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Cablegate: Pharmaceuticals Update: Got's Unsatisfactory

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 ANKARA 002071

SIPDIS


DEPT FOR EB/TPP/MTA/IPC - SWILSON/JURBAN AND EUR/SE
DEPT PASS USTR FOR LERRION/BPECK
DEPT PASS LIBRARY OF CONGRESS
DEPT PASS USPTO FOR ELAINE WU
USDOC FOR ITA/MAC/DDEFALCO


SENSITIVE


E.O. 12958: N/A
TAGS: ETRD KIPR TU
SUBJECT: Pharmaceuticals Update: GOT's Unsatisfactory
Data Exclusivity Proposal, Revised Pricing Decree


Ref: Ankara 1157 and previous


Summary
-------


1. (SBU) The Health Ministry has proposed a data
exclusivity strategy predicated on implementation at the
end of 2007, and with an effective term of less than
three years. The research-based pharmaceutical industry
is reacting very negatively, and the Embassy has again
weighed in on this issue. The Ministry is revising its
decree on drug pricing in ways that are, on balance,
likely to make its implementation less painful for U.S.
companies. Embassy recommends increased Washington
pressure on the GOT on data exclusivity. End Summary.


Limited Data Exclusivity in 2007
--------------------------------


2. (U) On March 31, the Health Ministry proposed a
strategy (translation at end of cable) on data
exclusivity which calls for implementation on December
31, 2007. Although the term of exclusivity (and patent
protection) is to be six years, it would in fact be less
than half of that, as no drug could be registered in
Turkey until three years had elapsed from registration
in a foreign country, with the term of exclusivity
beginning from that earlier date. The term of
protection would be further shortened by the period
required for registration procedures in Turkey. The
Ministry asked that the Association of Research-Based
Pharmaceutical Companies (AIFD) comment on this by April
9.


3. (SBU) Not surprisingly, AIFD members have sharply
criticized the GOT proposal as inadequate. Chris
Kartalis, the General Manager of Bristol-Myers Squibb
Turkey, told Econoff that AIFD would send a strong
response to the Ministry before the deadline.
Additionally, former Secretary Albright, who is visiting
Ankara in connection with an invitation from research-
based industry, is likely to raise the issue in a
meeting with the Health Minister on April 9.


4. (SBU) Acting DCM raised the Ministry strategy in an
April 7 meeting with Undersecretary Unuvar. A/DCM
maintained that swift implementation of data exclusivity
protection was essential to building a strong investment
climate in Turkey. Unuvar refused to comment in any
detail on the strategy, maintaining that the
implementation date and other provisions were subject to
the approval of other GOT agencies. He raised the
generic industry's exaggerated estimates of the
budgetary cost of data exclusivity as a factor in the
GOT's deliberations on this issue.


Limited Progress on Pricing Decree
----------------------------------


5. (SBU) Following intense AIFD lobbying and Commerce
U/S Aldonas' letter on the GOT's new reference pricing
system, the Health Ministry is revising it in ways that
should make it less painful for research-based industry.
U/S Unuvar confirmed that, instead of limiting
pharmaceuticals prices to a maximum of 90 percent of the
average of the lowest two prices prevailing in a group
of five European countries, 100 percent of the lowest
price in these five countries will be used as a
reference. While industry sources tell us this is an
improvement, several companies say this revised system
will still be painful and unfair because Turkey will not
permit upward price adjustment if the minimum price in
Europe is higher than the previous Turkish maximum.
AIFD advises that it may pursue a legal challenge to the
new price decree when it is issued (protect).


Comment
-------


6. (SBU) Although the data exclusivity scheme proposed
on March 31 may be amended, Embassy believes that the
GOT is not likely to implement a satisfactory data
exclusivity policy without significantly increased
external pressure and engagement. We have proposed, by
diplomatic note, an expert-level bilateral discussion of
intellectual property issues via digital video
conference to the MFA. USTR is due to issue its Special
301 report at the end of April. As recommended reftels,
further Washington engagement would buttress these
steps. In particular, Washington agencies should rebut
Turkey's argument that the TRIPS Agreement does not
require data exclusivity and provide an analysis of any
other areas in which we believe that the GOT is not
fulfilling its TRIPS obligations, as promised after the
December 2003 Economic Partnership Commission meeting.
We continue to believe that sending an interagency IPR
delegation to Ankara would have more impact on GOT
decisionmaking than a discussion by DVC.


7. (U) Begin Text AIFD Translation of Health Ministry
Letter:


THE MINISTRY OF HEALTH
OF THE TURKISH REPUBLIC
The Pharmaceutical General Directorate
NO : B100IEG0100007/014283
ISSUE :
ANKARA
March 31,2004


THE ASSOCIATION OF RESEARCH-BASED
PHARMACEUTICAL COMPANIES
Barbaros Bulvary No:85/A D:4
Besiktas/ISTANBUL


As you may know, the "National Programme of Turkey for
the Adoption of the European Union Acquis
Communautaire", had been published on the Reiterated
Official Gazette dated July 24, 2003, no. 25178.


As a result of the works conducted within the framework
of the "Directive 2001/83/EC of the European Parliament
and of the Council, of November 6, 2001, relating to
medicinal products for human use", anticipated to be
harmonised according to the National Programme, it has
been deemed necessary to revoke the Regulation on the
Registration of Medicinal Pharmaceutical Products,
published on the Official Gazette no. 22218, dated March
02, 1995 and draw up a new Regulation in line with the
section about market introduction of above mentioned
directive.


The following issues are planned to be reflected in the
Regulation Regarding the Registration of Medicinal
Products for Human Use which is being drawn up:
Any medicinal product for human use, including blood
products, vaccines and radiopharmaceuticals:
1. will be registered earliest three years after its
first registration in the EU, the United States or any
other country,
2. the implementation of data exclusivity in our country
will be initiated as of December 31, 2007,
3. the implementation of data exclusivity and patent
period will be limited for 6 years in our country, as of
the first registration date of the product in the EU,
the United States or any other country,
4. an additional period of 1 year will be implemented in
the event of the addition of a new indication, by
condition that such period is limited by the patent
period in our country,
5. the targeted completion of the registration procedure
within 210 working days will be implemented upon the
institutionalization of our General Directorate; in
other words, it will be implemented after the
establishment of the National Pharmaceutical Institution
and a transition period will be foreseen to allow an
improvement of the physical structure until such an
institutional structuring takes place,
6. in the event of the change of the registration holder
and the positive evaluation of the application submitted
with the document required by the related legislation,
with the exemption of the scientific and technological
inspections and laboratory analyses, a registration will
be drawn up in the name of the new applicant but the
company of origin will be prevented from transferring
the import registration unilaterally to another company,
before the completion of 5 years,
Furthermore,
7. the implementation of the procedure for granting
registration/permission to Homeopathic Products in our
country will be initiated as of the EU candidacy date of
Turkey.


We would highly appreciate if you could submit your
comments about the following issues to the General
Directorate by April 9, 2004.


Pharm. Hayriye MIHCAK
General Director
End Text AIFD Translation of Health Ministry Letter.
Edelman

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