Once I explained the concept of PHARMAC to my friend, Christian, a law lecturer, who is an expert in international trade law. As he pointed it out to me, there is a palpable tension between this heavy market control and the principles of free trade. I wrote this essay, partly in response to his concern.

I reviewed the essay a few times, as you do. During the last review, I discovered that the perhaps the most important message that I wanted to communicate is that trade law tends to frown on medicine regulations, and that is fundamentally wrong. Medicines are no ordinary goods and restrictions on their trade should not be regarded as a borderline accepted exception from free trade rules, rather, it should be the norm.

Summary of the article

Trade in medicines is highly regulated in New Zealand, both directly and indirectly. Nonetheless, our healthcare system is reliant on the importation of pharmaceutical products. Medicines are not ordinary goods and their market often resists the straightforward application of traditional trade rules, particularly, the fundamental non-discrimination rules. In order for New Zealand to be able to maintain its world renowned public funding scheme, it must ensure that its medicine market regulations are acceptable within the WTO framework. International trade rules are traditionally based on economic interests, and designed to promote equal market opportunities for competitive products. In case of medicines, the market is heavily influenced by non-economic factors, which has been largely accepted as justified breach of traditional non-discrimination rules. This article aims to show that market regulations in New Zealand, dominant as they are, are consistent with the WTO framework.

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