[Ip-health] Huffpo: Eli Lilly uses US/Australia trade pact to push for higher prices on osteoporosis drug Forteo

Tue May 9 07:32:11 2006

http://www.huffingtonpost.com/james-love/eli-lilly-uses-
usaustral_b_20657.html

Eli Lilly uses US/Australia trade pact to push for higher prices on
osteoporosis drug Forteo
May 9, 2006 The Huffington Post
James Love

The US government does not negotiate lower prices for drugs under
Medicare Part D. But it negotiates higher prices for drugs in
Australia and Korea, under two novel trade agreements.

This week the Australia press is reporting on a case just filed by
Eli Lilly, the Indiana based pharmaceutical giant. This from one ABC
radio report:

----
     "It's just over a year since the Australia US Free Trade
Agreement came into force, opening the door for US drug companies to
force a review of decisions about which drugs are subsidised by the
Australian Government. Now that power is being used by the US drug
company Eli Lilly. . . .

     "After having its application for Forteo to be included on the
Pharmaceutical Benefits Scheme knocked back four times, American
company Eli Lilly is making use of provisions under the US Free Trade
Agreement.
-----

The dispute is over where or not the Australia government can reject
insurance for a drug on the grounds that it is not "cost effective,"
given the high price. In effect, Lilly is seeking to use the US trade
agreement to force the Australian government to pay most of the $850
per month that Lilly want to charge for the drug, despite weak
clinical evidence the drug actually works.

The US/Australia FTA was concluded last year by the Bush
administration. One of the key players in the implementation of the
agreement is Bill Steiger, a young hardliner who closely follows
issues concerning pharmaceutical prices and intellectual property
rights.

Bill is the son of former Wisconsin Congressman Bill Steiger, and
former FTC Chair Janet Steiger, and the godson of former President
George HW Bush.

The US Australian FTA is probably the second major US trade agreement
to regulate prices of OECD countries.

In 1999, President Clinton negotiated an agreement with Korea that
set a floor for the prices of innovative medicines to at least the
average prices of A-7 countries (United States, United Kingdom,
Germany, France, Italy, Switzerland, and Japan).

Consider also this July 2, 2001 letter from Bush appinted Commerce
Secretary Don Evans, to Korean Minister of Health and Welfare Kim Won-
Gil:

------------
     Under the reference pricing system proposed in the Plan,
patients would incur a co-payment for certain pharmaceutical products
within a given therapeutic category based upon the cost of those
products. Research-based, innovative pharmaceuticals are often more
expensive than generics and other products; therefore, it is mainly
these products that would be subject to a co-payment requirement.
Requiring patient co-payments for only some products within a
therapeutic category would create a distinctive for patients to use
these pharmaceuticals, regardless of their effectiveness. . .

     Before final decisions are made, it is important that your
government consult and fully and substantively with interested
parties, including foreign research-based pharmaceutical
manufacturers, as well as with our government. . . .

     The United States has considerable expertise and experience in
health care financing matters, and we look forward to the opportunity
to work with you to find ways to bring high-quality health care to
the Korean people in a fiscally prudent and equitable manner.
------------

Surprised to learn about the Bush Administration's "considerable
expertise and experience in health care financing matters"? Should
Korea look for our advice on being "fiscally prudent" or "equitable"?

This month in Geneva the World Health Assembly (the governing body of
the UN's World Health Organization) will debate proposals for a new
global framework to foster medical R&D. So far, the main opponent of
this has been the Bush administration, led by Bill Steiger. Big
pharmaceutical companies see a global treaty on medical R&D as a
threat to trade agreements like the US Australian FTA or the Korean
A-7 pricing agreement.

A large number of public health groups, scientists, and other
stakeholders want to begin discussions on the new trade paradigm,
focusing on R&D, rather than high drug prices, and providing more
space for governments to address access concerns, and to push for
more efficient and priority sensitive outlays of R&D dollars.

http://www.whoscientistsletter.org/
http://www.who.int/intellectualproperty/submissions/CPTech.pdf
http://www.cptech.org/ip/health/rndtf/117who-rnd.html

---------------------------------
James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
tel. +1.202.332.2670 / mobile +1.202.361.3040

"If everyone thinks the same: No one thinks."  Bill Walton