From the Pink Sheet:
Data Exclusivity Remains A Top Issue In USTR's 2011 Special 301 Report
The failure of U.S. trading partners to adequately protect pharmaceutical test data remains one of the top concerns of the United States Trade Representative in its 2011 Special 301 Report on intellectual property rights.
The report encourages several countries to protect against unfair commercial use and unauthorized disclosure of undisclosed test or other data generated to obtain marketing approval of pharmaceutical products. The countries cited include Algeria, Argentina, Chile, India, Indonesia, Pakistan, Brazil, Dominican Republic, Ecuador, Egypt, Malaysia, Mexico, Turkey and Paraguay.
In its annual Special 301 report, the USTR places U.S. trading partners deemed to provide insufficient IP rights protection, enforcement or market access on a Priority Watch List, Watch List or Section 306 monitoring list. Of 77 trading partners reviewed, the USTR put 12 countries on the Priority Watch List, 29 on the Watch List, and one, Paraguay, on the monitoring list. China, India, Israel, Thailand and Venezuela are among those on the Priority Watch List.
The report, released on May 2, includes an extensive discussion of China. It notes that pharmaceutical manufacturers have reported positive results from China's "Program for Special Campaign on Combating IPR Infringement and Manufacture and Sales of Counterfeiting and Shoddy Commodities," which was launched in October 2010.
"According to rights holders in this sector, law enforcement has been reaching out to individual companies, investigating leads early on, and bringing criminal prosecutions against infringers," the report states. "Rights holders detect more diligence and promptness on the part of Chinese authorities in developing criminal counterfeit pharmaceutical cases."
However, the report says the United States is troubled by China's May 2010 prosecution guidelines that tripled the threshold for investigating and prosecuting trade in counterfeit goods.
Christopher Singer, Pharmaceutical Research and Manufacturers of America President, International, said in a statement on the report that China "continues to circumvent data protection obligations and permit widespread distribution of unregistered active pharmaceutical ingredients."
Singer also said India has had significant delays in providing data protection and expressed concern about the scope of patents and coverage of incremental innovation, delays in providing patents and recent court actions to limit or undermine patentablility. He also expressed support for USTR's out-of-cycle review of Thailand, saying the country's "weak protection" of IP rights is especially troubling.
While Japan, Poland and New Zealand did not make either watch list, the USTR singled them out in the report, citing the pharmaceutical industry's concerns about their policies.
U.S. industry has "expressed serious concerns about the policies and operation of New Zealand's Pharmaceutical Management Agency," including the transparency, fairness and predictability of its pricing and reimbursement regime, the report states.
The report says industry also is concerned about health care reform legislation introduced in Poland in 2010 that would alter the country's pricing, reimbursement and clinical trials policies. The report also notes that the pharmaceutical industry is upset that it has not been able to meet with Poland's Ministry of Health to discuss these initiatives.
As for Japan, USTR says it is seeking further improvements in transparency and reform of reimbursement and regulatory systems that "would facilitate the timely introduction of innovative pharmaceuticals and medical devices into Japan's market."
The 2011 report is similar to last year's. In addition to data exclusivity, the USTR also reiterates its concerns about patent laws in India and the Philippines that prohibit patents on certain chemical forms unless they show increased efficacy.
Despite making major concessions to the United States, Israel remains on the Priority Watch List. Last year, it reached an understanding with the U.S. to strengthen laws on protection of pharmaceutical test data and patent term extension and to publish patent applications 18 months after the application is filed. While Israel has submitted legislation for the protection of pharmaceutical test data, the report says it has not submitted legislation regarding patent term extension or patent publication.
Compulsory licensing, once a major issue for USTR, is mentioned only with respect to China and Ecuador. China's draft regulations for patenting technologies used in national standards may allow a compulsory license if a patent holder does not grant a royalty-free license. As for Ecuador, the report says simply that the U.S. "will continue to monitor developments concerning compulsory licensing of pharmaceutical and agricultural chemical products."
Jamie Love, director of Knowledge Ecology International, an organization that closely tracks IP and trade policy, said the report does not convey the arm twisting that goes on behind the scenes.
"The USTR discussion of IPR policy concerns seems muted in the report, compared to the pressure that the U.S. government actually applies both behind the scenes and in different trade fora," Love said in a blog posting. "In practice, the 301 Report represents only a fraction of the issues being raised and the pressures being applied by the White House and various federal agencies."
Industry also is concerned about the inclusions of IP rights in a regional trade agreement currently in development, the Trans-Pacific Partnership (TPP) Agreement. The United States and its TPP partners - Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam - held their sixth round of negotiations in Singapore last month and are to hold the seventh round the week of June 20 in Vietnam. The U.S. expects the agreement to increase American exports to the Asia-Pacific.
PhRMA is advocating for a strong IP chapter. In an April 2011 document, "PhRMA Views: Intellectual Property (IP) Chapter for the Trans-Pacific Partnership (TPP) Agreement," the association said data protection is essential to recoup R&D expenses. It cites the provision in the U.S. health care reform law that provides 12 years of data exclusivity - the time during which a generic or other competitor cannot use clinical data generated by an innovator to obtain marketing approval - for biologics.
PhRMA also says countries should be required to provide patent term adjustments to compensate for the loss of effective patent term from delays in marketing approval and the issuance of a patent. And it says the TPP "must include a mechanism to permit a patent owner to resolve patent infringement issues prior to marketing approval of the infringing pharmaceutical product."
