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It too aims to attract investment in pharmaceutical R&D in Australia, as well as providing an effective patent term for pharmaceuticals more in line with that available to other technologies. At the time, the annual cost of the extension to the Pharmaceutical Benefit Scheme (PBS) was estimated to grow from $6 million in 2001-02 to $160 million in 2005-06. The cost arises because there is a delayed entry to the pharmaceutical benefits scheme (PBS) of cheaper generic drugs.

The estimate for 2012-13 is over $200 million if the earlier figure is inflated by, say, four per cent per annum.

Another way to measure the cost of the extension scheme is to estimate savings from reducing the length of the extension. AUSFTA requires that Australia has a pharmaceutical extension provision but it is silent as to the length of the extension.

Actual savings obtained from reducing the extension term would be affected by many factors, including price changes caused by increasing sales hydrocodone no perscription volumes, the 16 per cent mandated price reduction following the entry of a second drug, the influence of competing generic manufacturers and reductions from price disclosure mechanisms. The Panel is still developing estimates of savings from reducing patent extension terms, but initial figures suggest they amount to some hundreds of millions of dollars a year. These amounts represent the subsidy which the government decided to provide to the pharmaceutical industry partly to effect an increase in pharmaceutical R&D investment in Australia. Using the patent scheme to provide indirect subsidies to one industry appears inconsistent with the rationale that patent schemes be technologically neutral. More importantly, particularly where there is already substantial patent protection and where increased patent protection only comes into effect after a patent term has already run 20 years, patents are at the limits of canadian pharmacy tramadol their policy effectiveness and most unlikely to be as effective as direct funding as a policy instrument. Commercial investment decisions are generally made before or early in the term of a patent and in such circumstances the net present value of some future extension of market exclusivity is much diminished over the course of a normal patent term. In 1984, the Government's Intellectual Property Advisory Committee found it difficult to believe that the prospect of additional returns from an extension of the then 16 year standard patent life could materially hydrocodone no perscription influence investment decisions made many years beforehand.

This argument remains valid today, and indeed gathers additional force in light of extension of the standard patent term to 20 years. Even if it were increasing investment, it is difficult to see why a pharmaceutical firm would chose to conduct R&D in Australia, merely because the Government hydrocodone no perscription decided to offer an extension of term here. More fundamental issues such as relative costs of R&D and skill availability should influence the location of R&D spending.

It is posited in Chapter five that, if the government wishes to support Australian- based pharmaceutical R&D, it may be more efficient to reduce the five-year extension of patent term and to use some of the savings to provide a direct subsidy than to retain the five-year extension. A dollar of subsidy online ambien hydrocodone no perscription zolpidem paid directly to a pharmaceutical research entity as it starts to develop a product may be more efficient in promoting Australian-based how long oxycontin stay in your system pharmaceutical R&D than an equivalent subsidy provided indirectly in the future through the PBS via the extension of patent term. This reflects several factors including the difference in discount rates applicable to government and commercial firms, the effect of subsidising activity at the beginning of product development instead of at the end, and the ability of a subsidy to be linked to spending on pharmaceutical R&D in Australia. Lastly, a direct subsidy has an additional benefit because it can be directed towards investment in pharmaceuticals which are not well addressed by the patent scheme (examples include too little research for new antibiotics - because once developed they must be used as sparingly as possible to prevent the development of antibiotic resistance).

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