Background:

In our news alert of 21 November 2012 we drew attention to the Review of Pharmaceutical Patents which was announced by the Australian Government and we raised concerns about the wide ranging remit of the Review, the timing of the Review (over the Christmas/New Year break) and the short period of time (8 weeks!) given for interested parties to respond. Further, this Review was no less than the fourth public consultation relating to Patents announced by the Australian Government in a very short period of time (following on from the Innovation Patents Review, the "Raising the Bar" patents Review and the Gene Patents Bill).

Although the analysis of the provisions in the Australian Patents Act relating to Pharmaceutical Patent Term Extensions (PTEs) was seen as the focal point of the Review, it breadth was much wider than that and covered many topics central to pharmaceutical companies in Australia including interlocutory injunctions, contributory infringement provisions, data exclusivity and patent linkage.

Concerns regarding the breadth of the Review:

As the Review developed and submissions were filed and the public Hearings were held, it became of major concern to innovative pharma that the Review seemed to focus more on Regulatory and Reimbursement procedures in Australia, the timing of these compared to expiration of patent term, our unique “patent certification” system and the impact generally of all of these on the entry of generic pharmaceuticals into the Australian market. There was a lot of argument put by various generic pharmaceutical bodies that patents in Australia expire much later than in other countries and the 'manufacture for export' argument was raised again.

Of further note, the practice of "evergreening" or "follow-on" patenting was given a very negative gloss by the Review Panel at some of the public hearings.

These issues are highlighted in the various submissions from many of the Australian based subsidiaries of innovative pharmaceutical companies. Of further concern was the filing of confidential submissions by the Generic Medicines Association of Australia and the Australian generic pharmaceutical company Alphapharm. A redacted version of the confidential submissions has subsequently become available.

As concerns grew following the public Hearings, Medicines Australia (the industry body representing Innovative Pharma in Australia) filed Supplementary Submissions which are in direct response to some of the arguments raised at the Hearings.

A link to all the submissions filed can be found here.

Release of latest Draft Report:

Following the written submissions and the public hearings, the Review Panel has just this afternoon released its findings in the draft Report. The draft report can be found here.

At 249 pages long, the report makes for detailed reading. The key recommendations are:

  1. Measures should be explored to seek agreement from Australian patentees to voluntarily agree not to enforce their patents in respect of generic companies wishing to manufacture for export.
  2. In respect of PTEs, the Draft Review offers a variety of recommendations:
    1. Reduce pharmaceutical patent term extensions and use part of the associated 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:

(a) 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.

This option thereby ensures Australian extended patents would not expire later than equivalent patents elsewhere.

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

  1. Amend the Contributory infringement provisions 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.
  2. The Government should take a more active role in managing the cost of the Pharmaceutical Benefits Scheme (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.
  3. 5) Patent Linkage: A transparency register linking therapeutic goods registered with the Therapeutic Goods Association (TGA) with related patents should be introduced.

A further draft finding of the Panel is that data exclusivity should not be increased for biologicals.

On first reading, the key thrust of the Draft report is to attempt to restrict pharmaceutical patentees’ rights. In respect of Patent Term extensions, as originators are unlikely to obtain regulatory approval in Australia at the same time as elsewhere (often simply because of the time taken by the TGA), implementation of the recommendations will in some instances reduce the effective Australian patent life. In fact the Draft report recommends that aligning an extended expiry date of an Australian pharmaceutical patent with that of the corresponding patent in another (unspecified) country could also be achieve by not using the Australian regulatory approval date but using the regulatory approval date from another country.

Written responses to the draft report are due 30 April 2013. Shahnaz Irani will be assisting Medicines Australia with their submission.

The final report of the Review Panel is due to be released in May 2013.