While Parliament’s Foreign Affairs, Defence and Trade Select Committee was yesterday yet again grinding its way through repetitive submissions opposing the TPP  the committee’s key members were elsewhere putting the finishing touches to the Committee report on the hearings.

Notably, absent from the hearings yesterday was the Committee Chair, Mark Mitchell and National’s Junior Whip, Jami-Lee Ross.

Labour’s David Shearer and David Clark were both replaced by Megan Woods but they were overseas.

Sitting in for Mr Mitchell was National’s Lindsey Tisch rather than the deputy chair, Shane Reti.

It is expected that the Committee will meet on Monday to debate the final report which is certain to include a minority opposition report from Labour.

That, however, points to the report making its way back to Parliament, very possibly on Tuesday.

Yet even yesterday big questions were being asked about the agreement.

The New Zealand Medical Association had a series of questions relating to the ISDS procedures and also Pharmac.

The questions were substantial enough for the acting chair, Mr Tisch, to undertake that he would get answers from officials on them.

The Association’s Chair, Stephen Child, said he was concerned about the future for biologic drugs.


These are the drugs that Medicines New Zealand, representing the American pharmaceutical companies, has threatened to withhold from New Zealand if the Government does stiffen up the intellectual property protection for them.

Medicines New Zealand says the Government is not interpreting the TPP correctly.

Most of the new cancer treatments are biologics and Dr Child said the problem was that they were very expensive drugs.

“it is the fastest growing market,” he said.

“More than 40% of new pharmaceuticals produced today are biologics.

“It is the future.

“It is going to be the vast majority of health care that we provide.”

Dr Child said that conventional chemical drugs were relatively straightforward to produce.

“You sit down in a chemistry lab and you put some chemicals together and bang, you’ve made a chemical.

But for a biologic you need to get cells of say a hamster and then get the hamster to produce what you want it to produce.

“And then you need to extract it and get the extraction just right and then turn it into some kind that is effective.

“So it’s the process you are trying to protect and trying to have intellectual property for.

“But it’s where the cost is.”

Generic drugs can relatively easily be replicated by companies other than the one which invented them. These replica drugs are called generics and Pharmac estimates that nearly half of all the medicines it subsidises (by volume) are generics. Yet they account for only about 20% of all Pharmac’s costs.

The equivalent of generics with biologic drugs are called “biosimilar’” drugs and are similar to, but not an exact copy of, the original.

Under the TPP rules being implemented in New Zealand, biologic drug makers will have an absolute monopoly on their drugs from five years after they enter the market “ other measures to provide additional effective market protection” 

t is the potential ambiguity in that requirement which has angered the pharmaceutical companies.

And Dr Child said it also worried him.

“The wording of that seems to us to be a little bit confusing,” he said.

“We’re not quite sure what the “other measures” would mean.

“And therefore, we are not sure of the certainty on the data exclusivity.”

The potential of the biosimilar drugs to save costs is huge – though possibly not as huge as generics.

Gary Lyman,  co-director of the Hutchinson Institute for Cancer Outcomes Research in Seattle says, generics cut the cost of brand-name drugs by 60% to 80%.

“For the biosimilar products, ”the projections are perhaps a 20% to 30% reduction” over the cost of the original biologics,” he says.

Dr Child said that because of the complexity of the production process there was a huge cost in producing biologic drugs at present.

“If you can’t get access to the data on how to produce them, then the longer the companies can withhold that then the longer it will be before a biosimilar or a cheaper product is on the market.

“So you are extending the monopoly for the production of the most expensive but promising treatments that we offer.”

Dr Child had other concerns — he was worried about the potential for future legal actions either by the ISDS process or through state to state action which might prevent New Zealand from undertaking some public health measures.

He said that though the TPP “carved out” actions to maintain public health and thus protected them from ISDS actions, the agreement was not so clear on future actions.

“It is potentially the future ones that may be introduced; minimum pricing for alcohol, let’s say; the hours of sale of alcohol; the density of alcohol; sugar tax.

“The question is are they or aren’t they fully protected.”

Mr Tisch said Mr Dr Child had raised questions “which I think we need answers to” and undertook to put the questions to the Committee’s MFAT advisors.

But the real question might be whether the submission was too late in the day to have any influence either on the Committee or the TPP deliberations as a whole.