Intellectual Property Protection

The Russian Patent Law passed in 1995 considerably improved the situation regarding the defense of intellectual property, including the protection of patents for pharmaceutical products. Companies with new product patents are able to register their patents in Russia and receive full protection. The Government of Russia has also made substantial efforts to improve legislative and enforcement provisions for intellectual property protection towards its prospective WTO TRIPS obligations, despite difficult political and economic conditions.

PhRMA appreciates the continuing efforts undertaken under the auspices of the U.S./Russian bilateral technical cooperation program, which has facilitated discussion of needed legislative and enforcement reforms, and law enforcement training for judges, prosecutors and investigators. Although problems remain in Russian administration and adjudication of patent disputes or violations of registered patents, we recognize that significant progress has been made. PhRMA has learned of two cases in recent months in which PhRMA member firms won patent infringement cases in the federal Commercial Court for Moscow and the Moscow Region, in one case for a patented product and in the second for a process patent. Given previous uncertainty in the process patent area, we hope that the most recent case in which the Commercial Court establishes legal protection for process patents will serve as useful precedent. Certainly the courts are gaining in experience in this area, but the degree of protection is dependent on the detail of each specific process patent.

Given the progress noted, we do remain very concerned by the possibility that the Government of Russia may adopt detailed provisions on intellectual property as part of the ongoing work on the Civil Code Part III, which would preempt current patent and enforcement provisions in Russian law and cause confusion for right holders and Russian law enforcement and judicial officers.

Data Exclusivity — Confidentiality

The new Russian Civil Code, which was passed in 1997 contains language which appears to meet the requirements of Article 39.3 of the GATT-TRIPS. Article 139 of the Civil Code provides for serious penalties if commercial secrecy and confidentiality is violated. Further, the Patent Law provides protection for patents of new molecules and so far PhRMA members have experienced no problems in this regard.

Market Issues

There is a lack of objective and verifiable criteria by which products are included on reimbursement lists. Lists and state purchases are conducted with virtually no transparency and little open or verifiable concern for the interests of quality and safety.

Potential Exports/Foreign Sales

PhRMA is unable 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, particularly in light of the continuing financial crisis in Russia.