New Zealand appears to be headed straight towards its first confrontation with the United States over the TPP since the agreement was signed in February.
The US “big pharma” drug company lobby is mounting an intense campaign against the way the New Zealand Government is interpreting sections of the agreement related to drug purchases by Pharmac.
Some US reports say that unless New Zealand gives way on the issue, the US congress may not ratify the agreement.
Meanwhile the New Zealand lobby group for the drug companies says that if New Zealasnd doesn’t give way the companies will not allow distribution of their drugs in this country.
A United States delegation from the US Trade Representative’s office is expected in Wellington within the next few days.
The chair of Medicines New Zealand, the drug company lobby group, Heather Roy, told POLITIK she expected the Pharmac issue would be “fairly near the top” of the delegation’s agenda when they were here.
The authoritative “World Trade Online” quoted Representative Michael Froman as saying brand name pharmaceutical companies were already taking issue with certain aspects of New Zealand’s proposals for implanting the TPP.
But he said the administration had not yet decided how it would address complaints by Members of Congress about the way countries were proposing to implement the TPP proposals on biologic medicines.
“World Trade Online said: “He (Froman) said the administration is still developing ideas on how to resolve complaints by Congressional Republicans that the TPP’s required market exclusivity for biologic drugs is too short.”
It is New Zealand’s interpretation about biologic drugs that is at the heart of the dispute.
In contrast to conventional medications which are chemically based, biologics are biologically based medicines produced from a variety of natural sources – human, animal, or microorganism – and may be produced by biotechnology methods and other cutting-edge technologies.
Biologics are the new “thing” in the $US100 billion a year anti-cancer drug market.
The controversial Keytruda anti-melanoma drug is a biologic but it costs $US150,000 a year.
It is those high costs that New Zealand is anxious to avoid which is why it wants to see the new biologic drugs exposed to competing for manufacturing as soon as possible.
There are two options for dealing with biologics in the TPP.
One would grant the drug companies eight years of so-called “data exclusivity” on their new drugs.
The other would allow five years data “along with other measures” including recognising that market circumstances also contribute to the required effective market protection, to deliver a comparable outcome in the market.
“These measures and circumstances could include regulatory settings, patents and the time it takes for follow-on medicines to become established in the market.”
The United States pharmaceutical industry newsletter “Pharma Dispatch” last Friday called the New Zealand proposals “too clever by half”.
Ms Roy told POLITIK that the way New Zealand was interpreting the TPP gave the drug companies no protection at all.
“They need to have their intellectual property recognised,” she said.
“What we will see is companies just not bothering about registering their drugs in New Zealand so even if people wanted them and could afford them they wouldn’t have access to them.”
The row comes on the eve of Parliament’s Foreign Affairs, Defence and Trade Committee wrapping up its examination of the TPP.
The last submissions are expected to be heard this week with the Committee ready to report back to Parliament possibly as early as next week.