"I think one of the lessons from Australia's experience is that the United States just keeps coming back," said Prof Peter Drahos, the director of the Centre for Governance of Knowledge and Development at the Australian National University.

"Even now, after the signing of the free-trade agreement, there is more pressure; more concessions asked for. This is a very important practical lesson," said Drahos, who was speaking at a free-trade agreement (FTA) conference in Bangkok yesterday.

The US-Australia FTA was finalised in February 2004 after 11 months of negotiations. The final text was signed in Washington on May 18, 2004, and came into force on January 1, 2005.

Since then, Australia's generic-drug industry has been adversely affected as a consequence of two law changes implemented under the FTA, the professor said. One change was the patent-term extension, in which a drug patent could be extended by up to five years. This forces manufacturers of generic drugs to wait for five more years before they can start producing a more affordable version of a medicine.

The other, he said, concerned data exclusivity, which confers de facto monopoly rights over a drug by prohibiting generic competitors from using clinical data from an originator company to prove the safety and efficacy of an equivalent generic drug.

"What these agreements [FTAs] are doing is creating higher and higher standards of intellectual property protection," said Drahos.

The effect has been a major blow to Australia's generic-drug industry, he added.

The generic-drug industry, he said, had tried to mitigate the impact of the Australia-US agreement by calling on the government to exploit a loophole in the FTA to allow the export of generic medicines to countries not covered by the patents.

The government did not give its approval in case it upset Washington, Drahos said.

"At my level, this issue seems technical … but in the end this is all about politics. That is all the free-trade agreement is about," he said.

From Australia's experience, Drahos said, it was important that the public had information and understanding of the issue rather than being blinded by technical arguments.

Arthit Khwankhom

The Nation