US embassy cable - 04ANKARA6279

UNCLAS SECTION 01 OF 02 ANKARA 006279 
 
SIPDIS 
 
DEPT FOR E, EB/TPP/MTA/IPC, EUR/ERA, EUR/SE 
USTR FOR LERRION/BPECK 
USEU FOR CHRIS WILSON 
USPTO FOR ELAINE WU 
USDOC FOR ITA/MAC/DDEFALCO 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD, KIPR, TU 
SUBJECT: Update and Next Steps on Pharmaceuticals Issues 
in Turkey 
 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE HANDLE ACCORDINGLY. 
 
Ref: (A) Ankara 5695 (B) 2003 State 322108 
(C) Ankara 5385 
 
Summary 
------- 
 
1. (SBU) The research-based pharmaceuticals industry 
continues to grapple with a difficult set of challenges 
in the areas of intellectual property protection (lack 
of data exclusivity and potential patent infringement) 
and reimbursement reform (including non-transparent 
development of restrictive lists of eligible drugs).  In 
response to the EU's threat of WTO dispute settlement or 
even trade sanctions if Turkey continues to delay data 
exclusivity, it appears that the GOT is close to a 
decision to implement protection soon.  Washington 
agencies and Mission elements have actively advocated 
for the pharmaceuticals companies in the past and will 
continue to do so.  End Summary. 
 
Data Exclusivity 
---------------- 
 
2. (SBU) As reported ref A, the EC's Trade Barrier 
Report (TBR) found that Turkey has not complied with the 
customs union and TRIPS Agreement requirements on data 
exclusivity.  The EU threatened formal WTO consultations 
or trade sanctions if Turkey did not agree to implement 
these by the end of October 2004.  Industry sources tell 
us that this deadline has been extended by several 
weeks.  The Foreign Trade Undersecretary in October 
hosted a meeting with representatives of both the 
research-based and generic industries to discuss data 
exclusivity.  Pfizer representatives are cautiously 
optimistic that the GOT will ultimately agree to move 
forward implementation of data exclusivity (currently 
planned for end-2007), perhaps even to retroactive 
implementation.  A Dutch diplomat based in Ankara 
recently told us that there is interest in several EU 
member embassies in a joint demarche with the USG on 
this issue if the GOT does not come up with a 
satisfactory policy, as Washington had suggested last 
year (ref B), but we have not heard an authoritative 
view from the European Union delegation on this matter. 
 
Zyprexa 
------- 
 
3. (U) Eli Lilly is concerned that generic manufacturers 
have applied to the Health Ministry for registration of 
copies of Zyprexa, which has a valid Turkish patent 
which is not due to expire until 2016.  We have raised 
this issue with the GOT on several occasions (see 
below). 
 
Reimbursement System Reform and Drug Savings 
-------------------------------------------- 
 
4. (U) As part of its planned social security reform, 
one of the key structural reforms supported by the IMF 
and World Bank, the GOT is contemplating reforms in its 
pharmaceuticals reimbursement systems which will reduce 
health expenditures, but have a dramatic impact on the 
industry.  A "positive list" of drugs eligible for 
reimbursement, not yet approved by the GOT, could 
severely limit Turkish patient access to innovative 
products by restricting the types of physicians and 
facilities authorized to prescribe certain drugs. 
Research-based industry claims that it has not had 
sufficient opportunity to provide input into the 
development of this restrictive list.  It also objects 
to GOT pressure to provide significant discounts on drug 
prices. 
 
Recent Advocacy 
--------------- 
 
5. (SBU) Washington agencies and the Mission have 
advocated aggressively and at high levels on behalf of 
research-based industry, particularly over the data 
exclusivity issue.  Lack of data exclusivity was the 
primary reason for elevating Turkey to the Priority 
Watch List in the 2004 Special 301 Review.   Recent 
advocacy includes: 
 
- Commerce U/S Aldonas' October 29 letter to Foreign 
Trade Undersecretary Tuncer Kayalar; 
 
- The Ambassador raised the data exclusivity problem in 
an October 25 speech to the Izmir Chamber of Commerce on 
investment issues, as well as in his opening remarks at 
a September 9 conference for Turkish judges and 
prosecutors on intellectual property enforcement; 
 
- The Ambassador told State Minister Tuzmen that Turkey 
is not complying with its WTO TRIPS obligations on data 
exclusivity in a September 17 meeting (ref C); 
 
- Commerce DAS Stewart's September 9 meeting with the 
Health Ministry's General Director for Pharmaceuticals, 
the Deputy U/S Foreign Trade, and other GOT officials; 
 
- The Ambassador's August 19 letter to Health Minister 
Akdag urging that the Ministry not approve patent- 
infringing copies of Eli Lilly's Zyprexa drug. 
 
Next Steps 
---------- 
 
6. (SBU) Post sees results from our and EU pressure on 
GOT.  The dialog between Pharma companies and senior GOT 
officials seems to have improved.  We will continue to 
press the Turks to implement data exclusivity 
immediately, involve industry stakeholders fully in 
reimbursement reform, and refrain from approving generic 
copies of drugs which should enjoy patent protection. 
As noted above, Turkey's data exclusivity policy may 
improve in the near future in response to the EC's TBR 
report.  Mission has requested meetings with the Health 
Ministry U/S as well as the President of the Turkish 
Patent Institute on these issues.  We will also ensure 
that visiting economic officials are briefed and have 
the opportunity to raise pharmaceuticals issues with 
decisionmakers in the GOT.  We should also use the next 
Trade and Investment Framework Agreement (TIFA) meeting, 
likely to be held in early 2005 in Ankara, to further 
our objectives in this area. 
Edelman