Menem's First Administration

During the first Administration of Argentine President Carlos Saul Menem, the US applied pressure to officials in the Argentine government to pass a patent law for pharmaceuticals. At the time, Argentina was plagued by enormous sums of foreign debt accrued during the 1980s and severe bouts of hyperinflation. Because the process and composition of pharmaceuticals have historically been considered a public good in Argentina, they were not eligible for patents. This lack of patent protection facilitated the success of a large Argentine non-research-based pharmaceutical industry that copied and produced foreign drugs to the dismay of the research-based multinational drug industry, which insisted upon compensation for its research and development of new drugs.

July 8th, 1989

• Argentine President Carlos Saul Menem is inaugurated early after the resignation of President Alfonsin. A member of the Peronist party, Menem was elected based on a campaign platform emphasizing improved conditions for the poor and working class. Once in office, however, he pursued liberalization, privatization, and stabilization policies that sometimes bore significant costs to the Argentine lower classes.

August 10th, 1989

• Argentine Secretary of Industry and Foreign Trade Oscar Saggese sends US Ambassador Terence Todman a note from Argentine Under Secretary of Health Matilde Menendez announcing that her secretariat is designing a non-discriminatory and transparent system for the registration of new pharmaceuticals in Argentina. The note says that Dr. Manuel Limeres, Menendez's Undersecretary of Regulations and Control, will survey pharmaceutical industry members in order to incorporate their concerns in the drafting of the new registration process.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

September 1989

• According to a later US Embassy communication, the Argentine government commits to enacting a patent law for pharmaceuticals within two years.

  See American Embassy, Buenos Aires, Cable 3101 to the US Secretary of State, March 1990.

• Dr. Manuel Limeres, Undersecretary of Regulations and Control at the Department of Health and Social Welfare obtains the signatures of the three key pharmaceutical associations in Argentina (CAEME, CILFA, and COOPERLA) on a letter to Argentine Minister of Health and Social Action Antonio Erman Gonzalez calling for a change in the registration process. CAEME represents the foreign labs operating in Argentina; larger domestic firms are incorporated into CILFA while smaller domestic firms are represented by COOPERLA.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

December 11th, 1989

• Dr. Limeres meets with an economic officer of the US Embassy in Buenos Aires. Limeres tells the officer that his drafted letter is on Minister Gonzalez's desk, awaiting his signature.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

December 18th, 1989

• Former Minister of Health and Social Welfare Antonio Erman Gonzalez becomes Minister of Economy; he is replaced by Eduardo Bauza.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

December 1989

• Jorge Pereyra de Olazabal takes over as Secretary of Industry and Foreign Trade in Argentina. He plans to begin what the US Embassy calls "an extended battle" to open the Argentinean economy to trade.

  See American Embassy, Buenos Aires, "New Secretary of Industry and Foreign Trade: Towards a More Open Economy," Cable 0584 to the US Secretary of State, DC, January 1990.

• The rapid appreciation of the US dollar and the slow response of the Argentine executive branch in reevaluating pharmaceutical price controls lead pharmaceutical labs to cut production. Many pharmacies run out of antibiotics and other medicines.

  See American Embassy, Buenos Aires, "Pharmaceutical Industry Adjustment and Implications for Patent Issue," Cable 0092 to the US Secretary of State, January 1990.

• Secretary of Health Matilde Menendez meets with pharmaceutical industry representatives including the Chamber of Argentine Specialty Medicines (CAEME), which represents multi-nationals. The group agrees to a 55% price increase for prescription drugs for drugs produced locally, which account for 70% of the market.

  According to a source from the multinational pharmaceutical industry who met with the Embassy's economic counselor, the agreement involved a 25% increase in the price of prescription drugs and a 24% savings on suppliers' credits for pharmaceutical companies. Earlier, the Argentine government had mandated that pharmaceutical companies give pharmacies interest-free credits for up to 18 days; the new agreement allows firms to charge market interest rates for these loans. The Argentine government also agrees to a 125% increase in the pharmodollar, the exchange rate for pharmaceuticals, which will be maintained until January 21st, 1990. The same industry source expressed satisfaction with the agreement, but predicted that all drug prices would reach the price ceiling, "despite the low cost of production for the large majority of these products" because of uncertainty created by the price control system.

  See American Embassy, Buenos Aires, "Pharmaceutical Industry Adjustment and Implications for Patent Issue," Cable 0092 to the US Secretary of State, January 1990.

Early January, 1990

• Radio reports claim that Argentina is experiencing a shortage of insulin.

• With pharmacies and labs still closed, Secretary of Domestic Trade Pablo Challu threatens to apply the anti-hording law, which enables him to take over any business that refuses to serve the market.

  See American Embassy, Buenos Aires, "Pharmaceutical Industry Adjustment and Implications for Patent Issue," Cable 0092 to the US Secretary of State, January 1990.

• US Ambassador Terence Todman sends a cable describing Argentina's pharmaceutical supply problems to Secretary of State James Baker.

  On the structural adjustment side, pharmaceutical price and exchange rate controls in the midst of a rapid rise in the dollar (A650 to A1550) and surging inflation caused local producers in mid-December to cut off the supply of drugs to the local market. This action got the GOA's attention and led to the approval of sizzable (sic) price increases for prescription drugs. The GOA also took the opportunity to eliminate a market distorting forced loan requirement. However, by early January price disorientation caused pharmacies to again close. This time the root of the problem shifted to the retail level, and the government threatened to apply the anti-hording law. The closure of the pharmacies and access to drug has become a significant social issue, drawing considerable media attention. The willingness of national labs to cut off the supply of drugs to the local market in mid-December flies in the face of their argument that the absence of patent protection allows them to ensure Argentine consumers a constant supply of medicine.

  See American Embassy, Buenos Aires, "Pharmaceutical Industry Adjustment and Implications for Patent Issue," Cable 0092 to the US Secretary of State, January 1990.

January 10th, 1990

• The first resolution published by the new Ministry of Economy announces that Argentina will reduce ad valorem tariffs.

  See American Embassy, Buenos Aires, "New Secretary of Industry and Foreign Trade: Towards a More Open Economy," Cable 0584 to the US Secretary of State, January 1990.

January 12th, 1990

• In an introductory meeting with new Argentine Secretary of Industry and Foreign Trade Jose Pereyra de Olazabal, the US Embassy's economic counselor brings up bilateral trade issues in pharmaceuticals. Pereyra de Olazabal agrees that a delegation from the Pharmaceutical Manufacturers Association (PMA), an organization of American research-based pharmaceutical companies, should visit Argentina. He says he will meet with the group if they come.

  See American Embassy, Buenos Aires, "New Secretary of Industry and Foreign Trade: Towards a More Open Economy," Cable 0584 to the US Secretary of State, January 1990.

Mid-February, 1990

• Dr. Manuel Limeres meets February 14th with a US Embassy economic officer. Even though Limeres's letter calling for new registration procedures was ready for signature in December, he says, the draft has not been signed by new Argentine Secretary of Health and Welfare Eduardo Bauza. He asks the US Embassy to work with the association of foreign labs (CAEME) in pushing for a signature.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

• Around the same date, the US Embassy discusses prospects for registration reform with industry executives, one of whom blames corruption, not discrimination toward foreign products, for continuing registration delays. Embassy official Thomas Austin Forbord reports in a cable to the US Secretary of State:

  The local head of a major US pharmaceutical said that foreign labs had noticed some improvement, but that foreign labs had registration applications that still had not moved. He claimed that this was not due to discrimination, but only to the need to payoff Secretary Menendez to have products registered. Other than Menendez, he had no idea how high or deep such payoffs went.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

• The economic counselor at the US Embassy in Buenos Aires calls Trade Negotiations Undersecretary Raul Ochoa at the Department of Trade and Industry February 15th to discuss the "lack of progress in eliminating the premonograph requirement." Ochoa promises to pursue the issue.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration Reform," Cable 1614 to the US Secretary of State, February 1990.

March 23rd, 1990

• US Ambassador to Argentina Terence Todman meets with Argentine Foreign Minister Domingo Cavallo to discuss bilateral issues, including pharmaceutical trade issues. Cavallo reaffirms Argentina's September 1989 commitment to enact a patent law on pharmaceuticals within two years. Minister Cavallo says that his discussions with foreign and local labs led him to conclude that a patent system would not result in a significant price change for pharmaceuticals in Argentina. With regard to the registration process, Minister Cavallo promises to raise the issue of increasing transparency at a May 24th cabinet meeting.

  See American Embassy, Buenos Aires, "Ambassador, Cavallo Review Bilateral Issues," Cable 3101 to the US Secretary of State, March 1990.

May 11th, 1990

• Representatives from the economic section of the US Embassy in Buenos Aires meet with COOPERLA, an association of small local pharmaceutical firms. The organization's president, Juan Dominguez, says he expects that, despite the strength of CILFA's lobbying against patents, he is convinced that patents will come, and has decided to reluctantly embrace opportunities to consult with the US: according to a cable from US Ambassador Terence Todman to US Secretary of State James Baker, Dominguez "said the best strategy now was 'if you can't beat 'em join 'em." Dominguez then asked about the specifics of US requirements for a new patent system and pressed Embassy officials about opportunities for Argentine labs to work with small US firms. The text of Ambassador Todman's May 1990 cable reads:

  Dominguez emphasized that his labs were interested in making contact with labs of similar size in the states. He thought such American labs were dynamic and doing research that some of his membership might be able to hook into. His membership did not have the capital to do primary research, but some were capable of doing investigations into additional uses for already discovered molecules. He also pointed out that the laws regulating research and testing in Argentina were much more flexible than in the US, providing US firms with the possibility to complete tests more quickly than might be done in the states. He also pointed out that the Argentine labs have capable scientists willing to work at much lower costs.

  Ambassador Todman concludes from his meeting with Dominguez that incentives for small Argentine labs to support patent legislation may provide a route for US influence on Government considerations. He comments in his cable to Secretary Baker:

  We are encouraged that the GOA may be gearing up to move on a patent law. While the general direction is favorable, we take Dominguez's warning seriously that CILFA still has not given up its opposition. This leaves us concerned about the contents of such a law. We still need to build allies among the national labs, and COOPERALA provides such an opportunity. At this point the PMA should be encouraged to look for some potential carrots so that we can use them to show the GOA and the local labs there can be tangible, near-term benefits from the adoption of product patent protection. It would be most useful if the PMA could provide use with contacts among its smaller members who would be interested in hearing out COOPERALA about what such labs could offer the Americans in cooperative arrangements once a strong product patent protection law is in place in Argentina. It would also be useful to include such members in the PMA delegation to visit Argentina.

  See American Embassy, Buenos Aires, "National Labs Prepare for Patent Law Change," Cable 4964 to the US Secretary of State, May 1990.

May 12th, 1990

• La Nacion, a Buenos Aires daily newspaper, reports that Undersecretary of Industry and Commerce Jorge Pereyra de Olazabal is determined to find a resolution to the continuing debate on pharmaceutical patents before the visit of US President George Bush in September.

  See American Embassy, Buenos Aires, "National Labs Prepare for Patent Law Change," Cable 4964 to the US Secretary of State, May 1990.

June 8th, 1990

• US Trade Representative Carla Hills visits Buenos Aires. Her proposed schedule, drafted by the American Embassy in Buenos Aires, includes a meeting with Minister of Economy Erman Gonzalez, Undersecretary of Industry Jorge Pereyra de Olazabal and Undersecretary of Agriculture Felipe Sola on trade disputes and a meeting with the Minister of Health and Social Action, Eduardo Bauza, on a pharmaceutical patent law. She is scheduled to have lunch with several Argentine Congressmen; as Ambassador Todman notes, "we will need their support in approving a new product patent law as well as any agreement in the GATT round."

  See US Embassy, Buenos Aires, "Proposed Schedule for the Visit of Ambassador Hills to Buenos Aires," Cable 5012 to the US Secretary of State, May 1990.

  Minister of Health and Social Action Eduardo Bauza will later (August 9th, 1990) tell the Clarin, a Buenos Aires daily newspaper, that during her visit, Ambassador Hill threatened Argentine government officials with a tariff on all Argentine exports to the United States if no changes to Argentine patent policy have been made by September 1991. The same issue of the Clarin quotes Ambassador Hill as saying during her visit that without patent protection for pharmaceuticals, Argentina will not have access to foreign investment and no anti-protectionist agricultural agreement will be incorporated in the Uruguay Round.

  See US Embassy, Buenos Aires, "Pharmaceutical Patents: Press Reports GOA Willing to Comply with US Request," Cable 8145 to the US Secretary of State, August 1990.

June 19th, 1990

• Eduardo Bauza, Argentine Minister of Health and Social Action, and his Undersecretary of Health Matilde Menendez meet with Ambassador Todman and representatives from the economic office of the US Embassy in Buenos Aires.

  Secretary Bauza tells Ambassador Todman that the Argentine cabinet has created an interagency committee on patents. In a June 1990 cable to US Secretary of State James Baker, Ambassador Todman asks for the input of Washington agencies and the Pharmaceutical Manufacturers of America in advance of a July meeting with the committee.

  The cable also reports that Menendez told economic section officials in a side conversation that registrations, which she claimed had been on hold while the ministry considered reforms, would be recommenced at the end of the month. However, a comment from Ambassador Todman in the cable suggests another reason for the halting of registrations:

  The registration process had been halted by Bauza after the Ambassador raised the issue of corruption in the registration process with both Foreign Minister Domingo Cavallo and Bauza in separate meetings.

  See American Embassy, "Pharmaceutical Discussion with Minister of Health," Cable 6246 to the US Secretary of State, June 1990.

  Note: The Embassy's concerns about possible corruption stem from a mid-February discussion with an industry executive who reported that increasing the speed of the registration process required paying a bribe to Secretary Menendez.

  See American Embassy, Buenos Aires, "Progress Stalls on Pharmaceutical Registration," Cable 1614 to the US Secretary of State, February 1990.

  During the June 19th meeting, Menendez also promises Embassy officials that the Ministry will "issue the new lists requested by the Embassy and local members of the PMA."

  Ambassador Todman's comments on the meeting in his cable to Secretary Baker demonstrate optimism in his ability to persuade Bauza of the need for patent recognition and call for industry leadership in the continued drive to "convert" Bauza and other lobbying efforts:

  While the meeting seemed to start with the Minister looking for ways to modify the GOA's promise on patent, by the end he was discussing ways to sell the issue to patent opponents. Nevertheless, the conversion of Minister Bauza is far from complete. We will be looking forward to a persuasive and concise reply form the PMA on prices and other benefits for Argentina to keep the ball rolling with the Minister as well as for use on Congressmen, the press, and in the GOA interagency committee.

  See American Embassy, "Pharmaceutical Discussion with Minister of Health," Cable 6246 to the US Secretary of State, June 1990.

June 20th, 1990

• La Nacion a Buenos Aires daily newspaper, reports a statement by Buenos Aires Minister of Health Gines Gonzalez Garcia that "the government needs to be very careful with the pharmaceutical patent issue" and that "the domestic industry is the best there is outside a developed country."

  See American Embassy, "Pharmaceutical Discussion with Minister of Health," Cable 6246 to the US Secretary of State, June 1990.

August 3rd, 1990

• Ambassador Todman meets with Michael May, Assistant Vice President of the International Division of the Pharmaceutical Manufacturers of America (PMA), Carlos R. Novo, President and General manager of John Wyeth Labs, Alejandro Daireaux, General Manager of Abbott Labs, and Jose Carlos Bilares, President and General Manager of Cyanamid de Argentina. The Ambassador bemoans the recent victories of CILFA in the Argentine media and accuses the PMA of overlooking the Argentine market. The Ambassador requests that the PMA send a representative to speak at a seminar on intellectual property September 25th held by the Buenos Aires College of Lawyers. The US industry representatives acknowledge that they have neglected the Argentine patent issue; however, they state their intention to undertake an active public campaign on patent protection which will begin in 30-60 days. The group plans to collaborate with CAEME, which represents the local branches of foreign firms, and CEDIQUIFA, another pro-patent group, in leading the campaign.

  Ambassador Todman complains in an August, 1990 cable to US Secretary of State James Baker that foreign labs continue to delay their public response to anti-patent arguments by CILFA, the association of large local labs, in the Argentine press:

  We remain concerned that that the foreign labs continue to delay the presentation of their case for patents to the Argentine public. The foreign labs had been talking for the last two months about running ads against the anti-patent press campaign but the further delay of 30-60 days has left the public and Congress with little but the CILFA propaganda to consider. We need more than moral support and promises from the PMA if we are to ensure a satisfactory resolution to the patent issue in Argentina.

  See US Embassy, Buenos Aires, "Pharmaceutical Issue," Cable 8143 to the US Secretary of State, August 1990.

August, 1990

• The August 9th edition of the Clarin, a prominent Argentine newspaper, publishes an August 8th public statement by Undersecretary of Industry and Trade Jorge Pereyra de Olazabal says that the Argentine government will comply with US requests to recognize patents for pharmaceutical products in exchange for the reduction of US obstacles to Argentine exports. Pereyra de Olazabal says he has asked CILFA, the association of large local labs, and CAEME, the association of foreign labs, to submit proposals for resolving the patent issue.

  The Clarin report includes a statement by Minister of Health Eduardo Bauza that in July, US Trade Representative Carla Hill had threatened that a lack of progress in pharmaceutical patents by September 1991 would result in a import tariff surcharge on all Argentine exports to the United States. The article quotes Ambassador Hill as saying that without patents, Argentina would face a decreased supply of foreign investment and a removal of the discussion of anti-protectionist agricultural agreement in the GATT from the realm of possibility.

  See US Embassy, Buenos Aires, "Pharmaceutical Patents: Press Reports GOA Willing to Comply with US Request," Cable 8145 to the US Secretary of State, August 1990.

• Following Peyeyra de Olazabal's statements, Raul Zavalla Carbo of CILFA, the association of large Argentine labs, speaks with President Menem. Carbo later says President promised him that any patent legislation would reflect a consensus of local and foreign industry, not just US demands.

  See American Embassy, Buenos Aires, "Press Reactions to Announcement of Intended Pharmaceutical Patent Recognition," Cable 8686 to the US Secretary of State, August 1990.

• Foreign Minister Domingo Cavallo confirms that the executive branch plans to recognize patents for pharmaceuticals within the next year.

  See American Embassy, Buenos Aires, "Press Reactions to Announcement of Intended Pharmaceutical Patent Recognition," Cable 8686 to the US Secretary of State, August 1990.

• Coverage of the issue in the Argentine press focuses on the negative reaction of local industry to Peyeyra de Olazabal's announcement. Ambassador Todman urges the PMA to "lead an active publicity campaign, at least to counter the CILFA propaganda."

  See American Embassy, Buenos Aires, "Press Reactions to Announcement of Intended Pharmaceutical Patent Recognition," Cable 8686 to the US Secretary of State, August 1990.

September 7th, 1990

• The economic counselor and an economic officer at the US Embassy in Buenos Aires and his staff members meet with new Undersecretary of Health Dr. Daniel Perlusky, who confirms his commitment to the passage of a new patent law for pharmaceuticals, saying that countries lacking intellectual property protection are backward.

  Perlusky tells the Embassy officials that he attended a recent meeting between CILFA and President Menem, who refused to reverse his decision to introduce a patent law despite CILFA's assertion that such a law would bankrupt its members. Dr. Perlusky conveyed to US officials his skepticism toward CILFA's claims of financial endangerment.

  The Embassy economic counselor asks Perlusky about a recent statement by Minister Cavallo that the Argentine government is considering asking for an Inter-American Development Bank (IDB) loan to assist local labs in adapting to a patent system. Perlusky says that the government is considering making such a request, but that no specifics have been discussed with the IDB.

  See American Embassy, Buenos Aires, "First Impressions of the New Under Secretary for Health: Pharmaceutical Patents," Cable 9427 to the US Secretary of State, September 1990.

September 10th, 1990

• Dr. Perlusky meets with the executive director of CAEME, an association representing the local branches of multinational pharmaceutical labs, who later reports to Embassy officials that Perlusky promised to eliminate price controls and normalize the drug registration process.

  See American Embassy, Buenos Aires, "First Impressions of the New Under Secretary for Health: Pharmaceutical Patents," Cable 9427 to the US Secretary of State, September 1990.

November 6th, 1990

• At the request of Ambassador Todman, Argentine President Carlos Menem meets with a delegation of the Pharmaceutical Manufacturers Association (PMA). The visitors include Daniel Pritchard of Cyanamid, Hector Lopez Pardo of Merck, Sharpe and Dohme, and Reinhold Buxhoeden, President of CAEME. Ambassador Todman, US Embassy Economic Officer John Riddle, Argentine Minister of Economy Erman Gonzalez, Minister of Foreign Affairs Domingo Cavallo and Minister of Health Alberto Kohan join the group.

  Ambassador Todman reports in a November, 1990 cable to US Secretary of State Jim Baker:

  Pritchard opened the substantive portion of the meeting by explaining the benefits that a sound patent law would bring Argentina: new investment and the gainful employment in significant research of Argentina's scientific talent. Anticipating questions on pricing, Pritchard pointed to the Italian case where pharmaceutical prices rose slower than prices overall following the enactment of a sound pharmaceutical law.

  Speaking for the CAEME labs, Buxhoeden said that his members were ready to work to improve Argentina's pharmaceutical industry. Among other efforts, his members would be willing collaborators in developing a program as in the past to provide medicine to the poor, who are outside the social security system. In addition the foreign labs are disposed to expand their research activities in Argentina. Lopez Pardo praised the new direction for Argentina, mentioning that a sound patent law would encourage foreign labs to expand their cooperation in research and licensing with local labs. (Comment: Several of the foreign labs report that they are already negotiating licensing agreements with CILFA members, who want to be better positioned for pharmaceutical patents. End comment.)

  Menem pointed out that Argentina was working on a solution to the patent issue in compliance with the GOA's commitment to present patent legislation to the Congress by September 1991. This effort is in accord with this government's larger goal of eliminating all non-transparent processes. The presence of his three ministers, he pointed out, demonstrated his administration's serious commitment to the issue. He welcomed CAEME's willingness to participate in a program to help the poor obtain needed pharmaceuticals.

  The foreign minister said that the GOA (sic) has moving forward on the issue in the context of the GATT round ______________________________________________________________________ _________________________________________________. He encouraged the PMA members and CAEME to deepen their dialogue with key CILFA members to head off such tactics. Minister Gonzalez added that during his short period as Minister of Health, he successfully brought the domestic and foreign labs together to agree on a change in the registration processes. He hoped the same could occur now for the patent (issue) to keep this form developing into and ideological (division) in the Congress.

• After the meeting, participants discuss the pharmaceutical issue in the Argentine media. Minister Kohan describes the meeting as "good" to a local radio station and as Ambassador Todman reports in his cable to the Secretary of State, "recognized the importance of the patent issue to Argentine companies but said that in the long run, Argentina has to bring itself into the world economy." Minister Gonzalez and the PMA delegates appear on a popular Argentine TV show. Gonzalez also demonstrates support for patents: Todman paraphrases him as saying that "if there is no patent law this is robbery."

• In his cable to the Secretary of State, Ambassador Todman reflects with optimism that "there is little more to obtain from Menem in the way of political commitments on a new patent law."

• Ambassador Todman's cable also requests information from the US Mission in Geneva about the activities of Pablo Challu, who is in Geneva for the GATT trade round.

  See American Embassy, Buenos Aires, "Menem Receives PMA Vice Presidents," Cable 11509 to the US Secretary of State, November 1990.

November 30th, 1990

• Reinhold B. Buxhoeveden and Alberto Irigoyen of Camara Argentina de Especialidades Medicinales (CAEME) write to Michael May, Assistant Vice President of the International Division of the Pharmaceutical Manufacturers of America (PMA), asking for the PMA position on Argentine patent law and advice on possible meetings between CAEME and CILFA.

  See May, Michael A., Letter to Reinhold Buxhoeveden and Alberto Irigoyen, Buenos Aires, 11 December 1990.

December 11th, 1990

• Michael A. May, Assistant Vice President of the International Division of the Pharmaceutical Manufacturers of America, responds to CAEME's letter of November 30th. He states that PMA's Latin America Regional Committee discussed the letter and recommended that CAEME refrain from meeting with CILFA in accordance with a PMA policy of "refusing to meet with any national association that refuses to recognize pharmaceutical patents and especially one that is engaged in a massive public disinformation campaign." May enumerates PMA's "principal criteria for an adequate world class patent law," which include:
  • Both product and process patent protection for pharmaceutical products
  • Patent terms of 20 years from the firm's filing or 17 years from the grant of a patent
  • No provisions for compulsory licensing
  • Patent protection for products already patented elsewhere but not yet marketed in Argentina
  • No delay in the implementation of the law
  • No provisions for parallel importation
  • Strict enforcement of patents

  See May, Michael A., Letter to Reinhold Buxhoeveden and Alberto Irigoyen, Buenos Aires, 11 December 1990.

December 14th, 1990

• A daily Argentine financial newspaper, Cronista Comercial, prints an article entitled "Analyzing the Italian Case." Ambassador Todman writes in a subsequent cable to the US Secretary of State Jim Baker that this is the first article on the patent issue in the local media that has not presented an anti-patent view to counter pro-patent arguments.

  See American Embassy, Buenos Aires, "Italian Pharmaceutical Patent Case Understudy in GOA," Cable 12881 to the US Secretary of State, December 1990.

January 11th, 1991

• In an interview published today in the Buenos Aires Herald, Pablo Challu of CILFA argues that strong patent legislation is against the national interest of Argentina. Challu advocates a limited patent system with strong provisions for compulsory licensing. He states that because of the continuing instability of the Argentine economy, foreign firms will increase imports to Argentina instead of producing locally. Speaking of his experience at the recent Geneva trade talks, Challu claims that during the round, "no US or European negotiator ever said 'approve patents because that will benefit Argentina.'" He says, "The US offered the third world textile concessions but demanded concessions ion the pharmaceutical issue in return."

  See American Embassy, Buenos Aires, "CILFA's Latest Against Patents," Cable 0388 to the US Secretary of State, Washington DC, January 1991.

February 1991

• US Secretary of State James Baker sends a cable to US Ambassador to Argentina Terence Todman regarding the anti-patent arguments of CILFA executive director Pablo Challu. Secretary Baker cautions that the Embassy "should be careful not to create or allow Challu to create the impression of a media debate between the USG and the Argentine pharmaceutical industry. Based on past experience, Washington agencies believe improved patent laws can only be accomplished through government to government negotiation." Secretary Baker comments at the end of the document: "Challu's arguments typify LDC pharmaceutical industry rhetoric against patent protection. Public rebuttal of these arguments risks emphasizing the domestic v. foreign conflict in public opinion and obscuring the need for improved IPR protection." If a public comment is necessary, Secretary Baker directs, Ambassador Todman should emphasize the role of non-governmental organizations (such as the PMA) in the patent issue.

  See US Secretary of State, "Responding to CILFA on Pharmaceutical Patents," Cable 40526 to the US Embassy in Buenos Aires, February 1991.

February 20th, 1991

• Ambassador Todman pays his first official visit to Argentine Foreign Minister Guido Di Tella, who is joined by Ministry of Foreign Affairs Chief of Cabinet Cisneiros and North America Affairs Director Gustavo Figueroa. Di Tella says he plans to meet with the Ministers of Economy and Health this week to discuss the formation of a team of MFA, Economic Ministry, and Health Ministry officials to draft legislation to be submitted to Congress in September. He asks Ambassador Todman for US assistance in obtaining political consensus for a patent law by granting GSP benefits to Argentine products.

Early March, 1991

• Representatives from the US Embassy in Buenos Aires meet with Jorge Di Igorio, the new Argentine Undersecretary of Health. When asked about pharmaceutical patents, Di Igorio confirmed that, as a physician, he was familiar with the quality-control problems posed by pirated drugs. Ambassador Todman comments in a March 1991 cable to the US Secretary of State that the new Undersecretary of Health's "concern for the quality of healthcare along with his understanding of the problems that pirated drugs present for doctors bodes well for his support on patents in the future."

  See American Embassy, Buenos Aires, "Further Contacts on Pharmaceuticals," Cable 01958 to the US Secretary of State, March 1991.

• CAEME lobbyist Rafael Alonso tells Embassy officials he fears that unless the administration introduces its pharmaceutical patents bill early on, it risks losing "any political momentum and special attention generated by the bill's introduction" as Congress prepares for the September 8th elections. Alonso claims that Congress "can be expected to work seriously on legislation only from early March to late June."

  See American Embassy, Buenos Aires, "Further Contacts on Pharmaceuticals," Cable 01958 to the US Secretary of State, March 1991.

March 4th, 1991

• Ambassador Todman and a US Embassy economic counselor visit Argentine Minister of Health and Social Action Porto. Ambassador Todman reports in a March 1999 cable to US Secretary of State James Baker that "Porto said that the question of patent protection for pharmaceutical products had once been a troublesome ideological issue. This was no longer the case -- the ideological battle for patents had been won. But powerful domestic economic interests would continue to resist pharmaceutical product patents and try to defend these interests by using ideological arguments." Todman comments, "Porto appears to want to take an activist approach to his new responsibilities. On the key issue of patent protection for pharmaceutical products he was well-briefed but seemed more of a political realist rather than an advocate for the US position."

  American Embassy, Buenos Aires, "Ambassador's Call on Health and Social Action Minister Porto," Cable 2113 to the US Secretary of State, March 1991.

Mid-March, 1991

• Immediately after his meeting with Argentine Minister of Economy Domingo Cavallo, new Argentine Ambassador Carlos Ortiz de Rozas is quoted in la Nacion, a widely-read Buenos Aires daily newspaper, as saying that the Argentine executive branch plans to send a draft bill to Congress before the end the Congressional ordinary session this year.

  See American Embassy, Buenos Aires, "Pharmaceutical Patents: Comments by the New GOA Ambassador to the US," Cable 02636 to the US Secretary of State, March 1991.

• As the office of US Trade Representative Carla Hills prepares for the Special 301 review, Ambassador Todman sends a cable to US Secretary of State James Baker emphasizing the importance of the pharmaceutical patent issue, which he describes as "clearly our number one bilateral trade priority." Although he cites the Argentine government's willingness to enact patent legislation, Ambassador Todman warns that a public campaign by domestic interest groups may diminish public support for the proposed law:

  Powerful domestic interests oppose GOA acceptance of this property right. While there is diminished ideological support for the pirates' position, the issue could be exploited in a demagogic anti-American manner. The downside for the US would be not only less than acceptable IPR protection but an important setback to the overall relationship.

  Although he recognizes Ambassador Hills has authority over the Special 301 list, Ambassador Todman asks that "the Embassy (and the Department) be notified, in advance, when possible by cable, of any high level approaches and be given an opportunity to provide our view on what tactics will work best."

  See American Embassy, Buenos Aires, "Pharmaceutical Patents in Argentina," Cable 02732 to the US Secretary of State, March 1991.

March 25th, 1991

• US Senator Bill Bradley and Congressman Jim Leach meet with Argentine Foreign Minister Guido Di Tella. Senator Bradley emphasizes the centrality of the pharmaceutical patent issue to the American Congress's concerns, calling it "a critical issue" that "tends to overshadow or detract from other elements of the 'big picture' in bilateral relations." Minister Di Tella affirmed his support for intellectual property protection, but repeated his earlier demand for trade benefits in exchange for the law's passage, asking for "a few million dollars" in GSP benefits.

  See US Embassy, Buenos Aires, "CODEL Bradley Meeting with Argentine Foreign Minister Di Tella," Cable 03077 to the US Secretary of State, April 1991.

March 26th, 1991

• US Senator Bill Bradley and Congressman Jim Leach meet with Argentine Senator Eduardo Menem, brother of Argentine President Carlos Menem, to discuss the prospects for a pharmaceutical patent law. Senator Menem predicts that the passage such a bill will be difficult because of local producers' media campaign. Another variable that may affect the bill's success is the possibility that the Peronists may lose seats in the September elections before the legislation is considered.

  Ambassador Todman reports in an April 1991 cable to US Secretary of State Jim Baker:

  In response to Senator Bradley's question on the possibilities of favorable legislative action to pass an intellectual property right bill, Menem stated this would not be easy. He described efforts by local pharmaceutical companies to finance a media campaign against patent protection for drugs. This campaign stresses the possibility of unemployment in the local laboratories and the high prices which will result from patent protection. _____ stated the executive branch will use all of its forces to get the law passed. He fully supports these efforts and expects no problem _____________. The Chamber of Deputies, however, is another problem. _____ said he and other GOA officials hope to complete action on this legislation before Congress changes in December, since the Peronists could lose seats in the Chamber of Deputies in the September elections.

  Senator Bradley then outlined the US Congress's concern that "research and development costs need to be recovered in order to promote new research."

  See US Embassy, Buenos Aires, "CODEL Bradley Meeting with Senator Eduardo Menem," Cable 03109 to the US Secretary of State, April 1991.

• An economic officer from the US Embassy in Buenos Aires meets with Agustina Fernandez, chief advisor to Undersecretary of Industry and Commerce Juan Schiaretti. Fernandez is uninformed about the issue and, according to Ambassador Todman's cable to US Secretary of State James Baker, "admitted to having done very little on this issue since taking up her position with the Cavallo economic team in February." The US Embassy officer "informed Fernandez that her minister had agreed with Hills to consultations in late May," "presented her with a Spanish translation of the USG's criteria for a sound patent law, and explained that this likely would be the criteria used by the US delegation as our basis for discussion when bilateral consultations on the Menem administration's draft bill take place."

  See American Embassy, Buenos Aires, "State of Play on Patents," Cable 02947 to the US Secretary of State, April 1991.

March 27th, 1991

• Ambassador Todman meets with Argentine Foreign Minister Guido Di Tella, who says that he has assured US Trade Representative Carla Hill of his commitment to obtaining the passage of a patent law, but that US willingness to extend GSP benefits to Argentine products would be necessary for the law to pass in the Chamber of Deputies.

  See American Embassy, Buenos Aires, "Foreign Minister Seeks Special GSP Treatment in Exchange for Patent Law," Cable 2920 to the US Secretary of State, March 1991.

• Ambassador Todman meets with CAEME members to discuss progress on pharmaceutical patents. CAEME is represented by Reinhold Buxhoeveden, president of CAEME and head of Bayer Argentina, Roberto Lavalle, president of Janssen, Alberto Irigoyen, director of CIBA-GEIGY, Cesar Siedlarek, general manager of Essez Argentina, and Rafael Alonso, CAEME coordinator for patents. The group plans to lobby the Argentine Congress and defend patents in the local media.

  In an April cable to US Secretary of State James Baker, Ambassador Todman reports:

  The group said they had prepared a lobbying plan, and were educating themselves on the issue to become more effective lobbyists. They are carrying out a public information campaign, and preparing additional material to counter a CILFA (patent pirate organization) media blitz, that they anticipate will take place once a bill is introduced in the Congress. The pro-patent think tank CEDIQUIFA is putting together a seminar on the issue for early June. The Ambassador encouraged them to push ahead with their publicity effort.

  See American Embassy, Buenos Aires, "State of Play on Patents," Cable 02947 to the US Secretary of State, April 1991.

April 1991

• In advance of the announcement of the results of the annual Special 301 review by United States Trade Representative Carla Hill, Acting Secretary of State Lawrence Eagleburger requests that Ambassador Todman inform Argentine government officials that Argentina will be listed on the priority watch list, continuing the status quo.

  See US Secretary of State, "Argentina: Special 301 Announcement," Cable to the US Embassy in Buenos Aires, April 1991.

May 3rd, 1991

• US Embassy officials meet with Dr. Marcelo Vernengo at the Argentine Ministry of Health. Dr. Vernengo is a former quality control expert for the Pan American Health Organization. He reports that the current Undersecretary for Health, Jorge Di Igorio, has "had a falling out with Minister Porto and would be replaced shortly by Dr. Elsa Moreno." US officials say that "Vernengo seems to be the most serious and best informed to move the issue forward."

  See American Embassy, Buenos Aires, "Update on Pharmaceuticals," Cable 04306 to the US Secretary of State, May 1991.

Mid-May, 1991

• Assistant Secretary of State for Inter-American Affairs Bernard Aronson sends Deputy US Secretary of State Lawrence Eagleburger a drafted briefing memorandum for an upcoming meeting with Argentine Foreign Minister Guido Di Tella. Among the listed "key points to make" is the following statement: "Intellectual property rights are a top priority for the US. We appreciate your efforts to protect pharmaceutical patents and look forward to passage of effective legislation as soon as possible." In a copy revised on May 23rd, the second sentence is crossed out, with a correction that reads: "We hope to consult on your patent laws in the very near future," implying continued US involvement.

  See Aronson, Bernard, "Meeting with Argentine Foreign Minister Guido Di Tella," Briefing Memorandum.

May 24th, 1991

• After a telephone conversation about the patent issue with Jon E. Hueneman at USTR, US Embassy economic counselor James M. Derham speaks with Sub secretary of the Economy Carlos Sanchez "to review GOA timetable for consulting with USG on GOA draft law on pharmaceutical patents." Sanchez says that during the week of May 27th, Minister Cavallo, Minister Di Tella, and Minister Porto will discuss the provisions of the draft law. The economic counselor requests a copy of the draft in advance of US consultations in Washington beginning June 10th.

June 1991

• Acting US Secretary of State Lawrence Eagleburger sends an action request to US Embassies in Europe and South America. Eagleburger asks that US Embassy officials solicit European officials to support the US in pressing for increased intellectual property protection in South American countries, including Argentina.

  See US Secretary of State, "Enlisting European Support for Improved IPR Protection in South America," Cable 197873 to the US Embassies in Bern, Bonn, London, Paris, Rome, and the Hague, June 1991.

July 1991

• The Argentine patent office, suffering from a severe crunch in funding, is unable to process patents and trademarks. Ambassador Todman comments in a cable to Secretary of State James Baker, "The demise of the patent office is a vivid reminder of the lack of importance the GOA bureaucracy actually gives to IPR issues. The patent office has been caught up in the general financial problems of the GOA and allowed to shrink along with other low priority functions." The Embassy fears that "merely obtaining a sound patent law is not likely to be sufficient to ensure the protection of patent rights. The effective execution of laws and regulations protecting intellectual property will require a much better understanding and higher priority for IPR within the GOA." Ambassador Todman recommends that "Washington agencies may want to seek opportunities with senior GOA interlocutors to show interest in the administration as they have in the legal foundation of IPR protection in Argentina."

  US Embassy, Buenos Aires, "Priority for IPR Administration," Cable 07046 to the US Secretary of State, July 1991.

