[Ip-health] IUT sources: US will abandon May 10 Agreement on medicines this week in Chicago

Peter Maybarduk pmaybarduk at citizen.org
Sat Sep 10 21:58:24 PDT 2011

It seems likely that the US will take another major step backward in access to medicines policy at the Trans-Pacific FTA negotiations this week in Chicago, by abandoning elements of the "May 10th Agreement" on access to medicines.  Public health advocates fought hard for that agreement, which was brokered between Congressional leaders and President Bush in 2007 and reduced the negative impact of US FTAs on access to medicines. 

The story below also lays out part of the argument we are expecting to read Monday in a USTR white paper on access to medicines.  

Fortunately, developing countries are fighting back at the IP negotiating table, and all indications are the parties remain very far apart on IP, with an increasingly vocal bloc  pressing for a TRIPS-aligned, rather than TRIPS-plus, structure.  

Inside US Trade Daily News
USTR To Table Full IPR Text, Explanatory IPR ‘White Paper’ Next Week
Posted: September 10, 2011
CHICAGO, IL -- The Office of the U.S. Trade Representative intends to table all outstanding proposals related to intellectual property rights in the Trans-Pacific Partnership (TPP) talks, including its most controversial proposals on patent protections, early next week, according to a senior U.S. negotiator.

U.S. officials are also expected to issue by Monday (Sept. 12) an accompanying public “white paper” on intellectual property rights that will outline its general approach on access to medicines in the TPP talks, the negotiator said.

“There are a lot of issues that we’re looking at that have some degree of sensitivity, and this is one where we’ve spent a lot of time speaking to stakeholders of all of the communities involved,” the negotiator said. The white paper is being released “so people understand what our position is and how we’ve thought through this issue.”

How USTR will handle the three “May 10” IPR issues is one of the most controversial areas of the TPP talks. Under the “May 10” deal, the United States changed patent provisions in trade deals with Colombia, Panama and South Korea to better ensure adequate access to medicines.

According to informed sources, the forthcoming USTR proposals will undo some aspects of the May 10 agreement and provide stronger patent protections by providing TPP countries with less flexibility to make patent linkage and patent term extension optional, as is possible under the “May 10” deal.

Pharmaceutical companies support mandatory patent linkage and patent term extension, whereas public health advocates argue that they burden foreign country governments and undermine access to medicines.

Data exclusivity refers to the period of time for which an original patent holder is permitted to withhold test data proving the safety and efficacy of a drug from generic manufacturers for the approval of chemically equivalent drugs.

Conventional pharmaceuticals have five years of such protection under U.S. law, although biologics were given an extended period of 12 years in the U.S. health care reform bill signed into law last year. U.S. pharmaceutical companies are pushing for 12 years of protection for biologics in the TPP talks as well.

However, President Obama’s fiscal year 2012 budget proposal called for a reduction of the data exclusivity period for biologics to seven years. Under the health care reform bill, biologics were granted an extended period of protection due to the higher expense of research and development of these drugs.

Under the May 10 deal, countries "may" regulate the terms of breaking data exclusivity for "reasons of public interest, situations of national emergency or extreme urgency, when it is necessary to allow access to those data to third parties." Usually, data exclusivity periods are rigidly enforced and even withstand compulsory licensing to produce generic drugs.

Patent linkage requires the regulatory authority of a country to refrain from issuing marketing approvals for generic drugs unless it can certify they do not infringe on a brand-name drug patent.

Sources that support broader access to medicines have said that making this optional under the May 10 deal for developing countries was desirable because these countries often do not have the resources in their patent offices to make such a determination.

Also optional under the May 10 deal are patent term extensions, which refer to extensions of the life of the patent to compensate for administrative processing delays.

In an apparent effort to bolster its position for tougher patent protections, USTR has devised a list of pharmaceuticals that examines when companies attained marketing approval for drugs in the United States and when they gained marketing approval in TPP countries, informed sources said.

The senior U.S. negotiator would not specifically reference the use of a list, but acknowledged that USTR “looked at data, we’ve looked at analysis and we’ve analyzed the input we’ve gotten from stakeholders across the board as we’ve put together this proposal.”

The point of this list, these sources said, is to demonstrate that marketing approval in TPP countries has lagged years behind approval in the United States. USTR then argues that this lag time reflects the fact that companies have not wanted to seek approval in TPP countries until the data exclusivity term in the United States has expired.

The reason for this, according to USTR reasoning, is that these companies fear that once they attain marketing approval in the TPP country, a generic competitor will emerge swiftly even if the pharmaceutical is supposed to be protected from such competition for a number of years, sources said.

Emergence of generic competition in the TPP country, in turn, could lead to a loss in profits overall when it comes to sales of that drug. By using this list to illustrate company behavior, USTR appears to be arguing that stronger IPR protections are necessary in TPP countries in order to entice companies to seek approval more swiftly and thereby allow foreign customers to benefit from new drugs, sources said.

But one industry source blasted this reasoning, stating that the dates USTR appears to be using in its list only reflect when the drug attained marketing approval in a TPP country, not when the drug company originally sought the marketing approval.

If drug companies sought approval immediately, but that approval was delayed in the TPP country due to legal disputes or a slow administrative process, that would undermine the USTR argument that TPP countries need stronger patent protections in order to entice companies to seek approval more swiftly, this source argued.

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