[Pharm-policy] clarification: imports != parallel imports

[James Love]

This is a note of clarification regarding terms.

The term Parallel Imports should not be used to describe all imports,
but rather a particular type of imports.

Parallel imports are imports that are unauthorized by the
manufacturer/publisher.   They may or may not be protected by patents,
trademarks or copyrights, and there may or may not be legal barriers to
parallel imports, based upon intellectual property laws (patents,
trademarks or copyrights) or regulation (health and saftey FDA type
rules).

Imports of the brand name Claritin product from Canada to the USA would
be a parallel import, if both products are made by Schering, and sold in
different (parallel) markets.  Imports of a generic version of Claritin,
manufactured and sold by someone other than Schering, would be an
import, but it would not be a parallel import.

Many of the barriers to cross-border trade in pharmaceuticals are
related to regualtory barriers to entry, specifically the domestic
requirements for registration of drugs.  These barriers exist even when
the product is off patent.

The parallel import issue addresses special issues.  If Glaxo, Pfizer or
BMS has the same drug registered in different countries, can you buy it
in the cheapest market?  The WTO agreement, in Article 6, says that
countries may decide to permit this under intellectual rules (nothing
involving exhaustion of intellectual rights can be brought to a WTO
dispute resolution panel).  Whether you can actually do it or not will
depend upon national IPR and registration laws.  In the USA, this is a
registration issue -- parallel imports are permited under national
patent and trademark laws, but limited under current FDA registration
rules.

Countries can reform registration laws to permit greater access to
cheaper drugs through imports, including those involving products off
patent.

In cases where there are patents in one country but not another, the
intellectual property issues will have to be addressed.  If there are
patents in the importing country, and it is seeking to import a product
manufacturered by someone other than patent owner, it will generally be
necessary to obtain a voluntary or complusory license first.  The import
of products for public non-commerical use may be done without first
obtaining a patent license, if domestic laws permit this (this is the
USA system for government use), but in any case, the patent owner will
have to receive "adequate" compensation.

If the product is sold in different countries under different licenses,
(including voluntary or compulsory licensese), they may be imported
under the WTO rules.  National laws could determine that the patent
owners rights were "exhausted" when the product was sold in the foreign
market, even under a complusory license in the foreign market. 
Alternativily, the importing country could issue a complusory license
for domestic use, and the exporting country could authorize exports
under an Article 31.k license, or through an Article 30 export
exception.  

  Jamie

-- 
James Love  <love@cptech.org>  http://www.cptech.org
Consumer Project on Technology, P.O. Box 19367, Washington, DC 200036
voice 1.202.387.8030 fax 1.202.234.5176