Webdiary - Independent, Ethical, Accountable and Transparent
header_02 home about login header_06
sidebar-top content-top

Nipping evergreens in the bud

This is Robyn's debut piece for Webdiary, though she is a regular commentor. Now a house-wife, Robyn's employment history includes time as a registered nurse, as the receptionist at Australia’s embassy in Washington DC and as a rouseabout. Currently her housekeeping efforts, such as they are, provide a home for three teenage daughters, a dog, the international headquarters of Healthy Skepticism http://healthyskepticism.org and its director (to whom she is married). Healthy Skepticism’s major aim is “Improving health by reducing harm from inappropriate, misleading or unethical marketing of health products or services, especially misleading pharmaceutical promotion.” Hamish Alcorn.

Nipping evergreens in the bud: responsible horticulture and the Pharmaceutical Benefits Scheme

by Robyn Clothier

Acting Prime Minister Mark Vaile said this week the government would consider removing the “anti-evergreening” amendments to the legislation enabling the Free Trade Agreement with the US. These amendments were introduced to ease enormous public concern about the USFTA’s potential to undermine the Pharmaceutical Benefits Scheme (PBS).

Thomas Faunce and Andrew Searles, from the Globalisation and Health project at the Centre for Governance of Knowledge and Development, ANU, discussed Vaile’s announcement in the following day’s Sydney Morning Herald and it was also covered on the 7.30 Report. However the opinion piece Dr Faunce published in The Age prior to the introduction of the legislation into Parliament provides a more thorough understanding of the practice of ‘evergreening” itself.

…Drug patent evergreening is the single most important strategy that multinational pharmaceutical companies have been using since 1983 in the US (and since 1993 in Canada) to retain profits from "blockbuster" (high sales volume) drugs for as long as possible.

When the original patent over the active compound of a brand-name drug is due to expire, these drug companies often claim large numbers of complex and often highly speculative patents. Laws in the US and Canada require manufacturers to notify the original brand-name patent holders of their intention to market copies at the expiry of the original patent. The original patent holders can then threaten these potential generic competitors with breaching their now "evergreened" patents and seek a court order preventing their marketing approval.

The problem is a severe one in the US. In 2002, an extensive inquiry by the US Federal Trade Commission found that as many as 75 per cent of new drug applications by generic drug manufacturers were the subject of legal actions under patent laws by the original brand-name patent owner. These were driving up US drug costs by keeping the cheaper generic versions off the market.

. . .

The ultimate consequence could be elderly and poor Australians paying not just four times the present co-payment price, but (if the PBS collapses) four times the price the Federal Government now pays for each drug.

The generic drug industry in the US and Canada has the financial resources and independence to fight evergreening patent claims. The profit margins of generic companies in Australia are extremely fragile. Most are subsidiaries of the multinational pharmaceutical companies. As a result, it will be much harder for them to resist the threats posed by evergreening.

The evergreening article was a central objective of the US pharmaceutical companies in the FTA negotiations…”

An existing patent, of course, prevents the Therapeutic Goods Administration granting marketing approval of a new generic drug. The “anti-evergreening” amendments to the legislation implementing the FTA require a pharmaceutical manufacturer to provide a certificate confirming that legal proceedings claiming patent infringements will be commenced in good faith, have reasonable prospects of success and be conducted without unreasonable delay. There are penalties of up to $A10 million (plus costs) for a false or misleading certification.

Without these disincentives we are very likely to see patent life extended beyond the current term (effectively 20 years) and the introduction of generic equivalents delayed or prevented. The cost of existing individual medicines in the market may not rise, and Mark Vaile and Medicines Australia want to assure us they will not, but removing the “anti-evergreening” provisions will inevitably mean higher over-all PBS costs. The PBS is a system designed and developed in Australia which has for years been the envy of the world for its ability to provide all of our people with access to affordable medicines. Why would we want to risk beginning its unravelling in this way?


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

PBS safe for now

At least in the short term it looks like we're not budging on anti-evergreening amendments and the US isn't budging on sugar. This is from The Age:

Both sides refused changes on contentious trade issues, such as the exemption of sugar from the agreement and the Labor-sponsored amendment designed to stop drug companies "evergreening" patents to stop the development of cheaper generic drugs.

However, the FTA is apparently a "living, breathing dynamic agreement" that will change over time, so we will have to keep an eye on it.

Those partial to a laugh at the expense of big Pharma may appreciate the "news" of this breakthrough (from The Onion):

PharmArmorin, available in 100-, 200-, and 400mg tablets, is classified as a critical-thinking inhibitor, a family of drugs that holds great promise for the estimated 20 million Americans who suffer from Free-Thinking Disorder.

Tuesday's the day

Mark Vaile is saying more encouraging things ahead of Tuesday's formal review of the FTA in Washington.

Mr Vaile said he believed there was no need to alter the government's amendments to protection for generic medicines.

"I imagine the Americans will want to have a discussion about some of the amendments that were made to the legislation after we'd agreed on the deal," he said.

"Our view on that is that there's been no identifiable commercial detriment as a result of those amendments and we don't believe there's any need to change them."

It seems he is defining "commercial detriment" in relation to the situation which existed prior to the FTA, rather than in terms of the potential commercial benefit which would result from the removal of the anti-evergreening amendments.

That suits me, though, because I don't think aspirations to freer markets should be given higher priority than the health of the public.

I hope he can "maintain the line".

Echoes to the north

US trade negotiators are in Kuala Lumpur this week to begin discussions about a free trade agreement with Malaysia. Last week they were in Chiang Mai, Thailand, discussing the proposed US-Thai FTA.

There were protests in Chiang Mai over things that sound very familiar.  I am not sure, though, how many poor Thais are able to pay for pharmaceuticals NOW.

Civil society network resumes opposition to Thai-US FTA pact

"BANGKOK, Jan 13 (TNA) – The network of 11 civil society organisations which showed its opposition to the Thai-US Free Trade Area (FTA) negotiations earlier this week in Chiang Mai Friday reaffirmed its intention to continue protesting the talks...

Nimitr Thien-udom, who heads ACCESS, an NGO focusing on HIV-AIDS issues, said the alliance stands by its earlier position against the ongoing negotiations because Thailand will lose more than it gains from the agreement... 

