mfj international, llc a global consulting firm “ftas and pharmaceuticals: a hijacked process?”...

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


AGENDAAGENDA

• Global Pharmaceutical Market before and after TRIPS

• Negotiating for the future: The cutting edge provisions of the FTAs.

• The need to change


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


8%4%

11%

30%

47%

North America

Europe

Japan

Latin America

Other

Total Sales: $565.9bn Source: IMS


Worldwide Pharmaceutical -- Sales 2005Worldwide Pharmaceutical -- Sales 2005



• Total global pharmaceutical sales

1994 2005

$246.4B 565.9

(100%) (230%)



• Distribution of global pharmaceutical sales

US, Europe, Japan 1994: 82%

US, Europe, Japan 2005: 88%



• "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



• 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?



• 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


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.



• 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



• Market Exclusivity

– At least – NCE vs. new pharmaceutical product– Same or similar– Can go beyond patent term– Required or permitted– Dropping the word “undisclosed”



• Elimination of Best Mode requirement

Focus: biotechnology industry and litigation cases



• 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


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


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


Thank [email protected]

mfj international, llc a global consulting firm “ftas and pharmaceuticals: a hijacked process?”...

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