[Ip-health] Cong Daily: Drug Companies Look To Head Off House Dem/Bush Deal

[Mike Palmedo]

National Review Congress Daily
By Martin Vaughan
April 6, 2007

Drug Companies Look To Head Off House Dem/Bush Deal

     Pharmaceutical companies are working to head off a deal between
House Democrats and the Bush administration that would weaken
intellectual property protections that affect drug sales overseas.

     The issue of intellectual property rights and access to medicines
is one of six broad areas Democrats are seeking to renegotiate in
agreements with Peru and Colombia, and create a new standard for other
trade agreements going forward.

     The call by House Ways and Means Chairman Rangel to alter IPR
provisions has already generated some pushback from within the
Democratic Caucus, in particular from New Democrats concerned that an
agreement not undercut the drug industry's ability to bring innovative
drugs to the market.

     In separate interviews, Reps. Adam Smith, D-Wash., and James Moran,
D-Va., identified the issue of access to medicines as one part of the
Democratic proposal that might need to be fine-tuned.

     Brand-name pharmaceutical firms met Thursday with staff for New
Democrats and lodged their concerns with the Rangel agenda, according to
a senior New Democrat staffer.

     The staffer stressed that New Democrats support the broad outline
that Rangel offered this week, while details still have to be negotiated.

     Rangel and Ways and Means Trade Subcommittee Chairman Sander Levin,
D-Mich., laid out their proposal Tuesday to the House Democratic Caucus,
which they hoped would serve as a blueprint for passing free trade deals
and extending presidential trade negotiating authority.

     According to a statement from New Democrats, "The leadership of the
New Democrat coalition supports the trade principles outlined by
Chairman Rangel and applauds his effort to negotiate a bipartisan
compromise that would allow forward-thinking trade policies to move ahead."

     But the inclusion of language opposed by the pharmaceutical
industry is likely to have a heavier impact on the Republican side,
where votes for any eventual trade deals will be every bit as crucial as
Democratic votes.

     Industry lobbyists also raised the issue of intellectual property
protections at a meeting hosted by House Minority Whip Blunt and Chief
Deputy Minority Whip Eric Cantor, R-Va., according to a source who
attended the meeting.

     The pharmaceutical issue is not as high-profile as Democratic
demands on labor, and might ultimately be easier to solve, according to
sources close to discussions.

     The labor issue remains intractable because Democrats have not
altered their demand that trade agreements obligate all parties to abide
by core International Labor Organization standards, and neither the Bush
administration nor Republicans are likely to agree to any plan that
would subject the United States to legal challenge over whether its
labor laws conform to the ILO.

     "Without a safe harbor for U.S. labor law, it's a non-starter,"
Rep. Kevin Brady, R-Texas, a member of the Ways and Means panel, said
Thursday.

     The intellectual property provisions in question affect how quickly
generic drug-makers are able to bring generic versions of patented drugs
to market in developing countries.

     According to sources familiar with the proposals, which are not yet
public, House Democrats are seeking more flexibility in a requirement
that protects clinical test data for brand-named drugs from being used
to bring generic drugs to market for five years after the patented drug
has been registered in a country.

     Critics have charged that the five-year requirement effectively
could delay approval of generics past patent expiration.

     Brand-name manufacturers typically will register a new drug in the
United States and European Union first, which starts a period of test
data exclusivity in those markets. Registration in smaller markets might
not come for months or years.

     That sets up a situation where generic drugs are already available
in the United States, but not in poorer countries because the five-year
data exclusivity provision has not yet expired.

     Democrats are proposing that the five-year period of exclusivity
for trading partners be allowed to run concurrently with the exclusivity
period in the United States, so that generic availability in the other
country is not delayed beyond the U.S. period.

     That demand is significantly less than some House Democrats and
health activists would have asked, who have sought that any specific
minimum period for data exclusivity be removed from trade agreements.

     One industry observer said in some cases data protection is at
least as important as patent protection, because patent infringements
must be challenged in courts that might be corrupt or unsympathetic to
the industry's arguments.

     It is unclear how willing the Bush administration might be to
accept Democratic terms in the area of medicines.

     The Office of the U.S. Trade Representative has criticized
countries such as Israel and Chile, in its annual Special 301 report on
intellectual property, for domestic laws aimed at limiting drug
companies' flexibility to take advantage of data exclusivity protections.

     But several sources in the business community said they doubted the
administration would let the drug industry's concerns stand in the way
of an agreement that will pave the way for large parts of its trade
agenda to move forward.



--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu