[Ip-health] The Australian: US attempt to wind back generic drugs

[Mike Palmedo]

http://www.theaustralian.news.com.au/common/story_page/0,5744,8197538%255E23289,00.html

US attempt to wind back generic drugs
By Christine Wallace and Roy Eccleston

December 18, 2003 A backdoor way of delivering more profits for US drug
companies from Australia's taxpayer-funded Pharmaceutical Benefits
Scheme through the proposed free trade agreement is being pursued by US
trade negotiators.

A document obtained by The Australian shows US negotiators aim to
undermine the "springboarding" rights that enable inexpensive generic
copies of patented medicines to be brought quickly to market to compete
with branded drugs on the Pharmaceutical Benefits Scheme.

It would oblige the Australian Government to run an early alert system
for patent holders of any plan by generic drug-makers to bring a
competing drug to market.

This would allow the big drug firms to take early defensive action
against generic competitors, which in the US has led to the effective
patent life of medicines being extended by up to 50 per cent.

While not changing the PBS system, it would inevitably lead to a
blow-out in government spending as consumers' ability to choose cheap
generic alternatives to expensive brand-name drugs was increasingly
delayed.

Marked "Australia Confidential Information - To Be Treated as US
Confidential", and dated in February, the document shows that from the
outset of talks, US negotiators sought to use "intellectual property"
issues as a backdoor route for dealing with the PBS.

"With respect to any pharmaceutical product that is subject to a patent
... the Party (to the FTA) shall provide that the patent owner shall be
notified of the identity of any third party requesting marketing
approval during the term of the patent," it says.

At present, generic drug-makers may apply for approvals prior to a
patent expiring, but can only "hit the button" for their manufacture
when the patent lapses.

The early alert would enable patent holders to tie up generic
manufacturers at the outset in legal action over the underlying
intellectual property rights.

US drug makers have been accused of "gaming" the patents system, using
litigation against generic drug competitors to extend the effective life
of their patents. Congressional testimony from the US Generic
Pharmaceuticals Association cites examples of drugs where the effective
patent life has been extended from 12 to 18 years, at significant public
cost.

The Opposition said the proposal would be a "deal-breaker" for Labor in
relation to the FTA. "It's a backdoor route to undermine the PBS by
delaying the introduction of generic drugs to the Australian market,"
trade spokesman Stephen Conroy said.

Concern is growing in Washington among supporters of the FTA that
controversy over the PBS could sink the deal.

Eighteen Democratic members of Congress have written to US Trade
Representative Robert Zoellick telling him to stop pushing the drug
companies' line.