Sep 202014
 

http://wikileaks.org/cable/2005/11/05MANILA5447.html#
Reference ID Created Released Classification Origin
05MANILA5447
2005-11-22 03:12
2011-08-30 01:44
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Manila

This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 MANILA 005447

SIPDIS

Sensitive

STATE FOR EAP/MTS
STATE PASS TO USTR FOR BWEISEL AND DKATZ
STATE PASS TO USAID FOR CDOWNEY
USDOC FOR 4430/ITA/MAC/DBISBEE
USDOC PASS TO USPTO FOR PFOWLER, KHAUDA

E.O. 12958: N/A
TAGS: ECON ETRD KIPR BEXP RP
SUBJECT: PHARMACEUTICAL PATENT PROTECTION ON THE CHOPPING BLOCK

Sensitive but Unclassified – Not for Internet – Protect
Accordingly.

——-
SUMMARY
——-

¶1. (SBU) Senator Manuel Roxas, Chairman of the Senate
Committee on Economic Affairs and the Committee on Trade and
Commerce, introduced a bill last month proposing amendments
to the RP’s Intellectual Property Code (IP) that could
significantly weaken intellectual property rights protection
for pharmaceutical products. The bill would further
liberalize the compulsory licensing provision, allow the
“early use” of patented drugs by potential generic
manufacturers, and expand parallel importation. Committee
hearings on SB2139 are scheduled to start this week.
Embassy has written to Roxas expressing our concern and are
trying to meet with him at the earliest opportunity. End
Summary.

——————————————-
SENATE BILL WEAKENS DRUG PATENT PROTECTIONS
——————————————-

¶2. (U) Senator Manuel (“Mar”) Roxas, Chairman of the
Senate Committee on Economic Affairs and the Committee on
Trade and Commerce, introduced a bill last month (SB2139) to
amend the Intellectual Property Code (IP) of the
Philippines. Based on conversations with GRP officials and
industry representatives, Embassy understands that the bill
proposes three major changes that could significantly weaken
intellectual property rights protection for pharmaceutical
products. First, it would liberalize compulsory licensing
by immediately allowing exceptions when drugs or medicines
are to “protect public health.” Current compulsory
licensing provisions involve a lengthy bureaucratic process.
Since the law’s inception in 1998, only four cases have been
filed.

¶3. (U) Second, the bill includes an “early use” provision
that would allow the experimentation, production and
registration of a patented drug and its data before the
expiration of the patent. This would permit manufacturers
to make and sell the drug as a generic immediately after
patent expiration. Current law provides patent protection
for a product from the date of patent approval in the
Philippines, provided that the patent application is filed
within one year of the product’s introduction to the world
market. The Roxas proposal would nullify any advantage to
filing a local patent in the Philippines and reduce the
overall period of patent protection.

¶4. (U) Third, the Roxas bill would allow parallel
importation of drugs and medicine by the government, again
under the umbrella of “public health,” upon application to
the Intellectual Property Office (IPO), regardless of
whether the imported product is protected by a local patent.
Currently, parallel imports are not allowed for products
under patent protection in the Philippines. The Roxas
proposal, therefore, expands parallel imports by eliminating
local patent protection on imported medicines. In addition,
the bill prohibits the ability of a rights holder to apply
for an additional patent for a “new use” discovered for a
drug with an existing patent.

——————————————
DIVERGENT VIEWS ON PATENT PROTECTION NEEDS
——————————————

¶5. (SBU) In mid-October, the GRP co-sponsored a forum on
public health with the Philippine Chamber of the
Pharmaceutical Industry (PCPI), a local industry advocacy
group composed of Philippine generic manufacturers, to
“examine flexibilities” in the Trade-Related Aspects of
Intellectual Property Rights Agreement (TRIPS) with respect
to patents, including compulsory licensing, early use
provisions, and allowances for parallel importation.
Although Embassy was not invited to the event, the
Pharmaceutical and Healthcare Association of the Philippines
(PHAP), an industry association with members holding U.S.
patent rights, said the forum was attended by pharmaceutical
industry representatives, officials from the Department of
Trade and Industry, Department of Health and the Bureau of
Food and Drugs, the Chair of the House Committee on Trade
and Industry, and the Vice-Chair of the House Committee on
Health.
¶6. (SBU) Ireneo Galicia, Deputy Director General at the
Intellectual Property Office, told Econoff that the Roxas
bill was “mentioned” at the forum and a “brief description
of the salient points of the bill” was provided. According
to Galicia, Senator Roxas sees patents as the main cause
behind high medicine costs. However, one of the forum
briefing papers, submitted by IPO itself, expressed “a
growing concern that the TRIPS standards for intellectual
property rights may have negative implications with regard
to affordability and access to medicines, especially in the
Philippines.” Galicia commented that Roxas does not
necessarily take into account other factors such as
production prices. Galicia noted that the IPO tried to
“disabuse” attendees of the notion that patents are the only
problem. He said the forum helped Roxas understand there
are other ways to reduce medicine prices. Galicia still
expects committee hearings to move forward on the Roxas
bill, however.

¶7. (SBU) Representatives from Pfizer and from PHAP had a
completely different assessment of the forum, expressing
dissatisfaction with the way it was organized and a general
feeling that the cards were stacked against patent holding
pharmaceutical companies. PHAP indicated that industry
representatives, aside from those of the local PCPI, were
given very little time to speak and felt that their views
were not heard. Pfizer expressed similar concerns, noting
that it seemed like the forum was organized so as to garner
support for the Roxas bill rather than to provide a balanced
discussion of alternative ways to reduce medicine costs.

¶8. (SBU) Overall, Galicia said the forum highlighted the
need for the IPO to revisit pertinent rules and regulations,
as well as business processes, in order to improve overall
efficiency and effectiveness. Specifically, IPO needs to
reexamine whether “issued patents are of good quality”
(meaning that IPO is issuing patents appropriately) and
whether rules are being applied uniformly. In the
meanwhile, SB2139 will move forward to committee hearings
this week. Rumor has it that Representative Ferjenel Biron,
Vice-Chair of the House Committee on Health, intends to file
a counter-bill in the House that closely models the Senate
version.

¶9. (U) Embassy has written to Senator Roxas expressing USG
concern with the legislation and Econ Counselor has
requested a meeting with him to underscore these concerns.

——-
COMMENT
——-

¶10. (SBU) The Roxas bill is especially troubling to U.S.
pharmaceutical rights holders who are trying to retain their
market share and profitability in the Philippines. While
the bill taps into more flexible provisions in TRIPS, it may
not offer enough protection for drug makers. Passage of the
bill would not reflect well on the Philippines’ efforts to
improve IPR and be removed from USTR’s Special 301 Priority
Watch List, following its out-of-cycle review this January.
U.S. pharmaceutical patent holders, represented by PHAP, may
defuse concerns about the high drug costs and the potential
for an avian flu pandemic by focusing on alternate ways to
reduce the cost of medicine, and support information
exchange and planning to address any potential pandemic.

JONES

   

 

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