[Ip-health] Mike's notes on Korea meeting

[Sean Flynn]

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Looks like there will be a pharmaceutical chapter in the Korea
agreement.



These are Mike's notes from attending the hearing yesterday:









March 20 Hearings on the US-Korea FTA

Ways and Means Committee

Subcommittee on Trade



Most of this hearing focused on the auto and agriculture industries, and
had nothing to do with medicines.  Assistant USTR Bhatia was the only
witness on the first panel.  The whole second panel was representatives
from the auto industry, including someone from the UAW.  The third panel
was a collection of other business (including agr.) interests, including
Geralyn S. Ritter from PhRMA.  I'm not including notes on the
auto/agriculture stuff, but there was a recurring complaint shared by
representatives of every industry that non-transparent and frequently
changing regulations are deliberately used to protect local industries
in Korea.  No one on the subcommittee or any of the panels was "good" on
pharmaceuticals.



Chairman Levin began by saying this FTA is a test of how we will shape
trade agreements in the future.  He is very focused on the concerns of
labor and the auto industry (he represents Michigan).  In the past, we
have negotiated deals with Korea on Non Tariff Barriers (NTBs) that
didn't work. Recently, a bipartisan group of legislators proposed a
solution to the impasse on autos, but there has been no significant
movement on it by the Koreans.  The US government seems to be "in
denial" of what the Koreans are doing.  We need a shift in strategy that
demands and measures progress.



The Ranking Minority Member, Herger, began by reminding us this is the
most significant FTA in recent years.  He mentions very briefly that it
will raise IPR protection. His four main areas of concern are rice,
beef, autos, and the need for a strong dispute settlement system (where
investors can sue countries).



Assistant USTR Bhatia's statement was short on detail and did not
deviate from his prepared testimony:
http://waysandmeans.house.gov/Media/pdf/110/3-20-07/BhatiaTestimony.pdf



Q&A:



Levin - This particular FTA has a lot of controversial negotiations
holding it up, and this is the end of the negotiations, so Congress
needs to be in the loop. We need to hear what' going on before USTR
shows up with a final text.  The testimony today didn't really tell us
much, and we're10 days from the deadline.



Bhatia - We've been working with Congress since the beginning and will
continue to do so.  We met with you last week.



Levin - Are you going to table proposals and then come by and show us
what you've done?



Bhatia - We show congress proposals before we table them.



Kevin Brady - In the area of pharmaceuticals, what's your plan?  We need
market access and transparency.



Bhatia - This has been a big part of our negotiations since the
beginning.  We are working hard on it, but it's not complete.  There are
two issues:

1.	The IP chapter.  We need to have strong data exclusivity and
linkage.
2.	The pharmaceuticals chapter - we need to make sure pricing and
reimbursement are transparent, fair, and values innovation.  They are
"pushing very hard" on this.



Blumenauer brought up tobacco, basically telling USTR not to push for
strong tobacco sales in Korea, which stumped Bhatia.



Bill Pascrell - I represent New Jersey, where we have a lot of
pharmaceutical companies. I want to make sure you're giving the drug
companies the same priority as ranchers and the auto industry.



Bhatia is adamant that USTR works with drug companies.  "I can't count
the conference calls with senior executives..." Pascrell tells him to
put it in writing.





The second panel is all about the auto industry.  Some of the many
complaints are similar to those of the drug companies, especially a lack
of transparencies and changing rules.





The third panel begins with Tami Overby from the Chamber of Commerce,
who called for more transparency across the board.  On the topic of
pharmaceuticals, she says the FTA could help Korean patients get access
to more innovative products from the US.  It is important that the FTA
bring more transparency and accountability to the regulation of the
market.



Geralyn S. Ritter testified for PhRMA, following closely her prepared
testimony:

http://waysandmeans.house.gov/hearings.asp?formmode=view&id=5714



Ritter - PhRMA thinks there are three opportunities with this FTA

1.	enhance access to new drugs for Koreans
2.	increase in transparency and predictability in reimbursement
rules
3.	improve appreciation of innovation



Ritter - With the new reimbursement system, American drug companies are
worse off than they were when FTA negotiations began. The changing rules
keep them guessing. Regulations for reimbursement need predictability -
the FTA must protect against arbitrariness of the regulators.  There
needs to be an appeals process with teeth, meaning it must be possible
to reverse decisions.



Ritter - also, the IP section must include five-year data exclusivity
and linkage.



PhRMA would like to support the FTA, but "we are far from the finish
line."



Q&A

Levin - Across industries, it seems the Koreans are using opaque
regulations as a barrier.  With respect to the pharmaceutical industry,
it's hard to tell what's going on?  How do we approach the FTA to ensure
there is a level playing field?  What do we need to do to get a
reasonable outcome?

We used to go after the industry for pushing too far, but Korea's a
developed nation, and it seems they need to level the playing field.



Ritter - Talk to PhRMA.  Introducing transparency to the Korean system
is very important and an appeals process is part of that. We also need
predictability.  Both the industry and the US government submitted
comments to the Korean government on their new reimbursement system, but
Korea has not taken into account any of our recommendations.

Levin - Please follow up in writing.