[Ip-health] ITC Report Concerning the Impact of the U.S.-KOREA Free Trade Agreement

[heeseob nam]

News Release: http://www.usitc.gov/ext_relations/news_release/2007/er0920ee3.htm

Published Report: http://hotdocs.usitc.gov/docs/pubs/2104F/pub3949.pdf

On Pharmaceuticals:

U.S. pharmaceutical companies exporting products to Korea would likely
benefit from the U.S.-Korea FTA. The agreement addresses three issues
that the U.S. industry has identified as having hindered U.S.
pharmaceutical exports in the past: lack of intellectual property
protections for pharmaceutical products, lack of transparency in
Korea's national health-care system, and unethical business practices.
The reduction of Korean tariffs for pharmaceutical products may also
provide a small positive effect for U.S. exports. The FTA is unlikely
to have any effect on U.S. imports because U.S. pharmaceutical imports
are currently free of
duty on an MFN basis364 and U.S. intellectual property protections
already meet or exceed the intellectual property standards included in
the FTA.

[snip]

The FTA would expand the intellectual property protections for
pharmaceuticals in three important areas.374 First, it would require
the implementation of measures to prevent the marketing approval of a
generic drug by drug regulators while the patent on the original drug
is still in effect, a so-called "patent linkage" system. Second,
the data-exclusivity provisions would preclude third parties from
relying on the safety or efficacy data submitted by the originator to
obtain marketing approval for a pharmaceutical product for 5 years for
a new product and 3 years for a previously approved chemical
entity.376 Third, the patent extension provision would allow companies
to request an extension of the patent term for a pharmaceutical
product as compensation for unreasonable delays in the patent or
marketing approval processes.377

[snip]

Several observers criticized the intellectual property protections for
harmaceuticals in the FTA. Several contend that these provisions would
delay the introduction of generic drugs to the Korean market and
increase health-care costs in Korea.396 A critic of the intellectual
property provisions for pharmaceuticals notes that the Korean National
Health Insurance Review Agency has a goal of reducing the percentage
of health-care costs due to pharmaceuticals, relying on generic drugs
to keep costs low, and claims that "because the proposed FTA is poised
to result in greater restrictions on generic drugs through extending
its patent expiration and limiting drug information, the FTA is likely
to drive up the cost of health care in South Korea."397 A
pharmaceutical industry representative responding to this
criticism said that if Korea, as well as other nations, adopts
policies like the ones in this FTA "it would provide an incentive for
even greater expansion of innovation in pharmaceuticals, the discovery
of even more enhanced cures, and that, in the end, rebounds to the
benefit of all patients, globally, in Korea and otherwise."398

On Intellectual Properties:

The IPR provisions of the U.S.- Korea FTA are more rigorous than those
included in U.S. FTAs with some developing countries and would address
many issues identified as problematic in the annual intellectual
property reviews of Korea conducted under the Special 301 provisions
of the Trade Act of 1974.

[snip]

In testimony before the House Committee on Ways and Means, the Program
on Information Justice and Intellectual Property at American
University's Washington College of Law also said that the patent-term
extension, data exclusivity, and linkage provisions of the FTA would
inhibit the introduction of generics and access to medicine in Korea.

--
HeeSeob Nam
IPLeft (www.ipleft.or.kr)
hurips@gmail.com
Tel.: +49 89 7240 2314
Geitauerstr. 4
81379 Munich, Germany