A new generation of multilateral and bilateral trade agreements is likely to significantly threaten access and cost of healthcare, and limit signatory Governments sovereignty to prioritise health care policy to protect and improve the health of citizens.1-5 The Trans-Pacific Partnership Agreement (TPPA), a Pacific Rim regional trade agreement involving 12 countries — including New Zealand, Australia and the US — is one such agreement, and it has the potential to significantly alter the domestic environment for health policy-making.
The TPPA is said to comprise approximately 29 chapters, which include legal rules covering issues such as investor protection, intellectual property rules and regulatory coherence along with more traditional trade issues such as the removal of tariffs. A number of recent reviews based on leaked negotiating documents conclude that there are legitimate concerns about the potential impact of the TPPA in relation to ensuring equitable access to medicines and public health regulation, including tobacco, food and alcohol regulation.1,2
It is unacceptable that given the potential significant impact on health and healthcare, the ongoing TPPA and other similar trade agreements negotiations are held in strict secrecy, and that few details about these negotiations are publicly available.1-3 What is known is based on leaked documents.1-5 It is also clear that many of the impacts will be differentially distributed. People in low income countries and disadvantaged groups within participant countries including those of low socioeconomic status, Indigenous people, those with chronic physical and illnesses, and disabilities are likely to be disproportionately affected.2,4
Through the TPPA, the US is seeking to eliminate therapeutic reference pricing, introduce appeals processes for pharmaceutical companies to challenge formulary listing and pricing decisions, and introduce onerous disclosure and “transparency” provisions that facilitate industry involvement in decision-making around coverage and pricing of medicines (and medical devices), which will inevitably lead to a significant increase in the cost of medications and delay market entry of generic drugs.1,5
The highly controversial investor-state dispute settlement (ISDS) mechanism in the investment chapter of the TPPA allows foreign corporations to sue governments for compensation (for awards that often amount to hundreds of millions of dollars) in international tribunals. For example Eli Lilly and Company, is currently using ISDS provisions under the North American Free Trade Agreement (NAFTA) to seek compensation of $500 million dollars from the Canadian Government in response to a patent ruling made in a Canadian federal court.6 Philip Morris Asia is using a similar clause in an investment treaty between Hong Kong and Australia to sue the Australian Government over the introduction of tobacco plain packaging.4 The uncertainty and legal costs associated with ISDS provisions will have a “chilling effect” on governments considering health and environmental protection policies that industry vested interests are likely to contest. This may have already contributed to delays in the introduction of plain packaging tobacco laws in New Zealand.4 ISDS provisions will also reduce the ability of Governments to maintain and improve regulatory controls on the sales and marketing of drugs by transnational pharmaceutical companies.
Referring to ISDS mechanism in general, the Director General of the World Health Organization (WHO) stated earlier this year:
“One particularly disturbing trend is the use of foreign investment agreements to handcuff governments and restrict their policy space… In my view, something is fundamentally wrong in this world when a corporation can challenge government policies introduced to protect the public from a product that kills” 7
Given recent landmark legal cases by the US Department of Justice, which have highlighted the extent to which the largest drug companies have repeatedly and systematically engaged in illegal activities to promote drug sales, it seems particularly unwise to restrict Governments regulatory controls. Common recent crimes have included illegal marketing of medications for off-label uses, misrepresentation of research results, withholding data on harms, and Medicaid and Medicare Fraud.1
Increasing public concern with the TPPA has led to thousands of New Zealanders recently marching across the country in a national day of protest.8 In addition the New Zealand Medical Association and a number of other health sector organizations have called for an independent assessment of the impact of the TPPA on the NZ health system and the ability to achieve legitimate public policy objectives, such as the protection of public health, safety and the environment.9
In considering these new generation trade agreements it may be that we are standing at a crucial cross roads, where the wrong turn will affect not only access and cost of healthcare, but most crucially our Governments sovereignty to prioritise health care policy to protect and improve the health of citizens for generations to come. When the stakes are seemingly this high and negotiations so exclusive, concerted international action to express concern and to access information about the health and other implications in the negotiating documents needs to take place.3
- Monasterio, E., & Gleeson, D. (2013). Pharmaceutical industry behaviour and the Trans Pacific Partnership Agreement. The New Zealand medical journal,127(1389), 6-12.
- Monasterio, E., & Gleeson, D. (2014). The Trans Pacific Partnership Agreement: Exacerbation of inequality for patients with serious mental illness. Australian and New Zealand Journal of Psychiatry, 0004867414557679.
- The Transatlantic Trade and Investment Partnership and UK healthcare
- Hirono K, Gleeson D, Haigh F, et al. (2014) The Trans Pacific Partnership Agreement and the Health of Australians: A Policy Brief. Centre for Health Equity Training, Research and Evaluation, Centre for Primary Health Care and Equity, UNSW, Australia.
- Gleeson D, Lopert R, Reid P. (2013) How the Trans Pacific Partnership Agreement could undermine PHARMAC and threaten access to affordable medicines and health equity in New Zealand. Health Policy 112: 227-233.
- Baker BK. Threat of pharmaceutical-related IP investment rights in the Trans Pacific Partnership Agreement: An Eli Lilly v Canada case study. Investment Treaty News, 20 September 2013.
- Chan M. Health has an obligatory place on any post-2015 agenda. Director-General of the World Health Organization address to the Sixty-seventh World Health Assembly, Geneva, Switzerland, 19 May 2014.
- Marches against TPPA trade deal
- NZMA supports call for TPPA assessment