August 6th, 1991

• US Secretary of Commerce Robert A. Mosbacher, Under Secretary of the International Trade Administration J. Michael Farren and US Ambassador to Argentine Terence Todman meet with Argentine Minister of Economy Domingo Cavallo and other cabinet officials. US officials press Cavallo to introduce patent legislation by September, but Cavallo says that the executive branch wants to wait until after the fall elections to take on such a controversial issue.

  American Embassy, Buenos Aires, Cable to the US Secretary of State, August 1991.

Late August 1991

• In the lead up to the introduction of patent legislation in the Argentine Congress, CILFA increases its media presence with ads threatening that patents will increase prices for medicines. The Embassy fears that CAEME's response to these attacks will be inadequate. Ambassador Todman writes in an August 1991 cable to US Secretary of State Lawrence Eagleburger:

  With the deadline for the GOA's introduction of a new patent law less than a month away, the local association of pharmaceutical patent pirates (CILFA) seems to have stepped up its campaign to ensure the new law will provide only minimal rights. Continuing to equate patents with monopoly rights in its newspaper and television advertisements, CILFA is hammering (sic) way with its claims that patents will greatly increase the price of pharmaceuticals to pensioners. The ads draw a picture of pensioners without vital medicine and a picture of the public health care system losing up to a USD billion a year. CILFA continues to preach that any new law must contain strong compulsory licensing provisions.

  The CILFA campaign has successfully generated some public political support as the September 8th elections near. The radical party recently issued a public statement against patents. In addition the Health Minister for Buenos Aires Province, Gonzalez Garcia, was reported to have told a pharmaceutical convention that Argentina "cannot recognize medical patents on the terms requested by the developed world" which would force its people to pay "outrageous" prices for medical products.

  The local PMA representatives (CAEME) have so far been working behind the scenes in trying to undo the CILFA successes. When CAEME's lobbyist on patents questioned the head of the radical block in the House about his party's public position, the Deputy claimed not to be aware of the reasons his party had taken such a stand. The lobbyist has taken this response to mean that the (sic) radically commitment could be reversed.

  Nevertheless, the local PMA representatives (CAEME) have been slow to organize against CILFA's stepped up public campaign. CAEME has promised ECONOFF that a newspaper and television counteroffensive is being prepared. CAEME hopes to have its rebuttal to the public by the first week of September. Meanwhile, the GOA's Minister of Health Porto told an August 26 conference on the economic plan that he would soon be sending a draft of a new bill to the President's office for approval, before forwarding it to the Congress.

  Comment: The Embassy is concerned that CAEME continues to be slow off the mark in confronting CILFA's anti-patent publicity campaign. In the past CAEME has been reluctant to publicly refute CILFA's claims on the price effects of patents, despite significant data that could be used in this regard. A concise treatment on prices and the willingness of the R and D based industry to sign licensing agreements after the Chilean and especially the Mexican laws were passed, would go a long way towards knocking the philosophical legs out form under the anti-patent campaign.

  See American Embassy, Buenos Aires, "Anti-Patent Campaign Heats Up," Cable 08429 to the US Secretary of State, August 1991.

August 28th, 1991

• The major Buenos Aires newspapers publish a statement by Argentine Foreign Minister Guido Di Tella at an August 27th conference of Argentine banks that the US is threatening economic sanctions against Argentina if patent law remains inadequate by US standards. The Ministry of Economy's Director of Economic Relations with North America and the Western hemisphere, Luis Maria Richerri, tells US Embassy officials that some of the minister's comments were taken out of context, and that his intention was to communicate that the Argentine government "has no choice but to go ahead with the law."

  American Embassy, Buenos Aires, "Patents: Foreign Minister Publicizes Potential 301 Retaliation," Cable 08523 to the US Secretary of State, August 1991.

September 10th, 1991

• Officials from USTR, US PTO, the State Department, and the American Embassy in Buenos Aires hold talks with the Argentine officials responsible for submitting a patent law to Congress. The US government representatives included Jon Huenemann and Carmen Suro-Bredie of USTR, Lee Skillington of the Patent and Trademark Office, Jon Farrar of the State Department, and John Riddle of the US Embassy in Buenos Aires. Argentine participants included under secretary of for industry Luis El Halli Obeid, under secretary for health Marcelo Vernengo, INPI director Norma Felix, and Director of Economic Relations with North America and the Western hemisphere Luis Maria Richerri. The US delegation and Ambassador Todman also met with Argentine Minister of Economy Domingo Cavallo. The Argentine government officials carry non-papers that reflect the objectives of access to medicine and technology transfer; however, Ambassador Todman reports in a September 1991 cable to US Secretary of State Lawrence Eagleburger that these non-papers "did not serve as the basis for the discussions."

  See American Embassy, Buenos Aires, "Patent Talks," Cable 09218 to the US Secretary of State, September 1991.

September 21st-26th, 1991

• CILFA attacks Ambassador Todman in the Argentine press in what the Ambassador calls a "last-ditch effort to halt expected patent legislation." Pagina 12, a daily Argentine newspaper, prints a comment from the president of CILFA that "the people" will be the "next victim" of America's involvement in Argentina. On September 25th, other Buenos Aires daily newspapers run full-page ads by CILFA that read "Asi no, Sr. Todman" (Not like this, Mr. Todman) and charge Ambassador Todman with attempting to "supplant our democratic institutions by your exclusive autocratic will" even though "such an attitude in your own country would be unacceptable."

  Presidential Chief of Staff Eduardo Bauza is quoted in Pagina 12 September 24th as saying that the Ambassador was entitled to his opinions, but did not have the right to interfere in Argentine domestic affairs.

  La Nacion political correspondent Angel Anaya accuses Ambassador Todman of overstepping his duties and earning the nickname "Braden II" given to him by Argentine government officials in an editorial published September 26th. The nickname refers to US Ambassador Spruille Braden, who was outspoken in his opposition to Argentina's Peronist government.

  See American Embassy, Buenos Aires, "CILFA Aims Low to Halt Patent Law," Cable to the US Secretary of State, October 1991. (Cable number is illegible.)

• The National Chamber of Deputies considers a resolution condemning Todman, but, due to Peronist leadership's rejection of the bill, it dies in committee. Todman writes:

  CILFA continued to keep the pressure on the Ambassador and the GOA by promoting ( according to the Buenos Aires daily "Clarin") a resolution in the National Chamber of Deputies urging the GOA to declare Ambassador Todman "persona non grata" for interference in Argentine domestic affairs. The Peronist house leadership managed late September 26th to remit the legislation to a death-in-committee, but not until 76 legislators had gone on record in favor of it.

  See American Embassy, Buenos Aires, "CILFA Aims Low to Halt Patent Law," Cable to the US Secretary of State, October 1991. (Cable number is illegible.)

September 27th, 1991

• President Menem, Minister Cavallo, and Minister Di Tella defend Ambassador Todman in the Argentine press.

  In a private meeting with Ambassador Todman, President Menem clarifies that he does not consider the Ambassador's efforts as an intrusion into domestic Argentine affairs.

  See American Embassy, Buenos Aires, "CILFA Aims Low to Halt Patent Law," Cable to the US Secretary of State, October 1991. (Cable number is illegible.)

October 2nd, 1991

• La Nacion, a Buenos Aires daily newspaper, reports that Minister Cavallo, Minister Porto, and Presidential Chief of Staff Eduardo Bauza have agreed on the text of a patent bill. Provisions of the agreement include the following:
  • The law is not to be retroactive.
  • The patent term will be 20 years.
  • Importation of patent products will be possible.
  • Compulsory licensing will be limited to national emergencies or monopolistic use.

  The article also reports that the Argentine government is considering a bill to require prescriptions to be written by the scientific name as opposed to the brand name in order to increase competition within the generic industry.

  See American Embassy, Buenos Aires, "Press Reports Ministerial Decision on Patent Bill," Cable 09808 to the US Secretary of State, Washington DC, October 1991.

October 4th, 1991

• Ambassador Todman meets with a Ministry of Foreign Affairs official who says that the politicians and journalists attacking the Ambassador are merely scapegoating him to promote a broader agenda of slowing reform in Argentina.

October 10th, 1991

• President Menem approves the draft patent law for submission to the Argentine Congress. The submission of the legislation had been delayed due to disagreement between Minister Cavallo and Minister Porto.

  Ambassador Todman comments in his October 1991 cable to the US Secretary of State:

  Embassy's preliminary, inexpert reading is that law as submitted is responsive to most US major concerns. This is only the first step and congressional approval will not be easy. Close associate of Minister Cavallo told DCM October 10th that Cavallo had said that the "guns of Navarone" will be needed to get the bill through Congress.

December 1991

• Norma Felix, the new director of the Argentine patent office, tells representatives from the US Embassy that the pharmaceutical patent bill will pass, but only with a sustained effort from the Ministry of Economy. Felix says that the patent office is still experiencing serious financial problems, but that she hopes WIPO funds will allow her to recruit more employees. She asks for US "technical assistance" in restoring her office.

  See US Embassy, Buenos Aires, "Congressional Debate on Patents and Patent Office Problems," Cable 12261 to the US Secretary of State, December 1991

• Pablo Challu publishes "The Consequences of Pharmaceutical Product Patenting," a 125-page booklet in which he argues that the level of research investment (and invention) in a country is not a function of its patent system, but of its level of economic development.

  Pablo Challu, "The Consequences of Pharmaceutical Product Patenting" Off-Prints of World Competition, December 1991.

December 10th, 1991

• The new Argentine Chamber of Deputies meets for the first time. The Peronists have 118 seats, a substantial portion of the 129 needed for a quorum.

December 27th, 1991

• The economic counselor at the US Embassy in Buenos Aires informs Argentine patent office director Norma Felix that the US Government is willing sponsor a program in Washington for Argentine officials on how to operate a patent office. Felix says she appreciates the offer and that a small group of officials would be interested in visiting Washington in February for such a program.

  American Embassy, Buenos Aires, "Technical Assistance for GOA Patent Office," Cable 12984 to the US Secretary of State, December 1991.

January, 1992

• Director of the Argentine National Institute for Industrial Property (INPI) Norma Felix meets with US Embassy officials Robert Asselin, John Riddle, and Julian Abella to give them a list of topics INPI officials wish to discuss during upcoming sessions in Washington in order to learn how to reinvent the Argentine patent office. Felix tells the Embassy officers that the old system of evaluating patents is not worth amending; Argentina needs a new, completely modern system. She also says that INPI will be responsible for writing the regulations of the new patent law for pharmaceuticals once it is passed by Congress.

  American Embassy, Buenos Aires, "GOA Request for Technical Assistance for New Patent Office," Cable 00838 to the US Secretary of State, January 1992.

January 23rd, 1992

• The Argentine executive branch issues Decree 150/92, which requires that prescriptions be written with the scientific name of the drug as opposed to the brand name. The order's objective is to give pharmacists and patients the freedom to choose among brands in order to encourage price competition and to demonstrate that pharmaceutical patents will not necessarily result in price increases. INPI tells an economic officer from the US Embassy that the decree is modeled after the generic prescription laws of some US states.

  Carlos Villagra, secretary general of a major pharmacy industry group, says that with such a decree on generics, his organization will support pharmaceutical patents.

  CILFA and CAEME both oppose the order: as Embassy officer James M. Derham notes in a February 1992 cable to the US Secretary of State, "the marketing investments of both groups have long been directed at convincing doctors to prescribe their products."

  See American Embassy, Buenos Aires, "GOA Decree on Generic Drug Prescriptions," Cable 01363 to the US Secretary of State, February 1992.

• Despite CAEME's overall objection to the decree, one provision of the order seems to speak to the concerns of foreign labs by allowing the automatic registration of products registered elsewhere. Chapter 11, Article 4 provides for the automatic registration of drugs already registered in any of 15 enumerated countries (including the US). CAEME complains that Israel and Spain, countries it considers to lack sufficient intellectual property protection, should not be included in this list.

  See American Embassy, Buenos Aires, "GOA Decree on Generic Drug Prescriptions," Cable 01363 to the US Secretary of State, February 1992.

February 6th, 1992

• Menem issues a Presidential decree to convene a special session of Congress to begin February 17. The administration and the radical party have agreed to a list of issues to address in the session; the list does not include pharmaceutical patents. However, Embassy officer James M. Derham notes optimistically in a February 1992 cable to Secretary of State Lawrence Eagleburger, "this and other legislation may come up later in the month or during the regular session of Congress which commences May 1."

  See American Embassy, Buenos Aires, "Congress Set for February 17 Special Session; Patents Law Expected to be Considered," Cable 01306 to the US Secretary of State, February 1992.

February 10th, 1992

• Argentine Minister of Economy Domingo Cavallo says on a radio program that the order requiring the use of a drug's scientific name for prescriptions is intended to promote consumer choice. In the face of Cavallo's defense of the decree, foreign pharmaceutical companies change their tack: instead of fighting for the reversal of the order, they plan to press the Argentine government to explicitly recognize in its regulations implementing the decree that prescriptions can include a trademark.

  American Embassy, Buenos Aires, "GOA Decree on Generic Drug Prescriptions," Cable 01363 to the US Secretary of State, February 1992.

Mid to Late February, 1992

• Foreign pharmaceutical manufacturers invite five members of the Argentine Chamber of Deputies to visit research labs in the US, Britain and Italy. Ambassador Todman notes "because of their potential leadership role in the passage of the draft law now before the Congress, these deputies would be well placed to use the information they learn during this trip in support of the administration's bill." Ambassador Todman requests US government assistance in planning the group's visit to Washington The Deputies include Carlos Romero, Vice President of the Peronist Bloc (the majority party), Alberto Juan Bautiste Iribarne, Chairman of the Industry Committee, Jorge Lopez, Chairman of the Commerce Committee, Miguel Camel Nacul, Chairman of the Science and Technology Committee, and Blasco Jose Manuel, Chairman of the Health Committee.

  American Embassy, Buenos Aires, "Request for Assistance in Arranging Argentine Deputies' IPR visit to Washington," Cable 01544 to the US Secretary of State, February 1992.

• CAEME subsequently reschedules the proposed visit to Washington of the Deputies in order to accommodate Luis Martinez, the First Vice President of the Argentine Chamber of Deputies.

  See American Embassy, Buenos Aires, "Expansion of GOA Deputies' IPR visit to Washington," Cable 01970 to the US Secretary of State, February 1992.

February 27th, 1992

• An article in the Cronista Comercial, an Argentine business newspaper, claims that the Ministry of Health and various associations of medical professionals have joined the pharmaceutical labs in opposition to Article 10 of the generics decree, which mandates the use of generic drugs in prescriptions and sales.

March 6th, 1992

• Ambassador Todman meets with President Menem to thank Menem for his support of the formulation of an "adequate patent bill." He is assured of the President's continued commitment to doing "everything necessary" toward the goal of its approval.

  See US Embassy, Buenos Aires, "Top GOA Administration Offices Commit to Push for Passage of Patent Bill," Cable 02583 to the US Secretary of State, Washington, March 1992.

March 9th, 1992

• Ambassador Todman meets with Argentine Minister of Economy Domingo Cavallo. He warns Cavallo that without an adequate patent law in place in Argentina, the US will be hesitant to enter into an agreement on broader and deeper cooperation in science and technology, an Argentine trade priority. Cavallo promises to speak with Presidential Chief of Staff Eduardo Bauza to ask that the bill be added to the agenda of the extraordinary session of Congress.

  See US Embassy, Buenos Aires, "Top GOA Administration Offices Commit to Push for Passage of Patent Bill," Cable 02583 to the US Secretary of State, Washington, March 1992.

Mid- March, 1992

• Officials from the economic section of the US Embassy in Buenos Aires meet with Jorge Lopez, Alberto Iribane, Miguel Camel Nacul, and Dr. Jose M. Corchuelo Blasco, four of the Deputies scheduled to visit Washington later in the month. Their visit to Washington has been rescheduled again due to a request from President Menem. The group is interested in US assistance of small American firms and the US electoral process.

  Alejandro Zaia, a lobbyist for CAEME, will join the delegation to DC.

  See American Embassy, Buenos Aires, "Additional Interests of GOA Deputies," Cable 02584 to the US Secretary of State, March 1992.

March 16th, 1992

• Ambassador Todman meets with Argentine Foreign Minister Guido Di Tella. Embassy officer James Walsh reports to Secretary of State James Baker in a May 1992 cable that Ambassador Todman "emphasized that GOA passage of adequate patent protection has important implications not only to Section 301 sanctions but also to scientific and technological cooperation between the US and Argentina." The Ambassador said that the absence of intellectual property protection in Argentina would limit "the scope of the S and T agreement."

  American Embassy, Buenos Aires, "Patent Legislation and S and T Cooperation," Cable 02945 to the US Secretary of State, March 1992.

April 9th, 1992

• Argentine Minister of Economy Domingo Cavallo calls Ambassador Todman to thank him for US government assistance in the Brady negotiations. Cavallo vows to work on the patent issue and says he has insisted to Jorge Matzkin, leader of the Peronist Deputies, that the passage of the patent law is a prerequisite for foreign investment. Ambassador Todman again reminds Minister Cavallo that the law's passage will influence the bilateral US-Argentine science and technology agreement.

  American Embassy, Buenos Aires, "Cavallo Comments on Patent Law," Cable 03665 to the US Secretary of State, April 1992.

April 15th, 1992

• Officials from the economic section of the US Embassy in Buenos Aires meet with lobbyists for the local branches of the foreign pharmaceutical industry Rafael Alonzo, Alejandro Zaia, Feliz Rozanski and Jesus Ramirez. The lobbyists emphasize the role of the Industry Committee, chaired by Deputy Alberto Iribarne, in drafting the text of the bill that will reach the floor. They anticipate that the Chamber of Deputies may spend two or three months on the bill, with another two months in the Senate to follow. Amendments by the pro-patent Pharmaceutical Manufacturers of America (PMA) to the bill have been sent to the House by the Ministry of Economy. Local anti-patent pharmaceutical industry group CILFA is also suggesting amendments to the bill. Although CILFA has attained influence in Congress through payoffs to Congressmen and their staffs in exchange for information on pro-patent amendment proposals, the lobbyists opine that recent public concern about corruption may undermine CILFA's influence. Ambassador Todman comments on the meeting in an April cable to Secretary of State Jim Baker, "We will look for opportunities to discreetly contact key group leaders who still need some massaging." He asks that USTR contact Jose Octavio Bordon, a Peronist living in Washington DC, to pursue his assistance in lobbying the Argentine government.

  American Embassy, Buenos Aires, "Legislative Strategy for Patent Bill Passage" Cable 03924 to the US Secretary of State, April 1992.

April 20th, 1992

• The Argentine government issues joint resolutions 470/92 and 268/92 of Decree No. 150/92. Although both local and multinational labs had feared the implementation of the Generics Decree, the resolution actually benefits multinational labs by allowing for automatic registration of pharmaceutical products registered elsewhere and placing the responsibility for the quality of a generic drug recommendation on the pharmacist. The resolutions do not require doctors to write prescription by generic name.

  American Embassy, Buenos Aires, "Generic Drug Resolution" Cable 04506 to the US Secretary of State, May 1992.

May 12th, 1992

• Economic and science counselors at the US Embassy in Buenos Aires meet with Deputy Jorge Yoma and his lawyer, Jose Garcia, to discuss the patent bill and follow up on a Yoma's meeting with Ambassador Todman May 8th. Yoma says that CILFA has been lobbying members of the industry committee aggressively, and that he is hoping to find a compromise between the goals of the administration and the demands of the local labs. Ambassador Todman notes in a May 1992 cable to the US Secretary of State, "the problem is that Yoma (and probably other deputies as well) see the executive's draft as a starting point, not an irreducible minimum."

  American Embassy, Buenos Aires, "Patent Law - Discussion with Diputado Yoma" Cable 04938 to the US Secretary of State, May 1992.

May 27th, 1992

• Ambassador Todman and Myles Frechette, Assistant US Trade Representative for Latin America, meet with Argentine Economy Minister Domingo Cavallo. Also present are USTR Southern Cone Director Jon E. Huenemann and the Embassy's economic counselor as well as Julio Nogues, the Argentine Ministry of Economy's trade representative in Washington, and Luis Obeid, Undersecretary for Industry at the Ministry of Economy.

  Cavallo says the first draft of the industry committee's report on the bill is unsatisfactory, and that the passage of an acceptable bill will require lobbying from himself, other ministers, and the President. The President has the power to veto specific parts of a law, but this power is limited. Cavallo asks that the US emphasize in its discussions with other Argentine ministers that free trade agreements with the US would not be possible without intellectual property protection.

  American Embassy, Buenos Aires, "Minister Cavallo's Comments on US-Argentine Trade Issues" Cable 05518 to the US Secretary of State, May 1992.

June 19th, 1992

• President Menem hosts a small private dinner for Ambassador Todman and five Argentine cabinet officials. At the dinner President Menem voices his hope of continued development of scientific research in Argentina. The Ambassador responds that US scientific support would require intellectual property protection. Menem replies that he is frustrated with the slow pace of Congressional action and "might have to consider" using a Presidential decree to address the pharmaceutical patent issue.

  See American Embassy, Buenos Aires, "Menem Notes Need for Swift Implementation of Pending Patents Legislation" Cable 05400 to the US Secretary of State, May 1992.

Late June, 1992

• Ambassador Todman asks Minister of Health and Social Action Julio Cesar Araoz to "work actively for the early passage, without amendment, of the Menem administration's patent bill." Araoz, like the Embassy's contacts in Congress, says the bill has been stalled.

  American Embassy, Buenos Aires, "Minister of Health Pledges Support for Patent Bill" Cable 06047 to the US Secretary of State, May 1992.

• An unidentified Congressman who met this month with officials from the economic section of the US Embassy said that the executive branch had not emphasized the importance of the bill.

  American Embassy, Buenos Aires, "_________ Gives His Priorities, Patents Bill is Not One of Them" Cable 06737 to the US Secretary of State, May 1992.

August 1992

• Ambassador Todman meets with Argentine Ambassador to the United States Carlos Ortiz de Rozas and Ministry of Foreign Affairs officials to press for faster progress on pharmaceutical patents. He writes in an August 1992 cable to the US Secretary of State:

  As part of the Embassy's effort to maintain pressure on the GOA for passage of sound IPR legislation, the Ambassador raised the issue with Argentina's Ambassador to the United States, Carlos Ortiz the Rozas, and other senior foreign ministry officials including Secretary Petrella, Undersecretary Pfirter, Assistant Under Secretary for Mercosur Abra, and North American desk director Dalton during an August 10th meeting. In raising the question, the Ambassador noted that sound IPR protection was our number one economic issue with Argentina. He pointed out that he had discussed the topic personally with President Menem, Ministers Cavallo, Di Tella, Araoz, and Secretary General of the Presidency Bauza and others in the executive branch. However, he was abstaining form personally lobbying Congress, because of the sensitivities shown by that body. Beyond patents, he said, it was important to have a broad scope law protecting intellectual property, since this would have an effect on the level of our cooperation in science and technology as well as on the attitudes towards investing in Argentina. The Ambassador noted that if the patent portion of the issue were not resolved soon, pressure could easily develop for another 301 action, and asked what might be done.

  Ortiz de Rozas and Undersecretary of Foreign Relations, Rogelio Pfirter, commented that the issue could be resolved only through a lobbying effort by the pharmaceutical companies. Undersecretary for economic integration Jesus Sabra noted the concern of opponents of the law that the law could lead to an increase in pharmaceutical prices.

  Ambassador Ortiz de Rozas recommended that the US enlist foreign labs from other countries to lobby for patents and to incorporate non-pharmaceutical companies interested in the broader idea of intellectual property protection.

  American Embassy, Buenos Aires, "IPR / Patent Effort: Discussion with Ambassador Ortiz de Rozas" Cable 08408 to the US Secretary of State, May 1992.

Early September 1992

• The American Embassy in Buenos Aires sends an action request to the Secretary of State. The text of the document follows:

  1. Summary and Action Request

  After 11 months of drifting, indications are that the administration's patent bill may be gaining momentum in the Chamber of Deputies. The Ambassador has continued to receive commitments of support from top officials, while ecouns and econoff have met with several groups of Congressmen in recent weeks and pressed for their support of the bill. German labs have come up with USD 69 thousand for a renewed public relations campaign. Should this momentum begin to flag due to continuing strong opposition, we would like to be in a position to note at the highest levels of the Argentine executive branch that there is a growing concern in Washington about the delay.

  (THE ACTION REQUEST IS CENSORED.)

  Why the bill has drifted in the Congress

  2. Supporters of the Menem administration's bill have faced both procedural and political obstacles since the bill entered the Chamber of Deputies, October 10 1991. Upon arrival the bill was sent immediately to eight committees, a maneuver which senior Peronist deputies recognize was instigated by opponents to complicate the legislative process. The industry committee has the lead, with the committees for science and technology, health and commerce in a second tier of importance. While leaders in the key committees have plowed ahead, some have been influenced by the local labs' attempt to amend the bill.

  Industry Committees

  3. For example, the president of the industry committee Iribarne told econoff that he supports the administration's bill but is pushing for three changes, which are damaging. He wants to:

  • delete the article which allows importation to be considered sufficient as meeting a "working" requirement,
  • replace pipeline protection with a phase-in period, and
  • allow parallel importation of patented products.

  He claims to agree with a duration of 20 years, although his staffer argues for a limit of 15 years, along the lines of Chile.

  4. CAEME (local association of multinational pharmaceutical firms) lobbyists explained that the committee's work on the patent bill came to a halt after administration officials told Iribarne that his changes were completely unacceptable. Iribarne's committee turned its attention to a fishing bill that has also been a difficult issue for the government. He planned to finish that work before taking up patents again.

  Health Committee

  5. The head of the health committee Deputy Corchuelo Blasco claims to support the administration's bill, but believes CILFA's (anti-patent association of large local firms) data on prices. Like Iribarne, Corchuelo Blasco wants a phase-in period. He also calls for freer GOA discretion in granting compulsory licenses.

  Commerce Committee

  6. Deputy Lopez, the head of the commerce committee, remains an indifferent supporter of the bill.

  Science and Technology Committee

  7. The president of the S and T committee, Deputy Nacul, actively defends the administration's bill, and suggests that patent supporters need a more concrete presentation of the benefits that IPR protection can bring Argentina. He emphasizes that "price effect" is a key issue for deputies and recommends that the research industry attempt to further substantiate in "common sense" fashion the neutral price effects of patents. He also believes it would be helpful if the research industry could demonstrate some intent to invest, once the legal climate improves.

  Insufficient administration emphasis in the Congress

  8. All our interlocutors agreed that top Menem administration officials had not, until recently, (sic) push hard for the bill within the Congress, despite commitments from the President on down to work for passage. Typical was (sic) Iribarne understandings that improving IPR protection is one of the administration's concerns, but he claimed not to have received word from a top official that the time had come to move the legislation.

  9. The administration's new pointman on patents is undersecretary for industry Carlos Magarinos. He enjoys a direct line of communications with Cavallo on the issue that bypasses the undersecretary's more immediate superior, Secretary of Industry and Commerce Schiaretti. We have heard from both lobbyists and Deputies that Magarino's message to the Congress on behalf of Economy / Minister Cavallo is: "no amendments to the administration's bill."

  Other political distractions

  11. While the controversy over reforming the constitution is no longer the distraction it was for Deputies, other issues have arisen to divert their attention from work on the more arcane legislation of economic reform. The Peronist bloc leadership is under fire for its inability to deliver a united party for a vote on the Chilean border treaty. With recriminations flying, attentions turned to replacing the leadership of the bloc.

  12. Meanwhile, Iribarne has been pulled out of the Congress by his political mentor, Mayor Grosso of the Federal Capital. In accepting the top post in Grosso's council, Iribarne asked for three months leave from the Congress. It now seems likely that he will be forced to give up the chairmanship of the committee. CAEME lobbyists believe that Deputy (CENSORED)

  13. Finally, lethargy in the Congress is another problem for patents. Congress has lost the sense of urgency it felt in early 1991 when inflation forced a change in the economic team. After 18 months of stability, Iribarne said, his fellow deputies are no longer seized with the country's economic problems.

  Reason for hope

  14. Despite obstacles, there is good reason to believe success is still possible, if a renewed effort is made. From (sic) Iribarne perspective, President Menem still has a sufficient following in the Congress to get a patent bill approved. Iribarne recognized that the patent issue is not likely to produce the same emotional division among his colleagues as some of the other legislation under discussion.

  15. We continue to receive very positive responses in our contacts with senior administration officials. The Ambassador is seeking out new political channels for our message as well as renewing commitments from top officials. In a recent visit to President Menem's province of La Rioja, the Ambassador pressed the issue with Governor Arnuado. (CENSORED).

  16. CAEME lobbyists report that La Rioja Deputy Yoma, an in-law of Menem's and a member of the industry committee, has written a favorable report on the bill with the support of Undersecretary Magarinos. We understand that Yoma has gathered sufficient support in the committee to move his report to the floor. Yoma recently met with Menem on the issue and reportedly receive the President's support. After Yoma got bloc leader Matzkin to speak to Menem, the bloc leader reportedly told his Deputies that the party would back Yoma's report. Lobbyists believe the bloc leader is at the point of announcing that the patent bill is the next up for consideration in the Chamber.

  Some helpful signs from opposition party ranks

  17. Lobbyist Alonso reports that former Foreign Minister Dante Caputo favors a sound law, and haw perhaps 20 Deputies from his party willing to help form a quorum at the time of a floor vote.

  Time is right to push harder.

  18. With the current ordinary session nearing its end on September 30, Margarinos and local pro-patent lobbyists believe the time is right to push for passage of the bill in the Chamber of Deputies. They see support firming in the Congress with CILFA on the defensive. The association has changed its president at a time when a quality control scandal has rocked local industry.

  19. In contacting the Minister of Health again on patents the Ambassador was told that the inability of a local firm to control the quality of one of its elixirs (propolio), which caused the death of more than 20 persons (Buenos Aires 8791), has improved the political environment for patents. Although the firm was not a pharmaceutical lab, the press associated it with that industry and consumer vulnerability to current practices.

  20. Most of the multiple competing bills produced by CILFA supporters have attracted little support and can be brushed aside, according to lobbyists. Margarinos also thinks that the number of committees set to review can be reduced.

  IDB Conditionality

  21. We understand that IDB conditionality for the $350 million investment sector loan (ISL) includes requirements on intellectual property protection as part of the effort to enhance the investment environment. As funds from the ISL are to help with Brady Plan financing and much of the work of the ISL has been completed, the ISL conditionality, as it stands, includes actions which have been taken. For example, on intellectual property rights, it requires in the policy matrix that the GOA: "present to Congress patent legislation that protects pharmaceutical patents." The legislation has, of course, been presented. At an appropriate time, e.g. after the Brady Plan for Argentina is concluded, we may wish to work with the IDB to add pressure on the GOA to comply not only with the letter of the conditionality, but also with the spirit of it which is to establish adequate patent protection for pharmaceuticals so that R and D and other foreign and domestic investment in this field is not discouraged.

  American Embassy, Buenos Aires, "Ending Patent Legislation Drift," Cable 09529 to the US Secretary of State, September 1992.

• CIFLA and American University in Washington, DC plan to co-sponsor a conference in Washington during the week of October 4th-10th. The Embassy states that while the seminar is only scheduled for one day, the group will be hosted at the Ritz Carlton for an entire week. It estimates the cost of this trip to CILFA at $200,000. The seminar is to feature Eliot Milstein, Dean of the Washington School of Law and Nobel Laureate as well as Pablo Challu, executive director of CILFA, and a representative from the Canadian pharmaceutical industry. The Embassy suggests that US agencies or legislators invite those Argentine legislators they determine to "still have an open mind" to "a serious session with USG experts."

  American Embassy, Buenos Aires, "Pirates Sponsor Deputies' Visit to Washington," Cable 10252 to the US Secretary of State, May 1992.

• Deputy Andres Fescina, a member of the Chamber of Deputies industry committee who will attend the CILFA-sponsored conference, asks the US Embassy to arrange meetings for him with US Department of State officials to hear the US side of the patent issue.

  American Embassy, Buenos Aires, "Argentine Patent Law: Visit of Deputy Fescina to Washington" Cable 10002 to the US Secretary of State, May 1992.

September 17th, 1992

• Ambassador Todman speaks with Deputy Jorge Yoma, who tells the Ambassador that because the ordinary session of Congress will soon close, the next step is to push for its inclusion in the upcoming extraordinary session. The delay in Congress is partially due to the absence of Alberto Iribarne, president of the industry committee. Iribarne's absence has left the bill "frozen in committee" with Deputy Moreau, who opposes the bill, in charge. After the meeting, Ambassador Todman contacts Minister Cavallo to discuss the inclusion of the bill in the extraordinary session.

  American Embassy, Buenos Aires, "Putting Patents on Agenda of the Extraordinary Session of Congress," Cable 10084 to the US Secretary of State, September 1992.

September 21st, 1992

• Acting US Secretary of State Lawrence Eagleburger meets with Argentine Foreign Minister Guido Di Tella. The talking points prepared for Eagleburger by the US Embassy in Buenos Aires include a stance that the proposed Argentine patent law is "the minimum to encourage investment and signal continued opening of the economy."

  American Embassy, Buenos Aires, "Talking Points for Eagleburger / Di Tella Meeting," Cable 09913 to the US Secretary of State, September 1992.

September 23rd, 1992

• The US Embassy hosts a meeting of economic counselors from the German, Swiss, British, French and Italian embassies. The European officials join the Americans in their support of the patent bill, but have not been as vocal in their advocacy. Ambassador Todman comments: "The patent issue is widely perceived in Argentina as a US bilateral issue. Giving patents more international cover will help make the issue more palatable to certain factions in the Congress. The European embassies have a significant role to play in this regard."

  American Embassy, Buenos Aires, "Coordination with European Embassies in Support of Patent Bill," Cable 10124 to the US Secretary of State, September 1992.

September 25th, 1992

• Economic section officials from the US Embassy speak with Argentine Deputy Carlos Ruckauf, president of the foreign relations committee of the Chamber of Deputies. Ruckauf explains that the stalling of the bill in the industry committee resulted from CILFA's lobbying efforts to hold the bill until a new president for the committee is elected by the Peronist bloc.

  American Embassy, Buenos Aires, "Head of Congressional Foreign Relations Committee Offers Assistance on Patents" Cable 10227 to the US Secretary of State, September 1992.

September 27th, 1992

• Ambassador Todman speaks with President Menem, asking him to pursue passage of the bill as soon as possible. Todman paraphrases Menem in a September 1992 cable to acting Secretary of State Lawrence Eagleburger and USTR Carla Hills as saying that he has made sure that the patent legislation is "one of a very few items on the agenda for an extraordinary session of the Congress" to ensure that "legislators will have to focus on it." The Argentine President also tells Todman that he has asked members of party to back the legislation; however, he voices uncertainty about the ultimate outcome of his efforts, given "the obstreperous way the Congress has been behaving recently on several matters of great importance to the country."

  In his comments in the September 1992 cable, Todman says, "I and Embassy officers continue to work quietly with other embassies, members of the government, and favorably inclined legislators to try to get this issue approved quickly."

  American Embassy, Buenos Aires, "Patent Legislation," Cable 10206 to the US Secretary of State, May 1992.

Early October, 1992

• American University in Washington DC holds a seminar to discuss the patent issue. Panelists include Pablo Challu of CILFA. Secretary Eagleburger subsequently informs Ambassador Todman in a cable that the conference "went pretty much as expected given its one-sided structure."

  US Secretary of State, Washington DC, "AU Pharmaceutical Patent Conference," Cable 344829 to the US Embassy in Buenos Aires, October 1992.

  An Argentine radio report Ambassador Todman describes as "typical of the way the press is playing the results of the conference" says, in Todman's words, that "the Deputies who had attended the conference left convinced that restricted royalties payment might be acceptable, but unrestricted patents would have an adverse social impact."

  American Embassy, Buenos Aires, "Request for Results of the AU Conference on Patents," Cable 10252 to the US Secretary of State, October 1992.

November 7th-8th, 1992

• Ambassador Todman discusses progress on the patent law with President Menem, Minister of Economy Domingo Cavallo and Presidential Chief of Staff Eduardo Bauza.

  President Menem expressed confidence in the ability of Congressmen Jorge Yoma to get the bill passed.

  Minister Cavallo said that he expected the bill to pass and warned that overzealous efforts on the part of the international community might backfire. He mentioned the policy conditionality of an Inter-American Development Bank Investment Sector Loan as an example of something that might provoke Congress to angrily and obstinately reject the patent legislation.

  Bauza was more skeptical about the bill's prospects, but ultimately promised to push hard for the bill.

  American Embassy, Buenos Aires, "Ambassador's Discussions with Menem, Cavallo and Bauza on the Patent Law," Cable 11945 to the US Secretary of State, November 1992.

Mid to Late November, 1992

• A cable from Ambassador Todman to acting US Secretary of State Lawrence Eagleburger summarizes Todman's success in finding "several more opportunities to press high-level administration officials for support for the patent bill."

  In response to concerns about Argentina's need to improve its research and development capabilities to keep up with current military technology raised by Minister of Defense Erman Gonzalez in a meeting with General Colin Powell, the Ambassador "emphasized the need for the Argentine Congress to pass the administration' patent bill as an important step toward solving this problem."

  The Ambassador also met with Minister of Health Julio Cesar Araoz to reinforce his insistence that the Ministry press for the bill's passage.

  Ambassador Todman comments in a cable acting US Secretary of State Lawrence Eagleburger: "We will continue to seek every opportunity to press the issue with Menem administration officials." However, he points out that "the PMA needs to make an additional, much more public effort."

  American Embassy, Buenos Aires, "Discussion with Cabinet Members on Patents," Cable 12323 to the US Secretary of State, November 1992.

December 1992

• US Secretary of State Lawrence Eagleburger sends a revision of the 1992 National Trade Estimate draft to the US Embassy in Buenos Aires. With regard to patents, the draft complains that "the Argentine patent law of 1864 does not provide adequate patent protection and specifically excludes pharmaceutical products from protection." The draft summarizes the bilateral dispute by noting:

  In response to a US pharmaceutical industry petition, the United States initiated a Section 301 investigation on patent protection on September 23rd, 1988. On September 23rd, 1989, the pharmaceutical industry withdrew its petition following progress on this issue. Subsequently, Argentina revised its drug registration procedures. In addition, the government of Argentina introduced a new patent law into its Congress on October 11th, 1991 to modernize its existing 1864 patent regime. The law remains in the Argentine legislature where it is under discussion in an extraordinary session. The United States continues to pursue improved intellectual property rights protection in Argentina. Argentina has been placed on the "watch list" under the "Special 301" provision of the 1988 trade act in May 1989 and remains on that list.

  US Secretary of State, Washington DC, "Revision of 1992 National Trade Estimate" Cable 402393 to the US Embassy in Buenos Aires, December 1992.

