[Ip-health] Australian Financial Review: Australia and US battle over IP rights for top selling drugs

Thiru Balasubramaniam thiru at keionline.org
Sat Oct 3 02:26:52 PDT 2015


Oct 3 2015 at 12:15 AM

Updated Oct 3 2015 at 3:14 AM

Australia and US battle over IP rights for top selling drugs

As ministers try to come to conclude the Trans-Pacific Partnership deal,
Australia and America are at loggerheads over cutting edge medicines worth
a massive $US300 billion a year.

by John Kehoe

As trade ministers from 12 countries bunkered down in a hotel in downtown
Atlanta to try to conclude an against-the-odds Trans-Pacific Partnership
trade deal by the weekend, about a dozen protesters burst into the lobby
chanting "stop the TPP".

Among them was a middle-aged woman, identifying herself as Zahara
Heckscher. She was wearing a t-shirt that read: "I HAVE CANCER. I CAN'T

Pharmaceutical drugs known as biologics are a key point of contention in
the TPP negotiations and may be the final hurdle in concluding a deal.
Australia and the United States are at loggerheads over the appropriate
intellectual property protections for cutting edge medicines. Underlining
the high stakes, President Barack Obama rang Prime Minister Malcolm
Turnbull on Thursday to discuss the TPP negotiations, including biologics.

Biologics are derived from biological sources including vaccines, blood,
anti-toxins, human cells, proteins and antibodies, to treat diseases
including cancer and rheumatoid arthritis.

They are big business in the $US300 billion a year global pharmaceutical
market, accounting for more than half of the world's top-selling drugs.

The TPP is viewed by pharmaceutical firms, particularly in the US, as a
golden opportunity to lock in crucial IP protection that could become the
common standard in TPP countries and any future trade agreements.

In developed economies like the US, Australia, Canada and Japan,
pharmaceutical drugs are often protected from generic treatments  by
patents for up to 20 years  to reward and incentivise expensive investments
in life-saving biotechnologies.

The dispute between Australia and the US is over an additional layer of

Data exclusivity rules for biologics stop follow-on manufacturers, that are
developing very similar products called biosimilars, from using the
originators' clinical trial data in the regulatory approval process. In
effect, it prolongs the entry of competitor copycat medicines into the

Trade and Investment Minister Andrew Robb has drawn  the line at five
years' data exclusivity, consistent with Australia's existing law.

Robb told US counterparts this week that Australia's system was, in
practice, more like six to seven years, once regulatory approvals and
Pharmaceutical Benefits Scheme listing time is added in.

He is conscious that opposition and minor parties in the Senate would
likely reject a lengthening of data exclusivity because it would stifle
competition and possibly push up the price of medicines under the
government's PBS.

"Our biologics sector has grown strongly and profits in Australia for
pharmaceutical companies are very satisfactory," Robb tells AFR Weekend.
"The objective is to keep the price at an appropriate level for the

Robb, a pro-business minister, finds himself in the unusual position of
facing pressure from drug companies in the US, and even the local industry.


AusBiotech, whose members include CSL, Cochclear and Mesoblast, wrote to
him in February to "urge support" for 12-year data exclusivity for

"The length of intellectual property protection, such as patent life and
data exclusivity periods, is a criterion that influences decisions to
invest in Australian biotech companies," AusBiotech chief Anna Lavelle

Vaccines and blood plasma giant CSL confirmed on Friday it supports
extending data exclusivity beyond five years to support "innovation across
the TPP region".

The US Trade Representative, under pressure from Republicans in Congress,
has also argued strongly for 12 years of data exclusivity, though leaks
from the TPP negotiations imply the US might settle for eight years in line
with existing rules in Japan and Canada.

Curiously, President Barack Obama and Democrats worried about drug prices
have tried unsuccessfully to enshrine a seven-year limit in US domestic
law. Republicans have blocked an easing in the current 12-year threshold.

Global pharmaceutical interests are adamant that Australia's five-year
offer is a significant low-ball because biologics are more expensive to
produce and different to molecule pharmaceuticals that can be precisely
replicated by generics.

Australia is seen as a power broker in the dispute because developing
countries without any data exclusivity laws such as Chile, Malaysia, Peru
and Brunei want to hold the line against the US.

Such developing countries have weak legal systems and patent laws, so drug
companies view the data exclusivity clause as an extra "backstop"

Furthermore, Biotechnology Industry Organisation international affairs
senior vice-president Joseph Damond says biosimilars are never the exact
copies of the original drug.

"The patent that normally would protect the original drug against generic
competition during the limited patent life may not provide predictable
patent protection against biosimilars because they are indeed not exactly
the same as the originator," Damond says.

Robb says America's litigious system drives more challenges against patents
and "gaming", but Australia's patent protection was working well.

Compromise options are being floated in Atlanta, including a "global
clock", whereby the countdown on data exclusivity would begin when it was
launched in the first market in the world, not each individual country.

Robb appears steadfast in his position.

"What the US is asking for we're already achieving," he says.

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