TWN Info Service on Free Trade Agreements

18 May 2007


Drug firms seek to limit impact of bipartisan deal on FTAs

We wish to bring to your attention some new developments on the US FTA front involving intellectual property rights and access to medicines.

In a number of US FTAs, the Democrats and Republicans have agreed to relax some requirements to give stronger protection than required under international law for drug patents, as a means to achieve the broader goal of reaching agreements on these trade deals. This change is part of the negotiations between the Democrats (who now control both the US Congress) and the Republican Administration which is seeking “fast track” authority to negotiate trade deals.

One key part of the compromise aims to ensure that generic drugs will be able to be offered in developing countries when those generics are already available in the US.

Brand-name drugmakers are not able to extend the five years of ‘exclusivity’ for clinical test data, that drug companies enjoy under recent trade agreements, in the developing country concerned longer than the clinical test data is protected in the US. A public health exception from data exclusivity obligations will also be introduced. Data exclusivity is designed to block generic medicines from being registered, and is not required under the WTO agreement on intellectual property rights, but remains part of the US trade policy.

A requirement that countries extend the term of patents to compensate for delays in the patent approval or marketing approval process will be removed. Drug regulatory agencies will be allowed to approve generics without having to first establish that no patents have been violated. The new policy also calls for making “side letters” on public health concerns part of the formal text of the FTAs (the legal status of these letters is currently uncertain when the main agreement contradicts the side letters), along with a reaffirmation of countries' right under WTO agreements to suspend patents in order to expand access to essential medicines.

While some health experts say that some of the compromises still pose obstacles to access to generic medicines, drug manufacturers are unhappy with the bipartisan deal. These companies now hope to limit the impact of these “softer” FTA provisions. For instance, they want to ensure that the new compromise provisions apply only to the three pending bilateral trade deals in Latin America namely, Peru, Panama and possibly Colombia, and will not carry over to future trade agreements.

US trade officials confirmed that the intellectual property changes are limited to pending trade deals but said they did not know the extent to which the changes would also become a part of future trade deals.

Other countries which are currently negotiating an FTA with the US, such as Malaysia, should therefore be vigilant to these developments and ensure that these provisions – at the minimum - should also apply to their FTAs with the US.


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Third World Network
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Item 1

Congress Daily AM - May 17, 2007
TRADE
Drug Firms Look To Limit Deal's Impact

Pharmaceutical firms and their allies on Capitol Hill are hoping to limit the impact of a bipartisan agreement to relax requirements in trade agreements to protect drug patents, which are part of a broader deal to unblock trade deals with Peru, Panama and potentially Colombia.

Business groups have hailed the overall agreement as providing a boost to the Bush administration's trade agenda, with one caveat: the portion covering intellectual property.

The drug industry is widely viewed as having been sacrificed to achieve progress on broader trade goals, as the White House bowed to Democratic demands to roll back the IP protections in the name of providing greater access to life-saving medicines in poor countries.

Some lawmakers who are sympathetic to the industry's bid to protect their innovative products say they will be closely watching how the actual language of the agreements is drafted, to ensure it does not undermine drug patent protections.

”I have some concerns about how they were handling the pharmaceutical aspect of it, and the notion that [IP protections] should be significantly reduced in these agreements with developing countries," said Rep. Adam Smith, D-Wash., a leader of the New Democrat Caucus.

Smith said that the conceptual language that the White House and lawmakers unveiled last week was "by and large, OK. It's not finalized, and we will continue to have that discussion," he said.

Another New Democrat, Rep. Melissa Bean, D-Ill., said in a statement, "I look forward to working with my colleagues to improve patent protections and ensure the competitiveness of America's innovators."

Ways and Means ranking member Jim McCrery, R-La., said Monday that the main concepts have already been agreed upon among Republicans, Democrats and the Bush administration, and that translating those concepts into legal text will not give rise to many problems. "I don't think there will be a lot of haggling over the language. We've hammered this thing out nine ways to Sunday already," he said.

But drug manufacturers also want to ensure that the new compromise provisions apply only to the three pending Latin American bilateral trade deals, and will not carry over to future trade agreements or any new grant of presidential trade negotiating authority.

One key part of the compromise aims to ensure that generic drugs will be able to be offered in developing countries when those generics are already available in the United States.

It keeps intact the five years of "exclusivity" for clinical test data that innovative drug companies enjoy under recent trade agreements. But it seeks to ensure that brand-name drugmakers are not able to extend that period in the developing country longer than the clinical test data is protected in the United States, subject to certain conditions.

Health activists have derided that portion of the deal, saying that it changes little from the current U.S. policy. "The preservation of data exclusivity alone is a gigantic gift to Big Pharma," the groups Health GAP, Essential Action, and the Student Global AIDS Campaign said in a statement Monday.

More significant, and potentially damaging for the innovative drug firms, is the removal of a requirement that countries extend the term of patents to compensate for delays in the patent approval or marketing approval process.

U.S. trade officials said in a conference call last week that the intellectual property changes are limited to pending trade deals but said they did not know the extent to which the changes would also become a part of future trade deals.

“That's to be determined when we get down to the next [trade promotion authority]," a trade official said. "When they starting writing TPA, it wouldn't surprise me at all if that's where [House Ways and Means Chairman] Rangel started from." By Martin Vaughan


Information posted by:
Benjamin Krohmal
Coordinator - Project on Medical Innovation
Knowledge Ecology International
Tel: +1-202-332-2670 ex. 17
Fax: +1-202-332-2673
ben.krohmal@keionline.org

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Item 2

Extract From: BRIDGES Weekly Trade News Digest - Vol. 11, Number 17 16 May 2007

WHITE HOUSE, DEMOCRATS REACH DEAL ON BILATERAL FTAs, SPARKING HOPES FOR TPA

“In response to Democrats' complaints that the intellectual property protections in FTAs were restricting access to lifesaving medicines in developing countries, the new template for trade agreements will allow trading partners to bring generic drugs to market more quickly. For instance, pharmaceutical test data will not be protected in partner countries beyond the period that it is in the US, which will make it possible for generics to be brought to market at the same time in both. A public health exception from data exclusivity obligations will also be introduced. Furthermore, patent extension requirements for pharmaceutical products will be softened, and drug regulatory agencies will be allowed to approve generics without having to first establish that no patents have been violated. Finally, the new policy calls for making side letters on public health concerns part of the formal text of the FTAs, along with a reaffirmation of countries' right under WTO agreements to suspend patents in order to expand access to essential medicines.”