Reborn TPP could see vital subsidised drugs cost more

Talks aimed at reviving the stalled Trans-Pacific Partnership between Australia and 10 other nations could add as much as $100 million to the cost of the Pharmaceutical Benefits Scheme a new study has found.

The talks, which began in Vietnam on Wednesday, are aimed at restarting the 12-nation trade agreement without the US, which withdrew after President Donald Trump took office.

Although 11nations including Australia, Canada, Japan, New Zealand and Singapore have signed the agreement, its text says it cannot be ratified without the US.

PBS's outlays of $2.2 billion on biologic medicines could be cut by 24 per cent if existing protections were removed, a study says. Photo: Louie Douvis

PBS's outlays of $2.2 billion on biologic medicines could be cut by 24 per cent if existing protections were removed, a study says. Photo: Louie Douvis

Australia and Japan are leading a push to have a near-identical agreement signed and ratified by the end of the year with provision for the US to join later.

At issue in the talks attended by Trade Minister Steven Ciobo will be whether the new agreement needs to include clauses added at the insistence of Washington.

One of them provides eight years of protection from competition for the developers of so-called biologic medicines, which are produced from living organisms.

One of them, an anti-cancer drug known as pembrolizumab costs $150,000 for one year's treatment before subsidy by the PBS.

Another, an arthritis treatment known as adalimumab, costs the scheme $272 million a year.

In a study published in Australian Health Review on Thursday, a team lead by Deborah Gleeson of La Trobe University estimates the cost to the scheme of the protection that is now provided at between $367 million and $560 million a year.

It says PBS's outlays of $2.2 billion on biologic medicines could be cut by 24 per cent if existing protections were removed.

The study says that given the high price of biologic medicines, even small price savings could deliver significant savings.

It finds no evidence that limiting the period of data exclusivity would cut the supply of drugs to Australia.

Each is developed for an international market and would be provided whatever Australia's period of data exclusivity.

During the negotiation of the Trans-Pacific Partnership in 2015 then-trade minister Andrew Robb refused to accept the US demand for eight years of data exclusivity, offering instead Australia's existing five years plus other unspecified measures that would deliver "comparable outcomes".

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This story Reborn TPP could see vital subsidised drugs cost more first appeared on The Sydney Morning Herald.