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USTR NTE Reports on Thailand Pharmaceutical Policies
USTR NTE Reports on Thailand Pharmaceutical Policies
The following are portions of USTR's 1995, 1996, 1997, 1998 and
1999 commentary on Thailand policies toward pharmaceuticals, as
reported in USTR's annual National Trade Estimate (NTE)
reports. Each year's entry is somewhat repetitive from the
previous year, but illustrates the nature and progress of USTR
efforts to reshape national legislation in Thailand on
pharmaceuticals. For example, in 1997 USTR reported:
The Thai legislature is expected in 1997 to consider
a bill abolishing the Pharmaceutical Review Board.
This measure would advance objectives of American
manufacturers.
And in 1999, USTR reported:
Thailand's Patent Law was amended by the Thai
Parliament in October 1998 and the amended provisions
will enter into effect in 1999. Pursuant to the
U.S.-Thai IPR Action Plan, the amended law abolished
the Pharmaceutical Review Board. According to initial
observations, businesses in Thailand are generally
pleased with the amendments. However, they foresee
problems rising from new provisions regarding
compulsory licensing authorizing the Director General
of the Department of Intellectual Property to
override a patent and issue a compulsory license if
the patent is deemed as not being locally "worked" or
if the price is deemed unreasonably high.
It is interesting that USTR's report goes far beyond patent
protection to express opposition to policies such as price
controls or even the collection of economic data (permitted
under the WTO/TRIPS), as well as the US insistence on high
regulatory barriers to the introduction of generic drugs. For
example, on numerous occasions, USTR complains that in
Thailand, "the market exclusivity period is only 5-6 years."
What USTR doesn't say is that regulatory exclusivity (the
period before generic drugs can use bioequivalency to register
drugs) is 5 years under the US Hatch/Waxman Act, and that USTR
is asking Thailand to adopt the longer market exclusivity
period now used by the European Union (6 to 10 years).
Jamie Love <love@cptech.org>
May 16, 1999
Here is the text from the past five years of USTR NTE annual
reports on Thailand:
1995
In January 1991, the Pharmaceutical Manufacturers
Association filed a petition under Section 301 for relief
from Thailand's failure to provide patent protection for
pharmaceuticals. In March 1992, the USTR determined that
Thailand's acts, policies and practices related to patent
protection were unreasonable and burden or restrict U.S.
Commerce. These acts, policies and practices were the
subject of consultations between the United States and
Thailand.
In September 1992, Thai legislation became effective that
extended patent protection to pharmaceuticals and
agricultural machinery and increased the patent protection
term to 20 years. However, the law did not provide
protection for existing products patented in other
countries that had not yet been marketed in Thailand
("pipeline protection") and it contained extremely broad
authority to issue compulsory licenses in cases where
patented goods are not yet produced in Thailand.
Additionally, this legislation created a pharmaceutical
patent review board with unique and extraordinarily broad
authority to require sensitive cost and pricing
information. These provisions are a significant
disincentive to obtain product patent protection for
pharmaceuticals in Thailand and seriously reduce the
benefits of the patent protection provided in the 1992
law.
In 1993 the Thai government established administrative
measures to provide a degree of market exclusivity for
pharmaceutical products not eligible for protection under
the 1992 law, to narrow the scope of compulsory licensing
provisions and to restrict the authority of the
pharmaceutical patent board. These administrative
measures, however, are not fully consistent with the
growing international consensus on protecting
pharmaceutical products. For example, the market
exclusivity period is only 5-6 years. [CPT Note: market
exclusivity is 5 years under US Hatch/Waxman act, but as
much as 10 years in the Europe Union. USTR seeks the EU
rather than the US period]. Thailand is still in the
process of developing a a new, fully-TRIPs consistent
patent law, which is crucial to resolving important issues
in the patent area.
1996
Following a complaint by the Pharmaceutical Manufacturers
Association, the Administration determined in March 1992
that Thailand's acts, policies and practices relating to
patent protection were unreasonable and restricted U.S.
commerce. In September 1992, Thai legislation extended
protection to pharmaceuticals and agricultural machinery
and increased the patent protection term to 20 years.
However, the law did not provide protection for products
patented in other countries that had not yet been marketed
in Thailand ("pipeline protection"), and it contained
extremely broad authority to issue compulsory licenses in
cases where patented goods are not yet produced in
Thailand. The legislation also created a pharmaceutical
patent review board with unique and extraordinary powers
to require sensitive cost and pricing information. These
provisions are a significant disincentive to obtain
product patent protection for pharmaceuticals in Thailand
and seriously reduce the benefits of the patent protection
provided in the 1992 law.
In 1993, the RTG established administrative measures to
provide a degree of market exclusivity for pharmaceutical
products not eligible for protection under the 1992 law,
narrow the scope of compulsory licensing provisions, and
restrict the authority of the pharmaceutical patent board.
These measures, however, are not fully consistent with the
growing international consensus on protecting
pharmaceutical products. For example, the market
exclusivity period is only five to six years [CPT Note:
market exclusivity is 5 years under US Hatch/Waxman act,
but as much as 10 years in the Europe Union. USTR seeks
the EU rather than the US period]. Thailand is still in
the process of developing a new patent law that is meant
to comply with the WTO Agreement on Trade Related Aspects
of Intellectual Property Rights (TRIPs); parliament will
consider such legislation in 1996. The Pharmaceutical
Research and Manufacturers of America estimates that in
1994 its members lost $70 million in sales due to
deficiencies in patent protection in Thailand.
1997
In September 1992, Thai legislation extended protection to
pharmaceuticals and agricultural chemicals and increased
patent protection to 20 years. In 1993, following
complaints from private industry about inadequacies in the
law, the Thai Government established administrative
measures to provide a degree of market exclusivity for
pharmaceutical products not eligible for protection under
the 1992 law ("pipeline protection"), narrowed the scope
of compulsory licensing provisions, and restricted the
authority of the Patent Review Board. These measures,
however, are not fully consistent with the growing
international consensus on protecting pharmaceutical
products.
Thailand is still in the process of amending its patent
law to comply with the WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPs). The Thai
legislature is expected in 1997 to consider a bill
abolishing the Pharmaceutical Review Board. This measure
would advance objectives of American manufacturers.
Industry representatives report that in 1994,
approximately $70 million in sales was lost due to
deficiencies in patent protection in Thailand. Estimates
of losses during 1995 and 1996 due to inadequate patent
protection in Thailand are not available.
1998
In September 1992, Thai legislation extended protection to
pharmaceuticals and agricultural machinery and increased
patent protection to 20 years. In 1993, following
complaints from private industry about inadequacies in the
law, Thailand established administrative measures to
provide a degree of market exclusivity for pharmaceutical
products not eligible for protection under the 1992 law
("pipeline protection"), narrowed the scope of compulsory
licensing provisions, and restricted the authority of the
pharmaceutical patent review board. These measures,
however, are not fully consistent with the growing
international consensus on protecting pharmaceutical
products. For example, the market exclusivity period is
only five to six years. [CPT Note: market exclusivity is
5 years under US Hatch/Waxman act, but as much as 10 years
in the Europe Union. USTR seeks the EU rather than the US
period]
Although the Thai Government recognizes importation as
"working the patent," this policy position is not
uniformly understood by Thai officials. The Thai
Government has long promised to amend its patent law to
comply with the WTO Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS), including the
abolition of the Pharmaceutical Review Board. Due to
domestic opposition and frequent changes of government, it
has failed to do so. The Thai Government also refuses to
exercise discretionary power to amend pending patent
applications under the 1979 law. Such action would provide
enhanced protection under the 1992 patent law and would
permit coverage of the pharmaceutical product, as well as
the production process.
1999
Thailand's Patent Law was amended by the Thai Parliament
in October 1998 and the amended provisions will enter into
effect in 1999. Pursuant to the U.S.-Thai IPR Action Plan,
the amended law abolished the Pharmaceutical Review Board.
According to initial observations, businesses in Thailand
are generally pleased with the amendments. However, they
foresee problems rising from new provisions regarding
compulsory licensing authorizing the Director General of
the Department of Intellectual Property to override a
patent and issue a compulsory license if the patent is
deemed as not being locally "worked" or if the price is
deemed unreasonably high.
In September 1992, Thai legislation extended protection to
pharmaceuticals and agricultural machinery, and increased
patent protection to 20 years. In 1993, following
complaints from private industry about inadequacies in the
law, the Thai Government established administrative
measures to provide a degree of market exclusivity for
pharmaceutical products not eligible for protection under
the 1992 law ("pipeline protection"), narrowed the scope
of compulsory licensing provisions, and restricted the
authority of the Pharmaceutical Review Board. These
measures, however, are not fully consistent with the
growing international consensus on protecting
pharmaceutical products. The market exclusivity period,
for example, is a maximum of just six years [CPT Note:
market exclusivity is 5 years under US Hatch/Waxman act,
but as much as 10 years in the Europe Union. USTR seeks
the EU rather than the US period]. The Thai Government
has refused to exercise discretionary authority to amend
pending patent applications under the 1979 law. Such
action would provide enhanced protection under the 1992
patent law amendments and would protect not only
pharmaceutical products, but also the production process.
Sources:
National Trade Estimate Reports
http://www.ustr.gov/reports/nte/1999/contents.html
http://www.ustr.gov/reports/nte/1998/contents.html
http://www.ustr.gov/reports/nte/1997/contents.html
http://www.ustr.gov/reports/nte/1996/contents.html
http://www.ustr.gov/reports/nte/1995/contents.html
--
James Love
Consumer Project on Technology
http://www.cptech.org
love@cptech.org
202.387.8030; fax 202.234.5176