Australia set to be targeted in Trump global drug review


Reports in the US suggest the Trump administration will look to lower drug prices by easing regulatory hurdles and targeting the policies of other countries through trade agreements.

A report in The New York Times, based on a copy of the relevant draft executive order, suggests a range of measures to lessen the financial impact of out-of-pocket costs on consumers.

The measures are less than what many expected, particularly given President Trump's hard language directed at industry during last year's campaign and following his election.

Importantly for Australia, the order directs the United States trade representative (USTR), that country's equivalent of the Australian trade minister, to conduct a study of price differences between the US and other countries.

The new order builds on an earlier but less extensive order issued by President Trump in May this year. 

The new order requires the USTR to review trade agreements that may need to be revised “to promote greater intellectual property protection and competition in the global market.”

The existing US-Australia Free Trade Agreement (FTA) is certain to face significant scrutiny.

Setting aside the price differential between the two countries, something certain to be highlighted in the review, the US-based industry has longstanding concern over Australia's implementation of the FTA's intellectual property provisions.

A specific criticism has been the lack of a US-style patent notification system in Australia.

The US FDA maintains a list of products and current uses under patient in its 'Orange Book'. It will not grant marketing approval for a generic copy of a product that would potentially infringe a patent listed in the 'Orange Book'.

In contrast, while a system was introduced in Australia following ratification of the FTA, it does not involve any substantive role for the TGA and gives patent holders virtually no capacity to challenge a product until after it is registered.

The system requires companies seeking marketing authorisation to simply declare to the TGA their application does not breach any patent. The TGA will not register a product if a company declares it will infringe a patent. Yet the regulator has no obligation to test an applicant's declaration.

The US industry, led by PhRMA, argues the Australian system does not meet the requirements of the FTA.

The US has previously argued Australia must extend the current legislated five-year data exclusivity period for biologics under the terms of the Trans Pacific Partnership Agreement.

The agreement, which the US has withdrawn from, essentially nullifying any demand, required countries to provide a legislated 8-year data protection period for biologics, or a 'market protection' period that delivers a "comparable outcome" of 8 years comprised of a legislated 5-year period plus "other measures".