Intellectual Property Protection

Egypt is among a very small number of developing countries availing itself of the full transition period for product patent protection until January 1, 2005 provided in the WTO TRIPS Agreement. Nonetheless, Egypt remains bound by other patent-related TRIPS provisions prior to that time including enacting a patent mailbox (Article 70.8), exclusive marketing rights (EMR) (Article 70.9), and protection of confidential data (Article 39.3). Unfortunately, PhRMA has recently learned that Egypt will not complete legislation needed to meet even its current obligations by January 1, 2000, including exclusive marketing rights. Should Egypt continue to evade its WTO TRIPS commitments, the U.S. should initiate formal bilateral consultations, as a step towards initiation of WTO dispute settlement procedures.

Egypt's current WTO TRIPS obligations combined with the obligations that will take effect as of January 1, 2000, require almost as much from Egypt as full product patent protection. For example, until it implements product patent protection, Egypt must process summarily, without examination of the underlying patent, applications by foreign patent holders for exclusive marketing rights. This leaves Egypt without the right that other WTO member states with full patent regimes have to examine patent applications and to reject them or accept them as appropriate. Similarly, to provide protection for confidential data, Egypt may not permit local firms to market copies of approved products for which the pioneer pharmaceutical firm created protected data for safety and efficacy. PhRMA understands that the current draft patent law does not provide data exclusivity.

Furthermore, it is in Egypt's best interest to provide full patent protection to encourage investment, technology transfer, commercial and scientific collaboration and growth of the pharmaceutical industry. Otherwise, the Egyptian pharmaceutical sector will continue to be characterized by imitation, and continued second-class status in the global market. The lack of any meaningful patent protection for pharmaceuticals jeopardizes the ability of the pharmaceutical industry to service the Egyptian market. Egyptian scientists are capable of word-class discovery - the recent Nobel prize awarded to an eminent Egyptian-born scientist Ahmed Zewail (1999 Nobel Prize for Chemistry) could have been achieved at the University of Cairo, but for the failure to foster an environment conducive to R & D in Egypt.

The current Egyptian patent law is based on the "Law on Patents, Designs, and Industrial Models 1949-1955." The current law has specific discriminatory aspects against pharmaceuticals. While the basic patent term available in Egypt is 15 years from date of application (with possible extension of up to 20 years), pharmaceuticals, medicines and foodstuffs specifically are excluded from product patentability. Furthermore, while manufacturing processes for pharmaceuticals and medicines are patentable, the term for process patents is only 10 years, which poses an additional layer of discrimination. Given the long period of time between the grant of a patent and the commercialization of the product due to regulatory review, a 10 year process patent is virtually meaningless.

Other Barriers

Egypt maintains an onerous price control system that does not allow for price increases to compensate for inflation. Also, many regulations regarding manufacture and registration are opaque and vague. Furthermore, Egypt bans the import of many pharmaceuticals in finished dosage forms, and requires foreign companies to license the manufacture and sale of imported drugs to local companies. All of these requirements appear to violate Egypt's WTO commitments regarding national treatment of foreign investors.

Potential Exports/Foreign Sales

Egypt is a significant market - indeed one of the largest - in the Middle East/Africa region. Even under current adverse circumstances, U.S. firms hold an estimated 18 percent share of the Egyptian pharmaceutical market, in a market estimated at more than three quarters of a billion dollars in 1997. If Egypt were to meet its WTO obligations, the U.S. share of the market would likely rise increase to at least 25%, and the market itself would likely show substantial expansion. Until the present time, for example, PhRMA member companies have been unable to move forward with an estimated 300 million dollars in planned investments in Egypt's pharmaceutical sector. In addition, given its location and large population, if Egypt were to adopt a modern patent law and market-based pricing, it would become a likely regional center for multinational pharmaceutical production. Accordingly, PhRMA estimates current losses in Egypt as in excess of 100 million dollars.