USTR's 2004 Special 301 Report Highlights the U.S.'s Global Ambition to Use Heightened Protection of Innovators' Drug Registration Data to Block and Delay Registration of Competing Generic Drugs.

Brook K. Baker, Health GAP
May 4, 2004

The office of the United States Trade Representative issued its 2004 Special 301 Report on May 3, 2004. Despite protestations in multiple contexts that the USTR is not initiating trade policies that undermine developing countries' flexibility to access affordable medicines for all, the Special Report contains damning admissions of an intellectual property agenda designed to pursue the interests of the proprietary pharmaceutical industry not matter what the cost in human lives. The U.S. campaign for escalating intellectual property protections, and its corresponding attack on public health, is broad in geographical scope and increasingly focused on preventing registration of generic medicines.

Expansive geographic scope: As stated in the Executive Summary (p. 2), the U.S. is pursuing heightened intellectual property protections in multiple bilateral and regional free trade agreements all around the globe, including areas hardest hit by the HIV/AIDS pandemic, e.g., Southern Africa and Thailand:

The United States is committed to a policy of promoting increased intellectual property protection. In this regard, we are making progress in advancing the protection of these rights through a variety of mechanisms, including through the negotiation of free trade agreements (FTAs). We are pleased that the recently concluded FTAs with Central America including the Dominican Republic, Morocco and Australia will strengthen the protection of IPR in those countries. Specifically, the intellectual property chapters of these agreements provide for higher levels of intellectual property protection in a number of areas covered by the TRIPS Agreement. We are also seeking higher levels of protection and enforcement in the FTAs that are currently under negotiation with Bahrain, Panama, the Southern Africa Customs Union, in the upcoming FTA negotiations with Andean countries and Thailand, and in the ongoing negotiation of a Free Trade Area of the Americas. Another opportunity we are using to strengthen the protection and enforcement of intellectual property is the increasing number of trade and investment framework agreement (TIFA) negotiations with several countries in regions such as the Middle East and Asia.


Protectionism for drug company data bars registration of generic drugs. Having lost some of its campaign objectives with respect to narrowing sovereign rights to issue compulsory licenses, the U.S. is intensifying its efforts to erect new, insurmountable barriers against registration of generic medicines not only during a five-year period of data exclusivity but also during the entire term of a 20-year patent via patent/registration linkage. The USTR is brazen in admitting these efforts:
One of the key implementation priorities that we have focused on in this year's review is the implementation of Article 39.3 of the TRIPS Agreement, which requires WTO Members to protect test data submitted by drug companies to health authorities against disclosure of that data and against "unfair commercial use" of that data.

Most countries, including the United States, impose stringent regulatory testing requirements on companies seeking to market a new drug or agricultural chemical product. Many countries have recognized, however, the value of allowing abbreviated approval procedures for second-comers seeking to market an identical product to one that has already been approved. Generally, these second applicants may be required to demonstrate only the bioequivalence of their products with the product of the first company, and will not be required to repeat all of the expensive and laborious clinical tests conducted by the first company to prove the safety of the product.

However, because of the expense involved in producing the safety and efficacy data needed to obtain marketing approval, the TRIPS Agreement recognizes that the original applicant should be entitled to a period of exclusivity during which second-comers may not rely on the data that the innovative company has created to obtain approval for their copies of the product. During this period of exclusive use, the data cannot be relied upon by regulatory officials to approve similar products. This period of exclusivity is generally five years in the United States and six to ten years in the EC member States. Other countries that provide a period of exclusivity against reliance on data include Australia, China, the Czech Republic, Estonia, Japan, Jordan, Korea, Mexico, New Zealand, Slovenia, and Switzerland. We commend Bulgaria and Colombia on their recent implementation of data protection for pharmaceutical and agricultural chemical products, respectively. In addition, we commend Mexico for passage of regulations that strengthen the coordination between its health and patent agencies to protect valid patents of innovative pharmaceutical products. We urge all WTO members to swiftly complete their implementation of Article 39.3, including the rest of the Andean countries, Israel and Turkey.

