Intellectual Property Protection
Lack of Pipeline Protection
Although product patent protection became available in 1993, pipeline protection was not included. As a result, the majority of currently-marketed pharmaceutical products, as well as those that will be launched in the next few years, are protected only by a process patent and are thus susceptible to copying. Unless appropriate pipeline protection is provided, the full product portfolio of R&D based companies will not enjoy full protection until the second decade of the next century. This lack of protection has allowed and continued to allow local and other companies to routinely pirate pharmaceuticals patented in the U.S. and the European Union.
Although a six-year data exclusivity provision has recently been integrated into Slovenian law, the Regulation on the "Detailed Procedures Governing the Issues of Marketing Authorization" substantially deviates from and does not meet the requirements of either TRIPs or relevant EU roles with regard to data exclusivity.
There is also a serious problem with protection of proprietary commercial data in Slovenia. It has been reported that the Ministry of Health routinely gives U.S. company product dossiers to the local companies for review with the reasoning that the government lacks the "expertise" to review the dossiers.
As local copiers export about 90 percent of their production, patent and data exclusivity shortcomings affect market conditions in other countries of the region and beyond.
Weak Enforcement of Existing Patent Rights
Attempts to enforce existing process patents in Slovenian courts have been largely unsuccessful. Enforcement measures under TRIPs (preliminary injunctions, reversal of burden of proof) have been repeatedly denied by the Slovenian courts on the grounds that reversal of burden of proof would not be applicable (i.e., would rest on the plaintiff) if the alleged infringer defendant has been granted its own process patent subsequent to the plaintiff's. This interpretation is incompatible with TRIPs and EU law and practice. In addition, intellectual property cases against domestic producers have been pending in Slovenian courts for up to six years due to court inaction.
Slovenia has indicated that it will reduce customs duties for pharmaceutical products of EU origin from 4.5% to 1.5%, and eventually to zero, under the "Europe" Agreement with the EU. However, it applies a 10 - 15% duty on non-EU products, including U.S. products, in violation of the MFN provisions under WTO.
Requirement of Individual Batch Control
Every batch of imported products must be tested, even if of EU origin, at the expense of the foreign manufacturers. This Ministry of Health practice is not based on a legal requirement, but has resulted in an interruption of import licenses from the MOH since Fall 1998, which discriminates against foreign products.
Pricing and Reimbursement
In January 1999 the Slovenian government began implementation of pricing regulations (sub-law of the Medicinal Act) first introduced in April. The regulations discriminate against imported pharmaceutical products, to the benefit of local producers. There is substantial evidence that this was in fact the original intent of the regulations, rather than an unintended result. To prepare for enforcing these regulations, the government removed over 300 pharmaceutical products from the reimbursement list in July 1998, the majority of which were foreign products, and primarily of U.S. corporate origin.
The regulations fix Slovenian wholesale prices based on the average of the wholesale prices in three reference countries in the EU, multiplied by an arbitrary factor of 0.85. As a result, foreign companies face an average price reduction of 30-40% for imported products, with more extreme consequences for individual products.
In addition, pricing and reimbursement decisions are non transparent and are taken without consulting the affected companies. No mechanism of appeal exists.
Product registration in Slovenia lacks transparency and discriminates against foreign products. For new product applications under review, the Slovenian MOH requirements for product prescribing information are frequently inconsistent and often require more extensive information from foreign companies than from local firms.
The Slovenian MOH does not accept international clinical expert reports, but requires that full clinical documentation be reviewed by local experts, despite the lack of professional knowledge in certain fields, causing substantial delays. In addition, the Ministry accepts only original documentation and certified notarized copies, requirements that add no verification of safety, quality and efficacy beyond that already by the manufacturers and other regulatory bodies such as the FDA and EU agencies. These requirements are not based on scientific principles, but are clearly discriminatory and regularly delay the introduction of foreign products.
Other bureaucratic requirements irrelevant for the evaluation of safety, efficacy and quality result in registration delays for foreign products. For example, product registration requires the submission of the foreign marketing authorization from the country where the legal entity is incorporated, a requirement applicable only to foreign products.
Potential Exports/Foreign Sales
PhRMA is not able at this time to provide any reliable estimates of the increase in our industry's sales that would accompany the removal of the aforementioned trade barriers.
For all the aforementioned reasons, PhRMA believes that Slovenia should be listed as a Watch Country under Special 301 in 1999.