18 Jun 2011

Drug company issue wider than trade deals

12:16 pm on 18 June 2011

A trade expert says fears the United States is targetting national drug-buying agencies like New Zealand's Pharmac are spreading to other countries.

In the past fortnight, seven US state governors have written to President Barack Obama calling for protections for pharmaceutical companies in the TransPacific Partnership (TPP) trade deal.

A more recent letter from the governor of Vermont, Peter Shumlin, warned a crackdown on drug-buying agencies like Pharmac could undermine American healthcare schemes such as Medicaid and Medicare.

The International Business Forum's Stephen Jacobi says Medicaid was exempted from the recent US-Korea trade deal.

Mr Jacobi says the type of concerns being voiced by Mr Shumlin could yet have some effect on the outcome of the TPP trade talks.

He says the debate over national drug-buying agencies and trade agreements has also attracted attention in Canada, which has signalled it would like to join the TPP.

Mr Jacobi says the matter is also relevant to Canada in its strong trade and economic relationship with the United States, and is a more general issue for international trade, including at the WTO.