WATCH COUNTRY

Chile

Intellectual Property Protection

Chile implemented a flawed patent law in 1991 which provides limited product patent protection for pharmaceuticals. This law is flawed because it offers an inadequate patent term (15 years from filing) and no transition (i.e., pipeline) protection for pharmaceuticals. Due to the ten to twelve-year development time before launching pharmaceutical products, the net effect of this law will not occur until after the year 2000 and, then, for a very limited period of exclusivity. The Chilean Government has expressed its commitment to bringing its legislation into compliance with TRIPs by 2000.

An increasing number of patent applications are being granted, a qualitative improvement from the situation since 1991. Numerous products are already being marketed in Chile, while their patent applications remain pending. With renewed leadership, the review and approval (or disapproval) of patent applications appears to be accelerating, but will remain an issue, so long as it is not fully consolidated as both policy and practice.

One way in which this situation could be ameliorated, is to require that "linkage" regulations be adopted in Chile. "Linkage" would require that "second applicants" (i.e., generic, or in some cases, "pirate" applicants) be required to demonstrate that the product for which they are applying for market approval is not the subject of a valid patent or pending application. "Linkage" exists in the United States and Canada, and has proven to be a useful adjunct to maintain the integrity of the intellectual property and patent system. A recent response by the Ministry of Health's Public Health Institute rejecting the submission of a company not owning the patent rights, suggests that there is effective linkage between regulatory approval and patent status. Yet, it remains unclear whether this is regulation or simply the interpretation of current officials.

A second way in which the intellectual property environment could be improved in Chile, until improved, adequate and effective de jure patent protection is in place, is for the authorities to implement and enforce provisions guarding against the unauthorized commercial use of company proprietary data, as per the principles outlined in TRIPs Article 39. As is described in several other country sections in this submission, allowing the registration of "generic" products that use, or incorporate by reference, the company proprietary data of the innovator is an unfair trade practice that severely if not completely undercuts intellectual property protection for pharmaceuticals. Chile should adopt a ten-year period standard against the use of proprietary data submitted for registration purposes, as is the case in several EU countries.

Other Barriers

The Chilean health registration system (e.g., Sanitary Code/Decree 435) demands more requirements for innovators before their products can be registered in Chile. This process discriminates against the research-based pharmaceutical industry when introducing original products into Chile, whereas it allows the swift introduction of copies in the Chilean market.

Potential Exports/Foreign Sales

At this time it is estimated that if current barriers were removed, sales of PhRMA company affiliates could increase in the range of US $50 million to $100 million dollars.

For all the aforementioned reasons, PhRMA believes that Chile should be listed as a Watch Country under Special 301 in 1999.