§ Lord Hackingasked Her Majesty's Government:
When they intend to publish their response to the European Community Commission's proposals for supplementary certificates for pharmaceutical patents.
§ The Minister of State, Department of Trade and Industry (Lord Hesketh):I am pleased to be able to make a statement indicating the Government's attitude to the Commission proposals for a regulation concerning the creation of a supplementary protection certificate for medicinal products.
The Commission proposes that medicinal products (pharmaceuticals) which have taken over four years to bring to the market following patent application should be eligible for a period of supplementary protection, equal to the amount of patent life lost minus 4 years, subject to a maximum extension of 10 years. The broad result is that most medicinal products would be assured of 16 years' effective protection.
We fully recognise the importance of patent protection for pharmaceuticals. Medicines are costly to develop and often easy to copy. An innovative industry must have a proper opportunity to secure a fair return. The United States and Japan already provide for the extension of patent term for pharmaceutical products and we wish to see broadly similar arrangements in the Community to avoid any distortion of competition which might occur.
The Commission's proposal needs to be considered in the context of the pharmaceutical industry as a whole. The market exclusivity which would go with a supplementary period of protection would delay the entry of competitors into the market. This could result in the cost of pharmaceuticals being higher than it otherwise would be. We need to strike the right balance between a proper reward for the innovator and the encouragement of a competitive market. We must also take into account the considerable cost of pharmaceuticals for the National Health Service.
In judging the right period of supplementary protection we need to look at the historical evidence. The average period of protection for new chemical entities in the 1960s was around 13 years. More recent evidence on the products that matter in terms of company profits show a similar overall position, and the level of research and development remains high. We do accept however that there is evidence of further decline in effective protection for all products in the past decade.
Taking all factors into account, we have concluded that in the United Kingdom, at least, restoration of protection would be achieved by a supplementary certificate of the sort proposed by the Commission but 88WA having the effect that industry would be able to count on 13 years' protected life subject to a maximum extension of five years. These figures would be more in line with United States and Japanese provisions and would prevent further erosion of the present effective patent term.
Finally, we think there may be a case for reducing the period of supplementary protection if the proprietor has not been diligent in obtaining marketing approval. United States law contains such a provision.