New Zealand's Drug-Price Controls In U.S. Crosshairs... Again
Pharmaceutical companies appear to be about to receive another black eye in New Zealand due to their lobbying activities in the U.S. This counterintuitive turn of events hinges on a letter 28 senators wrote to President Obama more than a month ago, and more than 20 years of animosity between Kiwi politicians and American drug companies.
The letter itself is a plea for the Obama Administration to push for high intellectual property standards in the "Trans-Pacific Partnership" trade agreement between the U.S. and Asian Rim nations. It's vague, obscure, boring stuff -- and it doesn't even mention New Zealand.
But that's not how it was interpreted Down Under. Radio New Zealand reported:
In May, the senators [who] wrote a letter to US president Barack Obama demanding changes to Pharmac ... have received $6.5 million in donations from the pharmaceutical industry over the past five years.The drug companies -- and the senators they've paid off -- want New Zealand to weaken the country's national drug buying agency, Pharmac, which has long kept prices down in the antipodes.
In New Zealand's national healthcare system, the government pays for any medicine that Pharmac approves, and bargains a price for those drugs. New Zealanders make only a small copay when receiving their prescriptions; the rest is paid for out of general taxation.
The problem for the drug industry is that Pharmac often concludes that some drugs aren't worth the extra cost and declines to cover them. New Zealanders are still permitted to buy them, but they must pay full price. Having created a cheap healthcare system that covers everyone, New Zealanders are not eager to swap it for an expensive one in which only some people are covered.
The letter from Sens. Orrin Hatch (R-Utah), Maria Cantwell (D-Wash.) and others is being taken by some as an American attempt to export its dysfunctional healthcare system to New Zealand:
The sole drug buying agency is a good idea. Our health system is largely nationalised and it makes sense for one organisation to buy pharmaceuticals for the whole of the country.
We are a very small country, and Pharmac has managed to keep costs down, buying drugs on behalf of the district health boards.
This has been done with a degree of ruthlessness, with some losers.
But for the vast majority of New Zealanders, it works.
We really don't want to become embroiled in a health system that in any way resembles what happens in the United States. Nor do we want to be as medicated as Americans.The backstory here is that Big Pharma has been trying for 20 years to weaken Pharmac, and has made many enemies in the process. In 1990, drug companies lobbied unsuccessfully to unseat former health minister Helen Clark â€"-- which became inconvenient when Clark later became the country's Labor Party prime minister. She became a staunch opponent of the "commercialization" of New Zealand healthcare.
In 2004, Pfizer was allegedly part of an attempt to scupper a U.S.-New Zealand free trade agreement made because the drug company believed it was becoming impossible to do business in New Zealand, according to the Wikileaks cables.
Having annoyed the locals twice, Big Pharma appears poised to do so again. New Zealand has a smaller population than Boston, and the Hatch letter looks like bullying to them. It could well backfire. There are already calls for New Zealand's government to refuse to even mention Pharmac at the talks:
Trade sources say that response played into the hands of New Zealand's trade negotiators, deep in negotiations with the eight other countries involved in the TransPacific Partnership, who can now readily point to evidence that Pharmac is political dynamite in this country and is not easily tampered with.Related: