US embassy cable - 05ANKARA835

UNCLAS SECTION 01 OF 02 ANKARA 000835 
 
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:  GOT DEFENDS NEW DATA EXCLUSIVITY REGULATION 
AND REPORTS SYSTEM FOR PATENT LINKAGE 
 
REFS: A) State 19340 B) Ankara 394 C) State 23950 
 
Summary 
------- 
 
1. (SBU) Health Ministry and Foreign Trade 
Undersecretariat representatives argued that Turkey's 
new data exclusivity regulation goes as far as is 
legally possible to protect research-based companies 
within Turkey's legal framework.  The Health Ministry 
reported that it had implemented a system for ensuring 
that generic registration applications for patented 
drugs are not accepted.  End Summary. 
 
Data Exclusivity Demarche 
------------------------- 
 
2. (SBU) Econoff and Econ Specialist met with Orhan 
Gumrukoglu, the Health Ministry's Director General for 
Pharmaceuticals, on February 10 to deliver ref (A) 
demarche outlining U.S. concerns with Turkey's January 
19 data exclusivity regulation (ref B).  Gumrukoglu 
responded that Turkey had gone as far as it could go in 
providing limited retroactive protection for research- 
based companies.  He maintained that generic companies 
would flood the Turkish court system with challenges if 
the GOT were to retroactively provide data exclusivity 
in cases in which generic copy applications had already 
been filed.  This would hurt the research-based 
companies by tying up implementation of the entire 
regulation, possibly for years.  Gumrukoglu asserted 
that the GOT would fully implement the protections in 
the regulation, and planned to increase the term of 
protection from six to ten years when Turkey joins the 
European Union. 
 
3. (SBU) Gumrukcuoglu stated that he was aware of at 
least 118 molecules with license applications in Europe, 
but not in Turkey, filed before 2005; all of these drugs 
could enjoy retroactive protection.  In response to 
Econoff's question as to how many Turkish generic 
applications had been filed before 2005 for molecules 
which would otherwise be entitled to retroactive data 
exclusivity protection, Gumrukoglu stated that there 
were perhaps 30 to 50 such molecules.  However, there 
might be multiple generic applications for the same 
molecule.  Note:  Research-based industry has said that 
there are hundreds, perhaps even 1,000 or more, data 
exclusivity-infringing applications in the Health 
Ministry pipeline.  End Note. 
 
4. (SBU) Gumrukoglu predicted that the January 
regulation would be a boon to research-based companies. 
He estimated that they would realize an extra one 
billion USD in sales over the next three or four years, 
and that this would create exceptional fiscal strain in 
connection with Turkey's IMF program since some 90 
percent of this would be publicly-funded.  Note: 
Research-based industry has claimed that the overall 
impact, especially for the GOT budget, will be far 
smaller.  End Note. 
 
5. (SBU) In response to Econoff's caution that 
continuing gaps in data exclusivity protection would be 
a major issue in this spring's Special 301 review, 
Gumrukoglu emphasized that the GOT had done all that it 
could on this issue and expressed the hope that the USG 
would recognize Turkey's efforts in this area. 
 
6. (SBU) Econ Counselor and Econoff also delivered ref 
(A) demarche to Tevfik Mengu, Foreign Trade's Director 
General for Agreements, on February 11.  We highlighted 
the inconsistency of the loopholes in the new 
regulations with the commitments Turkey made when it 
joined TRIPS, as well as the difficulties they created 
for expanding bilateral trade and investment.  Mengu 
noted that Turkey did not share the U.S. interpretation 
of TRIPS Article 39 and echoed the Health Ministry's 
opinion that doing more on retroactivity is legally 
impossible.  He said that GOT agencies are considering 
further amendments to the legislation that might address 
the concerns raised in our demarche.  However, he did 
not hold out any hope that "the lawyers" would be able 
to find a way around the legal problem. 
Patent Linkage 
-------------- 
7. (U) Recalling the Ambassador's discussion with the 
Health Minister in December 2004 on the patent linkage 
issue, Gumrukoglu reported that as of January 1, the 
Health Ministry and Turkish Patent Institute (TPI) have 
established a system to prevent generic registration of 
molecules entitled to patent protection.  Gumrukoglu 
stated that new generic applications must be accompanied 
by correspondence from TPI stating that there is no 
valid Turkish patent on the drug.  He said the Health 
Ministry would check with TPI if there were any reason 
to doubt whether an approval would infringe a Turkish 
patent.  He also told us he had asked the Research-Based 
Pharmaceuticals Association (Turkish acronym AIFD) for a 
list of patented drugs in Turkey. 
 
8. (SBU) Gumrukoglu implied that this system has no 
impact on Eli Lilly's efforts to block registration of 
generic copies of Zyprexa, but said that the Health 
Ministry has not approved the copy registration.  He 
downplayed Eli Lilly's claim that recent layoffs in 
Turkey were in part to weaknesses in the intellectual 
property regime, claiming that most of those laid off or 
reassigned were sales and marketing personnel. 
 
Comment 
------- 
 
9. (SBU) Comment.  The local EU Delegation and the 
Belgian Embassy (the local representative of the EU 
Presidency for economic issues), have told us that they 
share our views on the shortcomings of the new 
regulation.  In their presentations to the Turks, they 
highlight the inconsistency of the law with Customs 
Union obligations.  The EU will raise the issue at a 
regular bilateral Turkey-EU meeting under the Customs 
Union that will be held in Brussels at the end of 
February.  (This may account for the slightly more 
equivocal position we heard at the FTU.)  The EU 
Delegation has been attempting to assess the commercial 
impact of the loophole on retroactive application, but 
has not received useful information on pending 
applications from the Health Ministry.  The EU 
representatives have not responded to Embassy's 
suggestions that we jointly raise these issues with the 
Turks. 
 
10. (U) Embassy also plans to deliver ref (A) demarche 
to MFA and possibly other GOT agencies involved in 
pharmaceuticals policy.  We will also provide input on 
this issue Septel for the Special 301 review process. 
Edelman