[Ip-health] Korean Govt. Official's column on FTA Negotiations with US

[Mike Palmedo]

http://english.hani.co.kr/arti/english_edition/e_editorial/123445.html

Honest approach required in Korea-U.S. FTA negotiation

By Cho Won-dong
Director of the economic policy bureau, Ministry of Finance and Economy
The Hankyoreh
May 15, 2006

I read an article by Woo Seok-gyun, an official from the Korea
Federation of Medical Groups for Health Rights (KFHR), regarding the
Korea-U.S. Free Trade Agreement (FTA) negotiation on medical care and
education. Mr. Woo described the upcoming negotiation as a 'game of
truth' by the government.

I don't think that the government alone can predict the demands of the
U.S. Collecting opinions from experts from diverse fields would be in
the national interest. But if the government distorts these views in the
process of collecting them, there will be no benefit reaped.

As Mr. Woo pointed out, the issue of pharmaceuticals is expected to be
included in the core agenda of the FTA negotiation on medical care. Mr.
Woo predicted that the U.S. would demand that South Korea apply the
average price paid by the seven advanced countries (A7) to all drugs
supplied, and would also demand the ability to extend pharmaceutical
patent periods, as well. But we can't jump to that conclusion.

In my opinion, it is true that the U.S. is highly interested in
protecting its pharmaceutical firms, so it may demand that South Korea
disclose its drug pricing system more transparently and grant the U.S.
the right to file complaints over pricing. But regarding the patent
period extension, South Korean patent law already compensates for a
clinical demonstration period, along with providing a patent period
extension available within five years. Therefore, the U.S. demand can be
interpreted as asking Korea to honor the clinical demonstration period
for U.S. companies. Making people worry in advance by exaggerating the
expected U.S. demands, with no solid foundation, is not an honest approach.

Currently in Korea, the price of newly-developed drugs is decided after
negotiating with pharmaceutical companies. Prices of drugs included in
the public insurance program also have to be decided in the same way.
Consequently, possible U.S. demands of guaranteed transparency in the
drug pricing system and granting opportunities to file complaints are
already being met. The U.S. may have other related demands. But we can
cope with them confidently because Korea=92s system, already in place,
applies to both domestic and international pharmaceuticals.

Mr. Woo forecast that the private health insurance program would be an
important issue in the negotiations between South Korea and the U.S. He
noted that Canada slashed its medical budget after signing the North
American Free Trade Agreement (NAFTA) and cancelled an introduction of
public health insurance in Ontario. However, Mr. Woo admitted that there
were no separate healthcare-related regulations in neither the FTA
signed between Canada and the U.S. in 1987 nor the NAFTA that Canada and
the U.S. signed with Mexico in 1992. After signing the FTA, Canada still
operates a nationwide public health insurance program, together with a
supplementary private program. It is true that Canada reduced its
medical budget, but the reduction was because of prior excessive
financial burden, rather than the effect of their FTA with the U.S.
Taking the Canadian model into consideration, the possibility of the
U.S. targeting the South Korean health insurance market directly is very
low. Normalization of the private health insurance system is a task for
the South Korean economy, independent of the FTA.

According to recent opinion polls on the Korea-U.S. FTA, over 70 percent
of respondents thought that the medical and education markets should be
opened earlier than the legal and accounting markets, and even the auto
market. It's time to consider the meaning of these findings.