Against the backdrop of the bitter struggle between Israel's pharmaceutical industry and international, especially US, ethical drug companies, Israel has won the support of a group of 19 US Senators and Representatives.
The American Members of Congress are in favor ofIsrael's pharmaceutical industry led by Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), and oppose the position of the Office of the US Trade Representative (USTR), which wants an Israeli bill for protecting intellectual property to be made much stricter.
The support of the US Members of Congress comes just as the struggle over the Israeli bill on drug registration files is coming to a head. The bill is due to be approved by the end of March as part of the 2005 economics arrangements bill, despite the US position. Alternatively, the bill be amended to meet US demands.
"Globes" has obtained a copy of a letter sent last Friday to Acting US Trade Representative Ambassador Peter F. Allgeier, signed by Republican and Democratic Members of Congress. They accuse the USTR of discriminating against Israel regarding demands on data exclusivity. The Members of Congress assert that the demands made against US "goes beyond what the US has agreed to with our other allies."
The letter states, "The practical effect of this unfair policy is to delay, or in some cases deny, much needed medications and treatments to Israeli citizens that are available in the US. This practice, established under the direction of your predecessor, results in an inconsistent treatment of a key US ally and could have far-reaching consequences for both Americans and Israelis."
The principle threat by Pharma Israel - The Association of the Research-Based Pharmaceutical Companies, which represents the Israeli subsidiaries of international ethical pharmaceutical companies, has been that if the Israeli data exclusivity bill passes in its current format, international drug companies will continue to be concerned about registering innovative and life-saving drugs in Israel, and will reduce clinical trials.
The Members of Congress go on to say, "Israel has taken many steps to try to resolve your office's concerns. We have been advised that Israel and the US were close to reaching an agreement that fell through due to additional US demands raised only after Israeli officials had arrived in the US to codify this agreement." The reference is to a visit to the US by Minister of Industry Trade and Labor Ehud Olmert in late 2004.
The letter concludes, "We hope that you will take the actions necessary to close this embarrassing chapter in our close friendship with Israel. We ask that the USTR immediately undertake a reassessment of USTR's position in order to meet our obligation to a fair and consistent policy toward Israel that is in keeping with our own laws."
Teva VP Chaim Hurvitz, who also serves as chairman of the Manufacturers Association of Israel Chemical & Pharmaceutical society, denied allegations that the US Members of Congress were recruited by lobbyists in Washington on behalf of Israel's pharmaceutical industry, led by Teva.
Hurvitz said, "The charge is baseless. We don’t know most of these Representatives and Senators. Furthermore, many of the signatories on this letter are identified with the pharmaceutical industry. Their actions on this matter are solely motivated by concern for Israel."
There is an active group of US Representatives and Senators fighting against the pharmaceutical companies over patents in general and the very high cost of proprietary and innovative drugs, which blocks access to life-saving drugs by poor countries. The high cost of AIDS treatments that poor African nations cannot afford is an example this situation.
In the present case, Hurvitz said, "All the signatories are known as supporters of Israel, and are absolutely not a lobby for the generic drug industry. The justifiably claim that it is scandalous that pharmaceutical companies are avoiding registering life-saving drugs in Israel, including dozens of oncology treatments. This is incredible audacity. Pharma Israel has the chutzpah to say that because Israel lacks proper intellectual property rights, they won't register new drugs here. These Members of Congress are saying that it's scandalous that the Pharmaceutical Research and Manufacturers of America (PhRMA) is treating a US ally like an enemy."
Hurvitz added that if pharmaceutical companies continue to avoid registering such drugs in Israel, Israel will have to unilaterally register the drugs, or allow automatic parallel imports.
Hurvitz said the support of the Members of Congress "should show Israel's ministers that there's a lot of sympathy for our case abroad, too. This should strengthen the ministers' hands and show that there are other Americans, beside the heads of the USTR, who support Israel's position."
He added that following this letter, "The USTR will have to think carefully whether they can downgrade Israel regarding intellectual property rights."
Olmert recently promised that if no agreement on data exclusivity was reached with the US soon, the data exclusivity bill would be approved in its current format, even at the cost of Israel being downgraded.
Published by Globes [online], Israel business news - www.globes.co.il - on March 8, 2005