1. MFJ International, LLC A Global Consulting Firm “FTAs and Pharmaceuticals: a hijacked process?” M. Fabiana Jorge CPTECH November 16, 2006

2. MFJ International, LLC A Global Consulting Firm AGENDA Global Pharmaceutical Market before and after TRIPS Negotiating for the future: The cutting edge provisions of the FTAs. The need to change

3. MFJ International, LLC A Global Consulting Firm I. Global Pharmaceutical Market before and after TRIPS Worldwide Pharmaceutical -- Sales 1994 Total Sales: $246.4 billion Source: IMS

4. MFJ International, LLC A Global Consulting Firm Total Sales: $565.9bn Source: IMS I.Global Pharmaceutical Market before and after TRIPS Worldwide Pharmaceutical -- Sales 2005

5. MFJ International, LLC A Global Consulting Firm I. Global Pharmaceutical Market before and after TRIPS Total global pharmaceutical sales 19942005 $246.4B565.9 (100%)(230%)

6. MFJ International, LLC A Global Consulting Firm I. Global Pharmaceutical Market before and after TRIPS Distribution of global pharmaceutical sales US, Europe, Japan 1994:82% US, Europe, Japan 2005:88%

7. MFJ International, LLC A Global Consulting Firm I. Global Pharmaceutical Market before and after TRIPS "The pharmaceutical industry today sells 80 per cent of its products to 20 per cent of the world's population..." Jean-Pierre Garnier Financial Times (London, England) July 22, 2005 Friday

8. MFJ International, LLC A Global Consulting Firm I. Global Pharmaceutical Market before and after TRIPS Now, if brand name companies want to keep increasing their revenue maximization, what would their strategy be? To sell more and more expensive drugs where people can pay for them or to try to sell more in markets where people have less resources?

9. MFJ International, LLC A Global Consulting Firm I. Global Pharmaceutical Market before and after TRIPS USTR strategy in FTAs: –Increase level of IPR protection forcing smaller partners to adopt such standards –Create enough critical mass and later harmonize standards of protection –Success of strategy: when the big markets adopt such new levels of IP protection

10. MFJ International, LLC A Global Consulting Firm II. Negotiating for the future: the cutting edge provisions of the FTAs. Profit maximization through: –In developing countries: elimination of the use of flexibilities such as compulsory licensing, parallel imports, restrictions to patentable subject matter. –In developed countries: blocking generic competition through patent extensions, linkage provisions and market exclusivity.

11. MFJ International, LLC A Global Consulting Firm II. Negotiating for the future: the cutting edge provisions of the FTAs. Patent Extensions: They do not include the limits that exist under US law (5y; 14y EPT) Eventually it could lead to their elimination in the US; Potential effect? We have the lessons from TRIPS: Prof Schondelmeyer’s study

12. MFJ International, LLC A Global Consulting Firm II. Negotiating for the future: the cutting edge provisions of the FTAs. Market Exclusivity –At least –NCE vs. new pharmaceutical product –Same or similar –Can go beyond patent term –Required or permitted –Dropping the word “undisclosed”

13. MFJ International, LLC A Global Consulting Firm II. Negotiating for the future: the cutting edge provisions of the FTAs. Elimination of Best Mode requirement Focus: biotechnology industry and litigation cases

14. MFJ International, LLC A Global Consulting Firm II. Negotiating for the future: the cutting edge provisions of the FTAs. Linkage FTAs do not include limits or requirements that exist in US law NCE Lawsuits Can be challenged Objective: to block all patents and eventually eliminate Bolar

15. MFJ International, LLC A Global Consulting Firm III. Conclusions FTAs process has been “hijacked” by brand name pharmaceutical companies The process in the US to define the trade policy on pharmaceuticals is far from being democratic This trade policy hurts US generic companies Brand name pharmaceuticals will continue using FTAs as tools to increase their monopolies and obtain profit maximization New Congress: great opportunity to try to reach a better balance

16. MFJ International, LLC A Global Consulting Firm III. Conclusions Congress should at the very least approve an amendment that should apply to all past FTAs as well to ensure that all limits in US law should be respected (i.e. limits on patent extensions). Need for specific language Ultimately: other countries need to stop these negotiations or negotiate better

17. MFJ International, LLC A Global Consulting Firm Thank you! mfjorge@mfjint.com