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Cablegate: Update On Pharmaceutical Ipr Issues in Mexico

VZCZCXRO3980
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #3724/01 1972031
ZNR UUUUU ZZH
P 162031Z JUL 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 7991
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 MEXICO 003724

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: KIPR ETRD MX
SUBJECT: UPDATE ON PHARMACEUTICAL IPR ISSUES IN MEXICO

Summary
-------

1. (SBU) Embassy officials met with the head of Mexico's
Federal Commission of Health Risk Protection (COFEPRIS -
rough equivalent of the U.S. Food and Drug Administration) to
discuss issues of concern to U.S. drugmakers, including data
protection, patent linkage, and Mexico's proposed elimination
of the requirement that would-be pharmaceutical vendors must
have production facilities in Mexico. The following day
emboffs met with representatives of the U.S. pharmaceutical
industry to compare notes and strategize on how best to push
Mexico on data protection, the IPR issue of greatest
importance to the industry. End summary.

COFEPRIS Commissioner
---------------------

2. (SBU) Juan Antonio Garcia Villa, COFEPRIS Commissioner,
and three of his top staff met with Embassy FCS, EST, and
ECONoffs on July 10 to discuss issues of concern. Regarding
Mexico's lack of regulations to implement its NAFTA
commitment (Article 1711) to provide at least five years of
protection against disclosure of data that companies must
submit to health authorities in order to receive health
approval, Garcia Villa agreed that there was a gap in Mexican
law. He then pointed out that international agreements
themselves have the force of law in Mexico, thus suggesting
that the NAFTA text itself was sufficient basis for data
protection. Emboffs replied that companies would be
understandably reluctant to pursue legal claims in Mexico
with nothing other than a copy of the NAFTA in hand. Garcia
Villa pointed out that, despite the lack of legal or
regulatory guidance, COFEPRIS was very careful in handling
data from companies seeking health approval. His staff
complained that this task is made more difficult when
companies label everything included in their application
packets as confidential, putting a strain on the ability of
COFEPRIS to secure such large quantities documents. They
also pointed out that, in many cases, companies insist on
protecting data that is already accessible in the public
domain.

3. (SBU) Emboffs raised the issue of the pharmaceutical
patent linkage instituted via presidential decree in 2003,
praising COFEPRIS for its 2007 record of not issuing a single
health approval for a drug protected by a valid Mexican
patent, but inquiring about the legal status of the dozen
health approvals issued the year before for patent-protected
drugs. Garcia Villa replied that the twelve cases in
question involved patents that had already expired and for
which the original patent holders were seeking extensions.
The view of COFEPRIS was that, with the patents expired,
there was no reason for COFEPRIS to deny health approval to
generic drug-maker applicants. That said, the original
patent-holders had initiated legal proceedings by arguing
that approvals should not have been issued while their patent
extension applications were still pending. Garcia Villa said
these cases will be resolved by the courts and thus are no
longer in the hands of COFEPRIS or any other executive branch
agency.

4. (SBU) Garcia Villa commented that the GOM's decision to
eliminate its plant requirement for pharmaceutical vendors
was at least in part motivated by complaints made by El
Salvador that this rule violated national treatment under the
terms of the two countries' free trade agreement. As a
result of this change, COFEPRIS will soon have to meet the
challenge of certifying the safety and efficacy of
pharmaceutical products imported from other countries. To
meet the new demand, Garcia Villa said COFEPRIS planned to
increase its personnel, would seek to contract certified
private companies to perform health checks on less sensitive
products, and would consider reciprocal agreements to
recognize the health approvals of select trading partner
governments.

Industry Representatives
------------------------

5. (U) On July 11, Emboffs met with representatives of the
Pharmaceutical Research and Manufacturers of America (PhRMA)
to discuss the same set of issues from the U.S. industry
perspective. The PhRMA reps, who had met separately with
COFEPRIS earlier in the same week, said they were not opposed
to the elimination of the plant requirement, though specific
member companies might be affected. They also remarked on
COFEPRIS' recent good record in respecting the patent linkage
when considering health approval applications for drugs.

6. (SBU) They asserted that the industry's main IPR concern

MEXICO 00003724 002 OF 002


in Mexico is getting the GOM to formulate clear rules on data
protection. They were convinced that legislating such rules
would be hard if not impossible to achieve in the near term
future given the current state of politics in the Mexican
congress. Thus, even though legislation was the desired
long-term end point, for now they planned to concentrate on
seeking executive branch regulations on data protection.
Such regulations are vulnerable to being discarded by
subsequent administrations, unlike rules enshrined in law,
but they pointed out that the pharmaceutical patent linkage
decree issued by the previous administration of President Fox
was proving to be effective, at least at present. The
industry has submitted a proposal to the Mexican Secretariat
of Economy (the bureaucratic parent of the Mexican Institute
of Industrial Property, or IMPI, the rough equivalent of the
U.S. Patent and Trademark Office) on establishing clear and
NAFTA-consistent data protection rules and believes that
Economy Secretary Sojo might be willing to act on this
proposal. The PhRMA reps requested that the Embassy urge him
to do so. They noted one tactical concern -- apparently some
European embassies are planning to make a push for a
legislative amendment, an initiative that PhRMA believes
would expose the whole initiative to unwelcome political
manipulation. At the urging of Emboffs, the PhRMA reps
agreed to discuss the relative merits of the legislative
versus the regulatory approach with their European industry
counterparts and lobby their respective embassies to go for
the more sure bet of a relatively low-key regulatory solution
to this problem. Depending on the response, this Embassy
stands ready to coordinate with other embassies in lobbying
for clear and NAFTA-consistent data protection rules.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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