January, 1993

• Ambassador Todman meets with Alejandro Roemmers, a director of a leading Argentine lab. Ambassador Todman reports in a January 1993 cable to US Secretary of State Lawrence Eagleburger:

  Recently, Alejandro Roemmers, a director of his family's pharmaceutical laboratory, called on the Ambassador seeking support against the GOA's rules for generic drug prescriptions. The Ambassador took the opportunity to press the director on patents, refocusing the conversation on IPR. Roemmers Laboratories is the sales leader in the Argentine market as well as the leader of the domestic Argentine pharmaceutical association fighting improvements in patent protection.

  Roemmer's reducing desired changes to patent bill

  The Ambassador pointed out that sound IPR protection will be one of the top issues for the Clinton Administration. Acknowledging that improved patent protection was inevitable, the director argued for a ten year transition period in Argentina. He pointed out that such a period was currently part of the Dunkel text. At several points in the conversation, the director said that Argentine firms should have "some period" during which the GOA could grant compulsory licenses as part of the transition to a new regime. The director proposed that he and several other "flexible" members of CILFA talk directly with research labs to work out mutually acceptable terms for a law. (CILFA is a local laboratories' trade association.) The Ambassador emphasized the benefits of the Menem Administration's patent bill.

  Roemmers preparing for the inevitable.

  4. While Roemmers labs is fighting to weaken the Administration's bill, it is also preparing for passage of such a law. The director had just returned from the US, where he discussed possible joint research projects in Argentina with officials from Merck, Sharp, and Dohme as well as Glaxo. Roemmers had already arranged drug (sic) licences with Merck, Glaxo, and Bayer, and talks are underway with SmithKline Beecham. The director estimated that perhaps the top 15 of CILFA's 58 member labs were capable of attracting licensing agreements with foreign patent holders. Roemmers had also contracted Japanese labs. Roemmers had also contracted Japanese labs. However the Japanese were uninterested in licensing with an Argentine firm, preferring to give rights for the hemisphere to US labs.

  5. The director was pleased with the results of his talks in the US, but concerned about the short duration of the licensing agreements being discussed. The five year terms under discussion are too short, the director complained. If labs like Roemmers are going to relinquish their free access to front line technology, the director said, longer-term relationships with patent owners are needed. The director suggested that if such agreements were to cover 20 years, this would give his firm sufficient confidence to welcome a patent system. He would like such contracts to establish local labs as the long-term representatives of foreign labs, providing stable access to a stream of new products.

  Additional Twist to the Price Argument

  6. The director also told the Ambassador local labs would need more freedom of pricing in their contracts. The director complained that Glaxo had insisted Roemmers sell a product at four times its production costs. At such a price, he claimed, the drug would have little sales volume in Argentina. According to the director, Glaxo officials refused to allows the retail price to be more than 15 percent lower in Argentina, because they did not want to have to explain the difference to US consumers. From Glaxo's point of view, the director claimed, the Argentine market was simply too small to allow pricing issues here to endanger margins in major markets elsewhere.

  Need to restore a reputation for quality control.

  7. The director recognized a need to end at least some of the local industry's free wheeling style of operation. He lamented quality control scandals that rocked local pharmaceutical producers during 1992. Despite Roemmers Labs reputation for quality, it was being hurt by poor standards at other Argentine labs. In the absence of effective GOA regulation, fly-by-night labs have won some of Roemmers' traditional hospital contracts. He reiterated rumors that such labs have sold local hospitals serum which was actually water. These stories along with that of the 22 deaths caused by a tainted elixir had spread to neighboring countries, effecting Roemmers Labs' export sales.

  Comment

  8. As the leader of the antipatent lobbying effort under the CILFA umbrella, Roemmers is in a strong position to influence the political battle for patent protection in Argentina. Roemmers alone has been willing to spend hundreds of thousands of dollars for such projects as the American University seminar to cement Congressional opposition. While we remain confident our patent protection goal with eventually be obtained, the issues of timing and the actual level of protection that will be passed remain open questions.

  9. Turning leading labs like Roemmers around on the issue is a goal now obtainable. The director revealed the changes already underway in the thinking and operational planning at his firm. For instance, Roemmers labs appears to have reduced its demand for compulsory licensing, limiting it to a transition period. Clearly, it is up to PMA to decide whether to continue rejecting Roemmers' offer for direct talks on the contents of a law.

  10. Perhaps a more acceptable avenue of fruitful exchange is the request for deeper contractual relations with patent owners. Since the duration of such licensing and contractual relations is outside the scope of a patent law, an accommodation between private firms on this point would not weaken the integrity of the legislation. The impression that the director conveyed is that an amicable agreement on this point could lead to a change in attitude toward the bill and a reduction in the intensity of domestic firms' opposition. Eliminating opposition to the Menem Administration's bill should be an explicit requirement of any extended agreement. This goal can only be pursued by patent holders themselves.

  11. One problem is that Roemmers seems to be talking mostly with labs that already have their own reps in Argentina. Other PMA members need to be made aware of the opportunities that a new law will bring so they can consider working our representative arrangements now.

• In the same cable, Ambassador Todman states the importance of filling the position of assistant vice president for Latin America at the PMA as soon as possible, noting, "As the above case illustrates, there are some parts of the lobbying effort that only the PMA and its members can accomplish."

  See American Embassy, Buenos Aires, "Turning Lead Pirate Labs Around on Patents," Cable 0087 to the US Secretary of State, January 1993.

February 1993

• Ambassador Todman sends a cable to the US Secretary of State asking for clarification of US policy on public presentations and the assistance of the PMA in sending its experts to assist CAEME lobbyists. He states that the Argentine public is paying close attention to the debate underway in the US about the source of high prices for pharmaceuticals.

  See American Embassy, Buenos Aires, "Explaining USG Policy on IPR," Cable 1621 to the US Secretary of State, February 1993.

• An article on economic situations in South America sent by US Secretary of State Warren Christopher to the South American Embassies comments on the PMA's weak efforts to promote the pharmaceutical patent bill:

  Efforts by US pharmaceutical firms have been anemic, yet the pharmaceutical association, PMA, is threatening to recommend Argentina for a Special 301 case should the bill not pass.

  See US Secretary of State, Washington DC, "ARA Economic Highlights (January 26-31, 1993)," Cable 37742 to All American Republic Diplomatic Posts, February 1993.

March 3rd, 1993

• A conference on intellectual property rights is held in Buenos Aires. Panelists include Jose Eduardo Garcia, staff advisor to the Chamber of Deputies committee on science and technology and Daniel Hadad, a journalist. The conference is broadcast live on cable stations in Argentina. An Embassy officer reflects in a cable to US Secretary of State Warren Christopher, "This program came at a fortuitous time, as the Argentine Congress is poised to act on a pharmaceutical patent bill before the close of extraordinary sessions."

  See American Embassy, Buenos Aires, "Arnet, March 3, on Intellectual Property Rights," Cable 2020 to the US Secretary of State, March 1993.

March 10th, 1993

• Hector Lopez, a senior PMA official, and Hector Lopez, the new PMA assistant director for Latin America, meet with the Ambassador. They complain that CAEME has moved extremely slowly and inefficiently. Ambassador Todman reports in a March 1993 cable to the US Secretary of State: "when the two industry executives arrived at CAEME they found a lack of urgency about the issue among the staff and some member laboratories." Having finally obtained a commitment from member labs to support a campaign, the PMA delegates learned that Jose Fraccia, director of CAEME, had made a pact not to engage in a press campaign with CILFA's Pablo Challu; however, it appeared that only CAEME had respected the pact.

  See American Embassy, Buenos Aires, "Patching Together the Pro-Patent PR Campaign," Cable 2556 to the US Secretary of State, March 1993.

March 18th, 1993

• Deputy Carlos Ruckauf, president of the Chamber of Deputies foreign relations committee and chairman of Fundacion de los Cien, holds a conference entitled "The Patent Law: Yes or No?" with the assistance of the US Embassy.

  See American Embassy, Buenos Aires, "Patents Get Push From Deputy's Conference," Cable 2799 to the US Secretary of State, March 1993.

March 25th, 1993

• Pablo Challu, executive director of CILFA, tells a Buenos Aires radio program he is in Washington to speak with others who suppose patents.

  See American Embassy, Buenos Aires, "Patent Pirate Leader Visiting Washington," Cable 2851 to the US Secretary of State, March 1993.

April 1993

• Ambassador Todman complains in a cable to the US Secretary of State, "the difficulty of getting patent legislation passed is heightened by the opposition we sometimes receive from groups which are generally pro-market." He cites an article that appeared in the generally pro-market Buenos Aires newspaper "La Prensa" April 21, in which journalist Conrado Etchebarne Burllrich lists several reasons he does not agree with the argument that patents will increase investment in Argentine research:

  First, it must be made clear that we are neither constrained by any international obligation nor by any moral or philosophical principle either. In a strict sense a patent is against the natural laws of the market, since it establishes a twenty-year legal monopoly for the benefits of the inventor. The declared objective is to encourage research with the incentive that profits be produced during that period of legal monopoly based on the total exclusion of competition.

  Second, practically nothing is invented in Argentina. Less than 0.1% of the patents of the world originate in our country.

  Consequently, we do not see the benefits of modifying the current law -- in this aspect, the main argument in favor of the sanction is that the new legislation would encourage research in our country and consequently, technological development. Really, it is not like this because nothing prevents an Argentine inventor from patenting his discovery in developed countries. Besides, the Argentine market, objectively considered, is not big enough to justify the huge expenditure on research and development that any new technology requires.

  At the close of his article, Burllich states that invention is no longer as important a source of national wealth as it once was:

  In the past, the economic victors were those who invented new products. The British of the 19th century and the Americans of the 20th century got rich that way . . . so as to obtain monopolic yields in the technologies of the processes, it was necessary to expel the competitors . . . In the present world inventing a new product is worth very little if the inventor is not the least expensive producer of that product.

  See American Embassy, Buenos Aires, "Editorial against Patent Reform," Cable 3822 to the US Secretary of State, April 1993.

April 27th, 1993

• Ministry of Foreign Affairs Secretary of International Economic Relations Gambarotta tells Ambassador Todman that the executive branch is still committed to gaining the passage of its pharmaceutical patent law. He warns that changes to Argentina's Special 301 status could prompt a political backlash against the bill.

  See American Embassy, Buenos Aires, "GOA Promises New Effort to Secure Passage of Patent Law," Cable 4015 to the US Secretary of State, April 1993.

May 3rd, 1993

• The Business Day section of the New York Times carries an article by Nathanial C. Nash with the headline, "US Presses Argentina on Patents." The article raises the possibility that Argentina's failure to provide intellectual property protection could result in trade sanctions as the Clinton Administration considers making Argentina an example for other developing countries. Nash quotes a US Trade Representative official as saying that "United States firms are losing billions every year from a lack of patent protection and this Administration is intent on changing that. Moreover for countries like Argentina, strict patent laws that stop pirating should actually stimulate intervention and investment there, something those countries say they are interested in."

  See Nash, Nathaniel C., "US Presses Argentina on Patents," The New York Times, May 2nd, 1993.

June 6th, 1993

• Gary Marx writes in the Chicago Tribune that "Argentina's failure to pass a tough patent law will be high on the agenda when Menem makes an official visit to the White House June 29." Marx quotes Anibal Caprile, president of CIFLA, as saying that US threats of trade sanctions "are not positive" and that "the US shouldn't tell Argentina what kind of patent law it should pass."

  See Marx, Gary, "US Prods Argentina on Patents," The Chicago Tribune June 6th, 1993.

June 10th, 1993

• Public hearings on the patent bill before Argentine Senators representing the relevant committees begin. CILFA opens with a presentation Ambassador Todman describes in a June 1993 cable to the US Secretary of State as "well thought-out and effectively delivered." CILFA favors a 10 year transition period and broad provisions for compulsory licensing.

  See American Embassy, Buenos Aires, "Senate IPR Hearings: Local Labs Presentations," Cable 5748 to the US Secretary of State, June 1993.

June 11th, 1993

• The Embassy's concerns about CAEME's ability to counter CILFA's performance at yesterday's public hearings are soothed when Deputy Carlos Ruckauf tells an officer from the US Embassy that the committee hearings are not important: the Peronist bloc already has enough votes to pass the bill. However, both Deputy Ruckauf and Minister Cavallo criticized CAEME for its failure to counter CILFA in Congress and in the media.

  See American Embassy, Buenos Aires, "Senate IPR Hearings: Local Labs Presentations," Cable 5748 to the US Secretary of State, June 1993.

Mid-June, 1993

• Ambassador Todman writes to the US Secretary of State to inform him that the US Agency for International Development, USAID, is working on an aid project to be initiated once a patent law is passed. Ambassador Todman expresses his confidence that such a law will be passed, and asks that the US government prepare the aid project in advance so it can be implemented immediately after such a law is passed. The text of the Ambassador's June 1993 cable follows.

  As you know, concurrently with consideration of new patent legislation by the Argentine Congress, the A.I.D. representative's office here has been trying for several months to begin the process of designing a project which would start after, repeat after, the new law is passed. A.I.D, has funds available for this design effort, and I understand PTO has informally expressed its willingness to cooperate with Argentina, subject to USTR concurrence. I am told there has been a decision not to proceed with the design of a project because it was concluded that Argentina should not be quote rewarded with assistance unquote of this type until it had complied with its commitment to pass sound patents legislation, that includes protection for pharmaceutical products.

  I have no doubt that there will be a new Argentine patents law. It is not a question of whether there will be a better law, but when it will be passed. I believe passage in this year is likely. Obviously, the new law by itself will be of no use until it is implemented. The GOA industrial property office is not capable at this time of implementing even the existing antiquated patent legislation and will certainly be unable to cope with the complexities of a new patent law. The GOA knows this and is anxious to cooperate with PTO. It is in our interest to see that this cooperation begins as soon as possible after new legislation is passed, but this will not happen unless project planning is done now. In addition, the initiation of planning now will signal Argentina that the prospects for collaboration with PTO are indeed real (after a new law is passed) and this signal itself will have a positive impact on deliberations regarding the new law.

  Seeing that the GOA passes and implements new patents legislation has long been a top priority to which the USG has devoted great resources and effort. We should do everything possible now to ensure that the potential benefit from a new law will be realized soon after it is passed. I request that steps be taken to have this project approved urgently.

  See American Embassy, Buenos Aires, "Design of Project for Cooperation Between USDOC Patents and Trademark Office (PTO) and Argentine Industrial Property Office," Cable 5960 to the US Secretary of State, June 1993.

June 17th, 1993

• Foreign manufacturers speak at an Argentine Senate hearing. Ambassador Todman writes in a cable to the US Secretary of State that CAEME's rebuttal of CILFA's arguments against patents was "surprisingly strong." In the cable, Ambassador Todman recounts the points presented by CAEME, which include the potential benefits of patents in terms of job creation and quality control and a refutation of CILFA's arguments. However, despite his overall satisfaction with CAEME's performance, which he calls "better than we expected, given their present disorganization" Ambassador Todman is dismayed that CAEME received little coverage in the next day's press. He writes, "Clearly, CAEME has a long way to go before it equals CILFA's professional, comprehensive approach to getting its story out through the press, but it has begun to move in the right general direction."

  See American Embassy, Buenos Aires, "Patent Hearings - CAEME Gives Best Shot," Cable 6042 to the US Secretary of State, June 1993.

June 28th, 1993

• Argentine President Carlos Menem meets with USTR Mickey Kantor at the Blair House in Washington in advance of a June 29th meeting with President Bill Clinton. According to a June 29th article in the Buenos Aires Herald, "The interview was considered to be a precursor to today's meeting with Clinton in which the US President is expected to come down hard on the issue of patents."

  See "Kantor Presses Argentina for a Medical Patents Law," Buenos Aires Herald, June 29th, 1993.

Late June, 1993

• US Ambassador to Argentina Terence Todman leaves his post. He is replaced by Ambassador James Cheek.

July 1st, 1993

• COOPERLA, an association of smaller Argentine firms, and a group of wholesale distributors of pharmaceuticals, present arguments against the draft patent law in Senate hearings. COOPERLA argues that, contrary to CAEME's claims, the quality of Argentine pharmaceuticals is equal to that of foreign pharmaceuticals. It also claims that patents will bring a significant price increase and the loss of high-paid technical jobs. The wholesale distributors state that the bill will lead to job loss in the smaller firms.

  See American Embassy, Buenos Aires, "Patent Hearings Continue, with No Clear End in Sight," Cable 6600 to the US Secretary of State, July 1993.

July 29th, 1993

• Senate hearings on the draft patent law from biotechnology industry leaders include:
  • a refusal by the Comision de Biotecnologia Agropecuaria (CBA), an organization of government agencies, to take a side on the patent issue.
  • arguments by independent biotechnology researcher Dr. Alberto Elias that Argentina should defend its own jobs before enforcing the economic rights of foreign firms and that the bill should limit the possibilities for patenting natural phenomena.
  • a testimony by Foro de Biotecnologia that the economic cost of patents will be significant without broad provisions for compulsory licensing similar to those provided in a recent Brazilian Senate bill.
  • a statement by Marta Gutierrez of the Instituto Nacional de Tecnologia Agricola (INTA), a government-funded agricultural research institute, that the patent bill should be modified to allow more compulsory licensing, as Foro de Biotecnologia had argued.

  See American Embassy, Buenos Aires, "Patents Hearings Continue, with Weight of Argument Going Against Modern Protection," Cable 7907 to the US Secretary of State, Washington, August 1993.

August 5th, 1993

• CEDIQUIFA testifies in Senate hearings on the patent bill. Its speakers include:
  • Arnaldo Musich, former Argentine Ambassador to the United States and current director of an Argentine holding company and honorary chairman of Fiel, a think tank, who claims that patent protection has facilitated development in many countries.
  • Two speakers who discuss the potential for Argentine research and development and international legal issues.
  • Felix Rozanski, executive director of CEDIQUIFA, who presents detailed arguments against compulsory licensing and parallel importation.
• Asociacion de Desarrollo Tecnologico, a technical group, also testifies. Ambassador Cheek describes their testimony in his August 1993 cable to the US Secretary of State as "a polemical statement damning the supposed spread of protectionism in the last two years through Japan, Europe and the United States" which "degenerated into a 'us vs. them' 'North/South' confrontation reminiscent of the UNCTAD of old."

  See American Embassy, Buenos Aires, "Patents Hearings Continue, with Weight of Argument Going Against Modern Protection," Cable 7907 to the US Secretary of State, Washington, August 1993.

August 6th, 1993

• The Argentine press publishes a statement by CILFA calling Ambassador Cheek to declare publicly that he will accept any patent law passed by the Argentine legislature.

  See American Embassy, Buenos Aires, "Patents Hearings Continue, with Weight of Argument Going Against Modern Protection," Cable 7907 to the US Secretary of State, Washington, August 1993.

August 9th, 1993

• Somos, a popular Argentine news magazine, publishes an article on the patent debate. The article includes a chart displaying significant price differentials for drugs in the US and in Argentina. In response, Ambassador Cheek sends a cable to the US Secretary of State requesting that PMA provide documented US prices of the drugs for comparison of CAEME data on prices for the drugs in Argentina in order to refute the chart. In response, PMA sends the Embassy a 64-page study on the problems of price comparison. A frustrated Ambassador Cheek sends another cable to the US Secretary of State in which he writes:

  Cannot PMA do better? Are the prices in the chart accurate? If they are, the differences amounting to hundreds and thousands of percent are strong -- and locally very persuasive -- ammunition for those fighting against passage of the patent bill.

  See American Embassy, Buenos Aires, "Request for Information to Rebut Arguments of Opponents of Patent Law," Cable 7608 to the US Secretary of State, August 1993.

  See American Embassy, Buenos Aires, "Somos Article on Patents," Cable 7648 to the US Secretary of State, August 1993.

August 11th, 1993

• Ambassador Cheek meets with Minister Cavallo to discuss parallel importation under the patent law. Minister Cavallo clarifies that the law intends to limit parallel importation; however, over the objections of Ambassador Cheek, Cavallo argues that parallel importation should be allowed in cases in which prices for a given product are far lower in another country with similar patent protection laws.

  See American Embassy, Buenos Aires, "Patent Law: Ambassador Discusses with Min Econ Cavallo," Cable 7759 to the US Secretary of State, August 1993.

August 12th, 1993

• Several important associations of doctors fail to attend Senate hearings at which they are scheduled to testify. The sole witness called during the brief hearing, a doctor representing the Confederacion Medica de la Republica de Argentina, states that patent protection will increase prices, and that compulsory licensing is the absolute minimum protection necessary. He also argues that pharmaceutical patents violate Article 17 of the Argentine constitution, which mirrors Article 8 of the US Constitution.

  See American Embassy, Buenos Aires, "Patents Hearings Continue, with Weight of Argument Going Against Modern Protection," Cable 7907 to the US Secretary of State, Washington, August 1993.

October 1993

• Ambassador Cheek sends a cable to the US Secretary of State stating that "the outlook for quick passage of the patents bill remains cloudy" as the Senate remains preoccupied with constitutional reform. Recognizing this, Ambassador Cheek says, pharmaceutical companies have drafted several alternative strategies to obtain patent protection in the short run while striving for the eventual passage of a patent law. A memorandum on these strategies given to the US Embassy by Ernest Egli, president of the Argentine affiliate of Roche, lists these alternatives as follows:

  • Alternative I - Regulatory Decree enforcing recently ratified treaties and reinterpreting the old law.
  • Alternative II - Exceptional Urgency Decree with force of law
  • Alternative III - Amendments of Board of Health regulations

  See American Embassy, Buenos Aires, "Patents Outlook Still Uncertain," Cable 10053 to the US Secretary of State, October 1993.

Early November, 1993

• Ambassador Cheek sends a cable to US Secretary of State Warren Christopher to summarize the patent issue. Major developments announced by the Ambassador include the following:
  • The General Confederation of Industry (CGI), a group representing small-to-medium-sized firms, has allied itself with CILFA. CGI recently held a press conference in opposition to the patent bill.
  • CILFA has hired a Washington consulting firm, Rendon, which has written a letter to Argentine Congressional Deputies arguing that the patent system has caused a drastic increase in pharmaceutical prices in the US. Rendon has also given the Deputies a Spanish translation of letters from US Senator David Pryor and US Representative Pete Stark to US Trade Representative Mickey Kantor denouncing the PMA for pressuring foreign countries to introduce patent laws.

  See American Embassy, Buenos Aires, "Patents Debate Intensifies," Cable 11010 to the US Secretary of State, November 1993.

November 15th, 1993

• Representatives from the PMA (Pharmaceutical Manufacturers Association) meet with Raul Granillo Ocampo, Argentine Ambassador to the US, in Washington at the invitation of Ambassador Ocampo. Ambassador Ocampo says that the bill's prospects are not good; he asks the PMA what alternative provisions Argentina can grant to avoid US trade sanctions. The PMA was also asked to meet with Pablo Challu of CILFA by former PMA Latin America director Art Suarez; however, the PMA refused Suarez's request. Ambassador Cheek comments in a November 1993 cable to the US Secretary of State that it would be "interesting to know if Suarez is now working for the other side."

  See American Embassy, Buenos Aires, "Patent Developments," Cable 11062 to the US Secretary of State, November 1993.

Late November, 1993

• Industrial associations present arguments against the bill at Senate hearings. According to Ambassador Cheek's November 1993 cable to the US Secretary of State, arguments presented included the following:
  • Daniel Chimenti, vice president of the Argentine Industrial Council (CAI), argued that Argentina should wait until the conclusion of the GATT round to discuss a patent law, since the GATT talks include discussions of intellectual property protection.
  • Cesar Tortorella, president of the General Confederation of Industry (CGI), repeats the argument presented earlier by CGI that patent protection in the pharmaceutical industry will detrimentally impact small firms in other sectors as prices rise and imports increase. He argues that history shows no link between patent regimes and the rate of development.

  See American Embassy, Buenos Aires, "Patent Foes Lash Out in Senate Hearings," Cable 11259 to the US Secretary of State, November 1993.

December, 1993

• The Argentine Industrial Union (UIA), a powerful association of large firms, joins the front in opposition to the patent bill. UIA had previously declined to weigh in on the matter despite pressure from CILFA. At a Senate hearing, UIA president Jorge Blano Villegas speaks out against "absolute" intellectual property rights for inventors. His opposition to the law, however, is not as extreme as CILFA's. Ambassador Cheek reports in a December 1993 cable to the US Secretary of State that Villegas's statements included the following:
  • Importation should not satisfy the local working requirement. The patent law should require at least 50% local content of any pharmaceutical produced.
  • Compulsory licenses should be more broadly available.
  • A ten-year transition period should be written into the law.
• In public comments during a press conference with Japanese businessmen in Osaka, Japan, Argentine Minister of Economy Domingo Cavallo defends the patent bill and predicts that it will be passed within the next year.

  See American Embassy, Buenos Aires, "UIA Criticizes Patents Bill," Cable 11568 to the US Secretary of State, November 1993.

• In comments at a press conference for Japanese business in Osaka, Minister of Economy Domingo Cavallo defends the patent bill as a "good law."

  See American Embassy, Buenos Aires, "Cavallo Praises Patents Bill," Cable 11702 to the US Secretary of State, December 1993.

March, 1994

• A delegation from PMA meets with Argentine legislators including Senators Pedro Molina and Jose Genoud and with Argentine Minister of the Interior Carlos Ruckauf, who tells the PMA that the bill's passage is still a possibility if the US concedes to grant Argentina NAFTA membership. The PMA group includes Warren Wells, a vice president, Leslie Ackerman, a PMA Latin America specialist, and representatives of multinational pharmaceutical firms. Ambassador Cheek reports in a March 1994 cable to the US Secretary of State that while all PMA delegates supported increased intellectual property rights, the group was divided with regard to the parallel importation issue. Ambassador Cheek also says that he is pleased with Ackerman and hopes that under his leadership, the PMA "will provide us the industry support that we have lacked in the past."

  See American Embassy, Buenos Aires, "Talks with PMA Regarding Patent Law," Cable 2007 to the US Secretary of State, March 1994.

• Ambassador Cheek sends a cable to the US Secretary of State alerting the Secretary that advocates of the patent bill have achieved more media coverage in recent weeks. Felix Rozanski, a spokesman for CAEME who has recently been quoted in the Cronista, tells an Embassy official that Vice President Gore's recent visit to Argentina has increased media interest in the pro-patent arguments.

  See American Embassy, Buenos Aires, "Pro-Patents Press Coverage Increases in Wake of Gore Visit," Cable 2105 to the US Secretary of State, March 1994.

March 29th, 1994

• CILFA president Anibal Caprile, executive director Pablo Challu, and secretary Daniel Sielecki meet with Ambassador Cheek to debate the patent issue and request the Embassy's assistance in obtaining meetings with USTR and the PMA, who have previously refused to meet with them. Challu clarifies during the meeting that CILFA wants a patent law for pharmaceuticals, but wants this law to allow for extensive compulsory licensing, a more rigorous local working requirement, and a ten-year transition period as allowed by the TRIPs text.

  See American Embassy, Buenos Aires, "CILFA, Seeking Dialogue, Calls on Ambassador," Cable 2153 to the US Secretary of State, March 1994.

Early April 1994

• Argentine Senator Jose Genoud, the Radicalist president of the Senate industry committee, writes an op-ed piece in La Nacion, a Buenos Aires newspaper, arguing that Argentina should wait until the TRIPs agreement comes into force to enact a patent law. He argues that the Argentine law should be TRIPs-based and incorporate broad provisions for compulsory licensing and a transition period. CAEME responds with a brief statement published in La Nacion April 7th.

  See American Embassy, Buenos Aires, "Opposition Senator Backs the TRIPs Text on Patents," Cable 2350 to the US Secretary of State, April 1994.

April 21st, 1994

• Prominent Argentine legislators and Administration officials speak in Senate hearings. They include:
  • Eduardo Menem, President of the Senate, who asserts Argentine interests, not US pressure, will be reflected in the bill's passage.
  • Alberto Mazza, Minister of Health, who states that intellectual property protection can strengthen the prospects for domestic research and agrees with Menem that US pressure has not played a significant role in the bill's progress.
  • Carlos Sanchez, Vice Minister of Economy, who refutes the claims of CILFA that patents lead directly to price increases and allow monopolies.
  • Juan Jose Cavallari, a Radicalist Deputy, who argues in favor of a long transition period for pharmaceutical patents.
  • Jorge Campbell, Secretary for International Economic Relations at the Ministry of Foreign Affairs, who claims that rapid implementation of a patent system will allow Argentine integration into the global economy.

  See American Embassy, Buenos Aires, "GOA Officials Defend Patent Bill in Senate Testimony," Cable 2693 to the US Secretary of State, April 1994.

May 3rd, 1994

• At the bequest of Argentine President Carlos Menem, Eduardo Bauza, Menem's Chief of Staff, demands that Justicialist Senators pass the bill as quickly as possible. The Argentine executive branch continues to claim that its advocacy of prompt passage does not reflect the threat of US trade sanctions, but concern for Argentina's best interest in obtaining investment.

  See American Embassy, Buenos Aires, "Senate Passage of Patent Law by June 30?" Cable 2693 to the US Secretary of State, April 1994.

Early to Mid-May 1994

• Advocates of the patent law increase their media presence as the Senate prepares to vote. Public events and statements include the following:
  • The Study Center for the Development of the Argentine Pharmachemical Industry (CEDIQUIFA) holds a seminar on biotechnology at which guest speakers argue against compulsory licensing, a transition period, and parallel importation.
  • CAEME obtains the publication of a paid advertisement in favor of patent protection for pharmaceuticals.
  • Joaquin Morales Sola, an Argentine political commentator, advocated the passage of the bill in a television appearance.

  See American Embassy, Buenos Aires, "Patent Lobbying Heats Up," Cable 3068 to the US Secretary of State, May 1994.

• The Argentine press reports that the Senate is redrafting the patent bill.

  See American Embassy, Buenos Aires, "GOA (sic) Consideres Changing Draft Patent Law," Cable 3117 to the US Secretary of State, May 1994.

May 19th, 1994

• Ambassador Cheek meets with Radicalist Deputies to discuss the patent issue. The meeting is chaired by Radicalist bloc vice president Horacio Uzandizaga and former Foreign Minister and Deputy Elsa Kelly. The Ambassador tells the Congressmen that the US will begin its Section 301 review June 30th; if a patent law is not passed at this point, the US may decide to enact sanctions against Argentina.

  See American Embassy, Buenos Aires, "Patent Discussion with Opposition Deputies," Cable 3498 to the US Secretary of State, May 1994.

• Ambassador Cheek also meets with Vice Minister of Economy Carlos Sanchez, who says the Ministry of Economy continues to defend the Administration's patent bill but worries that a lack of party unity will undermine the bill's prospects; modifying a bill passed on TRIPs to reflect USG and GOA demands through regulation and decree may be a better approach.

  See American Embassy, Buenos Aires, "Meetings on Patent Law with Key Ministries and Presidential Chief of Staff," Cable 3422 to the US Secretary of State, May 1994.

• Ambassador Cheek has dinner with Presidential Chief of Staff Eduardo Bauza and Minister of the Interior Carlos Ruckauf, who share Sanchez's strategy.

  See American Embassy, Buenos Aires, "Meetings on Patent Law with Key Ministries and Presidential Chief of Staff," Cable 3422 to the US Secretary of State, May 1994.

• In a subsequent cable discussing these meetings and progress on the patent issue, Ambassador Cheek comments:

  After years of insistent pressure, we are now in a full scale debating atmosphere . . . in which our side of argument is beginning to appear in press, albeit alongside lies of well-heeled CILFA with its "influential" envelopes. If we don't talk too much about eventual sanctions and continue to focus on the generally positive arguments we have, we may win this battle.

  See American Embassy, Buenos Aires, "Meetings on Patent Law with Key Ministries and Presidential Chief of Staff," Cable 3422 to the US Secretary of State, May 1994.

June 2nd, 1994

• In Senate hearings, Argentine Minister of Economy Domingo Cavallo defends the original patent bill proposed by the Administration by noting the benefits of intellectual property protection for Argentine research and development. Minister Cavallo states that under the legislation, parallel importation of drugs from other countries with similar patent systems will be allowed to keep prices low. He denies that the threat of US sanctions is a motivating factor in the government's efforts to push the bill. Ambassador Cheek writes in a June 1994 cable to the US Secretary of State that "Cavallo's testimony may well have advanced chances for passage of strong patent law."

  See American Embassy, Buenos Aires, "Cavallo Strongly Defends Modern Patent Protection," Cable 3745 to the US Secretary of State, June 1994.

• The Argentine press coverage focuses on Cavallo's statements that a patent law is a necessary step to increasing foreign investment.

  See American Embassy, Buenos Aires, "Press Highlights Cavallo Patent Testimony," Cable 3776 to the US Secretary of State, June 1994

August 1994

• Minister Cavallo tells Ambassador Cheek that the Senate is likely to revisit the patent issue at the end of the month. He is pleased that the US Trade Representative refrained from placing Argentina on the priority country list.

  See American Embassy, Buenos Aires, "Status of Argentine Patent Law," Cable 5503 to the US Secretary of State, August 1994.

• The Embassy also learns from Argentine executive branch officials that alternative patent bills will be presented to the Senate by Senator Augusto Alasino and Senator Pedro Molina. Senator Alasino's bill modifies the Administration's draft by allowing a five year transition period, refraining from providing pipeline protection, and allowing parallel trade imports within Mercosur. Senator Molina's bill allows a similar transition period and may require local production, but provides pipeline protection. It uses the original draft's stance on parallel importation.

  See American Embassy, Buenos Aires, "Status of Argentine Patent Law," Cable 5503 to the US Secretary of State, August 1994.

September 1994

• Pablo Challu of CIFLA and Felix Rozanski of CAEME argue the patent issue at a debate sponsored by an Argentine think tank. Challu embraces the TRIPs text as "a good solution" to the patent issue and criticizes the US for pressuring Argentina without providing any positive incentives for a new law. Rozanski argues that patent protection will improve the possibilities for technology transfer.

  See American Embassy, Buenos Aires, "Patents Main Event -- CAEME vs. CILFA" Cable 5865 to the US Secretary of State, September 1994.

October 7th, 1994

• Ambassador Cheek and Embassy officials meet with Carlos Sanchez, acting Minister of Economy. Sanchez tells the Ambassador that the Ministry is working with Senator Molina to obtain passage of his bill even though Molina's proposals do not fully satisfy US demands.

  See American Embassy, Buenos Aires, "Latest Information on Progress of Patent Law," Cable 6714 to the US Secretary of State, October 1994.

October 13th, 1994

• Former US President George Bush and President Menem speak at a conference held by an organization of international pharmaceutical wholesalers in Buenos Aires. Bush, using talking points provided by the US Embassy in Buenos Aires, states the importance of the patent issue to bilateral relations. President Menem confirms his Administration's commitment to passage of a patent law per his 1992 agreement with President Bush and USTR Carla Hill. Menem also states that an agreement has been reached on the text of a patent law; however, Ambassador Cheek reports in his cable to the US Secretary of State that this is not the case.

  See American Embassy, Buenos Aires, "Ex-President Bush and President Menem Comment on Patent Law in Buenos Aires," Cable 6825 to the US Secretary of State, October 1994.

October 21st, 1994

• Ambassador Cheek meets with Minister Cavallo to express the Embassy's dissatisfaction with the patent legislation under consideration in the Argentine Congress. Cavallo promises to work on the issue and to discuss it with President Menem, who is interested in obtaining Senate passage of the bill promptly as he hopes to meet with President Clinton at the upcoming summit meeting.

  See American Embassy, Buenos Aires, "Ambassador Raises Patent Law with Cavallo," Cable 7003 to the US Secretary of State, October 1994.

November 8th, 1994

• Peter C. Richardson, Senior Assistant General Counsel of the General Patent Counsel, writes to Dr. Felix Rozanski of CEDIQUIFA in response to Rozanski's request for information about "how the health regulatory authorities can be encouraged to respect intellectual property rights so as not to grant marketing approval to generics in the face of patents held by the originator."

  Richardson, Peter C., New York, Letter to Felix Rozanski, Buenos Aires 8 November 1994.

November 22nd, 1994

• Ambassador Cheek meets with Argentine Minister of Economy Domingo Cavallo to voice the US government's concerns about a provision in the patent bill for an eight year transition period, the lack of specification that importation satisfies working requirements, and inadequate pipeline protection for pharmaceutical products. Minister Cavallo says he is optimistic that the first two issues can be resolved by line-item veto by President Menem and pledges to discuss the third issue with Undersecretary for Economic Policy Alejandro Mayoral.

  US Embassy, Buenos Aires, "Min Econ Cavallo Optimistic Problems in Patent Bill Can Be Solved," Cable 7663 to the US Secretary of State, November 1994.

December, 1994

• Argentina ratifies the Uruguay Round agreements, including TRIPs December 7th. This creates confusion as some IPR advocates say the government is now able to issue pharmaceutical patents without approving a domestic pharmaceutical patent law, whereas others are still pushing for the passage of the pharmaceutical patent bill in the Chamber of Deputies and a line-item veto of the bill by President Menem.
• Ronald D. Godard, Deputy Chief of Mission at the US Embassy in Buenos Aires later comments: "The coming into force of TRIPs has given aggressive IPR advocates such as Otamendi and Felix the means to bypass the Congress where patent legislation has moved, until now, with all the speed of molasses in January."

  See American Embassy, Buenos Aires, "Pharmaceutical Patenting in Argentina: Open for Business?" Cable 1649 to the US Secretary of State, March 1995.

• An economic officer from the US Embassy in Buenos Aires meeting with Justicialist Party Deputy Eduardo Varela Cid, who says he doubts the bill will pass by the end of December. Deputy Cid claims he opposes the current bill and plans to introduce a more stringent patent bill.

  See American Embassy, Buenos Aires, "Chamber of Deputies Moving on Patents?" Cable 8119 to the US Secretary of State, December 1994.

January 5th, 1995

• The Argentine government publishes Law 22.425/95, which adopts the Uruguay Round agreement. Intellectual property attorney Jorge Otamendi and Federal Judge Adolfo Vasquez claim that in doing so, the government has enacted a TRIPs-based pharmaceutical patent system with an immediate start date. Applications for pharmaceutical patents from foreign firms begin to pour in at the Argentine patent office, where director Norma Felix says she will start issuing patents next year on the basis of the TRIPs agreement.

  See American Embassy, Buenos Aires, "Pharmaceutical Patenting in Argentina: Open for Business?" Cable 1649 to the US Secretary of State, March 1995.

