CAFTA Intellectual Property Provisions Stir Controversy

The Central American Free Trade Agreement, which narrowly passed the House in an early morning vote last week, has various industry and advocacy groups arguing about how its intellectual property regulations compare with current domestic laws.

Patent Extensions:

The Generic Pharmaceutical Association supported the agreement but lobbied for changes in specific elements of the intellectual property rules, which it believes give unfair advantage to brand drug producers. The association objects to the provisions that allow patent extensions that compensate for time spent in the approval process because these extensions do not specify time limits.

    “We want to ensure that the extension does not exceed what is available in the U.S., at this time,” spokeswoman Andrea Hofelich said.

    Generic manufacturers are also concerned that CAFTA’s five-year market exclusivity period could be applied separately in every country, allowing manufacturers to delay applying in one country until the exclusivity period has already ended another country.

Lawsuit Provisions:

Another GphA complaint is that the agreement does not allow generic companies to begin marketing a drug until any potential lawsuits have been resolved, unlike the provisions of the Hatch-Waxman Act. This would allow brand companies to have “de facto patent extensions,” during the period that the suit is unsettled, according to the association. Hofelich described this as a potential way for pharma companies to “game” the system and prevent the entry of generic drugs.

    Asia Russell, spokeswoman for HIV/AIDS advocacy group Health GAP, is concerned that CAFTA will retroactively affect domestic policy. And she expressed fear that the agreements intellectual property provisions would “ratchet up protections even here at home,” through international harmonization.

Protection Enforcement:

Although generics manufacturers say that the CAFTA intellectual property protections are more stringent than domestic standards, brand pharma companies say the agreement brings Central American countries in line with United States law.

    According to a PhRMA statement, CAFTA “will considerably upgrade the level of IP protection in the region. Provisions on data protection, patent term restoration, linkage and patentability will provide a better framework for investment and improve patient’s access to medicines.”

    According to Stan Lovenworth, partner at Dewey Ballantine LLP, the agreement puts Central America in line with the United States.

    “I don’t think that it changes the basic world-wide pattern,” he said.

    Joseph McKinney, director of the McBride Center of International Business at Baylor University’s Hankamer School of Business, agreed. CAFTA provides a stable framework for protecting intellectual property that is uniform throughout the region and does not change as individual governments change, he explained. He also noted that it strengthens enforcement of counterfeiting and intellectual property violations.

    “The pharmaceutical industry is one of those that will benefit from the agreement,” McKinney said. Although he admitted that there is “certainly a concern on the part of generic manufacturers.”

International Comparison:

Russell believes that CAFTA protections are not just stronger than domestic laws but also more stringent than WTO standards and the Doha declaration. She is concerned that this will have a negative impact on public health in Central American countries.

    “CAFTA is a major step backwards for public health and access to affordable medicines in Central America,” she said.

    Lovenworth argued that public health and intellectual property rights do not have to be mutually exclusive.

    “A way should be found to preserve both,” he said. “[A] way to deal with developing world health problems that isn’t stopping protections of intellectual property. I don’t think you need to sacrifice the protections that bring new drugs to the world.”

    He asserted that the solution to the problem was intricately linked with issue of when, if ever, compulsory licensing is appropriate for public health reasons.