Trade Minister refuses to rule out Pharmac changes

Trade Minister Tim Groser. Photo / Mark Mitchell

Trade Minister Tim Groser has heaped praise on the Government's drug-buying agency, Pharmac, but still refuses to rule out possible changes to the agency as part of future free trade deals.

Both Labour and the Greens have called for Pharmac to be off limits in negotiations over the Trans Pacific Partnership, which involves nine countries including the US. American drug companies are critical of the Pharmac model because it is anti-competitive.

"Pharmac is an outstanding institution that has helped New Zealand get on top of its pharmaceutical drug bill in a spectacularly successful way, and we're not about to negotiate its fundamentals," Mr Groser told TVNZ's Q+A yesterday.

Last month, at the Institute of International Affairs, Mr Groser said, "We are not about to negotiate our public health system in any trade negotiation ... We are not about to adopt a health system, via a trade negotiation, that allocates resources according to capacity to pay."

In that speech, he also said he was not going to take Pharmac off the table.

Green Party co-leader Russel Norman said the free trade agreement between Australia and the US had crippled Australia's Pharmaceutical Benefit Scheme, its equivalent of Pharmac.

"They didn't abolish it or its fundamentals ... but they made changes to the way it operates."

The overall effect, he said, was higher costs that were either passed on to consumers or picked up by the Government.

"These trade deals are about re-tying the hands of a democratically elected government and stopping them regulating."

Dr Norman referred to the Philip Morris tobacco company suing the Australian Government for legislating for plain packaging because it could be a violation of Canberra's bilateral investment treaty with Hong Kong; and the issue of child labour in India, where New Zealand is pursuing a free trade deal.

"The trade deals give new, special rights to multinational companies so they can sue us, but they don't give rights to kids who are stuck in a factory somewhere," Dr Norman said.

Mr Groser told Q+A that it was "extremely difficult" to know what products were made through child labour.

He said the best way to address child labour was through political dialogue and to promote economic development through free trade.