Wikileaks has published several cables invovling Chile, a country that signed an FTA with the United States/ When the Chile/US FTA came into effect in 2004, it was the template for a series of subsequent Bush Administration FTA agreements that ramped up IPR protections for pharmacetuicals and copyrights, and it seemed aggressive at the time. However, as many other countries have discovered, the moment the ink was dry on the agreement, there were new demands from the United States, to go even further than was required in the agreement itself, as well as disputes over the actual meaning of key parts of the agreement.
This blog highlights three cables, sent from the US Embassy in Santiago Chile. One cable was in 2005, and concerns work with the Swiss mission. Two others are from 2007 and 2008, each with the title “Post Recommends Chile Remain On Priority Watch List. Among other topics, the cables discuss the pharmaceutical sector, and in particular, the U.S. objectives as regard Chile and the implementation of intellectual property rights in pharmaceutical test data, and the linkage between patents and drug registration in Chile. There is also a mention, in 2007, of a dispute over the enforcement of intellectual property rights for goods in transit.
The first cable, from Feb 21, 2007 has an extensive discussion of U.S. expectations regarding data protection and patent linkage. With regard to pharamcutical test data and linkage, Chile was obligated to impelment Article 17.10 of the Chile/US FTA, which reads:
Article 17.10: Measures Related to Certain Regulated Products
1. If a Party requires the submission of undisclosed information concerning the safety and efficacy of a pharmaceutical or agricultural chemical product which utilizes a new chemical entity, which product has not been previously approved, to grant a marketing approval or sanitary permit for such product, the Party shall not permit third parties not having the consent of the person providing the information to market a product based on this new chemical entity, on the basis of the approval granted to the party submitting such information. A Party shall maintain this prohibition for a period of at least five years from the date of approval for a pharmaceutical product and ten years from the date of approval for an agricultural chemical product./25/ Each Party shall protect such information against disclosure except where necessary to protect the public.
2. With respect to pharmaceutical products that are subject to a patent, each Party shall:
. . .
(c) not grant marketing approval to any third party prior to the expiration of the patent term, unless by consent or acquiescence of the patent owner.fn 25. Where a Party, on the date of its implementation of the TRIPS Agreement, had in place a system for protecting pharmaceutical or agricultural chemical products not involving new chemical entities from unfair commercial use which conferred a period of protection shorter than that specified in paragraph 1, that Party may retain such system notwithstanding the obligations of paragraph 1.
This text is from the Feb 2007 cable:
Data Protection and Patent Linkage
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¶3. (SBU) In 2006, there was no progress on core issues such as data protection and patents related to pharmaceutical products. Despite new legislation and implementing regulations from 2005, Chile continued to grant approval for generic copies, violating patents for innovative pharmaceuticals. Additionally, the GOC allowed local companies seeking market access to use exclusive company data from European and North American companies as the scientific basis for approving these generic copies. Local representatives of international pharmaceutical companies continued to detail violations of exclusive company test data in the Chilean drug approval process. On the issue of patents, there was no linkage between granting market access and the existence of valid patents. The GOC played a semantic game by arguing that its FDA-equivalent, the Instituto de Salud Publica (ISP), only granted “sanitary approval” and thus did not violate the FTA’s provision barring the granting of marketing approval in violation of a patent holder’s rights. Internal documentation publicly submitted by the GOC as part of a judicial case demonstrated that even it could not distinguish between sanitary approval and marketing approval, making its semantic shell game appear even more disingenuous.Step Forward Becomes A Step Backward
————————————¶4. (SBU) In July 2006, the ISP issued an internal regulation, which required any company seeking approval for a biotech product to submit its own proprietary clinical test data. This decision was never trumpeted by the GOC as an advance in IPR protection and the Embassy noticed it only through the GOC’s online public gazette. When the Embassy contacted local representatives of the international pharmaceuticals, all engaged in biotech development worldwide, they saw the ISP’s decision as an important step toward better IPR protection in Chile.
¶5. (SBU) What was a step forward became a step backward before the end of the year, however, because in December 2006, Minister of Health Barria overruled the ISP’s internal regulation with her own decree carrying the force of law. Barria decided that even for biotech products it was not/not necessary for a company to present its own proprietary clinical data when seeking sanitary/marketing approval. A company could present data from any source, including proprietary data from another company, as it sought sanitary/marketing approval for its product in Chile.
