“FTAs and Pharmaceuticals: a
hijacked process?”
M. Fabiana Jorge
CPTECH
November 16, 2006
MFJ International, LLC
A Global Consulting Firm
AGENDA
• Global Pharmaceutical Market before and
after TRIPS
• Negotiating for the future: The cutting edge
provisions of the FTAs.
• The need to change
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before and
after TRIPS
Worldwide Pharmaceutical -- Sales 1994
2%
1%
2%
North America
Europe
Japan
Latin America
Asia & China
Middle East
Africa
Australasia
6%
7%
33%
22%
27%
Total Sales: $246.4 billion
Source: IMS
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before and
after TRIPS
Worldwide Pharmaceutical -- Sales 2005
4%
North America
8%
Europe
Japan
11%
47%
30%
Total Sales: $565.9bn
Latin America
Other
Source: IMS
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before
and after TRIPS
• Total global pharmaceutical sales
1994
$246.4B
(100%)
2005
565.9
(230%)
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before
and after TRIPS
•
Distribution of global pharmaceutical
sales
US, Europe, Japan 1994:
82%
US, Europe, Japan 2005:
88%
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before
and after TRIPS
• "The pharmaceutical industry today sells 80
per cent of its products to 20 per cent of
the world's population..."
Jean-Pierre Garnier
Financial Times (London, England)
July 22, 2005 Friday
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before
and after TRIPS
• Now, if brand name companies want to
keep increasing their revenue maximization,
what would their strategy be? To sell more
and more expensive drugs where people can
pay for them or to try to sell more in
markets where people have less resources?
MFJ International, LLC
A Global Consulting Firm
I. Global Pharmaceutical Market before
and after TRIPS
• USTR strategy in FTAs:
– Increase level of IPR protection forcing smaller
partners to adopt such standards
– Create enough critical mass and later harmonize
standards of protection
– Success of strategy: when the big markets adopt
such new levels of IP protection
MFJ International, LLC
A Global Consulting Firm
II. Negotiating for the future: the
cutting edge provisions of the FTAs.
• Profit maximization through:
– In developing countries: elimination of the use
of flexibilities such as compulsory licensing,
parallel imports, restrictions to patentable
subject matter.
– In developed countries: blocking generic
competition through patent extensions, linkage
provisions and market exclusivity.
MFJ International, LLC
A Global Consulting Firm
II. Negotiating for the future: the
cutting edge provisions of the FTAs.
• Patent Extensions:
They do not include the limits that exist under US
law (5y; 14y EPT)
Eventually it could lead to their elimination in the
US;
Potential effect? We have the lessons from
TRIPS: Prof Schondelmeyer’s study
MFJ International, LLC
A Global Consulting Firm
II. Negotiating for the future: the
cutting edge provisions of the FTAs.
• Market Exclusivity
–
–
–
–
–
–
At least
NCE vs. new pharmaceutical product
Same or similar
Can go beyond patent term
Required or permitted
Dropping the word “undisclosed”
MFJ International, LLC
A Global Consulting Firm
II. Negotiating for the future: the
cutting edge provisions of the FTAs.
• Elimination of Best Mode
requirement
Focus: biotechnology industry and litigation
cases
MFJ International, LLC
A Global Consulting Firm
II. Negotiating for the future: the
cutting edge provisions of the FTAs.
• Linkage
FTAs do not include limits or requirements that
exist in US law
• NCE
• Lawsuits
• Can be challenged
• Objective: to block all patents and eventually
eliminate Bolar
MFJ International, LLC
A Global Consulting Firm
III. Conclusions
• FTAs process has been “hijacked” by brand name
pharmaceutical companies
• The process in the US to define the trade policy on
pharmaceuticals is far from being democratic
• This trade policy hurts US generic companies
• Brand name pharmaceuticals will continue using
FTAs as tools to increase their monopolies and
obtain profit maximization
• New Congress: great opportunity to try to reach a
better balance
MFJ International, LLC
A Global Consulting Firm
III. Conclusions
• Congress should at the very least approve
an amendment that should apply to all past
FTAs as well to ensure that all limits in US
law should be respected (i.e. limits on
patent extensions). Need for specific
language
• Ultimately: other countries need to stop
these negotiations or negotiate better
MFJ International, LLC
A Global Consulting Firm
Thank you!
[email protected]
MFJ International, LLC
A Global Consulting Firm