[A2k] IP-Watch: Drug Patents Still At Issue In U.S.-Central America Trade Deal

[Carolyn Deere]

A new entry titled 'Drug Patents Still At Issue In U.S.-Central America
Trade Deal' has been posted to Intellectual Property Watch weblog.

http://www.ip-watch.org/weblog/index_test.php?p=38


Drug Patents Still At Issue In U.S.-Central America Trade Deal

by William New @ 8:09 am 1/4/2005

Washington, D.C.-The free trade agreement signed last year by the United
States, five Central American nations and the Dominican Republic still
faces a tough fight in the U.S. Congress for a number of reasons, one of
which remains provisions on the treatment of pharmaceutical patents.

Guatemala recently responded to U.S. government and industry pressure by
undoing a law allowing quicker access to pharmaceutical test data for
its generics manufacturers, which is necessary for obtaining a marketing
license in a country. This cleared the way for the Bush administration
to send the agreement to the U.S. Congress for a vote, which it has not
yet done.

Proponents of the agreement had said that the Guatemalan law was a
reason for the delay in sending the agreement to Congress. Now opponents
of the pharmaceutical patent provisions in the agreement are trying to
make the provisions an issue for members of Congress who will likely be
faced with a vote in the coming weeks or months. Bush administration
officials decline to say when they will send the bill to Congress, but
sources say they are still lining up votes and continue to aim for the
end of May.

The Senate Finance Committee has scheduled a hearing on the agreement
for 13 April. The other congressional chamber's responsible panel, the
House Ways and Means Committee, is mum on the subject of a hearing.
Hearings are the first step in the process toward a congressional vote.

U.S. industry sources have argued that failure to pass the
U.S.-Dominican Republic-Central American free trade agreement (DR-CAFTA)
in the United States could have broader global implications for free
trade, possibly hurting trade-liberalisation talks at the World Trade
Organisation.

In a recent congressional staff briefing, Stephanie Weinberg of Oxfam
countered the assertion that WTO talks may not move if DR-CAFTA does not
get through Congress. Weinberg argued that the opposite may be true,
that the United States' pursuit of agreements with intellectual property
provisions disliked by developing countries could hurt progress at the
global level. She said the issue is better discussed at the WTO than in
bilateral agreements.

The U.S. government reacted strongly to Guatemala's passage in December
of a law that shortened the time to access the test data of the drug
patent-holding companies. The data is needed to market a product in the
country. U.S. officials and others suggested Guatemala's move ran
contrary to the terms of the agreement signed last June.

USTR Addresses IP Concerns

Opponents to the DR-CAFTA are raising a number of intellectual
property-related concerns, such as why it is necessary to include test
data protection in agreements with smaller countries where they have not
been recognised before.

A U.S. trade official said in a 29 March interview that this protection
has been included in U.S. agreements with countries of all sizes
reaching back to the 1994 North American Free Trade Agreement, which
included Mexico and Canada. The official added that the statement that
protection will last "at least" five years is typical for terms of
protection in agreements and is not intended to open the door to an
extension of protection within the United States in the future, which
says simply five years. He said that some countries, like those in the
European Union, have protection for six to ten years though they do not
include it in their trade agreements but rather in the World Trade
Organisation negotiations.

Another concern is that the test data protection provision could
override countries' ability to exercise their right to use compulsory
licenses to provide greater access to necessary medicines for their
populations, as stated in the 2001 Doha Declaration on TRIPS and Public
Health.

The U.S. official said inclusion of the data protection provision is in
essence a codification of Article 39.3 of the WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), which
requires protection of pharmaceutical and agricultural chemical data
from "unfair" commercial use. But he said U.S. agreements do not
specifically address all of the flexibilities provided countries under
TRIPS, like parallel imports (allowing imports of cheaper drugs) and
compulsory licensing, or the ability to determine what constitutes a
national emergency. These flexibilities are understood to apply, as are
those enumerated in the Doha Declaration, he said. The side letters that
accompany recent agreements, in which the Office of the U.S. Trade
Representative (USTR) states that it will not interfere with a country's
ability to act in the public health interest, are merely interpretive
notes.

USTR argues that the data protection rules are an incentive for early
launch of innovative medicines. The official addressed a charge made by
a Jordanian official at a recent Washington event that the data
protection provision has brought mostly increased investment in
marketing and sales of foreign-produced products. "What we've seen
demonstrated in the case is an actual incentive for early launch of the
latest medicines," he said.

An additional concern raised in the negotiations with Morocco was about
restrictions on parallel imports, and the trade representative's office
assured Congress that it would consider these restrictions on a
case-by-case basis in future agreements. Democrats accepted the
explanation and voted for the agreement last year, but are concerned
that the restrictions will reappear. The official said U.S. negotiators
prefer to include restrictions on parallel imports in agreements if the
other country agrees to it, as Morocco did in its bilateral agreement.

Another concern is that USTR might be asking developing countries not to
include the equivalent of the so-called Bolar amendment in U.S. law,
which allows competing companies access to patented information about a
drug before the rights expire. Under U.S. law, a company has exclusive
right to its test data for five years, after which additional applicants
can offer competing products if they show their product is
bioequivalent, that is, it has the same chemical composition and
performance quality.

The text of the DR-CAFTA does not preclude countries from passing such a
provision on their own. The official insisted that U.S. negotiators do
not pressure countries in negotiations to omit a Bolar amendment
equivalent but said that it must be up to them to pass it on their own,
in the same way they would choose to exercise other flexibilities like
compulsory licenses or parallel imports.

In Congress, the opposition effort is seeking to appeal to "people who
favour trade who don't think we ought to foist standards on countries
that are not favourable to them," a House Democratic aide said in
mid-March. It may be having some effect, he said, adding, "They're
definitely not close to having the votes."


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