Issues Magazine

Biological Patent Amendment: Good Intentions, Unnecessary Risk

By Julian Clark

Dangerous uncharted waters lie ahead if our politicians vote to support the proposed amendment of Australia’s Patents Act to ban patents on biological materials and genes.

No one can deny that improved medical treatments and equity of access to them are essential to improving our community’s quality of life. We all know of someone who suffers from, or has died from, a debilitating condition such as diabetes, chronic infection, dementia, mental illness or cancer. It is a simple fact that timely and effective treatment of these conditions depends on access to the latest pharmaceuticals, which are protected by patents.

At the end of 2010 a small group of senators introduced the into the Australian Senate with the purpose of changing the Patents Act 1990 to specifically exclude biological materials and gene sequences that are “identical or substantially identical to such materials as they exist in nature”.

The proposed amendment is intended to (i) address inequity of access by Australian citizens to new medicines and diagnostic tests, (ii) ensure that Australian researchers are not encumbered by patent claims, and (iii) ensure that more rigorous standards are applied to invention claims in biological material patents. Unfortunately, the proposed amendment fails in all three areas.

This is clearly an extraordinary, even cavalier, legislative experiment that has not considered the ramifications and consequences. It is certainly not based on experience of how new treatments for unmet medical needs come to the clinic or how research is done in Australia. Nor is it based on a critical analysis of alternative approaches. Parliament’s own independent advisers, the Parliamentary Library analysts, have warned that the proposed amendment is seriously flawed.

Access to Leading Treatments for Australians
We all understand and share community concerns about people having equal access to leading treatments and diagnostic tests. The problem is that the proposed amendment will do nothing to improve equity of access and is based on the dangerous fallacy that banning patents on biological materials will make Australia a better place to live. Our technology-neutral and generally well functioning patent system should not be arbitrarily manipulated to address issues of equity of access.

This proposed precedent becomes even more dangerous when we look at the imprecise and fuzzy wording of the proposed amendment. The architects propose that we exclude from patenting “biological materials including their components and derivatives… which are identical or substantially identical to materials as they exist in nature”, with biological materials defined as “DNA, RNA, proteins, cells and fluids”. What does “substantially identical” mean? What is a “derivative”? Why the artificial restriction in types of biological materials? What happened to carbohydrates, fats, peptides, hormones and metabolites? What is a “fluid”?

Clearly the amendment has not been drafted by anyone with adequate and rigorous knowledge of biology, and we can only conclude that, if enacted, this Bill will lead to major confusion and certainly result in many unproductive court cases trying to understand and rule on “fuzzy” thinking.

Now the crunch. We all agree that broad access to new ways of diagnosing, treating and curing diseases is desirable. However, it is naïve in the extreme (and ultimately placing patients’ lives at risk) to be advocating that this will be achieved by banning the patenting of biological materials.

Under this amendment around half of all future medicines would be under threat of not having patent protection in Australia. This would lead to Australia being marginalised and losing its status as a priority market for the clinical development of, and access to, novel biomedicines, vaccines and diagnostics. Imagine an Australia no longer with priority access to antibiotics, cholesterol-lowering agents, anticancer medicines or the vaccine to prevent cervical cancer!

Patents Don’t Stifle Creative Medical Research
The proponents of this amendment have crafted an unfounded and unsubstantiated belief that patents stifle medical research. For some reason they depict masses of Australian research scientists hampered and even being scared of infringing someone else’s patent.

Quoting from the Bill’s explanatory memorandum:

The purpose of this Bill is to advance medical and scientific research and the diagnosis, treatment and cure of human illness and disease by enabling doctors, clinicians and medical and scientific researchers to gain free and unfettered access to biological materials, however made, that are identical or substantially identical to such materials as they exist in nature.

First, let us consider whether the patenting of biological material, or indeed any other patent, has hindered medical and scientific research. My experience from working for decades in major centres of medical research in Australia, the United States, Japan and Europe makes my answer a resounding “no”. The vast majority of Australian medical researchers continue their programs without concern for patents.

With more than 11,000 patents being issued each year and more than 90,000 researchers in Australia, if patents, of any type, hindered public research, we would expect to see myriad infringement notices and court cases. Where are they? Examination of the past 5 years of court records does not find a single case. They have not occurred because, overwhelmingly, research takes place without paying any heed to patents. It is a non-issue. The advocates of the amendment paint a picture of the devastating impact of patents on medical research, which is a complete and dishonest distortion of reality – the creation and perpetuation of a myth.

More Bad Consequences
The risks that would flow from the amendments proposed to the Patents Act 1990 are significant, and the unintended negative economic and social consequences would be considerable. These include Australia losing its reputation as a country that respects intellectual property and patent laws, reduced capital investment, reduced return from taxpayers’ investment in biomedical research, and perceived “dumbing down” of Australia’s understanding of the value of intellectual property and the need for policy integrity and stability. All at a time when credit is tight, capital is highly mobile and options for investment and return increasingly present in other economies.

Experience in bringing new medicines to the community leads me to believe that this patent amendment would kill Australia’s priority access to new treatments, both from Australia and other countries. Australia will no longer be high on the priority list of international collaborators such as Abbott, Amgen, Genentech/Roche, Merck, Novartis, Pfizer and many other transnational innovators. The innovation-intensive companies and investors required to develop our inventions will seek more secure investment environments and no longer have Australia as a priority development location. When there are alternatives, why bother with Australia?

