[Ip-health] AUSFTA medicines compromise

[John Godwin]

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Howard gives ground to salvage FTA
Aug 06 Australian Financial Review

Aust. Prime Minister John Howard began laying the groundwork yesterday for =
a compromise over medicines so Labor would pass laws supporting the free-tr=
ade agreement with the United States.
Mr Howard told parliament that Opposition Leader Mark Latham had significan=
tly softened his own position on how Labor would outlaw the use of spurious=
 drug patents to stop cheaper generic drugs from being marketed in Australi=
a.

A senior coalition source insisted the government would wait until Labor pr=
oduced its amendments before deciding the next step. The manoeuvring, which=
 has implications for the timing of the election, came as Mr Latham secured=
 public support for his stance and the government came under fire for alleg=
ed links to big drug companies.

Competition policy expert Henry Ergas said one compromise option for the go=
vernment was to stiffen the Trade Practices Act to tackle the use of patent=
 laws by drug companies to substantially lessen competition in the pharmace=
uticals market.

The senior coalition source said the government was determined not to accep=
t Mr Latham's plan to fine companies making spurious patent applications be=
cause this would deter innovators and inventors from applying for patents.

But he said the government had a "neutral" attitude towards comments by the=
 Opposition Leader yesterday suggesting that fines should be imposed on exi=
sting patent holders rather than applicants who used the legal system to de=
ter competition from makers of generic medicines.

Earlier yesterday there was speculation the government was about to comprom=
ise after a frontbencher, parliamentary secretary Peter Slipper, said the g=
overnment might produce its own amendments to the FTA legislation on the ph=
armaceutical issue....Mr Latham told Channel Nine yesterday Labor wanted to=
 impose penalties in cases where drug companies holding patents took court =
action against generic drug makers and the court found the patent holder ha=
d abused the rules.

Mr Howard said this was a substantial change from Labor's position on Tuesd=
ay when Mr Latham said the opposition would amend the FTA legislation to pe=
nalise drug companies that tried to "stop cheaper generic drugs from coming=
 onto the market by lodging dodgy patent claims".

The distinction the Prime Minister was pointing to was a penalty regime for=
 people lodging spurious patent applications, which the government would no=
t accept, and a penalty regime for existing patent holders who abused their=
 patents to deter competition.

A senior Labor source said the opposition was drafting amendments to fine p=
harmaceutical manufacturers in at least two scenarios:

- Cases where a pharmaceutical manufacturer applied for a new patent, and s=
ought an injunction to deter a generic competitor on the basis that it had =
an application on foot, but the patent was later found to be invalid.

- Cases where a generic manufacturer took an existing patent holder to cour=
t and the court found the patent was invalid.

In other developments, the government tabled an amendment to the FTA legisl=
ation designed to entrench Australia's existing local-content rules for tel=
evision broadcasters.

Howard open to deal on FTA impasse
August 6, 2004 - Sydney Morning Herald

Prime Minister John Howard today said he would be willing to consider an AL=
P amendment in order to break the parliamentary impasse over the free trade=
 agreement with the United States.

Mr Howard, who has said previously described Labor's proposed amendments to=
 the free trade legislation as unnecessary and potentially harmful, today s=
aid he would look at any proposal put forward by the ALP as long as it did =
not harm patent laws.

Opposition Leader Mark Latham has said the ALP will not support the trade d=
eal in the Senate without an amendment to protect the Pharmaceutical Benefi=
ts Scheme from dodgy patent applications. The ALP said its amendment would =
be ready to be debated in parliament next week.

Mr Howard, who today left Australia for the Pacific Islands Forum in Wester=
n Samoa, told reporters he would look at Labor's amendment.

"If the Labor Party has an amendment that is not damaging to the patent law=
 of this country, well let it bring it forward and let us have a look at it=
," he said before his departure.
 "I think the point should be made that securing the free trade agreement f=
or Australia is far more important than any temporary political advantage I=
 might gain or Mr Latham might gain.

"The national interest requires of us both that we deliver this free trade =
agreement.

"Political advantage for either side, certainly in the short term, is quite=
 secondary to the national interest that is involved."

Mr Latham told reporters in Sydney his plan would ensure big American drug =
companies could not take control of the cost of drugs in Australia.

"Labor is going to be pursuing amendments next week to have multimillion do=
llar fines, multimillion dollar penalties in place, to ensure that the big =
companies can't hold up the generic products coming onto the market," he sa=
id. "We've got to defend the interests of our consumers and that's what we'=
ll be fighting for in the Senate next week with our amendments."