Since the negotiations for the Trans-Pacific Partnership (TPP) were concluded on 6 October last year, the government has ensured there is clear and extensive information available on the outcomes of TPP and the implications for New Zealand. This includes a dedicated website with factsheets on different areas of the agreement, including PHARMAC and the intellectual property outcomes, which has been set up by the Ministry of Foreign Affairs and Trade (MFAT). The legally verified text of the Agreement is on this website as well as further details on how the costs of implementing the changes to PHARMAC processes were calculated.
National Interest Analysis (NIA)
The NIA must be presented to Parliament for treaty examination. It was prepared by the Ministry of Foreign Affairs and Trade, in consultation with other relevant government agencies, including the Ministry of Health. The NIA sets out in detail the implications of TPP for New Zealand and was released on 26 January 2016. More information can be found on the Trans-Pacific Partnership website:
There is a section devoted to the ‘Health impacts’ (see 7.2.2 pages 251-253). The analysis of the advantages and disadvantages of the outcomes for the intellectual property treatment of pharmaceuticals (see 4.17.2 on page 78-83) and in relation to PHARMAC processes (see 4.27 on pages 104-106) may also be of interest.
The key points from a health perspective are:
- TPP will not change the fundamentals of the PHARMAC model. PHARMAC’s ability to prioritise its spending and negotiate the best price for medicines with suppliers is unchanged. (see also the Pharmaceutical and Medical Device Purchasing (Reimbursement) factsheet on the Trans-Pacific Partnership website.
- TPP requires a few administrative changes to PHARMAC (it will be required to consider applications within a specified period of time and offer a review mechanism). Implementing these changes is expected to involve up to $4.5 million in one-off establishment costs and $2.2 million per year in ongoing operational costs.
- Other than the PHARMAC costs, there are expected to be very small impacts on New Zealand’s health system.
- The outcome on data protection for pharmaceuticals, including biologics, can be met within New Zealand’s current law and practice, and in light of market circumstances (see also the Intellectual Property factsheet on the Trans-Pacific Partnership website.
- The patent term extension outcome in TPP is estimated to cost on average $1 million per year because New Zealand practices are already very efficient.
- Provisions in TPP safeguard New Zealand’s ability to regulate for legitimate public policy purposes including in important areas like health and the environment.
- Like New Zealand’s free trade agreements (FTAs) with China, Korea and the ASEAN countries, TPP includes an investor state dispute settlement (ISDS) mechanism. ISDS only applies to the investment related aspects of TPP. Under TPP’s investment rules, the government’s ability to regulate for legitimate public policy purposes is protected.
- An extra protection in TPP specifically allows the Government to rule out ISDS challenges over tobacco control measures. (see also the Investment and ISDS factsheet on the Trans-Pacific Partnership website.
Signature of the Treaty took place on 4 February 2016 in Auckland. This signalled all Parties agreement to the negotiated outcomes and their intention to progress their domestic processes to ratify the agreement.
Outreach events are taking place to explain in more detail the outcomes of the Treaty and also help businesses prepare to take advantage of new opportunities presented by TPP. They include a series of roadshows and Hui in the main centres at first, and later in the regions. Further information aboutscheduled events is available on the MFAT website.
The NIA has now been presented to Parliament following signature, together with the final text of the Agreement as signed, for examination by the Foreign Affairs, Defence and Trade Select Committee (FADTC). The first hearings took place on 11 and 18 February. Written public submissions to FADTC closed on 11 March. The committee’s report is due by 31 May 2016.
The Minister of Commerce and Consumer Affairs has announced the release of a consultation document that seeks feedback on how the Government proposes to implement the intellectual property changes required to ratify the TPP:
The consultation document focusses on those areas where New Zealand has some flexibility in how it implements its TPP intellectual property obligations, including those related to pharmaceuticals. The consultation document and for information on making a submission is available on the The Ministry of Business, Innovation and Employment (MBIE) website:
The closing date for submissions is Wednesday 30 March 2016.