February, 1995

• Officials from the economic section of the US Embassy in Buenos Aires with an Argentine Deputy who opposes the patent bill approved by the Senate. The Senator's name is censored in the February 1995 cable from Ambassador Cheek to Secretary Warren that summarizes the meeting. The economic office also meets with Felix Rozanski, director of CEDIQUIFA, who doubts the Deputy will succeed in blocking the bill's passage since he is not a member of the industry committee. Ministry of Foreign Affairs North America economic affairs director Jorge Pereira tells the Embassy that the executive branch will push for strong patent enforcement through TRIPs and a partial veto. He asks the Embassy not to publicly involve itself in the issue.

  See American Embassy, Buenos Aires, "Status of Draft Patent Legislation," Cable 0691 to the US Secretary of State, February 1995.

March 9th, 1995

• A US Congressional delegation led by Representative Phil Crane meets with Argentine Foreign Minister Guido Di Tella. Ambassador Cheek, who attended reports in an August 1995 cable to the US Secretary of State that the patent issue "dominated" the meeting. Minister Di Tella urged that Congress and US Trade Representative Mickey Kantor should refrain from commenting on the legislation until regulations are enacted in September.

  See American Embassy, Buenos Aires, "Codel Crane Meeting with FonMin Di Tella," Cable 4921 to the US Secretary of State, August 1995.

March 16th, 1995

• Committees in the Argentine Chamber of Deputies approve the Senate bill with no revisions. The Argentine Secretary of the Treasury tells the US Embassy that, contrary to Secretary Cavallo's warning that policy conditionality would impede the bill's progress, the lower house's acceptance of the bill was promoted by IMF policy conditionality, which had required patent protection as a prerequisite for an Inter-American Development Bank investment loan.

March 24th, 1995

• US Secretary of Commerce Ron Brown and US Ambassador to Argentina James Cheek meet with Argentine Minister of Economy Domingo Cavallo. Cavallo states that Congressional approval of GATT in December establishes patent protection in Argentina despite the likely passage of a patent law that contradicts some aspects of the TRIPs agreement. Ambassador Cheek comments in a March 1995 cable to the US Secretary of State that although INPI is already issuing pharmaceutical patents, a line-item veto of the bill by President Menem "would remove any doubt." At the meeting, the Ambassador complained that it appeared as if the Menem Administration was backing down to its commitment to limiting a transition period to three years. In response, the Ambassador says in a March 1995 cable to the US Secretary of State, "Di Tella rather testily replied that, in signing GATT, the USG had accepted the ten year period and now was trying to raise the standard and say this was unacceptable."

  See American Embassy, Buenos Aires, "Sec Brown and Min Cavallo Discuss Argentine Financial Situation, Patent Law and NAFTA Enlargement," Cable 1912 to the US Secretary of State, March 1995.

March 29th, 1995

• The Argentine Chamber of Deputies approves a patent bill already passed by the Senate that establishes a transition period for the new pharmaceutical patent system. Although applications for patents can be filed immediately, enforcement of patents will not begin until January 1st, 2003. Pablo Challu of CIFLA applauds the passage of the bill while CAEME's Felix Rozanski argues that Argentina would be better off implementing TRIPs immediately without a transition period.

  See American Embassy, Buenos Aires, "Chamber of Deputies Passes Patent Law," Cable 1955 to the US Secretary of State, March 1995.

• During the voting period, the Chamber denounces US Ambassador James Cheek's statements about intellectual property rights. The text of their declaration, as reported in the next morning's Clarin and transcribed later in a cable from Ambassador Cheek US Secretary of State Warren Christopher reads:

  The Chamber declares:

  Its most energetic repudiation of the declarations made by the Ambassador of the United States in our country, James Cheek, on the deliberations in the National Congress on the patents bill.

  It considers them a flagrant violation of the principle of non-intervention and non-interference in the internal affairs of other countries, in this case, the Argentine Republic.

  Their seriousness is even greater because they are repeated expressions that include open and veiled threats to apply economic and commercial sanctions and reprisals.

  The Chamber of Deputies is the representative of the nation's people and, as such, does not accept any form of foreign pressure and interference in the exercise of its functions, as established in Article 75 of the National Constitution.

  It would view with satisfaction the use by the national executive power of the attributes conferred by Article 99 (section 11) of the National Constitution, the necessary measures, considering the severity of the case, to prevent a repeat of incidents in this severity.

  See American Embassy, Buenos Aires, "Chamber of Deputies Passes Patent Law," Cable 1955 to the US Secretary of State, March 1995.

  A later article in the Journal of Commerce explains that Ambassador Cheek had decried the new legislation as suitable only for "countries like Suriname or Burundi."

  See Journal of Commerce "Argentine Patent Measure Heads for Veto by Menem," 12 April 1995.

April 12th, 1995

• A Journal of Commerce article reports that Deputy Economy Minister Carlos Sanchez has said that President Menem will veto parts of the recently-passed patent law that violate TRIPs. This action seems to mediate between the demands of the research-based foreign pharmaceutical industry, which has demanded a flat-out veto of the entire bill, and the nationalist Argentine opposition party, which has called on Menem to stand up to US pressure and approve the bill as it reads.

  See Journal of Commerce "Argentine Patent Measure Heads for Veto by Menem" 12 April 1995.

• Felix Borganov, Menem's technical and legal secretary, tells the US Embassy economic counselor that President Menem has not yet decided whether to veto the bill or not.

  See American Embassy, Buenos Aires, "Fate of Patent Law Still Undecided," Cable 2195 to the US Secretary of State, April 1995.

April 17th, 1995

• Just weeks before the publication of the Section 301 review results by the US Trade Representative, Argentine Foreign Minister Guido Di Tella visits Washington to describe the Menem Administration's efforts to enhance intellectual property law.

  See American Embassy, Buenos Aires, "Veto of Patent Law," Cable 2291 to the US Secretary of State, April 1995.

April 18th, 1995

• Argentine President Carlos Menem issues Presidential Decree 548, which sends the bill to the Senate with "observations" on the deficiencies of 16 articles included in the bill. Ambassador Cheek reports in an April 1995 cable to the US Secretary of State:

  In an act of considerable political courage President Menem, on the eve of elections, has effectively vetoed the unacceptable patent law passed by overwhelming majorities of both houses of Congress . . . . This makes GATT/TRIPS patent protection, without any transition period, the law in Argentina, unless, in unlikely event, Congress were to override veto.

  He subsequently comments:

  Embassy worked hard under heavy fire from our formidable opponents to secure full veto. We have achieved this immediate goal. What remains is to nail down GATT/ TRIPs plus."

  See American Embassy, Buenos Aires, "Veto of Patent Law," Cable 2291 to the US Secretary of State, April 1995.

  Text of veto: see American Embassy, Buenos Aires, "Patent Law Veto Decree," Cable 2337 to the US Secretary of State, April 1995.

April 26th, 1995

• President Menem signs a regulatory decree implementing TRIPs-plus standards for patents. The decree provides for pharmaceutical patents beginning January 1st 1996 and more rigid obstacles to parallel importation.

  See American Embassy, Buenos Aires, "Menem Signs Patent Decree," Cable 2451 to the US Secretary of State, April 1995.

April 29th, 1995

• US Trade Representative Mickey Kantor announces the results of the Special 301 review. Argentina is moved from the priority watch list to the watch list in light of the Menem Administration's aggressive steps to increase intellectual property protection. An out-of-cycle review on Argentina's progress on intellectual property rights will be held at the end of July.

  See US Secretary of State, Washington DC, "Special 301 Determination - Advance Notice," Cable 103690 to the US Embassy in Buenos Aires, April 1995.

May 2nd, 1995

• Radical party Senators attempt to fight President Menem's veto by holding a special session. Their efforts are blocked by Senate President Eduardo Menem, the President's brother, who has instructed the Judicialist Party not to attend in order to prevent the UCR Senators from reaching a quorum. The Judicialist Party hopes to avoid action on the patent issue until after the national elections so it can gage the President's popularity with the public.

  See American Embassy, Buenos Aires, "Argentine Patent Foes Trying to Rally," Cable 2581 to the US Secretary of State, May 1995.

May 3rd, 1995

• CILFA and Radicalist party legislators including Senator Jose Genoud hold a "patent law forum" in Congress. They hand out bulletins warning that the provision that importation will satisfy local working requirements will lead foreign labs to close their Argentine plants.

  See American Embassy, Buenos Aires, "Argentine Patent Foes Trying to Rally," Cable 2581 to the US Secretary of State, May 1995.

May 14th, 1995

• Argentine President Carlos Menem is re-elected. He earns 50% of the vote.

  See Vilches, Jorge A., "Argentine President's Biggest Challenge is Yet to Come," Wall Street Journal 19 May 1995.

Menem's Second Administration

After the passage of TRIPs in 1994 and its (partial) implementation in 1995, the US has a new basis for its arguments in support of Argentine patent rights. The obligations taken on by Argentina, somewhat vague in the text of TRIPs itself, will be fodder for continued conflict between the foreign and Argentine pharmaceutical industries and the two governments during the second Menem Administration.

Mid-May, 1995

• To the surprise of Minister of Economy Domingo Cavallo, the Senate overrides the patent law veto for 10 of the 16 provisions vetoed by Menem.

  See American Embassy, Buenos Aires, "Reaction to Override of Patent Veto," Cable 2980 to the US Secretary of State, May 1995.

• Minister Cavallo and Senate President Eduardo Menem have a heated exchange at a May 18th cabinet meeting over the Senate override of the President's veto.

  See American Embassy, Buenos Aires, "Reaction to Override of Patent Veto," Cable 2980 to the US Secretary of State, May 1995.

• Felix Rozanski of CEDIQUIFA says he believes the Senate override was pre-arranged with the executive branch. He is working to recruit foreign leaders, including the European Union's Ambassador to Argentina, Pieter Oldekop, to criticize the Argentine Senate. Rozanski tells US Embassy officials that Vice President Gore and Senator Jesse Helms plan to call President Menem to press him on patents.

  See American Embassy, Buenos Aires, "Reaction to Override of Patent Veto," Cable 2980 to the US Secretary of State, May 1995.

May 23rd, 1995

• The Chamber of Deputies also overrides the Presidential veto.

May 27th, 1995

• Eduardo Bauza and Domingo Cavallo agree to postpone issuing another draft patent law for Congressional approval until September.

  See American Embassy, Buenos Aires, "The New Argentine Cabinet: Containing Rivalries - For Now," Cable 3295 to the US Secretary of State, June 1995.

June 1st-2nd, 1995

• A US Congressional delegation led by Jim Kolbe of Arizona visits President Menem in Argentina. Kolbe emphasizes the benefits of intellectual property protection in terms of attracting investment beneficial to technology transfer. President Menem agrees, but says that Congress does not.

  See American Embassy, Buenos Aires, "Codel Kolbe and the Patent Issue," Cable 3324 to the US Secretary of State, June 1995.

• The delegation also meets with AMCHAM members who emphasize intellectual property issues as particularly problematic and urge the delegates to pass "fast track" to create a broader free trade network.

  See American Embassy, Buenos Aires, "Codel Kolbe and the Patent Issue," Cable 3324 to the US Secretary of State, June 1995.

• Horacio Liendo, a legal and technical secretary, hosts the Congressional delegation at the Ministry of the Economy, who says the executive branch is considering implementing GATT standards with a five-year transition period. According to Ambassador Cheek, "Congressman Kolbe emphasized that five years would create problems for US and Argentina and urged Liendo to make law GATT plus and not just GATT consistent."

  See American Embassy, Buenos Aires, "Codel Kolbe and the Patent Issue," Cable 3324 to the US Secretary of State, June 1995.

• The delegation attends a lunch held by Justicialist Deputy Julio Alberto Migliosi, secretary of the Chamber of Deputies foreign affairs committee. Ambassador Cheek says that the host "handpicked the Argentine participants to present the local Congress's best, most pro-American, and most Menemista face"; however, vocal anti-patent Deputy Humberto Rogerro "learned of the luncheon and invited himself." At the lunch, Justicialist Ana Kessler tells an Embassy economic official that, as Ambassador Cheek paraphrases, "the issue was not being decided on its merits" but "had become embroiled in power struggle between Congress and Menem."

  See American Embassy, Buenos Aires, "Argentine Deputies Receive Codel Kolbe," Cable 3360 to the US Secretary of State, June 1995.

June 14th, 1995

• Robert Neimeth, Executive Vice President of Pfizer and Chairman of the Intellectual Property Committee, writes to Secretary of State Warren Christopher. He says that the Senate override has made the April Presidential decree ineffective. Neimeth claims that the newest compromise, drafted "corrective legislation," is "unacceptably inferior to President Menem's decree of late April" because it does not grant pipeline protection and imposes a 5 year transition period.

  See Neimeth, Robert, New York, Letter to Warren Christopher, Washington DC, 14 June 1995.

June 21st, 1995

• Officialist party Senators submit a bill to change several articles of Law No. 24.481. With regard to pharmaceuticals, the new law provides that: "Pharmaceutical products inventions shall not be patentable prior to five (5) years as from the date on which the present Law is published in the Official Bulletin."

  The bill, a second attempt at a compromise after an unsuccessful effort earlier this month, is rejected.

June 20-23rd, 1995

• An Alifar (Asociación Latinoamericana de Industrias Farmacéuticas) assembly in the Dominican Republic includes an open forum in which Argentina is praised as a country resisting intense pressures from the US.

  See "Amended IP Law Vote in Argentina?" SCRIP No. 2038, 30 June 1995 p. 19.

July 19th, 1995

• The Argentine Senate passes the corrective legislation that reduces the transition period from eight to five years. New wording allows parallel imports if they are consistent with trade obligations under TRIPs. No pipeline protection is provided. The Argentine National Institute of Industrial Property, INPI, retains broad powers to grant compulsory licenses. The Patent bill rewrites Articles 36, 44, 46, 50, 91, 94, 104, 105, and 106 of Law No. 24,481 as follows:

  Article 36, c: Any person may buy, use, import or in any other way market the patented product or any product obtained by applying the patented process, after such product has been lawfully brought into the market in any country. The bringing into the market shall be considered lawful when it is made in accordance with the Agreement on Trade-Related Aspects of Intellectual Property Rights, Part III, Section IV, of GATT-TRIPs.

  Article 44: The National Institute of Industrial Property, upon request of the pertinent authority, shall be entitled to set limited exceptions to the rights conferred by a patent. Such exceptions may by no unjustifiable means affect the working of the patent, nor cause unjustified damage to the legitimate interests of the patent holder, taking into account third parties' legitimate interests.

  Article 46, last paragraph: Having previously held a hearing with the parties involved and if no agreement is reached, the application authority will establish a reasonable compensation to be received by the patent holder, according to the circumstances of each case, and taking into account the economic value of the authorization and the average royalty rate usually set in the market segment in question for license agreements entered into by independent parties. The decisions concerning the award of such uses must be taken within ninety (90) working days after the application date and the same may not be appealed before the Federal Civil and Commercial Courts. The appeal will not have suspensive effects.

  Article 50): Where the use of the subject matter of a patent without the authorization of the patent holder is allowed, the following provisions shall be respected:

  • a) The authorization of said uses shall be made by the National Institute of Industrial Property.
  • b) The authorization of said uses shall be considered on their individual merits.
  • c) For the cases of use considered under Articles 46) and / or 49), prior to the award of such uses, the potential user must have made efforts to obtain authorization from the patent holder on reasonable commercial terms and conditions pursuant to Article 46), and such efforts must have been unsuccessful within the period of time stated under Article 45). In the case of public non-commercial use, when the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the patent holder shall be informed properly.
  • d)The authorization shall include patents related to manufacturing processes and components that allow the working thereof;
  • e) Such uses shall be non-exclusive;
  • f) They shall be non-assignable, except with that part of the enterprise of goodwill which enjoys such use;
  • g) They shall be authorized mainly for the supply of the domestic market, with the exception of the cases included under Articles 47) and 48);
  • h) The rights holder shall be paid a reasonable remuneration in the circumstances of each case, taking into account the economic value of the authorization, following the procedure stated under Article 46); in determining the amount of remuneration in those cases where the uses have been authorized to remedy an anti-competitive practice, the need to correct such practice shall be taken into account, and the termination of the authorization may be refused if it is appreciated that the conditions which led to such authorization are likely to recur;
  • i) For uses set under Article 48) and any other unforeseen case, the scope and duration shall be limited to the purposes for which they were authorized, and they shall be subject to termination when the circumstances which led to them cease to exist and are unlikely to recur; the National Institute of Industrial Property shall have the authority to review, upon motivated request, the continued existence of these circumstances. In terminating these uses, the authority shall take into account the legitimate interests of the people who have received the authorization. In the case of semi-conductor technology, the uses without the patent owner's authorization shall only be for public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive.

  Article 91) For the purpose of civil proceedings, if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority, as of January 1, 1999 to order the defendant to prove that the process used to obtain a product is different from the patented process. For the purpose of this judicial authorization, as from that date, and in the absence of proof to the contrary, any identical product produced without the consent of the patent owner shall be deemed to have been obtained by the patented process, always provided that said product is new on that date in accordance with Article 4 above.

  Article 94): The National Institute of Industrial Property shall be conducted and managed by a Board of Trustees formed by three (3) members to be appointed by the National Executive Power, one of them upon the proposal submitted by the Ministry of Economy and Public Works and the other member upon the proposal submitted by the Ministry of Public Health and Welfare.

  The three members will appoint those Trustees who are to act as President and Vice-President, while the remaining member will only have the capacity of voter in the Board. The members of the Board of Trustees will fill their positions on a full-time basis, with the same incompatibilities and restrictions imposed upon any other public officials in general, and they shall only be removed from their positions through a motivated decision of the National Executive Power.

  The Trustees will remain in their positions during a term of FOUR (4) years, and this term may be renewed indefinitely.

  An Auditing Board is to be created within the National Institute of Industrial Property for the surveillance of all acts of the different agencies of the Institute.

  One Full Syndic and one Alternate Syndic will be in charge of the Board, to be appointed by the Ministry of Economy and Public Works and Services upon the proposal submitted by the National Auditing Agency.

  Article 104): Pharmaceutical products inventions shall not be patentable prior to five (5) years as from the date on which the present Law is published in the Official Gazette. Up until that time, none of the articles included in the present Law shall come into force which refer to the patentability of pharmaceutical products or are closely linked to it.

  Article 105): Notwithstanding the provision of Article 104 above, patent applications for pharmaceutical products may be filed in the manner and conditions set within the present Law and the same will be granted after five (5) years counted as from the date of publication of this Law in the Official Gazette.

  The duration of the patents mentioned herein shall be governed by Article 35 above.

  The patent holder will have exclusive right on his invention after five (5) years counted as from the date of publication of this Law in the Official Gazette, except that third parties using the invention without the holder's authorization guarantee the full supply of the domestic market at the same real prices. In such case, the holder shall only be entitled to receive a fair and reasonable compensation from such third parties making use of the same from the date of the patent award until its expiration. If the parties do not reach an agreement, the National Institute of Industrial Property shall set said compensation pursuant to the terms of Article 46 above. What is established in this paragraph will be applicable unless it needs to be modified to fulfill those directives taken by the World Trade Organization in accordance with GATT-TRIPS which are of mandatory fulfillment for the Argentine Republic.

  Article 106, paragraph a): The first application was filed within the year prior to the passing of the present Law.

August 1995

• Konrad Becker, a director of CIBA-GEIGY, a large pharmaceutical firm, criticizes the Argentine patent law and corrective text, which he claims is inconsistent with TRIPs.

  See American Embassy, "Swiss Expert Criticizes Argentine patent Bill; Congressional Committee Vote Delayed," Cable 5092 to the US Secretary of State, August 1995.

September, 1995

• Secretary of State Warren Christopher sends an action request to the US Embassy in Buenos Aires asking the Argentine government to send a delegation to Washington to discuss US concerns about the patent issue.

  See US Secretary of State, "Argentine Patent Issues," Cable 219034 to the US Embassy in Buenos Aires, September 1995.

September 28th, 1995

• The Chamber of Deputies passes corrective legislation after several weeks of delay. Only 133 of the 257 members are present. The Justicialist Party succeeds in passing the legislation despite opposition from Radical Civil Union (UCR) and Front for a Country of Solidarity (FREPASO) with a vote of 71-58-4. Ambassador Cheek reflects with mixed sentiments about the passage of this legislation in a September cable to US Secretary of State Warren Christopher.

  In the context of Argentina this resolution of the impasse between Congress and the President leading to final enactment of medical patent protection is historic, breaking with a tradition of over a century of denying such protection in any form as against the public interest. Nevertheless, the corrective legislation still leaves Argentina's new patent regime short of what we desire and actively seek from the GOA. The GOA well knows this but repeatedly assures us we can expect further improvements to emerge from the implementing regulations the executive will promulgate. We hope the GOA will let us participate in the process of administratively improving its patent regime, as we have requested. In any event, we are compelled to await the implementing regulations before making a final judgment regarding the adequacy of the medical patent protection being afforded us in Argentina and reacting/responding thereto.

  See American Embassy, Buenos Aires, "Chamber of Deputies Passes Corrective Patent Law," Cable 6094 to the US Secretary of State, September 1995.

October 18th, 1995

• Argentine President Carlos Menem signs the corrective patent law. He then issues a regulatory decree, Decree 590/95, which was written by the Ministry of Economy secretary of legal and technical coordination. Important provisions of the decree include the following:
  • Article 43, which limits parallel importation:

    The owner of a patent granted in the Argentine Republic shall have the right to prevent third parties from carrying out, without his consent, any acts of manufacture, use offer for sale, sale or importation within his territory of the product and object of the patent, in accordance with the provisions of article 28 of the TRIP's-GATT agreement. For the purposes of the provisions of article 38, paragraph c) of the Law, it shall be understood that a product has been lawfully placed on the market when its introduction thereto has been carried out by the owner of the patent or by a third party with his authorization. In the same way, it shall be understood that an imported product has been lawfully placed on the market within the territory of the Argentine Republic when it has been introduced by the owner of the patent in the country or by a third party with his authorization, or when it has been acquired abroad from the owner of the patent in order to market it in the Argentine Republic, or acquired from a third party authorized to market it in the Argentine Republic.

  • Article 44, which states that importation will be considered "working":

    The owner of the patent shall determine the way in which the actual working of the patent shall be carried out in accordance with the provisions of article 27.1 TRIP'S-GATT.

    Importation shall be considered as working as shall likewise include distribution and marketing in a manner sufficient to meet the demands of the domestic market.

  • Article 45, which states that the Ministry of Economy is the "competent authority with respect to compulsory licenses."
  • Article 46, which grants the National Institute of Industrial Property the authority to issue compulsory licenses under the conditions of failure to work the patent, anticompetitive behavior, and national health and security emergencies.
  • Article 47, which states that after the time period allowed for working the product under the law has elapsed, "any concerned party may request the owner of the patent to grant a license for the manufacture and sale of the patented product or for the use of the patented process." If the patent holder declines the request or does not respond, the "concerned party" may register an application for a compulsory license with the National Institute of Industrial Property.

  Ambassador Cheek comments in an October 1995 cable to US Secretary of State Warren Christopher:

  Having come up short of its goals in the patent corrective text, the GOA has all but rewritten the Congressionally-passed patent law and the corrective version. In doing so, it has given us virtually everything we asked for in a "TRIPs-plus" decree, including what looks suspiciously like de facto patenting immediately for pharmaceuticals through deft handling of market exclusivity.

October 25th, 1995

• The Chamber of Deputies passes a resolution that finds that Presidential Decree 590/5 distorts patent laws 24,481 and 24,572.

November 3rd, 1995

• The US Patent and Trademark Office completes its analysis of the Argentine patent regulations. Its findings include the following:
  • Pharmaceutical patents will not be provided until late 2000 or possibly 2001.
  • No pipeline is protected.
  • Data exclusivity provisions fail to protect data submitted for marketing approval and ban the use of this data by competitors.
  • The marketing exclusivity allowed before patents are implemented in 2000 or 2001 is not TRIPs-plus, as the Argentine government claims.
  • The 150 day deadline for voluntary licensing agreements before the imposition of compulsory licensing "will put unwarranted pressure on the patent-holder to settle prematurely."
  • Compulsory licenses can be granted for excessive prices. The PTO says this "will provide enormous discretion to GOA authorities to make mischief.
• In his cable to the US Embassy transmitting the US PTO's position, Undersecretary of State Peter Tarnoff attaches statements indicating USTR's dissatisfaction with the Argentine law's provisions for data exclusivity.

  US Secretary of State, Washington, "Argentina IPR: Summary of PTO Analysis," Cable 1416 to the US Embassy in Buenos Aires, November 1995.

November 10th, 1995

• Francine R. Salamone of Pfizer writes to Roger Freeman, Economic Commercial Officer of the Intellectual Property Division of the Economic and Business Bureau of the Department of State. She attaches a document entitled Review of Decree 590/95 and the Consolidated Patent Law. The document cites President Menem's 1991 commitment to the US that Argentina would enact a patent law providing immediate pharmaceutical product patent protection, 20 years of pipeline protection, and stringent limitations to compulsory licensing as the standard with which the current legislative compromise should be compared.

  The review notes:

  Argentina has managed to stall the United States for over 4 years and now argues the US should accept a law that will only provide effective protection well into the next century. It seeks to justify this by shifting the goal-posts and asking that the cumulative effect of three patent laws and a regulatory decree be judged against the standards established by GATT TRIPS several years after the Argentine commitments had been made. It would be inconsistent to provide immediate product and pipeline protection while allowing Argentina to fall far short of its commitments.

November 10th, 1995

• US State Department under secretary of economic, business, and agricultural affairs Joan Spero meets with Argentine Ambassador to the United States Raul E. Granillo Ocampo in Washington. Spero's briefing memo for the meeting, prepared by Alexander F. Watson, states that the objective of the meeting is "to reemphasize USG dissatisfaction with the state of Argentina's patent regime and send a clear message that we have no choice but to respond." The memo states that the US Patent and Trademark Office "has concluded that while the new patent law is arguably TRIPS-consistent, it does not adequately fulfill the pledges made by President Menem to USTR Kantor on our patent concerns."

November 13th, 1995

• The US issues a review of intellectual property protection around the world. To the surprise of many, Argentina is not mentioned.
• The International Division of PhRMA, the Pharmaceutical and Research-Based Manufacturers of America (an industry organization replacing the PMA) issues a summary of its stance on Argentine patent regulation. It states that the recent presidential decree and Law 24,481 (as amended by 24,572) "fall far short of the commitment made by President Menem in 1991." It cites the delay in implementing pharmaceutical patents until November 2000, the absence of provisions for pipeline protection, the lack of a ban on parallel imports, and the "broad discretion" granted to the National Institute of Industrial Property in issuing compulsory licenses as particularly problematic.

November 15th, 1995

• The Senate passes draft law calling for the replacement of Decree 590/95. The Resolution states that the regulatory decree violates the Constitutional provision that regulations are not to alter the spirit of the laws they implement. The resolution takes issue with the decree's statement that compulsory licenses are to be issued only in exceptional cases and the decree's articles 74 and 75, which it claims extend retroactive coverage for patents. The bill repeals the Argentine patent law of 1864.

  Ambassador Cheek comments in a November 1995 cable to Secretary of State Warren Christopher:

  Ironically, the GOA's decree, pilloried by many in Washington as too weak, is now seriously threatened by Argentine Congress- which considers it too strong. It is now virtually certain that Chamber of Deputies will pass the bill, only question is when.

  See American Embassy, Buenos Aires, "Argentine Congressional Moves to Nullify GOA Patent Decree," Cable 7219 to the US Secretary of State, November 1995.

December 3rd, 1995

• Argentine President Carlos Menem writes to US President Bill Clinton. He restates his commitment to intellectual property protection and calls Clinton's attention to the negative repercussions of applying sanctions to Argentina.

December 7th, 1995

• The Chamber of Deputies approves the bill that passed in the Senate November 15th and another bill that grants holders of compulsory licenses more rights. A December cable from American Ambassador James Cheek in Buenos Aires to US Secretary of State Warren Christopher reports that the latter bill "would further increase the scope for compulsory licensing" by providing that compulsory licenses granted in response to anticompetitive behavior by patent holders cannot be withdrawn if a withdrawal of the license would threaten the "licit interests" of the license holder.

  See American Embassy, Buenos Aires, "Chamber of Deputies Passes Bill on Compulsory Licensing," Cable 7781 to the US Secretary of State, December 1995.

December 11th, 1995

• Upon learning that some of President Menem's advisors are telling him to only partially veto the bill passed in both houses to nullify the presidential decree, Ambassador Cheek contacts Minister of Economy Domingo Cavallo and Foreign Minister Guido Di Tella "to register his strong concern that President Carlos Menem might be persuaded to accept such misguided advice." The Ambassador claims that "the result of a partial veto would be a worst of both worlds solution to the patent impasse with would create confusion and continued controversy in both capitals." Ministers Cavallo and Di Tella agree to recommend to the President that he not to follow the counsel of his advisors.

  See American Embassy, Buenos Aires, "Government Reportedly Decides on Total Veto of Latest Patent Law," Cable 7759 to the US Secretary of State, December 1995.

December 12th, 1995

• The Chamber of Deputies approves a bill protecting industrial and trade secrets for pharmaceuticals to go into effect immediately. According to the World Intellectual Property Review, the US had threatened to impose trade sanctions if such a law were not passed by December 20th. CAEME's legal counsel, Jorge Otamendi, says that "the US and foreign laboratories in Argentina should be happy with this law."

  See World Intellectual Property Review Volume 11, Number 1.

December 15th, 1995

• The Journal of Commerce publishes an article by John Maggs entitled "Drug Piracy Tariffs Test US-Argentine Relationship." Maggs reports that the US is considering revoking Argentina's GSP benefits, which he states allow duty-free trade on more than half of the $800 million of goods exported by Argentina to the US. However, despite the administration's concern about Argentine policy, State Department Latin America specialists and Thomas McLarty, a Clinton advisor, reportedly oppose trade sanctions out of fear that such measures would impact Argentine support for US foreign policy.

December 22nd, 1995

• La Nacion, a Buenos Aires daily newspaper, publishes an interview with President Menem in which the President claims that he has no power to veto the Congressional patent laws because they are TRIPs-consistent. La Nacion speculates that the President's decision not to veto the bill reflects his efforts to placate Congress.

• El Carin, another daily newspaper, publishes excerpts from President Menem's letter to US President Bill Clinton, which it cites as evidence of a new hard line the administration will hold in negotiations with the US on patents.

• In a meeting with US Embassy officials, Argentine Undersecretary for Cabinet Coordination Fernando Garcia Pulles says that Menem may be trying to ensure passage of economic reform measures in Congress, but may later veto the bill.

  See American Embassy, Buenos Aires, Cable to the US Secretary of State, Washington DC, December 1995.

January 2nd, 1996

• Foreign Minister Di Tella calls Charge Rochas to announce that President Menem will veto article 2 of the clarifying bill, which removes the power to regulate patents from the executive branch. The executive branch also plans to issue a decree revalidating older patent laws, which were nullified by article 1 of the clarifying bill.

  See American Embassy, Buenos Aires, "Menem Partially Vetoing Patent Bill," Cable 0031 to the US Secretary of State, Washington DC, January 1996.

• PhRMA issues a news release urging patent protection. It quotes PhRMA President Gerald J. Mossinghoff as saying that "convincing Argentina to live up to earlier commitments by developing patent protection for medicines" should be "a key US priority in 1996." Mossinghoff estimates the cost of piracy to US research-based pharmaceutical companies at $500 million/year and states that "the President and US Trade Representative (USTR) Michael Kantor should initiate the same kind of intense effort that convinced China earlier this year to develop protection for intellectual property."

  "Effective Patent Protection is Needed Now in Argentina, PhRMA Says," PhRMA 2 January 1996.

January 3rd, 1996

• Argentine President Carlos Menem issues a partial veto of the Congressional act that nullified his decree implementing patent law. He strikes through Article 2, which grants Congress the right to regulate patents, on the grounds that this violates the Constitutional separation of powers.
• El Cronista, a Buenos Aires newspaper, prints an opinion piece condemning "the astonishing provincialism" of those who deny the need for intellectual property rights as an instrument to obtain integration and growth.

January 4th, 1996

• Assistant Secretary of State Alexander F. Watson meets with Argentine Minister of Economy Domingo Cavallo to discuss prospects for Argentine growth. With regard to continuing US industry dissatisfaction with Argentine patent law, Watson recognizes that President Menem has "only limited maneuvering room to impose changes on a recalcitrant Congress, but urges Minister Cavallo to tell Foreign Minister Guido Di Tella to speak with US Trade Representative Mickey Kantor as soon as possible to avoid possible trade sanctions.

  See US Secretary of State, Washington, "A/S Watson's 1/4 Meeting with Argentine Economy Minister Cavallo," Cable 5182 to the US Embassy in Buenos Aires, January 1996.

• President Menem's Chief of Staff, Eduardo Bauza, meets with Chamber of Deputies Industry Committee Chairman Humberto Roggero. Bauza assures Roggero that the executive branch intends to work with Congress and representatives for the domestic and foreign pharmaceutical firms to draft a regulatory decree that satisfies all parties.

  See American Embassy, Buenos Aires, "Another Argentine Patent Regulatory Decree?" Cable 0119 to the US Secretary of State, January 1996.

January 6th, 1996

• La Nacion, an Argentine daily newspaper, publishes an article entitled "Kantor: Impaciente por la Ley de Patentos Argentina" (Kantor: Impatient for Argentine Patent Law). With regard to imposing repercussions on Argentine exporters, USTR Mickey Kantor is quoted as saying that "there is no discussion within this government that we will have to act in the immediate future."

January 17th, 1996

• The economic office at the American Embassy in Buenos Aires, discusses problems with Patent Decree 590 with Ministry of Economy Legal Undersecretary Carlos Tombeur and Undersecretary for Cabinet Coordination Fernando Garcia, both of whom assure Martin that the government will provide data exclusivity for patents. Cabinet Coordination Secretary Alberto Garcia Lema confirms this and claims that the executive branch has decided to draft a law explicitly providing data exclusivity.

  See American Embassy, Buenos Aires, "Update on Data Exclusivity," Cable 0271 to the US Secretary of State, 1996.

February, 1996

• An economic officer from the US Embassy in Buenos Aires speaks with Tony Imler, executive director for policy and coordination at Merck. Imler expressed frustration with Argentina, which he called "the largest pharmaceutical pirate in the world." He is concerned that Congress and local labs will try to double the five year transition period in a move that would be legal under the TRIPs agreement. Imler suggests that the US look into using its bilateral investment treaty with Argentina to demand increased patent protection, perhaps through a lawsuit.

  See American Embassy, Buenos Aires, "Argentine Patent Fight: The View from Merck," Cable 0885 to the US Secretary of State, February 1996.

• Local representatives of American pharmaceutical firms tell Embassy officials that Argentine firms are pursuing negotiations of licensing agreements with US firms, even as they continue copying the unlicensed patent products of other firms.

  See American Embassy, Buenos Aires, "Argentine Pharmaceutical Firms Changing Their Spots?" Cable 0980 to the US Secretary of State, February 1996.

February 20th, 1996

• Citing inadequate protection of its members' intellectual property, PhRMA requests that Argentina be listed as a Priority Foreign Country in the Special 301 Review in April.

February 23rd-28th, 1996

• An Argentine Congressional delegation visits Washington. Participants include Humberto Roggero, Roberto Digon, and Oscar Lamberto of the Judicialist Party, Mario Negri of UCR, and Rafael Flores of Frepaso, who are expected by US officials to argue that Argentine patent law is consistent with TRIPs and that compulsory licensing provisions are necessary to protect the public from price increases.
• In anticipation of the meeting, Ambassador Cheek sends a cable to the Secretary of State in Washington DC to present the arguments the Deputies may present in defense of maintaining the current patent system without improvement. Ambassador Cheek writes:

  The legal and economic defense of the Argentine Congress's patent law of March 1995, and its subsequent corrective text, are based on arguments developed by the association of local labs, CILFA, which boasts some 60 member firms. CILFA claims to support a patent system that provides "a balance between private interests and public welfare," including "the right of the Argentine people to obtain medicine at reasonable prices." With this official philosophy, CILFA firms (and others aligned with the smaller local association COOPERLA) have, for decades, vigorously copied international firms' patented products. In the process, local firms control around 54 percent of the Argentine pharmaceutical market, said to be the twelfth largest in the world with annual turnover of more than three billion dollars.

  As such, the Argentine Congress passed patent legislation intended, as much as anything else, to defend the interests of local pharmaceutical firms. At the same time, supporters of this legislation in Congress claim the law is consistent with TRIPs. In Washington, Argentine Congressmen are likely to argue that, with corrective text, the law is TRIPs-consistent because it allows importation as legitimate patent exploitation. They may also claim that the law's compulsory licensing regime, including stipulation that license can be issued to alleviate "excessive prices vis-a-vis the market average" is also legal because TRIPs article 31(k) authorizes licenses to remedy "anti-competitive" practices. The Congressmen may note that pipeline protection, demanded by the US, is not required by TRIPs. They might also argue that TRIPs allows parallel imports, since article 6 stipulates that the agreement does not address the issue of exhaustion.

  Congress has strongly defended the five-year transition for pharmaceutical patenting, arguing that Argentina, as a developing country, requires an adjustment period, in addition to noting that five-year transition contained in the law complies with TRIPs (which allows up to 10 years). Congressmen may also point out that other countries have enjoyed transition periods. According to CILFA, these include Austria with eight years, Portugal with five, Spain and Greece with six years and Denmark, Finland, Sweden, and Norway, each with 10 years. However, CILFA never mentions that Argentina's two leading labs have over 100 patents registered or applied for abroad, primarily in Europe but also in the US, Canada, and Japan.

  Probably the most effective argument in swaying Argentine public opinion in the CILFA/Congressional repertory centers on prices. Under "monopolistic" patenting (i.e. without easy compulsory licensing), CILFA has claimed, the price of medicines in Argentina will skyrocket by 273 percent, approximating US levels, although no time frame is given for this increase. To "prove" this, CILFA has published comparisons of prices of pharmaceuticals in Argentina to the US, where "monopoly" is said to reign. (Both CILFA and Congress contend that the patent system is responsible for the "health crisis" in the US. One local company president recently told ECONOFF even though health care reform had recently failed in the US, in his opinion "the American people would successfully demand overhaul of the patent system within 10 years.")In some cases the supposed price differentials are as high as several hundred percent. As a result, according to CILFA, with patenting consumption of pharmaceuticals in Argentina would decrease by 45 percent. However, a recent study published by the Fundacion Mediterranea, a highly respected local think tank with links to economy minister Cavallo, disputed CILFA's claim. Fundacion calculated a price hike for patented products of 71 percent, translating into an overall rise in pharmaceuticals (patented and non-patented) of 21 percent, using CILFA's assertion that patented medicines would account for 30 percent of the Argentine market. Using pro-IPR lobby CAEME's base of 10 percent as patented products, the overall price increase would be 10 percent. Again, no time line was presented.

