Government Must Resist Pressures from American Pharmaceuticals

Press Release

14 February 2005

The Egyptian Initiative for Personal Rights (EIPR) today called on the Egyptian Government to resist pressures from American Pharmaceutical companies, which seek to maximize their profits at the expense of Egyptian citizens by eradicating competition from cheaper drugs.

The EIPR's Health and Human Right Program obtained a letter sent by the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents the most powerful pharmaceuticals in the US, to the United States Trade Representative on 25 January 2005. The President of PhRMA urged the US administration in the letter to halt the resumption of negotiations for a US-Egypt free trade agreement, in retaliation for a decision by the Minister of Health 'Awad Tageddine in the first week of January to grant marketing approval to 850 generic versions of patented drugs that are equally effective but much cheaper than their original brand-name versions, making them more accessible to most Egyptians.

 The letter started with stating that "PhRMA members have been impressed by the effective financial sector reforms that have been undertaken by the new Egyptian Cabinet, and the successful establishment of new Qualifying Industrial Zones (QIZs)," but later rendered harsh criticism to the Minister of Health, adding that it was "particularly discouraging that the acts of one Minister could undermine the recent progress toward economic reform made by Egypt".

The basis for this criticism is the demands of American pharmaceutical companies that Egypt applies a "data exclusivity" system, which would prevent the government from using data provided by an originator drug company to authorize the use of an equivalent generic version of the same drug for a given period of no more than five years. Currently, domestic and foreign generic manufacturers only have to show that their drugs are of quality and therapeutically equivalent to the original version when they seek registration of their products, without having to submit new safety and efficacy data. Instead, the government relies in the registration of generic drugs on clinical trial data that it receives from originator companies when they seek registration or marketing approval for their products in the country.
The EIPR warned that requiring Egyptian drug manufacturers to generate new test data before their products are registered will result in a sharp increase in the prices of their generic products, or even their complete unavailability in the market given the high costs of these tests and the low margin of generic production.  The same effect will apply even to drugs whose patents have expired. Furthermore, retesting drugs that have already been proven to be safe and effective on patients is medically unethical. Date exclusivity will also restrict the power of the State to issue compulsory licenses to locally manufacture drugs that are unavailable or unaffordable in the local market. Companies which will receive a compulsory license will not will be able to register a generic product before its test date exclusivity period expires.

The EIPR also refuted the claim by the American pharmaceutical lobby that the decision of the Minister of Health violated the TRIPS agreement and Egypt's intellectual property law. The Egyptian human rights group reiterated that the TRIPS agreement does not include any "exclusive" rights to the test data originator for any given period, and gives countries the freedom to determine how to protect this data only from "unfair commercial use", without defining such use (Article 39.3). Similarly, Egypt's Law No. 182/2002 on the Protection of Intellectual Property Rights requires the State to protect undisclosed data for no more than five years from acts that are "contrary to fair trade practices" (Articles 56-57). Article 58 of the Law provides a list of such practices which does not include the State's reliance on originator clinical test data to register generic drugs.

"The American pharmaceutical lobby, assisted by the US administration, is seeking to restrictively interpret international and Egyptian laws in order to prevent competition from cheaper generic drugs that could save the lives of thousands of Egyptian citizens," said Aya El-Hilaly, EIPR's Health and Human Rights Program Officer.

The EIPR further warned that pressures from American pharmaceutical companies are expected to increase after Egyptian and American officials have announced the resumption of negotiations for a free trade agreement (FTA) between the two countries next March. The US has always insisted on the inclusion of data exclusivity provisions in its bilateral trade agreements with developing countries, hampering access to essential medicines by citizens of these countries.

"The current government seems so eager to reach a free-trade agreement with the US that we fear it might be willing to forfeit Egyptian citizens' right to health," said El-Hilaly. "We hope that Egypt will not join other countries in the region, such as Jordan and Morocco, who failed to defend their citizens' rights in bilateral agreement with the US in the face of severe pressures from American companies and state officials."