have made clear that the

Australia agreement sets a precedent they hope to

follow in negotiations with other countries.

 

Trade experts and the pharmaceutical industry offer no

assurance that drug prices will fall in the United

States if they rise abroad.

 

Representative Sander M. Levin of Michigan, the senior

Democrat on the panel's trade subcommittee, voted for

the agreement, which could help industries in his

state. But Mr. Levin said the trade pact would give a

potent weapon to opponents of the drug-import bill,

who could argue that " passing it would violate our

international obligations. "

 

Such violations could lead to trade sanctions costing

the United States and its exporters millions of

dollars.

 

One provision of the trade agreement with Australia

protects the right of patent owners, like drug

companies, to " prevent importation " of products on

which they own the patents. Mr. Dorgan's bill would

eliminate this right.

 

The trade pact is " almost completely inconsistent with

drug-import bills " that have broad support in

Congress, Mr. Levin said.

 

But Representative Bill Thomas, the California

Republican who is chairman of the Ways and Means

Committee, said, " The only workable procedure is to

write trade agreements according to current law. "

 

For years, drug companies have objected to Australia's

Pharmaceutical Benefits Scheme, under which government

officials decide which drugs to cover and how much to

pay for them. Before the government decides whether to

cover a drug, experts analyze its clinical benefits,

safety and " cost-effectiveness, " compared with other

treatments.

 

The trade pact would allow drug companies to challenge

decisions on coverage and payment.

 

Joseph M. Damond, an associate vice president of the

Pharmaceutical Research and Manufacturers of America,

said Australia's drug benefit system amounted to an

unfair trade practice.

 

" The solution is to get rid of these artificial price

controls in other developed countries and create real

marketplace incentives for innovation, " Mr. Damond

said.

 

While the trade pact has barely been noticed here, it

has touched off an impassioned national debate in

Australia, where the Parliament is also close to

approving it.

 

The Australian trade minister, Mark Vaile, promised

that " there is nothing in the free trade agreement

that would increase drug prices in Australia. "

 

But a recent report from a committee of the Australian

Parliament saw a serious possibility that " Australians

would pay more for certain medicines, " and that drug

companies would gain more leverage over government

decisions there.

 

Bush administration officials noted that the Trade Act

of 2002 said its negotiators should try to eliminate

price controls and other regulations that limit access

to foreign markets.

 

Dr. Mark B. McClellan, the former commissioner of food

and drugs now in charge of Medicare and Medicaid, said

last year that foreign price controls left American

consumers paying most of the cost of pharmaceutical

research and development, and that, he said, was

unacceptable.

 

Copyright 2004 The New York Times Company