Kamol Upakaew, Chairman of the Network of People Living with HIV-AIDS, said "the US demands far too much" when it asks for pharmaceutical patents to be protected for 25-30 years, from the internationally agreed period of 20 years under WTO practice.

This would result in a five-year delay in the entry of generic drugs to the market thereby imposing extra financial burden for anti-retroviral drugs for people living with HIV-AIDS, he said..."

Thanks for the article

Thanks for the article Robyn. I hope nobody minds if I inject a personal note here.

I use seven different prescription medicines at a cost of approx $130 per month. Without these meds I'd be dead. I'm lucky to have a decent income but I already worry about those on an income, say, $5 a week above the threshhold for a health care card who struggle with chronic illness, work, family, etc.

If the PBS goes, even on my decent but modest income I may not be able to comfortably afford increased costs. The taxpayer will then have wasted 3 1/2 years of treatment at $500 a week plus the cost of transplant surgery and 10 days in hospital because my transplant organ will fail and I'll either be back on treatment or dead.

Thanks in advance "Honest" John.

Still a sovereign nation?

See also Australia must hold line on evergreening from Patricia Ranald, Principal policy officer, Public Interest Advocacy Centre, in the Australian Financial Review today.

"...The inclusion of aspects of our intellectual property law and medicines policy in a trade agreement means they are now subject to the pressures of trade negotiations and trade law rather than decided democratically in Australia. The US government can also use the disputes process of the agreement to challenge our medicines policy on the grounds that it is not consistent with the agreement.

If, as Baume concedes, economic benefits from the agreement may not eventuate for 10 years, it is legitimate to ask whether we should be putting medicines policy at risk in the meantime. The agreement enables either government to give six months' notice to end the deal, and public interest demands that this possibility be debated sooner rather than later."

Drug lobby preparing a bitter pill

Dr Thomas Faunce and Dr David Henry have an opinion piece published in The Age today with the headline Drug lobby preparing a bitter pill. They conclude:

"A coherent system to meet future challenges to the PBS should involve a mixture of reference pricing, selective tendering and strategies to facilitate ultra-low cost generics. The correct mix will be the one that is most likely to achieve the goals of equity, affordability and fiscal responsibility reflected in the Australian National Medicines Policy. "Innovation" is merely an industry lobbying principle; it needs to be more thoroughly tested by democratic processes before it can be allowed to drive public health policy in this country."

Well worth reading the whole article.

Re: Low Hanging Fruit

Sorry Ron for not checking up on my sources. The phrase ,,,'low hanging fruit"... is a favourite of Robert Zoellick, former top Trade Negotiator for the Bush Administration, who now is the Deputy Secretary of State, under Condi Rice. He has used this phrase often after concluding negotiations.

This was reported with reference to the AUSFTA in articles on the Webdiary site by Brian Bahnisch ("Picking the Low-Hanging Fruit First" , SMH, July 29, 2004) and by Margo Kingston ("A Plague on Both Their Houses on the FTA", SMH, August 1 2004) To quote:

......"As Zoellick murmured quietly, Australia offers 'the low-hanging fruit', the Canberra Times' Jack Waterford reported a US diplomat as saying to him "We like you Aussies, because you are such an easy lay".......

Zoellick also used the term when reassuring the US Congress and the US Pharmacutical industry that the Free Trade Agreement would be approved by the Australian government.

My apologies for not doing my homework earlier.


Raymond, the focus of my questioing was on the statement that it doesn't get easier than this. Your references aren't helpful there.  I can't find the Waterford report on Google and the Canberra Times website isn't helpful.

The Tip of the Iceberg

Thanks Robyn for this important discussion point as it will directly affect the well-being of many Australians. Australia's PBS has been hailed as one of the finest systems of its kind, because it does protect the consumer from the waste of drugs which do not pass the test of cost effectiveness vs a successful clinical outcome.
Recently, I was at a workers' compensation conference here in California, and the topic of one of the sessions was the spiralling cost of pharmacuticals. One point made clear is that the marketing budgets of the drug companies will continue to rise and be a greater cost driver, because of its success. People are going to the doctor and asking if (insert whatever new drug it is) is "right for them" (as instructed by the adverts) and expecting/demanding the new drugs to be prescribed, if appropriate. The sales of Vioxx, Welbutrin and many other drugs has been fuelled by these very successful advertizing blitzes.
And lest we forget that somewhere between $10-15 million (my estimate) will be spent during the Superbowl alone on Ciallis, Viagra and Levitra  (the big three for erectile dysfunction) in advertising during the big game.
Yet, it's just not profitable for the drug companies to produce enough malaria fighting drugs for the African continent.
The threat to the PBS system is a direct result of the highly flawed and horrendous Free Trade Agreement. It should be clear by now that the only benefits which accrue do so towards the United States. This is par for the course.
The numbers released last week and reported on show the trade imbalance growing astronomically between the US and Australia. Its a simple reason - the US protected its primary products producers (the sugar industry in the US is a terribly inefficient industry but a very vocal and well-funded lobby - only one example) while Australia has few maunufactured goods either wanted or necessary in the US economy. This is NOT a Free Trade agreement and  it will NEVER become a positive agreement in real dollar terms for Australia.
It is on this point that the Howard government sold the FTA to the citizens - billions of dollars of growth coming into the economy, in a typical use of language designed to obfuscate the truth. It doesn't matter a damn when the other side of the ledger sees Australians  spending tens of billions  on American products. The trade deficit numbers will be always in arrears.
But this is just the tip of the iceberg. The Free Trade Agreement has made it much easier for American companies to buy Australian ones. Friends of mine here in the US, who do business in Australia are amazed at the labor relations and benefit structures provided to Australian workers. The notion of four weeks annual leave is simply ridiculous, unless you've been on the job for 10 years.
At least prior to the IR reform laws were passed.
While not a subscriber to conspiracy theories, I believe a big reason JWH moved so aggresively on IR reform is to appease the large American corporations and those who are eyeing further investment (read-buying up) in Australian companies. Much more user-friendly to the average American/multinational CEO.
This represents only a few of the threats posed by this ill-conceived FTA agreement. Intellectual property rights will be a very contested issue as are the patent laws (as discussed in this thread).
As one of the trade negotiators from Washington put it (sorry I can't remember who said this) ..." it doesn't get any easier than this; it's like picking low hanging fruit...."
The threat to the PBS system is real and the Howard government must be held accountable if Australians are not able to obtain/afford necessary drugs. It is a disgrace that the government of Australia holds the people of Australia in such distain.   
The Free Trade Agreement between Australia and the United States should be shredded.

low hanging fruit

Raymond Viers, so the trade balance between USA and Australia is "growing astronomically". A nice embellishment - "astronomically"  - and it fits your case against the FTA. But it isn't true.

