Concern over plan to remove or limit patent extensions 

AusBiotech has made a submission in response to the Pharmaceutical Patents Review’s (PPR) Draft Report, stating its disappointment at the options provided under recommendation 5 to remove or reduce Australia’s patent extension provisions.

AusBiotech said it was especially concerned at the plan, given that in its view the current provisions are not adequate. Extensions to patent life for health technologies like pharmaceuticals are important because the regulatory and reimbursement processes consume years of patent life - and the period or the possible period of the patent influences the decisions of investors.

“The real patient impact is likely to make it harder for biotechnology companies to develop and deliver new medicines in Australia, and further challenge the sustainability and growth of the emerging Australian biotech industry,” said AusBiotech.

The review to “evaluate whether the system for pharmaceutical patents is effectively balancing the objectives of securing timely access to competitively priced pharmaceuticals, fostering innovation and supporting employment in research and industry” has made a number of draft recommendations. Of particular note to the biotechnology industry was:

• Draft Recommendation 5, Option 5.1: The current model of using the patents system to subsidise pharmaceutical R&D indirectly should be replaced with a direct subsidy. To this end, the government should reduce extensions of term for pharmaceutical patents and use part of the associated savings to fund R&D directly. Some of this funding should be targeted to socially beneficial research for which patents provide inadequate incentives to conduct.
• Option 5.2: The government should change the current extension of term provisions such that patents receiving an extension of term in Australia will not expire later than the equivalent patents in major trading partners.

AusBiotech claims that if small biotechnology companies, which are predominantly progressing therapeutics, are to be successful in reaching the market (and earning revenues) and therefore able to contribute back to the Australian economy, they do not need any further government policy changes that act as a disincentive or barrier to attracting investment.

AusBiotech said that the removal or reduction of the patent extension term, as outlined in the PPR Draft Report, will impact investment decisions and make the attraction of investment even harder than it is now. While the patent term extension is obviously not the only factor on which an investor will make a decision, the total term available does in fact influence the risk profile and affect decisions. 

Prior to this submission, AusBiotech responded to the review’s Background and Suggested Issues Paper (November 2012) and appeared at the public hearings in February. In the initial submission, AusBiotech suggested that incentives are being eroded over time, thereby undermining innovation of biopharmaceuticals in Australia, and there is a good case for extending intellectual property protections to rebalance the system.

The full AusBiotech submission to the PPR’s Draft Report can be found here.

The Draft Report and all the review submissions can be found here.