Ministerial talks are underway in Hawaii that could see completion of the 12-country Trans Pacific Partnership Agreement (TPP).
In a stunning about face, New Zealand Prime Minister John Key has acknowledged the country may need to extend the duration of pharmaceutical patents in return for access to agriculture markets in other countries.
"That means the Government will have to pay for the original drug rather than the generic for a little bit longer," he told New Zealand radio. "But for consumers that won't make any difference because, you know, on subsidised drugs you pay $5 for your prescription so the Government may incur slightly more costs there."
New Zealand provides 20 years patent protection for pharmaceuticals, a five year data exclusivity period, but no patent term extension.
Australia provides a five year patent term extension, standard in many developed markets, to compensate pharmaceutical companies for long development and regulatory approval timelines.
While Greens Senator Peter Whish-Wilson jumped on Prime Minister Key's admission, he appears to be confused by existing differences between Australian and New Zealand pharmaceutical patent law, specifically the latter's lack of a patent term extension.
If completed, the TPP would be the world’s largest regional free trade agreement with the 12 countries involved accounting for around 40 per cent of the global economy and comprising more than 800 million people.
Formal TPP negotiations kicked-off over five years ago, in Melbourne in March 2010.
From the start, issues relating to the pharmaceutical and biotechnology industry have featured prominently during negotiations and in public debate over the merits of the TPP.
The Australian Government - initially the former Labor Government and now the Abbott Government - has consistently opposed a US push for changes to an extension in the data exclusivity period for biologics to 12 years.
Australia currently provides a five year data exclusivity period for all pharmaceuticals, including biologicals.
Data exclusivity is different to patent protection, and they operate separately.
Patent protection explicitly prevents any competition from generic competitors, while data exclusivity only prevents a competitor from using an originator company's clinical data as the basis for its own marketing approval.
The extent to which any extension would delay the approval and launch of biosimilars remains unclear and debatable.
US-based sources have previously told BiotechDispatch the Australian Government is actually leading the opposition to any extension in the data exclusivity period.
US reports also suggest the US may push for a compromise proposal, dropping its demand for a 12 year data exclusivity period in favour of seven years.
Trade Minister Andrew Robb told ABC Radio on Wednesday he was yet to be convinced of the need for any extension.
"They're coming at it from that angle but that doesn't mean we have to fall into line and we're not going to," Mr Robb said in relation to the US position.
He also restated the Government's demand that any investor-state dispute mechanism in the TPP must include a carve-out for public policy matters on health and the environment.
Leaked TPP draft texts confirmed the carve-out from the investor-state dispute mechanism for a range of programs, including the TGA, PBS and Medicare.
A recent leak of the TPP's draft 'Transparency for Healthcare Annex' showed the adoption of language largely consistent with the US-Australia Free Trade Agreement.
If adopted, it would have virtually no impact in Australia. However, it would result in significant improvements to processes underpinning New Zealand's PHARMAC, which is renowned for being opaque and largely unaccountable.