Impact of the Australia-US Free Trade Agreement on the Australian Medicines Regulation and Prices

Journal of Generic Medicines, Vol. 7, No. 1, pp. 18-29, 2010

ANU College of Law Research Paper No. 10-12

13 Pages Posted: 9 Feb 2010 Last revised: 29 Apr 2010

See all articles by Thomas Alured Faunce

Thomas Alured Faunce

Australian National University

Jimmy Bai

affiliation not provided to SSRN

Duy Nguyen

Australian National University - College of Medidine, Biology and the Environment

Abstract

The Australia-United States Free Trade Agreement (AUSFTA) came into force on 1 January 2005. Prior to and subsequently to the AUSFTA being concluded, controversy surrounded the debate over its impact on Australia’s health policy, specifically on regulation of pharmaceutical patents and Australia’s cost-effectiveness system relating to prescription medicine prices known as the Pharmaceutical Benefits Scheme (PBS). This article examines the expectations of both parties in the pharmaceutical sector concerning the AUSFTA, as well as how successfully they were achieved. It seeks to analyse important relevant outcomes for regulators, the public and pharmaceutical industry, as well as lessons about how trade negotiations relating to health and medicines policy should be approached in future. To investigate whether AUSFTA-related regulatory changes may lead to higher medicines prices in Australia we looked at recent PBS Public Summary Documents (PSDs) to discover examples of PBS-approved F1 (patented) drugs, over the period from July 2008 until June 2009, that failed to establish cost-effectiveness over F2 (generic) comparators (with mandated price cuts) and were thence cost-minimised. This period was chosen since the major price effects of the potentially AUSFTA-related National Health Amendment (Pharmaceuticals Benefits Scheme) Act 2007 (Cth) came into effect from August 2008.

Keywords: trade agreements, medicines regulation, pharmaceutical, cost-effectiveness, generic medicines, innovation

JEL Classification: L65, O32, O31, O34, O38

Suggested Citation

Faunce, Thomas Alured and Bai, Jimmy and Nguyen, Duy, Impact of the Australia-US Free Trade Agreement on the Australian Medicines Regulation and Prices. Journal of Generic Medicines, Vol. 7, No. 1, pp. 18-29, 2010 , ANU College of Law Research Paper No. 10-12, Available at SSRN: https://ssrn.com/abstract=1547563

Thomas Alured Faunce (Contact Author)

Australian National University ( email )

Canberra, Australian Capital Territory 0200
Australia
61 2 61253563 (Phone)

Jimmy Bai

affiliation not provided to SSRN

Duy Nguyen

Australian National University - College of Medidine, Biology and the Environment ( email )

Canberra, Australian Capital Territory 2601
Australia

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