R 071517Z FEB 06 – February 7, 2006
FM AMEMBASSY BRASILIA
TO SECSTATE WASHDC 4444
SUBJECT: INTERFARMA BRIEFS CHARGE ON DIFFCULTIES IN DOING BUSINESS IN BRAZIL
1. (SBU) Summary. During a recent trip by Charge to Sao Paulo, officials from Interfarma – the local industry group representing international pharmaceuticals firms – described the challenges member companies face in operating in Brazil. Chief among Interfarma complaints was that the high tax burden had lowered pharmaceutical industry sales (and employment as well) and that the Brazilian government did not afford adequate protection to intellectual property rights (IPR). Interfarma reps worried that legislation, currently in the Brazilian Chamber of Deputies, prohibiting the patenting of AIDs drugs might move forward to the Brazilian Senate. In a side conversation, the Brazil President of Merck told us that his company was in the process of negotiating with the Ministry of Health so as to avoid issuance of a compulsory license for that firm’s anti-AIDs drugs; talks were proceeding smoothly [remainder of paragraph excised] End Summary.
Weak IPR Protection
4. (SBU) Yet another problem, we were told, was the government’s lack of commitment to providing protection for intellectual property. After the passage of the 1997 Industrial Property Law – which first allowed pharmaceuticals to be patented – the government had not adopted an investor-friendly regulatory stance. Specifically, industry officials complained that article 229-C of the IPR law, added to the legislation in 1999, was TRIPs-inconsistent as it made the issuance of a pharmaceutical patent contingent upon prior approval by Brazil’s drug regulatory agency (ANVISA). ANVISA, they continued, while nominally independent in practice, was subservient to the Ministry of Health. The biggest problem, they felt, however, was that ANVISA and INPI (i.e., the patent agency) were just plain slow. Out of 20,000 pharmaceutical patents applied for in 1996, the year after IPR law as enacted, to date only 149 had been approved.
5. (SBU) [paragraph excised].
Bill 22 – the Biggest Challenge
6. (SBU) While our Interfarma contacts flagged a number of, in their view, objectionable bills currently pending in the Brazilian Congress, they made clear that the item which was receiving most of their attention was Bill 22 – a measure which, if enacted, would prohibit the patent of new anti-AIDs drugs. Introduced by PT Federal Deputy Roberto Gouvei, the bill had already been approved by three lower house committees. The bill was headed for debate (as yet unscheduled) on the lower house floor, although Interfarma lobbying had resulted in the creation of an additional hurdle: after the floor debate, it would need to pass through the Foreign Affairs committee prior to returning to the floor for a plenary vote. Given popular sentiment in favor of the bill, Interfarma officials stated that it would be difficult to stop in the lower house. Its sponsor was a member of President Lula’s party and the Speaker of the lower house had, on his own, previously introduced similar legislation. Preparing for the worse, Interfarma was already reaching out to its Brazilian Senate contacts in an effort to stop the legislation there.
7. (SBU) In response to Interfarma’s request for assistance with respect to Bill 22 [paragraph excised].
Good News on Compulsory Licensing