Govt thinks Pharmac is hugely successful, will take fair bit of convincing in TPP negotiations that it's not the right model, Key says

By Alex Tarrant

Pharmac, the government entity that subsidises pharmaceutical products in New Zealand, has been hugely successful and government will take a fair bit of convincing that it was not the right model, Prime Minister John Key says.

There are fears Pharmac may be on the chopping block as New Zealand negotiates a free trade deal with the United States under the Trans Pacific Partnership.

Advocacy groups in New Zealand have called for more transparency of government negotiations with the US, saying private interests in the US are calling for Pharmac to be disbanded under any free trade agreement.

Asked on Monday evening whether the government was coming under more pressure from US advocacy groups and politicians to get rid of the Pharmac model, Key replied the government’s view was a successful completion of the Trans Pacific Partnership would be beneficial, on balance, to the New Zealand economy.

“Now there are individual component parts of laws we’ve negotiated, and I’m not going to set bottom lines on those today,” Key told media in the Beehive.

“What I can say is New Zealand won’t sign up to an agreement unless it believes it’s, overall, in New Zealand’s best interest to do so,” he said.

“There’ll always be some give and take in every relationship that we have, and you’ll have that on the agricultural side internationally, just as there are other requests coming at us. But I’m not going to go through the individual parts of that.

“Let’s just see how the process goes, and let’s see how successful we can be."

The government thought Pharmac had been "hugely successful,” Key said.

“We think it makes money for New Zealand – or is the most cost-efficient way of purchasing pharmaceuticals for New Zealanders – and we’ll take a fair bit of convincing that that wasn’t the right model,” he said.

“But rather than get into an adversarial relationship or negotiation played out through the media, I’d rather allow our negotiators to have some freedom to have the negotiations and they’ll periodically report back to the government.

“All I can say is we’re not going to do something that’s not in New Zealand’s best interest,” Key said.

“Let’s wait and see – there are a lot of component parts here. We’re talking about access, through a free trade agreement, to arguably the largest economy in the world. That’s the prize if you can complete a US FTA, which is what TPP is,” he said.