Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry, Tourism and Resources) Share this | Hansard source

in reply—In summing up the second reading debate on the Intellectual Property Laws Amendment Bill 2006, I would like to thank all of the members who have contributed to this debate, in particular the members for Oxley, Mitchell, Blaxland, Shortland, Lowe and Kingsford-Smith. There were a number of points raised, particularly by members of the opposition, about the length of time the government has taken to introduce this bill. The thing to note is that the key recommendations of the IPCRC report were enacted in 2001 by the Patents Amendment Act 2001. These changes to the patents legislation have operated effectively for some years now, and this bill implements the majority of the residual recommendations.

Implementation of these recommendations was delayed by negotiation of the Australia-US Free Trade Agreement and by other competing government priorities. The government has not been able to implement all of the recommendations at this stage. This is because of other urgent government priorities that have arisen and also because of recommendations from some other recent reports into the Australian IP system that will affect the implementation of these recommendations. Outstanding recommendations are on the government’s legislative program and will be implemented in the near future.

This omnibus bill amends several pieces of intellectual property legislation. Many of the amendments are of a minor or technical nature and some of the more significant amendments implement recommendations of two reports into the intellectual property system. One of these, by the Intellectual Property and Competition Review Committee, considered the balance between Australia’s intellectual property and competition policy. The other, by the Advisory Council on Intellectual Property, considered issues relating to the enforcement of patents rights. However, the most significant amendment made by the bill is to the pharmaceuticals springboarding provisions of the Patents Act. I note that the opposition, as mentioned by the member for Oxley, is supporting the bill and referring it to the Senate Legal and Constitutional Legislation Committee. We welcome the committee’s review of this bill; as soon as they review it they will understand its benefits to Australia.

The amendments we are putting forward will enable generic companies to undertake more generic medicine research and development in Australia and remove disincentives for undertaking those activities that currently exist. The term ‘springboarding’ refers to the research and development of a generic pharmaceutical that a manufacturer needs to undertake in order to obtain regulatory approval for a generic version of a patented drug. The springboarding exemption allows generic manufacturers to undertake research and development during the term of a patent that would normally constitute an infringement of the patent, provided the work is limited to obtaining the regulatory approval.

It was quite rightly said by the member for Mitchell that this bill will allow Australian generic manufacturers to compete fairly with overseas countries. For too long Australian generic medicine manufacturers have been disadvantaged by the fact that overseas countries and their intellectual property laws have placed them in the position that when the patent runs out they are able to hit the marketplace in Australia within a very short period of time, whereas Australian companies are delayed.

The generic medicine industry is important to Australia. It employs around 3,000 people and is estimated to make up around 33 per cent of Australia’s $2.8 billion pharmaceutical export trade. There are eight generic medicine companies currently operating in Australia, and three main companies currently doing generic research and development: Alphapharm, Mayne Pharma and Arrow Laboratories. All three companies have made significant investments in Australia in recent years. It is estimated that combined they spend around $36 million a year on generics research and development.

The Patents Act currently allows generic medicine companies to springboard off patents for some pharmaceutical substances; however, springboarding is only available for a narrow class of patents that relate to pharmaceutical substances, and is only possible after the term of the patent has been extended. Other countries, such as Europe, the US and New Zealand, have more generous springboarding provisions in their patents legislation than Australia has at present. This has the potential to provide a powerful economic incentive for Australian based generics companies to conduct their generics research and development, and subsequent manufacturing, overseas rather than in Australia.

To prevent Australia losing generic drug development work overseas it is important that Australia introduce comparable springboarding provisions. During the debate the member for Banks criticised the Intellectual Property Laws Amendment Bill 2006 for tipping the balance between the big pharmaceutical industries and the generics industries too far in favour of the generics industries. What that does is allow the generics industries to be competitive, and in a more rapid time frame, than those companies from overseas that would bring generic product to Australia.

The amendments that the bill proposes to make to the springboarding provisions of the Patents Act achieve all that I have mentioned. Other markets, such as Europe, are introducing more generous springboarding provisions. As that happens, Australia will continue to lose generics drug development work overseas unless it introduces similar provisions. With the development work happening offshore there is a high chance that manufacturing will also be done offshore, so Australia could lose its manufacturing work overseas as well. I thought that the members of the Labor Party that supported jobs in Australia, rather than attacking the provisions of this bill, would be asking for it to be expedited so that jobs can be created.

With these provisions there will be scope for companies in Australia to do research and development work not only for the Australian market but also, importantly, for the export market. In this way, the Australian industry can benefit from the large number of patent expiries due in the coming years. Australian generic companies have come out strongly in support of these provisions. In fact, John Montgomery, the chair of the Generics Medicine Industry Association, has said that the widening of the springboarding provisions enables local industries to compete more fairly with overseas players.

Australian generics companies are making decisions now about the work they can do in Australia versus the work they will need to undertake overseas. Any delay in the passage of this bill could result in work being lost overseas. In summary, the Intellectual Property Laws Amendment Bill 2006 reflects the government’s commitment to encouraging innovation and providing Australia with a strong intellectual property system that meets the needs of all Australians. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.

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