US embassy cable - 04ANKARA2071

UNCLAS SECTION 01 OF 03 ANKARA 002071 
 
SIPDIS 
 
 
DEPT FOR EB/TPP/MTA/IPC - SWILSON/JURBAN AND EUR/SE 
DEPT PASS USTR FOR LERRION/BPECK 
DEPT PASS LIBRARY OF CONGRESS 
DEPT PASS USPTO FOR ELAINE WU 
USDOC FOR ITA/MAC/DDEFALCO 
 
 
SENSITIVE 
 
 
E.O. 12958: N/A 
TAGS: ETRD, KIPR, TU 
SUBJECT: Pharmaceuticals Update:  GOT's Unsatisfactory 
Data Exclusivity Proposal, Revised Pricing Decree 
 
 
Ref:  Ankara 1157 and previous 
 
 
Summary 
------- 
 
 
1. (SBU) The Health Ministry has proposed a data 
exclusivity strategy predicated on implementation at the 
end of 2007, and with an effective term of less than 
three years.  The research-based pharmaceutical industry 
is reacting very negatively, and the Embassy has again 
weighed in on this issue.  The Ministry is revising its 
decree on drug pricing in ways that are, on balance, 
likely to make its implementation less painful for U.S. 
companies.  Embassy recommends increased Washington 
pressure on the GOT on data exclusivity.  End Summary. 
 
 
Limited Data Exclusivity in 2007 
-------------------------------- 
 
 
2. (U) On March 31, the Health Ministry proposed a 
strategy (translation at end of cable) on data 
exclusivity which calls for implementation on December 
31, 2007.  Although the term of exclusivity (and patent 
protection) is to be six years, it would in fact be less 
than half of that, as no drug could be registered in 
Turkey until three years had elapsed from registration 
in a foreign country, with the term of exclusivity 
beginning from that earlier date.  The term of 
protection would be further shortened by the period 
required for registration procedures in Turkey.  The 
Ministry asked that the Association of Research-Based 
Pharmaceutical Companies (AIFD) comment on this by April 
9. 
 
 
3. (SBU) Not surprisingly, AIFD members have sharply 
criticized the GOT proposal as inadequate.  Chris 
Kartalis, the General Manager of Bristol-Myers Squibb 
Turkey, told Econoff that AIFD would send a strong 
response to the Ministry before the deadline. 
Additionally, former Secretary Albright, who is visiting 
Ankara in connection with an invitation from research- 
based industry, is likely to raise the issue in a 
meeting with the Health Minister on April 9. 
 
 
4. (SBU) Acting DCM raised the Ministry strategy in an 
April 7 meeting with Undersecretary Unuvar.  A/DCM 
maintained that swift implementation of data exclusivity 
protection was essential to building a strong investment 
climate in Turkey.  Unuvar refused to comment in any 
detail on the strategy, maintaining that the 
implementation date and other provisions were subject to 
the approval of other GOT agencies.  He raised the 
generic industry's exaggerated estimates of the 
budgetary cost of data exclusivity as a factor in the 
GOT's deliberations on this issue. 
 
 
Limited Progress on Pricing Decree 
---------------------------------- 
 
 
5. (SBU) Following intense AIFD lobbying and Commerce 
U/S Aldonas' letter on the GOT's new reference pricing 
system, the Health Ministry is revising it in ways that 
should make it less painful for research-based industry. 
U/S Unuvar confirmed that, instead of limiting 
pharmaceuticals prices to a maximum of 90 percent of the 
average of the lowest two prices prevailing in a group 
of five European countries, 100 percent of the lowest 
price in these five countries will be used as a 
reference.  While industry sources tell us this is an 
improvement, several companies say this revised system 
will still be painful and unfair because Turkey will not 
permit upward price adjustment if the minimum price in 
Europe is higher than the previous Turkish maximum. 
AIFD advises that it may pursue a legal challenge to the 
new price decree when it is issued (protect). 
 
