[Ip-health] US says: U.S. and Korea Resolve Drug Dispute That Stalled Trade Talks

[robert weissman]

U.S. and Korea Resolve Drug Dispute That Stalled Trade Talks
2006-08-11 14:50 (New York)


By Mark Drajem
      Aug. 11 (Bloomberg) -- The U.S. and South Korea worked out
differences over pharmaceutical pricing that caused a breakdown
last month in negotiations on a free-trade agreement, the top
U.S. negotiator said.
      The U.S. accepted South Korea's proposal to limit the drugs
eligible for Korean government reimbursement after South Korea
agreed to negotiate how that government system works, said Wendy
Cutler, the assistant U.S. Trade Representative for Japan and
Korea.
      ``We want to make sure pricing decisions are made in a
transparent manner,'' Cutler told reporters on a conference call
today. Officials from the two countries will meet for two days
starting Aug. 21 in Singapore to discuss pharmaceuticals.
      U.S. drugmakers such as New Jersey-based Merck & Co. have
demanded that South Korea roll back regulations drafted in May
that may exclude many foreign drugs from prescription
reimbursements under its national health insurance program.
Access for American drugs has become one of the most contentious
issues in the trade talks, which began June 5th in Washington.
      The issue prompted U.S. negotiators to cut short the second
round of free trade talks held in Seoul last month, threatening
what would be a $29 billion accord. The U.S. says it wants to
wrap up an accord by year's end so that Congress can ratify it
before President George W. Bush's trade negotiating authority
expires in July 2007.
      South Korea currently incorporates a ``negative list'' in
its national health insurance system that lists drugs that cannot
be reimbursed. The government plans to adopt a ``positive list''
system, which requires the approval of the state insurance agency
for drugs to get reimbursed.
      The U.S. agreed to South Korea's plans to change its drug
regulations, the Health Ministry said in the statement today.
      Cutler had said earlier that the U.S. government was
concerned that the new system would discriminate against American
pharmaceutical firms. Today, she said the Koreans agreed to make
the process of choosing eligible drugs more transparent and open
to review, and that would compensate for the ``positive list,''
which the U.S. had opposed.
      In addition to pharmaceuticals, the two countries are
scheduled to provide each other with offers about tariff cuts
within the next week in preparation for the third round of
negotiations in Seattle Sept. 6-9.

--With reporting by William Sim in Seoul. Editor: Arthur

Story illustration: See {ECST SK <GO>} to access economic
statistics for South Korea. Click {KOGDPYOY <Index> GP <GO>} for
seasonally adjusted change in South Korea's gross domestic
product from a year earlier.

To contact the reporter on this story:
William Sim in Seoul at (82)(2)3702-1646 or
wsim2@bloomberg.net.
Mark Drajem in Washington at (1) (202) 624-1964 or
mdrajem@bloomberg.net

To contact the editor responsible for this story:
Ben Richardson at (852) 2977-6467 or
brichardson8@bloomberg.net.
Ken Fireman at (1) (202) 624-1978 or
kfireman1@bloomberg.net