The Trans Pacific Partnership Agreement has the potential to negatively impact the health of Australians by raising the cost of medicine and limiting the government's ability to regulate tobacco and alcohol, argues this policy brief based on publicly available and recently leaked negotiating documents.

Executive summary

The purpose of this policy brief is to inform the debate from a health perspective in the final stages of the negotiations on the Trans Pacific Partnership Agreement (TPPA), particularly during meetings of chief negotiators and ministers in February 2014.

This policy brief outlines the evidence about the potential health effects on the Australian community of actions related to the TPPA, based on publicly available and recently leaked negotiating documents. The purpose of the TPPA is to enhance each of the countries’ economic development and that this may lead to improved social and health development. However, although there may be positive impacts on the health and wellbeing of Australians resulting from economic growth, there are also many ways in which the TPPA has the potential to have negative impacts on the health of Australians. This policy brief examines the potential impact of provisions proposed for the TPPA on the health of Australians, focusing on two specific issues: the cost of medicines, and the ability of government to take major steps to improve the health of Australians by regulating the areas of tobacco and alcohol policy. In each of these areas we trace some of the pathways through which provisions that have been proposed for the TPPA may impact on the health of the Australian population, and the health of specific groups within the population. We highlight the ways in which some of the expected economic gains from the TPPA may be undermined by health and economic costs.

Concerning the cost of medicine we focus on how proposed provisions in the TPPA could impact the affordability of medicines through several different routes: by delaying the availability of cheaper generic medicines, by altering the operation of the Pharmaceutical Benefits Scheme (PBS) making it more difficult to keep costs down, and by enabling pharmaceutical companies to sue the government over its pharmaceutical policies. These changes would increase the cost of the PBS for the government and taxpayers. Strategies to compensate for an increase in medication costs include increased cost-sharing, with patients assuming higher co-payments, or funding reallocation from other parts of the healthcare system.

Provisions in the TPPA may impact the ability of Government to enforce existing policies and implement new policies that support public health. Australia is internationally recognised for the success of comprehensive strategies to reduce tobacco smoking. And more recently, there are multiple initiatives being proposed to achieve similar success to reduce harmful use of alcohol. We outline several of the many provisions in the TPPA that could affect tobacco and alcohol policies in Australia.

Concerning tobacco these include an investor-state dispute settlement mechanism clause in the TPPA would provide more opportunities for tobacco companies to sue the Australian government over strong tobacco control measures. Rules about ‘indirect expropriation’ (i.e. depriving an investor of property, which, if broadly defined, can include intellectual property such as trademarks) and ‘fair and equitable treatment’ provide additional grounds for corporations to argue that their assets are being unfairly affected by government policies and laws. Provisions in the TPPA may impact the Government’s ability to implement effective alcohol control policies such as restrictions on liquor licences, bans or limits on alcohol advertising, and alcohol health warning labels.

Concerning alcohol these include provisions in the Technical Barriers to Trade (TBT) Chapter of the TPPA which could limit possibilities for introducing innovative alcohol policies, such as requiring health warning labels. Provisions in the wine and spirits annex to the TBT Chapter may limit the options available to create a fully effective alcohol warnings scheme for wine and spirits. If Australia agrees to an investor-state dispute settlement (ISDS) mechanism applying to Australia, the alcohol industry will have access to a new legal channel to sue the Australian Government over alcohol policy decisions that adversely impact their investments.

We conclude that while there is some potential for the TPPA to contribute to economic development, there is also significant risk that the economic gains which the TPPA may represent, as well as the health of the Australian community, will be threatened if certain proposed provisions are adopted for the TPPA. These include increased direct costs in terms of providing health care and increased use of hospitals, higher costs of obtaining pharmaceuticals, indirect costs associated with lost productivity across society, continuing or exacerbating inequalities in society, and worsening the health of Australia’s already vulnerable communities.

Authored by:

Katie Hirono, Centre for Health Equity Training, Research and Evaluation, University of New South Wales

Deborah Gleeson, School of Public Health and Biosciences, La Trobe University

Fiona Haigh, Centre for Health Equity Training, Research and Evaluation, University of New South Wales

Patrick Harris, Centre for Health Equity Training, Research and Evaluation, University of New South Wales

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