  In countering CILFA's argument, it should also be noted that the association only compares the prices of products still under patent in the US with the local equivalent, copied or original. Representatives of international labs have countered with data showing that at least some patented products are cheaper in the US. CILFA also ignores the fact that many, if not most, non-patented US products (generic or trademark) including such medicine cabinet mainstays as Motrin, Tylenol, Imodium or simple aspirin, are cheaper in the US than in Argentina. Furthermore, the prices of original products in Argentina in many, if not most cases, are lower than their copied counterparts. In response, CILFA claims "competition," which would be absent with patenting, forces the innovative firms to keep their prices low.

  Balance of Payments Impact

  Related to pricing are balance of payments effects. According to CILFA, barring parallel imports, patent holders will force Argentina to import higher priced pharmaceutical raw materials. CILFA claims that Italy went from a trade surplus of around 50 million dollars before pharmaceutical patenting in 1978 to a deficit of several hundred million dollars by 1990. In the process, the price of pharmaceuticals in Italy rose by 200 percent. (Note: CAEME countered this by noting the overall inflation rate in Italy was higher.) CILFA and the Congress also claim that royalty payments to foreign patent holders will also impact on the balance of payments. All told, higher imports and royalty payments would supposedly translate into 367 million dollars transferred abroad. As such, in many local minds, conferring patent protection is a trade concession to the US without receiving anything comparable in return. At the same time, Argentine Congressmen habitually slam the US and to a lesser extent the EU on agricultural subsidies, which allegedly "rob" Argentina of its "natural" export markets.

  Denying the Benefits

  CILFA and Congress habitually deny the link between patents and innovation. Instead, they claim a country's level of development determines its level of inventiveness. They point to the disproportionate share of inventions originating in industrialized countries such as the US, Germany, Japan, etc. CILFA spokesman Pablo Challu goes even further, claiming that patents stifle inventiveness. Reason: by conferring exclusive marketing rights, an inventor with a mediocre product is shielded from competition. Without a monopoly, the patentee would be forced to invent better products.

  CILFA's literature also downplays the amount of investment in research and development generated by patent protection, particularly in lesser-developed countries. CILFA claims R and D will remain centered in the developed world, in the Northern hemisphere, which will be content merely to export its patented products, as opposed to investing in local production. (One local pharmaceutical firm president told ECONOFF "not even Australia" has received significant research and development investment), since it is a small country and far from major markets. ECONOFF countered with information provided by Pharma and Merck showing a significant increase in R and D in Australia after its patent law of 1990 came into effect.) CILFA argues this leads to disinvestment, a la Chile, where several international firms shut down their plants after the new patent law of 1991, replacing them with sales offices, resulting in higher unemployment. CILFA also claims that Canada's pharmaceutical sector has lost over 1800 jobs since 1993 when the new patent law was enacted "under pressure form the US," although this was attributed to mergers and downsizing. Yet, CILFA asserts that the market share of foreign firms invariably increases with patenting, because their exports will force local labs (which presumably made their living previously by infringement) to shut down.

  Comment

  CILFA pulled out all the stops in lobbying for weak patent protection and succeeded brilliantly with Congress. The passage of TRIPs, with its stipulation that imports count as patent exploitation, helped to prevent passage of an even weaker law.

  Argentine Congressmen will now travel to Washington intending to convince the US, and the Argentine public, that the law is TRIPs-consistent, and that the US government should cease pressuring for more. The delegation is bringing its own press corps (four to five journalists, including representatives of the leading daily Clarin, left of center Pagina 12 and news service DYN) to Washington to send their version of the truth back home. Hard-line Deputy Humberto Roggero traveled early, "to scout the turf," according to the local press. We suspect he conferred with CILFA's public relations firm in Washington to sharpen its arguments.

  Washington interlocutors can expect Roggero and his fellows to be dressed for bear, ready to use the Argentine press and to push their message from a prestigious perch in Washington. We should be prepared to counter their arguments directly and forcefully, both in private and before the visiting Argentine journalists, by emphasizing the benefits to Argentina of strong IPR protection, rather than the sanctions under consideration by the US government.

  See American Embassy, Buenos Aires, "Argentine Congress' Patent Arguments," Cable 1111 to the US Secretary of State, February 1996.

• On February 26th, the legislators visit State Department under secretary of economic, business, and agricultural affairs Joan Spero. Her briefing memorandum for the meeting, prepared by Alexander F. Watson, states:

  You should send a firm message that the present regime is unacceptable to us and that it is causing our industry serious harm. You should emphasize that this is a point of view shared throughout the USG. I also recommend that you speak to Argentina's place in the global economy and the essential role strong patent protection plays.

  The memorandum concludes: "You avoid being drawn into a discussion of whether the Argentine regime satisfies TRIPs or not. We have made clear that we expect TRIPs-plus protection and have laid down specific benchmarks for adequate protection.

February 29th, 1996

• US Secretary of State Warren Christopher visits Argentina to discuss bilateral issues. Participants in the meeting between US and Argentine officials include the following people:
  • Warren Christopher, US Secretary of State
  • James R. Cheek, US Ambassador to Argentina
  • Thomas McLarty, Counselor to US President Bill Clinton
  • Thomas Donilonr, Chief of Staff to US Secretary of State Christopher Warren
  • Alexander Watson, Assistant US Secretary of State, ARA
  • Nancy Soderberg, Deputy Assistant to the US President for National Security Affairs
  • Guido Di Tella, Argentine Foreign Minister
  • Ambassador Fernando Petrella, Argentine Deputy Foreign Minister
  • Ambassador Andres Cisneros, Secretary General of Foreign Ministry
  • Ambassador Raul Granillo Ocampo, Argentine Ambassador to the US
  • Ambassador Jorge Campbell, Ministry of Foreign Affairs Secretary for International Economic Relations

  With regard to the pharmaceutical patents issue, Secretary Christopher warns that the US may soon enact trade sanctions against Argentina. Minister Di Tella responds that the executive branch is engaged in a dispute with Congress, but has succeeded in obtaining the passage of legislation that, as Secretary Christopher paraphrased in a later cable, "would be GATT-consistent with a few additional 'pluses.'" Secretary Christopher notes, "While there would be fewer 'pluses' than the US might want, Di Tella urged the US to be understanding and not to take retaliatory measures."

  See US Secretary of State, Washington DC, Cable to the American Embassy in Buenos Aires, March 1996.

• Despite Minister Di Tella's promises of "pluses," Ambassador Cheek writes later that the US Embassy officials "expect the patent regime to fall far short of our standards and receive a GATT-minus rating from our pharmaceutical industry and patent experts."

  See US Secretary of State, Washington DC, "Secretary's February 29 Meeting with Argentine FM Guido Di Tella, Palacio San Martin, Buenos Aires," Cable 48875 to the US Embassy in Buenos Aires.

Early to Mid-March, 1996

• Ambassador Cheek sends a cable to US Secretary of State Warren Christopher, announcing that in the past few days, Embassy officials have discussed the patent situation with Argentine Presidential Secretary for Cabinet Coordination Alberto Garcia Lema and Undersecretary Fernando Garcia Pulles. Ambassador Cheek summarizes the executive branch's "negotiating strategy with Congress" with the following note:

  The GOA is seeking to clarify the prohibition against parallel imports and confine them to instances in which a compulsory license has been issued. Compulsory licenses would be circumscribed at least somewhat by restricting invocation of 150 day negotiating deadline to instances of non-working of patent. GOA is also trying to maintain its version of "limited pipeline" (TRIPs Article 70.4) in new decree. Nevertheless, the situation is fluid with Congressional opposition still strong, particularly in the Senate. Congress has also hinted it would add a local working requirement, a la Brazil. The final result could well be "TRIPs minus."

  Cheek paraphrases Garcia Lema as saying that "the GOA is trying to maintain, or even improve, 'positive elements' contained in Decree 590, which Congress has tried to derogate, while ceding on minor, 'symbolic' issues." Pulles is quoted as saying that the Decree provision that any pirated drugs in the market in 2000, when patenting begins, must be withdrawn constitutes a "limited form of pipeline." Cheek paraphrases Pulles as continuing on to say that "the five year transition was more myth than reality."

  The cable also reports that an Embassy economic section official met with Pulles and Robert Sherwood, a "visiting IPR expert" sponsored by the US Embassy. With regard to the compulsory licensing bill passed by the Argentine Chamber of Deputies, Ambassador Cheek paraphrases the Embassy official as demanding that "GOA either try to kill the bill in the Senate or veto it should it pass." Pulles agrees.

  Pulles points out the lack of consistency in US pressures on intellectual property regulations by noting the precedent created by Brazil's Bezerra Bill, which imposes a local working requirement. Ambassador Cheek reports that "Pulles said some Congressmen, particularly those who recently consulted with the USG in Washington, were threatening to add a local working clause to counter the perceived advantage that article gave Brazil in attracting investment."

  See American Embassy, Buenos Aires, "GOA Readout on Patent Negotiations," Cable 1587 to the US Secretary of State, March 1996.

• Bristol Myers/Squibb acquires a large local lab. CILFA cites this as proof that patent law is not a necessary precursor to investment in the Argentine market. In comments to an Embassy economic officer, Squibb representative Ernesto Felicio states that the purchase does not Squibb will conduct local research and development; that would require improvements in patent law. Instead, like other companies increasing their presence in Argentina, Squibb hopes to increase local marketing operations. Ambassador Cheek comments in a cable to US Secretary of State Warren Christopher that although more firms are entering the market, investment in research and development is "conspicuously absent."

  See American Embassy, Buenos Aires, "US Takeover of Argentine Pharmaceutical Company," Cable 1702 to the US Secretary of State, March 1996.

March 14th, 1996

• The executive branch and Congress agree on the text of a new regulatory decree for patents. Both Presidential cabinet coordination secretary Alberto Garcia Lema and Humberto Roggero express satisfaction with the decree. The US attributes this contentment on both sides to differing interpretations of the decree, which may result in "further bickering down the road."

  See American Embassy, Buenos Aires, "GOA / Congress Agree on New Patent Decree" Cable 1610 to the US Secretary of State, Washington DC, March 1996.

March 20th, 1996

• The Associated Press Online reports that the hemispheric trade conference in Cartagena, Colombia erupted with conflict between multinational pharmaceutical firms and domestic industry representatives. The article reports:

  Tempers exploded over US patent rights at the hemispheric trade summit on Wednesday, prompting organizers to summon police to calm unruly South American drug company representatives.

  "There were boos. There were charges of manipulation" said Harvey E. Bale Jr., a senior vice president of the Pharmaceutical Research and Manufacturers of America. "It was the most violent meeting I ever attended."

  The disruption -- where the violence was only verbal-- was over what US drug companies call piracy, but which some South American companies say is greed by US drugmakers.

  "They want a law that only benefits them," protested Pablo Maron Challu, executive director of CILFA, which represents Argentine drug companies.

  He said drug makers operating in 14 countries including Paraguay, Uruguay, Venezuela, and Colombia oppose the strict patent regulations demanded by the US drug and publishing industries.

  Industrial countries should be more generous in sharing technology with the developing world, he said.

  Summit coordinator Jorge Ramirez Ocampo had to personally intervene to get the working group to include the dissenting opinion in its final report, one of 13 being presented to trade ministers on Wednesday.

  Bale said the issues are actually quite simple: the Argentina-centered pharmaceutical "pirates" want to be able to continue producing heart drugs, antibiotics, anti-ulcerants and other medications based on US-developed products whose patents are still pending.

  They also want their governments to be able to oblige multinational companies like Pfizer, Merck, and Squibb, which Bale represents, to license drugs to domestic producers at low royalty rates, he said.

  The trade ministers, including US Trade Representative Mickey Kantor, will meet behind closed doors on Thursday to work out a final communique.

  "Tempers Flare at Trade Summit," AP Online, 20 March 1996.

• President Menem signs the consensual decree, Decree 260, a revised version of his earlier regulatory decree, which was vetoed by Congress. The decree revises the language used on compulsory licensing and allows the patenting of products introduced during the transition period.

  Congressional reaction to the decree, as reported in the local papers, is mixed. Ambassador Cheek reports in a March 1996 cable to the US Secretary of State:

  Local press has reported that Congressional leaders disagree with the decree's stipulations on transition and compulsory licensing. They contend that copied pharmaceutical products introduced during the transition period should not be excluded from the market after 2000, and that 150 day negotiating deadline for compulsory license should apply not only in cases of non-working but in all cases in which local company seeks a license. (Press reported some Congressmen want to resolve these issues in court.) Nevertheless, hardline Congressman Humberto Roggero was quoted in business daily "El Cronista" saying that while the decree "was not ideal, we're satisfied.

  American Embassy, Buenos Aires, "New Argentine Patent Decree Issued," Cable 1769 to the US Secretary of State, March 1996.

March 21st, 1996

• Argentine President Carlos Menem, Minister of Economy Domingo Cavallo, and Chief of Staff Eduardo Bauza submit to the Argentine Congress a draft of legislation designed to provide six years of confidentiality of information presented to the National Administration of Medicine, Foods, and Medical Technology. A previous draft had only provided 5 years of confidentiality. The modified draft suspends data protection if the information is publicized by the original research or if the information has entered the public domain in another country. The authors note, "approval of the present draft will permit fulfillment of the international agreements assumed by the Republic and will bring to the investigators an adequate defense for the results of their labors, promoting investigation and development."

  American Embassy, Buenos Aires, "Draft Data Exclusivity Law Submitted to Congress," Cable 1795 to the US Secretary of State, March 1996.

March 28th, 1996

• Secretary Christopher holds a Latin America Breakfast Meeting. In advance of the meeting, Shaun Donnelly, Deputy Assistant Secretary of State for Trade Policy and Programs in the Bureau of Economic and Business Affairs, sends Alan P. Larson, Deputy Assistant Secretary for International Finance and Development, a briefing memorandum warning that "the Argentina patent issue might come up in the discussion (an official from Pfizer Corp. will be in attendance)." Donnelly instructs, "If the patent issue is raised, you will want to be in a largely listening mode. You, of course, will want to assure the pharmaceutical companies that we share their legitimate concern and are determined to see the patent issue through to resolution."

April 10th, 1996

• The Brazilian legislature approves a patent bill that includes a local manufacturing requirement, pipeline protection, and a short transition period.

April, 1996

• A US Congressional delegation led by US Representative Carlos J. Moorhead visits Buenos Aires. The group meets with the following Argentine government officials:
  • President Menem, whom Chairman Moorhead reminds of the Argentine commitment to improved intellectual property protection. Members of the delegation also argue to Menem that Argentina's failure to enact more stringent patent law may decrease the country's ability to compete for foreign investment with its neighbors, many of whom are working toward increasing intellectual property protection.
  • Carlos Tombeur, undersecretary for legal affairs and the Ministry of Economy, and INPI director Norma Felix, who say that the executive branch has done all it can to improve the intellectual property regime despite opposition from Congress, and that current law is consistent with the TRIPs agreement.
  • Speaker of the Chamber of Deputies Alberto Pierri, who suggests increased contacts between the US and Argentine legislatures to address US concerns. In response, the US delegation states that improved patent law is not a bilateral issue, but a priority for Argentine development.
  • US pharmaceutical and software firms, who agree with the Congressional delegation that trade sanctions would undermine current efforts to improve patent law.

  Ambassador Cheek comments: "putting these issues in a more global context advanced our arguments while reaffirming US diplomatic and commercial interests."

  See American Embassy, Buenos Aires, "Visit of Codel Moorhead to Buenos Aires: Keeping Patents on the Agenda," Cable 2296 to the US Secretary of State, April 1996.

Late April, 1996

• Ambassador Cheek sends a cable to Secretary of State Warren Christopher to say that the local press is reporting that Humberto Roggero, chairman of the Chamber of Deputies industry committee, plans to introduce a bill to add a local manufacturing requirement to Argentine patent law. President Menem vetoed a local manufacturing requirement in an earlier version of the law. CILFA director Pablo Challu is quoted in support of Roggero's effort in La Nacion April 28th arguing that the US cannot oppose this legislation when it accepts Brazil's local manufacturing requirement.

  See American Embassy, Buenos Aires, "Local Working Requirement to be added to Argentine Patent Law?" Cable 2624 to the US Secretary of State, April 1996.

April 25th, 1996

• In the lead-up to the annual USTR Special 301 Review, the Journal of Commerce publishes an article by John Maggs that forecasts that "Argentina is again expected to escape US retaliation next week, despite continued patent piracy, while India, Pakistan, Turkey, and Portugal are likely to be targeted under the new global rules against copyright and patent piracy." Maggs suggests that the new international norms have made it easier to ensure that governments do not violate WTO standards, but have made it more difficult for the US to threaten unilateral trade sanctions, such as those imposed by USTR. He cites President Menem's close relationship with US President Bill Clinton as an advantage held by Argentina over other Special-301-candidate countries.

  See Maggs, John, "Four Countries Face Sanctions for Copyright, Patent Violations," Journal of Commerce 25 April 1996.

April 30th, 1996

• President Clinton writes to President Menem to announce that Argentina has been elevated to the Priority Watch List, the most serious category of patent offenders on the Special 301 list. President Clinton states that

  The failure of the Argentine Congress to pass a strong patent law imposes economic costs on both of our countries. It reduces Argentina's ability to attract foreign investment and the competitiveness of Argentine companies in global markets. And here at home, I am concerned about the damage that the lack of effective patent protection in Argentina is causing to US companies and workers.

  The US does not impose trade sanctions because, as President Clinton writes, it expects that the Argentine administration will "continue to work with the Argentine Congress to improve intellectual property."

  Clinton, William J., Washington DC, Letter to Carlos Menem, Buenos Aires, 30 April 1996.

May 3rd, 1996

• In response to President Clinton's letter, President Menem says he will return to working for increased patent protection in discussions with Congress. Ambassador Cheek comments:

  By the look of things, the combination of Brazil's new patent law and President Clinton's letter (sic) have turned Menem -- who just last month told CODELs Moorhead and Burton that the Argentine law was TRIPs-consistent and, because of near-unanimous Congressional opposition, could not be changed.

  See American Embassy, Buenos Aires, "Menem Says Patent Law to be Revisited," Cable 2728 to the US Secretary of State, May 1996.

May 9th, 1996

• Ambassador Cheek meets with Jorge Rodriguez, Menem's chief of staff, to insist that the executive branch push for passage of a draft law on data exclusivity by December in order to fulfill President Menem's commitment to President Clinton

• The day after the meeting, "La Prensa," a daily newspaper, reports that Congress will most likely change the bill to make it more friendly to local labs because as it stands, the bill "would nullify advantages gained by local pharmaceutical labs" in the current patent law.

  See American Embassy, Buenos Aires, "Status of Argentine Draft Data Exclusivity Law," Cable 2905 to the US Secretary of State, Washington DC, May 1996.

May 23rd-24th, 1996

• The Argentine Chamber of Deputies releases a list of expected investors in Argentina in an effort to discredit claims that investment requires increased intellectual property protection. Ambassador Cheek sends a cable to US Secretary of State Warren Christopher to describe the Argentine reaction to the Brazilian patent law. Cheek writes that Argentine Deputies are warning that the local manufacturing requirement contained in the Brazilian law will redirect investment toward Brazil, thereby increasing Argentine reliance on imported medicines, while, according to CILFA, Brazil's new ban on parallel imports will decrease Argentine pharmaceutical exports.

• Argentine Congressmen meet with fellow Congressmen from the Mercosur countries. Argentina insists that Brazil modify its patent law to extend the local manufacturing requirement to all Mercosur countries, such that production in any Mercosur country would satisfy the requirement.

  See American Embassy, Buenos Aires, "Argentines Propose Mercosur Patent Working Requirement," Cable 3348 to the US Secretary of State, May 1996.

June, 1996

• Pablo Challu, executive director of CILFA, asks the US Embassy for assistance in scheduling negotiations with the US industry. The US Embassy requests a response from US industry on the proposed meetings.

  See American Embassy, Buenos Aires, "Patents: Argentine Labs Ready to Deal?" Cable 3601 to the US Secretary of State, 1996.

June 12th, 1996

• The Argentine Embassy in Washington DC circulates a brief entitled "Intellectual Property Rights in Argentina: comments about possible US Actions." The Embassy asserts that "Argentina's patent legislation is in line with international rules concerning intellectual property" and "fully meets all WTO requirements." Furthermore, the Embassy claims, the executive branch has proposed legislation "beyond and above WTO requirements." The Embassy warns that any sanctions instituted by the US on Argentina would undermine these efforts.

June 19-20, 1996

• The Argentine Association for Intellectual Property Rights (ASDIN) convenes a symposium to discuss economic integration and intellectual property protection. Ambassador Cheek and other pro-patent speakers state that strong patent protection generally increases investment in research and development.

  See American Embassy, Buenos Aires, "Conclusions of Symposium on Integration and Intellectual Property Rights," Cable 4226 to the US Secretary of State, July 1996.

July 16th, 1996

• Argentine Deputies Edgardo Barberis and Jose Maria Paraida write to US Trade Representative Mickey Kantor to express their displeasure that Argentine labs will be excluded from participation in the USPTO-sponsored Intellectual Property Conference of the Americas. They write,

  To be sure, CILFA may not see eye-to-eye with those who advocate strict, monopoly-patent systems which excess the international intellectual property agreements such as trips. But that does not justify their exclusion from a "hemispheric" conference. We would ask that the US government either make efforts to include Argentine interests such as CILFA in the future, or refrain from calling US government events meetings "of the Americas."

  Barberis, Edgardo A. and Paraida, Jose M., Buenos Aires, Letter to Mickey Kantor, Washington DC, 16 July 1996.

• Warner-Lambert sends INPI a "mailbox" patent application for atorvastatin, a drug for patients with high cholesterol marketed under the brand name Lipitor, in order to qualify for a patent at the end of the transition period and for exclusive marketing rights for the drug until patent protection becomes available.

  See Warner-Lambert Company, "Exclusive Marketing Rights for Lipitor in Argentina," 14 December 1999.

July 26th, 1996

• Minister of Economy Domingo Cavallo resigns.

August 1st, 1996

• Bruce Lehman, Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, replies to Barberis's and Paraida's letter of July 16th, which complained that CILFA had been unfairly excluded from participation in a July conference on intellectual property. Lehman writes, "Representatives of CILFA were unable to articulate how it or its members had used the intellectual property system as an engine for economic growth and wealth creation. Since this was the focus of the IP Conference, no representative of CILFA was asked to participate as a panelist."

September 20th, 1996

• Ministry of Economy undersecretary for legal affairs Carlos Tombeur resigns. He is to be replaced by Miguel Pareja, who is currently general manager of the Argentine central bank.

  See American Embassy, Buenos Aires, "Resignation of Under Secretary Tombeur," Cable 5756 to the US Secretary of State, September 1996.

September 24th-26th, 1996

• The Clarin, a prominent daily newspaper, carries comments September 24th by ITC commissioner Carol Crawford calling the current Argentine patent law "very bad."

• Deputies Humberto Roggero, Juan Pablo Baylac and Dario Alessandro, and CILFA executive director Pablo Challu voice objections to Crawford's statements in the next day's press.

• La Nacion reports a statement by Foreign Minister Guido Di Tella says that patents continue to be a divisive issue. He is quoted as saying, "nothing satisfies the US laboratories. Their lobby is never going to admit that they've gotten what they wanted. They will never be happy."

  See American Embassy, Buenos Aires, "ITC Commissioner's Remarks on Pharmaceutical Patents," Cable 5909 to the US Secretary of State, September 1996.

October 4th, 1996

• Grey F. Warmer and Dr. J. Anthony Imler of Merck write to Under Secretary Joan Spero to voice their concern over the lack of protection for pharmaceuticals in the Argentine market. In response, E. Bryan Samuel, Deputy Assistant Secretary of State at the Bureau of Inter-American Affairs, writes,

  Both Mrs. Spero and I share your concern over the lack of protection for pharmaceutical products in Argentina and its continuing impact on US industry. The Argentine patent system falls far short of providing adequate and effective protection. We continue to press the Argentine government on this issue through high level dialogue, Special 301, and the day to day activities of the US Embassy in Buenos Aires.

  Samuel then promises that "the views of the US pharmaceutical industry will play an important role in the conduct of this review" and assures the Merck executives that he and Mrs. Spero "look forward to working with you to further the interests of our pharmaceutical industry in Argentina."

  See Samuel, E. Bryan, Washington DC, Letter to Grey F. Warner and J. Anthony Imler, Whitehouse Station, New Jersey.

Week of October 10th, 1996

• The Chamber of Deputies trade and industry committee meets October 10th to discuss the data exclusivity bill prepared by the executive branch. The bill protects the confidentiality of data submitted by pharmaceutical firms seeking government approval of their products.
• "La Nacion," a prominent Buenos Aires daily newspaper, reports October 14th that even as they recognize the need for a data exclusivity law, some members of the Chamber of Deputies do not approve of the bill as it stands. Ambassador Cheek's summary of the article reads:

  The daily said congressional reaction to the data exclusivity bill has been negative. One unidentified congressional source acknowledged that Argentina is required to protect such data under TRIPS, but said that "as written, the GOA's bill is a new patent law thought up by the US and its lobbies." The source said, "The secrecy law is necessary, but not at the price, again, that the White House wants us to pay." In its lead editorial of the same day, "La Nation" noted that the enactment of Argentina's new patent regime only came after three years of constant threats by the US to impose economic sanctions.

• Humberto Roggero, chairman of the industry committee, tells weekly news report "Sucesos" that the bill is "an attempt by the US to collect the famous USD 500-600 million that they want to receive from Argentina retroactively."

  All articles quoted or paraphrased in American Embassy, Buenos Aires, "Argentina: Prospects for Improvement in Pharmaceutical Patent Protection," Cable 6356 to the US Secretary of State, Washington DC, October 1996

October 15th, 1996

• The US Secretary of Commerce meets with Eli Lilly executives to discuss progress on patent laws in Brazil and Argentina. Their positions represent those of PhRMA. The Secretary's talking points for the meeting, prepared by Stuart Eizenstat, read:

  Brazil

  • Brazil certainly provided a positive example for the rest of the hemisphere with the approval of the new patent and trademark law in April.
  • We are urging Brazil to resolve our concerns about the TRIPs-inconsistent local working requirement in the patent law. In your view, what are the prospects for a successful resolution of this issue? Do you have any ideas regarding US strategy? What would be the implications for your company and the US industry if it is not resolved?

  Argentina

  • In a recent meeting with Argentine Minister of Economy Roque Fernandez and Chief of Cabinet Jorge Rodriguez, I made clear our continued disappointment with the patent law and implementing regulations enacted by the Argentine Congress.
  • I urged the GOA to enact legislation to protect test data submitted for regulatory approval (data exclusivity) but made clear that all of our other longstanding issues also must be addressed.
  • I also cautioned that Argentina should resist efforts to establish "working requirements" in the patent law similar to the provisions in the new Brazilian law. The Argentines replied that reopening the patent issue in Congress would almost certainly result in a working requirement.
  • Frankly, it appears that the Argentine position on this issue is hardening, potentially putting our two countries on a potential collision course as the December 1 deadline for completion of the Special 301 out-of-cycle review approaches.
  • We will be carefully examining our options in the context of the review. If you have any new ideas about how to move the Argentines forward on this issue we are eager to hear them.
  • We noted a recent press report that Bristol Myers Squibb has purchased an Argentine "pirate" company with the intention of rectifying its practices and using the company as a base for market development. Do you see a trend developing along these lines?

  Mercosur

  • We have heard that Mercosur may be considering development of a common IPR regime. Do you have any information on the timing and content of this?

October 21st, 1996

• The US Embassy's deputy chief of mission and economic counselor meet with Jorge Hugo Herrera Vegas, undersecretary for economic integration at the Argentine Ministry of Foreign Affairs, and Jorge Pereira, director of North American and hemispheric affairs. Ambassador Cheek later paraphrases Herrera Vegas as saying that the recent public statements of Carol Crawford "only served to stiffen Congressional resistance to a new bill."

October 25th, 1996

• At the unveiling of a new plant of Laboratories Roemmers in Mataderos, President Carlos Menem asserts that Argentina provides security in investment and production "because security exists in the political field, the economy, and starting from the legislation."

  See La Nacion "Menem Affirmed that there are Guarantees for Investment in the Country." 25 October 1996.

October 29th-30th, 1996

• PhRMA holds a brain-storming session to discuss strategies on promoting Argentine patent recognition. In an invitation to USTR, Commerce, State, and Patent and Trademark Office officials, Leslie Ackerman, Assistant Vice President of PhRMA writes, "the penetration and damage that Argentine companies, like Roemmers and Bago, are causing to the pharmaceutical research industry goes beyond the southern cone and is not decreasing."

• The day following the PhRMA meeting, Susan Schmidt of the State Department's Office of Intellectual Property and Competition sends a cable to fellow State Department officials, USTR, USPTO, and the Department of Commerce. She instructs them to begin recommendations for the special 301 review. She writes,

  At this time we are exploring various alternatives to address this longstanding issue. All USG agencies share a commitment to two major objectives: (1) to obtain patent protection in Argentina and (2) to create disincentives for other countries to follow in Argentina's footsteps. We understand that these two goals may suggest conflicting approaches and we might not achieve both, at least in the short run.

  With these goals in mind, we would be interested in obtaining Post's views on a number of issues.

  First, what action would Post suggest as a result of the OCR? This includes not only thoughts on Special 301 designation, but appropriate complementary actions, if any. In this regard, the question of whether Menem has gone as far as he can politically to obtain better patent protection is of interest. [PhRMA argues that he has not done everything he could politically, citing the unanimous rejection of the patent decree (after he was overwhelmingly re-elected) as a signal that he lacked the political will to institute this protection.]

  Second, what other measures could be pursued to achieve our goals? In this regard, we have been exploring other avenues that continue to remind the GOA that the failure to provide patent protection affects it in ways more than placement on a Special 301 list. Basically, the question is whether actions could be packaged to strengthen the message that patent protection for pharmaceuticals is not only a priority for the US industry, but should also be a priority for the Argentine Congress and Executive branches and the Argentine population in general. We are looking to identify constituencies that might benefit from those reforms that pirate pharmaceutical manufacturers oppose. This might be the scientific community, the high tech community, the agricultural community, or others. We would like to explore whether leverage in areas previously not explored provide allies not yet identified to pressure the GOA on this issue.

  Additionally, we still are reviewing the timeline Post provided to assess whether the current Argentine law is TRIPs-consistent or has a "stand-still" violation of TRIPs, raising the option of a WTO case.

  PhRMA has told us that their representatives in Argentina want even stronger action taken than the Washington office has been pushing. Any input on the local representatives views on the OCR would assist us during this process.

  Finally, we understand that any GOA action to improve patent protection likely will meet stiff resistance from pirate pharmaceutical firms and their allies that benefit from the current situation. Thinking ahead, we question what these firms plan to do in year 2000 when Argentina is required to adhere to TRIPs. Any thoughts on what might persuade these firms to move into the legitimate market now or what could hinder their current activities would be welcome.

November 7th, 1996

• US government officials including Deputy Assistant US Trade Representative Joe Papovich, Susan Schmidt of the State Department, US Patent and Trade Office attorney G. Lee Skillington and US Patent and Trade Office trade policy analyst Jo Ellen Urban meet with Norma Felix of the Argentine patent office (INPI) and Dr. Jorge Pereira.
• At the meeting, Pereira tells the US officials that a meeting between Argentine Foreign Minister Guido Di Tella and Deputy Humberto Roggero is also scheduled for November 7th.
• Pereira tells the US officials that the Chamber of Deputies and Argentine labs advocate a five-year transition period for the protection of test data and a limitation of protection to "new chemical entities."
• In response to a question from Papovich, Felix states that patent protection for pharmaceuticals will come into force on November 1st, 2000.

  See US Secretary of State, Washington DC, "Discussion with GOA Officials on IPR Issues," Cable 241292 to the US Embassy in Buenos Aires, November 1996.

November 20th-21st, 1996

• The Chamber of Deputies committees on industry and trade approve a draft bill that Ambassador Cheek says "does not adequately protect the data involved." The draft provides a four-year transition period delaying protection until January 2000.

  See American Embassy, Buenos Aires, "Prospects for Acceptable Data Exclusivity Law Fade," Cable 6996 to the US Secretary of State, November 1996.

• Jorge Pereira of the Ministry of Foreign Affairs, who Ambassador Cheek says "was tasked by FM Di Tella with shepherding the bill through Congress" tells Embassy officials that the executive branch is dissatisfied with the committees' bill, having discontinued negotiations with the committees on the 15th, implying that the executive branch may veto the bill if it is passed.

  See American Embassy, Buenos Aires, "Prospects for Acceptable Data Exclusivity Law Fade," Cable 6996 to the US Secretary of State, November 1996.

• Ambassador Cheek comments in a November 1996 cable to Secretary of State Warren Christopher, "With the legislative clock ticking, prospects for passage of a data exclusivity bill meeting the needs of the US pharmaceutical industry before the year's end appear increasingly dim." He continues, "Given the power of the local pharmaceutical industry and Menem's current low standing in public opinion polls, it appears unlikely the executive branch will be able to move Congress on this issue."

  See American Embassy, Buenos Aires, "Prospects for Acceptable Data Exclusivity Law Fade," Cable 6996 to the US Secretary of State, November 1996.

• Thomas McLarty, a counselor to President Clinton, meets with President Menem, Foreign Minister Guido Di Tella, and Minister of Economy Roque Fernandez. McLarty tells the officials he expects that the patent issue will be central among President Clinton's priorities at his meeting with President Menem in December.

  See American Embassy, Buenos Aires, "Presidential Counselor McLarty's November 21 Meeting with Minister of Economy Fernandez," Cable 7018 to the US Secretary of State, November 1996.

  Ambassador Cheek, who attended the lunch meeting between McLarty and Di Tella, summarizes their discussion of intellectual property rights as follows in a subsequent cable:

  12. Turning to intellectual property issues at McLarty's request, di Tella said the GOA should be given credit for legislation Argentina has already passed. Legislation on data exclusivity would also be disposed of quickly, di Tella predicted. Reiterating the point from his earlier meeting with Menem, McLarty said IPR issues are "critically important" to the United States. While we understand the difficulties the GOA has had domestically on this issue, US industry has lost untold sums to Argentine pirates and the issue is also highly charged in the United States. Even if the confidentiality law referred to by di Tella passes, however, that won't necessarily be sufficient for the USG and for US industry. Speaking as a true friend of Argentina, McLarty commented, we need to be clear on this point.

  13. Di Tella said, "If you take away our access to GSP, that would be a problem, but not the end of the world." Ambassador Cheek noted the point may turn out to be moot, because of the lower "graduation level" of per capita GDP which the new legislation establishes for GSP participation. If, as appears likely, Argentina falls above this lowered level, it would lose its GSP privileges even with perfect IPR protection. Di Tella seized on the symbolism of such a move. Who would believe we have a "special relationship" with you, he asked rhetorically, if you take actions against us no matter what we do? With some exasperation, he asked if there was anything Argentina could do which would actually satisfy US concerns on intellectual property.

  14. McLarty suggested that as a first step, Argentina should pass a strong data exclusivity law. USTR would then evaluate the new regime in time for the upcoming meeting of the two Presidents in December, assuming the Argentine legislature acted immediately. The issue could thus be "teed up" for our leaders to decide the next steps. Di Tella said the GOA is not interested in solving the IPR issue in order to placate the United States. Rather, fashioning world class IPR protections would be good for Argentina, even critical if that country is to successfully join the first world economic system. But the United States must be reasonable and realistic, he said.

  See American Embassy, Buenos Aires, "Luncheon Meeting of Presidential Counselor McLarty and Foreign Minister Di Tella," Cable 7440 to the US Secretary of State, December 1996.

November 27th, 1996

• The vote on the data exclusivity bill, originally scheduled for today, is postponed until December 4th due to objections from the executive branch, which have led Humberto Roggero, chairman of the industry committee, to strike the provision for a transition period.

  See American Embassy, Buenos Aires, "Congressional Activity on Improved Data Exclusivity Bill," Cable 7132 to the US Secretary of State, December 1996.

Early December, 1996

• US Government agencies debate whether to support imposing sanctions on Argentina. Some officials within the US State Department support imposing sanctions, while others do not. E-mail messages exchanged on the subject follow.

  Larry, given everything else going on I doubt your office has reviewed the USTR proposal on the OCR. Our initial feeling in EB is that we support it. If you have any thoughts, I would appreciate an update. However, as I doubt that we will reach agreement, I will begin to draft a split decision memo for Mrs. Spero. When your position becomes clearer, we can insert the paragraph that describes your office's position. Mrs. Spero will be out Dec. 13, but at this time is expected to be in town until the Xmas week. Please let me know how this issue is moving in your office. Thanks. Susan.

  See Schmidt, Susan M., "OCR Decision on Argentina," email, 29 November 1999.

  Susan et al - Bryan Samuel and I discussed Argentina IPR in general tuesday night. BS said Dobbins at NSC continues to push Davidow to "just say no" on any sanctions. Bryan and PDAS Romero are telling Davidow that won't wash. BS thought McLarty had been educated and would be "better" on the issue this year. Bryan said his own view at this point was that we would have to hit Argentina with at least half of its GSP. Wondered aloud if we shouldn't just take away all of the GSP benefits at one time in December. Get it all over with. Sees little chance that Arg will be able to do anything for us so why set up unrealistic expectations that they'll move by Spring. If, by some miracle, they do improve, we could give them back some of their GSP but that's a longshot. Bryan was vague on PFC designation. Later asked if we could set some "realistic" benchmarks short of what industry wants as interim steps we think Argentina would have a chance of accomplishing by Spring. We agreed we'd see how the Menem 15 minute courtesy call with Clinton goes plus the Secretary / DeTello meeting. Then try to do some sort of a paper for Joan to get a State position.

  Shaun

  Diance, Bill C, Mary Jo, Robin, Tony, Tim

  PS - These musings from Bryan are interesting but may not materialize into ARA's formal position when we have to get something down on paper.

  See Donnelly, Shaun, "Argentina IPR," email to Susan Schmidt, 3 December 1999.

December, 1996

• Ambassador Cheek sends a cable to the Secretary of State in Washington to discuss options for the pharmaceutical patent issue and articulate the Embassy's opposition to the use of trade sanctions against Argentina. The text of his cable follows.

