Russel Norman

NZ Last

by Russel Norman

NZ First, which should henceforth be called NZ Last, has agreed to sign up to a deal on the Joint Therapeutics Agency with Australia even though they previously promised to oppose it. This is a major sellout given the strident position of opposition they took before they signed up to the deal with Labour.

The joint agency will make it hard for the NZ based dietary supplements industry and it will hand over sovereignty for the regulation of therapeutics to an organisation established under Australian law (though with significant NZ input). We all agreed that dietary supplements needed more regualtion, but a heavy handed Australian-based organisation wasn’t the way to go.

One dimension worth considering is that this agreement effectively brings the NZ regulation of drugs under the Australia US Free Trade Agreement because the Joint Therapeutics Agency is established under Australian federal law. One of the targets of the AUSFTA was Australia’s Pharmaceutical Benefits Scheme which is a weak version of our Pharmac. US big pharmaceutical companies hate the PBS and Pharmac because they drive down prices by bulk tendering and the use of generics. So, in the future, under this deal, when US drug companies slow down the introduction of cheaper generic drugs in NZ as a result of the joint agency we can thank NZ Last. And that of course means that Pharmac’s budget is stretched thinner.

And one other dimension of the deal is the continuation of direct-to-consumer-advertising of drugs. NZ and the US are the two western countries that allow DTCA and there were plans afoot to stop it here because of the pressure it puts on GPs to prescribe unecessary and expensive drugs, along with the misleading and unbalanced nature of the advertising – see Toop report. But as part of the deal that NZ Last has signed up to, we will continue with DTCA.

For these reasons this is a very bad deal that NZ Last have signed up to. Two big victories for the big pharmaeutical companies. Why did they do it?

Published in Environment & Resource Management by Russel Norman on Wed, December 13th, 2006   

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