States back plasma status quo

7 February 2007, Australian Financial Review, By John Breusch

The states are set to reject a federal government request to allow overseas companies to compete for CSL's monopoly on supplying blood plasma products to the Australian market.

Federal Health Minister Tony Abbott announced in December that the commonwealth would comply with its obligations under the US free-trade agreement by proposing to open up the blood fractionation service to tender.

In doing so he rejected the recommendations of a government-commissioned review, conducted by former Foreign Affairs Department secretary Philip Flood, which warned the move could threaten the quality of Australia's blood supply.

But under the national blood agreement, the commonwealth has to obtain the consent of all states before making any policy changes.

South Australian Health Minister John Hill said he would block Mr Abbott's proposal.

"I am opposed to Australian blood supplies being sent elsewhere for processing," he said.

"Indeed the commonwealth's own review has recommended against such a proposal."

A spokeswoman for Victorian Health Minister Bronwyn Pike said the Bracks government would also reject any moves to allow US companies to compete for the plasma supply contracts.

"In line with the Flood review, we think it's in the best interests of Victorians to keep the current arrangements," she said.

The states' rejection of the proposal is a slap in the face for the US, which had pushed for its companies to be given access to Australia's blood plasma market.

But the states' position also gives the federal government a handy escape route.

When it signed the FTA, Canberra agreed to conduct a review into allowing overseas processing of its blood supply and to push for a change to CSL's monopoly on the service.

By blocking this request the states would effectively provide a way out for the commonwealth, enabling it to avoid enforcing a change that would likely have been deeply unpopular in the electorate without having to breach its trade obligations.

Queensland Health Minister Stephen Robertson said he would discuss the issue at a meeting of state health ministers in Melbourne on Friday before making a decision.

"However, Queensland's prime concern is to ensure that any commercial arrangement for the fractionation of Australian plasma provides a sufficient and reliable supply of only the safest, highest quality, state of the art blood products to Queenslanders," he said.

Simon Sestich, general manager of the local arm of Swiss-based fractionation company Octapharma, said consumers would benefit if CSL lost its monopoly.

"There should be a competitive framework. We're not talking about a little Australian company," he said.