Key recommendations from the Australian pharmaceutical patents review

Date: 2013-04-11
Author: Carol Burnton

The Australian Government has continued with the trend of reviewing Australian patent law by commissioning a review of laws relating to patents for medicines ie pharmaceutical patents. The Pharmaceutical Patents Review Panel (the Panel) has now released their Draft Report for review: Pharmaceutical Patents Review. The report has a particular focus on extending patent term because such extensions are only available to pharmaceutical patents.

The key recommendations of the report, summarised below, have already been the subject of significant debate. They are in contrast to those in the recently released McKeon medical research review, which concluded Australia’s IP system is weak and needs strengthening by, for example, extending the term of data exclusivity. Thus, the debate on the appropriate mechanism for supporting medical research and development is likely to continue. In addition, the upcoming federal election may delay the progress of the recommendations contained in the Final Report, or may result in the Report being ignored.

Submissions on the Draft Report are due by 30 April 2013.

Extensions of patent term

Should patent term be extended?

Currently an Australian patent for a pharmaceutical substance may have its term extended for up to 5 years to increase the effective life of the patent where there have been considerable delays in registration for sale of a product containing that substance.

The Panel has recommended that this extension of term regime be replaced with direct subsidies for research and development. Implementation of this recommendation would shift the Government from:

1. compensating for the diminished effective patent life where regulatory procedures delay the sale of a pharmaceutical product developed anywhere in the world


2. providing a specific incentive to conduct research and development in Australia.

Given these two options benefit significantly different parts of industry, this recommendation is likely to be much debated.

Length of the patent term

The average extended Australian patent expires later than its equivalent in the United Kingdom or United States. If the extension of term regime is retained, the Panel recommends altering it so that the Australian patent does not expire later than the equivalent overseas patents.

To protect the profit that may be made by the patentee, the Panel also recommends providing an incentive for Pharmaceutical Companies to file for registration of their products in Australia promptly so the product is sold in Australia as soon as possible and the length of the effective patent life is maintained.

Extensions for which patents?

Currently, the law provides for an extension of the term of a patent for a ‘pharmaceutical substance per se’ where regulatory approval and thus, sale, of a product containing that pharmaceutical substance has been delayed. The review considered whether an extension should also be provided for a new:

  • method of manufacture; and/or
  • therapeutic use.

The panel has recommended maintaining the current provisions.

Contributory infringement

In Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 3) [2001] FCA 846, a patent for a method for the treatment of psoriasis was held to be infringed by marketing a product for the known treatment of psoriatic arthritis and rheumatoid arthritis. Patents for treatment of psoriatic arthritis and rheumatoid arthritis had expired. The result was based on a finding that a person with rheumatoid arthritis will almost always have psoriasis. This decision was perceived as having the effect of extending the monopoly for treatment of rheumatoid arthritis beyond expiry of the patents protecting that therapeutic use.

The Panel is recommending amendment of the contributory infringement provisions so that a pharmaceutical manufacturer does not contribute to infringement of a patent where that manufacturer has taken reasonable steps to avoid infringement. It is also recommended that where the labelled indications on the product do not include any infringing indications, there should be a presumption that reasonable steps have been taken. These amendments would be intended to permit ‘carve-outs’ on product labels.

Extension of monopoly with non-active pharmaceutical ingredient (API) patents

Selling a pharmaceutical requires approval from the Therapeutic Goods Administration (TGA). This approval depends on data showing the safety and efficacy of a medicine, and its formulation, therapeutic use, method of administration etc. Thus, a non-API patent for a TGA registered product can be as valuable as a primary patent in that it can operate as a bar to market entry.

The Panel considered whether non-API patents are being used to inappropriately extend protection for pharmaceuticals. In this context, ‘ever-greening’ patent protection was noted, as was the categorisation of the term as pejorative by some submissions. The Panel considered the filing strategies of originator companies to reflect ongoing innovation and the understandable desire to protect their investment as well as possible. Any issues with the grant of inappropriate patents are expected to be addressed by the amendments to the patent law resulting from the Intellectual Property Laws Amendment (Raising the Bar) Act 2012. The Panel has recommended the effect of this legislation be reviewed in the near future.

Manufacture for export

The Panel expressed concern that an Australian patent can prevent manufacture of a product in Australia for export to a country without a relevant patent. This situation was considered to cost the Australian economy without providing any benefit. Allowing export for manufacture was not considered to be in accordance with our current international obligations. Thus, the panel recommends the Government seek to alter the international agreements and, as an interim measure, seek agreement from pharmaceutical companies to not enforce their Australian patents against manufacture for export.

Data exclusivity

Data exclusivity currently only applies to protect the non-public clinical trial data for registered pharmaceuticals. The Panel has recommended not to expand data protection or increase the length of data protection for biological products.

Australian version of Orange Book

To assist with awareness of the patent position in Australia, the Panel recommended development of a public database, similar to the United States Food and Drug Administration (FDA) Orange Book, which identifies patents protecting a specific pharmaceutical product. The extent of the patents included in the database is yet to be outlined.

Warning of generic launch

In order to provide originator pharmaceutical companies with greater time to assess their position, the Panel is recommending generic companies be required to advise the appropriate originator when they apply for registration of a generic medicine.