A push by the United States to set a longer period of exclusivity for drug makers who develop biological drugs like Genentech's Avastin cancer-treatment has run into opposition from other TPP economies and is holding up a broader deal.
Australia's Trade Minister, Andrew Robb, said negotiations over drug patents has the potential to detroy the chances of securing a deal.
"It has the potential to disrupt," he told the ABC. "As I said, we have come to an impasse over the past several days. There have been many hours...in fact last night, we went all night. We are trying to do our best and act in good faith."
Australia, along with others such as New Zealand and Chile, have been unwilling to offer more than five years protection for the medicines since longer terms will push up the cost of state-subsidized medical programs.
New Zealand Trade Minister Tim Groser said the impasse is holding up a deal on trade in dairy products, New Zealand's main interest, and repeated that the country would not be pushed out of the pact. "We are not shooting for the stars," he said.
Groser warned that failing to seal a deal would have long-term strategic implications for the United States and all its trading partners.
"You can see the summit within reach and it's just a question as to whether or not you've got just enough political energy to reach out and do the last little bit," he said.
Canadian Prime Minister Stephen Harper, whose party faces a general election later this month, said the talks had made progress.
"Let me assure everyone that we will only conclude a deal that is in the best interests of our country," he told reporters in Montreal.
Harper's Conservatives are on course to win the most seats in the Oct. 19 election but may lose their majority, and the main opposition party has said it would not feel itself bound by any TPP deal that Harper negotiated.
Japanese Economy Minister Akira Amari said he had agreed to a U.S. request to stay on in the southern city of Atlanta for another 24 hours, but said the United States had to find a way forward on biologics.
"I said there were two conditions for us to accept that proposal: first, this would be the last chance, in other words there had to be certainty of getting a deal on pharmaceuticals; second, because of the schedule, Japan could not accept any further extension," Amari told reporters.
The United States allows pharmaceutical companies an exclusive period of 12 years to use clinical data behind the approval for a new biological drug.
The Obama administration had previously proposed lowering that threshold to seven years but has pushed a proposal for an eight-year minimum in the TPP talks in Atlanta.
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