[Reposted from the AFINET website] The Australian Fair Trade and Investment Network (AFTINET), the Public Health Association and three other health organisations have made a submission to the review of pharmaceutical patents because the issue of patents and medicine is a key issue in the Trans-Pacific Partnership Agreement (TPPA) negotiations.
The US is demanding much stronger patent laws which would allow pharmaceutical companies to charge high prices for medicines for longer periods. Our submission argues that there is no evidence for stronger patent laws, and that the Australian government should reject such requests in the TPPA.
SEE THE FULL SUBMISSION HERE
Excerpts from the summary and the key recommendations follow:
Summary of key issues
Our organisations agree with the point made in the Pharmaceutical Patents Review Background and Suggested Issues Paper that patents are a social contract between the inventor and government:
The government grants an inventor an exclusive, temporary set of legal rights for an invention in exchange for the inventor sharing details of the invention with the public, thereby facilitating further innovation in that field (p.2).
Patent rights are private monopoly rights which need to be regulated judiciously to ensure that public policy goals such as access to affordable medicines are not impeded.
We also agree that medicines are public goods with positive externalities, subject to market failure (p.47) and that government intervention is required to ensure that medicines are affordable to all. The Australian Pharmaceutical Benefits Scheme is based on those principles. Regulation of patents for medicines must therefore ensure that there are limits to the scope and duration of monopoly rights in order to ensure that public health objectives are not impeded.
We note that the Background and Suggested Issues Paper recognises that medicine patent owners use a variety of strategies known as ‘evergreening’ to extend the duration of market monopolies (p.3).
The current system of pharmaceutical patents is unbalanced, and favours pharmaceutical companies which hold patents on medicines. These companies hold patents for the compounds that may ultimately be useful in medicines, and patents for the medicines that are ultimately developed. Through the use of evergreening strategies, they obtain additional patents over these medicines, creating patent ‘thickets’ and thereby extend patent protection around various aspects of these medicines (such as combination therapies; methods of treatment; new uses and indications; different formulations, e.g. tablets, capsules, liquids; extended release preparations; and dosage regimens). The ease with which pharmaceutical companies obtain these additional patents arises in part from the low inventive step threshold.
Australia’s commitments under international trade agreements have also played a role in extending the monopoly rights of patent-holding pharmaceutical companies.
The WTO TRIPS agreement established 20 years as the standard patent period, which was a considerable increase on patent periods in many countries, especially for medicines. This has led to a vast increase in economic benefits for patent holders, at the expense of access to medicines and public health. There is no evidence to suggest that current patent periods are inadequate.
However, pharmaceutical companies are influencing governments to progressively extend their patent rights through bilateral and regional trade agreements, where negotiations are conducted without public scrutiny. Of particular concern are trade agreements involving the United States and the European Union, which have sought increasingly strong intellectual property rights for pharmaceutical companies in successive trade agreements (Sell, 2007, Krikorian and Szymkowiak, 2007).
The Australia-US Free Trade Agreement (AUSFTA) included much stronger intellectual property rights than TRIPS, by expanding the scope of patentability, limiting grounds for revocation of patents, restricting the use of compulsory licensing, reinforcing patent term extension provisions and existing prohibitions on parallel importation and imposing a form of patent linkage. While some of these provisions did not change existing arrangements in Australia (as they were already reflected in Australian law), their inclusion in a trade agreement had the effect of reducing future domestic policy flexibility to modify or remove them (Lopert and Gleeson, 2013).
The Productivity Commission’s 2010 Report on Bilateral and Regional Trade Agreements concluded:
‘The Commission is not convinced, however, that the approach adopted by Australia in relation to IP in trade agreements has always been in the best interests of either Australia or (most of) its trading partners. Among other things, there does not appear to have been any economic analysis of the specific provisions in AUSFTA undertaken prior to the finalisation of negotiations, nor incorporated in the government’s supporting documentation to the parliament…Subsequent analysis by Commission staff found that the extension of rights to existing patents could result in a large net cost to Australia.
(Productivity Commission, 2010: 263).
