King Annette: Trans-Pacific Partnership Agreement Amendment Bill — First ReadingText is incorporated into the Bound VolumeKing Annette: Trans-Pacific Partnership Agreement Amendment Bill — First Reading[Sitting date: 12 May 2016. Volume:713;Page:11078. Text is incorporated into the Bound Volume.]Hon ANNETTE KING (Deputy Leader—Labour): At the beginning of this whole process Labour set out five bottom lines before it would support the Trans-Pacific Partnership (TPP) agreement and one of those bottom lines was that Pharmac must be protected. Pharmac is a model that as members know is set up for the negotiation the purchase and the subsidisation of medicines for New Zealanders and it has been supported by this Parliament since its establishment in June 1993.Over time there have been some minor changes to Pharmac. It actually started off as a joint-venture company owned by four regional health authorities but by 2001 it became a Crown entity. There have been changes in things like reference pricing and multi-product tendering and changes to the Pharmacology and Therapeutics Advisory Committee and the Consumer Advisory Committee. There have been changes to operating procedures and quite recently Pharmac got the right to buy medical devices. There has even been the rare political Government interference in Pharmac. Who could forget John Key saying in 2009 that stepping in to fund a 12-month course of Herceptin was his proudest achievement during National’s first 100 days?I would say that in the main we have had cross-party support for this agency so we were keen to watch and wait to see what the secret negotiations under the TPP would do for Pharmac. I have to say that we got the first indication when a number of Labour MPs were briefed by the then Minister of Trade Tim Groser. He briefed Andrew Little Phil Goff me Grant Robertson and David Shearer. I questioned him about Pharmac; at that point he became very obtuse. He was very slow to understand the questions—Hon Dr Jonathan Coleman: That doesn’t sound like him.Hon ANNETTE KING: No it might not. You can be very sure Minister that he was first of all very obtuse very slow to understand our concerns. When we pressed him about the negotiations in relation to the patents on data exclusivity as they affect biologic drugs he became very collusive—very collusive indeed—and finally he became constructive. He called the TPP approach to Pharmac and the patent period for biologic drugs “constructive ambiguity”. “Constructive ambiguity”—those are the words of the former trade Minister. And this was what he said about the patents: “What we’ve put in place”—Hon Dr Jonathan Coleman: Don’t forget it was a confidential briefing.Hon ANNETTE KING: No it was not. Wait a moment—can I address that issue because the Minister is waving at me and saying that it was a confidential briefing. We asked at that briefing—and if those members and my colleagues who were there would like to back me up—“Can we quote you on this?”. What did he say? And you were not there Minister. You were not there.Hon Dr Jonathan Coleman: No; he told me about it though.Hon ANNETTE KING: Oh no you were not there so do not make it up. He said: “Yes you can.”“Constructive ambiguity”—these are the words the then trade Minister said about Pharmac and ambiguity is exactly what we have got.No. 1: “The TPP will not change the Pharmac model.” thundered Todd McClay.Hon Dr Jonathan Coleman: That’s right.Hon ANNETTE KING: But the agreement does change the model Minister.Hon Dr Jonathan Coleman: It doesn’t.Hon ANNETTE KING: Of course—when Mr Mark Mitchell was speaking I asked Minister McClay. I asked him questions because he said there will be administrative changes and increasing transparency for the big Pharmac companies. How Minister? How will that administrative change work? Have we been told how the administration changes giving more transparency will work? No—not one word on it.The second administrative change we are told is that there will be a setting of a time frame for considering funding applications. How long? What sort of time frame? How will that work? No we have not been told that.The third one is that there will be a review or an appeal process when Pharmac declines an application. How will that work? Who will make that decision? How will the review work? What sort of an appeal will it be? Where will the appeal go? None of that has been provided. We still have ambiguity going on around this issue.We were then told that the best guess of the cost was $4.5 million in establishment costs and $2.2 million a year in operating costs but you see I do not believe that because I believe what Treasury provided when it released its papers. This is what Treasury said: “the impact of the agreement on the cost of pharmaceuticals is uncertain”—I am quoting directly from the Treasury paper for the members opposite—“and will only materialise over time. This makes it difficult for the current government to make credible commitments on funding.” Minister that is what Treasury said. “In particular: the costs associated with transparency provisions (if they eventuate) will be unpredictable and lumpy. The estimate provided (average annual cost over the long-term) is essentially a quantifiable risk rather than a precise costing that can be funded”. That is what Treasury said. When we get the flannel from the members opposite—not one of them has answered the questions that I have put to them and that Treasury raised around transparency and the way it would work.Then we got the grand statement from Minister McClay that the TPP is going to have a minimal impact on New Zealand. This is where Mr Groser’s constructive ambiguity was mentioned: “The term of the patent currently on biologic drugs for the data exclusivity is 5 years.” But what was negotiated was deliberately ambiguous. It was ambiguous.Hon David Cunliffe: It was ambiguous.Hon ANNETTE KING: It was ambiguous—the whole thing is ambiguous. I have to say it was deliberately done to have ambiguity. [Interruption] That is it; that is what he said.Grant Robertson: That’s what he said.Hon ANNETTE KING: While Mr Robertson is here—Minister Coleman has been disputing that we are allowed to use the words “constructive ambiguity”. He said we were not allowed to use them because the previous Minister would not let us. That is totally untrue—he said that we may.We will get back to the biologic drugs. These drugs are produced from a variety of natural sources—from humans animals or micro-organisms—and they are cutting-edge technologies. They are expensive. New Zealand needs to be able to have access to these drugs as soon as possible and if the patent on the data exclusivity of these drugs is not 5 years but some other number that is tied up in ambiguity—Grant Robertson: Eight.Hon ANNETTE KING: —like 8 or 12—thousands of sick New Zealanders will have to wait a long time to get medicines for life-threatening conditions.I then looked at the Cabinet paper—MinisterColeman you may have read it; we could not read most of it. Can I just show the Minister why most of us could not read it. This is the Treasury paper on the biologic drugs. It is full of what you call redacted information. As I would say it is blankety-blank blankety-blank-blank and blankety-blank-blank. That is what we got from this Government opposite around the biologic drugs.Then we had the real oil come out when the trade negotiator from the US Michael Froman said that the administration is developing ideas for how to resolve complaints by congressional Republicans that the TPP’s required market exclusivity period for biologic drugs is too short. They sent down some trade envoys to give us a tutorial on what we ought to be doing in New Zealand. They are saying that they do not want 5 years; they want 12 years—but there is somewhere in the middle which could be around 8 years. What we have got in this constructive ambiguity is for New Zealand to say: “Well look it’s going to be 5 years but along with other measures that deliver a comparable outcome.” What does that mean—5 years plus other measures to deliver a comparable outcome? Comparable to 12 years? Or comparable to 8 years? It is 5 years plus—plus—so it is not just 5 years. This is where the dishonesty has been about Pharmac. That is why—David Bennett: Oh come on. She can’t say that.Hon ANNETTE KING: Yes I can. That is the dishonesty about Pharmac and how it is going to work. I am going to oppose it—The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member’s time has expired.