The Prime Minister has admitted medicines could cost more under the Trans-Pacific Partnership (TPP) – the major trade deal the Government wants to sign up to.
Trade ministers meeting in Hawaii now for the final push will make or break the TPP.
John Key revealed today drugs could get more expensive if New Zealand signs up to the deal.
"Overall the net benefits to New Zealand significantly outweigh that," says Mr Key.
The TPP would be the world's biggest free trade deal. It involves 12 Pacific Rim countries, including the United States and Japan. It's been negotiated for years in secret.
But today Mr Key revealed what it could mean for Pharmac. Currently it bulk buys all of New Zealand's drugs.
A patent means Pharmac has to buy the more expensive original version. But after that patent expires, Pharmac can buy cheaper generic drugs.
However, the TPP will mean drug companies can extend their patent longer, meaning Pharmac will have to pay more for the drugs.
But Mr Key says that won't be passed onto consumers.
"Possibly a tiny amount [of extra money will be put into Pharmac], but overall the amount of money coming into the economy is far greater than that," says Mr Key.
"The Government all along has said that Pharmac would be protected, that it won't cost the taxpayer a lot more money," says Labour Party leader Andrew Little. "Now we find it's costing the taxpayer a lot more money."
By making such a big admission that the taxpayer's bill could rise for drugs under the TPP, Mr Key is clearly softening up the public for possible compromises in the deal.
That is because it's getting close. The TPP could be agreed to this weekend.
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