Pharma Patent Review releases draft report for comment

The Pharmaceutical Patent Review, conducted by an IP Australia-appointed panel, has released its draft report, which is now open for comment.

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 are the following:

• Draft Recommendation 4.1: As an interim measure, the Government should actively seek the agreement of the owners of Australian pharmaceutical patents to voluntarily agree not to enforce their patents in respect of manufacturing for export.
• 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.
• Draft Recommendation 6.4: Section 117 of the Patents Act should be amended to provide that the supply of a pharmaceutical product subject to a patent which is used for a non-patented indication will not amount to infringement where reasonable steps have been taken to ensure that the product will only be used in a non-infringing manner. Policy should further impose a presumption that “reasonable steps” have been taken where the product has been labelled with indications which do not include any infringing indications.
• Draft Recommendation 8.1: As the party that ‘internalises’ the most benefits of a successful challenge to a patent for a product on the PBS, the Government should take a more active role in managing the cost of the PBS where a patent relating to a PBS-listed pharmaceutical is successfully challenged in the courts. This could involve ensuring that the Government recoups more of the cost to the PBS arising from delayed generic entry.
• Draft Recommendation 8.2: A transparency register linking therapeutic goods registered with the TGA with related patents should be introduced.
• Draft Recommendation 9.1: The Government should actively contribute to the development of an internationally coordinated and harmonised system where data protection is provided in exchange for the publication of clinical trial data.
• Draft Recommendation 10.1: The Government should establish a non-statutory Pharmaceutical System Coordinating Committee (PSCC) that reports to Parliament on an annual basis on the success and effectiveness of the patent, marketing approval and PBS systems, particularly where these interface.

In the lead-up to this draft report, a Background and Suggested Issues Paper was released by the panel on 21 November 2012 and submissions closed on 21 January 2013. Public hearings were then held from 11 to 15 February 2013.

AusBiotech made a submission in response to the Pharmaceutical Patents Review’s Background and Suggested Issues Paper (November 2012) and appeared at the public hearings in February. In response to the review, 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 draft report and the review submissions, including AusBiotech’s, can be found here.

AusBiotech will be making a submission and members contributions are invited to contact Lorraine Chiroiu (lchiroiu@ausbiotceh.org) by 26 April 2013.