Washington International Law Journal


Providing access to affordable medicines and rewarding innovation produces a difficult tension in the global economy. Different nations deal with this tension differently, as illustrated by the United States-Australia Free Trade Agreement ("U.S.-Australia FTA") negotiations. Both nations stood to benefit greatly from reduced or eliminated tariffs. During negotiations, both nations sought to capitalize on the opportunity to alter certain practices that hindered trade. One such practice was Australia's fifty-five-year-old Pharmaceutical Benefits Scheme ("PBS"). The PBS controls prices for most medicines within Australia. Australian consumers are concerned that the U.S.-Australia FTA will adversely affect access to affordable medicines because free trade agreements are generally intended to remove tariffs as well as non-tariff barriers to trade between the parties. This agreement, however, leaves Australia's subsidization program intact. Similar concerns have been raised before, specifically in Canada over the North American Free Trade Agreement ("NAFTA"). Canada, however, is still able to provide access to affordable, yet innovative drugs, even after NAFTA. Australia will be able to do the same well after the U.S.-Australia FTA is fully implemented. The provisions of the U.S.-Australia FITA are minor procedural changes and do not substantively change how the PBS operates.

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