A potential TPP gotcha

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Fred99

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#180808 22-Sep-2015 16:04

CEO of US drug company jacks up price of pills from $13.50 to US$700 each.

These pills are available in NZ with Pharmac subsidy by special authority at $36.95 per 50 tablets (25mg)

Price today in the USA has jumped to over US$45,000 per 60 tablets (25mg) - up from about $800.

And I thought Walter White was an evil bastard.

The active compound is available (pharma grade) from China for less than $5 per gram ( works out at about 12 cents per tablet )

Typical dose may be 75mg per day. From Pharmac schedule:

Toxoplasmosis treatment for HIV patients, 3 months (new cost up to about $280,000 per patient)
Pregnant women during course of pregnancy (new cost perhaps $750,000 per patient)
Children - toxoplasmosis up to 12 months (new cost perhaps a million dollars per patient)

Going to have to sell a hell of a lot of milk powder to Uncle Sam to make it worth not being able to press a few tablets out of a cheap and easy to obtain chemical.

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#1392054 22-Sep-2015 16:27

Yep, its only once a drug is out of patient that Pharmac will be able to afford to fund it. This means not only an increase in drug prices for longer, but at those price its ineffective to buy it. So they wont fund it, and people will miss out for longer.

In real world reality this equates to

- Increased suffering with symptoms and co-morbidities (they are talking an extra 5 years patent on every new drug)
- Increased fatality rates.

I have posted in an earlier TPPA thread a new series of drugs for the treatment of hepatitis. The clinical evidence for them is excellent. They reduce co-morbidities, reduce mortality and increase quality of life. These drugs are the ones NZers wont see for 5+ years on top of the current patent times. No amount of extra milk money will cover the cost of $60,000 a year drug for 5000 kiwis that need it.

And thats just one single example. Can you imagine the cost involved in doing this across dozens and dozens of more effective drug treatments??

Think new

- Rare disorder meds
- Antibiotics
- Cancer treatments
- Pain relievers
... the list goes on.

MikeB4

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#1392055 22-Sep-2015 16:27

This is one aspect of TPP that worries me. One of the medications I take currently would cost me to buy $2100 per week. If a similar price hike was applied to this the weekly price would be circa $110,000 if my math is right. I do not think Pharmac would continue the special authority for this.
I am not sure where the win for NZ is but if does seem like a good thing for the US economy.

scuwp

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#1392075 22-Sep-2015 17:04

Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

Lazy is such an ugly word, I prefer to call it selective participation

Fred99

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#1392076 22-Sep-2015 17:04

MikeB4: This is one aspect of TPP that worries me. One of the medications I take currently would cost me to buy $2100 per week. If a similar price hike was applied to this the weekly price would be circa $110,000 if my math is right. I do not think Pharmac would continue the special authority for this.
I am not sure where the win for NZ is but if does seem like a good thing for the US economy.

Total up the potential cost to NZ of just hikes in drug prices, and I shudder to think.
I do believe that our great leader is not being completely up front about the cost - because I don't think he knows.

SWMBO works at a level in public service where her department's reporting to the Minister. I know the level of detail that she has to go to in reports on cost and other impact of proposed policy changes, then to provide answers to the inevitable questions in parliament.

But of course in this case as the negotiation is top secret, then there won't be teams of analysts at Pharmac scrutinising the details, as they don't have the damned details, and there won't be any questions in parliament until it's too late.

So we have a politician's well intended guess, and only a few specialists involved in areas such as oncology brave enough to doubt the great leader's rather cheerful and optimistic forecast.

ETA
Gareth Morgan should jump on to this one. As one of the uses for the drug is to treat toxoplasmosis, a cheaper and more effective solution may be to completely eliminate cats in NZ.

MikeB4

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#1392082 22-Sep-2015 17:14

scuwp: Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

It may or may not happen but it is a potential. This is the problem with the veil of secrecy over this issue. The government needs to be more open so New Zealanders can make informed decisions regarding TPP.

jmh

458 posts

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#1392085 22-Sep-2015 17:15

scuwp: Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

Following a Wikileaks leak, John Key has admitted that drugs through pharmac may cost more. He tells us not to worry, the government will pay the difference. That's you and me, the taxpayer.

At the moment once a drug is out of patent it can be produced by anyone cheaply. TPP allows pharma co's to keep their patent for longer than they do now, so they can make more profit.

