Legal advice provided to the former federal government confirmed that implementing manufacture for export would contravene Australia's commitments under international trade agreements.
BiotechDispatch understands the advice was provided to the former Rudd Labor government in 2009.
The advice, provided by the Attorney-General, concluded that any change that would allow manufacture for export would contravene Australia’s international commitments on intellectual property and trade.
Information on the advice comes following a renewed push to adopt the change as one of several recommendations contained in the Productivity Commission's draft report on Australia's intellectual property arrangements.
Australian manufacturers are not permitted to manufacture and export for commercial sale medicines currently patented in Australia to countries where patents have expired.
The pharmaceutical sector has engaged in a longstanding debate regarding 'manufacture for export', under which Australian-based companies would be permitted to manufacture and export for a commercial purpose medicines patented in Australia to countries where patents have expired.
According to the Productivity Commission's draft report, government should change the patent-term extension period, essentially detaching it from the standard 20-year patent term. In so doing, it would then only grant extensions in a way that explicitly allowed manufacture for export during the extension period.
Yet it is also understood that the 2009 advice confirms that detaching the patent term extension period from the 20-year patent term, and effectively offering a lesser form of protection, as recommended by the Productivity Commission, would breach Australia’s longstanding international commitments.
The Productivity Commission referenced aspects of the TRIPS Agreement, the recently negotiated Trans Pacific Partnership Agreement and one section of the US-Australia Free Trade Agreement (FTA), to construct its argument.
However, it what could have been a significant oversight, it appears to have overlooked a side letter to the FTA in which then trade minister Mark Vaile explicitly committed to his US counterpart, Robert Zoellick, that Australia would not allow manufacture for export during the patent term extension period.
"...if a patent for a pharmaceutical product has been granted an adjustment of its term....Australia may permit the export by a third party of a pharmaceutical product covered by that patent, only for the purposes of meeting the marketing approval requirements of Australia or another country."
The apparent oversight raises questions about the extent to which the Productivity Commission considered Australia's international trade commitments in constructing its draft report, particularly in its recommendation to wind back patent term extensions.