AusBiotech appears at IP hearing

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Below is AusBiotech's opening statement at today's public hearing in response to the Productivity Commission's draft report into Australia's intellectual property arrangements.

AusBiotech was represented at the hearing by Lorraine Chiroiu, AusBiotech chief industry affairs officer at AusBiotech, Mr Rob McInnes, Partner at Dibbs Barker in the Intellectual Property and Technology services group and the Life Sciences and Healthcare group.

AusBiotech is a network of over 3,000 members in the life sciences, seeking to promote the sustainability and growth of Australian biotechnology.

The core of AusBiotech’s membership is Australian biotechnology and medical technology companies working to commercialise biomedical research - which has usually been publicly funded in universities or medical research institutes. The Australian bio-pharmaceutical industry consists of about 400 therapeutics companies. In Australia, with a few exceptions, these companies are typically young, small and pre-revenue, competing globally for investment dollars, which will most likely run into hundreds of millions of dollars before regulatory approval is achieved.

As in many first World countries, in Australia, pharmaceutical development is a public/private compact. Typically, the research, publicly funded in universities or medical research institutes, should it show promise as a therapeutic, enters a translation process that relies on the attraction of private money. Given no Australian government has ever brought a product to market, the public/private compact is activated. The task ahead is to attract the hundreds of millions of dollars required over the 10+ years of the clinical trials and development, that is takes to make a therapeutic.

Intellectual property protection is the fundamental source of value that is used by these companies to attract the substantial, multi-million dollar investment it takes to bring these treatments, cures, tests and devices to the patient.

It is also important to note that AusBiotech’s membership also consists of members across the entire biotechnology development ecosystem, including multinational pharmaceutical companies. These companies play a valuable role in the ecosystem in two key ways: by providing expertise and investing resources to develop locally-discovered technologies, via licensing and partnering arrangements; and by investing in local clinical trials, which bolsters Australia’s clinical trial community and capability and gives Australian patients early access to medicines in development, as well as local jobs.

AusBiotech believes the findings of the Commission in regard to pharmaceutical patents is at odds with public policy in three key areas: the recent commitment to $20 billion Medical Research Future Fund; the National Innovation and Science Agenda; and the recognition of medical technologies and (bio)pharmaceuticals as one of Australia’s areas of strengths.

Therefore the Australian pharmaceutical industry has importance for the transition of the Australian economy as the mining boom fades and to our social fabric as we seek to translate our world class research into real value in the form of therapeutics. Ensuring that Australia has a globally-competitive IP system that enables development of new biotechnologies is the key to Australia’s future health and wealth.

Notably, there is a vibe throughout the pharmaceutical chapter of the Draft Report that is negative toward pharmaceutical developers, which is disappointing.

It is also disappointing that many of the recommendations made revisit issues that have already been given detailed consideration. Many of these were raised in the period leading up to the implementation of the “Raising the Bar” Act in 2013. The Act raised the quality of granted patents to more closely align Australian patentability standards with international standards. It is not clear why the new provisions have not been given time to settle and their impact properly assessed before further changes are considered. This is pertinent in regard to the Commission's recommendation to amend the definition of an “inventive step”.

AusBiotech believes the recommendation that the Innovation Patent system should be abolished is premature, and instead proposes serious consideration be given to improving the system.

AusBiotech urges that the patent extension period not be decreased. Extensions to patent life for health technologies like pharmaceuticals are important because the regulatory and reimbursement processes consume years of patent life - and the period or the possible period of the patent influences the decisions of and value to investors.

For the same reason, AusBiotech supports an extension to data exclusivity periods for biologics. Australia’s five-year data exclusivity provision lags global competitors and collaborators such as the United State, which allows up to 12 years.

The real impact of these recommendations is that they are likely to make it harder for biotechnology companies to develop and deliver new medicines to patients in Australia, and further challenges the sustainability and growth of the emerging Australian biotech industry. In short, these changes recommended by the Commission, albeit unintended, could have a negative impact on social value.