Background to the review

In October 2012 Mark Dreyfus, parliamentary secretary for industry and innovation, announced a review of pharmaceutical patents and appointed an expert Review Panel to conduct the review.  

The announcement of the review followed concerns about some aspects of pharmaceutical patents, including bringing generic pharmaceuticals to market and the effect of patent terms on innovation.

Aim of the review

The stated aim of the review is to examine whether Australia's patent system is effective in balancing the objectives of securing timely access to competitively priced pharmaceuticals and in supporting innovation and employment in the industry. 

An important part of the review is to examine the Australian provisions for extending the terms of pharmaceutical patents.

The review process

The Review Panel issued a wide-ranging discussion paper in November 2012. The paper raised a number of other topics in addition to the extension of term provisions, including so-called evergreening and whether patents for new formulations and new uses of known products should be allowed, and whether the law on data exclusivity is appropriate. 

Submissions from interested parties were invited and 43 parties provided submissions. Several of these parties provided further evidence in public hearings in February of this year. Several Commonwealth departments also provided oral advice to the Panel.

The Panel has now issued its draft report. The report is over 200 pages long and very detailed. It is available on the Pharmaceutical Patents Review website ( http://pharmapatentsreview.govspace.gov.au). Submissions will be accepted up until 30 April 2013. 

The Panel is due to submit its final report to the Government on 30 May 2013.  

Recommendations in the draft report

In general terms, the recommendations in the draft report lean towards improving the landscape for generic manufacturers in Australia such as

  • reducing the length of patent term extensions
  • introducing patent linkage
  • making manufacture for export a non-infringing act
  • permitting the Government to claim for losses incurred where a patent covering a listed medicine is found invalid
  • not lengthening the term of data protection. 

 The key recommendations are summarised below.

Length of patent term extensions

The report offers two alternative recommendations on the length of patent term extensions:

  1. reduce extensions of term of pharmaceutical patents and use part of the associated cost savings to fund R&D directly
  2. 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.  Potential ways of achieving this include:

providing an extension expiring up to 5 years after the original patent term or upon the expiry of the equivalent patent extension in one of a list of other jurisdictions including the United States and European Union, and

changing the method of calculating the length of extensions of term to provide an incentive to submit applications for regulatory approval in Australia earlier than is currently the practice.

Eligibility of patents for term extensions

The Government should maintain the current approach that allows extensions of patent term for drugs and formulations but not for methods of use and manufacture.

Manufacturing for export (MFE)

The Review Panel found that Governments appear to have shown little strategic interest in the issue of MFE, despite a number of opportunities to do so and the significant potential advantages MFE could provide for Australia. 

The report recommends, as an interim measure, that 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.

Patent linkage

A transparency register linking therapeutic goods registered with the Therapeutic Goods Administration (TGA) with related patents should be introduced.

Contributory infringement provisions

Section 117 of the Patents Act relating to contributory infringement 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. 

The body of the report explains that the result of the proposed carve out is that a generic manufacturer can supply a drug for a treatment indication which is not covered by a patent without being liable for infringement of a patent covering another indication of the drug. 

Recouping costs under Pharmaceutical Benefits Scheme (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.

It should also include implementing measures to reduce disincentives for generic manufacturers to challenge patents by providing negotiated incentives for a party who successfully challenges a patent. 

Data protection for biologics

The Review Panel considered whether data protection should be increased for biologics, but was unconvinced that an extension of data protection would be beneficial.