Date: February 10, 2011
Source: Inside U.S. Trades
U.S. trade officials last week signaled that the U.S. proposal for intellectual
property rights (IPR) provisions within the Trans-Pacific Partnership (TPP)
will not be bound by the standards set by the May 10, 2007 agreement negotiated
between the Bush administration and House Democrats, according to informed sources.
U.S. trade officials in a Feb. 3 meeting with stakeholders indicated that the
May 10 agreement reflects the position of a previous Congress and
administration, and that the TPP will be a high standard agreement
that will deal with IPR in the context of the present circumstances, which may
require different provisions, sources said.
Moreover, sources said the Office of the U.S. Trade Representative appears
interested in putting in place more stringent patent protections than what is
contained in the May 10 agreement. Asked to comment, a USTR official said USTR
is still evaluating proposals and input on IPR issues from stakeholders, and no
decisions have been made.
U.S. officials have told stakeholders that the IPR language it plans to propose
in the TPP talks will reflect IPR provisions in "past Asia-Pacific
agreements" that the U.S. has negotiated. Some sources have taken this to
mean that the U.S. may support industry demands that it table language similar
to the IPR standards in the U.S.-Korea free trade agreement.
The Korea FTA did not incorporate the IPR provisions from the May 10 agreement,
and pharmaceutical groups are urging USTR to use the IPR provisions in the
Korea FTA as a template for the TPP negotiations.
Access to medicines advocates oppose the provisions of the Korea FTA, and are
urging USTR to use the May 10 agreement as a baseline for the TPP negotiations.
U.S. trade officials have also signaled that they will not look to replicate
the data exclusivity provisions in the May 10 agreement in an eventual TPP
agreement. Instead, these officials have said they intend to approach the issue
of data exclusivity in the TPP talks the same way as that issue is handled
under U.S. law, sources said.
Some sources said this would mean that test data for a particular drug would be
restricted for five years. According to access to medicines advocates, this
would delay the manufacture of generic versions of the
drug.
Data exclusivity is granted for a period of time to prohibit generic drug
manufacturers from using clinical test data generated by a brand name drug
company to demonstrate the safety and efficacy of the drug. Generic
manufacturers use the data for the approval of a generic version of a drug.
The May 10 agreement does not make this data exclusivity period optional, but
it does make it easier for the government to issue compulsory licenses that
allow other companies access to the restricted data. For example, a compulsory
license can be issued for public health reasons.
The May 10 agreement also make data exclusivity less restrictive by starting
the five-year period from where the patent was filed first and prevents drug
companies from beginning the five-year period anew in another country.
A Feb. 7 letter from the U.S. Business Coalition for TPP to USTR Ron Kirk asks
for IPR provisions that "do not diminish the protections found in each of
the existing U.S. trade agreements with TPP countries." The
organization also requests provisions that build on the obligations in the
Korea FTA, which one business lobbyist said is one of the "codes" for
moving away from the May 10 deal.
Rep. Jim McDermott (D-WA) pressed Kirk at a Feb. 9 Ways and Means Committee
hearing on the IPR proposal to be tabled in the TPP. He said that he did not
want USTR to "weaken the things that were agreed upon in that May 10th
agreement that made possible the Peru agreement, particularly the access to
medications."
Kirk did not directly respond, but said the May 10 agreement was a "good,
sound, bipartisan agreement among Democrats and Republicans." He seemed to
imply that it needed to be updated when he said some new areas are not
addressed in the May 10 deal, such as indigenous innovation and state-owned
enterprises. He said those are issues USTR was "striving for" in the
context of the TPP.
Speaking with Inside U.S. Trade, McDermott said he did not know that USTR was
moving away from the May 10 deal, but wanted to convey the message to Kirk that
he and other members of Congress were watching. "I
wanted him to think about that," he said.
He said an eventual TPP agreement should incorporate all the provisions of the
May 10 agreement. Moving away from it on the pharmaceutical provisions, would
convey the message that the U.S. is indifferent to
global health issues, he said.
McDermott also signaled that not incorporating the May 10 agreement provisions
could create problems when the administration eventually works to get the TPP
passed through Congress.
The May 10 agreement was initially reached as a way to apply less stringent IPR
standards to the U.S.-Peru FTA by making patent term extensions and patent
linkage both optional, which allows for faster marketing of cheaper, generic
pharmaceuticals. The Korea FTA makes these provisions mandatory.
TPP countries will gather for another negotiating round in Santiago, Chile from
Feb. 14-18, but USTR has said it is not likely to table any new IPR text and
has continued to express that it remains involved with an internal process of
developing a position on the more controversial aspects of an IPR section
(Inside U.S. Trade, Jan. 14).
The negotiations will include an opportunity for stakeholders to present to the
negotiators on issues of concern. Sources said access to medicines groups as
well as those representing high tech companies, such
as Google, are expected to attend the briefing.
Sources said that industry groups are pushing USTR to propose a chapter devoted
to pharmaceuticals, but one industry source said this is not a specific request
and that industry is instead seeking assurances that
any provisions that are relevant to pharmaceuticals be strong throughout the
agreement.
Pharmaceutical chapters can be found in other U.S. trade agreements with Australia
and South Korea. In these agreements, pharmaceutical chapters set standards for
how a country should implement a pricing and
reimbursement program for drugs that are made available to the public through
government programs.
For example, the Korea FTA language requires that the government "appropriately
recognize the value of the patented pharmaceutical product or medical device in
the amount of reimbursement it provides."
The Korea FTA chapter on pharmaceuticals sets transparency requirements for
pricing and reimbursement programs by accepting input from companies and allows
companies to appeal decisions taken by a government on the pricing or listing
of a particular drug. The U.S.-Australia FTA does not have a similar appeals
process.
USTR has not yet taken an official position on whether it would push for a
pharmaceutical chapter similar to those found in pre-existing FTAs, but USTR
officials have said they were involved in consultations on the
issue, sources said.
A Jan. 25, 2010 submission to USTR from the Pharmaceutical Research and Manufacturers
of America (PhRMA) does not demand a specific pharmaceutical chapter in the TPP
but asks for greater transparency on
policy and regulatory procedures, opportunities for input from manufacturers
and the right to appeal decisions made by a regulatory body.
One source noted that TPP negotiators will discuss anti-trust and IPR enforcement
issues, which would regulate the use of IP through competition law mandates.
The relationship of these two issues are not
currently governed by any international rules and are not usually addressed in
trade agreements, this source said.
Some countries do have anti-trust laws that have been interpreted to allow
broader access to IPR, which could be taken into account when discussing this
agenda item.
For example, in South Africa, anti-trust laws were
used to open the market to cheaper AIDS medications.
These medications were made more widely available after the government found
that drug companies were excessively pricing their products, refusing to give
competitors access to essential facilities for research
when it is economically feasible to do so and not dealing with competitors when
the harm in not doing so outweighs the benefit to the company.
