Improving regulatory capacity to manage risks associated with trade agreements.

Modern trade negotiations have delivered a plethora of bilateral and regional preferential trade agreements (PTAs), which involve considerable risk to public health, thus placing demands on governments to strengthen administrative regulatory capacities in regard to the negotiation, implementation and on-going management of PTAs. In terms of risk management, the administrative regulatory capacity requisite for appropriate negotiation of PTAs is different to that for the implementation or on-going management of PTAs, but at all stages the capacity needed is expensive, skill-intensive and requires considerable infrastructure, which smaller and poorer states especially struggle to find. It is also a task generally underestimated. If states do not find ways to increase their capacities then PTAs are likely to become much greater drivers of health inequities. Developing countries especially struggle to find this capacity. In this article we set out the importance of administrative regulatory capacity and coordination to manage the risks to public health associated with PTAs, and suggest ways countries can improve their capacity.

Pandemics, antiviral stockpiles and biosecurity in Australia: what about the generic option?

In view of the possibility of a human pandemic of avian influenza, a first-line strategy for many countries is stockpiling of antiviral neuraminidase inhibitors (oseltamivir [Tamiflu] and zanamivir [Relenza]), which can reduce mortality, morbidity and influenza transmission. However, global supply of the antivirals is controlled by the European-based patent owners, Roche and GlaxoSmithKline. This prevents competition in the manufacturing and distribution of antivirals and has reduced global supply capacity and affordability. The Australian Government has acknowledged that, in the event of a pandemic, its own stockpile of antivirals will be limited and reserved for those on a confidential rationing list. Pharmacies are running out of stocks, limiting opportunities for individuals to secure supplies privately. Compulsory licensing provisions, permitted under domestic patent law, would allow Australian generic manufacturers to start producing antivirals locally or import them from generic producers at affordable prices. Australia also has an opportunity and a responsibility to promote compulsory licensing and generic antiviral production in the Asian region, to ensure our neighbours can establish pandemic stockpiles in a timely and affordable manner.

Assessing the impact of the Australia-United States Free Trade Agreement on Australian and global medicines policy.

On 1 January 2005, a controversial trade agreement entered into force between Australia and the United States. Though heralded by the parties as facilitating the removal of barriers to free trade (in ways not achievable in multilateral fora), it also contained many trade-restricting intellectual property provisions and others uniquely related to altering pharmaceutical regulation and public health policy in Australia. The latter appear to have particularly focused on the world-respected process of federal government reimbursement after expert cost-effectiveness evaluation, popularly known as the Pharmaceutical Benefits Scheme ('PBS'). It remains uncertain what sort of impacts--if any--the Australia-United States Free Trade Agreement ('AUSFTA') will have on PBS processes such as reference pricing and their important role in facilitating equitable and affordable access to essential medicines. This is now the field of inquiry for a major three year Australian Research Council ('ARC')-funded study bringing together a team of senior researchers in regulatory theory from the Australian National University and pharmacoeconomics from the University of Newcastle. The project proposes to monitor, assess and analyse the real and potential impacts of the AUSFTA in this area, providing Australian policy-makers with continuing expertise and options. To the extent that the AUSFTA medicines provisions may represent an important precedent in a global strategy by industry on cost-effectiveness evaluation of pharmaceuticals, the study will also be of great interest to policy makers in other jurisdictions.

Will the Australia-United States Free Trade Agreement undermine the Pharmaceutical Benefits Scheme?

The Australia-United States Free Trade Agreement (AUSFTA) contains major concessions to the US pharmaceutical industry that may undermine the egalitarian principles and operation of the Pharmaceutical Benefits Scheme (PBS) and substantially increase the costs of medicinal drugs to Australian consumers. AUSFTA's approach to the PBS excessively emphasises the need to reward manufacturers of "innovative" new pharmaceuticals, instead of emphasising consumers' need for equitable and affordable access to necessary medicines (the first principle of our National Medicines Policy). Several features of AUSFTA may bring pressure to bear on the Pharmaceutical Benefits Advisory Committee (PBAC) to list "innovative" drugs that the committee initially rejected because the evidence for cost-effectiveness was not compelling. Intellectual property provisions of AUSFTA are likely to delay the entry of PBS cost-reducing generic products when pharmaceutical patents expire. We support the many concerned health and consumer organisations who have asked the Senate either not to pass the enabling legislation, or to delay its passage until a fairer deal in terms of public health can be obtained.