22 August, 2015
We understand that one of the three key outstanding issues in Trans-Pacific Partnership (TPP) negotiations is the period of data exclusivity which will be granted for biologics. The US's preferred position differs from current regulation under the laws of other TPP participants, including Australia.
Data exclusivity is an administrative restriction on regulatory agencies from using regulatory dossiers relating to registered therapeutic products to evaluate third party applications for registration, including in the context of a establishing that a new therapeutic product is bioequivalent with an existing registered product. During the period of data exclusivity, a third party may not rely upon another manufacturer’s data, which limits their ability to efficiently pursue registration for equivalent products. Data exclusivity is separate from any patent rights that might subsist in a product.
The US trade representative initially argued for a 12 year data exclusivity period under the TPP. We understand that the US has offered to compromise to 8 years, however this would still represent a significant extension of rights in many TPP countries, including Australia. Section 25A of Australia’s Therapeutic Goods Act (TGA) currently provides for 5 years of data exclusivity for all medicines.
Australian implementation of an extension of the data exclusivity period would require an amendment to the TGA.
Current status of TPP negotiations
The TPP is to be a trade agreement between 12 Asia Pacific economies who make up 36.3% of world GDP (2014 figures). The negotiating parties are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The last TPP ministerial negotiating session was in July 2015 in Hawaii. No date for another session has been announced. It is unclear if TPP negotiations will be shortly finalised, or face a significant delay due to the approaching US Presidential election and difficulties agreeing the remaining issues. Access to pharmaceuticals, patent protection and data exclusivity have been heavily negotiated issues. It appears some key points still need to be agreed.
What are "biologics"?
Biologics remain at the cutting-edge of biomedical research. They are biological medicines produced from living organisms (natural human, animal or microorganism sources) and include a wide range of products such as vaccines, blood and blood components, allergenics, somatic cells, gene therapy products, living cells and tissues, and recombinant therapeutic proteins.
In contrast to most drugs that are chemically synthesized with a known chemical structure, and therefore relatively easy to replicate, most biologics are complex mixtures that require intense research and development. In order to reduce costs, manufacturers of follow-on versions (biosimilars) may seek to direct a regulator to data submitted by the originator of a biologic to support the marketing approval of their product.
What is data exclusivity?
Data exclusivity refers to the period during which data submitted to regulatory agencies (including the Therapeutic Goods Administration) cannot be relied upon by the agency to evaluate applications for marketing approval by other medicine manufacturers. The period commences from marketing approval for the first product.
The practical effect of this period is that third party manufacturers must compile their own dossiers for safety, efficacy and clinical trial data, rather than demonstrating that their product is equivalent to products already registered with the agency by reference to the dossiers for those registered products. This represents a significant barrier to entry.
What is patent protection?
Patent protection is the exclusive right to prevent others from commercially making, using, selling, importing, or distributing a patented invention or using a patented method or process without the patent holder's permission. For the life of the patent (up to 25 years in Australia for pharmaceutical products), patent-holders can profit from their inventions by producing their patented inventions (such as a patented medicine) or licensing the use of their invention to other companies, to the exclusion of others. Patent owners may sue third parties for infringement of their patents and a patent may be subject to challenge in Court for failing to meet criteria for patentability.
How does Australia currently regulate data exclusivity for biologics?
Section 25A of the TGA provides for 5 years of data exclusivity for medicines, including biologics, (except where the active component of the medicine has previously been included in a registered medicine).
What does the US want under the TPP?
From an initial position seeking 12 years of data exclusivity, the US trade representative has now relaxed the US position to seek 8 years of data exclusivity. This still represents a 3 year extension to the current data exclusivity period in Australia.
If Australia were to agree to the US position, how would this be implemented and what would be the implications?
Increasing the data exclusivity period by 3 years in Australia would require an amendment to the TGA, which would need to pass through the House of Representatives and the Senate.
If the Australian Government (along with the other parties) agrees the TPP, it would be required to implement its terms. While there are a number of permutations, the likely procedure is as follows. The TPP text would be tabled in Federal Parliament. The Joint Standing Committee on Treaties would then conduct an inquiry into the TPP and table a report in Parliament. The report will advise if Australia should take action to be bound by the TPP terms. Amendments to law would then need to be passed by Parliament (including expected amendments to the TGA) before Australia could confirm with the other TPP members that the TPP had entered into force. The Australian government would face embarrassment if it agreed the TPP but, due to Parliamentary opposition, could not fully implement the TPP.
For further information, please contact:
Ben McLaughlin, Partner, Baker & McKenzie