Pharmaceuticals and TPP New Zealand -  Makes you wonder what all the fuss was about

Friday 23rd October 2015

The Trans-Pacific Partnership (TPP) trade negotiations concluded in Atlanta earlier this month with an announcement that a deal between the twelve countries had been reached.  Although the official text may be a few weeks away, the chapter of the IP provisions was quickly leaked and published on Wikileaks (taking all of about ten days).

In the weeks leading up to the negotiations being concluded, there were a number of protests about the increased health costs the public would have to bear stemming from the IP provisions in the agreement.  Apparently fanning the flames, New Zealand’s trade minister cryptically referred to the ‘dead rats’ in the agreement that would need to be swallowed.[1]

Now that we have some detail of the IP provisions of the agreement, it appears that the health care blowout that was forecast by some may have been a little overblown.   

Data exclusivity

A TPP-mandated extension to data exclusivity periods for biologic medicines probably created the most concern.  Previously leaked negotiations showed the US was pushing for a 12 year data exclusivity period.  Critics complained about the increased cost the taxpayer would bear as a result of the extension.  The agreed period ended up being just 5 years, which is the duration New Zealand has provided for since 1995 and no law change will be required as a result.  However, the agreement does provide for the data exclusivity period to be reviewed in 10 years.

In addition, the TPP provides for a data exclusivity period of 10 years for new agricultural chemicals (such as veterinary medicines).  This will have consequences for the 8 year term provided for by the Agricultural Compounds and Veterinary Medicines Amendment Bill, which has just passed its first reading in New Zealand’s Parliament and has been sent to Select Committee.  It is likely that the Select Committee will now recommend increasing the term to 10 years, to meet New Zealand’s new international commitments.[2]

Patent terms

The TPP provides for the extension of patent terms in limited circumstances.  The basic term of a patent remains at 20 years, but may be extended if:

  • (i) a patent application is unreasonably delayed such that it is issued more than 5 years from filing, or more than 3 years from the request for examination (whichever is later); or
  • (ii) if there are unreasonable delays in the safety and efficacy approval process run by Medsafe. 

It is difficult to imagine a realistic situation in which either of the patent application time limits would be exceeded in New Zealand.  The Intellectual Property Office of New Zealand (IPONZ) has a relatively light backlog of unexamined patents.  Further, under the Patents Act 2013, applicants only have a (non-extendible) 12 month period in which to place a patent application in order for acceptance, starting from the issuance of the first examination report.  Coupled with a limit of 5 years from filing of the ultimate parent to request examination for any divisional applications, term extensions stemming from this provision of the TPP seem unlikely. 

The impact on patent term due to unreasonable delays in the safety and efficacy approval process run by Medsafe is a little more difficult to assess. The Wikileaks document does not provide much detail on what an unreasonable delay might be. All that is stated in Wikileaks is that each Party shall make available an adjustment of the patent term to compensate the patent owner for unreasonable curtailment of the effective patent term as a result of the marketing approval process (there is no reference to Medsafe directly). The NZ Government’s IP Factsheet[1] however refers to unreasonable delays in the safety and efficacy approval process run by Medsafe, but there is no detail provided. The Medsafe website[2] says that Medsafe is responsible for pre-marketing approval of products but that it is not responsible in funding medicines. That is the responsibility of Pharmac. Therefore any delay in obtaining a listing on the Pharmaceutical Schedule (which lists those medicines that are funded by Pharmac) is unlikely to be included in any patent term assessment.  

As New Zealand does not currently have any mechanism for patent term extension, this will need to be implemented.   

Patent linkage

The TPP also requires countries to implement a ‘patent linkage’ system. 

Patent linkage regulates situations where a pharmaceutical supplier wishes to gain marketing approval for a drug on the basis of bioequivalence with a competing drug already in New Zealand (e.g. a generics supplier wishes to introduce a generic version of a name brand drug).  If the original drug is covered by a patent in New Zealand, the details of which have been provided to Medsafe, then the patentee will be notified of anyone seeking to rely on that drug’s clinical trial data prior to granting marketing approval.  In this way, the marketing approval for generic versions of a drug is ‘linked’ to the patent for the original drug.  Currently, New Zealand has no linkage system.

This provision gives a patentee slightly advanced warning that a generics provider is seeking to enter New Zealand with a drug that may infringe a New Zealand patent.  The patentee may be able to oppose the granting of marketing approval on the basis that the generic drug infringes a patent. 

The generic provider therefore must either wait until the patent term expires, or revoke the patent before it can gain marketing approval.  On the other side of the equation, generic providers will have advanced warning of the patent rights that could be relied upon, although there is no requirement specified that a patentee must list all relevant patent rights that might apply.

The NZ Government’s IP Factsheet specifies that Medsafe will not be required directly to prevent a competitor placing a generic on the market until a patent expires, or resolve patent disputes. That will remain a matter for New Zealand Courts. As a result, it is unlikely that the patent linkage system New Zealand chooses to put in place will impact too much on the ability of generic providers to obtain registration their products. New Zealand retains its regulatory review exception to patent infringement and it would be extremely unlikely that listing relevant patent details would provide information that a generic provider would not already know.

Grace periods

Applicants are given a grace period of 12 months prior to filing a patent application in New Zealand.  In the 12 months before a patent for an invention is filed, any disclosures about the invention by the applicant are disregarded for the purposes of novelty and inventive step. 

This is a substantial change from the status quo in New Zealand.  Currently, grace periods only apply to disclosures in a very limited set of circumstances, such as where the disclosures were made in breach of confidence or were for the purposes of reasonable trial.  Patent attorneys often have the sad task of telling many a potential patent applicant that they have unwittingly prevented any valid patent protection being obtained because they have already disclosed their invention.  So this provision is good news for many.

Even though the TPP has been agreed, all of these changes must be enacted into New Zealand’s law before they can take effect.  As this agreement has not even been formally published, a timeframe for this is still uncertain.





This article is intended to summarise potentially complicated legal issues, and is not intended to be a substitute for individual legal advice. If you would like further information, please contact a Baldwins representative.

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