Five years of negotiations have culminated this week in the signing of the Trans-Pacific Partnership (the “TPP”) agreement by 12 countries from the Pacific-rim region, including the US and Australia. While the partnership negotiations have now been completed, each individual country will need to ratify the agreement before it is implemented.

The potential impact of the agreement on the pharmaceutical industry has made headlines in Australia in recent days. Much of the media has misleadingly reported that the term of patent protection for biological pharmaceutical products was the subject of disagreement between the US and many of the other countries, in particular Australia. Data exclusivity, rather than patent term, however, was the subject of the disagreement – an important distinction that has not been adequately explained by the mainstream media.

Data exclusivity (also known as “regulatory data protection”) is the period of time in which the clinical data of the original marketing authorisation holder remains confidential. In Australia, this period of confidentiality is provided for by the Therapeutic Goods Act 1989; it does not relate to the term of a patent, although an “artificial monopoly” may be the net result of such protection as it may delay generic or biosimilar entry into the market. In many instances, however, the period of data exclusivity may have ended before expiry of the key patents relating to a pharmaceutical product (and thus the patents, rather than data exclusivity may cause the delay for market entry of a generic or biosimilar). Once the period of data exclusivity ends,  generic or biosimilar companies may choose to use part or all of that data to assist in obtaining regulatory approval of their generic or biosimilar products. Currently in Australia, the Therapeutic Goods Administration (TGA) provides that biological products are given a 5 year period of data exclusivity, which is the same period provided for small molecule pharmaceuticals. In the US, the period of data exclusivity provided to manufacturers of biological drugs by the Federal Drug Administration (FDA) is significantly longer: 12 years (compared to 5 years for small molecule pharmaceuticals).

In recent months it has been widely reported that the US was seeking for the TPP to provide a longer period of data exclusivity for biologics; one which aligned more closely with the period of data exclusivity currently afforded by US provisions. Disagreement between the US and other TPP countries in relation to the issue of data exclusivity for biologicals apparently delayed resolution of the TPP negotiations. On one hand, the US argued that 12 years of protection was required to encourage pharmaceutical and biotechnology companies to invest in expensive biological treatments. On the other hand, representatives from Australia and New Zealand allegedly argued that a 5 year period was sufficient and required to reduce drug costs as well as reducing the burden on state-subsidised medical programs (such as the PBS and Pharmac). However, news agencies are this week reporting that a compromise has been reached, with the period of data exclusivity under the TPP likely to be between 5 and 8 years, depending on particular circumstances (which have not yet been revealed).

While text of the TPP agreement has not yet been released, it will no doubt be closely scrutinised by key stakeholders in the pharmaceutical and biotechnology industry once it becomes available.