email: mark.vaile.mp@aph.gov.au

Dear Mr Vaile,

I am writing to you to request that you exclude the reference pricing facility of the Pharmaceutical Benefits Scheme from the negotiations for a Free Trade Agreement with the United States (USFTA).

The US Under Secretary of Commerce, Mr. Grant Aldonan, has stated publicly that the US wishes to challenge reference pricing as part of the negotiations. The Australian Financial Review of 13 August 2003 quotes Mr. Aldonan as saying that ‘there is a sense of unfairness in the US’ because US consumers paid high prices under a free market while consumers in Australia and elsewhere benefited from low ‘reference prices’ under schemes like the PBS (‘US wants reform of ‘unfair’ PBS, Australian Financial Review 13 August 2003).

The Australia Institute has undertaken research comparing prices of the most common drugs in the US and Australia (The Australia Institute, (2003) ‘Comparing Drug Prices in Australia and the US: The implications of the US-Australia Free Trade Agreement’, 25 July 2003, www.tai.org.au). It found that the wholesale prices of ten of the most commonly prescribed drugs in Australia are at least 79 per cent to 306 per cent more expensive in the US. The report concluded that if reference pricing were removed under the USFTA negotiations, it is clear that prices for drugs in Australia would rise significantly.

Reference pricing makes drugs affordable to Australians, including those on low incomes, and I am very concerned that you have not been prepared to state that it is off the agenda in the USFTA negotiations. Important social policies such as this should not be traded away in secret trade negotiations. Trade agreements should be subject to a full parliamentary vote, not simply signed off by Cabinet.

I look forward to your response.

Yours sincerely,

(Name, Address)