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Thursday, 12 August 2004
Page: 26308


Senator CARR (12:01 PM) —I welcome the opportunity to speak to the amendments—and I do actually want to speak to the amendments. What we have heard today is a rerun of second reading debate speeches. We have heard from the doormat party of this government, the National Party, a proposition about the great benefits of these arrangements. What the National Party fails to point out is that our biggest trade deficit is with the United States. Nothing in this agreement is going to change that proposition. I want to talk about what is actually before us: the four amendments to the Therapeutic Goods Act which have been proposed by the Labor Party. They are important, tough amendments which, I note, the government is now obliged to support. We heard 14½ minutes from the Leader of the Government in the Senate, and it took 14½ minutes to say, `We support these amendments.'

This is after the humiliating press conference by the Prime Minister this morning when he revealed that he had to ring up the United States in a grovelling manner and ask for permission to support these amendments. The United States is not certain, so the Prime Minister is not certain. He quivers. The doddering position he takes is based on a dithering attitude because he has not got his instructions right. He has not got permission, so he is worried—`What will I do? I do not know whether or not the United States will accept my word on this.' How pathetic! How miserable! The Prime Minister of Australia has to ring up and get permission to support Senate amendments to this arrangement. This demonstrates the value of these amendments and points out their necessity. If the government has to get permission to support the amendments, it is quite clear why they are necessary. These are tough amendments. These four amendments are necessary to ensure the protection of the PBS. You cannot rely on the government to do that. It has to get permission—to find out whether or not it is allowed to support the PBS. How incredible that the national government of Australia should humiliate itself in that way.

With these amendments we propose a requirement that companies holding a patent make sure that they issue a certificate when they seek to use the courts to block a generic drug from coming onto the market. This will ensure that companies certify that their intended action is in good faith and that they believe the action has a reasonable chance of success. Here we are proposing a clear signal to the companies that evergreening or vexatious patent applications will not be tolerated in Australia. Yet the Prime Minister has to get permission; he has to ask whether or not he is allowed to support these amendments. We are saying that a certificate has to be issued and that, if the certificate is later found to be misleading or the undertakings are broken, the company will be liable to a civil penalty of up to $10 million.

Further action will be taken to give the courts the power to order that compensation be paid to the Commonwealth and the states and territories if such undertakings are not presented in good faith. This compensation will take into account losses sustained as a result of any injunction obtained by the patent company. That gives the lie to the claim that these are weak amendments. They are actually very tough amendments. They are legitimate amendments and they are necessary. This second amendment means that if a generic medicine is held up from being listed on the PBS the subsequent cost to the taxpayer can be recouped. The third amendment is a minor one which is necessary to reduce the burden of proof on generic companies issuing a certificate regarding the patent status of a drug. This will mean that the burden of proof for certificates will move from absolute to reasonable grounds.

These amendments are necessary. I repeat: the fact that the Prime Minister has to ring up and get permission highlights why it is necessary to ensure that these measures are taken to protect the PBS. The amendments make sure that safeguards are imposed on these matters in the Therapeutic Goods Act to give a level of comfort to all Australians. The subtle changes to the PBS through the free trade agreement are matters of great concern. We all know that there are reasons why drug companies and the US negotiators wanted to modify the regime in the free trade agreement. Patent holders want notice of when generic manufacturers are going to manufacture a drug. It stands to reason that they probably want the notice so that they can take steps to avert the manufacture of generic alternatives. Of course they want to avoid losing profits. You would expect that to be how things work. It is therefore necessary to ensure that protections are built into the legislation to prevent the practice of evergreening.

We all understand that evergreening is effectively a mechanism of litigious activity employed to delay the introduction of generic drugs. Evergreening will increase the cost of the PBS. It is accepted practice in the United States and it cannot become accepted practice in this country. These amendments are important because they will protect the taxpayer. They will ensure that our PBS and our health system remain affordable and sustainable. Let us think about just two examples of drugs coming off patent in the next four years—statins, which treat cholesterol problems; and serotonins, which are antidepressive medications. I am advised that the estimated savings for those two drugs alone are $900 million. It strikes me that in those circumstances it is absolutely critical that these measures be undertaken.

