Jerusalem Post | 14 October 2004
EU demands improved intellectual property protection
The European Commission decided Thursday to increase pressure on Israel to adopt more stringent intellectual property protection.
Commercial attaches and counselors from all the European Union embassies met in Ramat Gan to discuss Israel’s lax intellectual property legislation.
"We will ask the EU leadership in Brussels to make data exclusivity high priority in relations with Israel," said Daniel Shemi, commercial counselor at the Danish Embassy, after the meeting.
The meeting comes a day before the arrival of US trade representative Robert Zoellick. Ostensibly Zoellick’s visit is to mark the 20th anniversary of the US-Israel Free Trade Agreement. He will also visit the United Arab Emirates and Oman.
However, he is expected to express US dissatisfaction with Israeli intellectual property protection laws during his meeting with Industry, Trade, and Labor Minister Ehud Olmert.
In May, the US warned that there are "serious shortcomings" in Israel’s proposed legislation that "severely compromise the data protection afforded by Israel, keeping it far short of OECD-level standards for data exclusivity."
The US has announced that it is considering putting Israel back on its priority watch list, after removing it in 2003.
In September, the socio-economic cabinet approved legislation drafted by an interministerial committee that it knew did not meet US and European demands. The legislation is part of the arrangements bill, which, together with the budget, represents economic policy for 2005.
The US and Europe demand that Israel adopt data exclusivity legislation, but the cabinet approved a less stringent market exclusivity bill, international pharmaceutical companies said.
However, Ronit Kan, deputy director-general and director of foreign trade administration at the Industry, Trade, and Labor Ministry, said the cabinet decision provides five years of data exclusivity, not just market exclusivity.
Data exclusivity protects the confidentiality of proprietary tests and clinical trial data used by a pharmaceutical firm while registering a drug. It blocks generic drug companies from using this data to develop the same drug for a specified period, usually five to 10 years.
In contrast, market exclusivity protects pharmaceutical firms’ products, but not their data.
Shemi said that NovoNordisk, Lundbeck, and Farring, the three Danish pharmaceutical firms operating here, are reconsidering future operations in light of Israel’s intransigence. Pharma-Israel, a non-profit advocate of multinational research-based pharmaceutical companies with operations here, says the economy loses hundreds of millions of dollars in investments yearly due to the government’s policy.
"Instead of investing $400 million a year, multinationals invest just $150m. and even that sum is in danger of dropping," said Tomer Feffer, general-secretary of Pharma-Israel.
He said 1,200 Israelis are employed by these firms. Dozens of contractors that employ thousands more provide services.
In September, Yair Shiran, deputy director-general for foreign trade in the Industry, Trade, and Labor Ministry and head of the interministerial committee, told The Jerusalem Post that despite US opposition, no changes have been made in the legislation.
"We have to balance the nation’s best interests with the demands of the US and Europe," he said. "We’ve found the best solution without increasing drug costs to the health funds and without hurting the sales of local generic drug firms."
Teva vice president Haim Hurvitz, chairman of the Manufacturers’ Association’s chemical and pharmaceutical division, estimates that acquiescing to the US demands would cost the health funds hundreds of millions of shekels a year.
He said Israel already has extensive patent laws that guard the molecules used to develop drugs for 20 to 25 years.