Intellectual property (IP) protections are the foundation stone of innovation, so Australia's patent system for drugs and medical technologies needs to be harmonised with those of the countries that are Australia's key trading partners, the government has been told. 

Among the options for doing this is to introduce longer initial patent periods or increase extension periods - this would provide greater certainty to industry and the government, says the life sciences industry group AusBiotech, responding to the government's consultation on its review of pharmaceutical patents.

The incentive to develop and patent innovative medicines in Australia is being eroded by a raft of forces, including the trend toward medicines that target smaller patient groups, increasing regulatory and reimbursement times, costs, complexity, the industry groups tells the review.

New therapies such as biologics demand more time and investment due to the level of complexity, and the data exclusivity period has not been reviewed in line with the industry-wide shift from small to large molecules, it adds.

Australia’s patent term extension provisions were intended to provide a reasonable period of exclusivity after regulatory approval and, since 1995, 15 years has been understood to be an effective protected period. However, an analysis of data collected by IP Australia published this month shows that only 53.22% of patent extensions have provided an effective 15-year provision from the date of the product's first "inclusion" in the Australian Register of Therapeutic Goods, AusBiotech tells the review.

The length of government administrative and review processes prior to the listing of a device or medicine needs to be factored into what is seen as the reasonable exclusive period covered by a patent, it recommends.

The group also notes that patents on medicine in Australia have five-year data protection for clinical trial data submitted for regulatory approval, while most other industrialised countries offer 8-12 years.

Late last year, a study by the Australian Healthcare and Hospitals Association (AHHA) looked at the applications for new medicines or for products to be used to treat new conditions which were approved in 2004 by the country’s Therapeutic Goods Administration (TGA). This exercise found that only 43% of these products were submitted for listing on the Pharmaceutical Benefits Scheme (PBS) within two years, and that there was an average 17-month delay from TGA approval of a product to its consideration by the Pharmaceutical Benefits Advisory Committee (PBAC).

Possible reasons for the delays, acceding to AHHA, included the cost of a major submission to the PBS - which since 2010 has charged companies additional cost recovery fees of up to A$19,500 per submission - particularly for products for relatively small patient populations. A major PBS submission requires the collection of rigorous data on effectiveness and cost-effectiveness, and the time required means that companies may choose not to apply for PBS listing and look instead for alternative ways of selling and marketing their products, says AusBiotech.

"The need to negotiate on price with the pricing authority creates fewer incentives for pharmaceutical companies to apply for PBS listing," it adds.

If Australia is serious about becoming a knowledge-based economy, the case is strong for extended and increased periods of exclusive market access, as the pendulum has swung too far in the wrong direction, discouraging innovative companies, AusBiotech tells the review.

"Many of the contributing factors are outside of the remit of IP Australia, but one way to rebalance is for consideration to be given to increasing the period of time companies have to recover their investment by ensuring a reasonable period of exclusivity," it suggests.