These amendments are important for the generic medicines industry in Australia. Our generic medicines industry comprises six large manufacturing companies. Together they employ 1,500 Australians. These companies undertake significant research and development, they enjoy sustainable growth in Australia and they are increasingly able to develop export markets. The government's own action agenda on pharmaceuticals states that generic medicines have saved Australian taxpayers $850 million since 1995 by reducing the benchmark price of medicines. We want to see the generic industry grow. We want to ensure that their work is not hampered by costly court actions, that they employ Australians, that they manufacture drugs in this country and that they provide drugs at a cheaper rate, which of course forces down the prices and protects the PBS.

I also want to take this opportunity to highlight why the pharmaceuticals industry in this country is particularly important, from the research elements right through to the production elements. The industry has a strong scientific, statistical and clinical research base. The industry spends $450 million a year on research and development and has a turnover of $12 billion per annum. It is our second largest exporter after the automotive industry. It employs 30,000 people across the value chain—and that of course includes the generic manufacturers. I believe that we have to stimulate partnerships across the value chain to build on this very substantial industrial base. Labor's amendments will in no way impede the development of the whole industry. They are about safeguards.


Senator Hill —You're a bit worried.


Senator CARR —They are about ensuring that our patent laws are not in fact weakened.


Senator Hill —There's a little bit of nervousness coming through now.


Senator CARR —They are, of course, consistent with the agreement that has been negotiated with the United States.


Senator Hill —You think you might have gone too far.


Senator CARR —Senator Hill seems quite animated about these matters. I ask him: where has his colleague the minister for industry been on these matters? The Australia-US free trade agreement has enormous implications for Australian industry, yet not one piece of formal advice was prepared by the industry department. There was no analysis or understanding of what the implications of this agreement are for manufacturing in this country. There was no work done on those questions. We have had a few little home truths from Senator Boswell about pencil-sharpeners and various other things. We are talking about a very serious question in terms of our trade relations with the United States, and the industry department do not think it is worthy of their consideration or any detailed analysis. What we have got are back-of-the-envelope calculations undertaken by the government's favourite modellers, which of course produced ridiculous, laughable estimates of what consequences there are.

Intellectual property is squarely within the portfolio responsibility of the minister for industry. What has he said on these matters? Nothing. The policy that assists to strengthen and grow the generic medicines industry is essential for the creation of jobs and the development of wealth in this country. What has the minister said about these things? Nothing. He is missing in action. This is a government that signs up to a deal sight unseen. We have no analysis being undertaken by the industry department and no real interest in the consequences—that is the only measure you can draw from the public statements that have been made.

It is essential that all Australians do have access to medicines. It is equally important that we have a viable pharmaceutical industry in this country. It is extremely important that generic alternatives provide both cheaper drugs and employment opportunities for Australians. I urge the government to understand how important these things are and not continue with this quivering, dotty approach we have seen from the Prime Minister, who is so uncertain and so lacking in leadership when it comes to these matters that he has to ring up and get permission. I think the government ought to understand how critical these questions are and full-heartedly support these matters. So far they have failed to do that, because they are really quite worried that the permission from their great powerful friends, the United States, will not come forward. It is a tragedy and it is pathetic that the government find it necessary to behave in this way.

There is an opportunity here to actually support the generic medicines industry in Australia. Labor support the pharmaceuticals industry, from research right through to production, and we want to see it grow and prosper. We want to make sure production in this country is protected. That is why I urge the Senate to support this. Despite the awkwardness and the nervousness of the Prime Minister and the government, reflected here by Senator Hill today, I think it is important that we appreciate that this is an opportunity to strengthen the PBS and to defend Australian interests, not the American drug companies' interests.