Australian Pharmaceutical Patents Review Draft Report Critical Of Patent Extensions, R&D Funding

The Australian Pharmaceutical Patents Review yesterday issued its draft report, recommending that the Australian government reduce pharmaceutical patent extension terms and use estimated savings to subsidise research and development.

The review, announced in October 2012, seeks to “evaluate whether the system for pharmaceutical patents is effectively balancing the objectives of securing timely access to competitively priced pharmaceuticals, fostering innovation and supporting employment in research and industry.”

International trade agreements, such as the Australia-United States Free Trade Agreement (AUSFTA) and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), are cited as an explanation for increasing patent extensions in Australia. The report argues that these agreements were signed “without careful regard to whether this was in our own economic interest” and should be reconsidered. Seventy per cent of pharmaceutical patents expire later in Australia than in other countries, according to the report.

Specific savings from reducing patent extension terms are still unclear, but according to the report, “initial figures suggest they amount to some hundreds of millions of dollars a year.”

The report offers an example of reducing protection of data exclusivity from five years to one year that could offer savings of nearly AUD$ 200 million.

The report suggests that the government change the way pharmaceutical R&D is funded.

“The current model of using the patents system to subsidise pharmaceutical R&D indirectly should be replaced with a direct subsidy,” it said. “Some of this funding should be targeted to socially beneficial research for which patents provide inadequate incentives to conduct. Such areas include new antibiotics which, once developed, must be used as sparingly as possible to prevent the development of antibodies and pharmaceuticals to address rare diseases, paediatric illnesses and endemic health issues in low income countries.”

The draft report can be found here [pdf]. The comment period is open through 30 April.