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.