Zoellick Presses Bad Deals that Kill People

[Guest guest]

Zoellick Vows Continued Effort On Overseas Drug Pricing

CongressDaily pm

Vaughan

July 9, 2004

U.S. Trade Representative Zoellick said Thursday his office will

continue to press trading partners to alter their national drug

reimbursement systems to give U.S. drug companies more say in approval

and pricing decisions, and ensure that the research costs borne by U.S.

companies are factored into how drugs are priced overseas. Zoellick,

working closely with House Speaker Hastert and U.S. drug manufacturers,

succeeded in negotiating first-of-their kind provisions in the

U.S.-Australia free trade agreement that set up an independent process

under which drug companies can challenge decisions made under

Australia's pharmaceutical benefits system. The agreement also prevents

importation into the United States of patented drugs from Australia

without the permission of the patent holder. " Our core objectives are

things that most Americans across the political spectrum find as common

sense, which is due process, transparency in the system, rewarding

innovation and R & D, independent review processes. Those are things that

have been built into the U.S. system, " Zoellick said in an interview

with CongressDaily.

But Zoellick rejected the notion of negotiating rules at the World Trade

Organization that would govern drug reimbursement programs, saying such

rules would be impractical because various countries' systems differ

widely. " You have to customize the discussions because each country is

very different, " Zoellick said. He noted, however, work is continuing at

WTO on the issue of drug patents and access to medicines for poor

countries. Asked whether efforts to address unfair practices in price

controls abroad should be conducted in the WTO or bilateral venue, a

Hastert spokesman said: " It's both. I don't think we would tell

Ambassador Zoellick about how to do his job, but [Hastert] wants a

solution. ... We need to be cognizant of it and bring it up with every

trade relationship we have. " Hastert believes that price controls abroad

are a form of subsidy, at the expense of U.S. consumers who are forced

to shoulder a greater burden of drug research and development costs in

their own drug bills.

In next week's House floor debate on the Australia agreement, Democrats

are likely to level criticism at provisions in the trade pact affecting

pharmaceuticals. They have charged that the provisions establishing an

independent review process would create new rights for drug firms to

challenge U.S. government pricing decisions under Medicare Part B. In

addition, Democrats claim the provisions preventing parallel imports are

in direct contradiction to reimportation legislation that has passed in

both chambers. If reimportation legislation becomes law, Democrats say,

the United States would be thrown into non-compliance with the Australia

agreement. Administration officials have responded that they must

negotiate agreements based on current law, not based on what may become law.

***

Forwarded and insightful message...

>From: " Dean Baker " <dean.baker1@...>

><mpalmedo@...>, <ip-health@...>

>Subject: Re: [ip-health] Question on FTAs and pharmaceuticals

>List-Subscribe: <http://lists.essential.org/mailman/listinfo/ip-health>,

> <mailto:ip-health-request@...?subject=subscribe>

>Date: Tue, 13 Jul 2004 04:52:04 -0400

>

>

>This may be a sidebar to some extent, but it is likely that most countries

>are hugely over-estimating the value of entering a new trade agreement with

>the U.S..Usually, the main benefit that they anticipate is greater access to

>the U.S. import market. While this market has expanded enormously over the

>last 12 years (the annual level of imports has increased by $800 billion),

>it is easy to show that it is almost certainly going to be declining over

>the next decade. Increased access to a rapidly declining market is probably

>not worth very much (see " Fool's Gold: Projections of theU.S. Import Market

>[http://www.cepr.net/Import_Projections.htm]).

>

>In other words, when it comes to issues like concessions on pharmaceutical

>pricing, countries are agreeing to pay more for drugs, but will likely

>getting little in value in exchange.

>

>Regards,

>

>Dean Baker

>

>Co-Director

>Center for Economic and Policy Research

>1621 Connecticut Ave, NW

>Washington, DC 20009

>202-332-5218