Prime Minister John Key has conceded New Zealand will have to pay more for some medicines under the Trans-Pacific Partnership (TPP) but he says patients will not be disadvantaged.

http://www.radionz.co.nz/news/political/279879/tpp-key-admits-medicine-costs-will-rise

sir1963

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#1392087 22-Sep-2015 17:17

scuwp: Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

Because the TPPA is based on US patents system.
We currently buy a LOT of our "generic" medications from China, that may stop for many drugs.

It also allows for "Patent disputes" whereby a patent can come out of its patentable period but the original patent holder can lodge a "dispute" forcing everyone to continue buying from them (at what ever price they set) until such time as the dispute is resolved.

If you think the Kim.Com saga has been going on for years, you aint seen nothing yet.

The drug in question has been marketed for 62 years , and they can still do this in the USA....

And Investor State trade disputes are another scary thought.

https://solidarity-us.org/node/977

http://www.huffingtonpost.ca/2015/01/14/canada-sued-investor-state-dispute-ccpa_n_6471460.html

http://www.huffingtonpost.com/larry-cohen/report-from-berlin-global_1_b_5588169.html

http://www.euractiv.com/trade/report-investor-state-lawsuits-w-news-534005

Any thoughts that this could not happen here is just burying ones head in the sand.

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Batman

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#1392106 22-Sep-2015 17:40

First world corruption.

Not much different to third world corruption really

gzt

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#1392112 22-Sep-2015 17:57

I read something recently that explained the pharma companies drug development was mostly minor development of publicly available research. So now i mostly disagree that low prices mean that drugs would not come to market yadayada blah blah BS. In any case they are perfectly profitable entities so I see no reason for increased protection.

sbiddle

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#1392123 22-Sep-2015 18:18

scuwp: Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

TPP also isn't going to stop generic drugs as many people seem to think (well it could since we don't really know what's in the TPP) - generic drugs are now the norm in the US drug industry, so I don't see how TPP could prevent this and how TPP could put demands on other countries that don't exist in the US

As for what happened with this incident I don't see what TPP has to do with it. This could happen to any drug that still has patents on it.

mattwnz

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#1392126 22-Sep-2015 18:26

scuwp: Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

That is the whole thing though, people don't have any say in what NZ is agreeing to, because it is secret. I mean, who would vote in a government if you didn't know their policies. The TPP will affect people in one way or another. I believe JK has already said that drugs may cost more, but the government would make up the difference. But the government are funded by NZer's, so it is NZers (taxpayers) who are making up the difference in price, so we will be paying more if that occurs.

scuwp

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#1392132 22-Sep-2015 18:43

Thanks for the feedback, I get the negative "possibilities" but still fail to see any of this as anything much more than pure speculation. Equally speculative is the positives, but of course no one is interested in those.

Drugs companies can hike their prices whenever they wan't particularly so with new drugs under patent. I fail to see how the TPP will make any material difference to that fact.

sir1963 - Because the TPPA is based on US patents system

How do you know this when no details are available? Again an honest question...no disrespect. Everything is secret, yet so much (negative) detail is allegedly known by so many? I don't get it.

Lazy is such an ugly word, I prefer to call it selective participation

NorthernZone

69 posts

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#1392151 22-Sep-2015 19:05

With respect I disagree with many comments here.

Yes, of course the TPP, like any agreement following tough negotiations, is bound to include both benefits and disadvantages. To date none of us know the details and even the Govt is saying they can't yet be certain the final outcome will be worth signing up to (although clearly they are enthusiastic). That is exactly the same as in all previous trade negotiations: no country is going to give away their bottom line before the fat lady sings. I am really disappointed that some people oppose the TPP at this stage, without knowing for certain the outcome, when in the past trade agreements hyave always rpt always been bipartisan. I can't help feeling there are some people playing petty politics instead of acknowledging the huge benefits we can get from such agreements (eg I hate to think how the NZ economy would have survived the GFC without the China FTA, negotiated by the Labour Govt and supported by National in opposition - as it should have been).

Yes, we think we know some of the "difficult" areas - but largely through the leak of earlier "negotiating" papers from various countries. Of course these will show starting positions, not final (compromise) agreements. So NZ docs showed we wanted, inter alia, full access to all markets for all our agricultural products especially. Not surprisingly we know understand that is unlikely to happen. It seems as if we'll make great headway in tariff reduction for meat and horticulture but apparently Japan and Canada are still playing hard ball over dairy. None of us yet know how that will play out but Minister Groser (one of the world's most experienced trade negotiators) has said we still need to have "commercially meaningful" access to those dairy markets. My guess is that we'll gain something but not much in terms of dairy. NZ's gains will be mostly in other areas.