  1. SUMMARY

  2. "Priority Foreign Country" (PFC) designation of Argentina, leading to imposition of sanctions would not advance our IPR agenda but would jeopardize key US economic, political, and strategic interests. Instead, an aggressive and sustained medium term strategy should include: immediate US pressure in multilateral fora such as the WTO and the FTAA process, steps to encourage the EU and selected European countries to push Argentina on this issue, technical assistance to Argentina's National Institute for Intellectual Property and to its judiciary, and support for a serious industry-led public campaign making the case for patent protection to the Argentine public. The challenge to US foreign policy in dealing with this highly contentious issue is to artfully manage it in a way that both keeps the pressure on the GOA for more progress and avoids damage to our substantial economic and commercial interests in Argentina and injury to our very special relationship with the GOA. We believe that the measures recommended herein will do just that. END SUMMARY.

  3. As requested by Department and USTR, this message provides Embassy's views for the December Special 301 out of cycle review (OCR) of pharmaceutical patents in Argentina. Ambassador will provide additional thoughts septel.

  POLITICAL COMMITMENT OF THE MENEM ADMINISTRATION

  4. The major obstacle to improved IPR protection for the pharmaceutical industry is a strong pirate-financed and led anti-IPR lobby in the Argentine Congress -- not lack of political will on the part of the Menem Administration. Over the last three years President Menem has spent substantial political capital in a protracted tug of war with Congress over this issue (BA 5296) He has repeatedly used his line item veto and decree powers to provide patent protection for pharmaceuticals consistent with our demands, only to see these actions subsequently overridden by unanimous Congressional votes. Menem also vetoed legislation which adversely impacted IPR protection for pharmaceuticals. The resulting political standoff between the legislative and executive branches led to the negotiated March 1996 compromise decree which established Argentina's current, inadequate (to our demands) patent regime.

  STRONG DOMESTIC PIRATE INDUSTRY

  5. The strong Congressional opposition to IPR protection for pharmaceuticals reflects the power of a well-entrenched, highly profitable, very sophisticated pirate industry committed to delaying patent protection for as long as possible. PhRMA estimates that in 1995 local firms accounted for 55 percent of total pharmaceutical sales of USD 3.6 billion in Argentina. The two leading pirate firms -- Roemmers and Bago -- had sales of USD 263 and USD 242 million respectively. The sector, which consists of more than twelve pirate firms, is well-organized, well-financed and has devoted substantial resources to combating IPR protection. Its industry organization -- CILFA -- has hired public relations firms in Argentina and the US to successfully portray the patent issue as a unilateral US effort to obtain huge monopolistic profits for US firms. Pirate executives hold key posts in major Argentine business groups and make large contributions to charity. They also have close ties with key Congressional figures, such as Chamber of Deputies Industry Committee chairman Roggero.

  6. In addition to their successful efforts to torpedo or delay IPR protection, pirate firms have also begun to prepare to operate in the November 2000 environment. Pirate firms have stated their intention to invest USD 750 million over the next five years to develop their research and production capacity. At the same time, they stress that the transition period is crucial to their efforts to compete with multinational companies. Pirate firms have also signed, or are negotiating, strategic alliances with major multinational companies. These deals combine the pirates' marketing networks with the MNC's product pipelines. CILFA also recently began to cooperate with CAEME -- the MNC industry association -- on issues of mutual interest such as generics. Lastly, pirate firms are working to place individuals sympathetic to their interests in the judiciary and key regulatory agencies.

  MOBILIZING CONSTITUENCIES

  7. The US has made a concerted effort over the past ten years to develop a broad constituency in support of improved patent protection for pharmaceuticals. Drawing on presentations prepared by the Embassy, a parade of senior US visitors -- including seven cabinet members -- have repeatedly and publicly stressed the benefits which will accrue to Argentine consumers from patent protection. In addition, numerous US officials and US sponsored speakers have participated in IPR conferences and seminars. The Embassy also regularly distributes information about the positive impact of IPR protection in other countries to the media and key decision-makers. These efforts have been in partnership with PhRMA, its member firms and their local representatives (CAEME), and occasionally European firms.

  8. Despite these sustained efforts, no broad constituency or politically potent lobby in favor of patent protection has emerged. Within the MNC pharmaceutical community, European firms -- which control 30 percent of the Argentine market -- have chosen not to actively push the Argentine government on this issue. Hence, the EU and individual European governments have not backed US efforts. Lack of European support has also hindered CAEME's ability to mount a sustained campaign for IPR protection. Personal and institutional rivalries within the local MNC pharmaceutical community have further weakened CAEME's lobbying campaign.

  9. Similarly, active attempts to engage sectors outside the pharmaceutical community have met with little success. Members of the Argentine scientific community show some sympathy, but lack the political clout and will to take on the pirate lobby and significantly influence the debate. The high tech community cooperates with the MNC pharmaceutical industry on broad IPR concerns, but has resisted becoming identified with the highly contentious pharmaceutical patent issue. (FYI: local representatives of a major software firm have confided to use their main fear is that opponents of a bit making criminal sanctions applicable to cases of software piracy will link that legislation to pharmaceuticals and drag them into the continuing pharmaceuticals fray.) Our efforts to obtain the agrochemical industry's support on the data exclusivity bill were undercut when Congress authorized the Argentine Institute of Vegetable Health and Quality to develop its own regulatory scheme outside of the proposed bill.

  PRIORITY FOREIGN COUNTRY DESIGNATION AND ECONOMIC SANCTIONS

  10. We believe that, with or without passage of a data exclusivity bill, designation of Argentina as a "priority foreign country" under "special" Section 301 or the imposition of economic sanctions is unwarranted at this time. A PFC designation would not achieve the desired changes in Argentina's pharmaceutical patent regime. In fact, it would likely have the perverse effect of undercutting the pro-IPR executive while further strengthening and hardening Congressional opposition. Furthermore, a PFC designation would seriously jeopardize a wide range of key US economic and political interests, while failing to recognize that with the exception of pharmaceutical patents, Argentina has a good record on IPR protection.

  11. Designation of Argentina as a PFC would require USTR to launch a formal investigation to determine if Argentina's pharmaceutical patent regime is "actionable" under Section 301 and whether trade sanctions are an appropriate response. Announcement of such an investigation would be a blow to Menem's pro-US foreign policy, and would damage his presently sagging domestic political standing (Ref C). It would provoke a nationalistic backlash in Congress -- especially since the investigation would occur during the run-up to the October 1997 Congressional elections -- and would provide a new and easy opening for those currently pressing to insert a local production requirement in the current patent regime to conform to that of Brazil.

  12. While not advancing our goal of improving Argentina's patent regime, a PFC designation would endanger a wide range of US economic and political interests. In the economic area, Argentina has made clear its intent to respond appropriately if the US imposes sanctions because of the pharmaceutical patents issue, although its WTO consistent options are limited (as are ours). Argentine retaliation could endanger the roughly USD 2.5 billion trade surplus which the US will run with Argentina in 1996. It could also impact negatively on lucrative direct US investment in the country, currently standing at over USD 8 billion and increasing by USD two billion annually. Our large trade surplus and direct investments are big targets of opportunity: it would be naive to expect them to escape unharmed from a sanctions war.

  13. The PFC designation and the prospect of trade sanctions would come at a moment when the US is looking to Argentina to support efforts to revive the FTAA process. Sanctioning Argentina for its failure to fulfill commitments which exceed its WTO obligations would dampen Argentine interest and enthusiasm for backing important long-term US trade goals in the FTAA, Mercosur, and the WTO. It would also set a bad example for other, less-willing-to-cooperate countries.

  14. In the political arena, a PFC designation would undermine Menem's ability and enthusiasm -- and perhaps his desire -- to continue to back US foreign policy goals around the world. Argentine has unfailingly supported critical UN peacekeeping efforts in areas such as Croatia, Bosnia, and Haiti, contributed to nuclear non-proliferation and missile technology control schemes, backed regional cooperation efforts on counterterrorism and money laundering, and firmly backed the US on key human rights issues such as Cuba. In short, the US counts on Argentine support on a wide range of international and regional issues -- support which will be endangered by imposing sanctions on Argentina over the lone issue of pharmaceutical patents.

  A MEDIUM AND LONG-TERM STRATEGY

  15. We fully appreciate that Argentina's present pharmaceutical patents regime is unacceptable and that pressure must be maintained to promote prospects of future progress and to preserve US credibility on the issue. However, a medium to long-term strategy involving concerted pressure in multilateral fora such as WTO and the FTAA process, continued US diplomatic efforts backed by strong EU support, technical support to Argentina's (sic) National Instate for Intellectual Property (INPI) and the Argentine judiciary and a sustained public relations / lobbying campaign by the MNC pharmaceutical industry in Argentina offers better long-term prospects for achieving our IPR goals on pharmaceuticals. Such an approach also avoids the considerable downside risks of sanctions.

  16. A measured and sustained strategy medium to long-term would include the following elements:

  • Immediate application of sustained pressure in multilateral fora. USTR should initiate a case against Argentina in the WTO based on standstill grounds (Ref B). In addition, US officials should use every opportunity in WTO and FTAA intellectual property working group sessions to highlight Argentina's deficiencies and to push for progress. The upcoming FTAA Belo Horizonte trade ministerial will provide such an opportunity.
  • Press the EU and specific European countries, such as Germany and Switzerland, to lobby Argentina in a sustained, high profile fashion. As noted above, despite the substantial market share of European firms, the EU has been almost totally silent on this issue.
  • Augment technical assistance to INPI and the Argentine judiciary. The next battlefield on pharmaceutical protection will be in the areas of administration and enforcement. INPI currently has a backlog of 13,000 patent applications and is ill-equipped to handle that caseload. Similarly, few judges have the necessary expertise to make sound rulings in this area. USPTO should deepen its relationship with the institute. USIS can also continue to play a role in working with INPI and the judicial community through exchange programs, such as the international / voluntary visitors programs and the US speakers program.
  • Support for a stepped-up industry public relations / lobbying campaign in Argentina. The financial resources which PhRMA, its member companies, and European firms have devoted to public relations / lobbying in Argentina have been minimal, much less than those of the pirate industry. CAEME should now mount a coordinated (i.e. multinational) effort to put forward the positive message on the public benefits which protection of pharmaceuticals would provide. USIS and other elements of Embassy would actively support this effort.
  • Have senior US visitors continue at every opportunity to press Argentine executive and legislative branches. President Clinton's visit to Argentina next year will afford an invaluable opportunity to remind Argentina of the importance of this issue.

  17. Finally, the challenge to US foreign policy in dealing with this highly contentious issue is to artfully manage it in a way that both keeps the pressure on the GOA for more progress and avoids damage to our substantial economic and commercial interests in Argentina and injury to our very special relationship. We believe the measures recommended herein will do just that.

  See American Embassy, Buenos Aires, "Pharmaceutical Patents in Argentina - Evaluating USG Options," Cable 7131 to the US Secretary of State, Washington DC, December 1996 as amended in American Embassy, Buenos Aires, Cable 7168 to the US Secretary of State, Washington DC, December 1996.

• In advance of Ambassador Cheek's departure from office, the US Embassy in Buenos Aires circulates a cable entitled "Safeguarding US-Argentina Relations: Myths, Realities, and Options on Pharmaceutical Patents." The text of the memo follows:

  Introduction: Over the past six years the issue of patent protection for pharmaceutical products has become the number one hot-button issue besetting, and threatening, our otherwise superb and unique partnership with Argentina. I have been on the front lines of the fight for patents from the time of my arrival in Buenos Aires in July 1993, devoting more time to this subject than to any other. My lobbying efforts have been roundly denounced by the "pirate" pharmaceutical companies and their allies in the Argentine Congress, who have repeatedly called for my expulsion and passed a resolution to that effect in April, 1995. Several years of massive media coverage of my lobbying efforts ensure that I will be forever associated in the minds of Argentines with the "ley de patentes" issue.

  Our mammoth efforts have produced some positive results: in March, 1996 Argentina, breaking with a 132-year history of specifically denying any patent protection to medicines, enacted its first-ever law extending such protection. Unfortunately, the protection granted is inadequate to meet our demands of Argentina so the issue remains to plague and threaten our relations with it.

  Before leaving the patent lobbying field to my successor, I would like to comment on certain myths which have come to encrust the Argentina / US patent issue as perceived by some Americans, both in government and the private sector. I would also like to lay out the realities of the issue and the alternatives available to the USG and our industry for achieving our mutual objective of "world-class" patent protection for pharmaceuticals in Argentina. End introduction.

  MYTHS AND REALITIES

  Myth: President Menem has repeatedly promised two American Presidents that he would deliver the full patent protection we desire / demand, and his senior officials have reaffirmed this on many occasions. They should be compelled by whatever means to honor this commitment.

  Reality: Menem has repeatedly reaffirmed his personal support for full patent protection and promised to do all that he could to bring this about in Argentina. As a democratically elected President operating in a separation-of-powers system identical to that of the USA, he cannot (and I believe did not) promise to deliver something that is beyond his constitutional authority to guarantee.

  Myth: If President Menem really wanted to he could compel the Argentine Congress to fulfill his commitment and enact the patent law he professes to support and which we seek. This is especially true when the Congress is being pulled in the opposite direction (as it clearly is by the powerful pirate lobby) and when the President's position enjoys minimal popular support (as it unfortunately does in the case of patents). The just-concluded session of Congress failed to enact over two-thirds of the President's legislative proposals, many of which he has repeatedly submitted over recent years. Most of what Menem has achieved in transforming Argentina since 1989 was accomplished by emergency decrees. This power, however, was restricted by the new (1994) Constitution and is not available for enacting a patent regime although Menem has pushed his powers to the limit in trying to deliver adequate patent protection.

  Myth: We can accomplish our goals of patent protection in Argentina by imposing trade sanctions in retaliation for its failure to deliver.

  Reality: First, it is unclear what sanctions we have at our disposal. Punitive tariffs under Special 301 would require compensatory offsets for WTO member Argentina. Argentina already exceeds the new, lower graduation threshold of GSP with its ample and growing per capita GDP. In any event, whatever sanctions might be available would not produce the results desired. Such unilateral punitive action on our part, however, would jeopardize our extensive trade and economic interests in Argentina and our special relationship in general. Some form of retaliation by the GOA would be assured. Pharmaceutical patent protection would not be improved in response to sanctions but could be weakened as opponents exploit a charged nationalistic atmosphere to enact a national working requirement similar to that of Brazil.

  Myth: Punitive sanctions and tough treatment of Argentina are necessary to give disincentives to other countries to follow in Argentina's footsteps: our credibility is at stake.

  Reality: Sanctions will enhance our credibility with others only if they are effective in obtaining their objective -- in this instance, improved patent protection in Argentina. No one will be impressed if we shoot ourselves in both feet, the most likely result of trade sanctions in the specific case of Argentina.

  SITUATION AT PRESENT

  • A patent law is on the books to take effect in November, 2000 (four more years) and applications for patents are already being accepted by the GOA. Some in our industry reject this regime as unacceptably inadequate. Others believe it has some value and are inclined to work with it. These different assessments result from worst and best case scenarios as to how the law and its accompanying regulations will be interpreted and implemented by the GOA and its intellectual property institute (INPI).
  • A data exclusivity law will soon be enacted by the Congress and subsequently regulated and implemented by the executive. As of this writing we do not know the specific provisions of the law (it is a work in progress) but Menem's personal involvement in passing it gives cause for optimism. Although some in our industry downplay the value of this law, it is something which the USG has specifically demanded of the GOA for some time, so it is presumably worthwhile to have.
  • For the foreseeable future, there is no prospect of wringing anything further from the Argentine Congress. Menem has gone as far as he can go with the limited Constitutional authority and political capital available to him for this purpose. Although Menem's political capital is not exhausted he has many top priority demands on it, including for remaining structural reforms that are more important to USG economic and commercial interests here than patents.

  PROSPECTS / OPTIONS FOR THE FUTURE

  • While continuing to press the patent issue, accept that we will, realistically, have to wait until 2000 before we have a law in effect. Leading up to this and thereafter we will need to lobby hard for the "best case" implementation of this law (e.g. the law provides for compulsory licensing but the provisions are ambiguous, and nothing obligates the GOA to issue such licenses.)
  • Resolve the patent issue to our full satisfaction within the context of the to-be-negotiated FTAA agreement. We might be able to convince the GOA to anticipate the IPR requirements of the FTAA and improve its patent protection in advance of the agreement (as we have tried to do with Chile.) Since broad, free trade agreements have been our only assured means of obtaining world class IPR protection (e.g. NAFTA) this probably is the only realistic road to success with Argentina. The downside is a wait to 2005 for a FTAA.
  • Negotiate with the GOA to try to resolve our respective trade complaints against one another within the context of a limited, bilateral trade agreement. At present we and the Argentines simply talk past one another -- we press hard on patents and specific duties issues and they respond with their litany of trade complaints (meat, peanuts, steel, tubing, leather, citrus, etc). Could we put our respective issues on the table and try to cut a quid pro quo deal? We have never attempted such a solution. But it might work. It would at least take us beyond the sterility and mutual recriminations of our current exchanges on bilateral trade issues.
  • Try to use the mechanisms and provisions of the WTO to obtain better pharmaceutical patent protection from Argentina. This option has been considered within the USG but no initiatives have yet been taken. The problem will be making a sufficient case that Argentina is failing to comply with its WTO/GATT commitments.
  • Take advantage of any significant industry investment in pharmaceutical research and testing in Brazil to strengthen our case for Argentina to improve its own patent protection. Keeping up with the Brazilians in trade and investment is mandatory for the Argentines. Substantial investments in Brazil would at least force the GOA to reconsider the inadequacies of its patent protection.
  • Although never attempted, or even seriously explored, negotiations between the local industry and our pharmaceutical companies (and the Europeans) could be a way out of the current impasse and bring better patent protection. As the year 2000 approaches the local pirate industry may wish to get ahead of the power curve and provide for its own future under a regime of patent protection.
  • Another conceivable way out for our industry would be to buy out the local drug producers and take them out of the pirate business altogether. One local pirate firm has already been acquired by and American company (Bristol-Myers Squibb), which presumably will make is a more "honest" producer.

  CONCLUSION

  As observed Ref A., the challenge to US foreign policy in dealing with the highly contentious pharmaceutical patents issue is to artfully manage it in a way that both keeps the pressure on the GOA for more progress and avoids damage to our substantial economic and commercial interests in Argentina and injury to our very special relationship with the GOA. This is not a prescription for just rolling over or sitting idly by and doing nothing. To the contrary, in Ref A we describe a number of measures that the USG and our industry can take to continue to actively and constructively pursue our patent protection goals in Argentina. The discussion of prospects for the future in Para 6 above also demonstrates that we are not at a dead end on patents in Argentina and other options are available to both the USG and our industry.

  See American Embassy, Buenos Aires, "Safeguarding US - Argentina Relations: Myths, Realities and Options on Pharmaceutical Patents," Cable 7197 to the US Secretary of State, December 1996.

December 5th, 1996

• President Clinton holds a 15-minute meeting with President Carlos Menem at the White House. Secretary Christopher's Briefing Memorandum for the meeting lists "Patent Protection for Pharmaceuticals" as a Talking Point. The Memorandum, drafted by Jack Deasy, regional specialist for Latin America and the Caribbean at the International Bureau of the Federal Communications Commission, notes

  The Argentine Congress has taken a short-term view on the patent protection issue. In providing temporary protection for a pirate domestic industry, it has insisted on a regime that is out of step with your program of modernization and economic reforms -- a program that has restored necessary vigor to the Argentine economy.

  The US is committed to protecting the legitimate investments of US pharmaceutical companies -- who lose approximately $500 million annually to Argentine pharmaceutical "pirates." In the long run, Argentina's own interests would also be better served by moving quickly to modernize its patent regime.

  We know you share this view. We need to consider how, working together, we can advance this objective, while recognizing the constraints we both face.

• Secretary of State Warren Christopher also meets with Argentine Foreign Minister Guido Di Tella.

December 6th, 1996

• Argentine Ambassador to the US Raul Granillo Ocampo writes to Secretary of State Warren Christopher, enclosing an Aide Memoire opposing sanctions on the grounds that they will damage bilateral relations.
• Argentine Ministry of Foreign Affairs Director Vignaud and IPR Specialist Pereira visit ARA/BSC Director Rogus. They give Rogus a non-paper opposing US sanctions. The text of the non-paper follows:

  Intellectual Property Rights in Argentina: Comments about Possible US Actions.

  1. Argentina's patent legislation is in line with international rules concerning intellectual property.

  Said legislation fully meets all WTO requirements. To accomplish this, the executive branch has resorted to different legal instruments at its disposal, including the use of its veto against pieces of legislation that it considered not to be adequate.

  2. In order to meet higher standards of protection of intellectual property - beyond and above WTO requirements - the executive branch has the intention of further pursuing its approval. If that would prove not to be possible, it is ready to resort to other legal means at its disposal to attain those objectives.

  3. Notwithstanding these circumstances, there exists the intention of applying certain economic sanctions against Argentina.

  The following reasons make such actions highly undesirable and contrary to both states' best interests:

  A) They would be self-defeating:

  Sanctions would strengthen the position of those opposed to the government's efforts to reach higher standards of intellectual property rights protection, making the government's task more difficult.

  B) They would discourage support for the government's endeavors.

  Those backing the government would find little reason to continue to support its efforts in this field while the US has, for all practical purposes, closed the dialogue by adoption of sanctions.

  C) Sanctions would be imposed in the field in which the US is benefiting most - trade:

  Bilateral trade exceeds six billion dollars. The US has a trade surplus of around three billion dollars with Argentina, while is experiences deficits with most other countries.

  D) The US attitude would compare negatively with the one assumed by other states and economic groupings with similar interests:

  Other states and groupings - even more interested than the US in this field due to the level of their investments in the pharmaceutical industry of Argentina - have shown concern but have acted in a restrained manner, thus recognizing the government's efforts to find a solution and keep the dialogue open.

  E) Sanctions would hamper the expectations raised by the new term of President Clinton in office:

  Argentina and Latin America in general are confident that, in his second term in office, President Clinton would reinforce the links with Latin America, as he himself has ensured and his advisors reiterated recently. President Clinton's announced visit to the region would be a major event and would contribute to this goal. The initiative, however, would be clouded if sanctions are applied.

  F) Sanctions would not contribute to the creation of a free trade area in the Americas, an initiative strongly supported by Argentina:

  The adoption of sanctions would impact upon the role played by Argentina as a front runner in the support of the planned free trade area.

  G) The adoption of such measures shortly after President Menem's most recent visit to the White House would compound their impact upon Congress and public opinion in Argentina:

  Sanctions might strengthen the position of those who do not support the government's firm commitment to a close partnership with the US.

• JP Deasy e-mails Lisa J Kubinske, criticizing the Aide Memoire as "a very weak response to what Di Tella was told yesterday." He continues, "If Di Tella really thought the sky is falling, he should have penned a Dear Chris letter last night. Instead, we got a very scatter-shot nonpaper that reads like it was drafted by bureaucrats, not policymakers. The bottom line of the nonpaper is that the likely GOA reaction to sanctions will be political - and this is what we have always assumed."
• Robin White e-mails Susan Schmidt at the US State Department, saying, "I yield to you and IPR experts on the WTO case, but I'm afraid it would be a fairly weak one. A standsill violation may be a difficult case, and could get wrapped up in the issue of whether or not they are close to being in TRIPs conformance."

  See White, Robin L., "Argentina with E," email to Susan M. Schmidt, 6 December 1996.

December 9th, 1996

• Lisa J. Kubinske sends an e-mail to Robin White and Susan Schmidt. She writes that Joan Spero is still undecided with regard to listing Argentina as a priority foreign country. Kubinske's email reads:

  Closehold, please, I spoke with JES (= Spero) further this morning. She hadn't thought a great deal about the pros and cons of the priority foreign country label. I suggested that there were still some questions to be thought through anyway on this. Bottom line: no answer yet about JES views.

  Re: timing, JES was sensitive to the potential harm of any pre-Christmas action against Argentina if Menem in fact moves heaven and earth to get the data exclusivity law passed. I think she views some form of suspension of GSP as a (justified) given, but wants to be sensitive to the timing of action.

  See Kubiske, Lisa J., "RE: arg IPR," email to Robin L. White, 9 December 1996.

December 10th, 1996

• German Ambassador to Argentina Wiegand Pabsch is quoted in the Argentine press as saying that the German government will not press the patent issue with the Argentine Congress. These comments come at the heels of an interview in Cuarto Poder, a daily newspaper, in which Silvio Riegner, the local manager of Hoechst Marion Russel, a major multinational pharmaceutical company, contrasted the more flexible European views on patents with the all-or-nothing American approach.

  Ambassador Cheek fears that these statements will undermine US insistence on pharmaceutical patent implementation. His comment at the close of his December 1996 cable to Secretary of State Warren Christopher follows:

  Comment: with the end of USTR's out of cycle review of Argentina's pharmaceutical patent regime approaching, European firms and governments appear to be distancing themselves form us on this issue. The comments of Pabsch and Riegner will undercut our public and private arguments that sound patent protection is key to Argentine efforts to attract pharmaceutical investment. Riegner's remarks are particularly damaging, since Hoescht Marion Russel -- with annual sales of USD 135 million in Argentina -- is the third largest pharmaceutical firm in the world. With that in mind, emboffs have discussed Riegner's comments with industry representatives who plan to raise the issue at the next industry meeting.

  See American Embassy, Buenos Aires, "Germans Downplay Pharmaceutical Patents," Cable 7319 to the US Secretary of State, December 1996.

December 12th, 1996

• The Argentine Chamber of Deputies approves a data exclusivity bill, which, if passed by the Senate, will go into effect January 1st. The bill grants confidentiality for data submitted by companies pursuing approval to market pharmaceutical products in Argentina; however, local representatives of US firms argue that the bill does not go far enough in protecting this kind of data, and may actually be a step backward. Lobbyist Felix Rozanski recommends that PhRMA, CAEME, and the US push President Menem to veto the bill because it recognizes the government's authority to approve products similar to those already registered.

December 18th, 1996

• The debate on whether to oppose sanctions continues as agencies prepare for a discussion December 19th The State Department's Bryan Samuel recommends designating Argentina as a Priority Foreign Country again and immediately imposing sanctions by suspending GSP benefits. Ambassador Cheek recommends that the US apply pressure through multilateral channels and lobby for European support of the US stance on patents instead of pursuing unilateral action by designating Argentina as a PFC and imposing sanctions. PhRMA recommends PFC designation "at a minimum."

  See Schmidt, Susan "Background on Special 301" 18 December 1996.

• The Argentine Senate approves the data exclusivity bill already passed by the Chamber of Deputies. The law comes under fire from the foreign pharmaceutical industry because it permits the marketing of drugs "similar" to those approved in the US, Japan, Sweden, Switzerland, Israel, Canada, Austria, Germany, France, the United Kingdom, the Netherlands, Belgium, Denmark, Spain and Italy. Dr Felix Rozanski of CEDIQUIFA charges that this law blatantly favors imitatator drugs and does not accomplish its goal of protecting health data. The law also allows the importation of drugs "similar" to those approved in Argentina from Australia, Mexico, Brazil, Cuba, Chile, Finland, Hungary, China, Luxembourg, Norway, and New Zealand.

• Grey F. Warner and J. Anthony Imler of Merck again write to Joan Spero, Under Secretary of Economic, Business, and Agricultural Affairs at the US Department of State. Warner and Imler complain that the data exclusivity bill recently passed by the Argentine Chamber of Deputies "offers no protection for the inventor and developer of original products." The letter concludes, "We appreciate your strong support of intellectual property and ask that you redouble your effort to oppose Argentina's meaningless data exclusivity legislation and to back USTR designation of Argentina as a Priority Foreign Country in 1997."

December 19th, 1996

• Argentine Ambassador to the US Raul Granillo Ocampo writes to Secretary Christopher, asking that the US consider Argentina's passage of the data exclusivity law in reviewing the options under Section 301.

December 20th, 1996

• US Trade Representative Charlene Barshefsky announces that USTR will extend its review of Argentina to consider the data exclusivity law.

January, 1997

• US Secretary of State Warren Christopher sends an action cable to the American Embassy in Buenos Aires to announce that the Clinton Administration will revoke half of Argentina's trade benefits and to instruct the Embassy to deliver a letter from President Clinton to President Menem. The text of President Clinton's letter follows.

  Dear Mr. President:

  Thank you for your letter. I too enjoyed our December meeting and am excited that we are moving forward on so many issues. I am delighted that our foreign ministers are moving ahead with plans to establish a special "consultative process" and will look to energize this process in the year ahead. In addition, Secretary Glickman reports progress on several of the agricultural initiatives we discussed.

  Nevertheless, as we discussed in December, our governments face a difficult problem regarding the effort to enact adequate and effective patent protection in Argentina. I greatly appreciate your commitment to this goal, including your strong push to pass data exclusivity legislation in December. Even with the new legislation, Argentina still falls considerably short of effective protection. This situation gives me no alternative but to suspend half of Argentina's Generalized System of Preferences benefits as a signal of the importance we attach to the resolution of these issues.

  Over the past several years, in the expectation the Argentine Congress would take steps to address significant shortcomings in Argentina's patent regime, the United States has postponed sanctions several times. However, the continued failure of the Argentine Congress to pass strong patent legislation imposes economic costs on both of our countries. It reduces Argentina's ability to attract foreign investment and the competitiveness of Argentine companies in global markets. And here at home, I am still concerned about the severe damage that the lack of effective patent protection in Argentina is causing to US companies and workers.

  I trust that this action -- which we have carefully crafted as a measured response -- will not impair the deep respect and cooperation between our governments. You can be assured of my strong and continuing commitment to close cooperation with Argentina. As your letter notes, our shared vision for the region and the world will allow us to continue to work together on the eve of this new century as we have done in the past so successfully.

  Sincerely,

  Bill Clinton

  See US Secretary of State, "Argentina IPR: Results of Out-of-Cycle Review," Cable 00713 to the American Embassy, Buenos Aires, January 1997.

January 6th-7th, 1997

• A January 6th article in the Journal of Commerce leads the Argentine press to report January 7th that the US will soon announce the imposition of trade sanctions on Argentina due to continuing US dissatisfaction with pharmaceutical patent law. Humberto Roggero and others perceive the timing of this decision as indicative of US efforts to influence the Menem administration's implementing decree of the data exclusivity law.

  See American Embassy, Buenos Aires, "Argentine Press Reports US to Sanction Argentina over Pharmaceuticals," Cable 0076 to the US Secretary of State, January 1997.

January 14th, 1997

• Argentine newspapers quote Argentine Minister Guido Di Tella as saying that because Argentina would have soon graduated from the GSP program, the significance of the trade sanctions was more in its symbolism than in its economic costs; however, Di Tella threatens that if the US introduces additional sanctions, Argentina will bring the US to the WTO.

• El Ambito Financiero, an Argentine financial newspaper, claims that multinational companies will see significant losses from the trade sanctions as they lose their leverage of threatening sanctions with the Argentine government.

• Pablo Challu, executive director of CILFA, states that any losses Argentina may accrue in the face of US sanctions would be dwarfed by the cost of instituting a patent regime consistent with US industry demands.

  American Embassy, Buenos Aires, "GOA Discounts GSP Suspension Announcement," Cable 0228 to the US Secretary of State, January 1997.

January 15th, 1997

• Acting United States Trade Representative Charlene Barshefsky announces that the Clinton administration has decided to revoke half of the trade benefits allotted to Argentina under the US Generalized System of Preferences. Argentina Trade and Investment News, a newsletter published by the Argentine Embassy in Washington DC, estimates the loss of benefits to Argentine producers at about $260 million.

  See Argentina Trade and Investment News, Argentine Embassy, Washington DC, Volume 4, No. 1, January / February 1999.

January 16th, 1997

• Argentine ambassador to the US Raul Granillo Ocampo condemns the US withdrawal of trade benefits as un castigo injusto (an unjust punishment) in the Clarin, an Argentine daily newspaper. Raul Granillo Ocampo says that while Argentina believes it has met its international obligations, the US understanding is that Argentine policy falls short of international agreements. He argues that such a misunderstanding should be resolved through the World Trade Organization, not through the withdrawal of trade benefits.

  See "Propieded Intelectual: Declaraciones Del Emajador Argentino en Washington," the Clarin, 16 January 1999. (In Spanish.)

• El Clarin also prints an analysis of the US decision entitled "Un Pais de Inventores" (A Country of Inventors.) The analysis states that although attributing the US decision entirely to the US pharmaceutical industry is an oversimplification, pharmaceutical lobbying has been effective:

  Es cierto que estan en juego cientos de millones de dolares. Es cierto tambien que el lobby de la poderosa PhRMA ha sabido moverse en los bien regado canteros de Washington, hasta lograr el castigo deseado.

  (It is true that hundreds of millions of dollars are at stake. It is also true that the lobby of the powerful PhRMA has learned to navigate the well-watered flowerbeds of Washington until achieving the desired punishment.)

  "Un Pais de Inventores," El Clarin 16 January 1997.

• El Cronista, another Argentine newspaper, quotes Ambassador Ocampo as saying the US decision is, in his words, "formal y sustancialmente equivocada" (a formal and substantive mistake) because Argentina has fulfilled its commitment to the GATT agreement and because such a punishment will not achieve the US end of improving the patent law.

  Serrichio, Sergio, "Raul Granillo Ocampo Arremete Contra la Sancion de los EEUU por Patentes: Desde Todo Punto de Vista, Estan Equivocados," El Cronista.

January 18th, 1997

• CILFA (Centro Industrial de Laboratorios Faramceuticos Argentinos), an organization of large Argentine pharmaceutical labs, issues a statement condemning the withdrawal of GSP benefits as an "unwarranted attack on Argentina" motivated by the US pharmaceutical industry's efforts "to line their own pockets at the expense of consumers." CILFA condemns acting USTR Charlene Barshefsky as a representative of the Clinton Administration's "absolute lack of respect for Argentina's democratic system" and charges that "her comments lack the civility necessary to deal with the special relationship that exists between sovereign nations."

  See "Multinational Drug Companies Dictate US Trade Policy, Force US to Launch Unwarranted Economic Attack on Closest Ally in Hemisphere," PRNewswire, 18 January 1997.

February 4th, 1997

• James Love of CP Tech, Robert Weissman of Essential Information, and Ralph Nader write to President Clinton. See their letter here.

February 12th, 1997

• Guido Di Tella, Argentine Minister of Foreign Affairs, comments in La Razon, an Argentine newspaper, that even in the face of heavy US pressure and endless lobbying by the US pharmaceutical industry, the Argentine government will not bow down to the US.

  See "EEUU Esta Muy Pesado con el Tema Patentes," La Razon 12 February 1997.

• Argentine newspapers publicize a comment by PhRMA's Leslie Ackerman that "the Argentine patent law is the worst in the Western hemisphere, and the data exclusivity law does not improve anything."

  See American Embassy, Buenos Aires, "Renewed Argentine Interest in Pharmaceutical Patents," Cable 0876 to the US Secretary of State, February 1997.

February 13th, 1997

• El Clarin interviews Dr. Osvaldo Podhajcer, an Argentine scientist who says he had to patent his discovery, a genetically manipulated protein that would help stop the progression of melanoma, in England because of Argentina's inadequate protection for intellectual property. The article states that the recent Argentine law "in many formal aspects complies with international treaties" but "legitimizes the copy", thereby delivering "a blow to the country that prides itself to have invented the pen, the minibus, dulce de leche, and the soccer ball."

  "La Investigacion en Argentina es una Aventura Personal," El Clarin13 February 1997.

• The Argentine press reports that Argentine Congressmen Humberto Roggero, Juan Baylac, and Dario Alessandro sent letters February 12th to President Clinton and Argentine Foreign Minister Guido Di Tella in opposition to the US sanctions.

  See American Embassy, Buenos Aires, "Renewed Argentine Interest in Pharmaceutical Patents," Cable 0876 to the US Secretary of State, February 1997.

February 18th, 1997

• PhRMA submits a recommendation to the USTR that Argentina be listed as a Priority Foreign Country in 1997. It describes the recent withdrawal of GSP benefits as "a positive first step" but calls on USTR to "establish milestones to measure Argentina's progress toward providing effective patent protection." PhRMA is particularly incensed that Argentine labs export "pirated" pharmaceuticals to other Latin American countries.

  "Submission of the Pharmaceutical Research and Manufacturers of America for the "Special 301" Report on Intellectual Property Barries: Priority Foreign Countries," 18 February 1997.

• Howard Coble, chairman of the House Subcommittee on Courts and Intellectual Property, writes to Secretary Daley in support of the Clinton Administration's withdrawal of Argentine GSP benefits, but cautions that this US action may not be sufficient to ensure the passage of an adequate patent law.

  Coble, Howard, Washington DC, Letter to William Daley, Washington DC, 18 February 1997.

March 7th, 1997

• New US State Department BSC deputy director James Heg meets with Jorge Pereira and Cecilia Barros at the Argentine Ministry of Foreign Affairs, Argentine Deputy Miguel Toma, American Chamber of Commerce board members and Jaime Campos, executive director of Fundacion Invertir, to discuss the pharmaceutical patent issue and the US withdrawal of Argentine GSP benefits. Notes on his meetings prepared by the American Embassy for the US Secretary of State include the following.
  • Pereira says that the Argentine patent regime fulfills WTO requirements and that the executive branch cannot interfere with the patent issue for at least two years. He suggests that the US work on improving the National Institute of Intellectual Property (INPI) instead of applying sanctions, and a public campaign to foster respect for intellectual property.
  • Deputy Miguel Toma states that the existing Argentine patent regime represents a balance between international standards and the demands of local industry, and that the US decision to impose sanctions for Argentina's failure to enact GATT-plus standards is unreasonable.
  • American Chamber board members also criticize the sanctions, saying that although Argentina's patent regime, though inadequate by US standards, fulfills WTO requirements and that the withdrawal of trade benefits has created problems for the executive branch and US companies.
  • Jaime Campos of Fundacion Invertir says that the effects of Argentina's minimal patent regime and the US sanctions in decreasing investment have been overstated.

  See American Embassy, Buenos Aires, "Pharmaceutical Patents in Argentina -- Still Contentious, No Change Likely," Cable 1280 to the US Secretary of State, March 1997.

March 24th-27th

• US Trade Representative Charlene Barshefsky writes to Ambassador Ocampo to propose an agenda for bilateral commercial discussions between Minister Di Tella and US officials in the coming weeks. Jorge Pereira of the Ministry of Foreign Affairs criticizes this agenda as unbalanced in discussions with US Embassy officials March 26th. Pereira informs the US officials that the Argentine executive branch does not wish to discuss its patent regime, although it will discuss US sanctions.

  See American Embassy, Buenos Aires, "GOA Links Telecommunications to Progress on Other Trade Issues," Cable 1567 to the US Secretary of State, March 1997.

April 1st, 1997

• US Secretary of State Madeline Albright meets with Argentine Foreign Minister Guido Di Tella. With regard to pharmaceutical patents, Secretary Albright emphasizes that the US will soon announce the details of its implementation of the January withdrawal of GSP benefits.

