Barrier to Trade or Barrier to Profit? Why Australia\u27s Pharmaceutical Benefits Scheme Worries U.S. Drug Companies

Much of the rhetoric that underpins arguments for free trade relies on the assertion that free trade agreements between nations are win-win arrangements. That is, it focuses on the textbook conclusion that by reducing trade barriers the total volume of goods and services available for consumption will increase and that, as a result, people in participating countries will likely benefit. In reality, free trade agreements are about winners and losers. Individual industries use their political influence to fight for or to defend their domestic or international profitability. For example, in the recently concluded negotiations of a free trade agreement between the United States and Australia, U.S. sugar farmers succeeded in convincing U.S. negotiators to defend them against increased import competition. The win-win rhetoric was further challenged during those same negotiations when U.S. pharmaceutical companies convinced U.S. negotiators to press hard for changes to Australian drug pricing policies that limit pharmaceutical profits