Geneva, 10/18/2004 - IFPMA welcomed the signature of the recent Free Trade Agreement (FTA) between Australia and the United States, as this agreement strengthened opportunities for pharmaceutical innovation and fair competition in the Australian market.

IFPMA was thus very surprised and concerned about the amendments proposed after the signature of the FTA, a concern that appeared to be shared by the Australian Government at the time. Such amendments could be counterproductive and would tend to undermine the purpose of the FTA in fostering innovation, economic growth and access of patients to innovative medicines. If these amendments stay in force, they will seriously affect the investments made in research and development in the pharmaceutical industry by weakening the ability of innovators to protect their intellectual property from infringement by copiers. Innovation, both within and outside of Australia, will suffer and thereby, even more importantly, Australian patients will potentially suffer most, as the effects of these amendments will limit their access to biomedical advances that come with enhanced intellectual property protection for biotechnology and pharmaceutical companies.

“Experience in countries around the world, including Australia, has demonstrated how innovative medicines improve health and save lives. The recent amendments to the Australian patent law are unique to Australia, compared to other developed countries and even developing countries that have adopted patent protection, and not only reduce the incentives for innovation contained in the US-Australian FTA, but could make Australia less innovative and competitive in attracting biomedical investment than it was before the FTA was signed,” noted Dr. Harvey E. Bale, Jr. Director-General of IFPMA.

Australia passed legislation to implement their obligations under the AUSFTA on August 16, 2004. Schedule 7 of the legislation concerns creation of a patent “linkage” system and Section 8 contains amendments to the Australian Patents Act. As passed, the Act contains an amendment offered by the Opposition Labor Party that amended Schedule 7 of the Act. The system established by Section 6 of Schedule 7, as amended, imposes a number of conditions on use and sanctions for “misuse” of patent rights concerning pharmaceutical products that are not imposed on owners of patents on inventions outside this technological field. These measures interfere with the benefit of the patent rights in a pharmaceutical invention in a discriminatory manner that is not the case with respect to patent rights in non-pharmaceutical technologies. The consequence is that these measures would be inconsistent with Australia’s obligations the TRIPS Agreement.

While the rest of the world is moving towards adopting stronger standards for intellectual property protection, Australia stands alone in suddenly going the other way. It must be of significant concern for innovators that, in literally a matter of days and with very little debate, Australia's intellectual property laws have been diminished to the extent that they are now below the standards set in all other OECD countries and even in a number of developing countries.

In summary, the amendments to Australia’s patent law were proposed an overly hasty manner and without adequate consideration of the consequences these amendments will have. This situation will cause research-based pharmaceutical and biotechnology companies to wonder how committed Australia really is to attracting investment and research in this sector, when such radical changes can happen in such an apparently fast and loose manner, without a robust and reasoned public debate. Furthermore, by creating disincentives for patent-holders to introduce their innovative products into the Australian market, Australian patients will have their access to new and improved treatments restricted for obvious though highly dubious reasons.