However, I am posting to comment on your apparently devastating quote: you say a US negotiator said: "It doesn't get any easier than this; it is like picking low hanging fruit".  As I said, devastating. But is it true?

You don't remember who said it and you provide no source. Again while I am prepared to accept that you think this is true I very much doubt it.

Take your medicine

C’mon folks, it’s FREE, it’s TRADE and its an AGREEMENT.  It must be good for us. 

Those interested in learning the basics of this new weapon of imperialist domination called “intellectual property” may want to read a balanced analysis of  Theories of Intellectual Property by William Fisher, a professor at Harvard. Among other things, he says “ Empirical work has suggested that patent law has been more important in stimulating innovation in certain industries (e.g., pharmaceuticals and chemicals) than in others, but has failed to answer the ultimate question of whether the stimulus to innovation is worth its costs.”

Jay White, American

Jay White, American university hospitals don't usually need to worry about being sued for breach of ethics by Puerto Ricans living on welfare.  As I said, her FAMILY agreed for her to be flown to New York - she herself was in no state to be able to agree to anything.  It was a tragic circumstance all round - and in my opinion, degrading.  The treatment in of itself was just treatment.

If she herself had been fully aware and informed of what was going to happen to her in New York and consented with full knowledge of what she was going to be put through, there would be no problem.  As she was barely coherent for most of the time she was in the hospital in NY though, I don't see how that was possible.  

There are many people who agree to take part in studies that might not help them much but go on to help other people and I have enormous respect for their decision and the work that is done.  I sincerely hope that what happened to this lady in New York had a positive outcomes for other people in her situation further down the track.

Ross Chippendale, I take your point about our opposition being as pharmceutically inclined as the government.  Perhaps if the pharmceutical companies didn't spend so much money on advertising their pills, potions and lobbying governments, it would bring the cost of their products down to reasonable levels.


Hey Robyn, In relation to the sale of drugs, promotion of drugs etc we are still partly protected, for now. If you have seen any US media and most of us would have in one way or another you would be aware of the extent of advertising of drugs which purport to solve medical problems. Most drugs are released in the US and Europe before they are here which saves us from being the front line guinea pigs.

As most here would be aware I have been through a lot of treatment for depression and through that have become aware that the drugs that sell big over the counter in the US are only those not requiring prescription. Of course they don't actually help except perhaps through the placebo effect.

As to experimental medicine I'm afraid I must agree strongly with Jay. Again, with treatment for depression much of the offered treatment really is, in effect, experimental. I and others I've communicated with on the issue refer to ourselves as guinea pigs, admittedly 2nd or 3rd line guinea pigs behind the US and Europe but still guinea pigs.

Why? Because, even though these drugs are supposedly fully tested through clinical trials the reality is that enough time and enough testing has not been done. Think of Vioxx for example.

I have a personal example where an anti depressant, hot off the shelf, was prescribed to me before it came out in Australia. How? Doctors go to trade fairs at the cost of drug companies and walk away with showbags full of drugs before our administration has looked at them for PBS purposes.

That particular drug had been clinically trialled in Europe and passed enough to dole out to doctors world wide. Being in Brisbane we have one thing which most European climates don't have generally. Humidity and a long sticky summer.

The effects of that drug on me were good mentally but a disaster physically. I developed fluid retention in my legs, to knee depth, and even after 3 years of being off that drug I suffer peripheral neuropathy in both feet and part of my left leg. That is, the fine nerve endings died during use of that drug as it reacted badly with the climate here. Loss of feeling is the result.

My psychiatrist reported that to the company in Europe and they sent reps here to check it out which resulted in a small note being added to the warnings that are included with drugs.

Full knowledge? No way, not now and ever with any drug as drugs work differently on different people, particularly those for mental illnesses. What full knowledge encompasses in Australia is that sometimes large piece of paper that is included in each box of pills. Listing all known and recorded issues, problems and side effects. Unfortunately most doctors who prescribe these things know little about such effects until they see the results in their own patients.

The legality of full knowledge is covered by that piece of paper but who reads it and who understand what it says? I certainly didn't in the past but examine it closely these days. including a search through the internet before I agree to any treatment, for anything.

Then there is ECT (ElecroconvulsiveElecroconvulsive therapy). This is espoused as a last ditch cure for those ready to agree to anything. Most of you would be aware of it but to undergo such treatment a patient is required to sign a consent form exonerating the practitioners and hospital from any responsibility legally. That is because medical science does not yet know WHY it works, if it does that is.

In other words it is experimental and is being used every day in every capital city of this country. It is an accepted treatment yet no responsibility is taken for the potential results.

I'm sure there would be many such examples across the range of medical treatments for all illnesses and diseases but the point is this:

.Australian medical practitioners do use treatments that may have unknown effects and let me assure you that some of the side effects I have suffered are indeed degrading. And painful. And permanent.

Regardless of the effects though I am confident that doctors do not knowingly inflict drugs and treatments on people that they know will result in bad side effects to that individual. They rather rely on what has been documented and trust that the trialling has been extensive and thorough.

Nothing I have written here disagrees with or detracts from what the person flown to New York suffered of course. I can only sympathise with that person and all others that accept treatment hoping it will help. Mostly it is better than the original illness or disease but not always. 

I'm off track about the main issue anyway, being the PBS system. None of what I have written lessens the need for that system to remain and be protected. Without it the experiences I have mentioned would expand rapidly and cause great suffering and misery, not just for the individuals either, for the whole of our society.

