. The US approach to “Free Trade” agreements;
. The role of Minister Tim Groser;
. The desire of US negotiators to make NZ’s Pharmac a key obstacle to achieving a FTA between NZ and US.
I have been slowly catching up with events since early June. Hey!! I is getting older and the enthusiasm and energy resources are very limited; most at this stage directed toward photography rather than current events. Then there was a very enjoyable week that recharged most of the batteries – the ones with remaining functional cells anyway… Hoosoever!
It started – in part – with this article in Granny Herald on June 15
And in reference to United States concerns over the state drug-buying agency Pharmac, which the US sees as anti-competitive, Mr Groser said the New Zealand was not about to negotiate away its public health system.
He said Pharmac was not perfect "and we are always open to suggestions of change, but we are not about to adopt a health system, via a trade negotiation, that allocates resources according to capacity to pay."
Come forward to 4 July and the wording has already started to morph –
Trade Minister Tim Groser has heaped praise on the Government's drug-buying agency, Pharmac, but still refuses to rule out possible changes to the agency as part of future free trade deals.
Green Party co-leader Russel Norman said the free trade agreement between Australia and the US had crippled Australia's Pharmaceutical Benefit Scheme, its equivalent of Pharmac.
"They didn't abolish it or its fundamentals ... but they made changes to the way it operates."
The overall effect, he said, was higher costs that were either passed on to consumers or picked up by the Government.
The question is not “What was the effect?”, but “Why was it changed?” The answer has to be that the Aus government decided it was more important to have an FTA with the US and to disregard any cost that might be incurred as a consequence of the changes. Rather than just take Russel Norman’s word for it, a quick hunt around the SMH turns up this op-ed piece from last March –
Last year the Rudd government proudly announced it had cut a new and tougher deal with the drug companies, represented by Medicines Australia, which would save the taxpayer $1.9 billion over five years.
…a health economist at the University of Sydney, associate professor Philip Clarke, and his colleague Edmund Fitzgerald, argue the deal still leaves our off-patent and generic drug prices much higher than they are in most developed countries. They quote the example of statins, the cholesterol-lowering drugs, where the patents of the various types have expired or soon will. Statins account for about 16 per cent of the total cost of the pharmaceutical benefits scheme.
They surveyed the wholesale price of Simvastatin 40mg in 10 developed countries and found our price was the highest: 50 per cent more than the next highest country and more than four times greater than the average price.
The lowest price was in New Zealand, which stages competitive tenders between the drug companies. Its price is just a fraction of our wholesale price of $1 a tablet. And even in the US, chains such as Kmart Pharmacy sell that statin for $15 for 90 tablets.
Clarke and Fitzgerald estimate that, compared with prices in England and Canada, the Rudd government's deal with the industry lobby will cost taxpayers and consumers $1.7 billion more over its five-year term. And that's just for the statin group of drugs.
It bears repeating; given the results that Pharmac are achieving why should NZ “fix” something that is working? That question is especially a propos when the drug barons are pushing the US on the other side of the table.
And, from that too, comes the biggest of all –
Will Groser, and eventually the Jonkey himself, be able to put political reality before ideology?
Experience tells me not. The poodle, sorry Jonkey had his tummy well and truly scritched last week in his visit to the Oval Room. Now watch him return home and find all of the things that are "wrong" with Pharmac.