[Pharm-policy] Letter from Thai Academics to USTR regarding PhRMA NTE submissions

[James Love]

Tido has sent us a copy of this open letter from Thai academics to
Charlene Barshefsky at USTR, responding to the recent PhRMA report on
Thailand (http://www.phrma.org/issues/intl/nte.html).


---------------------------------------------------

Dear Ambassador Barshefsky

We are concerned that the National Trade Estimate Report on Thailand that
PhRMA has submitted to the US government will negatively influence the year
2000 USTR NTE report. We are writing to ask the USTR to abstain from its
previous 'TRIPS PLUS" approach and to carefully review the accusations on
Thailand that PhRMA has made.

The PhRMA report claims that Thai law is still not TRIPS compliant in many
points.
1. Regarding S. 9(1) of the Patent Act. The Report suggests that the
provision is against the TRIPs Agreement since it excludes naturally
existing biologicals. Art. 27.3(b) of the TRIPs authorized the Member
states to exclude living organisms other than microorganisms. Thai law does
not exclude all kinds of microorganism but only those organisms that exist
in nature. This is not against the spirit of the international agreement as
microoganisms that are not technically created are not considered
invention. They are merely discovery and no country's law protects
discovery.

2. The PhRMA report attacks the Bolar type provision that is part of patent
law in many countries. As to Section 36(4) of the Thai Patent Act, the law
exempts from patent infringement the use of patented products for market
approval during the duration of the patent. This is again not contrary to
the TRIPS because the patent holder continues to enjoy market exclusivity
during the patent term. The use of patented products for clinical trials is
further not a commercial use and does not affect the patent rights. Generic
drugs can be released into the market only after the patent expires.
Without Bolar provisions patent protection is in practice unfairly extended
beyond the current 20 years.

3. PhRMA comments that absence of local working is reason for compulsory
license in Thai law. It is true that failure to manufacture the patented
product in the country is one of the grounds for the application of
compulsory license under Section 46 of the Thai Patent Act. However we do
not believe that TRIPS obliges member states to recognize importation as
sufficient working of the patent. Following active USTR intervention under
"special 301" the Thai government adopted regulations in 1993 that restrict
the use compulsory license as to Section 46 of the Thai Patent Act. The
regulations broadly exclude many reasons for compulsory license, including
importation.

4. We disagree that the provision on dependent compulsory licences is not
in line with the TRIPS. Art. 31(j) of the Agreement states "any decision
relating to the remuneration provided in respect of such use shall be
subject to judicial review or other independent review by a distinct higher
authority in the Member". Though the Thai law does not provide for judicial
review in this case, the affected party is able to appeal the decision to
grant a compulsory licence to the Patent Board, which comprises
representatives from various sectors and is absolutely independent from
government control.

5. As to Section 6(4), Thailand recognizes a 12-month priority period for
foreign applications, not 18 months as mentioned in the PHRMA report. This
is found in Section 19 B of the Thai Patent Act, not in Section 6(4).
Section 6(4) applies the 18-month period because in most countries patent
applications are published for public scrutiny after 18 months from the
filing date. This is a normal practice in most countries and does not fall
outside the scope of the TRIPs.

6. Regarding the Draft Trade Secret Law, the "public interest" provision
can be found in all countries' intellectual property law. We are surprised
that PHRMA considers this provision illegal.

7. PhRMA mispresents facts on parallel import in Thailand and speaks of
"the dangers that such imports pose to national health". PhRMA confuses
illegal smuggling of counterfeit drugs into Thailand with the legal
parallel importing under the supervision of the Thai FDA. All imported
drugs need to be registered with the FDA and are assessed according to
quality, safety and efficacy. Section 36(7) of Thai Patent Law now
authorizes parallel importation. "The TRIPS Agreement explicitly states
that if a country allows parallel imports - that is, imports of goods
already put on the market in another country with the right holder's
authorization - those practices cannot be challenged under the Agreement"
(Text of the official WTO booklet to the Seattle meetings).

8. PhRMA complains that drugs still under the Safety Monitoring Program can
not be included in the National List of Essential Drugs (NLED). PhRMA
believes that the Thai government is setting up market access barriers by
using the NLED as a maximum list for government hospitals and by setting
maximum prices for drugs in the NLED.
a)	Making the NLED a minimal rather than a maximum list in public hospitals
as PhRMA suggests would undermine the very concept of an essential drug
list as is it is promoted by WHO. The rationale for the use of a limited
number of essential drugs is that it leads to an improved supply of drugs,
more rational prescribing and lower costs.
b)	Following pressure by the USTR the Thai government is since 1994
providing 5- years of market exclusivity as pipeline protection of drugs.
This protection is given under the cover of the Safety Monitoring Program
(SMP) that provides extremely limited safety data due to the passive
monitoring system; so far SMP has in no case detected safety problems that
were not reported earlier in other countries. Pharmaceutical companies were
thus given pipeline protection and "safety monitoring" purely to grant
market monopoly; how can PhRMA now demand that provisionally registered
pipeline drugs should be included in the NEDL?
c)	Price control of medicines is a legitimate way of increasing
affordability of drugs and is clearly permissible under TRIPS. Thailand has
made very limited use of price control. Most medicines on the NLED are
still not affordable for  the majority of people and are reimbursed only
for the small group of people covered by social insurance.

Pharmaceutical companies have repeatedly emphasized that public health
policy rather than price is the main obstacle to insufficient access to
medicines. PhRMA here actively attempts to undermine good, WHO recommended
standards of national drug management. 

We are seriously concerned that PhRMA policies negatively affect public
health in Thailand if given impact on the USTR NTE report.
We urge the USTR to consult with DHHS on this issue as was announced by
President Clinton during the 1999 Seattle meetings.

Sincerely,

Jakkrit Kuanpoth, PhD
Associate Professor, School of Law
Sukhothai Thammathirat University, Thailand

Jiraporn Limpananont, PhD
Associate Professor, Faculty of Pharmaceutical Sciences
Chulalongkorn University, Thailand