Intellectual Property Protection

On the eve of the year 2000, Argentina remains the worst expropriator of the intellectual property of the research-based pharmaceutical industry in the entire hemisphere. Not only does the government facilitate local company appropriation of the core of PhRMA member competitiveness in both the Argentine and the extended regional market, but it has signaled its intent to dilute existing commitments and extend the transition period for compliance with 1/1/2000 TRIPs obligations.

On March 22, 1996, Argentina approved a new patent regime through Decree 260 which, due to deficiencies, ambiguities and contradictions, does not adequately protect intellectual property. Lack of patent protection for pharmaceuticals remains in force and will hinder the participation of U.S. pharmaceutical companies operating in Argentina. Thus, Decree 260 falls far short of the commitment made by President Menem in 1989 to enact a patent law in Argentina that would:

Likewise, the new legislation does not fulfill several minimum mandatory standards to protect intellectual property included in the ratified multilateral WTO/TRIPs agreement.

According to this legislation, the date for the availability of pharmaceutical product patent protection would be deferred until October 2000. However, due to the lack of protection for medicines in development (pipeline) and other severe deficiencies, effective pharmaceutical product protection cannot be expected to take place even after the year 2001.

Other deficiencies in the legislation include:

These deficiencies indicate that patent protection will not be effectively enforced even after TRIPs is fully implemented. Thus, very considerable legal uncertainty remains, offering the prospect of extensive litigation to unravel all of the possible interpretations of many ambiguous and contradictory patent provisions.

In addition to the egregious patent law passed in March 1996, the Government of Argentina made a bad situation worse by passing a data exclusivity law that legitimizes, and even requires, that company proprietary information submitted for registration purposes may be used by other companies after only four months. The data exclusivity law runs counter to TRIPs Article 39, and to established practice in the US, Europe, and many other countries. While there is no acceptable "fix" to this legislation, other than wholesale changes, as per the discussion of "linkage" in the Andean Pact section above, requiring that "second applicants" affirmatively demonstrate that their application does not violate either a product or process patent might provide some amelioration of a very poor IP situation.

The Argentine Congress approval of these two unacceptable pieces of legislation is the result of the Argentine domestic laboratories' pressure to maintain barriers to U.S. trade and investments, and maintain Argentina's lax IP regime well beyond the time frame stipulated by the WTO. Indeed, efforts are under way in the Argentine Congress to step back from existing TRIPs commitments, extending the transition period for compliance beyond the year 2000 (to 2005).

Additional congressional efforts, in anticipation of upcoming presidential elections, include a draft bill instructing the government to promote production of those medicines excepted from patent laws, and creating a restrictive National Therapeutic Formulary including only those medicines authorized for prescription in the public and social funds, programs accounting approximately 80 % of the market.

Argentina failed to respond to efforts by the research-based industry and the U.S. Government to identify specific administrative actions that would serve to at least partially address the deficiencies in its patent regime, a situation further aggravated of late by the difficulties encountered in effectively implementing a precedent -setting decision by National Institute of Industrial Property (INPI) and the health agency (ANMAT ) to honor Exclusive Marketing Rights (EMR).

Argentina remains by far the worst expropriator of US pharmaceutical inventions in the Western Hemisphere, as local firms dominate over 50 % of the pharmaceutical market currently estimated at almost $ 4.1 billion.

Potential Exports/Foreign Sales

If current trade barriers were removed, PhRMA member company affiliates in Argentina would enjoy a potential increase in sales of over US $600 million dollars. As its practices spread, Argentine local company behavior further impacts PhRMA member companies in other regional markets by up to US$100 million in lost sales.