As more countries fulfill their implementation obligations, we will adjust our focus to determine whether our trading partners are providing adequate and effective enforcement as required by the TRIPS enforcement provisions.

Ibid. p.4.

The importance of expanding the reach of data exclusivity and patent/registration linkage provisions worldwide is highlighted in the 2004 Special 301 Report. Of the fifteen countries on the Priority Watch List, twelve involved allegations that they did not provide sufficient protection for confidential data submitted by research-based pharmaceutical companies (5 years of data exclusivity) and/or that they did not prevent marketing approval of generic products during the term of a conflicting patent. (The twelve countries are: Argentina, Brazil, Egypt, India, Korea, Lebanon, Pakistan, Republic of the Philippines, Russia, Taiwan, and Turkey.) Similarly, of the thirty-four countries on the "regular" Watch List, over half, nineteen, were listed in part because of their alleged failure to protect drug companies' proprietary interests in drug registration data. (The nineteen countries are: Canada, Chile, Columbia, Costa Rica, Croatia, the Dominican Republic, Ecuador, Guatemala, Hungary, Israel, Malaysia, Peru, Poland, Romania, Saudi Arabia, Slovak Republic, Thailand, Uruguay, and Venezuela.)

Reading the steady stream of U.S. complaints about failed intellectual property protections for drug registration data is a lot like reading a shortened version of PhRMA's 2004 Submission to the U.S. Trade Representative for the Special 301 Report. (See full report at Every country on the U.S. 301 Watch List is discussed at length in the PhRMA submission except the Philippines. In each and every one of these country submissions, PhRMA expressly targets registration issues, sometime for pages at a time. This focus is no surprise because in Appendix B, PhRMA expressly states that it "urges USTR to use this year's Special 301 report to launch a global initiative on data exclusivity that will capitalize on the TRIPS clarifications that the United States has not only gained in the FTAs but also in recent WTO accessions of China and Taiwan. The United States should make it clear that the clarifications found in the FTAs on data exclusivity represent the U.S. interpretation of how the obligations contained in TRIPS Article 39.3 should be implemented and that it will allocate the necessary resource to ensure that the non-FTA countries act accordingly."

301 undermines Doha.

The USTR/PhRMA tag team is hell bent on erecting new barriers to generic competition in the form of global rules on data exclusivity and patent/registration linkage. The accomplishment of this focused campaign would undermine most, if not all, of the pro-public health flexibilities clarified in the Doha Declaration in November 2001. Even though compulsory licenses approved at Doha are ill-suited to providing a steady stream of newer medicines at affordable costs to poor people in developing countries, the availability (and threat) of compulsory licenses has pressured Big Pharma to lower drug prices. The possibility of compulsory licenses has also energized generic producers to prepare for the post-2005 Big Bang when the TRIPS' straight jacket gets imposed on countries like India which have heretofore used pre-TRIPS flexibilities to produce cheaper generics of assured quality to address health needs in developing countries.

Developing countries and activists alike must resist and raise the stakes against the registration juggernaut. Death by patent is being replaced by death by registration. Just as PhRMA and the USTR are willing to move the battle line when they have lost ground on one IPR front, we must be prepared to engage them on this new terrain.

Drug regulatory agencies in developing countries must be permitted to use previously filed proprietary data on drug safety and efficacy in order to access the bio-equivalence of more affordable generic alternatives. Without this option, poor people in the Global South will wait five years at a minimum for access to newer medicines. In many instances, they will wait much longer as drug companies unfold their cynical evergreening strategies designed to extend patent protection well beyond a single 20-year term and thereafter use patent/registration linkage to delay marketing approval for decades.

Registration is not an arcane topic? - it is now a matter of life and death. The Bush Administration must be prevailed upon by all available means to sever its allegiance to PhRMA profits and instead to recognize the human right to health. Otherwise, tens of thousands of people will continue to die unnecessarily each and every day simply because they cannot afford medicines routinely available to rich people.

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