Title: Trade Agreements Threaten Drug Reimportation, Public Health Protections
Author:
Section/SPIG: Medical Care
Issue Date:
“There is growing concern that international trade agreements such as the Central American treaty threaten health care and the health of communities. Provisions in that treaty, for example, could reduce affordable access to vital human services, including health care, water supply, education and energy as well as availability of medications.” APHA President Virginia Caine summed up these concerns about trade agreements and public health in her August 2004 editorial in The Nation’s Health. She concluded, “The public health and health care communities must be party to discussions on trade agreements and must work hard to reframe the trade debate so that health and health protections are included as priorities.”
Many members of Congress now agree.
The Center for Policy Analysis on Trade and Health (CPATH) was alerted in early 2004 by the Australia Public Health Association that the proposed U.S. administration trade agreement with Australia reflected a new U.S. policy of seeking to raise drug prices in other developed countries. In response to growing discontent over high drug prices in the United States, the administration claimed that raising prices abroad would shift the burden of paying for drug research and development costs off of U.S. consumers, and thereby lower the cost of drugs in the United States.
The Australia agreement as initially presented in the United States early in 2004 reportedly had several features:
1. It modified Australia’s Pharmaceutical Benefits Scheme (PBS), which negotiates affordable drug prices using a system of “reference pricing.”
2. It could outlaw the reimportation of lower priced drugs into the United States.
Facing public outcry on both issues and bipartisan concern by members of Congress, the U.S. Trade Representative (USTR) claimed that both provisions were rescinded.
CPATH reviewed the relevant sections of the Agreement, when it was released publicly, and determined that the Agreement:
1. Still threatened Australia’s PBS, although it had been modified from the original version;
2. Still potentially outlawed reimportation of prescription drugs into the United States; and
3. Also potentially threatened the systems that U.S. agencies use to negotiate affordable drug prices for the Veterans Affairs (VA) Department, Medicare, and Medicaid.
In response to CPATH briefing papers and written testimony to Congress, the Senate Veterans’ Affairs Committee wrote a letter of inquiry to the VA in mid-May, asking for their interpretation of the trade rules. The California Senate Office of Research, in response to a request from state Sen. Liz Figueroa, provided an opinion on the implications for Medicaid. Rep. Tom Allen of Maine and many other members of Congress circulated “Dear Colleague” letters raising serious questions about the Agreement.
On July 12, 2004, the New York Times published a major front page story presenting the concerns about the prescription drug provisions of the Agreement.
For a variety of reasons, the Australia Agreement was always expected to be approved by Congress, and it was. However, almost without exception, every member of the House and Senate who rose to speak on this Agreement during the vote in mid-July addressed the following points proposed by CPATH.
1. Trade agreements must not undermine Congress’ right and responsibility to pass future legislation that would provide affordable medications for Americans, and to protect current programs that offer affordable drugs, including those through the VA Department, Medicare and Medicaid.
2. The provisions of the Australia FTA related to pharmaceuticals should not set a precedent for future trade agreements (including the pharmaceuticals annex, government procurement and intellectual property sections).
3. The public health community must be officially represented in trade negotiations, which should promote transparent, democratic decision-making. Congress, the USTR and the American public must be informed of the impact of trade agreements on the public’s health.
4. U.S. policies should support enforceable commitments to advancing population health, and to achieving access to affordable medications, health care, and other vital services in the United States and internationally.
Members of Congress have now become aware of the links –- and conflicts –- between international trade agreements, the pharmaceutical industry, and the interests of U.S. constituents in access to affordable medicines. Members of Congress have further committed to take action as these issues resurface, which will surely be the case as trade negotiations progress with the Andean nations, southern Africa and Thailand. The Central American Free Trade Agreement (CAFTA) has been completed, containing a number of barriers to access to medicines; CAFTA could come before Congress during a lame duck session in December.
Further background information is available on the CPATH Web site: >www.cpath.org>.
A study session at the APHA Annual Meeting will explore how trade agreements threaten access to affordable medicines and related public health issues. The session is scheduled for:
Sunday, Nov. 7, 2004 at 2 p.m.
Study Group on Global Trade, Affordable Drugs, and Public Health's Right to Regulate
(Session 235.0, Committee on Health Services Research Study Group #6)
Washington Convention Center, Room 208B
By Ellen R. Shaffer PhD, MPH