[Ip-health] Rep. Tom Allen and Sen. Grassley on anti-parallel trade provision in Australia FTA

[James Love]

February 11, 2004

Dear Colleague:

The U.S.-Australia Free Trade Agreement contains a provision that
prohibits the re-importation of drugs into the U.S. from Australia.
Since Australian law already prohibits re-importation, this provision
appears to have been inserted as a precedent for future trade
agreements.  One upcoming pact, the Free Trade Area of the Americas
(FTAA), involves Canada, where many Americans go for cheaper drugs.

  As Congress debates re-importation of drugs from Canada, we should ask
whether the Administration is improperly using a trade agreement to
prejudice domestic policy-making on this issue.  As our colleague Rep.
David Dreier wrote in the Washington Times last November: "[if] our
trade negotiators with Australia are moving the drug policy debate in
one direction or the other, the tail will be wagging the dog on some of
the most important policy decisions we face."

Sincerely,

Tom Allen
Member of Congress

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 From CongressDaily, Feb 10.

Grassley Says Australia Drug Provision Intrudes On Hill Debate
      A provision in the recently concluded U.S.-Australia free trade
agreement aimed at ensuring more fair conditions of competition for U.S.
drugmakers overseas has drawn the ire of Senate Finance Chairman Grassley.
      As part of the free trade pact announced Sunday, U.S. and
Australian negotiators agreed to prohibit the re-importation to the
United States of medicines covered by Australia's pharmaceutical
benefits scheme, according to congressional sources. Grassley charged
that the inclusion of that ban in the trade agreement intruded on the
congressional debate over access to drugs for U.S. seniors.
      "This is an important issue that Congress is currently debating.
Given the importance of this issue, I don't understand why it wasn't
raised earlier in the negotiations," Grassley said in a Monday statement.
      The House voted last year to permit re-importation, but the
language was struck from the House bill in the Medicare prescription
drug conference.
      Australia agreed to several other demands from the U.S. drug
industry, including establishing a consultation process under which the
U.S. government can object to decisions on whether or not to list a new
drug on the PBS.
      But congressional sources said that in the face of refusal by the
Australians to make more far-reaching changes to the way drugs are
priced under the scheme, the United States sought a ban on
re-importation of drugs as a way to ensure, at the least, that U.S.
companies' sales in this market are not undercut by lower-priced
Australian drugs.

   [snip]



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--
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040