The US Trade Representative (USTR) is about to put Israel back on its priority watch list of countries in violation of intellectual property rights. A final decision is expected within days, US sources told "Globes".
Last year, the USTR upgraded Israel to a less restrictive watch list, after keeping it on the priority watch list for six consecutive years. A return to the priority watch list, despite Israel's legislative and enforcement efforts, which the USTR praised in its annual report for 2003, will damage Israel's image as a law-abiding country, and mitigate its achievements in intellectual property rights in recent years.
The US sources believe that the USTR will accept the claims of Pharmaceutical Research and Manufacturers of America (PhRMA) and International Intellectual Property Alliance (IIPA), which defends the rights of music artists. PhRMA and IIPA have both been struggling for years against what they call the continuous violation of intellectual property rights of US companies by Israeli companies.
The US sources said the main dispute is over the intellectual property rights of US ethical drug manufacturers.
PhRMA submitted documents to the USTR alleging that Israel's Ministry of Health provides Israeli generic drug makers with documents of US pharmaceutical companies originally sent to the ministry for the licensing of their products for sale in Israel.
The Americans claim that the Ministry of Health's policy makes it easier for Israel generic drug makers to use the documentation of the US companies, thereby expediting the Israeli companies' R&D for their generic drugs.
PhRMA claims that the release of documents to Israel's generic drug makers before the patents on the ethical drugs expire enables the Israeli companies to launch generic versions of the ethical drugs immediately upon the expiration of the ethical drugs.
PhRMA also claims that classifying documents will increase the R&D costs of Israeli companies and delay the launch of generic products by a year. PhRMA states that extending the exclusivity period of ethical drugs by a year would generate tens of millions of dollars in revenue for the ethical drug makers.
Pharma Israel, which comprises of the subsidiaries of US and multinational drug makers, claims that if the documents are classified, foreign pharmaceutical companies would invest tens of millions of dollars in medical research in Israeli R&D centers.
Published by Globes [online] - www.globes.co.il - on March 31, 2004