|Michael W. Michalak, former Ambassador to Vietnam, pressured Vietnam on behalf of PhRMA.|
Cables recently published by Wikileaks illustrate the degree to which the U.S. has been engaged in writing laws and training judges and government officials in Vietnam, on a wide range of pharmaceutical and intellectual property issues.
Vietnam is a country of 89 million persons, making it the 13th most populous country in the world, and the second largest in population to the U.S. in the current TPPA trade negotiation. Vietnam is also the poorest country in the TPPA negotiation. In 2009, per capita income in Vietnam was just $1,000, which is lower than many sub-Saharan African countries, and just 2 percent of the US figure.
Below are some highlights of the sections of the cables that deal with intellectual property rights for pharmaceutical test data. One important cable is the March 2, 2009 Embassy recommendation, signed by Ambassador Michael Michalak, that “Vietnam Should Remain On The 2009 Special 301 Watch List.” Note in particular paragraph 7 of the cable:
¶7. (U) In December 2008, the Drug Administration of Vietnam (DAV) agreed, after urging by the USTR and U.S. industry, to modify its internal procedure and grant five years of data exclusivity to new pharmaceuticals entering the Vietnamese market, in line with Vietnam’s BTA and TRIPs obligations. The Mission is currently waiting to learn how the DAV will implement the new rule, including whether data exclusivity will be automatic, comprehensive, retroactive and, as industry group PhRMA noted, “without procedures and formalities.”
In a few words, the cable sets out the U.S. demand for Vietnam and other poor countries. The United States government want data exclusivity to be “automatic, comprehensive, retroactive and . . . without procedures and formalities.” This is at the center of the current TPPA negotiations on medicines.
Earlier cables show that Vietnam had tried to limit IPR rights in data in various ways, and even asked companies for evidence about their investments in clinical trials. For example, there is this March 28, 2008 cable, which was signed by Michalak, and “cleared by USTR’s David Bisbee and USPTO’s Jennie Ness.” (Bisbee is now the Deputy lead negotiator for USTR on the TPPA).
PHARMACEUTICAL IP ISSUES AND MARKET ACCESS
¶15. (SBU) Officials from the Ministry of Health’s (MOH) Drug Administration told the U.S. delegation that pharmaceutical companies (including Swiss firms Novartis and Astra-Zenica) have filed five applications thus far under Vietnam’s regulations for protection of data submitted in drug registration dossiers. All five applications have been denied based on MOH officials’ assessments that the products have been on the market “for years” in other countries and that the data is therefore publicly available and undeserving of protection in Vietnam. MOH officials then described their process for assessing whether each dossier merits protection, including research to see whether the information in the dossier is a trade secret. (Note: Pharmaceutical companies had separately told the delegation that MOH also required them to submit evidence of the costs of their clinical trials so as to prove that the data was the product of “remarkable investments.” End note.) The U.S. delegation expressed concerns that the evaluation process the officials described is not consistent with the system Vietnam explained it would use to meet its WTO and BTA commitments during previous discussions. MOH agreed that it would send the U.S. side an official response describing the reasons for refusal in these five cases and listing the conditions that companies must meet to merit data exclusivity.
¶16. (U) Bisbee also asked the Drug Administration officials for clarification on a recent GVN circular seeking to regulate drug prices in Vietnam by referencing prices for those drugs in other countries in the region. Specifically, he raised concerns that this policy appears to only focus on the drug prices of foreign firms but not those of domestic drug producers. The Vice Director of the Drug Administration Nguyen Van Thanh responded that the circular was passed to avoid “sudden surges” of drug prices in Vietnam and to protect Vietnamese consumers and patients from paying “unreasonably high” prices. Initially insisting that the policy does not discriminate against foreign firms, Thanh ultimately admitted that it puts in place different systems to evaluate the prices used by foreign firms and by those who do not export. He agreed to report this issue to his ministry’s leadership, and will respond to the USG in writing. Thanh also committed to answer U.S. questions about which activities foreign drug companies are permitted to conduct in Vietnam, and to address requests about how Vietnam’s clinical trial requirements (i.e., drug companies can not rely on clinical trials performed in any other country to seek registration in Vietnam) relate to plans for further ASEAN integration on drug registration.
While the cable notes that Vietnam had required pharmaceutical companies “to submit evidence of the costs of their clinical trials so as to prove that the data was the product of ‘remarkable investments,’ there is little context, and only the implication that if the pharmacetuical industry was unhappy, the U.S. government would intervene. But what was Vietnam trying to do? They were trying to implment Article 39.3 of the TRIPS, which reads as follows:
3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.
Among other things, Vietnam was asking the companies to provide evidence that the undisclosed test data involved “a considerable effort.” KEI and others public health groups think that disclosure of test costs should be routine, and help policy makers better understand the economics of innovation for new medicines, and the basis for drug prices and IPR protections.
The follow up to the March 28, 2008 cable was a cable on May 22, 2008, which reported that Merck was “planning to deliver critical capacity building and technical expertise on this issue.”