Bringing a new medicine to market takes years or decades and many hundreds of millions of dollars due to the extensive need to test the safety and effectiveness of new medicines. This places it beyond the reach of academia, philanthropy or government alone, leaving only the private sector capable of making investments of the scale required.

This reality means that we must work with the private sector if we want the potential of life-changing discoveries to be realised. This reality means that the private sector must be able to generate a return on its investment, and the protection afforded by patents is an important mechanism by which investors are provided with the time to reap a return so they can make investments in new medicines. Whether we like it or not, any company focusing on bringing innovative medicines to market will give priority to those countries that will provide them with patent protection. No patent protection, no priority access to new medicines.

Given the central role that the Patents Act 1990 plays in enabling investment and bringing new medicines to market, we must demand that any proposed amendments to the Act are overwhelming in their intent, precise in their effect, and that the benefits of the amendments vastly outweigh their potential disadvantages. The proposed amendments to the Act weaken Australia’s international position just as major markets such as China and India are strengthening patent laws for novel medicines. If the amendments go ahead, Australia’s access to new products that treat the untreatable and prevent the unpreventable will slow to a trickle, and with it will dissipate the hopes of Australian patients.

Previous Expert Analyses
The cruel irony of this proposed amendment is that the findings of previous expert analyses – of the Australian Law Reform Commission (2004), the Senate Community Affairs References Committee (2010) and the Australian Council on Intellectual Property (2010) – have been ignored by successive Australian governments, which have all reached the conclusion that gene patents should not be excluded under the Patents Act 1990. The original inquiries focused on gene patents and the recent proposed amendment has seemingly spontaneously decided to introduce all biological materials. This amendment places Australia’s global intellectual property and research reputation at risk, all on the basis of the actions of only three companies (Chiron, Myriad and Genetic Technologies) over two decades, and in the absence of any other evidence.

Other means can address the issue. Issues of equitable access to medicines can be addressed through other means at law in Australia such as Crown use provisions, compulsory licence provisions or Commonwealth acquisition. We should also explore a more broad application of the Pharmaceutical Benefits Scheme (PBS) as a way of negotiating prices with patent-holders.

Support “Raising the Bar”
Proponents of the Bill argue that the patent system is old and should be updated. The reality is that over many years there have been many adaptive changes to this fundamental and important system for conferring exclusive rights in return for disclosing what would otherwise be trade secrets. Just because systems of democracy, constitution, religion and technology have been established for many years, this does not mean that they are necessarily out of date.

Everybody agrees that patent claims must be inventive and have utility, and a standalone DNA sequence of natural origin without invention and utility should not be patented. Confirming standards of invention, novelty and utility in Australian patent claims has been a major focus of IP Australia and has resulted in the recent introduction of the Intellectual Property Laws Amendment (Raising the Bar) Bill into Australia’s Parliament. “Raising the Bar” addresses most of the major concerns expressed by people concerned over granting of unwarranted patent rights in Australia and will bring Australian intellectual property (IP) laws in line with the best in the world.

The proposed changes include raising the standard of “inventiveness” required for patenting any biological materials and clarifies a broad research exemption from patent infringement that enhances innovation and improves sharing of information on patented materials.

It is clear that the new “Raising the Bar” Bill addresses legitimate community concerns about gene patenting much better than the proposed Patent Amendment (Human Genes and Biological Materials) Bill. Further, the “Raising the Bar” Bill will raise industry standards on patenting and improve the efficiency of Australia’s patent system without jeopardising the introduction of new treatments for disease.

The Way Forward
There are very real challenges facing the healthcare sector, such as the high costs of new genetic tests and new medicines prohibiting widespread availability, and the escalating cost of healthcare as a percentage of gross domestic product. These are important issues that cannot be dealt with through the patent system, particularly when clear alternative mechanisms exist for addressing equity of access.

The proposed Patent Amendment (Human Genes and Biological Materials) Bill fails to address any of the material issues that have been addressed by previous inquiries and does not add anything over what is proposed in the “Raising the Bar” Bill.

If the Patent Amendment (Human Genes and Biological Materials) Bill is implemented, the effects will be far-reaching and unpredictable. Without doubt, the proposal will worsen Australian patients’ access to leading treatments – precisely the opposite of what was originally intended.

Australia must focus on real solutions to real problems. We must reject the Patent Amendment (Human Genes and Biological Materials) Bill, encourage adoption of the recommendations of the Australian Law Reform Commission (2004), the Senate Community Affairs References Committee (2010) and the Australian Council on Intellectual Property (2010) and support IP Australia in its program to develop Australia’s IP system through the Intellectual Property Laws Amendment (Raising the Bar) Bill.

The Walter and Eliza Hall Institute is a not-for-profit organisation that takes many approaches to translating its innovations into successful medicines. In some cases we work with philanthropists or non-governmental agencies; in other cases we work with the biopharmaceutical industry. We choose the partner that will help us deliver benefits to patients as quickly as possible and patent our inventions to improve their chance of delivering benefits. If our partnerships with the private sector are successful we reinvest any royalties that we receive back into our research effort.