The CPTPP does not change the Pharmaceutical Management Agency’s (Pharmac) model or its ability to negotiate the best price for medicines for New Zealanders.

Pharmac model not changed

The CPTPP includes provisions that apply to government programmes that subsidise pharmaceuticals and medical devices. For New Zealand, the annex will apply to the Pharmac consideration of applications to fund pharmaceuticals only.

The annex includes a number of provisions that promote transparency and consultation. These reflect existing Pharmac processes, such as the publication of significant amounts of material on Pharmac’s website, the processes it uses to engage suppliers throughout the application process, and the information published on decisions.

These obligations will not change the Pharmac model or its ability to fund, prioritise pharmaceuticals for listing for reimbursement, or approve pharmaceutical funding. Pharmac will continue to prioritise its funding options and negotiate with suppliers to ensure New Zealanders get the best possible health outcomes from the money the Government allocates for medicines funding.

Following the suspension of some of the provisions that were included in the transparency annex of the TPP, Pharmac’s current application practices no longer need to change to be consistent with the obligations of the Agreement.  This saves New Zealand implementation costs that were expected to cost the government an initial $4.5 million and $2.2 million per year thereafter.

General health funding principles protected

Parties have agreed the annex does not affect the right of governments to determine health expenditure priorities. Other general principles are also included such as the importance of protecting and promoting public health and research and development, the promotion of timely and affordable access to pharmaceuticals and medical devices, and the importance of appropriately recognising the value of these products. There are no specific obligations attached to these principles.

No dispute settlement for pharmaceuticals

Furthermore, the obligations of the annex will not be subject to dispute settlement. In other words, while the provisions are legally binding, CPTPP governments or investors will not be able to bring formal dispute settlement proceedings if they have concerns about another Party’s approach to implementation of the annex.

CPTPP Parties have also agreed to a government-to-government mechanism to facilitate dialogue and mutual understanding on the issues covered by the annex.

Intellectual property suspensions

Parties have agreed to suspend a number of intellectual property provisions relating to the pharmaceutical industry.  The CPTPP does not contain:

  • any obligations on data protection or market protection for new pharmaceutical products, including biologics.
  • any obligations to extend the term of a patent following unreasonable delays in the patent examination process by the Intellectual Property Office of New Zealand or by Medsafe when approving a pharmaceutical product’s entry into the New Zealand market.