[Ip-health] TPP: US to table remaining controversial IP provisions by June 20

Peter Maybarduk pmaybarduk at citizen.org
Fri Apr 29 15:15:49 PDT 2011

Inside US Trade - 04/29/2011
USTR Plan To Table Full TPP IPR Proposal Spurs Pharmaceutical Lobbying
Posted: April 28, 2011

The decision by the Office of the U.S. Trade Representative to attempt to table a complete proposal on intellectual property (IP) protections in the Trans-Pacific Partnership (TPP) negotiations by mid-June has triggered an intensified lobbying campaign by brand-name U.S. drug manufacturers that want to ensure the proposal reflects their interests.

With a "deadline" now in view, drug companies are doing all they can to ensure that the United States makes a strong proposal to protect their interests, a private-sector source said. USTR Ron Kirk this week said publicly that he wants to table all outstanding TPP proposals before the next TPP round, scheduled for the week of June 20 in Vietnam.

Overall, pharmaceutical companies want the U.S. proposal to replicate the IP in the Korea-U.S. free trade agreement (KORUS), with some even stronger protections for biologics (see related story). 

They do not want USTR to base its proposal on the so-called May 10, 2007 agreement.

In an April 2011 lobbying document obtained by Inside U.S. Trade, the Pharmaceutical Research and Manufacturers of America (PhRMA) criticizes the May 10 deal. It "openly discriminates against the innovative pharmaceutical industry and would hinder our ability to compete fairly by lowering IP standards in export markets," the document charges.

Likewise, Harrison Cook, Vice President of International Government Affairs at Eli Lilly, said in an April 26 interview with Inside U.S. Trade that replicating the May 10 patent provisions in the forthcoming U.S. TPP proposal "would be a huge miss." Eli Lilly is a member of PhRMA.

Up to this point, PhRMA has largely refrained from explicitly stating that the May 10 agreement -- which altered the original IP provisions in trade deals with Colombia, Panama and Peru, but not KORUS -- should not be the basis for a U.S. TPP proposal, though it has long been clear that it is taking that position.

On pharmaceuticals, the key differences between KORUS and the May 10 agreement relate to the areas of patent linkage, patent term extensions and data exclusivity. The May 10 agreement was meant to help ensure access to affordable medicines in developing countries.

A U.S. proposal on IP issues tabled in the TPP negotiations earlier this year left open several key areas, including the three pharmaceutical issues covered by the May 10 agreement. The United States wants to now move forward with a proposal so as to avoid being responsible for "holding up" the TPP talks on key issues, one source said.

Senior USTR officials have signaled in congressional testimony they are open to moving away from the May 10 provisions, although the substance of the upcoming TPP proposal remains unclear.

Cook hinted that the administration may not have a uniform position on these issues yet. "I think, to a degree, it may depend on who you ask," he said, when asked on the administration's position. 

Likewise, a USTR spokeswoman said this week that USTR officials were still discussing possible approaches, including the May 10 provisions.

Cook conceded that there are some "fairly loud" opponents to strong patent protections in trade deals, but stressed that he is confident the administration will be able to "sort through the static" and table a strong proposal. He said there is "no reason" USTR could not table exactly what is in KORUS in its TPP proposal.

Similarly, Cook said, Democrats in Congress do not have a uniform view on the May 10 agreement.

While some Democrats -- such as Rep. Jim McDermott (D-WA), who is the ranking member on the Ways and Means trade subcommittee -- want to replicate the May 10 deal in the TPP talks, others understand the value of stronger protections, he maintained.

"I see it as a huge continuum," he said. "It varies greatly from office to office." In February, 18 House members -- including eight Democrats -- sent a letter to President Obama urging him to pursue strong IP protections in the TPP, using KORUS as a starting point.

Among the signatories were Reps. Howard Berman (D-CA), Adam Smith (D-WA), Adam Schiff (D-CA), Jay Inslee (D-WA), John Barrow (D-GA), Edolphus Towns (D-NY), Hank Johnson (D-GA), and Rick Larsen (D-WA).

Cook said that many congressional offices are not fixated on replicating the May 10 deal in the TPP context, in part because that 2007 deal has somewhat faded from view. "There are not, frankly, a lot of people . . . that remember it really well," he maintained.

"It is only within a much smaller circle that you have people who were really committed to, and continue to be committed to, the ideas that are in May 10." Leading public health groups are pushing USTR to use May 10 as the basis for its TPP proposal.

Concerning the three issues covered by the May 10 deal, 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.

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, and patent term extensions refers to extensions to compensate for administrative delays in processing patents.

Of the three issues, data exclusivity is probably the most important for pharmaceutical companies, followed by patent linkage, Cook said. The May 10 deal took several technical steps that had the effect of weakening the five years of data exclusivity protections that were originally contained in the trade deals with Colombia, Panama and Peru.

Patent linkage is mandatory under the Korea FTA and optional under the May 10 agreement, although the May 10 agreement does establish the obligation to put in place a system under which a patent holder can effectively guard against patent infringement if patent linkage is not in place.

The PhRMA lobbying document also stresses that mandatory patent term extensions are essential for TPP. "The compensatory adjustments to patent term for patent office delays must be mandatory for all technology areas, including for biopharmaceutical products, without discrimination," it states.

The May 10 deal switched patent term extension from a mandatory to an optional commitment. Under mandatory patent term extension, the duration of a patent in a given country is extended to compensate the patent owner for delays in the marketing approval process (Inside U.S. Trade, March 6, 2009).

According to Cook, replicating the May 10 deal in the TPP would undermine the ability of the United States to secure stronger IP protections throughout the region.

He noted that TPP is meant to be an agreement which other countries in the Asia-Pacific can join. "Whatever we agree to in TPP, that is going to be the game field that we play in for the next foreseeable decade," he said.

In addition, a weak TPP standard on IP would undermine U.S. efforts to secure stronger IP protections in China and throughout the world, he said.

"If we were to go into TPP and come out with a pharmaceutical IP level of protection that was below what is in KORUS, that would send the message to China that essentially they can wait another 140 years to get their pharmaceutical IP provisions up to where the United States is," he argued.

"The point is that we have set the precedent in the region," especially with China, he said. Whether China actually joins the TPP in the future "is not relevant, because [TPP] still sets the precedent for them, and that is what they are going to point back to every single time they sit down in an IP negotiation with the United States government," he said.

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