Pharma’s incremental drug patents not good for consumer purse

2 minute read

A report by the Productivity Commission claims that big pharma have cost taxpayers more than $250 million


Tactics used by big pharmaceutical companies to delay generic drugs becoming available to consumers have cost Australian taxpayers more than $250 million, according to a report by the Productivity Commission

The commission recommended limiting the five-year patent term extension, which allows incremental patenting. While the extension was introduced to stimulate research and development, the commission found no evidence that it had been successful.

“Only genuine innovations should be granted patent protection and patent fees need to be higher to discourage rights holders from hanging onto patents for longer than they need to,” said commissioner Karen Chester.

The release of the draft report was welcomed by the Generic and Biosimilar Medicines Association, with the CEO Belinda Wood saying it “provides further evidence of an imbalance in Australia’s pharmaceutical patient system”.

She said intellectual property protection should be aimed at innovation, not as a commercial strategy to block competitors in the market.

The report also warned of “pay for delay” tactics, where pharmaceutical companies pay generic companies to slow down the development of cheaper medicines. There was no evidence of it occurring here in Australia, but this might be because of a lack of monitoring, the report said.

However, Medicines Australia said they had several concerns with the findings. Medicines Australia members spent around $1 billion each year on R&D in Australia, and it was crucial to maintain an environment which supported this investment, they said.

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