Senator McLUCAS (5:17 PM) —I rise today in defence of the Pharmaceutical Benefits Scheme and in defence of those Australians—particularly low-income earners, families, pensioners and the chronically ill—whose quality of life relies on affordable quality medicines. Labor's decision to protect the PBS reflects Labor's determination to defend the health of all Australians—a position that has been strongly supported by the AMA. In my view, the Prime Minister needs to accept the advice of the AMA. The doctors who actually prescribe medicines to patients in this country last night came out resoundingly in favour of Labor's leadership on the PBS with respect to the free trade agreement.

Let us look at the issue of leadership. The Prime Minister is on the public record stating that Mr Mark Latham and Labor have in some way acted to stall the free trade agreement process; yet it is the Prime Minister who is now standing behind giant US pharmaceutical corporations and playing brinkmanship with an agreement that was signed by the US President only in the past 24 hours. The Senate Select Committee on the Free Trade Agreement between Australia and the United States of America, established as a result of Labor's leadership, has uncovered a range of issues associated with the FTA's supposedly intended commitment to increase transparency when it comes to the PBS listing process.

These issues are now the subject of important community debate at an appropriate time. There has been no delay. There has been no obfuscation. There has been measured consideration in the public interest. Issues of real public concern have been identified with respect to Australian content and with respect to pharmaceuticals. Labor has proposed sensible conditiona1 amendments which will protect our community. For, as the interim report of the Senate select committee spells out, the sustainability of the PBS and the future of drug prices in Australia is an issue of interest not just to one sector of the Australian economy or community; it is an issue that directly impacts on all Australians. Should the AUSFTA result in higher prices for pharmaceuticals, Australians would bear the cost either indirectly as increasing tax revenue is needed to support the PBS or directly through higher out-of-pocket expenses for non-listed drugs.

Responsible leadership has been demonstrated—but not by the Howard government. The Howard government are playing political brinkmanship with the free trade agreement and the PBS. By contrast, Mr Latham and Labor have shown the capacity appropriately to define our trading relationship with the largest economy in the world. Mr Latham made a very salient point on John Laws's radio program this morning. He said:

He went on:

And let us not forget that the Minister for Health and Ageing, Mr Abbott, went on the record on the Sunday Sunrise program on 2 November last year saying that the PBS was non-negotiable as far as he was concerned. Mr Abbott said:

And I agree with him. He went on, though:

He concluded:

So now we have a situation that cuts to the heart of whether Mr Howard and Mr Abbott have, in fact, been honest with the Australian community. What Labor is calling for in terms of protecting the sustainability of the PBS and preventing rises in the costs of medicines is a stop to what is known as evergreening—drug companies taking legal action to prolong the term of their patent and thus avoid the introduction of cheaper generics onto the market.

The AMA, like the Labor Party, sees risks for the PBS in the FTA agreement as it currently stands. Dr Mukesh Haikerwal said yesterday:

The AMA has also unequivocally backed Labor's other proposals to protect the PBS: the publication of most information on the Internet, requiring each successful use of the independent review mechanism to be reported to parliament in a ministerial statement, annual Productivity Commission reports on the impact of the free trade agreement on pharmaceutical prices, and a commitment to the principle of universal access to affordable medicines in the terms of reference for the medicines working group.

Dr Haikerwal knows Labor's proposed changes are sensible ones which will give effect to the government's assurances that the FTA will not harm Australia's internationally admired PBS. In fact, he asserts:

Little wonder, when we examine just how powerful and how profitable US drug companies are. On July 15 this year, the influential New York Review of Books published an article by Marcia Angell called `The Truth About the Drug Companies'. It clearly shows that big pharma is not only profitable; it is really profitable. In 2002, the combined profits for the 10 drug companies on the Fortune500 list—which were $35.9 billion—were more than the profits for all the other 490 businesses put together, which were $33.7 billion. I should point out that this data was drawn from the Fortune 500 list of April 7, 2003 and the drug companies' own annual reports. We are not talking about an industry short of change which they can use to take matters through any court and to prolong applications—as we know occurs very regularly in the United States.

Australia is no match for the lobbying and legal efforts of the drug corporations. When our doctors believe we need to safeguard the PBS, we in this chamber—and those in the other one—are obliged to believe them. The pharmaceutical companies spend over twice as much on marketing as they do on research and development. It is financially in their interests, and in their shareholders' interests, to delay the introduction of generics into the community. The greed and aggression of the pharmaceutical manufacturers is not limited to American firms; it applies just as much to the Swiss and German ones. Anyone who follows the proceedings of the World Health Organisation would know that. Firms such as Bayer have not covered themselves with glory in their dealings with the Third World. Greed knows no nationality, and profiteering deserves no protection.

Mr Abbott, on Lateline last night, could not confirm the cost to taxpayers of the current PBS arrangements. He therefore cannot guarantee the sustainability of the PBS, despite his past assurances that the PBS is both `non-negotiable' and `not a trade instrument'. The Prime Minister, Mr Abbott and the Howard government are determined to play political brinkmanship with the PBS, the FTA and—by implication—the health of our community. I say to the government: the PBS is too important to be used in an election context as a political football. I remind senators that access to affordable quality medicine is often, in fact, a matter of life and death. The government stands condemned for refusing to provide the Australian people and the medical profession with a guarantee of the protection of the PBS through Labor's amendment to the FTA-enabling legislation.