Real costs and sacrifices

Jay White, it is true that clinical trials of new drugs are conducted in patients whose life is threatened by their illness and who are unlikely to respond positively to any further currently available treatments, and that, at least in Australia and similar legal systems, this is done with “informed consent”. We are indeed indebted to people such as your friend who willingly undergo this sort of experimental treatment. As you say, they do it in the very uncertain hope that it will improve their health but also because they want their experience to further scientific knowledge. And they risk side effects which may or may not be known. For anti-cancer drugs at least, they are likely to be pretty awful. 

It is also true that dying from leukaemia or cancer of any sort is not dignified, and that sometimes treatment, eg. further surgery or drugs with side effects like vomiting and diarrhoea, is prolonged past the point of really being in the patient’s best interests (because imperfect decisions are made or influenced by the humans involved – be they families, medical staff or the patient themselves). Such treatment could be termed “degrading”. 

I agree with your statement that “uality and life changing medicine and treatment costs big money!” especially when looked at in the context of the US health system. However, I think we are obliged to ask whether it needs to cost as much as it currently does, and to think about how to make access to treatment as equitable as possible. In doing so, I would venture to suggest, we are following the example of people like your friend who have done what they did for the greater good of all humanity.

On the question of whether the pharmaceutical component of a health care system needs to be as expensive as it is, I offer the following quote in response to the often-asserted proposition that drugs are as expensive as they are because of the high cost of their research and development. It is sourced from a key international pharmaceutical industry journal (unfortunately free access is not available on-line) and comes from an industry consultant.


“The industry spends perhaps around 10% of its revenues on conducting clinical trials, and then another 30% promoting its products.”



Mehta V. “Batten down the hatches in 2005.” Scrip News Update, 2005, May 11

30% of what we pay for drugs is actually the cost of wining and dining doctors, visiting them with sales spiels, samples and gifts, tracking their prescribing to work out how to do it better, advertising etc etc. There must be a better way!

Patenting and protection

I will begin by thanking Robin Clothier for raising this subject and for writing so incisively on it.

According to the website of one firm of patent attorneys:

“A patent is a government grant of a 20 year monopoly to an inventor in return for a full and public description of the invention. Within limits, a patent allows control of the market for the invention during the term of the patent.”

More here, and here.

In other words, free competition in the marketplace is suspended for 20 years to allow innovators to recover their research and development costs and then make sufficient profits for the whole exercise to have been worthwhile. Arguably, without patents to protect them, there would be few innovations and innovators. In the case of pharmaceuticals, it costs huge amounts of money to develop and trial a single new drug, though that is not the full story on cost.

However, there is a trade-off here. The public, and competing companies, get full disclosure of the invention. The public good is arguably served by the 20 year monopoly granted by a patent. Some inventions, like say a new mousetrap, are easy to comprehend once production and sale are underway, and a competitor does not need any text or diagrams as submitted with the patent application. Others, like pharmaceuticals and microchips, require specialists and costly equipment for their analysis and so the information supplied in the patent applications is very valuable to competitors.

If I have an Australian patent on a new mousetrap, competitors cannot break my monopoly by manufacturing in say, China, and selling their version of it here. But they can sell to their hearts’ content in any country where I do not have patent cover. Of course, if I do patent my mousetrap in say India, Pakistan, Turkey or Peru, I have to be prepared to defend it in the court systems of those countries against violations should the need arise; and if it is a money spinner, that need will probably arise. That can make it really expensive.


There is also no such thing as a global patent. If an innovator wants global protection, patents have to be taken out country by country across the entire world, including the members of the EU. According to one patent attorney I know, one reason that pharmaceuticals are so expensive is that the drug companies make it their business to patent each new drug globally, country by country, and to prosecute violators. This also means that pharmacists and chemists in poorer countries cannot take advantage of the information disclosed for patenting purposes in the originating country. 

Evergreening is a device used by holders of patents to avoid the trade-off described above and to renege on their side of the deal. It clearly violates the whole spirit, justification and purpose of patenting, and begs closure of the legal loopholes that make it possible. But don’t hold your breath on that.  

So if today I invent a radical new mousetrap (which includes a zinc plated spring) and patent it, I should not be able in 20 years time to take out a fresh patent on the same mousetrap but this time with a powder coated spring. My competitors should be free to market at least my original mousetrap without having to pay me a cent in royalties, but plate their springs in gold, platinum or whatever they desire. (Arguably, a patent would not be granted in the latter case because the gold plated spring would have negligible effect on the operation or novelty of the mousetrap, though it might qualify as a novel ‘design’.) 

In these times of free market rhetoric and selective deregulation, the free market concept ultimately behind patenting should be defended, because it is in the public interest. Finding the will to do it in either Labor or the Coalition is of course, something else again, as the pharmaceutical companies make it their business to contribute heavily to any party likely to win government. 

And then of course, those parties go into auction mode come election time and try to outbid each other for the votes of the citizens. Last election it was all about education and health insurance. Ironically, those citizens are the ultimate source of the companies’ donations to the parties, thanks to the high prices they pay for pharmaceuticals.

S Marker "On the more

S Marker  "On the more dubious side of the health system, I knew a family from Puerto Rico whose daughter was flown to New York, dying of leukemia, on the promise of medical treatment.  My friend who used to go and sit with them every day wondered why so much blood was being transfused in and out of her body, so many times per day and found out that the family had agreed for the daughter to be eligible for an experimental treatment in return for the hospital bed in New York.  The experimental treatment did nothing except prolong the woman's life for a few more weeks and subjected her to degrading treatment in hospital whilst she was dying".

I would need proof that this unfortunate girl was simply used as a experimental guinea pig simply to degrade her. I would also remind S Marker these same things take place in Australia everyday and have done since the advent of medicine. This is hardly as sinister as you are attempting to make out. If there was a clear breach of medical ethics this hospital should and will have a case to answer.

As a matter of fact I had somebody very close to me die ten years ago from a terminal disease. This person had a experimental drug tested on them during the final stages of the disease. The person was made aware from the beginning that the drug had a big chance of failure and next to nil chance of saving their life.

The person decided to go through with the treatment firstly I guess because of hope for the impossible and secondly to many peoples eternal credit hoping that what was to be learned may one day help somebody else. For the record the drug had a major early benefit which prolonged this person life for about nine months longer six of those being a much higher quality of life. This person would be proud to know that this drug has since gone on to make a "real" difference in many peoples lives.