Australia is currently involved in negotiations for the Trans-Pacific Partnership Agreement (TPPA) with ten other countries from around the Pacific Rim (Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam). The Office of the United States Trade Representative is pressing for extremely onerous intellectual property (IP) provisions in the TPPA that not only go well beyond the obligations of the TRIPS Agreement, but also exceed ‘TRIPS Plus’ IP standards in other free trade agreements to date, including the AUSFTA (Lopert and Gleeson, 2013, Flynn et al, 2011). Negotiating documents are not publicly available. Leaked draft texts from 2011, however, indicate that the US has tabled provisions that would, inter alia, extend the scope of patentability, extend the duration of patents and delay the entry of generic pharmaceuticals to the market (Trans-Pacific Partnership, 2011, Lopert and Gleeson, 2013, Gleeson et al, 2012).
The Australian Government should not make commitments in trade agreements that ‘lock in’ or extend intellectual property rights for pharmaceuticals, thereby reducing domestic flexibility to determine the appropriate balance. We believe that these issues should be deliberated through domestic political processes after transparent public discussion, preparation and discussion of legislation and democratic parliamentary processes. They should not be determined through confidential trade negotiations where trade-offs between different sectors can be made.
This submission is limited in scope because of limited time and resources. It is therefore confined primarily to addressing those issues which are relevant to current and future trade negotiations…
Summary of Recommendations
Recommendations for Question 1:
1.1 Patent term extension should be restricted to patents disclosing new molecules. The breadth of pharmaceutical patents eligible for an extension of term should not be extended.
1.2 Patent terms should not be extended to compensate for delays in the marketing approval process as there is no evidence of such delays in Australia.
1.3 The Australian Government should oppose proposals in the Trans-Pacific Partnership Agreement (TPPA) negotiations to extend patent term extension to cover patents for methods of making and using pharmaceutical products
Recommendations for Question 2:
2.1 Patent terms should not be extended.
2.2 Economic analysis should be undertaken to determine the costs of the current PTE regime.
2.3 The Australian Government should oppose proposals in the (TPPA) negotiations for expanding the scope and duration of patent term extension.
Recommendation for Question 3:
3.1. The review should re-examine the thresholds for the grant of an Australian patent with a view to strengthening all of the criteria, and preventing the development of patent thickets and evergreening for medicine patents.
Recommendations for Question 4:
4.1 The process of public disclosure and pre-grant opposition should be retained.
4.2 The grounds for re-examination should include all substantive grounds considered during initial examination.
4.3 The Australian government should oppose proposals in the TPPA negotiations which would result in weakening or removal of pre-grant opposition or patent re-examination.
Recommendation for Question 5:
5.1 The current process for interlocutory injunctions makes them too readily available, and should be reviewed with a view to reducing delays in the marketing of generic medicines and reducing costs to the public health system.
Recommendations for Question 8:
8.1 Follow-on patents delay generic market entry and maintain monopoly pricing of medicines. Australian law should be amended to prevent abuse of follow-on patents.
8.2 The Australian government should oppose proposals in the TPPA negotiations which would result in the patenting of new forms of existing products.
Recommendations for Question 9:
9.1 There should be no extension of data protection.
9.2 There should be a review of the impact of current data protection provisions and their impact on compulsory licensing.
9.3 The Australian government should oppose all proposals for data exclusivity in the TPPA negotiations, including five years of data exclusivity for new pharmaceutical products (which would entrench current arrangements in Australia), an additional three years for new uses of existing products, special provisions for biologic drugs and protection of data which is already in the public domain.
Recommendations for Question 10:
10.1 The system of patent linkage should be reviewed, as it is not appropriate for regulatory bodies such as the Therapeutic Goods Administration to enforce IP rights, and patent linkage can cause significant delays to market entry of generics.
10.2 The provision in Australia’s Therapeutic Goods Act for preventing ‘linkage evergreening’ should be retained and strengthened.
10.3 The Australian government should oppose proposals in the TPPA negotiations which would result in a more burdensome patent linkage system.
