25.20 DP 68 suggested that informal prices monitoring might be a desirable vehicle for addressing community concerns regarding the pricing of patented genetic inventions. The ALRC proposed that the ACCC should conduct informal price monitoring of patented medical genetic tests and other genetic inventions involved in the provision of healthcare services, if evidence emerges that such prices are having an adverse impact on healthcare services.
25.21 Many submissions supported this proposal. The Queensland Government submitted that ongoing price monitoring is necessary due to the rapidly changing nature of the biotechnology industry. It suggested that informal monitoring of the price of medical genetic tests, and other genetic inventions generally, could restrict excessive prices; provide the Minister with evidence that remedial action is required; and be useful in addressing any new issues that may emerge.
25.22 Several submissions suggested that the ACCC could conduct formal price monitoring in certain circumstances. The Department of Health and Ageing noted that price monitoring would provide a means to determine whether conduct is anti-competitive under Part IV of the TPA.
25.23 The ACCC did not support the option of informal price monitoring. It commented that price regulation might be appropriate in certain limited circumstances to constrain excessive pricing and its consequent effects. However, such price regulation should be limited to very specific circumstances where the industry is characterised by high market power; the benefits of regulation exceed the costs; and where no other appropriate policy measures can be taken.
25.24 The ACCC emphasised the desirability of first establishing whether there is a problem in the cost and delivery of services to consumers before imposing any form of price regulation on a particular industry. It suggested that this could be done through a government review or specific inquiry into whether gene patents, or the exclusive licensing of genetic testing, have had any significant adverse impact on the cost of healthcare provision in Australia. This could assist policy makers by establishing:
whether or not the consideration of regulatory options is warranted;
the objectives of price monitoring, if it were adopted; and
a body of industry information, which would provide a useful context and background for developing an approach to price monitoring, if it were adopted.
25.25 The Centre for Law and Genetics also did not support informal price monitoring. It considered that ‘informal monitoring would be marginalised within the regulator and unlikely to be given sufficient resources to enable it to be carried out in any useful or substantive manner’. The Centre commented that regulation would only be necessary where monopoly prices are being charged in a market without sufficient competition. They suggested that if evidence is available that the competitive structure associated with patented medical genetic tests and other genetic inventions is monopolistic, ‘the role of government should be to end the monopoly and allow competitive conditions to evolve’.
25.26 The Cancer Council Australia commented that patent enforcement action in Canada and the United States provides sufficient evidence that gene patents adversely impact on the affordability of genetic testing for the public health system. It noted that the speed of change in genetic science requires a structured, rather than ad hoc, approach to pricing. Accordingly, it suggested that the ACCC should conduct a review of prices and affordability of patented medical genetic tests.
Australian Law Reform Commission, Gene Patenting and Human Health, DP 68 (2004), Proposal 25–1.
Department of Industry Tourism and Resources, Submission P97, 19 April 2004; Royal College of Pathologists of Australasia, Submission P82, 16 April 2004; Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004; Department of Health Western Australia, Submission P89, 16 April 2004; Walter and Eliza Hall Institute of Medical Research, Submission P71, 13 April 2004; Australian Centre for Intellectual Property in Agriculture, Submission P81, 16 April 2004; Queensland Government, Submission P103, 22 April 2004; Cancer Council Victoria, Submission P101, 20 April 2004; Genetic Support Council WA (Inc), Submission P119, 13 May 2004.
Queensland Government, Submission P103, 22 April 2004.
Australian Centre for Intellectual Property in Agriculture, Submission P81, 16 April 2004; Department of Industry Tourism and Resources, Submission P97, 19 April 2004.
Commonwealth Department of Health and Ageing, Submission P79, 16 April 2004.
Australian Competition and Consumer Commission, Submission P64, 12 December 2003.
Australian Competition and Consumer Commission, Submission P114, 3 May 2004.
Centre for Law and Genetics, Submission P104, 22 April 2004.
Cancer Council Australia, Submission P96, 19 April 2004. See also Cancer Council New South Wales, Submission P99, 20 April 2004.