Howard Strikes Again - Long Drug Patents Costing 'Billions

7/28/2019 Howard Strikes Again - Long Drug Patents Costing 'Billions'

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Long drug patents costing 'billions'Peter Martin

Published: April 3, 2013 - 3:00AM

Australia's enthusiastic approach to extendingthe life of pharmaceutical patents has cost theeconomy "billions of dollars" an independentreview has found.

Originally 14 years, then 16 years and nowthe 20 years enshrined in the US-Australia

Free Trade Agreement, the review finds theextensions to the standard life of drug patentshave been made "without careful regard towhether this was in our own economicinterest".

Justified at the time as measures to"encourage the development of thepharmaceutical products industry inAustralia" the review instead found that theyhad suppressed the development of a generic drugs industry and cost the government$200 million a year by slowing the entry of cheaper generic drugs into the

pharmaceutical benefits scheme.

Generic manufacturers have missed out on an estimated $2 billion over eight years.

The report says 70 per cent of drug patents expire later in Australia than in othercountries.

"If you want to fill the gap when an original drug comes off patent you want tomanufacture and stockpile generics to be ready," the chairman of the inquiry, NicholasGruen, said on Tuesday.

"But, and this is really quite remarkable, patent rights have been defined to mean

Australian firms can't do that while the drug is under patent her, even though foreignfirms where patents have expired can. So they get the first-mover advantage."

"Likewise Australian firms cant manufacture for export to countries where the drugshave come off patent even though its legal to sell them there."

Dr Gruen said part of the problem was that the legal situation was murky.

"A generic manufacturer is by definition a lower profit-per-unit than an originator andlegal proceedings are highly expensive - five to seven million dollars, believe it or not."

"And there are layers of difficulty. There is the domestic law and then there is the United

States-Australia Free Trade Agreement, which can allow an originator to get the USgovernment to represent its interests."

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7/28/2019 Howard Strikes Again - Long Drug Patents Costing 'Billions'

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"Our government should be helping to clarify the law, but there is no evidence we canfind that the government has made representations on behalf of the manufacturersaffected."

The draft report recommends Australia cut the term of the five-year semi-automaticpatent extension to one year, using part of the savings to directly subsidise research anddevelopment.

The review wants trade negotiations such as those over the proposed Trans PacificPartnership to be much more focused on the costs and benefits to Australia of extendingintellectual property.

"So far weve seen no evidence suggesting the Australian government has shown anyvigor in pursuing any of these issues or an agenda for a patent rights regime that wouldmore fully advantage Australia," Dr Gruen said.

The review calls for written responses to its draft report by the end of this month.

It will deliver its final report to industry minister Greg Combet in May.

This story was found at: http://www.smh.com.au/opinion/political-news/long-drug-patents-

costing-billions-20130402-2h54r.html

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