  See US Secretary of State, Washington DC, "The Secretary's 4/01/97 Meeting with Argentine FM Di Tella," Cable 063571 to the US Embassy in Buenos Aires, April 1997.

Early April, 1997

• Agencies within the US State Department begin debating their position on Argentina's status in the upcoming USTR Special 301 Review. A note from Shaun Donnelly to Bryan Samuels reads:

  Bryan,

  I am following up on the memo I sent to you a few weeks ago on the next steps in Argentina. As we are at a decision point in the Special 301 process, the points I made in the memo are not very timely. Any countries on which there remains disagreement after today will be forwarded to the TPSC, and we expect at that point that positions will harden.

  USTR wants to maintain Argentina on the priority watch list, and schedule an out of cycle review. Other agencies are still reviewing the recommendation, but appear to be leaning towards supporting it. ARA, we understand, wants no OCR. We are prepared to support that position, so long as we can tell the other agencies that in the next year we will use public and private methods to raise various IPR issues of concern to us. What we want to be able to assure them is that the State Department will use all of its "good offices" aggressively to advance this discussion. I think that other agencies, rightly or wrongly, perceive the Department and Embassy BA as obstacles to raising IPR issues -- pharmaceutical and other -- rather than making efforts to press for movement. Issues such as resolving the question on protection for computer software through legislation and the courts, bringing the data exclusivity law into (at a minimum) TRIPs compliance, and stepping up enforcement efforts immediately come to mind.

  I would appreciate it if you could confirm that our two Bureaus will move forward cooperatively on these issues in the next year. With that assurance, EB is more than willing to advocate leaving Argentina on the PWL without an out-of-cycle review. We then will have 12 months or so to use other tools to advance this difficult agenda.

  Shaun

April 7th, 1997

• The Argentine National Institute of Intellectual Property (INPI) opens its new headquarters. INPI director Norma Felix invites several US officials to the opening ceremony.

  See US Secretary of State, Cable 053959 to the American Embassy in Buenos Aires, March 1997.

April 8th, 1997

• Argentine Foreign Minister Guido Di Tella tells US Embassy officials he is satisfied with the progress made on bilateral commercial issues during his recent visit to Washington.

  See American Embassy, Buenos Aires, "Argentine Upbeat About Progress on Commercial Issues During FM Di Tella Visit," Cable 1833 to the US Secretary of State, April 1997.

April 9th, 1997

• Charles A. Heimbold, Jr., Chairman and CEO of Bristol-Myers Squibb, the largest American pharmaceutical company in the Argentine market, writes to Secretary Daley to articulate his company's dissatisfaction with Argentina's intellectual property regime, which he says "does not meet the minimum international standard for intellectual property protection established in the GATT TRIPs provisions" and fails "to live up to the commitments made by President Menem to protect pharmaceutical patents." He urges Secretary Daley to maintain trade pressure on Argentina by holding an out-of-cycle review of Argentine intellectual property law to "signal to the Government of Argentina that (the US government) wants immediate change that would improve the environment for intellectual property."

  See Heimbold, Charles A., New York City, Letter to William M. Daley, Washington DC, 9 April 1997.

April 15th, 1997

• President Clinton issues a message to the US Congress announcing his intention to withdraw 50% of Argentine trade benefits afforded by the Generalized System of Preferences. Argentine products that will be removed from the duty-free list include chemicals, some metals, some manufactured products, and some agricultural items such as raw cane sugar, garlic, fish, milk protein concentrates, and anchovies.

  See Clinton, William J. Intention to Withdraw Benefits for 50 Percent of Argentina's Exports Under the Generalized System of Preferences Program Message to the 105th Congress, 1st Session, 15 April 1997.

• The Argentine press reports that Foreign Minister Guido Di Tella says that the withdrawal of trade benefits "constitutes an unnecessary and arbitrary blow against a political and commercial ally" and that Argentina will not modify its patent regime, which it considers WTO-consistent, in response to US sanctions.

  See American Embassy, Buenos Aires, "GSP Suspension Announcement Triggers Criticism of US," Cable 1946 to the US Secretary of State, April 1997.

• Humberto Roggero, chairman of the Chamber of Deputies Industry Committee, introduces a retaliatory resolution and asks the executive branch to challenge the US sanctions in the WTO.

  See Ibid.

April 18th, 1997

• Secretary Daley meets with executives from Pfizer including chairman and CEO Bill Steere, vice presidents Lou Caemente and Ken Bowler, and policy office director David Lane. Secretary Daley's talking points for the meeting, prepared by Kathy Chung, include a request for more information about PhRMA's request that Argentina be listed a priority foreign country in the upcoming Special 301 review.

April 23rd, 1997

• The Argentine Chamber of Deputies passes a resolution condemning the US withdrawal of GSP benefits from Argentina. The industry committee, headed by patent opponent Humberto Roggero, will soon consider bills extending the transition period for the pharmaceutical patent law and adding a local manufacturing requirement. US Chief of Mission at the Embassy in Buenos Aires Ronald D. Godard comments,

  We remain skeptical that any of the "retaliation" bills will become law, but many Deputies clearly see this as a winning issue in an election year. In the current atmosphere, it is doubtful the Argentine or other elements of the country's patent regime through implementing regulations or other administrative actions.

April 30th, 1997

• US Trade Representative Charlene Barshefsky announces the results of the Special 301 review. Argentine remains on the priority watch list and is not scheduled for an out-of-cycle review despite the US pharmaceutical industry's request that the country be elevated to the priority foreign country list and subjected to an out-of-cycle review.

May 5th, 1997

• Jorge Pereira at the Argentine Ministry of Foreign Affairs says that Ambassador Barshefsky's decision not to elevate Argentina's status on the Special 301 list or conduct an out-of-cycle review will help the executive branch defeat retaliatory measures under consideration in Congress.

  See American Embassy, Buenos Aires, "Argentina: 301 Priority Watch List Rating Well-Received," Cable 2313 to the US Secretary of State, May 1997.

• US Trade Representative Charlene Barshefsky answers Ralph Nader's February 4th letter. She defends the withdrawal of trade benefits as "balanced, WTO-consistent and (reflective of) both our strategic and economic interests."

May 7th, 1997

• Leslie Ackerman, assistant vice president of the international division of PhRMA, sends PhRMA's 1996 market data to Lee Skillington. His data shows that the key Argentine labs price their products 15% higher than the innovator's product (on average.)

May 9th, 1997

• Secretary Daley responds to an April 9th letter from Charles A. Heimbold, Jr., chairman and CEO of Bristol-Myers Squibb. Secretary Daley explains the Clinton Administration's decision not to hold an out-of-cycle review, noting, "we believe that the President's trip to Argentina this fall will focus attention on the intellectual property issues in a more constructive manner than an out-of-cycle review in this particular situation."

• Marco A. Fonseca, president of Cyanamid, writes to Secretary Daley to ask for US government assistance in ending the infringement of Cyanamid's patents in Brazil and Argentina by and Israeli company.

May 12th, 1997

• Fresh from a landslide victory in his Congressional reelection race, Humberto Roggero tells officials at the Ministry of Foreign Affairs that he will abandon retaliatory bills aimed at the US because of recent progress on the beef and countervailing duty issues.

June 9th, 1997

• Ralph Nader and James Love again write to US Trade Representative Charlene Barshefsky to reiterate their specific complaints with the US action and to request meetings with Barshefsky's staff to discuss the justifications for the withdrawal of GSP benefits. See their letter here.

Mid-June, 1997

• US Secretary of State Madeline Albright sends an action request to the US Embassy in Buenos Aires urging Embassy officials to revisit the data exclusivity issue and to discuss software legislation with Argentine government officials as they prepare for an upcoming visit by President Clinton. The talking points provided for Embassy officers by Secretary Albright include the following points about pharmaceuticals and data exclusivity among other statements about software law:

  • The Special 301 and GSP decisions are not the USG's final efforts regarding IPR protection in Argentina. Adequate protection of intellectual property rights is sure to be a topic of discussion during President Clinton's visit to Argentina this fall.
  • We would like Presidents Clinton and Menem to be able to recognize that our IPR agenda has moved forward. Although it is unlikely that agreement can be reached on certain issues such as pharmaceutical product patent protection, we believe that progress can be made on other IPR issues before President Clinton's visit.
  • (A) pending action is the promulgation of regulations to implement the recently enacted data exclusivity law. As you know, the US government and US private sector interests have identified substantial concerns with that legislation as enacted. We expect that the implementing regulations promulgated will include provisions to preclude competitors from relying on data submitted by others in obtaining marketing approval for their products.
  • What is the status of the regulations? We would be interested in your strategy for moving the process forward and the projected timing for promulgation of the regulations.
  • Similarly, we would like to suggest that the Government of Argentina consider other improvements that the executive branch could make that could be implemented to mitigate the concerns of the pharmaceutical industry until patent protection for pharmaceutical products enters into force. These could include improvements to the procedures used by the Argentine National Administration of Medicine, Foods, and Medical Technology (ANMAT) and improvements to Decree 260 or procedures in the National Institute of Industrial Property (INPI) that would increase transparency and efficiency.

  See US Secretary of State, Washington DC, "Demarche on IPR Issues," Cable 2376 to the US Embassy in Buenos Aires, June 1997.

June 24th, 1999

• La Prensa, an Argentine newspaper, reports that Humberto Roggero has returned to publicly criticizing Norma Felix, director of INPI. He claims her appointment was questionable and refuses to invite her to meetings between Argentine Congressmen and WIPO scheduled at the end of June.

  See American Embassy, Buenos Aires, "Argentine Congressional Foe of Pharmaceutical Patents Renews Attacks on Local Patent Office Director," Cable 3246 to the US Secretary of State, June 1997.

July 14th, 1997

• The European Union voices its dissatisfaction with Argentina's intellectual property regime and urges reform in a memorandum distributed to Argentine government officials including Argentine Secretary of Trade and Industry Alieto Guadagni, Ministry of Foreign Affairs and Secretary of International Economic Relations Jorge Campbell. The memorandum states that Argentina's intellectual property law violates the "standstill provisions" of TRIPs article 65.5 and that the data exclusivity law violated TRIPs 65.5 and 39.3. It also warns that Argentina's inferior patent system may channel investment to neighboring Brazil.

  See American Embassy, Buenos Aires, "EU Voices Concerns to GOA About Argentine Patent Regime," Cable 3929 to the US Secretary of State, August 1997.

  See also Union Europea, Delegacion de la Comision Europea en la Republica Argentina Memorandum: Proteccion de Patentes e Informaciones Confidenciales en Argentina. (In Spanish)

August 12th, 1997

• Leslie Ackerman, Assistant Vice President of the International Division of PhRMA, sends a copy of the European Union memorandum of July 14th to PhRMA's Latin American Regional Committee, Dr. Harvey E. Bale of PhRMA, Bennet Harman and Teresa Estrada-Hurlbert of USTR, Susan Schmidt of the State Department, Carrie Clark of the Department of Commerce, and PhRMA-back Latin-American working groups and associations. He calls the issuance of the memorandum "a major development" that he hopes will "provide some capital to the Argentine Government in its attempt to deliver a 'milestone of progress' with the Regulation and Confidentiality Law, prior to President Clinton's October 1997 trip."

August 19th, 1997

• The US Embassy Deputy Chief of Mission makes an introductory call on Argentine Health Minister Alberto Mazza. At the meeting, Godard articulates US objections to the data exclusivity law, which he says promotes the sale of copied products by allowing firms to use competitors' data in applications for marketing approval of pharmaceuticals. Minister Mazza responds that the executive branch hopes to resolve the matter through implementing regulations before President Clinton's visit to Argentina.

  See American Embassy, Buenos Aires, "Pharmaceuticals -- Argentine Health Minister Positive on Data Confidentiality Regulations," Cable 4158 to the US Secretary of State, Washington DC, August 1997.

August 22nd, 1997

• Felix Rozanski, coordinator of CEDIQVIFA, writes to Konrad Becker of the Novartis Patent Department. Rozanski alerts Becker that a recent court decision by an Argentine federal judge could set a precedent for the revalidation of pharmaceuticals filed for patents in 1995, which INPI has refused to process.

September 9th, 1997

• ARA Assistant Secretary Jeffrey Davidow meets with Eli Lilly representative Richard Pilnik (who is also a PhRMA Latin America committee chairman) and Kathryn Dickey Karol to discuss trade issues for US pharmaceutical companies in Latin America. Also in attendance are ARA Regional Economic DAS Bryan Samuel, EB/TPP/MTA/IPC Susan Schmidt, and ARA/BSC regional economic officer John Desmond.

  Secretary of State Madeline Albright later writes to the US Embassy in Buenos Aires to summarize the meeting. Her notes on the discussion of Argentina read:

  Argentina

  4. Pilnik told A/S Davidow that Lilly had learned lessons from its previous experiences in Argentina and intended to be more pragmatic -- emphasizing relationship building rather than confrontation. He admitted that previously Lilly "hadn't done its homework" in Argentina, but had now formed (sic) an pharmaceutical manufacturers' association in Argentina (CAEME) and hired a public relations consultant to help develop a strategy which would include educating the Argentine public about the real costs of pharmaceutical patents.

  5. Pilnik commented that the GOA's handling of the data exclusivity law and drafting of regulations had been disappointing. He hoped that the new GOA regulations would link registration or products with approval of process patents as a way of stemming Argentine piracy that was costing the US pharmaceutical industry millions of dollars. As an example, he mentioned that Lilly had spent years developing a new drug for schizophrenia that had been copied by pirates and was available in Argentina two weeks after Lilly had released it for distribution.

  6. Pilnik said Lilly and other manufacturers would continue to press the patents issue, but wondered if the GOA would be at all responsive. He asked A/S Davidow to make sure that the USG did not give up on this issue and that this be on the agenda of the President or Commerce Secretary Daley for the October POTUS visit to Argentina.

  7. A/S Davidow stated that he was not optimistic that the GOA Congress would change its mind on pharmaceutical patents. The pirates have popular support for their compelling argument that they make high quality products for low prices. It would take significant educational efforts to turn that around. Nevertheless, he added, we discuss this issue in every conversation we have with high-level GOA officials, and will continue to do so.

  8. DAS Samuel said that we intended to pursue IPR issues with greater vigor after the October Congressional elections in Argentina, and that we would remind President Menem of his promises to improve IPR laws. He and Schmidt mentioned that the USG was evaluating whether to ask the GOA to submit its IPR regime to the WTO IPR council for advisory review, as a way of bringing peer pressure on the GOA to make its IPR laws TRIPs-consistent by 2000.

  See US Secretary of State, Washington DC, "Assistant Secretary Davidow's September 9 Meeting With Eli Lilly Representatives," Cable 172851 to the US Embassy in Buenos Aires, September 1997.

October 3rd, 1997

• Charge Rochas meets with President Menem's cabinet chief, Jorge Rodriguez. At the meeting, Charge Rochas states that he has met several times with Ana Kessler, chief of staff to Argentine Minister of the Economy Roque Fernandez to lobby for regulations implementing the decree in line with US demands. Rodriguez states that the German and British Embassies have also spoken with government officials about the regulations.

  See American Embassy, Buenos Aires, "Meeting with Chief of Cabinet Rodriguez," Cable 5119 to the US Secretary of State, Washington DC, October 1997.

November 19th, 1997

• New US Embassy Charge Manuel Rocha makes an "introductory call" on Argentine Ministry of Economy Trade and Production Secretary Alieto Guadagni. Rocha reports that at the meeting, he "reminded Guadagni that Argentina's pharmaceutical patent regime continues to be a matter of very strong concern to the USG" and expressed the US Government's disappointment that Argentina had not issued its implementing regulations on data confidentiality before Clinton's visit in October. These regulations, Charge Rocha elaborates, will "figure prominently" in the Special 301 Review. Earlier in the meeting, Guadagni had questioned the US Government's inability to achieve Congressional passage of Fast Track legislation.

  See American Embassy, "Charge's Introductory Call on Secretary of Trade and Industries Alieto Guadagni," Cable 5925 to the US Secretary of State, November 1997.

December 5th, 1997

• Counselor to US President Bill Clinton Thomas McLarty meets with representatives from PhRMA Washington to discuss Argentine pharmaceutical patent issues. ARA, USTR, Commerce, and NSC also attend the meeting. PhRMA proposes that Menem use an executive order to implement five changes they list as essential, asserting that Menem has "no end of power to implement these changes" despite McLarty's objection that, given the history of a Congressional override of Menem's executive order on intellectual property and the Argentine President's diminished popularity, Menem is unlikely to risk an override. Furthermore, the US Government's inability to achieve Congressional passage of a Fast Track act despite pressures from its trading partners will give Menem's difficulties with Congress a new legitimacy. McLarty advises the pharmaceutical industry to contact Argentine Congressional leaders and to consider framing the issue by linking "the questionable business practices" of local labs to corruption, which was a heated issue in recent Argentine elections. McLarty also recommends that the US companies press their European counterparts to lobby for intellectual property protection.

  See US Department of State, "Assistant Secretary's Daily Activity Report," ARA / BSC 5 December 1997.

January 13th-14th, 1998

• US Patent and Trademark Office Commissioner Bruce Lehman visits Argentina. He meets with INPI director Norma Felix, National Copyright Office director Hilda Retondo, Alliance economist Jose Machinea, local intellectual property attorneys and local US executives. According to a cable sent from the US Embassy in Buenos Aires to US Secretary of State Madeline Albright, "in all meetings, Lehman stressed the role of a sound IPR regime in promoting private investment in research and development. He attributed much of the US success in developing new technologies to our long history of protecting the rights of patent and copyright holders."

  Norma Felix of INPI tells Lehman that the executive branch hopes Congress will ratify the Patent Cooperation Treaty (PCT) in 1998 to increase the potential for cooperation between INPI and foreign patent offices. She also says that INPI hopes for technical assistance from other patent offices and WIPO.

  Jose Machinea says that he is interested in learning more about use of an intellectual property system to increase investment, but is skeptical that patents alone will be sufficient in inducing multinational labs to conduct research in Argentina.

  See American Embassy, Buenos Aires, "USPTO Commissioner Visits Argentina January 13-14," Cable 0270 to the US Secretary of State, January 1998.

Mid-January, 1998

• Continued dissatisfaction with the rate of progress on pharmaceutical patents prompts the US to consider withdrawing the second half of Argentina's GSP benefits. This threat may be immaterial because Argentina's per capita GNP, at $8,485, pushes the threshold for automatic graduation from the SDT program, recently lowered to $8,600 by the US.

  John M. Desmond sends an e-mail January 15th to Susan M Schmidt, James T Heg, Benjamin I Muskovitz, David F Rogus, and Richard M Sanders with the subject line "Argentina and GSP." It reads:

  There has been some discussion about the possibility of removing the other half of Argentina's GSP benefits in response to the GOA's lack of action on IPR reform. This needs to be considered in the context of Argentina's possible graduation from the GSP program - will this be our last chance to use this tool, or, conversely, if they do what we want and avoid the sanctions, will we send the wrong signal by graduating them anyway?

  I spoke with Roger Freeman of EB / ODC about GSP graduation for Argentina. He said that last year the Administration had favored graduation of several countries including Argentina and Brazil, for financial / budgetary reasons; i.e., to reallocate their shares to less- developed countries because they had relatively high incomes and were significant users. However, Congress opted for a one-year renewal for all countries. Therefore, the only countries that graduated were those above the income threshold. This year, given the financial crisis in Asia, the Administration is taking a lower profile and intends to ask Congress for another one-year extension, meaning that the financial / budgetary reasons will not come into play. Roger thinks it unlikely that Congress would oppose the Administration's proposal, given their stance last year.

  More critical is the per capita GNP threshold for automatic graduation. The USG lowered this in August 1996 from $11,800 to $8,600 (based on World Bank data) +escalation based on US GNP growth (e.g. if the US GNP grew at 3%, then the threshold would increase by 3% to about $8860 in 1997). Countries that passed this threshold in 1996 will graduate this year, 2 years after the determination.

  In Argentina's case, the most recent per capita GNP figure (December 1996) is $8485. Assuming Argentina grew at 8% in 1997, its new per capita GNP would be $9160 as of December 1997 - over the 1997 limit. Up to date figures on 1997 GNP will not be available until March, but it is clear that Argentina is on the bubble regarding automatic graduation, and we need to think about this carefully in the IPR context.

January 29th, 1998

• Charge Rocha meets with Julio Carceres, Secretary of Coordination and Legal Affairs for the Argentine Ministry of the Economy. Rochas reports in a cable to US Secretary of State Madeline Albright that he "said we understand that the GOA faces strong domestic opposition from local pharmaceutical firms, but we also face significant pressure from the US pharmaceutical industry." At the end of the cable, Rochas comments on the recent difficulties the Embassy has encountered in approaching the Argentine executive branch:

  Comment: Since former Economy Minister Cavallo resigned last July, senior MINECON officials have preferred to leave the controversial pharmaceutical patent and related data confidentiality issue to MFA. Unfortunately, MFA officials -- citing Argentine Congressional opposition -- are unwilling to try to address our concerns about data confidentiality through the regulations. Nevertheless, we are asking for an appointment with MFA to continue to press the issue directly with Campbell.

  See American Embassy, Buenos Aires, "Argentina: Senior Economy Ministry Official Says Progress on Data Confidentiality Unlikely," Cable 0574 to the US Secretary of State, January 1998.

February 23rd, 1998

• PhRMA submits a request that Argentina be listed as a Priority Foreign Country in the Special 301 Report. It argues that Argentine patent law is deficient. According to PhRMA, President Menem's Decree 260 of March 22nd, 1996, fails to protect intellectual property and does not meet the Argentina's obligations under the TRIPs agreement. The passage of the data exclusivity law of December 1996 "made a bad situation worse" by allowing information submitted during the registration process to be used by other companies after only 4 months of protection.

February 27th, 1998

• The US Embassy host a lunch for Argentine officials including Raul Justo, director of the Ministry of Foreign Affairs North American economic affairs office, and Norma Felix, director of INPI and European diplomats including Giulio Menato of the European Union, Gordon Kricke of the German Embassy, and British commercial officer Graeme Wise. At the luncheon, US and European officials presented their complaints with current Argentine intellectual property law and suggestions for an improved intellectual property climate. Charge Rocha explains in a March cable to US Secretary of State Madeline Albright that the Embassy "organized the lunch with GOA officials to remind them that the flaws in Argentina's patent regime are not simply a US concern. The EU shares many of our criticisms regarding Argentina's patent regime, and is also seeking improvements in both the short and medium term."

  See American Embassy, Buenos Aires, "European Diplomats Prod Argentine Officials on Patent Regime," Cable 1105 to the US Secretary of State, March 1998.

April 3rd, 1998

• Norma Felix, director of Argentine National Institute for Industrial Property (INPI), tells Embassy officials that the executive branch plans to issue an implementing decree for the data confidentiality law extending protection to both pharmaceutical and agrochemical products.

  Felix also reports that an Argentine Senate committee has recommended Senate ratification of the Patent Cooperation Treaty (PCT).

  See American Embassy, Buenos Aires, "Argentine Movement on Data Confidentiality Regulations, Other IPR Issues," Cable 1733 to the US Secretary of State, April 1998.

April 7th, 1998

• At the request of Jorge Campbell, Ambassador Eduardo A. Sadous, National Director for International Economic Negotiations at the Ministry of Foreign Affairs, sends the European Union delegation to Buenos Aires a response to the EU's Memorandum on Patents and Confidential Information Protection in Argentina. The response defends Argentine law as TRIPs-consistent.

  Sadous, Eduardo A., Buenos Aires, Letter to Vittorio Alloco, Buenos Aires, 7 April 1998.

• US government agencies hold bilateral intellectual property talks with Argentine government officials including Norma Felix, director of INPI. According to a cable sent earlier in April from the US Embassy in Buenos Aires to US Secretary of State Madeline Albright, the agenda "will focus on PhRMA's proposals for pharmaceutical patents, implementing regulations for the data confidentiality law, Argentina's draft copyright law and the bill criminalizing software policy."

  See American Embassy, Buenos Aires, "Argentina: Proposed Agenda for IP Bilateral," Cable 1656 to the US Secretary of State, April 1998.

• "El Cronista," an Argentine newspaper, carries comments by Deputy Emilio Martinez, the new chairman of the Chamber of Deputies Industry Committee, criticizing Felix for her participation in the consultations.

  See American Embassy, Buenos Aires, "Argentine INPI Director Felix Under Fire (Again) From Congressional IPR Foes," Cable 1756 to the US Secretary of State, April 1998.

April 14th, 1998

• The Argentine press reports (incorrectly) that the US has decided to revoke Argentina's remaining GSP benefits after revoking half of the country's benefits in 1997. In response, Chamber of Deputies Industry Committee chairman Emilio Martinez threatens to reintroduce a bill to lengthen the transition period for pharmaceuticals.

  See American Embassy, Buenos Aires, "Argentine Congress Threatens Retaliation if US Suspends Remaining GSP Privileges." Cable 1948 to the US Secretary of State, Washington DC, April 1998.

Week of April 25th, 1998

• After publicly pledging to do so, Emilio Martinez, chairman of the Chamber of Deputies Industry Committee calls INPI director Norma Felix to testify May 6th about any commitments she may have made during her recent visit to Washington.

• Felix tells the US Embassy April 26th that Alberto Pierri, president of the Chamber of Deputies, has asked to meet with her April 28th. In a cable to US Secretary of State Madeline Albright, Embassy Charge d'Affaires Manuel Rochas writes:

  She speculated that the Congressional requests are part of an effort by the local pharmaceutical industry to force her resignation. Felix noted that while the local industry has long sought her removal, it has redoubled its efforts since she became a candidate for a deputy director position in WIPO. Felix said the local industry strongly opposes her WIPO candidacy, and hopes to derail it by forcing her out of her current post.

  Charge Rochas comments:

  Members of the Argentine Congress have repeatedly criticized Felix in the past for her alleged support for US pharmaceutical interests, and she has always managed to weather the storm. Still, it is unfortunate that the current Argentine Congressional attack centers on her participation in technical IPR consultations with the US. If the Argentine executive bows to Congressional pressure and removes Felix, it does not bode well for future US-GOA dialogue on pharmaceuticals and other IPR issues.

  See American Embassy, Buenos Aires, "Argentine Congress Renews Attacks on INPI Director," Cable 2178 to the US Secretary of State, April 1998.

May 1st, 1998

• US Trade Representative Charlene Barshefsky announces the results of the Special 301 review.

  Argentine Ambassador to the US Diego Guelar says he is satisfied with the US decision not to withdraw Argentina's remaining GSP benefits or impose other sanctions.

  See American Embassy, Buenos Aires, "Argentina: GOA Content with Outcome of Special 301 Review," Cable 2228 to the US Secretary of State, May 1998.

Mid-May, 1998

• A US Embassy economic officer meets with Jorge Ruiz, director of the Multilateral Economic Affairs Office of the Ministry of Foreign Affairs to convey US displeasure with Argentine sponsorship of a draft resolution to change the World Health Assembly's drug policy. In a cable to Secretary Albright, Embassy Charge Manuel Rocha writes:

  Ruiz agreed the draft's language is problematic, and said Argentina will support our proposed changes. He attributed Argentina's initial support for the draft to the efforts of the Health Ministry, explaining that some health officials fear TRIPS may adversely affect their public health efforts.

  See American Embassy, Buenos Aires, "Argentina and the Revised Drug Strategy at the World Health Assembly," Cable 2417 to the US Secretary of State, May 1998.

May 17th, 1998

• La Nacion carries comments by German Embassy officials and European executives criticizing Argentina's patent laws as inadequate and detrimental to the country's prospects for attracting investment. Jorge Campbell, an international economic relations secretary at the Ministry of Foreign Affairs, states that the Menem Administration has no intention of revisiting the patent issue. Pablo Challu of CILFA argues that the existing law has not decreased investment.

  See American Embassy, Buenos Aires, "Europeans Criticize Argentine Pharmaceutical Patent Regime," Cable 2534 to the US Secretary of State, Washington DC, May 1998.

June 1st, 1998

• A USTR memo printed today reveals that the US plans to prepare a WTO case against Argentina for the year 2000, when some of Argentina's TRIPs obligations become binding.

June 9th, 1998

• Warner Lambert applies for exclusive marketing rights for atorvastin under TRIPs article 70.9. The company has already filed a "mailbox" patent application for the drug as of July 16th, 1996.

  TRIPs article 70.9 states:

  Where a product is the subject of a patent application in a Member in accordance with paragraph 8(a), exclusive marketing rights shall be granted, notwithstanding the provisions of Part VI, for a period of five years after obtaining marketing approval in that Member or until a product patent is granted or rejected in the Member, whichever period is shorter, provided that, subsequent to the entry of force of the WTO agreement, a patent application has been filed and a patent granted for that product in another Member and marketing approval obtained in such other Member.

July 1998

• Eduardo Martinez, chairman of the Chamber of Deputies Industry Committee, announces he will begin a Congressional inquiry into the marketing approval procedures of the National Administration of Medicine, Food and Medical Technology (ANMAT) in the face of ANMAT's delay in approving Argentine versions of viagra, a drug developed by US pharmaceutical company Pfizer. Martinez charges that ANMAT's delay in approving Argentine versions of viagra has given Pfizer an unfair advantage in the Argentine market.

  See American Embassy, Buenos Aires, "Argentina Congress Questions Regulatory Delays in Authorizing Sale of Pirate Viagra," Cable 3425 to the US Secretary of State, July 1998.

September 10th, 1998

• State Department officers Peter Romero of ARA, ARA Deputy Assistant Secretary Eddleman, EB Deputy Assistant Secretary Bryan Samuel, EB/ IPC division chief Cronin, ARA/EPSC Deputy Director Llorens, and ARA/ BSC Desk Officer Sanders meet with PhRMA representatives. Romero's briefing notes for the meeting, prepared by David F. Rogus, mention US concern that the Argentine Congress may delay TRIPs implementation until 2005 if the domestic pharmaceutical industry is threatened. The notes also state that the US is worried about "the international reach of Argentine piracy" because Argentine labs have lobbied against measures for increased intellectual property protection in other Latin American countries.

October 7th, 1998

• Jorge Ruiz, director of the Ministry of Foreign Affairs Multilateral Economic Relations office, meets with officials from the economic section of the US Embassy in Buenos Aires. Ruiz says that the Argentine executive branch agrees with the US government that IPR issues for medicines should be resolved by the WTO and WIPO without involvement by the World Health Organization. He promises to tell the Argentine Ministry of Health not to support discussion of intellectual property issues at the World Health Organization. Despite Ruiz's assurances, Charge Rochas remains doubtful of Argentine support for the US position. He writes in an October 1998 cable to Secretary of State Madeline Albright:

  Despite Ruiz's comments, we suspect that Argentina's sophisticated and aggressive pirate pharmaceutical industry will lobby the GOA to support the South African position. Hence, we would not be surprised if, in the end, the GOA reverses course and at least tacitly supports the South African view.

  See American Embassy, Buenos Aires, "Argentina: Intellectual Property Rights in the World Health Organization," Cable 5240 to the US Secretary of State, October 1998

• A cable from the American Embassy in Buenos Aires to US Secretary of State Madeline Albright discusses a dispute between Eli Lilly, which holds exclusive marketing rights for olanzapina in Argentina, and Gador, an Argentine firm that also manufactures the drug. An INPI resolution recognized Eli Lilly as the proprietor of exclusive marketing rights for the drug, but Gador is seeking a court order to invalidate the resolution. Gador argues that olanzapina is not a novel drug; thus, it is not patentable.

  See American Embassy, Buenos Aires, "Argentina and Pharmaceuticals: Executive Unlikely to Enforce Exclusive Marketing Rights for US Firm," Cable 5509 to the US Secretary of State, October 1998.

October 23rd, 1998

• The US Embassy's Assistant Deputy Chief of Mission meets with Ministry of Finance North American Economic Affairs Office Director Raul Justo and Minister of Foreign Affairs Nora Capello to lobby the officials to enforce Lilly's exclusive marketing rights for olanzapina. Both Argentine officials express doubt about the government's ability and will to enforce Lilly's rights.

  See American Embassy, Buenos Aires, "Argentina: Embassy Urges GOA to Enforce US Firm's Exclusive Marketing Rights," Cable 5583 to the US Secretary of State, October 1998.

December 1998

• INPI sends a letter to Warner-Lambert insisting that some of the documents included in its application for exclusive marketing rights be legalized; Warner-Lambert fulfills this requirement.

January 29th, 1999

• The US Embassy learns that the Argentine government plans to issue a decree removing two of the directors of the Argentine patent office, INPI. In a January 1999 cable to Secretary of State Madeline Albright, Embassy Charge d'Affaires Manuel Rocha claims that the timing of this decree is "a direct response" to "efforts to secure full GOA approval of exclusive marketing rights for US pharmaceutical firms." The decree appoints Horacio Jaquenod, an advisor to anti-patent Deputy Humberto Roggero, to oversee INPI as a special representative of the President. Of the three advisors to Jaquenod appointed by the decree, one allegedly embezzled funds from INPI and another allegedly gave a US pharmaceutical firm's data to a local manufacturer.

January 20th-21st, 1999

• The WTO Trade Policy Review Body holds a Trade Policy Review of Argentina. Secretary of State Madeline Albright sends the US delegate to the Trade Policy Review Body a list of points to make at the review. These include several statements about US concern that Argentina's commitment to intellectual property rights is waning:

  One area of concern is the protection of intellectual property. We are extremely interested in seeing that Argentina's IPR regime comports in a timely manner with the WTO obligations of Argentina, and we look forward to Argentina's full implementation of the provisions included in TRIPs.

  However, our concerns have been heightened by recent moves taken by the Government of Argentina that seem to indicate deterioration rather than improvement on this issue. Some of this deterioration involves current TRIPs obligations of the Argentine government.

  For example, we are extremely concerned by the failure of the Argentine government to provide exclusive marketing rights (EMR) for pharmaceutical products and by the weakening of protection provided to test data submitted by agrochemical firms.

February 9th, 1999

• US Embassy officials meet with Industry Undersecretary Miguel Cuervo to discuss the recent changes at INPI. Cuervo tells the Embassy officials that Minister of Economy Roque Fernandez fired the INPI board of directors, including Norma Felix at the request of Coordination Secretary Julio Caceres and Trade and Industry Secretary Alieto Guadagni. Cuervo says that Felix's involvement in Argentine intellectual property policy undermined her ability to attend to INPI business. The US Embassy paraphrases his statements in a February 1999 cable to Secretary of State Madeline Albright:

  The recommendation was prompted by well-documented reports of growing administrative chaos within INPI, as well as the perception that the controversial Felix had become overly involved in the making of IPR policy. Cuervo said the previous INPI board was hopelessly divided, often taking up to 6-7 months to approve simple administrative matters. Similarly, in conjunction with the Foreign Affairs Ministry, Felix had pursued several contentious policy initiatives without consulting with the Trade and Industry Secretariat. This had made her the target of Argentine Congressional criticism, further distracting her from her administrative responsibilities.

  Cuervo says that Horacio Jaquenod, the new INPI director, will focus on administrative duties instead of intellectual property policy. The Embassy cable elaborates:

  Cuervo said the interventor (Horacio Jaquenod) will focus on improving INPI's administrative capacities and facilitating the processing of patent applications. INPI officials will no longer be involved in the formulation of IPR policy -- an area that will be reserved for Congress and the Economy Ministry -- and will adhere strictly to the letter of the existing patent law and executive decrees when ruling on specific issues.

  Cuervo also says that Argentina will not delay its implementation of TRIPs, but a cable from the US Embassy to Secretary of State Madeline Albright reports that he later claimed in conversation with a colleague that such a delay in implementation would not violate the TRIPs agreement.

  See American Embassy, Buenos Aires, Cable 0726 to the US Secretary of State, Washington DC, February 1999.

February 11th, 1999

• Horacio Jaquenod, interventor at INPI, tells Embassy officials that INPI will not be involved in IPR policy formulation, but will instead focus on the implementation of policy. In response to an Embassy question on how INPI will respond to requests for exclusive marketing rights (EMR), Frederico Zamora, Jaquenod's companion at the meeting and an advisor to CILFA representative Pablo Challu, stated that "TRIPs is not applicable in Argentina until the year 2000." Both Jaquenod and Challu argued that the US has failed to uphold its end of the Uruguay Round bargain.

  See American Embassy, Buenos Aires, Cable 0762 to the US Secretary of State, Washington DC, February 1999.

• INPI's legal department states that Warner-Lambert meets the requirements for the grant of exclusive marketing rights. However, INPI does not grant the company exclusive marketing rights at this time.

  See "Exclusive Marketing Rights for Lipitor in Argentina" Warner-Lambert Co., 14 December 1999.

April 1999

• The US Embassy in Buenos Aires sends a cable summarizing the Argentine intellectual property regime to Secretary of State Madeline Albright to assist US agencies in their preparation for the Special 301 review. Much of the cable is censored; however, available portions of the document are presented below.

  SUMMARY 1. The biggest irritant in Argentine-US bilateral relations over the last five years -- and probably over the next five as well -- has been pharmaceutical patent protection. This cable provides background information on the issue to help Washington agencies on the eve of the Special 301 process. It reviews US goals and assesses tools to achieve concrete progress on these issues. END SUMMARY

  INTRODUCTION

  2. [Paragraph 2 is classified in its entirety.]

  WHAT'S AT STAKE?

  3. Total sales of prescription pharmaceutical products in Argentina were USD 3.756 billion in 1998, making Argentina the third largest market in Latin America and the thirteenth largest in the world. Local pirate firms controlled 52 percent of the market, down from a peak of 59 percent in 1992, with European and US firms holding 27 percent and 16.5 percent respectively. German and Swiss companies accounted for almost 70 percent of the European market share. Of the top 50 pharmaceutical firms, 23 were Argentine, 15 were European, and 12 were US. A local pirate -- Roemmers -- was the market leader with a 7.84 percent share. US firms estimate that they lose over USD 500 million a year in sales because of the pirates.

  MARKET TRENDS

  4. Overall pharmaceutical sales have stagnated at approximately USD 3.6 billion since 1995, primarily as a result of severe budget problems in the public health sector and union-managed health providers. In this context, the fall in the pirate market share since 1992 stems largely from the entry of new multinational firms in the 1990's, as well as the purchase of local pirates by multinationals. During 1993-1998, 13 multinationals -- including 5 US firms -- opened new operations in Argentina. (FYI: numerous multinationals closed their operations in Argentina in the 1980s, often selling their interests to local pirates.) Similarly, eight multinationals bought controlling interests in pirate firms. Total new investment in the pharmaceutical sector from 1994-1998 reportedly exceed USD 800 million.

