Pharmaceutical Research and Manufacturers of America - Policy Views - Issues Around The World - Special 301 Report WATCH COUNTRY


Australian law and practices continue to deviate significantly from their WTO TRIPS obligations. Accordingly, PhRMA requests that Australia be placed on the 2000 "Special 301" Watch List.

Intellectual Property Protection

Patent Term Length: PhRMA considers it essential for an adequate patent life to be afforded to pharmaceuticals in Australia, as in the rest of the world. Many members of PhRMA's International Section maintain affiliates in Australia, and consider Australia an important country in their overall global business and investment planning. PhRMA welcomes recognition by the Australian Government of the importance of patent protection to the pharmaceutical industry, particularly to encourage research, development and investment in Australia.

Last year, the Australian Government enacted patent term extension for pharmaceuticals by up to five years, in order to bring Australia into line with international practice. The new policy will apply to patents which are still viable as of July 1, 1999. They will be eligible for an extension of up to five years, in order to gain an effective patent life of 15 years. Where patent extensions are granted, "springboarding" or Bolar-type provisions will apply, so that generic manufacturers will be able to do all necessary testing of their products before the expiration of the innovator's patent rights.

The Australian Government long has viewed any extension for existing patents as a "windfall" for the industry, as several companies could benefit from the immediate extension of the patent life for their products. It therefore made the commitment to offer generic firms a "springboarding" benefit in exchange for the "benefit" to the research-based industry of patent term extension. However, the Australian Government overlooked at least two issues in this regard:

(1) that the market launch of pharmaceuticals in Australia is delayed in any case through the long regulatory process in that country, as well as by the complex and lengthy requirements in a strict cost containment environment, including the submission of "cost effectiveness" data; and

(2) that economic returns from currently marketed products in Australia provide the funding for future research and development (R&D), so patent term restoration applied to current products on the market in Australia will provide the foundation for investment to support future R&D in that country.

PhRMA does not agree with the necessity of maintaining a "springboarding" provision that basically undercuts the current value of intellectual property protection in Australia, and certainly does not agree that a "springboarding" provision is needed to "compensate" for the value of patent term restoration.

Protection of Proprietary Data: PhRMA applauds the recent enactment by the Australian Government of a law governing data protection that commits Australia to abide by the WTO TRIPS Agreement (See Appendix A for discussion of data exclusivity and TRIPS Article 39). PhRMA hopes that the Australian Government would provide protection for confidential data to all chemical entities, to the extent a particular use for which approval is sought has not been granted approval for that particular entity. This should include new indications for entities already approved, in addition to the first approved usage.

Furthermore, while the Australian Government has moved to provide five years of data protection for new chemical entities in the first instance, PhRMA believes that this period of protection should be ten years from the date of marketing approval, to allow for the additional time that it takes for a product to be listed on Australia's Pharmaceutical Benefits Scheme (PBS), which is the list of products eligible for reimbursement by the Australia Government. If the period of data protection begins before this date, the effectiveness of such protection would be eroded through the lengthy time needed for regulatory and listing approval.

Damage Estimate

PhRMA is currently studying methodology for estimating damages caused by the aforementioned trade barriers in Australia. Australia's cost containment policies, particularly the recent TGP initiative, are undermining the intellectual property rights of pharmaceutical manufacturers, by devaluing the value of patents and effectively denying market access to new medicines.