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Thursday, 12 August 2004
Page: 26370


Senator HARRIS (4:25 PM) —I will very briefly encapsulate the points I was making earlier in relation to Labor amendments (1) and (2) on sheet 4371. I reiterate that One Nation will support those amendments, but I clearly place on the record that the reason for supporting them is that they do, to a small extent, go towards resolving some of the glaring problems that are quite evident, particularly in annex 2-C, in relation to pharmaceuticals. Earlier today I was making some comparisons from a document from the Executive Office of the President of the United States headed `U.S.-Australia Free Trade Agreement—Questions and Answers About Pharmaceuticals' dealing with what guidance congress received about pharmaceutical trade issues. Contained within those questions and answers, there is one paramount issue in relation to how the US have been dealing with international pharmaceutical issues in previous trade agreements. The document says:

Over the past few decades, market access and pricing issues also have been part of the U.S. trade dialogue with Canada, Japan, Korea and China.

It then goes on to say:

What are the key provisions regarding pharmaceuticals in the U.S.-Australia FTA?

This is where the paramount difference is very clear. The document says:

Based on new guidance from Congress in the Trade Act of 2002, the Australia FTA was the first FTA to include specific provisions dealing with non-tariff market access issues related to pharmaceuticals.

But the profound statement is the closing sentence in this paragraph, which says:

These provisions are based in large part on the Australian government's own studies.

So here we have a document directly from the Office of the United States Trade Representative clearly setting out that this US-Australia free trade agreement is the first agreement that carries a section in it relating to pharmaceutical benefits and that, at large, these provisions are based on the Australian government's own studies. The document says:

These provisions are based in large part on the Australian government's own studies.

The next question posed is:

Does the U.S.-Australia FTA block imports of patented pharmaceuticals?

The answer says:

The FTA imposes no new barriers to imports but reflects current U.S. law, which gives any patent holder the right to control sales (including by contract) of its product in the United States. This right, a core principle of U.S. Patent law for more than 100 years, applies to all U.S. patents, not just pharmaceuticals.

In the American document they are saying very clearly that their patent laws have been in place for more than 100 years and not just for pharmaceuticals. There is a further question:

Does the U.S.-Australia FTA prevent Congress from passing drug re-importation legislation?

The answer is:

No. The FTA reflects current law in the United States. Nothing in this FTA or any other trade agreement prevents Congress from changing U.S. law in the future. Even if a dispute settlement panel found the U.S. acted inconsistently with the FTA, it could not require Congress to amend the law. Importantly, provisions in the FTA protecting patent holders' rights only apply to products under patent. This provision would have no impact on importation of non-patented (generic) prescription drugs.

I wish to make this point absolutely clear: there is a vast difference between the US parliamentary process and the one that we have in Australia.

Yesterday I asked Senator Hill if he would be able to give a guarantee that no Australians' rights prior to the implementation of the changes to these 10 bills would suffer any impediment as a result of those changes. Senator Hill could not give that assurance. Yet we have here a document from the Office of the United States Trade Representative clearly saying that the free trade agreement in America does not bind their congress. They go even further to say that even if a dispute settlement panel found that the US had acted inconsistently with the free trade agreement it could not require congress to amend the law. That is absolutely astounding. These are the differences between what applies in America and what applies here in Australia. Interestingly, the next question is:

Will the U.S.-Australia FTA raise the price of medicines in Australia?

The answer is intriguing:

The Government of Australia retains the right and authority to set the prices of medicine under the PBS. The provisions of the pharmaceutical annex to the Agreement will help improve market access for pharmaceuticals in Australia by improving the transparency and accountability of Australia's PBS system.

There is something missing. We have a question that says:

Will the U.S.-Australia FTA raise the price of medicines in Australia?

That is the question. Was it answered? No, of course it was not. There is nothing in that response from America that says that in their interpretation of the free trade agreement there will not be an increase in pharmaceuticals. The next question is:

Are any existing or future U.S. health care programs subject to the pharmaceutical provisions of the U.S.-Australia FTA?

The answer is:

USTR has worked closely with all relevant U.S. agencies to ensure the FTA does not require any changes to U.S. health care programs.

It is as clear as that. We are not going to affect any of their health programs. The answer goes on:

Procurement of pharmaceutical products by the Veterans Administration (VA) and the Department of Defense (DoD) is excluded from the Pharmaceutical Annex of the agreement ...

In America, two of their major government departments are not even subject to the agreement. A very relevant question for Senator Hill is: has the Australian government excluded any of our pharmaceutical purchases from the agreement? They go on to say:

Procurement of pharmaceutical products by state Medicaid agencies is excluded because coverage and reimbursement decisions are made by state officials, not by federal health authorities.

Here is another question for Senator Hill: are the pharmaceuticals that our state governments procure in Australia excluded from the agreement? They are in America. This is the document from their trade representative. If you like, I will seek leave afterwards to table it. It says very clearly:

Procurement of pharmaceutical products by state Medicaid agencies is excluded because coverage and reimbursement decisions are made by state officials, not by federal health authorities.

It is a clear out for every state in America to protect their purchases of pharmaceuticals and put them outside the free trade agreement.

I asked a question of Senator Hill in question time on 3 August relating specifically to the commitments that Australia had made in the exchange of letters on the PBS. In that answer Senator Hill made reference to paragraph 3, where it says:

3. In order to make its process of selection, listing, and pricing of pharmaceuticals and indications under its PBS more expeditious, Australia

shall:

(a) reduce the time ... ;

(b) introduce procedures for more frequent revisions ... ; and

(c) make available expedited procedures for processing of applications ...

The fourth paragraph was the one I put to Senator Hill:

Australia shall provide opportunities to apply for an adjustment to the price of a pharmaceutical under the PBS.

In his answer I do not believe Senator Hill addressed the issue of paragraph 4, because it clearly says it is a commitment by Australia under this agreement to provide opportunities to apply for an adjustment to the price of a pharmaceutical under Australia's Pharmaceutical Benefits Scheme. It is there. It is absolutely clear. The Americans have protected the purchasing of their pharmaceuticals by their state governments and two of their major agencies and put them outside of the agreement. My question to the minister is: why hasn't Australia done the same?