May 22, 2008:
¶3. (SBU) Vietnam has improved its IP legal regime over the past several years, however, roundtable participants highlighted two key areas where Vietnam’s legal system requires additional work in the immediate future to comply with World Trade Organization (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPs) requirements. The first is the provision of criminal remedies for commercial scale IP violations and the second is the adequate protection of data submitted as part of registration dossiers for pharmaceutical and chemical products. Microsoft’s Senior Director for Legal and Corporate Affairs for Southeast Asia Antony Cook noted that as the Government of Vietnam (GVN) works to revise its Criminal Code in 2008, stakeholders must engage the drafters to ensure that Vietnam translates its commitments on criminalization of commercial scale violations into a workable process. Noting that the current data protection system Vietnam has put in place is onerous and ineffective, Merck’s Vietnam Country Manager revealed that the pharmaceutical industry is planning to deliver critical capacity building and technical expertise on this issue.
The pharmacetucial test data issue was subsequently mentioned in the 2010 and 2011 USTR Special 301 reports, as follows:
2010: The United States encourages Vietnam to continue considering regulations to protect against unfair commercial use, as well as unauthorized disclosure, of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. The United States will continue to engage with Vietnam under the U.S.-Vietnam Trade and Investment Framework Agreement working group and through cooperative IPR capacity-building programs to support the improvement of IP enforcement efforts in the country.
2011: The United States encourages Vietnam to clarify its system for protecting against unfair commercial use, as well as unauthorized disclosure, of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. The United Stateswill continue to engage with Vietnam under the U.S.-Vietnam Trade and Investment Framework Agreement to address these and other issues.
Below is a non-exhaustive list of cables from Vietnam on relevant topics
May 21, 2002 | Hcmc Faces Regional Ipr Woes
Aug 21, 2003 | Vietnam: Local Business Knows Value Of Trademarks– Seminar A Success
Feb 26, 2007 | Ustr Discusses Wto Membership, It And Ipr With Hcmc Business Community
Nov 7, 2008 | Amidst Muddled Policies, Staffdel Atkins Finds Solid Science Research In Public-private Partnerships
Jun 13, 2002 | Vietnam: Intellectual Property Rights On The Agenda For Private Sector And Government Agencies
Dec 4, 2002 | Vietnam: Survey Of International Technical Unclassified
Dec 30, 2002 | Vietnam: National Trade Estimates Report 2003
Feb 18, 2003 | Vietnam: Second Annual U.s.-vietnam Bta Joint Committee: Scenesetter – The Bta At One Year
Feb 28, 2003 | Vietnam: Year 2003 Special 301 Review: Embassy Input
Mar 21, 2003 | Vietnam: Second Annual Bta Joint Committee
Jun 20, 2003 | Vietnam: Reorganization Of Ipr Agencies – Future Of Trademark Office In Limbo
Jul 16, 2003 | Vietnam: 2003 Investment Climate Statement
Jul 21, 2003 | Trade Minister On Wto, Human Rights, Oil For Food
Oct 31, 2003 | Vietnam: Review Of Bta Implementation
Dec 16, 2003 | Vietnam: National Trade Estimates Report
Feb 23, 2004 | Vietnam: Embassy Input For 2004 Special 301 Review
Jul 30, 2004 | Vietnam: Dustr Shiner Undescores Usg Support For Vietnam’s Wto Accession
Dec 17, 2004 | Vietnam: Suggested Revisions For 2005 Nte
Feb 25, 2005 | Vietnam: Embassy Input For 2005 Special 301 Review
Feb 25, 2005 | Vietnam: 2005 Investment Climate Statement
Mar 9, 2005 | Vietnam: 2005 Investment Climate Statement
May 5, 2005 | Vietnam: Bta Joint Committee Review
May 9, 2005 | Vietnam: Ambassador Hosts Ipr Roundtable With U.s. Industry
Nov 22, 2005 | Deputy Secretary Of Commerce’s Economic Roundtable
Jul 6, 2006 | U.s. – Vietnam Bta Review
Feb 22, 2007 | Mission Recommends That Vietnam Remain On The 2007 Special 301 Watch List – Part 1 Of 2
Feb 22, 2007 | Mission Recommends That Vietnam Remain On The 2007 Special 301 Watch List – Part 2 Of 2
May 4, 2007 | Ipr Program Reveals Basis For Closer Cooperation With The Procuracy
Jan 7, 2008 | Codel Hoyer’s Meetings With Gvn Leadership
Jan 7, 2008 | Codel Hoyer’s Meetings With Gvn Leadership
Feb 20, 2008 | Vietnam Should Remain On The 2008 Special 301 Watch List
Mar 28, 2008 | Tifa Meetings Focus On Trading Rights, Ipr And Market Access
May 22, 2008 | Ambassador’s Roundtable Identifies Key Challenges To Protecting Ipr In Vietnam
Mar 2, 2009 | Vietnam Should Remain On The 2009 Special 301 Watch List
Oct 28, 2009 | Promoting Ipr Protection In Vietnam