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Trade agreement hits snag on Guatemala law

Jan. 7, 2005

Trade agreement hits snag on Guatemala law
Drug companies want protection on testing data

Bloomberg News

The U.S. Trade Representative’s Office said Friday that Guatemala violated the terms of a pending Central American trade agreement with a new pharmaceutical data law the United States objects to.

Guatemala repealed a law in December that keeps drug companies’ testing data under seal for five years, a move that could stall consideration of the U.S.-Central American Free Trade Agreement by the U.S. Congress. That five-year protection is mandated by rules of the trade accord, reached in late 2003 and still awaiting congressional approval.

"Congress has voiced concerns to us that for CAFTA to proceed, all participants need to be in compliance with its provisions," said Neena Moorjani, a spokeswoman for the U.S. trade office. "We’re very disappointed that Guatemala has taken a step that violates its commitments under CAFTA."

Guatemalan President Oscar Berger pledged to reinstate the data protections, which were requested by pharmaceutical companies, the U.S. trade office said Friday. The U.S. pharmaceutical industry pressed to include those measures in the trade agreement, saying they clarify global rules protecting patents.

The trade accord with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua would immediately end duties on as much as 80 percent of the $15 billion in U.S. exports to the region. It would help U.S. companies sell more products at lower cost in Central America and protect investments of U.S. businesses in the region.

The data protection ensures that makers of generic drugs can’t use the trial data of the originators of the drug for a certain period of time. Allowing use of that data can speed the introduction of cheaper generic drugs, by giving them access to safety and efficacy studies, and also make it easier for countries facing a health crisis to overturn patent protections and use cheaper generics, said Jennifer Brant, a trade and copyright analyst at Oxfam in Geneva.

"They want these legal protections in CAFTA as precedents for other trade agreements that may follow," Brant said.

The U.S. pharmaceutical industry would "definitely" oppose moving ahead with congressional consideration of CAFTA as long as the Guatemalan measure is in force, said Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America.

 source: Houston Chronicle