[Pharm-policy] PhRMA's Dec 3, 1999 Thailand NTE submissions

[James Love]

Here is PhRMA's Dec 3, 1999 Thailand NTE submissions.


http://www.phrma.org/issues/intl/thailand.html


Thailand Intellectual Property Protection

While the Thai patent act changed in 1999 with the abolishment
of the Price Review board, there are still many features
of the Thai Patent Act which will not be changed in the pending
legislation:

Patentable subject matter - Section 9(1) still excludes naturally
existing biologicals which is not in compliance with the
requirements of TRIPS.

The Bolar type provision which allows generic use of patentable
subject material for testing prior to patent expiry of the
originator's product, (Section 36(4)) is still the part of the
amended Patent Act.

Compulsory licensing if the patented product is not produced in
Thailand is still incorporated in Section 46. However, the Royal
Thai Government will now recognize importation as working the
patent.

Dependent compulsory licenses, compensation and appeals are all
still inconsistent with TRIPS.

In addition, the draft Thai law introduces new inconsistencies:

Section 6(4) extends the state of the art period to "an invention
of which more than eighteen months prior to the date of
(application) an (application) in a foreign country has been
filed and not been granted. The internationally accepted period
is 12 months. This new provision was added to increase the
definition of Novelty under the Patent Act to be in conformity
with that of PCT. 

Section 36(7) of the Patent Act allows importation of patented
products if the patentee permits or gives consent to the
manufacture or sale of the aforesaid product.

The current interpretation of the Thai Department of Intellectual
Property of Section 39 of the 1992 law is directly opposite to
the agreed intent of the law before the law was enacted. The
focus is to prevent pending applications from having product
claims inserted - as was intended. This calls into question the
sincerity of the RTG in providing Intellectual Property
Protection.

Draft Trade Secrets Law: Thailand is preparing a new trade
secrets law to comply with TRIPS. Unfortunately, Section
11(4) attempts to exclude disclosure of trade secrets by a
government agency to protect any "public interest" not having
commercial objectives. This is intended to allow the use of
registration data for generic regulatory filings.

Parallel Imports: The Thai pharmaceutical market suffers a
relatively high level of parallel imports from other parts of
Asia, yet neither the Thai FDA nor other authorities has moved to
rectify this situation, despite the dangers that such
imports pose to national health. There is recent evidence the
Thai FDA is being slightly more diligent in enforcing
restrictions on parallel imports.


Restrictive Drug Lists

The original list (NLED: National List of Essential Drugs) has
been in place for several years and was an adaptation of
the WHO 'essential drug list' (designed as a minimal list of
drugs that should be available to satisfy basic health care
needs in developing countries.) The WHO list maintains some 250
compounds. Thailand expanded its list to about 1,400
compounds, but applied a restrictive pricing scheme to limit
reimbursement. Because of the severe price restrictions,
companies avoided applying for listing on the National List and
sought listing on individual hospital formularies since
there were no restrictions on having their products prescribed
and reimbursed within the hospital system. 

The MOPH recently indicated that the NLED will now become a
maximum list for government hospitals and that products with
"provisional registration" subject to a "Safety Monitoring
Protocol" (SMP) (i.e., Thailand's form of pipeline
protection) would be excluded from the list.

The intention of the 1994 Thai FDA Rules on 'Transitory Provision
to Conduct Safety Monitoring and Bioequivalence Study of New
Drug', to provide pipeline protection for pharmaceutical products
patented elsewhere in the world between 1 January 1986 and 30
September 1991 is clearly stated. The procedure required
companies to report adverse reactions for a two year period. If
requested by the company this could be rolled over for a further
"two plus one" year reporting periods during which time the FDA
would not accept a registration file for a generic copy. The
rules provided up to five years market exclusivity; the only
restriction being that sales were restricted to hospitals and
clinics (i.e., no drugstore sales). 

The treatment of the NLED as a maximum list and the exclusion of
the opportunity to have SMP drugs included in the list
effectively negates the original intent of the provisions to
provide pipeline protection and market exclusivity for new
products in Thailand. Innovative products qualifying for the SMP
will not be listed or stocked in most hospitals. 

PhRMA believes that the Thai Government's removal of the
opportunity to market new products through government
hospitals is tantamount to setting up a market access barrier to
the introduction of new products in Thailand.


Import Policies

Drug and raw material imports are subject to duty which currently
ranges from 10% to 30% (In the recent economic stimulation
initiative, the duty for certain intermediate hormones was
reduced to 1%). The duty rate for drugs where a generic
equivalent is not manufactured in Thailand is normally 10%. The
duty rate for imported finished goods that compete with locally
manufactured product is 20% to 30%. While there are no specific
policies which mandate "BUY THAI", the government hospitals are
strongly encouraged to buy locally produced products where ever
possible.



Standards, Testing and Labeling Requirements

A new chemical entity can be registered in Thailand, but the
filing will not be accepted unless a Certificate of Free Sale
(FSC) from the country of origin is supplied. Samples of the new
drug must be submitted to the Thai Department of Medical Science
for analysis prior to acceptance of registration filings. This
analysis usually takes 6 months. Once the file is received, the
FDA can take up to 18 months ensuring that it is complete, to its
satisfaction, before submitting the clinical work to the Review
Committee for consideration. The Committee may ask additional
questions or require that a local study be carried out to ensure
that the clinical data can be duplicated in Thailand by Thai
national companies under local conditions.

The Thai FDA has implemented "user fees" to quicken the
registration process and this policy has improved registration
timing. However, these user fees are being politically challenged
and may be eliminated in the near future. If this occurs,
registration timing may fall back to the old two year filing
term.

The Ministry of Public Health has eliminated the requirement for
sample analysis before filing of registration dossiers.
The Ministry still requires an FSC to allow filings for imported
products. An FSC is not required for regulatory filings
where the product is to be based upon local production. PhRMA
believes this is in contravention of WTO principles of
national treatment.



Government Pharmaceutical Organization

This organization is exempted from registration and Good
Manufacturing Practice requirements and has rights to an
exclusive position in supplying government hospitals with
products on the National List of Essential Drugs. PhRMA
believes this also is in contravention of WTO principles
regarding national treatment.



Potential Exports/Foreign Sales

>From Thai-based sales data and from estimates based on the size
and buying power of the Thai population, PhRMA estimates that the
potential market for its companies could be US$70 million, if the
aforementioned barriers were removed.


-- 
James Love
http://www.cptech.org
mailto:love@cptech.org
voice 1.202.387.8030