Intellectual Property Protection
Kuwait provides no effective legal protection for pharmaceutical product patents, pending action by the Kuwait legislative body. Since 1998 there have been some encouraging developments, however, demonstrating a new willingness among health and commerce officials to prevent pirate product registrations and amend the deficient 1962 patent law.
In 1998, Kuwait was upgraded on the "Special 301" to "Priority Watch" in response to a lack of tangible progress on intellectual property rights, including software, videos, and adequate and effective patent protection for pharmaceuticals. There has been some recent progress, however, although major challenges remain:
In December 1998, the Minister of Health approved MoH Decision 675, banning unauthorized (pirate) copy product registrations in Kuwait. This de facto decision went into effect on 1 June, and we are unaware of any new pirate copy approvals until now.
His Highness the Emir of Kuwait decreed new amendments to the patent law in May. These amendments appear to be mostly TRIPS compatible; however, we believe stronger language should be included to provide specifically for pipeline protection, and we are unaware of provisions for data exclusivity. All WTO member states have an obligation to provide safeguards for data. Kuwait should ensure linkage to procedures in the ministry of health.
On the other hand, there have been also several worrisome developments since the beginning of the year:
The Minister of Health apparently joined other Gulf Cooperation Council member states to approve GCC resolution no. 11, calling for GCC member states to delay patent protection for pharmaceuticals for up to five years.
The parliament rejected the Emir's decreed amendments to the patent law in early November (along with many other pieces of legislation approved while the parliament was out of session).
Kuwait does not allow free-market, competition based pricing. Instead, the law requires that multinational companies register at the price of the source (exporting) country. While not a major barrier to trade, we believe that a free-pricing system would encourage greater competition among companies, allowing customers to chose between products at prices reflecting their real value.
Public Sector Procurement Discrimination
As with other Gulf Cooperation Council states, Kuwait is obliged to allow up to a 20% price advantage in public procurement, placing foreign competitors at a distinct disadvantage.
Kuwait maintains one of the most efficient and transparent new product evaluation and registration systems in the region. There is a streamlined yet thorough process for authorizing the marketing of new pharmaceutical products, provided they have prior approval in a major "reference" country, e.g. FDA approval.
Unfortunately, this system may be replaced by a Gulf Cooperation Council "centralized" system based in Riyadh, an untried experiment with few successful models to emulate worldwide. American and European companies have expressed concerns that the new system, reportedly slated for introduction in 2000-2001, could lead to unnecessary and in some cases, even life-threatening delays of new product introductions. Kuwait would be the first country to feel the effects, as Kuwaiti patients are accustomed to having access to the latest innovative products available in industrialized countries.
Potential Exports/Foreign Sales
Kuwait represents the third largest pharmaceutical market in the Gulf region, nearly US$ 200 million ex manufacturer. We believe, however, that the introduction of a "world class" patent law in January 2000, and repeal of the 20% price advantage accorded to "local" Gulf producers, would significantly enhance prospects for American pharmaceutical exports.