We Oppose Participation in TPP, Which Would Render
Japan's Public Health Care System Dysfunctional


The Japanese Medical and Dental Practitioners for the Improvement of Medical Care (Hodanren) consists of 104,000 medical doctors and dentists in Japan.  Our organization aims to defend and develop Japan's universal health care coverage system.

Japan's public health care coverage system guarantees fair and equal access to universal medical care for all Japanese nationals.  This system was launched in April 1961, and is now entering its 52nd year.  The overall achievement in health in Japan is highly evaluated in WHO studies, indicating the great contribution of the system in promoting people's health.  The system is characterized by its universal coverage and direct provision of medical care to patients, including diagnosis, medical treatment, examination, prescribed medicines, and surgery.  (In exceptional cases cash is even provided to patients in need.)  Patients can freely consult with any medical institution of their choice (Free access).  Such facilities are located all over the country: 8,605 hospitals, 99,547 clinics and 68,156 dental clinics.  The cost incurred to provide medical treatment is paid from the national treasury, insurance contributions and patients' out-of-pocket expense to medical institutions at official prices common throughout the country.  The total cost of medical care provision covered by the public health care system amounted to 37,800 billion yen in FY2011 (US $ 474 billion)*1.

In the Trans-Pacific Strategic Economic Partnership Agreement (TPP) negotiations, issues reported to be discussed include the following:

 (1) As part of the attempt to strengthen patent protection over medical and pharmaceutical products, brand-name drug producers are to hold exclusive rights over clinical trial data of new drugs.

(2) Pharmaceutical companies are to participate in the process of determining official redemption prices of drugs by each government; Drugs having special safety, quality or efficacy are to be priced at a premium.

An international comparison of prices of medical/pharmaceutical products was conducted respectively by Hodanren and the government of Japan.  The results of both studies showed that prices in the U.S.A. are higher than those in Japan.  (Setting the prices in the U.K. as 100, those in Japan range between 197 and 222, while in the U.S., they are between 289 and 352.)  Taking part in the TPP, Japan would be forced to accept higher-priced drugs, which might lead to a price surge of drug products used in Japan's public health care, which is now estimated at about 9.8 trillion (US $ 112 billion) - 11 trillion yen (US $ 126 billion)*2.  It is feared that this increase in official prices of prescribed medicines would worsen the public health care financial condition, and there is a danger of expenditures for diagnosis, treatment, examination or surgeries being reduced to compensate for the increase.

Regarding the plan of allowing brand-name drug producers to hold a monopoly on clinical trial data of new drugs, the NPO Médecins Sans Frontiéres points out that more than 80% of HIV-AIDS treatment drugs currently used in developing countries are generic products, and the plan would reduce patients' chance for receiving medical treatment by fixing a high price for drugs.  MSF's fear is that the inhuman business model of the U.S. might well decide the future of many human lives should TPP prevail.

In the U.S., methods of diagnosis, treatment and surgery are to be covered by patent protection.  If Japan takes part in the TPP, there is no denying the possibility that new treatment methods or surgical operations would fall under patent protection.  We are concerned that the patented surgical operations would be monopolized by a few, or additional patent fee payments would become necessary.  Another concern is that in fear of aggravating the financial condition of the public health care system, the Japanese government might exclude patented methods of treatment or surgery from the scope of coverage of the public health care system.

In such countries as the U.S. or Singapore, profit-making company hospitals operate and are taken for granted.  Currently, the Japanese domestic law prohibits the entry of commercial hospitals in the field of medical care, but if Japan takes part in the TPP, this prohibition could be regarded as a non-tariff barrier and therefore be subject to abolition.  Profit-making corporations will give priority to paying investors dividends.  We fear the possibility of reduced safety and security due to cuts in costs, withdrawal of hospitals operation from loss-making fields or localities, or selection of patients based on their income.  At present, the Japanese government says, "dividends are not appropriate as it would violate the nonprofit nature of hospitals."  

The Investor-State Dispute Settlement (ISDS), to be included in the TPP, enables foreign insurance companies to file complaints with the International Centre for Settlement of Investment Disputes when they believe their sales of insurance products are negatively affected by Japan's public health care coverage system.  For example, if Japan conducts a clinical study on some "advanced medical treatment" and plans to include it in the scope of coverage by the public health care system, and if that advanced treatment method has been covered by a particular product of an insurance company, the company can demand the cancellation of the government's plan for the sake of its own sales.  And if the Japanese government tries to lower the price of drugs used in its public health care system, the manufacturers of drugs can also use the ISDS to file a complaint against Japan over their potential loss.

In the U.S., people in general are expected to subscribe to private medical insurance.  The scope of coverage is determined by the price they pay in insurance premiums.  In this developed country, more than 48 million people are uninsured and one out of six citizens cannot afford medical insurance and thus is unable to receive decent medical care.  And still, the U.S. spends the world's largest amount of money on medical care.  The Japanese public broadcasting network, NHK, aired a TV program with a title, "U.S. dental care at risk."  According to the program, one out of three U.S. citizens gives up the hope of having dental treatment due to the high cost.

If Japan takes part in the TPP, the universality of public health care coverage may be maintained, but in name only.  It is highly possible that fair and equal access to medical care, the core function of this system, will be lost.

For the above reasons, Hodanren, on behalf of 104,000 member medical and dental practitioners, firmly opposes Japan's participation in the TPP.

We are working in cooperation with medical doctors and dental practitioners in the U.S. and other countries opposing the TPP, to study, exchange and examine the information relating to the content of the TPP negotiations.  We sincerely call for your cooperation in our effort.



*1  US $1.00 = 87.16 Yen (average exchange rate of 2010)
*2  US $1.00 = 79.807 Yen (average exchange rate of 2011)