The last ditch attempt to conclude the Trans-Pacific Partnership (TPP) trade deal have dragged into the weekend, with the dispute over protections for so-called “biologic” drugs continuing to prevent an agreement from being reached.
Biologic drugs are an important new class of medicines produced from living organisms and are used to treat cancers and diseases such as rheumatoid arthritis.
Australian patent law currently gives pharmaceuticals 20 years of protection. Rival pharmaceutical companies must then wait another five years to access the clinical data needed to create similar and cheaper versions, known as “biosimilars”.
In the TPP negotiations, the US first pushed for 12 years of data exclusivity before reducing its bid to 8 years. By contrast, Australia (amongst others) have argued to keep protections to 5 years, as applies currently. Any extension of protections beyond five years would delay the entry of generic drugs, raise the cost of drugs in Australia, and would compromise Australia’s Pharmaceutical Benefits Scheme (PBS).
As reported in the Inside US Trade website, Australia and the US have circulated to other ministers a compromise proposal on how many years of protection are to be accorded creators of biologics. Included is a complicated compromise that would provide eight years of exclusivity for biologics in some circumstances, thus giving US pharmaceutical companies greater power to raise drug prices.
According to John Kehoe at The AFR, “each extra year of data exclusivity delays the entry of cheaper “biosimilar” drugs and would cost the federal budget through the Pharmaceutical Benefits Scheme more than $100 million a year, a figure that would rise as new biologics were developed”.
Australia’s public health groups have pushed back hard, urging Andrew Robb not to cede to the US demands and grant greater protections on biologics.
Last month, 150 senior health experts wrote to Minister Robb to express their resolve not to extend monopolies on biologics, since it would delay affordable access to life-saving treatments.
The chief executive officer of the Public Health Association Australia, Michael Moore, also wrote to Malcolm Turnbull over the weekend urging the Government to stand firm against the US push to lengthen biologic monopolies:
“We are still hoping there is no last-minute trade off that kowtows to the US pharmaceutical companies that are actually driving the agenda…
“We understand that monopolies for biologic products may become the final sticking point in the TPP negotiations and that Minister Robb is under intense pressure to compromise on his commitment not to agree to anything longer than Australia’s current five-year data exclusivity period.
“There is strong opposition amongst Australian health organisations to lengthening market exclusivity for biologics”…
Meanwhile, the head of the Australian Medical Association, Brian Owler, and La Trobe University public health researcher, Dr Deborah Gleeson, have previously voiced concerns over US demands for biologics, warning that they could risk the PBS and pass on rising costs from pharmaceutical monopoly protections to consumers.
Andrew Robb has continually insisted that he would never agree to any deal that pushed-up the cost of medicines in Australia or compromised the PBS. The Department of Foreign Affairs and Trade (DFAT) has backed this view, stating the following in its fact sheet on the TPP, released in June:
The Government is negotiating intellectual property provisions in the TPP within the framework of Australia’s existing laws and policies and does not support any proposals that would require changes to Australia’s current intellectual property arrangements, including our copyright and enforcement regimes…
The Government has stated clearly that it will not accept an outcome in the TPP which adversely affects the Pharmaceutical Benefits Scheme or our health system more generally, or an outcome that increases the price of medicines for Australians.
It is understood that the biologics impasse has delayed the finalisation of other key outstanding issues including sugar and dairy market access for Australia and New Zealand.
Given the issues at stake, Andrew Robb must stand firm on pharmaceutical protections and not cede to US demands in order to receive slightly improved dairy and sugar access.
It is a sad state of affairs when the best outcome for Australia is for the TPP negotiations to collapse, as this is the only way to stop copyright and patent protections from being extended, and to stop foreign corporations suing the Australian Government (read taxpayers) via investor-state dispute settlement clauses embedded in the TPP.
Either way, we should know the outcome by the end of the day when negotiations reach their deadline.
