The on-going dispute between the U.S. and Israel over intellectual property protection of pharmaceuticals has recently turned a corner. For years, the Office of the U.S. Trade Representative (USTR) which defends U.S. foreign trade interests, has criticized Israel’s lack of intellectual property protection for branded drug manufacturers. Currently, Israeli pharmaceutical companies are permitted to exploit the informational files that are submitted when registering a drug in Israel. These files contain the results of clinical trials and allow Israeli generic companies to take a drug to market in a fraction of the time and at a fraction of the cost for branded firms.
Israel recently proposed legislation that would increase the protection of intellectual property in pharmaceuticals. U.S. negotiators demanded and received more protection for international drug manufacturers. IP drug protection legislation was accepted by the U.S., thus allowing Israeli companies to export “ethical” or prescription pharmaceuticals to the U.S. The legislation will permit exports by Israeli pharmaceutical companies, even during the exclusivity period granted for branded drugs, provided they do not rely on the informational files submitted to the Israel Ministry of Health for purposes of registering new drugs in Israel. The period of exclusivity for such drugs is to begin upon registration in Israel and end with expiration in the U.S., Canada or Mexico. The USTR considered such a proposal as a step in the right direction.
The decision is liable to hamper Israeli generic drug companies, notably Teva Pharmaceuticals, but will not prevent generic drug exports by Israeli companies to non-U.S. countries. Thus, the proposed legislation will probably only affect generic drug manufacturers in Israel exporting generic drugs to the U.S. only. Subsidiaries of branded firms demanded a ban on such exports.
Still remaining are negotiations over the expiration of the exclusivity period—the U.S. is considering Israel’s request that the termination of the period in Europe, Japan, or Australia end the exclusivity period in Israel.
If you have any questions regarding intellectual property protection, please contact Kenneth Horton at khorton@kmclaw.com or Dax Anderson at danderson@kmclaw.com.