Also one of the Doctors involved in this persons treatment had just finished a two year stint in a US hospital. He compared the treatment of this particular disease in this US hospital to that of its Australian counterpart as being like the laser age compared to the stone age. Medicine is expensive and pretending that it is not will not make the problems in the health system evaporate.

Quality and life changing medicine and treatment costs big money! The current system as is cannot afford it and will be even less able to as life expectancy grows with an aging population along with the technical advances in medicine and treatment itself.

US medical system

We have been extremely lucky to have PBS over the last 30 years.   When I lived in the US, one month of my prescription cost more than what I pay for 4 months of the same thing here.   My annual health insurance premium was paid by my employer and 8 years ago, this was about four times what I paid in Australia in 2005.  I hate to think what the same coverage costs now.  Under the terms of my health insurance, I could only go to the specific doctors my insurance company approved.  If I wanted to visit someone else, I had to pay the full cost of the visit - upfront.  Dental coverage was extra and not paid for by the company. 

Doctors have to check with the patients insurance company as to whether the company will cover the cost of a procedure before it takes place also.  If the insurance company says no and the patient doesn't have a healthy bank balance, the patient goes home without treatment. 

The different health insurance companies, as well as having their approved hospitals / medical practitioners under their umbrella, also have relationships with different pharmaceutical companies.   A doctor who works under the umbrella of a specific medical insurance company will prescribe drugs that come from the insurance company's pharmaceutical partner/s and not others. 

I was lucky in that I had my ex-spouses medical insurance to fall back on as well but as I didn't live near a facility where I could use it, I rarely bothered.   A few times I asked friends back in Australia to get a prescription from their doctor for me - unethical perhaps but at the end of the day, easier.   

Often, insurance companies will only pay for one procedure per calendar day and as a consultation counts as a procedure, if your doctor doesn't inform you of this, it can become expensive.  I was lucky to have a decent doctor who would instruct his secretary to change dates on procedure claims when the visit involved more than just one thing.

On the more dubious side of the health system, I knew a family from Puerto Rico whose daughter was flown to New York, dying of leukemia, on the promise of medical treatment.  My friend who used to go and sit with them every day wondered why so much blood was being transfused in and out of her body, so many times per day and found out that the family had agreed for the daughter to be eligible for an experimental treatment in return for the hospital bed in New York.  The experimental treatment did nothing except prolong the woman's life for a few more weeks and subjected her to degrading treatment in hospital whilst she was dying.

This is the system I don't want in this country.  Australia has its own health problems aplenty but medicare gives us a much better sense of security that Americans enjoy.  The PBS scheme is part of medicare.   We don't yet have the situation where not just people below the poverty line but the middle class as well are scared to use the health system due to the prohibitive costs but with the what has been coming out of the Prime Ministers office these last few years, it could very well come to pass.

Inspite of recent apathy in the Australian community, I'd like to think that dismantling the PBS and exposing Australia to the 'real' cost of phamaceuticals, would be the death knell for the coalition for many years to come.  Unfortunately, I also think they are arrogant enough to do it.

Coalition/Labor? No difference?

Hey S Marker, Trevor Kerr makes a good point below where he points out that both major parties are likely to give access to US drug companies to the cost of Australian pockets, and lives.

It is only when in Opposition that the opposite is espoused.

It's not the change of government that is needed, although JWH is a horror show, rather it is a change of emphasis from ALL our governments.

All major party policies are now based purely on economics and not on the humane needs of the people. Until that changes and public services are run as public services and not businesses there will be no change to policies regardless of government. Even under the current policies our governments are selling the farm for short term pockets full of money.

They don't care about the individuals or even groups unless they represent a powerful lobby. The most powerful lobby is the people of this country but our politicians have divided us so succesfully it is difficult to find agreement on anything. This is evidenced on any media site you care to look at or listen to.

Who does run government policy? It surely is not the people of this country. Certainly most of the Coalition MP's don't run policy either. It seems there is one voice only and it's where he gets his instructions that run policy.

There was a short period where Latham had some effect on policy but there is no one sitting in the void he created upon leaving. Just Humpty Dumpty.

How free is "free"?

Chris Matthews, since you have relatives in Ohio, here’s a link for you which was forwarded to me by a fellow Webdiarist. 

The people of Ohio were not keen on the “free” trade agreement with Australia because it contains elements which prevent the importation of cheaper drugs from Australia!


Good one, Robyn. My blood ran cold at the mention of Jane Halton. 

In Financial Review, Jan 9th, Lisa Allen writes about 'Drugs debate clouded by big donations'. The article begins:

The local arms of multinational drug companies, like their American counterparts, are emerging as big political donors channelling hundreds of thousands of dollars into the coffers of major parties ...

Key points are:

  • Both Labor and the coalition have given the pharmacy industry preferential treatment.
  • There are calls for the banning of political donations by the pharmaceutical industry and medical lobbyists.

(The article has not been made available at afr.com. It is well worth the $2.50, though, or a visit to the photocopier in the public library.)

It has facts and figures on the Pharmacy Guild, Merck, Pfizer, etc, and words from David Henry and other spokespersons.

The Age editorial flaps the teatowel over political donations, too, in Lessons for Australia in US corruption scandal, and how we need to be more careful, and ..... SHARK ATTACK! ... Whew! That was close, Fairfax almost fell off the corporate gravy train.

Perhaps I should also

Perhaps I should also explain that, if you are a pharmaceutical manufacturer, to be legally allowed to sell the drug you have invented in Austalia, you must prove to the TGA and its Australian Drug Evaluation Committee that the drug (a) works for the things you are claiming it works for and (b) is safe (or more properly, since no drug is perfectly safe, has an acceptable risk to benefit ratio).

However, to get it widely prescribed and used here, you will need to have it listed on the PBS so that the government pays for part of the cost of each individual consumer. To justify the expense to the tax-payer, when you apply for the listing, the Pharmaceutical Benefits Advisory Committee (who advise the Minister which drugs to list) will assess whether your drug offers value for money in terms of clinical advantage over what is currently available. To get a listing your drug will need to be at least as safe and effective as other drugs already listed for that "indication" or condition. The price you are able to charge (since the government is effectively your main customer) will be negotiated based partly on what is perceived to be the value of the advance (if any) over existing therapies.

