Excerpt from PhRMA's 2003 Submission to the US Trade Representative on Australia


The US research-based pharmaceutical industry views the US-Australian FTA as a win-win opportunity to strengthen protection and enforcement of intellectual property rights, improve access to innovative U.S. medicines, support transparent science-based regulation in Asia Pacific, and improve recognition of the value of biomedical innovation under the for Pharmaceutical Benefit Scheme (PBS).

The successful negotiation of a U.S.-Australia FTA will do much to ensure that Australia remains competitive in the field of global biomedical research and that Australian patients are able to benefit from life-saving advances in treatment for disease and disability. We welcome the launch of U.S.-Australia free trade negotiations and look forward to working with the U.S. and Australian Governments to fashion an FTA agenda that advances policies that promote pharmaceutical and biotechnology and genomic discovery in both the US and Australia. Nonetheless, there are some intellectual property issues that have yet to be addressed. PhRMA therefore requests that Australia be included on the “Special 301” Watch List.

Intellectual Property Protection

Springboarding and Stockpiling

While Australia has strong intellectual property laws, which include patent term extension and data exclusivity consistent with the Trade Related Intellectual Property Agreement (TRIPS) Article 39:3 we are concerned, however, about proposals for expanded export "springboarding" and stockpiling.

Because of lobbying from certain local generic producers, the Australian Government periodically has considered various proposals for extending the existing “springboarding” provisions or “stockpiling” in which infringing medicines could be manufactured for export or stockpiled pending expiration of a patent. Such an approach makes little economic sense, because it would further undermine Australian investment in the innovative life sciences. While Australia’s total pharmaceutical exports amount to about A$2.3 billion per year, only 10% of such exports are generics. Thus, for Australia to abandon the innovative patented segment of the pharmaceutical industry, which is characterized by high value-added and advanced scientific discovery, would appear questionable from an industrial policy perspective. In addition, recent springboarding and stockpiling proposals appear to violate TRIPS Article 30, particularly in view of the ruling of the World Trade Organization (WTO) in Canada – Patent Protection of Pharmaceutical Products, WT/DS114/R (2000). Accordingly, the adoption of patent springboarding and/or stockpiling would send an important negative signal about Australia’s commitment to the innovative life sciences and the future success of the FTA negotiations.

Market Access Barriers

Due to increasing budgetary pressures, the Australian Government has adopted a series of increasingly restrictive regulatory and budgetary schemes that effectively diminish the intellectual property rights granted to innovative pharmaceutical and biotechnology products. Such practices include:

Many of these measures lead to a de facto reduction in the effective patent life of products, as innovative patented medical discoveries are routinely linked to older, generic products and fail to gain early reimbursement due to the magnitude of the challenge of demonstrating satisfactory cost-effectiveness vs. these older and generic products. This “one size fits all” approach to drug pricing denies any recognition of the improvements which innovative American pharmaceuticals bring to patients, insulates older drugs makers who have failed to innovate, and delays access to important medical breakthroughs.

Damage Estimate

PhRMA Members report that the above barriers have had significant commercial impact. However, it is difficult to estimate such impact with precision, and PhRMA does not yet have such an estimate.

Return to: CPTech Home -> Main IP Page -> IP and Healthcare -> Australia