Intellectual Property Protection

Jordan represents a significant and growing regional source of pirated pharmaceuticals. As piracy of software, videos, publication and pharmaceuticals flourishes, Jordan may have earned the dubious distinction of ranking among countries with the highest per capita rates of intellectual property infringement.

A recently updated industry survey of 17 multinational research-based companies shows that during a 36 month period, from January 1996-December 1998, Jordanian pirating companies have applied for or registered nearly 70 unauthorized copies of internationally patented pharmaceutical products. More than 50% of these pirated products are of American origin. The damage Jordanian pirate copies inflict on leading American products is enormous, estimated to be in the range of US$ 25,000,000 to 50,000,000 per year, especially in export markets in the Middle East and North Africa region.

Indeed, as knowledge of the Uruguay Round TRIPs agreement spreads in the region, the latest industry survey shows that local Jordanian companies are accelerating registration of unauthorized copies out of fear that pharmaceutical patents will be protected. Jordanian producers are now also appearing as bidders on regional Government tenders, particularly in Gulf and North African countries, where they traditionally have not been accepted due to quality concerns. The appearance of these exports in the Gulf is particularly dangerous, as several of these countries, high potential markets for American pharmaceutical exports, do not yet provide adequate and effective patent protection.

Even more ominous is the Jordanian pirating companies' new thrust into Lebanon, one of the fastest growing markets in the region for American pharmaceuticals, which are steadily displacing long-established European competitors. Jordanian companies view Lebanon as a "green field" pirate export market, where antiquated patent laws offer no meaningful product patent protection.

Jordan provides no pharmaceutical product patent protection whatsoever. In fact, Jordan amended its patent law in 1986 to repeal pharmaceutical product protection, thereby opening the door to a flood of locally produced pirate copies. Unauthorized copies often receive marketing approval simultaneously with or even before the original product.


Other Trade Barriers

Product Registration Discrimination

As a form of subtle discrimination against international companies, locally-produced copies are not subject to the same rigid registration requirements required to document a new product's quality, safety and efficacy. For instance, international products cannot be imported into Jordan without providing extensive documentation and proof of registration in a "major" or "reference" country, such as the FDA in the U.S.A. or equivalent regulatory authorities in Europe. By contrast, Jordan accepts pirate copies of internationally patented products based on abbreviated dossiers and without "major" or "reference" country approvals. One recent example is an Argentine firm which has submitted several pirate copy products for registration. None of these pirate versions is approved or available in a major or primary reference country.

More seriously, there is a lack of transparency and fairness in the new product registration process. American and European companies submitting applications for new product registrations can wait for many months before technical committee review. In 1998, there were examples where the review and approval of international products were unnecessarily delayed for many months-in an apparently deliberate effort to allow local producers to "catch up" with their own submissions of pirate copies. Research companies conclude that the Ministry of Health has adopted a strategy of trying to compel international suppliers to accept lower prices by threatening new product introductions with the simultaneous introduction of "cheaper" pirate products.

There also seems to be a politically-inspired move to favor "Arab" pharmaceutical companies with accelerated company and product approvals. In a recent case, an Arab company was allowed to "jump the queue" of international firms waiting to register new products, including American companies.

Infringement of Copyright and Proprietary Data

Enforcement of copyrights is very weak, allowing local Jordanian companies to copy freely an innovator's product label, insert and promotional material, thereby misleading healthcare professionals and patients.

The misrepresentation and infringement of copyrighted scientific promotional materials is of serious concern. American companies spend billions of dollars each year on clinical studies examining the efficacy, safety and tolerability of novel pharmaceutical compounds. In Jordan, pirating companies routinely copy American promotional materials and misrepresent the exclusive clinical data as pertaining to their own products, which have little or no original data to support claims.

Discriminatory Public Sector Procurement

The Government of Jordan provides up to 20% preferential pricing protection for locally produced products competing in public tenders. In many cases, local companies shadow price multinational products, to come in just under the 20% limit. In such cases, local companies can win tender business despite offering prices higher than those of multinationals. This is a discriminatory practice against multinationals and represents an unnecessary burden on Jordanian taxpayers.


In 1997, the Government of Jordan approved a government controlled price increase for locally-made products, varying from 5-50%. The permission to raise prices did not include foreign origin products-- some of which have not been permitted a price increase in over 15 years. The practice of allowing price increases only on locally made products is clearly discriminatory, and further disadvantages American exporters, who face inflation- associated increases in the costs of production, shipping, packaging etc.


New Patent Legislation Delaying Tactics

American and European industry and diplomatic representatives have engaged in a three year dialogue with the Jordanian government and local industry. The American Embassy has issued at least 2 demarches, and numerous U.S. officials have urged an end to the piracy of American products and reform of the current patent law. As recently as 1997, the British, French, German, Swiss and U.S. Ambassadors presented the Jordanian Government with a multilateral demarche on pharmaceutical piracy and IPRs in general, but pharmaceutical piracy continues to accelerate.

In response, the Jordanian government reportedly agreed in April 1998 to a USTR proposal to defer a contemplated (and PhRMA-supported) upgrade to "Priority Watch" as part of the Special 301 annual report in exchange for concrete steps to improve the intellectual property environment. Deliverables include a new, WTO/TRIPS consistent draft patent law by December 1998 and submission to Parliament in early 1999. The U.S. has insisted that many years have already elapsed, and that a "transition period" should not extend past the year 2000.

As anticipated, the new draft patent law, produced for public commentary in November, falls far short of WTO/TRIPS compliance. It does not meet key concerns regarding pipeline protection, and the door is left open to an unspecified "transition" period to end sometime after Jordan joins the WTO.

In the view of American companies, the Jordanian government and industry are merely engaging in delaying tactics to forestall an upgrade to "Priority Watch" and any meaningful progress toward adequate and effective patent protection. Meanwhile, pharmaceutical piracy continues to accelerate, targeting the newest and best selling American pharmaceutical exports. In this environment, American and European companies are increasingly hesitant to introduce new medicines, which may have an impact on the quality of healthcare in Jordan. This may in turn jeopardize the attractiveness of Jordan as a regional center for medical treatment-- an area the Government has targeted for growth.


Potential Exports/Foreign Sales

We estimate that U.S. pharmaceutical companies lose between $25 and $50 million annually due to piracy in Jordan and Jordanian exports to regional markets. It is estimated that a minimum of 150 pirated copies of innovative, internationally-patented drugs circulate freely in the Jordanian market.



Jordan is now considered a PhRMA priority country in the Middle East region. PhRMA views gravely the growing threat of export sales losses for U.S. companies. Jordan may represent the highest per capita pirate product manufacturing and export rates in the world (including pirate software, video, publications and pharmaceuticals). Despite sustained appeals from major trading partners, American companies continue to encounter persistent and various kinds of obvious and subtle trade barriers, including a lack of transparency in the registration process.

For all the aforementioned reasons, PhRMA believes that Jordan should be listed as a Priority Watch Country under Special 301 in 1999.