The techniques for this "cost-effectiveness" analysis were developed by Dr David Henry and his team at Newcastle University. "Cost-effectiveness" analysis has been very unpopular with the pharmaceutical industry, not least because people have sought to imitate it elsewhere in the world, and Dr Henry was kicked off the PBAC for his efforts when the current government replaced nearly the whole committee soon after it came to power. Cost- effectiveness analysis has since been reinstituted, though. 

Unjust law hiding behind complexities

Robyn, during times of universal deceit, telling the truth becomes a revolutionary act. -George Orwell 'It worries me that its complexities will prevent it being discussed as widely as it should.' Indeed, it worries me too that telling the truth on complex subjects is becoming a revolutionaaary act. I could not agree more with your sentiment on this complex issue. I admire anyone who is able to dive into the complexities of such topics as monopolies or how powerful groups can hide their self-interests behind complexities.

When society forgets its mistakes, those mistakes are bound to repeat. As difficult as it is, the horror of the mess inside the American health system has to be taught and has to be told and only then can we guard it from spreading far and wide Webdiary needs writers like you who dare to disturb the world and make us think. Many of us are too frightened to express our opinions as soon as any issue involves ethical or commercial complexities and compromises.

We must continue to thrive to balance the extreme capitalism tendency of selling the masses the rope. We need to create an environment where human face shines in every market place. In my opinion, you are brave and bright and hopefully you will continue to challenge us with your thought-provoking ideas in the future.

Legend has it when Henry David Thoreau went to jail to protest an unjust law, his friend, the philosopher Ralph Waldo Emerson, visited him and asked, "Henry, what are you doing in here?" The great nature writer replied, "What are you doing out there?"

Thanks all, for your

Thanks all, for your compliments and contributions.

Since submitting my piece I’ve discovered Google News (it probably would have been good to check it out before-hand!) Anyway, here’s a couple of snippets:

From FTA drug safeguard at risk by Steve Lewis in The Australian on Jan 3rd.

“…Health Department secretary Jane Halton will be grilled about these concerns when she meets senior US officials in Washington on January 13.

Ahead of a formal review of the deal in March, Mr Vaile has already been lobbied by US Trade Representative Rob Portman…

Mr Portman and William Steiger, who will convene the January 13 meeting with Ms Halton, are expected to call for greater transparency …”

That will mean greater transparency of the processes and decisions they don’t like, such as the Pharmaceutical Benefits Advisory Committee's considerations of cost-effectiveness when the decision is made to list a product on the PBS or not. I don’t imagine they will be asking the Therapeutic Goods Administration to release to the general scientific community the contents of pharmaceutical manufacturers' applications for registration of a new product for sale ie. the studies that support (or not) their claims that their drug is safe and efficacious. That information, of course, is “commercial in-confidence”.

 Drug-price plan no surprise: expert from The Advertiser of 3rd Jan.

University of NSW academic Elizabeth Thurbon, who co-authored a scathing book on the FTA called "How to Kill a Country", said the Government had left itself open to having to scrap the amendment…

"It's not America's fault. We signed the deal."

Dr Thurbon, a lecturer in international relations, said the FTA prioritised rewarding the innovation of drug companies over delivering affordable medicines to Australia.

The US is now arguing that the evergreening amendment goes against the spirit of the FTA.

"When you sign an agreement in which you prioritise rewarding the innovation of pharmaceutical companies and don't mention at all the need to deliver affordable medicines to Australia, then you leave yourself wide open to this," Dr Thurbon said.

"I think the Government will really have to roll over on this because in effect the US is right – it is violating the spirit of the free trade agreement because we didn't ensure that we maintained the right to prioritise access to affordable medicines.

"It's left it vague enough to be able to interpret any moves to keep costs down or to stop evergreening as an attack on the profits of pharmaceutical companies."… University of NSW academic Elizabeth Thurbon, who co-authored a scathing book on the FTA called "How to Kill a Country", said the Government had left itself open to having to scrap the amendment…

That one’s pretty depressing. 

I don’t know if there is still room to move in the Australian public’s favour in the ambiguities of the language of the FTA. Dr Thurbon doesn’t seem to think so. But have a look at Drahos, Faunce et al's submission to the Senate Select Committee on the US-Australia Free Trade Agreement when the legislation was being debated. It’s long but very thorough, and provides an explanation of the concept of  “constructive ambiguity” which is apparently commonly used when international treaties and agreements are negotiated.

See also this discussion  by Harvey, Faunce et al in the Medical Journal of Australia in July 2004 about the implications for the PBS in the FTA.

Jozef Imrich, this IS a complex subject. It worries me that its complexities will prevent it being discussed as widely as it should.

Forgive me if my attempts to spell things start to sound patronizing. But there should be no doubt that, if evergreening of pharmaceutical patents happens in Australia, we will end up paying top-price for “originator” brand-name drugs longer than we would if equivalent generic competitors were permitted in the market. The ratio of brand name to generic drugs on the PBS list will also grow compared to the current mix.

The government will wear the majority of this increased cost initially because it caps consumer payments. ( I think the cap is currently set at $28.60 per prescription and $4.60 for pensioners)  But the PBS is already stretched and the increased cost will mean money has to be taken from other parts of the health budget. The cap on consumer co-payments could therefore be expected to rise very soon, as could the level at which the safety net kicks in.

The strain might well force “small government” ideologues to radically reduce the coverage of the PBS or perhaps even scrap it altogether. As has already been pointed out with the personal examples, Australia would be a very different place without the PBS. This applies especially to the elderly (think old-age pension incomes) who are often on multiple medications and to those on less-commonly-prescribed but very expensive medications such as anti-cancer drugs which can cost thousands of dollars at full price.

To be perfectly clear, it is lives that are at stake here.

Congrats Robyn, good topic

As above, Robyn, I'm glad to see someone new contribute an article, and a great topic too. It typifies the way our current government(s) "make love" to us doesn't it?

Of course it's no surprise that such a change would be raised and subsequently enacted as it will be. After all a majority shouldn't be wasted would it? Oh! that the last election could have been held with the knowledge of the subsequent 14 months or so since it was held. Would it have been any different I wonder? More tax cuts would fix any change wouldn't it?

As others have noted, the costs in our great, shining example, the US (not us yet) make it almost impossible for the poor to attain required medication. As well as the middle income people.