 
Comment 
------- 
 
 
6. (SBU) Although the data exclusivity scheme proposed 
on March 31 may be amended, Embassy believes that the 
GOT is not likely to implement a satisfactory data 
exclusivity policy without significantly increased 
external pressure and engagement.  We have proposed, by 
diplomatic note, an expert-level bilateral discussion of 
intellectual property issues via digital video 
conference to the MFA.  USTR is due to issue its Special 
301 report at the end of April.  As recommended reftels, 
further Washington engagement would buttress these 
steps.  In particular, Washington agencies should rebut 
Turkey's argument that the TRIPS Agreement does not 
require data exclusivity and provide an analysis of any 
other areas in which we believe that the GOT is not 
fulfilling its TRIPS obligations, as promised after the 
December 2003 Economic Partnership Commission meeting. 
We continue to believe that sending an interagency IPR 
delegation to Ankara would have more impact on GOT 
decisionmaking than a discussion by DVC. 
 
 
7. (U) Begin Text AIFD Translation of Health Ministry 
Letter: 
 
 
THE MINISTRY OF HEALTH 
OF THE TURKISH REPUBLIC 
The Pharmaceutical General Directorate 
NO   : B100IEG0100007/014283 
ISSUE     : 
ANKARA 
March 31,2004 
 
 
THE ASSOCIATION OF RESEARCH-BASED 
PHARMACEUTICAL COMPANIES 
Barbaros Bulvary No:85/A D:4 
Besiktas/ISTANBUL 
 
 
 
 
As you may know, the "National Programme of Turkey for 
the Adoption of the European Union Acquis 
Communautaire", had been published on the Reiterated 
Official Gazette dated July 24, 2003, no. 25178. 
 
 
As a result of the works conducted within the framework 
of the "Directive 2001/83/EC of the European Parliament 
and of the Council, of November 6, 2001, relating to 
medicinal products for human use", anticipated to be 
harmonised according to the National Programme, it has 
been deemed necessary to revoke the Regulation on the 
Registration of Medicinal Pharmaceutical Products, 
published on the Official Gazette no. 22218, dated March 
02, 1995 and draw up a new Regulation in line with the 
section about market introduction of above mentioned 
directive. 
 
 
The following issues are planned to be reflected in the 
Regulation Regarding the Registration of Medicinal 
Products for Human Use which is being drawn up: 
Any medicinal product for human use, including blood 
products, vaccines and radiopharmaceuticals: 
1. will be registered earliest three years after its 
first registration in the EU, the United States or any 
other country, 
2. the implementation of data exclusivity in our country 
will be initiated as of December 31, 2007, 
3. the implementation of data exclusivity and patent 
period will be limited for 6 years in our country, as of 
the first registration date of the product in the EU, 
the United States or any other country, 
4. an additional period of 1 year will be implemented in 
the event of the addition of a new indication, by 
condition that such period is limited by the patent 
period in our country, 
5. the targeted completion of the registration procedure 
within 210 working days will be implemented upon the 
institutionalization of our General Directorate; in 
other words, it will be implemented after the 
establishment of the National Pharmaceutical Institution 
and a transition period will be foreseen to allow an 
improvement of the physical structure until such an 
institutional structuring takes place, 
6. in the event of the change of the registration holder 
and the positive evaluation of the application submitted 
with the document required by the related legislation, 
with the exemption of the scientific and technological 
inspections and laboratory analyses, a registration will 
be drawn up in the name of the new applicant but the 
company of origin will be prevented from transferring 
the import registration unilaterally to another company, 
before the completion of 5 years, 
Furthermore, 
7. the implementation of the procedure for granting 
registration/permission to Homeopathic Products in our 
country will be initiated as of the EU candidacy date of 
Turkey. 
 
 
We would highly appreciate if you could submit your 
comments about the following issues to the General 
Directorate by April 9, 2004. 
 
 
Pharm. Hayriye MIHCAK 
General Director 
End Text AIFD Translation of Health Ministry Letter. 
Edelman