Stage Fright: The Risks and Benefits of Moving Forward - Pharmaceutical Technology

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Stage Fright: The Risks and Benefits of Moving Forward

Pharmaceutical Technology

Because it appears that in any FTA signed before mid-2007 the US Trade Representative is legally obliged to obtain US-similar standards of intellectual property protection with the signatory country, the threat lurking in the almost exclusively generic industry is clear. The United States has the highest and most onerous intellectual property standards in the world, so Malaysia and other Southeast Asian countries would need to raise their intellectual property protection standards significantly. Following the latest round of trade talks undertaken by the World Trade Organization, the Doha declaration established the use of trade-related aspects of intellectual property rights (TRIPS) agreements and reinforced the importance of access to medicines while reaffirming the ability of governments to use the flexibilities available in TRIPS to ensure the affordability of medicines.

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Now the United States is pushing for what is commonly referred to as "TRIPS-Plus" allowing for a period of data exclusivity of up to 11 years beyond the date a generic version of a product would normally begin to compete with the patent holder.

According to a letter highlighting a Thai survey and sent by the president of a Malaysian consumers association to the Malaysian Minister of Health in March 2006, "The Thai Ministry of Health has done a study of the predicted impact of the TRIPS-Plus provisions found in US FTAs. It found that if generics were prevented by data exclusivity from entering the market for a period of ten years beyond the date when patents normally expire, this would cost an extra $5400 million (at wholesale prices) per year which is 77% of the current total Thai health expenditure."

Furthermore, the adoption of TRIPS-Plus provisions would greatly harm the development of the local pharmaceutical industry, which relies on being able to produce bioequivalent products for its markets under the current protection of the TRIPS system and the other intellectual property protection mechanisms.

This will be a sticky situation if the negotiation favor international originators as opposed to local generic manufacturers in Southeast Asia. It is also a test of the ability of the industry to mobilize itself across the region, while facing a common threat. Beyond this issue lies opportunities to strengthen what is today a multitude of medium-size players with different business agendas into a more solid, forward-thinking and opportunities-grabbing industry. In turn, this should offer plenty of areas of possible cooperation between international companies, particularly US and European, and the movers and shakers who will emerge from these trying times. For once, casting originators against generic players might end up strengthening the industry across the board.

This report was prepared by Executive Country Reviews. Authors are Gilles Valentin
Emmanuelle Berthemet
Marco Parigi
Amicie de Bodinat
and Yaz Yazicioglu


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