Whaitiri Meka: Agricultural Compounds and Veterinary Medicines Amendment Bill — First ReadingText is incorporated into the Bound VolumeWhaitiri Meka: Agricultural Compounds and Veterinary Medicines Amendment Bill — First Reading[Sitting date: 15 September 2015. Volume:708;Page:6658. Text is incorporated into the Bound Volume.]MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti):Tēnā koe Mr Assistant Speaker. E ngā mema o te Whare nei tēnā tātou katoa. I am honoured to lead Labour’s contribution to this bill we are debating tonight in place of the very experienced and very knowledgable Hon Damien O’Connor who no doubt will be undertaking his own agricultural compounds and veterinary medicines of sorts as co-captain of the New Zealand Parliamentary Rugby Team representing us on the other side of the world. So I wish them and the All Blacks the very very best.What does this bill do? This bill extends the period of protection for confidential information given in support of an application to register an innovative trade name product from 5 to 8 years by allowing 1 year of additional protection for each new use added to the registration. It also expands the scope of data protection coverage to include confidential information provided in support of applications to register non-innovative trade name products and uses for 3 years. This means that suppliers of agricultural and veterinary medicines would have their products protected for longer in addition to their 20-year patents.There is argument in the international literature about whether longer patent times incentivise more innovation or not. It will create a strong incentive to produce a new product but it also reduces the pool of ideas to design new products. As it extends the effective monopoly on these products for a further 3 years it can mean higher costs for farmers.In standing here and offering Labour’s position on this bill I think it is important that I share with the House the consideration that we had in terms of getting to the point of supporting this bill. We consider that 300 companies have approximately 3000 products registered for sale under the Act. These companies are likely to be in support of the changes. But on the flip side there were very low interest levels in consultations with only 29 submissions. Although those who use the system were in favour generic product manufacturers and Federated Farmers were not so supportive. On the pro side supporting this bill this could increase the access to new innovative products.The regulatory impact statement indicates that the lack of new-use data protection may be putting off several pest control applications like contorta pine white fly in glasshouse tomatoes and western flower thrip. On the flip side this gives a monopoly to producers that will raise costs on farmers at a time when they are under significant strain. In submissions Federated Farmers sought to narrow data protection and shorten protection periods to support competition and low costs. On the pro side again Labour generally opposes bills at first reading only in principle and we feel it is important that we send this bill to the select committee because it will help shape and strengthen it and address some of those concerns we have outlined.Labour has taken a position on the Trans-Pacific Partnership agreement. We oppose the undermining of Pharmac. This includes opposing data protection extension for medicinal products. It could be considered inconsistent with our position to then support this agricultural data protection extension.Finally our last consideration was that the issue was first raised and consultation undertaken by the fifth Labour Government in 2006. Therefore Labour will support this bill’s referral to the select committee but we want to see a better analysis of the costs and benefits from officials and reassurance from the sector that this is going to be for its benefit. As I said the bill will extend data protection for new uses of innovative products and for non-innovative products by up to 3 years. This is in addition to the 5 years of data protection innovative products have access to and their 20-year patents.There is the potential for these measures to increase access to innovative new products as I outlined earlier for several pest control applications: contorta pine white fly in glasshouse tomatoes and western flower thrip. However extending data protection means a longer period of effective monopoly for some products. That could lead to higher prices for farmers at a time when many are struggling due to falling dairy prices. In the consultation that was run on these measures although those who used the Act were broadly in favour of extending data protection generic product manufacturers and Federated Farmers sought narrow data protection and shortened protection periods to support competition and low costs. At a time when dairy prices are crashing several regions’ economies are shrinking and half of Silver Fern Farms is being sold to a subsidiary of China’s Bright Food we want to see more comprehensive action from the Government to support economic development in the regions.I want to turn to the background. It is important to acknowledge where this is all derived from. I want to acknowledge the Government working group that was established in 2008 to review the data protection regime. The Government of the day commissioned Covec Ltd an independent economic research organisation to examine the effects of New Zealand’s current data protection rules on the market. I have got the report here. I am not going to read all of it but I just want to highlight a couple of the points to impress on members the point as to where this particular bill comes from.In terms of what the issue was the report: “seeks to evaluate whether the present rules regarding data protection are consistent with maximising the net benefits to the agricultural compound and veterinary medicines industry in particular and the agricultural sector and New Zealand more generally. To this extent this report seeks to inform policy makers on whether there is a need for change to the regulatory environment relating to data protection so as to maximise these net benefits.” Further on the report talks about negative impacts and I do want to take the time to just highlight them briefly: “Although the current rules facilitate vigorous competition and can lower prices for end-users the absence of data protection can also deter suppliers from: developing and registering new products using existing chemistry; registering existing products for new uses; or providing data for reassessments.”Overall the report the evidence and the analysis outlined suggests that any increase in net benefits to New Zealand from increasing data protection are likely to be greatest in relation to new-use registrations. There may also be benefits from providing data protection for reformulations although this is less clear. Whether the net impact of an extension of data protection for reassessment will be positive is perhaps even more uncertain although there may be policy approaches—for example cost-sharing—that could address any anti-competitive impact that may arise from such a change. There do not appear to be any significant issues arising from the 5-year data protection period provided for the registration of new innovative agricultural compounds and veterinary medicines. Therefore Labour stands to support this bill in its first reading and its referral to the select committee. Kia ora tātou.