  5. The Argentine market is a "branded generic" market, meaning that local pirates do not compete with multinationals on the basis of price. In fact, most pirates charge prices comparable to those set by multinationals. The pirates' ability to avoid generic pricing reflects their strong marketing position and absence of research and development costs, buttressed by their control of the main distribution channels for pharmaceuticals. The three main distributors of pharmaceuticals -- Rofina, Disprofarma and Pharmnet -- are controlled by pirates and cooperate to protect margins and maintain price discipline. Most multinationals use these distributors, since the alternative, i.e. development of one's own distribution net, would be very costly. The three firms recently tightened their hold on distribution by acquiring several independent wholesale companies.

  6. [Paragraph 6 is classified in its entirety.]

  7. The lack of patent protection -- coupled with the pirates' strong marketing positions and control of local distribution channels -- has led many multinational firms to enter into licensing or co-marketing arrangements with the pirates. For example, Pfizer signed its first co-marketing agreement with Bago six years ago. More recently, Pfizer agreed to co-market Viagra with the same pirate firm. Roemmers also has co-marketing deals with several multinationals. Local managers of US firms complain that Argentina's unequal playing field forces them into such arrangements in order to survive.

  A HISTORY OF CONFLICT

  8-9. [Paragraphs 8 and 9 are classified in their entirety.]

  10. Decree 260 recognizes the principle of patent protection for pharmaceuticals, but defers the grant of such patents until November 2000. The decree grants the Argentine patent office (INPI) broad grounds for issuing compulsory licenses and contains ambiguous language on parallel imports. It does not provide pipeline protection for products patented prior to January 1994. These defects were exacerbated by Argentina's enactment of a flawed data confidentiality law in December 1996. The law -- negotiated by the Foreign Affairs Ministry (MFA) with Justicialist party Deputy and then Industry Committee chairman Humberto Roggero -- facilitates the copying of products by local pirates. The executive has yet to issue implementing regulations for the data law, but the Agricultural Secretariat has used it to justify the removal of the protection previously accorded data submitted for agrochemicals.

  PIRATES VS. MULTINATIONALS

  A FUTURE GOVERNMENT LIKELY TO BE UNHELPFUL

  11-17. [Paragraphs 11-17 are classified in their entirety.]

  18. Lilly's travails have continued even after INPI granted it an EMR for olanzapina. Argentina's FDA equivalent -- the National Administration of Medicine, Food, and Medical Technology (ANMAT) -- has refused Lilly's request that it revoke the registration of a pirate version of olanzapina already on the market, arguing that it lacks the legal authority to enforce an EMR. In fact, ANMAT has registered several other pirate versions since Lilly obtained the EMR. Lilly's efforts to seek relief through the Argentine courts have to date been fruitless. Meanwhile, a pirate firm has succeeded in obtaining a court order enjoining INPI from enforcing the EMR against its product. The pirate has also challenged the legal basis for INPI's original grant of the EMR. The complicated legal situation ensures that Lilly will face extensive legal delays and costs before it receives any concrete benefits from the EMR.

  US STRATEGY: ENDS AND MEANS

  [The remaining paragraphs are classified in their entirety.]

April 21st, 1999

• INPI confirms its earlier (February 11th) statement that Warner-Lambert meets the requirements for exclusive marketing rights; however, it does not grant exclusive marketing rights at this time. Warner-Lambert files an "amparo," a judicial complaint against INPI. It requests that an Argentine court find that INPI's delay in issuing exclusive marketing rights is "unjustified" and that the court set a date by which INPI must grant Warner-Lambert its exclusive marketing rights.

  See "Exclusive Marketing Rights for Lipitor in Argentina," Warner-Lambert Co., 14 December 1999.

Late April, 1999

• In advance of US Trade Representative Charlene Barshefsky's announcement of the Special 301 Review results, US Secretary of State Madeline Albright sends an action request to the US Embassy in Buenos Aires, asking that Embassy officials use the talking points that follow to give Argentine government officials advance notice of Ambassador Barshefsky's decision to keep Argentina on the priority watch list.

  TALKING POINTS

  In accordance with Section 301 of the US Trade Act, the Administration must conduct an annual review of the practices of our trading partners to determine if there is adequate and effective protection for intellectual property and to determine if fair market access is provided to the products dependent on intellectual property.

  On April 30, US Trade Representative Charlene Barshefsky will announce in a press release the results of this year's Special 301 review.

  We wish to inform you that Argentina remains on the priority watch list.

  Our governments have spent the better part of the past decade discussing the intellectual property issue.

  The failure of the Argentine government to provide adequate and effective patent protection for pharmaceutical products continues to be of great concern to the US government.

  Even more troubling has been the deterioration of intellectual property protection over the past year -- both as regards protection for confidential test data for agrochemicals and the Argentine government's failure to provide exclusive marketing rights as required by TRIPs article 70.9.

  We look forward to moving our discussion of these issues to Geneva and to the Argentine government's expeditiously bringing its industrial property regime into compliance with your country's WTO obligations. It was disappointing that our governments were unable to meet on the margins of the TRIPs council meeting last week.

  On the copyright side, the passage in late 1998 of a bill criminalizing software piracy was a positive step, and we look to Argentina to ensure its effective implementation. We look forward to working with you as Argentina ensures that the copyright regime meets TRIPs standards by January 1, 2000.

  See American Embassy, Buenos Aires, Cable 9343 to the US Secretary of State, Washington DC, April 1999.

• A subsequent cable from the US Embassy Charge d'Affaires Manuel Rocha to Secretary Albright describes the reactions of Argentine executive branch officials and members of Congress to the Special 301 review and its announcement that the US will pursue WTO resolution of Argentina's patent regime as "relatively restrained."

  See American Embassy, Buenos Aires, Cable 2127 to the US Secretary of State, Washington DC, May 1999.

May 5th, 1999

• US Embassy Charge d'Affaires Manuel Rocha meets with Argentine Minister of Foreign Affairs to express US opposition to a bipartisan bill in the Argentine Congress seeking to delay the implementation of pharmaceutical patents from 2000 to 2005. The Minister promises to voice his own concerns about the bill at the cabinet meeting on May 6th, but Charge Rocha remains concerned that the Minister's opposition "is unlikely to be sufficient to thwart passage of the bill."

  American Embassy, Buenos Aires, Cable to the US Secretary of State, Washington DC, May 1999.

May 6th, 1999

• The US files a WTO dispute case against Argentina, citing Argentina's refusal to grant exclusive marketing rights for pharmaceuticals. The US request for consultation lists two issues: Argentina's lack of provisions for patents or exclusive patent rights for pharmaceuticals and its decreasing level of compliance with TRIPs protocol. According to the US request, all countries that had not established a pharmaceutical patents system when TRIPs went into effect (January 1st, 1995) are obligated to provide exclusive marketing rights for pharmaceuticals according to TRIPs Article 70.9. The US also complains that Regulation 440 of 1998 is a step backward in Argentine compliance with TRIPs because it eliminated earlier protection of agricultural chemical products. Therefore, the US claims, Argentina is in violation of TRIPs Article 65, which prohibits countries in a transition period from enacting laws that decrease their compliance with TRIPs.

  See World Trade Organization, "Argentina - Patent Protection for Pharmaceuticals and Test Data Protection for Agricultural Chemicals - Request for Consultations by the United States." Document No. 99-1954.

May 10th, 1999

• Deputy Humberto Roggero, leader of the Justicialist Party, says that he expects the committees in the Chamber of Deputies to conclude their reviews of two bills related to pharmaceutical patents within ten days. If passed, the first bill would delay the implementation of pharmaceutical patents until 2005; the second would add a local working requirement to existing patent laws. The support of the Justicialist, Radical, and Frepasa parties and Minister of Economy Roque Fernandez bode well, Roggero says, for the passage of the bill. Although US Deputy Chief of Mission to Argentina Thomas Martin comments in his May 1999 cable to Secretary of State Madeline Albright that he doubts the bills will make it through committee within ten days, he predicts that "the pirate industry's well-oiled lobbying machine and deep pockets make it likely that Congress will eventually pass the bills." Martin says, "The lack of any clear resistance from the executive branch further improves the bills' prospects" but pledges that his Embassy will "continue to press GOA officials to work to derail the patent initiatives in Congress."
• In the same cable, Martin reports that lawyers affiliated with the foreign pharmaceutical industry have complained of what Martin terms "serious delays and malfeasance" at INPI since the appointment of Jaquenod.

May 12th, 1999

• A Deputy from the Justicialist Party tells US leaders that the extension of Argentina's transition period has strong support in the Chamber of Deputies as a response to US protectionism.

May 14th, 1999

• Former INPI board member Diego Martinez tells US Embassy officials that INPI interventor Horacio Jaquenod has decided not to review any more petitions for exclusive marketing rights (EMR).

May 17th, 1999

• Argentine newspapers report that the Industry Committee of the Chamber of Commerce will discuss three bills on May 19th: a bill to extend the transition period for pharmaceutical patents, a bill to add a local working requirement, and a bill banning exclusive marketing rights (EMR).
• An attorney for Warner Lambert tells US Embassy officials that he will pursue legal action to force INPI to process the company's application for EMR.

May 18th, 1999

• An Argentine Deputy from the Justicialist party tells John S. Creamer, an officer in the economic section of the US Embassy, that Economy Minister Roque Fernandez had defended INPI interventor Horacio Jaquenod as a "good guy" in a recent conversation.

May 20th, 1999

• US Department of State Under Secretary for Economic, Business, and Agricultural Affairs Stuart E. Eizenstat writes to Argentine Economy Minister Roque Fernandez and Argentine Ministry of Foreign Affairs Secretary for International Economic Relations Jorge Campbell. Citing the history of bilateral cooperation on "sensitive political and security issues," Eizenstat voices his concern that the pending legislation "would seem to put us back to dealing with proliferating irritants, rather than deepening our economic legislation."
• An Argentine newspaper quotes Chamber of Deputies Industry Committee President Emilio Garbino as saying that "without fail, the bill will be reported unanimously out of committee, and will be ready to go in the Chamber floor during the first two weeks of June."

  American Embassy, Buenos Aires, Cable to the US Secretary of State, Washington DC, May 1999

• Lee Skillington at the US Patent and Trademark Office e-mails colleagues in the State Department, USTR, and USPTO to announce that Diego Martinez Astrada, who was vice president of INPI under Norma Felix, is in Washington "on some USIS boondoggle." Astrada called Skillington earlier in the day to suggest that he stay after a scheduled presentation by Vicki Allums at the US PTO so he can tell the US officials what is "really going on with INPI." Skillington agrees to meet with Astrada and invites Sue Cronin of the State Department, Claude Burcky of USTR, Valerie Dees of the Department of Commerce's International Trade Administration, and Jo Ellen Urban and Mary Critharsis of USPTO to join the meeting.

May 26th, 1999

• Mauricio Macri, president of Socieded Macri, an extremely powerful Mercosur company, writes to Peter Romero, Assistant Secretary of State for Inter-American Affairs at the US Department of State. Macri promises Romero, "You may be certain that I have taken your message on the intellectual property question to heart and that it will be discreetly passed on to appropriate circles."

May 27th, 1999

• US Embassy Charge d'Affaires Manuel Rochas meets separately with Alliance party Presidential candidate Fernando de la Rua and Justicialist candidate Eduardo Duhalde to discuss the US position on patents.

May 28th, 1999

• The Ministry of Economy extends the intervention period at INPI for another 120 days.

June 2nd, 1999

• INPI publishes Warner-Lambert's application for exclusive marketing rights to allow local companies to file comments in opposition to the granting of these rights. Within a month, four Argentine companies file opposition claims.

  See "Exclusive Marketing Rights for Lipitor in Argentina," Warner-Lambert Co., 14 December 1999.

June 8th, 1999

• An Argentine official promises the US Embassy that he will work to block the pending legislation. A June 1999 cable from Embassy Charge d Affaires Manuel Rocha to Secretary of State Madeline Albright states:

  _____________________________________________________________________ told us June 8th that after discussions _____________________________________ he is working to try and "put the brakes" on Argentine Congressional efforts extending pharmaceutical patent transition period from 2000 to 2005. ________ cautioned that it would not be easy to achieve, but said he believed that the legislation could be indefinitely bottled up in committee.

  Charge Rocha comments that despite the "formidable foe" of local industry in Congress, the Embassy "will continue to lobby other key legislators and executive officials to oppose the legislation."

June 16th, 1999

• The Argentine media reports that a Congressional bill seeking to extend the transition period for a pharmaceutical patent system until 2005 have been delayed as the Justicialist party wavers on whether to support the measure.

  American Embassy, Buenos Aires, Cable 2836 to the US Secretary of State, Washington DC, June 1999.

June 17th, 1999

• Argentine newspapers report that President Menem said at an Americas Council Luncheon that he will veto any Congressional measure to extend the transition period for pharmaceuticals. At the same event, the President criticized the US initiation of a WTO case against Argentina.
• Deputies Emilio Martinez and Saul Ubaldini of the Justicialist Party sponsor a resolution condemning Embassy Charge Manuel Rocha as a "persona non grata" in an effort echoing the 1995 resolution passed against former US Ambassador James Cheek.

June 18th, 1999

An Argentine informant tells the Embassy that the bill to extend the transition period for pharmaceutical patents will not be passed, listing the threat of a Presidential veto, diminished Justicialist Party support, and a shortened Congressional session as factors combining to make the bill's passage impossible. The official tells the US Embassy that the President decided to veto the bill after meeting with Economy Minister Roque Fernandez, Trade and Industry Secretary Alieto Guadagni and Coordination Secretary Julio Caceres June 8th.

July 5th, 1999

• Pablo Challu of CILFA tells the Argentine press: "US Charge Manuel Rocha would contribute to solving the pharmaceutical patent dispute if he would work to achieve the multinational firms' public acceptance of the royalties offered by local laboratories." Challu says that multinationals refuse to accept reasonable fees offered by the local labs because they want to create monopolies and channel profits and employment into the US.

  See American Embassy, Buenos Aires, Cable 3125 to the US Secretary of State, Washington DC, July 1999.

July 16th, 1999

• Horacio Jaquenod threatens that the negative press he has received due to the efforts of an association of local patent lawyers may prevent him from processing applications. Charge Rocha reports in a July 1999 cable to US Secretary of State Madeline Albright:

  (Jaquenod) complained to US July 16 about continuing press criticism of his management of INPI. He charged that the local association of patent attorneys is behind the media attacks, and said the negative press coverage is hindering his ability to run the Institute effectively. For example, it would be difficult for him to finalize pending exclusive marketing rights (EMR) applications, if he were busy defending his personal integrity.

July 23rd, 1999

• Argentine newspaper Buenos Aires Economico reports that local pharmaceutical firms are lobbying heavily to protect their interests. Among their reported targets is Eduardo Duhalde, Justicialist Party Presidential candidate; however, Duhalde has previously said that he opposes the extension of the transition period for pharmaceutical patents.

  See American Embassy, Buenos Aires, Cable to the US Secretary of State, Washington DC, July 1999.

August 5th, 1999

• An Argentine court rules that INPI's delay in issuing exclusive marketing rights for atorvastatin to Warner-Lambert is unjustified.

  See "Exclusive Marketing Rights for Lipitor in Argentina," Warner-Lambert Co., 14 December 1999.

September, 1999

• Eli Lilly succeeds in its efforts to block Argentine firm Beta from marketing a copy of olanzapine, a Lilly drug, when an Argentine court grants its requested injunction. However, Lilly's lawyer, Pedro Chaloupka, worries that the verdict may not withstand an appeal.

September 30th, 1999

• President Menem extends the intervention period at INPI until December 10th, 1999, the day he will leave office.

October 5th, 1999

• An Argentine court of appeal upholds a lower court's August 5th ruling that INPI's delay in issuing exclusive marketing rights to Warner-Lambert is unjustified and mandates that INPI respond to Warner-Lambert's request by October 21st.

  See "Exclusive Marketing Rights for Lipitor in Argentina," Warner-Lambert Co., 14 December 1999.

October 22nd 1999

• INPI issues a statement that Warner-Lambert's mailbox patent application is invalid because atorvastatin is not patentable under Argentine law; therefore, it refuses to grant Warner-Lambert exclusive marketing rights for the compound. This finding contradicts INPI's earlier statements that Warner-Lambert had met the requirements for a grant of exclusive marketing rights.

  See "Exclusive Marketing Rights for Lipitor in Argentina," Warner-Lambert Co., 14 December 1999.

November 16th, 1999

• The Argentine National Institute of Industrial Property (INPI) issues a statement confirming that atorvastatin, the subject of Warner Lambert's application for exclusive marketing rights, is identical to a compound already given exclusive marketing rights in South Africa.

November 17th, 1999

• Journalist Martin Anderson writes in the Washington Times that Claudio Sebastiani, a former Congressional Deputy, boasted to Anderson that he handed out $25 million in bribes to Congressmen to ensure their support for changes in the patent law in 1995 that benefitted local industry.

• The executive branch announces that Horacio Jaquenod has been appointed to permanent leadership of INPI's board of directors. Some officials protest that this decision should have been left to President-elect Fernando De La Rua, who will take office in December.

November 19th, 1999

• The Industry Committee of the Chamber of Deputies approves a bill requiring foreign pharmaceutical companies to share licensing on imports with local manufacturers, a provision of the Intellectual Property Rights Law of 1995 vetoed by President Menem.

December 3rd, 1999

• PhRMA submits its recommendations for the 2000 National Trade Estimate Report on Foreign Trade Barriers (NTE). See http://www.cptech.org/ip/health/phrma/nte-99/argentina.html.

De la Rua Administration

December 10th, 1999

• Fernando de la Rua is inaugurated President of Argentina.

December 14th, 1999

• In response to INPI's rejection of its application for exclusive marketing rights for atorvastatin, a cholesterol-lowering drug, Warner-Lambert says it will respond to INPI's action and seek assistance from the new Argentine Minister of Economy under President de la Rua.

December 21st, 1999

• Charge Rochas speaks with Argentine Foreign Minister Rodriguez Giavarini to encourage the new Argentine Administration to appoint a new board of directors at INPI.

December 28th, 1999

• Officials from the economic section of the US Embassy in Buenos Aires meet with Debora Giorgi, the new Argentine Secretary of Industry, and her Undersecretary, Gonzalo Martinez. Both Argentine officials agreed with the US sentiment that the INPI board of directors should be replaced by a Presidential decree. Giorgi addressed US concerns by telling the Embassy officials that neither Carlos Correa nor Frederico Zamora was a candidate for the position and promising that the new board would be governed by professionalism and integrity. However, despite Giorgi's assurances, Charge Rocha writes in a January 2000 cable to Secretary of State Madeline Albright that the Embassy remains concerned that "the ability of local pharmaceutical firms to overcome such good intentions should not be underestimated" because "local pirate firms still exercise considerable influence with key Radical and Peronist party leaders in Argentina's Congress."

January 10th, 2000

• Economic section officials from the US Embassy in Buenos Aires meet with an Argentine official whose name is classified in their reports. The official is described in a January 2000 cable from Embassy Charge d'Affaires Manuel Rochas to Secretary of State Madeline Albright as a "capable young technocrat" with a temporary leadership position in the Anti-Trust Commission. In conversations with US officials, he "characterized his own views on patent protection as very similar to those of the USG" and asked for US assistance in the reform of INPI. However, he recommended that such assistance come from an American university or the World Intellectual Property Organization (WIPO), not directly from the US government.

February, 2000

• US industry groups begin filing their recommendations for the Special 301 list, which will be released by the United States Trade Representative in April. In its submission to USTR, PhRMA recommends that Argentina be listed as a Priority Foreign Country, the most serious category of infringer of intellectual property rights. PhRMA states, "The current Administration has not yet demonstrated that it will or can obtain the changes necessary to fulfill the minimum standards contained in the TRIPS Agreement and to provide for an effective agency for granting industrial property rights." Citing a hostile political environment in Argentina, PhRMA opines that "it is unlikely that any positive actions can be expected in the foreseeable future" and recommends that the US engage Argentina in a WTO dispute.

February, 2000

• US Secretary of Commerce William Daley discusses bilateral issues including intellectual property protection with Argentine President Fernando de la Rua. A February 28th article in Marketletter reports that Daley emphasized the benefits Argentine businesses would accrue from intellectual property protection. He warned that the local manufacturing bill currently under consideration in the Argentine Congress "is unacceptable to us, and if it becomes law, we will take action." Daley traveled to Argentina with representatives from 19 US companies including Merck and Pfizer.

  See "Argentina Reviews IPR Laws; US Commerce Sec Warns Over Local Production Plans" Marketletter 28 February 2000 as replicated in Foster, James F., "Daley" Email to Jeff C. Irwin, 3 March 2000.

March, 2000

• The Argentine Congress opens its new session with the renewed introduction of two bills introduced during the last session. One bill would mandate that all patented products be manufactured in Argentina; the other would increase the availability of compulsory licenses to local firms. In a March 2000 cable to Secretary of State Madeline Albright, Charge Rochas voices his concern that "sponsorship from Juan Pablo Baylac, the Alianza Chairman of the Chamber of Deputies' Industry Committee, increases the chances of the bills' passage considerably." Although he does not support the local production bill as written, Baylac considers the idea promising and plans to draft an alternative bill.

• The Argentine executive branch, although ostensibly in support of existing patent law and its November 2000 implementation, declines to take a public position opposing the bills. Charge Rochas worries in his March 2000 cable to Secretary Albright that "the recent resurgence of economic nationalist and protectionist rhetoric in Argentina has given Congressional opponents of patent protection an opening" and that "proposals to gut the patent law could acquire sufficient momentum in Congress -- and some quarters of the Administration -- in the coming months to make it hard for President De La Rua and his economic team to sustain opposition to them." However, Rochas remains confident that De La Rua's popularity would enable him to defeat the proposals "if he were willing to expend political capital to do so." In light of this, Rochas recommends that "In high-level discussions with the GOA, such as those on the margins of Chile's Presidential Inauguration, we should urge the GOA to take definite steps to head off this potential nightmare for our bilateral relationship."

March 19th, 2000

• La Nacion, an Argentine newspaper, runs a brief front-page article claiming that pharmaceutical prices in Argentina are among the highest in the world. Citing research by independent consultants specializing in healthcare (Fundacion Isalud), the article reports that pharmaceutical prices have increased by 66% to 150% since Argentina instituted currency convertibility.

  See "Medicamentos, Entre los Mas Caros del Mundo" La Nacion, 19 March 2000. (In Spanish)

  A second article printed in the "Economia y Negocios" section elaborates on the study's findings and discusses the sources of the price increases. Journalist Juan Aznarez cites Martin Massini Ezcurrea, director of CAEME, as saying that price increases for research-based medicines are due to increasing costs of research.

  See Aznarez, Juan "En la Argentina, los Precios de los Medicamentos Suben sin Remedio" La Nacion 19 March 2000.

March 21st, 2000

• PhRMA briefs State Department officers on Argentina and Brazil, asking that WTO cases be brought against both countries. PhRMA hopes that Argentina, its primary target, will be the first TRIPs case the US government takes on after the January 1st deadline for TRIPs compliance. PhRMA voices frustration with the hostile political environment in Argentina and the Argentine industry's international operations.

  See Creamer, John S. "PhRMA Briefing" E-mail to Andrew N. Bowan and Kevin K. Sullivan, 21 March 2000.

March 22nd, 2000

• An article in la Nacion quotes Pablo Challu, director of CILFA, as estimating that within the next 6 months there will be more than 1000 patent applications for new drugs, the majority of which will be filed by foreign companies. The article explains that in the past, Argentine firms were permitted to copy the drugs that had been formulated through the research of another lab without violating the law because medicine was considered a public good. However, beginning at the end of October, new pharmaceutical products reaching the Argentine patent office will be patented, such that for 20 years, no one can copy their formula without a license. Fines Gonzales Garcia, former Buenos Aires Minister of Health comments that drugs don't have prices; they are priced. He predicts that the implementation of patents will result in further price increases. Martin Massinini Ezcurra of CAEME counters this assertion by pointing out that new medicines account for only 5% of all products on the market in Argentina, so any overall price increase would be minor. However, as Challu states, the Brazilian case provides an illustrative example of how an implementation of patent laws leads to price increases.

  The author also discusses whether the charge that local firms are acting as pirates is merited. He quotes an unnamed source as stating that the foreign firms were never forced to operate in Argentina, where they are knowingly putting their products at risk of copying. The same source says in Spanish that "The true pirates have been the multinational companies. Various important firms bought smaller local labs that used to copy their products as well as those of other multinational companies. When they did this, they didn't immediately remove the copied products of other multinational companies from the market. Is that ethical behavior or piracy?"

  See "Marca Registrada" La Nacion 22 March 2000 (In Spanish)

• Martin Massini Ezcurra, director of CAEME, writes an opinion piece in the Clarin entitled "Patentes: No Todos Investigan" (Patents: Not Everyone Researches). Ezcurra argues against the local working requirement of the bill pending in Congress by stating that the decision to operate a firm in a country depends on various macroeconomic factors. A patent system will not lead multinational companies to flee the country; although the Chilean example may seem to indicate that this is so, foreign companies actually left Chile not because of patents but because of macroeconomic instability. Ezcurra also invalidates the examples of local working requirements in Uruguay and Brazil by stating that importation is considered "working" in Uruguay and local working is only required in Brazil when it is economically viable.

  See Ezcurra, Martin Massini, "Patentes: No Todos Investigan" El Clarin 22 March 2000.

• INPI interventor Horacio Jaquenod tells Embassy officials that he does not expect INPI to encounter any problems issuing exclusive marketing rights to Warner Lambert for atorvastatin because there is no copied version of the drug already on the Argentine market, unlike in the olanzapina case.

March 23rd, 2000

• The Argentine government issues an executive decree replacing the board of directors at INPI. German Voss, a former judge, Mario Trincheri, and Jorge Medici are appointed to the board. A March 2000 cable from Charge Rochas to Secretary of State Madeline Albright quotes unnamed Argentine government sources as indicating that Argentina's new Anti-Corruption Office may process charges against the former INPI board.

March 26th, 2000

• The Argentine press reports that Congress will begin consideration of a bill extending the transition period for pharmaceutical patents until November 2005.

May 30th, 2000

• The US increases the scope of its WTO dispute settlement case against Argentina to include its complaint that Argentina has not fully implemented its TRIPs obligations that went into effect January 1st. The new request supplements the complaint filed May 6th, 1999.

April 6th, 2000

• The new INPI board invites representatives from the economic section of the US Embassy in Buenos Aires to a "get acquainted meeting." The INPI board members reveal to the Embassy officials that they had to resort to calling the police to evacuate the former board members from their INPI offices and are having similar difficulty ensuring funds for the operation of the patent office from the Ministry of Economy.

April 28th, 2000

• Mara Laudonia reports in the Buenos Aires business newspaper el Cronista that both foreign and domestic pharmaceutical companies embrace the recent US decision to initiate a WTO case on pharmaceutical patents in Argentina. The foreign firms remain convinced that the WTO panel will find that Argentina is violating its international obligations while the domestic labs are equally confident that Argentina is in full compliance with TRIPs.

  Laudonia Mara, El Cronista, 28 April 2000. As translated in US Cable LAP2000428000029.

April, 2000

• Secretary of State Madeline Albright sends an action message to the US Embassy in Buenos Aires requesting that Embassy officials give talking points about the Special 301 review to Argentine officials in advance of US Trade Representative Charlene Barshefsky's April 30th announcement of the Special 301 list. Argentina will remain on the Priority Watch List because of its failure to grant TRIPs-mandated exclusive marketing rights for pharmaceuticals and inadequate protection of biotech test data as well as problems in other areas.

July 2000

• US Trade Representative Charlene Barshefsky announces that she will begin the annual review of GSP eligibility. Among the factors considered in determining eligibility is the extent and progress of IPR protection in the developing country. Secretary of State Madeline Albright asks the US Embassy in Buenos Aires to look over the recommendations of US industry groups regarding Argentine GSP benefits and issue comments on their validity by September 25th.

September 2000

• James Walsh, an officer at the US Embassy in Argentina, responds to Secretary Albright's July 2000 request for comments on GSP submissions by confirming the accuracy of PhRMA's statement. He states that "Argentina's patent regime does not conform with its obligations under the World Trade Organization's agreement on Trade-Related aspects of Intellectual Property Rights (TRIPs), and the GOA has selectively applied laws in a manner that has damaged the interests of US firms."

October 24th, 2000

• INPI begins issuing patents for pharmaceuticals. Within days, 82 patents are issued, all to foreign firms.

Key Players

US

Madeline Albright

Albright served as US Secretary of State under President Bill Clinton from 1997 until 2001.

Bernard Aronson

Aronson was Assistant Secretary of State for Inter-American Affairs under US President George Bush from 1989 until 1993. He was an international advisor to Goldman and Sachs.

James Baker

Baker served as Secretary of State under US President George Bush from January 1989 until August 1992. As Secretary of State, Baker was credited as a significant contributor to the reunification of Germany and the transition of Eastern Europe from communism to democracy. He received the Presidential Medal of Freedom in 1991. From 1997 until 2004, Baker was UN Secretary General Kofi Annan's personal envoy to conflict in the Western Sahara. In 2000, he acted as chief legal counselor to Republican Presidential candidate George W. Bush. He is now a senior partner with Baker Botts, LLP and a senior counselor to the Carlyle Group, a large private equity group whose specialties include defense and healthcare.

Charlene Barshefsky

Barshefsky, the United States Trade Representative from 1997-2001 under President Bill Clinton, is as of February 2005 Senior International Partner at Wilmer, Cutler, Pickering, Hale, and Dorr, LLP. Since June 2002, Barshefsky has been a director of Idenix Pharmaceuticals, a biotechnology company acquired in May 2003 by Novartis. Ambassador Barshefsky also serves on the corporate Board of Directors for American Express, Estee Lauder, Intel, and Starwood Hotels and Resorts.

Bill Bradley

Bill Bradley was a Democratic US Senator who represented New Jersey from 1979 until 1997. In 2000, he ran for President but was unsuccessful in gaining his party's nomination. Since 2001, he has been chief outside advisor to the nonprofit practice of McKinsey and Company. In 2005, he became managing director of Allen and Company, LLC. He serves on the boards of directors of Quinstreet, Inc. and Starbucks.

George H. W. Bush

Bush served as the 41st President of the United States from January 1989 through January 1993. He was defeated in the 2000 election by Democratic candidate Bill Clinton.

James Cheek

James R. Cheek was appointed US Ambassador to Argentina by President Clinton in March 1993. He held this position until 1996. As of March, 2002 he was ambassador-in-residence and a lecturer at the University of Arkansas at Little Rock.

Warren Christopher

Christopher was appointed Secretary of State by Bill Clinton in 1993. Upon his retirement from the State Department in January 1997, he returned to Olmeny & Myers, LLP as a senior partner.

Bill Clinton

Clinton was President of the United States from January 1993 until January 2001.

William Daley

Daley served as US Secretary of Commerce from January 1997 until June 2000. He was chairman of Al Gore's campaign for the US presidency from June 2000 until December 2000. From November 2001 through May 2004, he was president of telecommunications company SBC. In October 2004, he was named to the Board of Directors of Abbott Laboratories, a major US pharmaceutical company.

Lawrence Eagleburger

Eagleburger was appointed Deputy Secretary of State by US President George Bush in 1989. In August 1992 he became Acting US Secretary of State. He was sworn in as US Secretary of State the following December. After retiring from the public sector, Eagleburger served on the board of Dresser Industries. When Dresser was acquired by Halliburton in 1998, he accepted a position on the Halliburton board of directors.

Stuart E. Eizenstat

During the second Administration, Eizenstat filled a number of posts including Deputy Treasury Secretary, Under Secretary of State for Economic, Business and Agricultural Affairs and Under Secretary of Commerce for International Trade. As of March 2005, he is head of the international trade and finance division of the law firm of Covington and Burling.

J. Michael Farren

Farren was undersecretary for international trade for the US Department of Commerce from 1989 until 1992. In 1992, he was deputy campaign manager for President George Bush's reelection campaign. After the election, Farren joined Xerox Corporation, where he was named a vice president in 1994. As of March 2005 he is vice president of external and legal affairs, general counsel, and corporate secretary to Xerox.

Myles Frechette

Frechette, assistant US Trade Representative for Latin American affairs during the first Clinton Administration, served as US Ambassador to Colombia from 1994 to 1997. He was subsequently a consultant with Hills & Co., an international consulting firm overseen by former USTR Carla Hills, and president and CEO of the Council of the Americas, an organization of American businesses operating in Latin America.

Al Gore

Gore was Vice President of the United States under President Bill Clinton from January 1993 until January 2001. In 2000, he campaigned unsuccessfully for the Presidency. As of 2005, he is president of INdTV, a cable news network catering to the youth market, chairman of Generation Investment Management, and a director of Apple Computers.

Carla Hills

Ambassador Hills was United States Trade Representative under George Bush from 1989 until 1993. She is now chairman and C.E.O. of Hills and Company, a consulting firm.

Mickey Kantor

Kantor was appointed to the position of United States Trade Representative by President Clinton in 1993. He subsequently became US Secretary of Commerce. After leaving his second cabinet position in 1997, Kantor became a partner at Mayer, Brown, Rowe & Maw LLP. He was a member of President Clinton's legal team during the impeachment proceedings against the President. As of March 2005, Kantor is still a partner at Mayor, Brown, Rowe & Maw; he is also a senior advisor at Morgan Stanley. Kantor serves on the board of directors at Pharmacia Corporation and Monsanto.

Jim Leach

Leach has been a US Congressman from Iowa since 1976. He is chairman of the subcommittee on East Asian and Pacific Affairs of the House Committee on International Relations and chairman emeritus of the Committee on Financial Services.

Thomas McLarty

Childhood companion to Bill Clinton Thomas McLarty served as White House Chief of Staff, Counselor, and Special Envoy for the Americas during President Clinton's first term (1993-1997). As of March 2005, he is a senior advisor to the Carlyle Group, president of Kissinger-McLarty Associates (a consulting group serving American multinationals), and chairman of McLarty Companies, a transportation company.

Robert A. Mosbacher

Mosbacher was US Secretary of Commerce under President George Bush from 1989 until 1992. Since then, he has been chairman of Mosbacher Energy Company and Mosbacher Power Group.

Manuel Rocha

Rocha was Deputy Chief of Mission at the US Embassy in Buenos Aires from July 1997 until October 1997, when he became the Embassy's Charge d'Affaires. In July 2000, he became the US Ambassador to Bolivia, where he served until 2002.

Joan Spero

Spero was Undersecretary of State for Economic, Business and Agricultural Affairs from 1993 to 1997 under President Bill Clinton. Since 1997, she has been president of the Doris Duke foundation, a philanthropic organization supporting the performing arts, the environment, and medical research.

Terrence Todman

Todman served as US Ambassador to Argentina from April 1989 until June 1993. A Career Ambassador for the State Department, Todman is now president of Todman and Associates, Inc and a consultant to several US and Argentine businesses.

Argentina

Eduardo Bauza

Bauza became Secretary of Health in 1999. He was subsequently chief of staff to President Carlos Menem and was a Senator in Argentina. In 2000, he was charged with accepting bribes.

Domingo Cavallo

Cavallo served as Foreign Minister beginning in 1989. In 1991, he was appointed Minister of Economy. He resigned in 1996 to start a new political party. In 1997, he won a seat in Congress. After losing the Presidential election of 1999, he was again appointed Minister of Economy in 2001 by President Fernando de la Rua, but was removed from the office at the close of 2001. Since then, he has been a professor at NYU's Stern School of Business (2002-2003) and Harvard University (beginning in 2003).

Pablo Challu

Challu was director of domestic trade under the first Menem administration. He later became the director of CILFA, an association of large Argentine labs, and subsequently served as secretary for consumer defense under Argentine President Eduardo Duhalde.

Fernando de la Rua

De la Rua was President of Argentina from December 1999 until December 2001, when he was forced out of office during a financial crisis.

Guido Di Tella

Di Tella, who had previously served as Argentina's Ambassador to the US, replaced Domingo Cavallo as Minister of Foreign Affairs in 1991, when Cavallo became Minister of Economy.

Eduardo Duhalde

Duhalde, Argentina's Vice President under President Carlos Menem from 1989 through 1991, was governor of Buenos Aires from 1991 through 1999. He lost the Presidential election of 1999 to Fernando de la Rua, but became President in February 2002 after De la Rua's resignation.

Norma Felix

Felix was director of the Argentina Patent office (INPI) until she was fired. US Embassy officials speculated that her issuance of exclusive marketing rights to foreign pharmaceutical companies motivated her dismissal.

Antonio Erman Gonzalez

Gonzalez held various key posts in the Menem Administration, including Minister of Health and Social Action, Minister of Economy, Minister of Defense, and Minister of Labor.

Horacio Jaquenod

Jaquenod was appointed director of the INPI office by President Carlos Menem when Norma Felix was fired. As of May 2004, he was General Consul of the Argentine Republic in Milan.

Manuel Limeres

Limeres served under Undersecretary Menendez during the first Menem administration. As of 2004, he is the director of ANMAT, the National Administration of Medicines, Ailments, and Medical Technology.

Carlos Saul Menem

Carlos Menem was President of the Republic of Argentina from 1989 until 1999. In 2001, he was arrested and placed under house arrested over alleged involvement in an arms scandal. Expecting to lose the 2003 Presidential election, Menem moved to Chile, where he was protected from extradition to face embezzlement charges. He has since returned to Argentina and remains involved in Argentine politics.

Eduardo Menem

As of February 2005, Eduardo Menem continues to serve as a Senator in Argentina.

Matilde Menendez

Menendez was Undersecretary of Health during the first Menem administration. She later acted as the director of the National Institute of Social Services for Retirees and Pensioners. In March 2003, she was charged with perjury following her testimony in the trial of several police officers being charged as accessories in a 1994 bombing.

Raul E. Granillo Ocampo

Ocampo, a friend of President Menem, was Argentina's Ambassador to the United States between 1993 until 1997, when he became Argentina's Minister of Justice. In August 2004 he was tried in an Argentine court for accepting illegal funds.

Raul Ochoa

A February 2005 article in Newsweek described Ochoa as "a consultant for the Argentine Department of Industry and Trade." (See Hudson, Peter, "Brazil's Corporate Raiders" Newsweek 28 February 2005)

Humberto Roggero

Roggero was a leader of the Peronist party in the Argentine Chamber of Deputies. In May 2003, he was appointed Argentine ambassador to Italy.

Oscar Saggese

Oscar Saggese was Secretary of Industry and Trade during the first Menem administration. In January 2002, he became executive vice president of Grupo BAPRO, a group of banks in Buenos Aires.

Carlos Sanchez

Sanchez was Sub secretary of the Economy under Argentine Minister of Economy Domingo Cavallo. Upon the resignation of Federico Sturzenegger in 2001, Sanchez became Secretary of Economic Policy.