US To Loosen Drug Patent Provisions In Some Trade Deals 17/05/2007 by Martin Vaughan for Intellectual Property Watch 1 Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)By Martin Vaughan for Intellectual Property Watch WASHINGTON – The White House has agreed to loosen restrictions on clinical test data and patent safeguards for pharmaceuticals in bilateral trade agreements between the United States and Peru, Panama, and Colombia as part of a broader agreement with congressional Democrats to spur progress on the Bush administration trade agenda. But some fear the changes will not be enough to significantly improve medicines access in developing countries. The extent to which the new, less stringent intellectual property language will apply to future trade agreements and to a potential grant of fast-track trade authority is unclear, and will be the subject of continued negotiations, officials said. Key House Democrats (the opposition party which took control of Congress in November) secured most of their demands on patent rules and access to medicines despite the objections of pharmaceutical firms that watering down the model used in recent trade agreements would undermine innovation. The principle underlying the agreement is that generic drugs should not be prevented from reaching the market in developing country partners to free trade agreements, if those generics are already available in the United States. An outline of the new agreement is available here. Recent US bilateral trade deals such as the Central American Free Trade Agreement, and the Peru and Colombia deals in their current form, have required countries to provide a five-year period of “data exclusivity,” during which clinical test data produced by innovative drug manufacturers cannot be used for marketing approval of generics. The five-year requirement has the potential to delay access in a market such as Panama, for example, if the maker of the name-brand drug did not seek entry into that market at the same time as it brought the drug to market in the United States. The bipartisan agreement would provide a way for the five-year data exclusivity period in the developing country to run concurrently with the US exclusivity period, subject to certain conditions. For example, the country must grant marketing approval within six months of application by the brand-name drug maker. In addition, the benefit from a concurrent period only applies if the country relies on the same data used in the US marketing approval process. Health advocates said that some countries, because of the way their regulatory systems are set up, would therefore not benefit from that flexibility. “The benefits of [the data exclusivity change] are very minor, at best shortening the term of exclusivity by six months, in cases where the foreign registration is based upon the US registration, and occurs within six month of the US registration, a set of facts which will often not apply,” wrote James Love, director of Knowledge Ecology International, in comments on the outline of the trade deal. A House Democratic aide involved in negotiating the agreement said those limitations recognised that the five-year data exclusivity period is meant to allow time for drug makers to recoup their investment in clinical tests. If a manufacturer can use the same set of data to obtain marketing approval, then no extra period is warranted. But, “if they are having to produce new data to serve the market in Peru, they should benefit from the full five-year period,” the aide said. The fact that lawmakers and the White House chose to leave intact the standard period of five years – rather than a shorter period or no data exclusivity period at all – was a victory of sorts for the industry and a disappointment to public health advocates. “In a best-case scenario, what the deal will do is limit the extent to which US trade agreements expand brand-name drug companies’ monopolies,” according to a joint statement from Health GAP, Essential Action, and the Student Global AIDS Campaign. “However, arguing about how to make trade deals ‘less harmful’ is the wrong framework.” Other Changes A change that is likely to have a greater impact is the elimination of a requirement that countries provide patent-term extensions when there are delays in the patent approval or marketing approval process. In addition, countries will no longer be required to provide “linkage” – the notion that a drug regulatory authority would withhold approval from a generic drug until it can be shown that no patent is being violated. But, in a nod to industry concerns, countries will have to provide expedited judicial means, such as preliminary injunctions, to challenge such approvals if there is a dispute over patent rights. Finally, a statement that obligations to protect IP do not limit parties’ ability to use the flexibilities in the 2001 World Trade Organization Doha Declaration on intellectual property rights and public health – which to date has been appended as a side letter to trade deals – would formally be made part of the text of agreements. Only the latter change will apply to the US-Korea free trade agreement, while the other three changes – dealing with data exclusivity, patent term extensions and “linkage” – will not apply to the Korea deal. That is because lawmakers sought to have the loosening of restrictions apply only to developing countries, aides said. The Pharmaceutical Research and Manufacturers Association (PhRMA) – the US trade association that represents brand-name drug makers – is still reviewing the outcome of the deal and has not commented on its substance. But in a May 11 statement, PhRMA President Billy Tauzin warned that “the future innovation of medicines could be threatened if countries around the world are free to undermine intellectual property protections that create incentives for pharmaceutical companies to continue their investment in the development of new cures.” In addition to intellectual property, the broad trade framework involves a strengthening of labour and environmental obligations in trade deals, and more modest changes to model language on investment, procurement and port security. The agreement was announced 10 May in a press conference that included Treasury Secretary Henry Paulson, US Trade Representative Susan Schwab, House Speaker Nancy Pelosi (D-California), House Ways and Means Chairman Charles Rangel (D-New York), Senate Finance Chairman Max Baucus (D-Montana), and others. Trade officials and congressional staff are now working to translate the agreed-upon concepts into legal language that can be added to the trade deals themselves. The deal between lawmakers and the White House also is conditional on the governments of Peru, Panama, Colombia and Korea themselves agreeing to the changes. Timing for consideration by Congress of the Peru and Panama deals remains unclear, but congressional sources said leaders are aiming for passage in the House of Representatives by the autumn. Democrats have said they will continue to block the Colombia trade deal without dramatic improvements in Colombia’s record of violence against trade unionists. The Korea agreement is stymied until lawmakers see improved access to Korea’s market for US beef and autos. Martin Vaughan may be reached at firstname.lastname@example.org. Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related "US To Loosen Drug Patent Provisions In Some Trade Deals" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.