Pharmac is the Government's bulk-drug buying agency and it estimated in its 2012 annual report it had saved New Zealand's district health boards more than $5 billion since 2000.
It essentially rations the country's medicine bill and saves tax-payer money by being able to negotiate bulk deals, often for generic drugs just as a leading and more expensive drug is coming out of its patent period.
But Pharmac is seen by the United States' pharmaceutical industry as anti-competitive, lacking transparency in its decisions, limiting the range of drugs on offer to New Zealanders and not giving intellectual property and research their due rewards.
Various states within the United States have similar agencies to Pharmac, but the leaked text suggests that only national agencies will be subject to the TPP.
The leaked text is an annex to the Transparency chapter and is titled "Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices".
Anti-TPP campaigner and Auckland University law professor Jane Kelsey told reporters today that the US pharmaceutical industry had Pharmac in its sights because it was seen as a highly successful model (for New Zealand) and did not want it replicated elsewhere in countries such as Vietnam.
She said there would be pressure on Pharmac by drug companies and consumers to spend more and there were four options: the Government could increase the health budget overall; the health budget could remain the same but more funding go from non-Pharmac costs to Pharmac; the price the public paid for prescriptions could rise - which Mr Key ruled out today; and the fourth was that fewer medicines were bought by Pharmac.
New Zealand, Australia, the United States and Japan are among 12 countries negotiating the TPP which is at a critical stage - if the US House of Representatives votes to give the Obama Administration fast track authority on the deal, the text could be signed off by ministers and published before the US August break.