I have had contact with a number of other US depression sufferers over the last few years and their lives compared to mine are nightmares. Those that had a regular job and normal living conditions when they first got depression were OK for a few months but the longer the depressive period lasted the worse their lives became.

Of course they all lost their jobs, consequently lost their health care coverage and were forced to simply bear the ravages that depression takes you through. They could not afford the drugs that actually help and they certainly couldn't afford counselling or a psychologist's help.  There are many over the counter drugs that the big drug companies sell without prescription in the US but guess what? They don't help. They are useless. Forget about psychiatrists altogether.

GP's they could go to, but what for? Five minutes of being told they need x drug or drugs.

Some of them were taking the trips to Canada or Mexico but that is only a short term answer as well because their entire security, housing and so on was eroded fairly quickly once they could not work.

Two of those contacts have since stopped contact but I suspect I know what happened to them. Their emails before they stopped contact were rather desperate and broke my heart as I couldn't do anything from here. Others still write but they are deteriorating and mainly living off relatives, sharing rooms and the like.

That's just one illness remember. All the rest get the same deal and Howard wants it for us.

Howard's government have been attacking the PBS ever since they could. There have been many steps in the process, changing membership of committees, blackening names of others, applying pressure to people who couldn't hold out and more.

This last little tweak is nothing compared to the work that this government has put in on this process.

What really baffles me is WHY? Can someone explain why? Or is it just the bleeding obvious, money and power and no care for anyone who hasn't enough money. Is that it? What is this country called again? I forget as it's not the one I was born in.

Warning: giving in to the US may have serious side effects

This subject is too complex for me to make any personal views, however, some of the bloggers who are in the health industry appear to be rather articulate about the issue. As Bill Miller of comucat writes:

Borrowing the words of a popular song " 'Now this is the situation: hands off.!' our Pharmaceutical Benefits Scheme (PBS), Minister."

On the evidence, "evergreening" is a scam which operates to keep the price of drugs artificially high. It is an effective micro-economic rigging the market by the manufacturers/patent holders to the benefit only of the riggers. It is therefore immoral.

Hopefully it also unlawful. Put to the test it would be found to be unfair trading. Evidence also indicates that increased drug prices put prescription medicines health care beyond the reach of many Australians. The Australia - USA free trade agreement and our drug prices   (this post on PBS is just below Bill's take on the criminalisation of suicide)

Editorial in the Australian might also be of interest ... A political placebo: The high cost of free trade.

Coda: Few things matter more in the next decade than how we approach human rights within the new economic superpowers We must not kowtow to these undemocratic giants. It may be eclipsed by the anti-EU musings of the current Czech president, but the influence of Vaclav Havel lives on Exporting Dissent: Made in the Czech Republic.

Tax Cuts

Why worry about increase in cost for our medicine. In today's SMH web site Peter C., has feelings for the people on average income ($40,000 to $50,000) and wants to give them a tax cut, funded by a decrease in govt. spending. He also wants to provide more child care places, so that he can increase the status of some of those Mac Childcare owners to Billionaires with, of coarse, our Tax dollars via the increase of subsidies to child care payments.Sounds like a free trade agreement.

Why this has got so far out of hand, I don't know. IMHO we should be funding child care, by providing Public Child Care like we provide Public Schools. 

Don't Forget

What should be noted is that, when the "Free Trade" agreement was being nutted out in parliament in 2004, the blatherings of the Liberal Party included the preposterous claim that to be against the agreement is to be anti-American. (now THAT is a badge I wear proudly!)

Anyways, Labor was in a position that it was hard to maneuver from: being that, close to an election, if it was seen as a anti-American, then the government could jump up and down like hyper-monkeys in front of a docile electorate claiming harm to Australia's future blah blah blah.

Labor, with wisdom, sought to bypass this path and yet take one that on the surface, appeared appeasing, yet underneath kept it's opposition to it fully in tact. The amendments put forward by Latham, and the governments back down over them, showed the electorate who held the cards in parliament. It was a victory, however small.

Now, the government seeks to repudiate these amendments for it's own fallacious ideals. How pathetic. It shows how subservient they really are to the US, and provides further proof that the 'Free' in 'Free Trade' is false. It is a one way street - a glut of imports vs. a drought of exports. An article in the SMH today explained it clearly.

The PBS is in its dying days with this government, and they show how much they stand for the average Australian in fighting for its protection: barely negligible.


Thanks for the debut piece Robyn and it is timely to look at Big Pharma given so many at the start of the year are contemplating the extra dollars they'll need to spend on prescriptions under the changes to the PBS safety net

And thanks too for the personal angles on the issue from Chris Matthews and Michael de Angelos.

Evergreening is clearly anti-competitive, and surely that's not something ok within "free" markets based on "free" trade. It results in higher expenditure for financially burdened healthcare systems as well as driving up patient co-payments. So we pay and pay again to obtain pharmaceuticals in packaging with particular brand names that deliver nothing more than they would if sold by a competitor with a different brand label to stick on packing.

We really have to ask ourselves: How much longer are we willing to subsidise pharmaceutical companies through the high prices they demand for their products when lower-priced generic equivalents could be available?

And to evergreen their products, the originator company will often develop what are euphemistically called “life-cycle management plans“ composed not only of patent strategies, but an entire range of practices aimed at limiting or delaying the entry of a generic product onto the market. This raises questions like: How long will we continue to put up with Big Pharma diverting resources to the creation of these plans and the often non-value adding "updates" on which new patents are granted? Shouldn't those resources go toward the more important work of creating entirely new medicines instead of toward protecting extended monopoly?

John Ralston Saul in The Collapse of Globalism, refering to medicines made unaffordable to the populations in poverty around the world, raises another question for us to think about:

The question is quiet simple: How long will a handful of the most profitable joint stock corporations in the world, whose declared purpose is human well-being, be allowed to cause tens of thousands of premature deaths each year in the name of patent protection and stockholder interests?  

terrible US health care

I had a similar experience Chris Matthews when I stayed with a friend in New York about 30 years ago after he had recovered from cancer which had claimed two of his family. While I was there he had a relapse, but had exhausted his medical insurance. Fortunately he had just received geneous dole payments as he was unemployed for the first time in his life and that paid for another week in hospital.

