Potential AUSFTA Dispute Resolution over Off-Shore Constructions of Australian Pharmaceutical Policy

Abstract:     
In the modern global economy, trade agreements, both multilateral and bilateral, have become increasingly important in shaping domestic health policies. The effect of trade agreements on medicines policy has been particularly stark, with the World Trade Organization’s (WTO’s) Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) achieving considerable notoriety for its significant deleterious impact on the provision and affordability of essential medicines in developing nations. In addition, recent bilateral trade agreements pursued, and concluded, by the United States Trade Representative contain provisions that strengthen and expand elements of intellectual monopoly privileges (IMPs) that are restricted and contentious in the multilateral trading system (for example non patent reward of innovation (anti-reference pricing), ‘linkage’ evergreening and non-violation nullification of benefits (NVNB) provisions ). The hypothesis explored here is that trade agreements are emerging as a new and largely unexplored, tier of sovereignty in the construction of domestic health policy whose influence will largely be shaped by private interest lobbying backed by the threat of trade disputes.

If NVNB claims about pharmaceutical provisions in trade deals are allowed to expand significantly outside of policing negotiations towards assisting with textual interpretation, this would represent another major shift in sovereignty in international relations. It would place one party’s domestic policies, including health care and social welfare policies, within the ambit of very narrowly focused ongoing and potentially infinite trade negotiations. The paradox would be that in order to protect domestic policy from subsequent NVNB claims, parties to trade negotiations would have to bring those policies to the negotiating table. This would represent a major reconfiguration of the relationship between international trade law and domestic sovereignty.

The medicines-related provisions of the Australia-US Free Trade Agreement (AUSFTA) provide a valuable a case study in this respect. It is now some years since the AUSFTA entered into force. Whilst its domestic policy implications are still percolating through bureaucratic, industry and political dynamics, it is important to examine the regulatory components of potential AUSFTA trade disputes over Australia’s Pharmaceutical Benefits Scheme (PBS) as a means of discovering of how trade agreements provide a new regulatory architecture for domestic health policy in that period of symbiotic government and global industry interests best described as the age of the Market State.

Number of Pages in PDF File: 16

Keywords: Free Trade Agreements, Pharmaceutical Regulation, AUSFTA, Non-Violation Nullification of Benefits, Cost-Effectiveness, Medicines Regulation

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