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

Thomas Faunce, Evan Doran, David Henry, Peter Drahos, Andrew Searles, Brita Pekarsky, Warwick Neville

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.