Friday, 21 November 2014

NZ's Mickey Mouse Farming Establishment

The NZ Farmers Weekly reported this week that "the primary sector and chemical companies" are annoyed at NZ government policy over protectionism. This is an interesting coalition, which has only recently formed after Federated Farmers "altered its stance" where by "altered" they mean "reversed" - it was a 180 degree U turn flip flop.

The common concern of these newly aligned groups is that two official agencies don't grant enough monopoly power to the chemical companies. Specifically, the Environmental Protection Agency (EPA) and the Animal Compounds Veterinary Medicines Group (ACVMG) can and do
approve and register new uses for similar products from competing companies without those companies always having to submit testing data specific to their product.
This sounds a bit like the Pharmac model to me. If someone comes along with a generic product that uses a well understood active ingredient, they can get it approved and registered without always having to supply their own test data.

It seems that "the industry" is wanting 10 years of monopoly power to apply in each of three different scenarios

  • new formulations based on active ingredients new to NZ;
  • new uses - reformulations for already approved products; and
  • reassessment of use for established compounds. 

It sounds as though the second of these is the main gripe. Reading between the lines, my guess is that the chemical companies use this angle to periodically extend their monopoly power by the simple device of changing some of the non-essential ingredients to produce a "reformulation".

The article includes a large dose of self-serving rhetoric about how if we don't look after (foreign) shareholders in (multinational) chemical companies they might not invest in "further innovations". Brazenly, it seeks to use the small size of the NZ market as a weapon (hard to recover local costs without a longer monopoly), while ignoring the corollary that innovation depends on global profit in which calculus we are but a tiddler.

I expect such sophistry from "the industry" but am very disappointing to see the Feds supporting it, especially since it had earlier opposed time extensions. Is this an evidence-based flip-flop or is it just something that happens to suit their new President's private interests and/or his known fondness for GE technology?

This whole topic reminds me of the famous Mickey Mouse curve that shows how copyright duration in the USA kept getting extended as Disney's rights approached expiry. If monopoly rights can be provided through laws or regulations, there will always be pressure to create and extend them.

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