mfj international, llc a global consulting firm “ftas and pharmaceuticals: a hijacked process?”...
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MFJ International, LLCA Global Consulting Firm
““FTAs and Pharmaceuticals: a FTAs and Pharmaceuticals: a hijacked process?”hijacked process?”
M. Fabiana JorgeM. Fabiana Jorge
CPTECHCPTECHNovember 16, 2006November 16, 2006
MFJ International, LLCA Global Consulting Firm
AGENDAAGENDA
• Global Pharmaceutical Market before and after TRIPS
• Negotiating for the future: The cutting edge provisions of the FTAs.
• The need to change
MFJ International, LLCA Global Consulting Firm
1%2%
6%
2%
7%
22%
27%
33%
North America
Europe
Japan
Latin America
Asia & China
Middle East
Africa
Australasia
I. Global Pharmaceutical Market before and after TRIPS
Worldwide Pharmaceutical -- Sales 1994Worldwide Pharmaceutical -- Sales 1994
Total Sales: $246.4 billion Source: IMS
MFJ International, LLCA Global Consulting Firm
8%4%
11%
30%
47%
North America
Europe
Japan
Latin America
Other
Total Sales: $565.9bn Source: IMS
I. Global Pharmaceutical Market before and after TRIPS
Worldwide Pharmaceutical -- Sales 2005Worldwide Pharmaceutical -- Sales 2005
MFJ International, LLCA Global Consulting Firm
I. Global Pharmaceutical Market before and after TRIPS
• Total global pharmaceutical sales
1994 2005
$246.4B 565.9
(100%) (230%)
MFJ International, LLCA 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, LLCA 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, LLCA 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, LLCA 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, LLCA 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, LLCA 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, LLCA 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, LLCA 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, LLCA Global Consulting Firm
II. Negotiating for the future: the cutting edge provisions of the FTAs.
• LinkageFTAs 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, LLCA 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, LLCA 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, LLCA Global Consulting Firm
Thank you!mfjorge@mfjint.com
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