No Policy on IPR
—————-¶6. (SBU) The core issue at the heart of IPR-related issues in Chile is the lack of a clear, enforceable government policy. With a strong presidential system in place, individual ministries cannot on their own make policy on IPR. If it is to emerge at all, that unambiguous direction must come from President Bachelet. Though the judiciary is independent, it also understands there is no clear policy direction on the issue. So, it manages either to drag out court cases so long that a decision is OBE for the IPR stakeholders, or to find unrelated technical reasons for dismissal. The efforts of the judiciary to avoid setting precedence in IPR cases have been noticed in a number of different areas. In addition to familiar cases in Santiago largely involving pharmaceutical products, we have also learned of cases involving pirated products being dismissed by judges in Chile’s free trade zone in Iquique. Judges have dismissed cases either on technical grounds or with spurious arguments that the goods were only “transiting” Chile, and thus were not its responsibility.
The language in the Chile/US/FTA concerns “undisclosed information concerning the safety and efficacy of a pharmaceutical or agricultural chemical product.” The 2007 cable reports that at one point Chile seemed poised to require “any company seeking approval for a biotech product to submit its own proprietary clinical test data.” Then, the cable reports, Minister of Health Barria overruled this decision, so that a “company could present data from any source, including proprietary data from another company.” What the cable is unclear about are the details of how this would work, and whether not the reliance upon third party data was in connection with publicly available information, or “undisclosed” information. For example, if Chile allowed a company to point to a foreign drug registration as evidence of the safety and efficacy of a product, without having access to the “undisclosed” information used in the foreign registration, or to published articles in medical journals, then it could arguably be in compliance with the FTA, while not requiring the replication of the clinical trials used for the foreign registration or the study cited in the academic literature.
The second cable, with the same title, was sent on February 21, 2008, and here are some sections of the text.
Data Protection and Patent Linkage
———————————-¶4. (SBU) Since the FTA went into force in January 2004, there has been no institutional progress on core issues such as data protection and patents related to pharmaceutical products. Despite new legislation and implementing regulations dating back to 2005, Chile has continued to grant approval for generic copies, which violate patents for innovative pharmaceuticals. Additionally, the GOC has exhibited a pattern of allowing local companies to use exclusive company data from innovative Asian, European and North American companies as the scientific basis for granting sanitary (and thus market) approval for these generic copies. International pharmaceutical companies continue to detail violations of exclusive company test data in the Chilean drug approval process.
¶5. (SBU) On the issue of patents, there is no linkage between granting market access and the existence of valid patents.
The GOC has consistently maintained that it provides linkage through the judicial system and that the dispute over linkage is a difference of interpretation as to the specific obligations in the U.S.-Chile FTA. A French pharmaceutical company enjoyed one minor and partial legal victory in 2007 in a case against a Chilean firm over a patent violation. The case was lengthy, the fine was minimal (USD 6,000) and the offending drug was not pulled from the market. It’s hard to see how the courts provide linkage in Chile.
Dancing Sideways on Clinical Data
———————————¶6. (SBU) In July 2006, the Instituto de Salud Publica (ISP) — the rough equivalent of the FDA — issued an internal regulation, which required any company seeking approval for a biotech product to submit its own proprietary clinical test data. This was viewed by innovative pharmaceutical companies as a clear step forward in better protecting their clinical data and, hopefully, eventually their valid patents as well. By December 2006, in what has been privately described to us as part of an internal turf battle at the ministry, Minister of Health Barria overruled and removed the ISP regulation. Though there has been informal talk of Minister Barria re-issuing these rules under her own authority, over a year later nothing has happened.
¶7. (SBU) As a further twist, new data protection rules were briefly published on the Ministry of Health’s website in January 2008, only to be removed within days for “further drafting.” The official GOC explanation is that the rules were published for public comment. The unofficial explanation is that they were removed due to pressure from Chilean pharmaceutical firms which saw the rules as disadvantageous. What was briefly exposed to public view was largely in line with the ISP’s initial regulation from July 2006 and represented some improvement over existing norms. If something along these same lines were to be issued as a Ministry of Health decree, it could represent an advance inproviding protection to proprietary clinical data. However, it appears that once again everything is on hold.