Page:Special 301 Report 2014.pdf/26

 or are not adequately transparent, in order to facilitate both affordable health care today and the innovation that assures improved health care tomorrow. This year's Special 301 Report highlights concerns regarding market access barriers affecting pharmaceutical and medical device products, particularly in Algeria, Indonesia, and India.

Measures, including those that are discriminatory, nontransparent or otherwise trade-restrictive, have the potential to hinder market access in the pharmaceutical and medical device sector, and potentially result in higher healthcare costs. For example, taxes or tariffs may be levied – often in a non-transparent manner – on imported medicines and the increased expense associated with those levies is then passed directly to healthcare institutions and patients. The United States notes that, according to an October 2012 WTO report titled ''More Trade for Better Health? International Trade and Tariffs on Health Products'', India maintains the highest tariffs on medicines, inputs to medicines, and medical devices among the WTO members identified in the report. These tariffs, combined with other internal charges or measures, such as price controls that appear to exempt domestically developed and manufactured medicines, can hinder the Indian government's efforts to promote increased access to healthcare products.

Moreover, unreasonable regulatory approval delays and non-transparent reimbursement policies can impede a company's ability to exercise its IP rights, and thereby discourage the development and marketing of new drugs and other medical products. The criteria, rationale, and operation of such measures are often nontransparent or not fully disclosed to patients or to pharmaceutical and medical device companies seeking to market their products. USTR encourages trading partners to provide appropriate mechanisms for transparency, procedural and due process protections, and opportunities for public engagement in the context of their relevant health care systems.

U.S. industry has expressed concerns regarding the policies of several trading partners, including Finland, Germany, Greece, Hungary, Italy, Korea, New Zealand, Poland, Portugal, Romania, Spain, Turkey, and Taiwan, on issues related to innovation in the pharmaceutical sector and other aspects of health care goods and services. Examples include:

 With respect to New Zealand, U.S. industry has expressed serious concerns about the policies and operation of New Zealand's Pharmaceutical Management Agency (PhARMAC), including, among other things, the lack of transparency, fairness, and predictability of the PhARMAC pricing and reimbursement regime, as well as the negative aspects of the overall climate for innovative medicines in New Zealand; and

With respect to Turkey, U.S. industry continues to express significant concern regarding the lack of fairness and the slow pace of pharmaceutical manufacturing inspections. 

The United States is seeking to establish or continue dialogues with relevant trading partners to address these and other concerns, and encourage a common understanding on questions related to innovation in the pharmaceutical and medical device sectors. The United States also looks forward to continuing its engagement with China, India, and other trading partners to promote fair and transparent policies in this sector. 26