1
FTAs and Pharmaceuticals a hijacked
process?M. Fabiana JorgeCPTECHNovember 16,
2006
2
AGENDA

• Global Pharmaceutical Market before and after
  TRIPS
• Negotiating for the future The cutting edge
  provisions of the FTAs.
• The need to change

3
I. Global Pharmaceutical Market before and after
TRIPS Worldwide Pharmaceutical -- Sales 1994
Total Sales 246.4 billion
Source IMS
4

• Global Pharmaceutical Market before and after
  TRIPS
• Worldwide Pharmaceutical -- Sales 2005

Total Sales 565.9bn
Source IMS
5
I. Global Pharmaceutical Market before and after
TRIPS

• Total global pharmaceutical sales
• 1994 2005
• 246.4B 565.9
• (100) (230)

6
I. Global Pharmaceutical Market before and after
TRIPS

• Distribution of global pharmaceutical sales
• US, Europe, Japan 1994 82
• US, Europe, Japan 2005 88

7
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
8
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?

9
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

10
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.

11
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 Schondelmeyers study

12
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

13
II. Negotiating for the future the cutting edge
provisions of the FTAs.

• Elimination of Best Mode requirement
• Focus biotechnology industry and litigation
  cases

14
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

15
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

16
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

17

• Thank you!
• mfjorge_at_mfjint.com