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Local drug makers may lose out under US FTA

The Edge | 17 July 2006

Local drug makers may lose out under US FTA

By Jacqueline Ann Surin

Malaysia’s generic drug manufacturers might find it more difficult to conduct business if the US’ negotiations for a free trade agreement (FTA) are influenced by the strong US pharmaceutical lobby there.

There is concern that the US would seek stronger intellectual property protection in its negotiations for an FTA, as it had with other countries, said Third World Network legal adviser Chee Yoke Ling.

Local pharmaceutical firms that would be affected include several government-linked companies such as Pharmaniaga Bhd.

“The World Health Organisation predicted that Colombia’s generic industry would lose up to 71% of its market share due to its US FTA, while one-third of Australia’s generic companies had to close or merge when data exclusivity alone was introduced in Australia,” she told Financial Daily.

Data exclusivity is a provision in intellectual property provisions in US FTAs that create monopolies by stopping generic competition even when there is no patent.

US FTAs also usually require patents on a broader range of things, patents to last for longer than the existing 20 years, and provisions that make it harder and more expensive to use compulsory licences and government use orders which enable governments to reduce the cost of medicines.

“Malaysian pharmaceutical manufacturers, represented by the Malaysian Organisation of Pharmaceutical Industries (Mopi), all make generic versions of medicines. They are still decades away from inventing new medicines,” Chee said, noting that 98% of patents granted in Malaysia are to foreigners.

She added that Mopi members produce about 35% of Malaysia’s medicine requirements and in terms of product range, Mopi can make more than 80% of the product categories in Malaysia’s National Essential Drugs List.

“They also export medicines to Asia, the Middle East, Africa, the Pacific Rim, South America and Europe, and employ significant numbers of Malaysians,” she said.

She noted that during the 1997/1998 financial crisis, Malaysia’s generic manufacturers ensured medicines were available locally when Malaysia’s foreign exchange problems made imports prohibitive.

She said the government needed to conduct a thorough cost-benefit analysis before signing any FTA.

 source: The Edge Daily