I chose to stay on and pay his rent for 3 months while he recovered, but because he had no more insurance and had run up huge bills we were subjected to abusive non-stop phone calls from doctor's accountants.

It was my first taste of that American atitude- that it is simply not enough being poor and all the misery that comes with that, but you are expected to be ashamed and accept full responsibilty for your bad fortune. Now of course it's far tougher for the poor and working poor.

We are heading headlong into accepting US style values courtesy of the Coaltion, with some Labor help.

Follow the money...

If you pop over to http://www.democracy4sale.org/search.php and look at the political donations from pharmacutical/health organisations (try the 2002/03 and 2003/04 years) you find that there's big bucks in donations of over $850k to the major parties.. $627k of that to the current government.

The Oz and the FTA

Thanks for this Robyn - cool to know your rich opposites in background! See also "Done like a dinner on free trade deal" (The Australian - OPINION, by Michael Costello), a great piece, and surpringly critical for the Oz' usual right-wing tendencies:

"....the explanation from FTA defenders?

"First, that you have to give the agreement time to settle in. Problem: US exports grew by 4 per cent in the same period as ours declined by 4 per cent, leading to a billion-dollar increase in our trade deficit with the US over the comparable period in 2004. Clearly the US did not need a settling-in period.

"Second, FTA defenders argue that a strengthening Australian dollar over that period made our exports less competitive and US imports more competitive. Problem: the exact opposite is the case. The average value of the Australian dollar to the US dollar in January 2005 was US.7744; in October 2005 it was US.7487, a significant weakening that made Australian exports more competitive, not less.

"Third, Austrade is reported as believing that the FTA has had a significant head-turning effect in both countries. Problem: it may have turned heads but the evidence shows that those heads unfortunately turned away from Australian exports, not to them.

"Fourth, the Howard Government insists that the last-minute amendment to the FTA on pharmaceuticals forced on it by Labor was in substance meaningless. In the words of Trade Minister and Acting Prime Minister Mark Vaile it was "nothing more than populist politics by Labor".

Why believe me?

But hey, why take Dr. Faunce's or my word for it? If you really want to know how evergreening is done, check out this report from http://www.pharmagenerics.com/ advertised right here on Webdiary. It's a steal at only US$6,995!

See the summary...

Here's a preview link and if you add your details (including junk email address) you can get to the link which gives you a 13-page summary.

Page 10 shoes "brand erosion" - the issue that drives this.

What a system

Hi Robyn great debut!

When my partner Maria and I went to the US for a holiday (we hired a car in San Fransisco and drove across to Florida) we stopped at El Paso Texas - we walked over the border to Mexico and there were literally hundreds of elderly people lining up outside chemist shops - we found out from a local taxi driver that these were US citizens buying cheaper drugs.

Later, when visiting relatives in Ohio, we saw the house next door boarded up with a notice in the front window saying that it was now subject to a forced sale.

I asked my mum what it meant and she said that the home had been in the family for generations but that recently the elderly occupant had gotten sick and his medical plan had been exhausted. They got a loan on their house to pay for the treatment, but that money had now run out and they were being forced to sell the house.

Recently my brother who works in Ohio told me of his two colleagues, both doctors who had a baby with extensive medical needs- their medical plan, for $1million of treatment has just run out so the baby (who has had an anus and an oesophagus surgically fashioned) will not get any further treatment.

This is slightly off the topic but it adds to the context in which US drug companies are being discussed.


I wondered how long it would take the Americans to rid themselves of this protection we were to enjoy, courtesy of Mark Latham who fought for this despite the right-wing continually bleating about the non-existence of Labor policies.

The US drug manufacturers are the most powerful corporations and the biggest backers of George Bush. No wonder the Howard government would roll so easily and sell us out so cheaply to his master. This trade deal, which is not "free" has been a disaster for us to date but like many of Howard's bankrupt policies, we are meant to live for some future date when the pay-off will come.

Socialised medicine is an anathema to the Bush administration and I believe Howard also, despite his claims to the contrary. The beginning of the end for Bill Clinton that brought the wrath of the corrupt right-wing Republicans was when he announced Hillary was to study Australia's enviable Medicare with a view to implementing something similar in the States.

The only thing I can not understand is why country people continue to vote for the appalling National Party who sell out their interests in favour of large corporations.

Bob Brown's take

This Press Release from Bob Brown is dated January 3.

Greens Leader Bob Brown predicted today that the government's backdown to the Bush administration on the Pharmaceutical Benefits Scheme in the free trade agreement would not be the last.

"The PBS change dictated by the US drug companies will mean more expensive drugs for Australian users and, inevitably, some Australians failing to be able to afford vital pharmaceuticals," Senator Brown said today.

"The US - Australia free trade agreement was already heavily weighted in favour of the US. For example, while there are no exemptions to the import of agricultural produce from America there are 20 pages of conditions and prohibitions on Australian produce going the other way.

"The Howard government has made the Australian parliament subservient to the free trade agreement. For example, disputes are resolved by faceless panels appointed by the two trade ministers, with no review by parliament and no report to parliament," Senator Brown said.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
© 2005-2011, Webdiary Pty Ltd
Disclaimer: This site is home to many debates, and the views expressed on this site are not necessarily those of the site editors.
Contributors submit comments on their own responsibility: if you believe that a comment is incorrect or offensive in any way,
please submit a comment to that effect and we will make corrections or deletions as necessary.
Margo Kingston Photo © Elaine Campaner

Recent Comments

David Roffey: {whimper} in Not with a bang ... 12 weeks 6 days ago
Jenny Hume: So long mate in Not with a bang ... 12 weeks 6 days ago
Fiona Reynolds: Reds (under beds?) in Not with a bang ... 13 weeks 1 day ago
Justin Obodie: Why not, with a bang? in Not with a bang ... 13 weeks 1 day ago
Fiona Reynolds: Dear Albatross in Not with a bang ... 13 weeks 1 day ago
Michael Talbot-Wilson: Good luck in Not with a bang ... 13 weeks 1 day ago
Fiona Reynolds: Goodnight and good luck in Not with a bang ... 13 weeks 3 days ago
Margo Kingston: bye, babe in Not with a bang ... 13 weeks 6 days ago