For the third consecutive year, Israel has earned the dubious honor of being listed on the Priority Watch List of the US Office of the Trade Representative (USTR). The list consists of countries which the US feels blatantly violate intellectual property rights.
Also on the list together with Israel are China, Russia, Argentina, Chile, India, Pakistan, Venezuela, and Thailand. The USTR hinted in the report that it may seek to block Israel's admittance to the OECD, if Israel does not amend its intellectual property legislation. "The US expects Israel to provide an appropriately high level of IP protection that reflects its status as a partner in the US - Israel FTA and its objective of becoming a member of the OECD," it wrote.
The main reasons for retaining Israel on the Priority Watch List were the lack of protection against Internet piracy and Israel’s laws that adversely affect the term of pharmaceutical patent protection by effectively reducing the time granted to compensate for delays in obtaining regulatory approval of a drug. This has been a longstanding bone of contention between Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and the major US pharmaceutical companies, which allege that Israel has enacted laws to suit the convenience of Teva - the world's largest generics company and the largest company in Israel, at the expense of intellectual property protection. Teva, on the other hand, claims that Israel has been placed on the Priority Watch List solely as a result of lobbying to block it.
Teva VP strategic planning Aharon Schwartz said, "Israel has been placed on the list, despite having introduced a new patents law. The bone of contention is the privileged information law, which prevents generic companies from launching a drug in Israel for five years after the Ministry of Health approved the ethical version of the drug, even if the patent on it has lapsed. The argument in support of this is that the Ministry of Health uses information owned by the innovative drug companies to approve generic companies' products."
Schwartz continued, "Israel reached a settlement with the innovative companies, and agreed to a further five year period during which ethical drugs would be on their own in the Israeli market, provided that exports were not affected, that is to say that Teva could launch drugs overseas once their generic versions are allowed in the target countries. Any anger they have has actually been brewing in the time since the settlement was agreed in the US, and nothing seems to help. Teva and the Israeli government have been intensively lobbying the US Department of Commerce. They asked questions, we answered them, and then they asked the same questions again. When the Americans don't want to listen, they don't listen."
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008