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Wednesday, 23 March 2011
Page: 3051

Mr ALEXANDER (11:50 AM) —I rise to speak on the Therapeutic Goods Legislation Amendment (Copyright) Bill 2011. Whilst the coalition will not be opposing this bill, I feel it necessary to put on record some reservations about the direction in which we are heading with this industry which this bill represents. This bill is intended to prevent the pharmaceutical companies that research, develop, test, invest in and, finally, produce original medicines from being able to claim copyright over the heavily regulated product information document that they create to be inserted in the medicine packaging. As a result of this, as soon as the patent for a particular medicine expires, a generics company, that has made no investment in research and development and taken no risk, can start producing the same medicine with virtually a photocopy of the product information document inserted.

In short, this bill will add a caveat to the Copyright Act to basically say that if you are a company you can claim intellectual property through copyright of documents you produce, unless you are a pharmaceutical company. When I first read of this bill I was more than surprised to find that the industry’s representative, Medicines Australia, was supporting the passage of this legislation despite the fact that this further erodes its ownership over its property. I now understand that this decision is based on the best interests of Australia’s broader health industry. Medicines Australia has given proof that it is not an obstructive industry pursuing legal rights to frustrate generics companies. We all understand and support the role that generics companies play in reducing costs to the consumer by offering alternatives, and as representatives for those consumers it is our responsibility to ensure that we are protecting their interests. However, sometimes we as legislators can go too far in the dispensation of this protection. This is something we must remain mindful of when providing governance to this important industry.

The journey of a typical medicine can take on average almost 15 years from discovery to market. This includes more than six years refining 10,000 potential compounds down to 250, a further six years of clinical trials with up to 500 volunteers, followed by two to four years attaining TGA approval and commencing large-scale production. This journey is one of great expense and significant risk, as not all trialled medicines end up in the marketplace to recoup those costs. Of course, for a generics company all the hard work has been done and the risk has been borne years earlier. The product has proven to be a success and all they need to do is simply wait for the product’s patent to expire.

Through the research on this bill, I have learned that some generics companies are stocking pharmacy shelves on the day the patent expires, meaning they have previously gone through the process of attaining TGA approval and commencing large-scale production. This raises a legitimate concern with the way in which this industry is regulated, as there is minimal, if any, communication between the TGA and IP Australia when placing generic medicines on the Australian Register of Therapeutic Goods. It seems that the TGA takes the view that it is up to the generic companies to self-regulate in ensuring they are compliant with the patent restrictions and, if not, then the original medicine producer can instigate legal action. We all know that, by the time the original medicine producers discover the breach and serve an injunction to prevent the marketing of these products, great damage can already have been done through a large quantity of sales and dilution of the brand. Surely we would prefer a society where our regulatory bodies take the initiative to check that a company has the patent permission to market a medicine prior to giving them the regulatory approval to do so. Surely it would be reasonable for the companies that have made all of the investment and taken all of the risk to be informed that a generics company has been given approval to copy their products. In the current system this is not the case.

It is my belief that, with all the regulatory support given to the generics companies in the name of competition, the original medicine producer should be afforded a reasonable notice period of one or two weeks so they can ensure the generics company copying their product is not in breach of the patent. This will avoid the need for a threat of involvement by lawyers with injunctions and claims for damages, and will simply ensure that all parties are doing the right thing in the first place.

The actions of both Medicines Australia and the coalition in not opposing this bill highlight our shared desire to avoid becoming a more litigious society and to support the important role played by the generics companies in our society. The pharmaceutical industry contributes over $4 billion per year in manufacturing exports, more than any other high-tech industry. They invest more than $1 billion per year in research and development and employ approximately 14,000 people, many of whom are based in the electorate of Bennelong. As we work to promote competition in this industry in order to lower prices for the end consumer, we must also ensure that we do not implement too many barriers to profitability and thereby reduce the incentive for the original medicine manufacturers to make the investment in the first place. After all, if there is no research and development, if there is no intellectual property developed, if there is no invention of an original medicine, there will be no product for the generics to copy.

Recently we witnessed the Gillard cabinet reject seven medicines from being listed on the Pharmaceutical Benefits Scheme despite these medicines being recommended for approval by the experts, the Pharmaceutical Benefits Advisory Committee. This decision is unprecedented and has created a dangerous environment, as many players in this industry are forced to reassess the longstanding processes for the production and marketing of their products. The fact that Medicines Australia, who will lose some control through this bill, has chosen not to oppose it and yet has expressed vociferous opposition to the government’s actions on the PBS, highlights what a bad decision this really is. Despite the government’s overt support for the generics industry, this decision—to not offer some essential medicines on the PBS—means it is the consumers who can least afford these medicines who will be forced to pay the maximum price, instead of receiving the standard government subsidies for these health products.

This industry will only survive and thrive on the certainty with which we are able to provide it. Unprecedented and ill-thought decisions, based on politics rather than on what is right, will only serve to undermine this certainty and the foundations that this important industry is built upon. We are a country that has rapidly transitioned from a farming based economy to a more urban society exporting mineral resources. The future must embrace, encourage and stimulate high-tech industries that will produce an Australia at the forefront of the Asia-Pacific region. As legislators, we should do everything possible to support these cutting-edge industries and make welcome the investment that comes with a profitable and productive high-tech sector.

This legislation is fairly simple in its scope and it is both fair and right that we should ensure that technical information supplied for health products is consistent in its high quality. As a party we support the role of both competing interests, the original medicine providers and the generics companies. We support the competition in this market ensuring efficiencies, the original medicine providers and the generics companies. We support the competition in this market, ensuring efficiencies in service and keeping downward pressure on the price paid by the end consumer, yet this support must also be tempered by some clarity and forethought in the direction we take to support the vital role played by the original medicine producers, the essential contribution they make to our nation through investment, employment and, most importantly, the health of our constituents.