Intellectual Property Protection

In 1991, Mexico implemented its industrial property law which addressed most of the concerns of the US pharmaceutical industry. In another positive development, the North American Free Trade Agreement (NAFTA) served to strengthen the Mexican patent law and raised it to the level of an international agreement.

On the other hand, it took more than three years for the implementing regulations, published in November 1994, which, disappointingly and contrary to prior commitments to USTR, did not fully address the issue of exhaustion, leaving an open door to parallel importation of patented products.

PhRMA companies also have expressed concern with the enforcement of the law, where "lack of unity" can lead to revocation, in whole or in part, of the patent. That is, the patentee could be penalized for a mistake made by the patent office.

Additionally, it is cause for grave concern that outdated legislation meant to address lack of supply in particular areas of the country, is serving to justify Ministry of Health-authorized importation of non-registered products, without pertinent price or price controls. In the case of the State of Tijuana, this practice is particularly damaging, as it provides a platform for unsafe counterfeit products to spread to other Mexican states, and across the border into the U.S.

A new law approved in July 1997 required doctors to write all pharmaceutical prescriptions using the generic name only, forbidding the use of the trademark, in potential violation of TRIPs Article 20. While this initiative has apparently been rectified, and substitution at point of sale is not permitted, this area will require close scrutiny in 1999.

Finally, concerns persist regarding the extent to which company proprietary information is protected against unfair commercial use, as is required by both NAFTA and TRIPs Article 39. Beyond implementation itself, absence of linkage, and deficient protection of data exclusivity have been identified as two of the principal problems with Mexico's intellectual property regime.


Other Barriers

The Mexican Government continues trying to steer some of the business it generates directly to local companies, contrary to the spirit of NAFTA. In other areas, delays and bureaucratic difficulties imposed by the Ministry of Health on importation of finished pharmaceutical products and registration procedures still discriminate against the innovator.


Price Controls

The pharmaceutical industry is still one of the very few in the Mexican economy subject to Government price controls.


Potential Export/Foreign Sales

The removal of current barriers would mean an increase in sales and exports in the range of US$100 million to US$500 million dollars for PhRMA members.

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