Medicine prices could rise under Trans-Pacific Partnership deal Australians are likely to face price rises for their medicines in coming years if intellectual property proposals contained in the Trans-Pacific Partnership agreement go ahead. The leaked treaty reveals a range of measures that would enhance the ability of drug companies to extend and widen patents on drugs. It also proposes compensation for companies that face delays in the granting or extension of patents along with measures to ensure data exclusivity for companies so they can prevent competitors, specifically manufacturers of generic medicines, from using past clinic data to support new products. The leaked TPP negotiations suggest drug companies will also be able to extend patent protection beyond the typical 20-year limit by patenting different aspects of their products, such as an active ingredient for new use further down the track. This is called "evergreening." While these proposals would arguably encourage research and development of new drugs and boost the profits of large drug companies, which are mainly concentrated in the US, they will inevitably delay generic manufacturing of drugs which reduce the price of medicines for consumers. The reason medicines cost more under patents is because they effectively give companies an exclusive licence to manufacture a drug they have developed to be sold at a price they set. When a patent expires, other companies can use the intellectual property to effectively copy the drug. In Australia, the cost of longer patents could be significant. At the moment, drugs listed on the government's $10 billion Pharmaceutical Benefits Scheme are almost always under a patent to begin with. However, when they come off patent, they are immediately 16 per cent cheaper. This saving flows through to Australian taxpayers, who fund the PBS. Any increase in the cost of medicines will continue a trend towards more out-of-pocket costs for healthcare. According to the Australian Institute of Health and Welfare, the average annual out-of-pocket expenditure on healthcare has almost doubled, from about $583 in 2000 to $1075 in 2010 - $94 above the weighted OECD average of $981. In 2010-11, nearly 40 per cent of this was for medications, followed by 19 per cent for dental services and 12 per cent for services such as GP visits.