Much has been said about the TPP being more than just a "free trade agreement"; ie it covers more than just tariff reductions. I'm glad it does. Business these days is not just trade in goods and there are many non-tariff barriers too, so I think it's great the TPP is also looking at trade in services (including software) and investment protection. As a 21st century agreement, so it should.

A lot of scare-mongering has been published about the danger to a sovereign govt's right to pursue its own health and environmental policies (etc). Although I don't know the exact provisions of the TPP (of course), I note that several recent trade agreements have dealt with the same sort of issue and in every case there have been "carve out" positions whereby each country has protected its "sovereign rights" in certain areas. Since the Govt has repeatedly insisted that Pharmac, other health & environmental policies, will be fundamentally preserved, I infer they have placed such matters in their "carved out" area.

Lots of loud noise has also been made about ISDS; ie the alleged provision for private companies to sue govts for policy changes made to their commercial disadvantage. Again that is nothing new: several of our last trade agreements have included such a provision too and the sky hasn't fallen. Why not? Because the hurdles to be overcome by a foreign company are actually very high and I assume that will be the same for the TPP too. Perhaps its worth noting that Philip Morris's current case against the Australian Govt's plain packaging policy is not being pursued under the ISDS provisions of the Aust-US FTA - because the hurdles are too high - but rather under a separate arcane provision relating to Hong Kong.

Which brings us to biologics. Currently NZ provides 5 year patent protection but the US provides 12 years protection and that is what their start negotiating position was. Rumour has it that the final compromise agreement might increase our patent protection from 5 to 7 or 8 years, and that seems to be why the Govt has admitted there might be a modest increase in biologic costs for Pharmac (ie an extra 2-3 years before generics are permitted) but the Govt has promised the cost to patients won't increase (or, to put it another way, taxpayers at large will cover the extra costs of the increased patent protection period). To be honest I cannot see that as being apocalyptic. Yes, it can be seen as a cost disadvantage for NZ but we all knew there was inevitably going to be some downsides as well as benefits so let's wait and see all the details before balancing out the gains and losses.

sir1963

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#1392152 22-Sep-2015 19:06

scuwp: Thanks for the feedback, I get the negative "possibilities" but still fail to see any of this as anything much more than pure speculation. Equally speculative is the positives, but of course no one is interested in those.

Drugs companies can hike their prices whenever they wan't particularly so with new drugs under patent. I fail to see how the TPP will make any material difference to that fact.

sir1963 - Because the TPPA is based on US patents system

How do you know this when no details are available? Again an honest question...no disrespect. Everything is secret, yet so much (negative) detail is allegedly known by so many? I don't get it.

I guess the answer is to look at who is the 600LB Gorilla in the negotiations.

Then look at the number of times we have had to take other countries to court (US/AUS) just to get them to obey international trade laws already in place.

The USA is more than 100 times our size population wise and a LOT larger than that GDP wise.

Also look at how many agricultural industries get huge subsidies in the USA.

US corporations have been invited to view/edit the documents. Some were even written by the US corporations.

The European version, the documents are held in the US embassy , EU parliamentarians have to book a 1 hour slot to read the documents, can not take notes, can not not recording devices, and are monitored by US security.

Thats kind of like being given War and Peace, be expected to do a book review, be given 1 hour to read it with no ability to take notes.

throbb

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#1392158 22-Sep-2015 19:17

mattwnz:
scuwp: Where is it written that this could happen in NZ? I thought the TPP details were secret? If so isn't this just speculative? Or scaremongering?

What's to stop this happening without the TPP?

Honest question. I can't understand why everyone is up in arms about something they know nothing about?

That is the whole thing though, people don't have any say in what NZ is agreeing to, because it is secret. I mean, who would vote in a government if you didn't know their policies. The TPP will affect people in one way or another. I believe JK has already said that drugs may cost more, but the government would make up the difference. But the government are funded by NZer's, so it is NZers (taxpayers) who are making up the difference in price, so we will be paying more if that occurs.

The way I see it is that when you vote for a government, you are giving them permission to do what they think is best for the country, without asking the public. I'm sure there will be winners and losers in the TPP, things like more expensive drugs could be offset by cheaper other goods, so its not the taxpayers forking out extra cash.

I don't mind it being a secret, its a negotiation, imagine trying to negotiate when the other party already know what your bottom price is.

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