CONCLUSION - PHARMACEUTICAL INDUSTRY IN EUROPE

PHARMACEUTICAL INDUSTRY IN EUROPE

5.5 CONCLUSION

continue to cooperate and to coordinate their activities, both internally and externally, in order to monitor and secure negotiations on a comprehensive GATT IP agreement (that is TRIPs).¹³² In 1998 a joint IPC–UNICE delegation undertook a series of meetings with ofﬁcials from the WTO, WIPO and the European Commission. Their aim was to present the industry view regarding possible negotiations on TRIPs to the WTO Seattle ministerial meeting (November 1999) and to argue for the rapid and full implementation of TRIPs by member countries.¹³³

In seeking to secure and to promote its international IP interests, the advanced pharmaceutical industry in Europe has expanded its organizational IP build-up beyond the intra-industry spectrum. Direct and indirect cooperation with other IP-based industries, such as the chemical and computer software industries, takes place through various organizations and forums. At the regional level, CEFIC as the primary representative of the chemical industry and UNICE as the umbrella organization of industry federations and associations are the natural partners of the European-based advanced pharmaceutical industry. Not only do EFPIA, CEFIC and UNICE share the same IP interests, but cooperation and coordination between these organization is a necessity given that pharmaceutical MNCs are members of all three organizations (directly in the case of EFPIA and CEFIC and indirectly in the case of UNICE).

At the international level, European-based pharmaceutical MNCs are either part of, or partners with, forums such as TABD and the US IPC (representing the IP interests of well-established and dominant MNCs from several industries).

Active and inﬂuential membership in the TABD IPRs Issue Group allows European-based pharmaceutical companies to reach a wider audience from US and European governments and institutions. It also allows pharmaceutical MNCs to cooperate with companies from other industries, such as the movie and telecommunication industries. Cooperation with the US IPC, mainly via UNICE, allows the advanced pharmaceutical industry in Europe to present an additional IP uniﬁed front, either via position papers (sometimes jointly with Japan), or through direct lobbying.

advanced pharmaceutical industry in Europe would like to secure and increase the international protection of IPRs. Speciﬁcally, the industry desires strong and extended protection (in scope and term) for patents, data exclusivity and trademarks.

Guided by Sallyʼs work, which advocated the study of MNCs as a basic unit of analysis in politico-economy scholarship, the chapter mapped the intra- industry (vertical) and inter-industry (horizontal) IP organizational structure of the advanced pharmaceutical industry in Europe.

With regard to vertical relations (corporate, national regional and international), pharmaceutical MNCs should be placed at the core of the industryʼs IP organizational structure. At the corporate level, each company has its own department responsible for securing, exploiting and enforcing IPRs (contracts, patent and trademark applications, litigation, royalties, and so on). Similar professional backgrounds and common day-to-day practices create a strong sense of epistemic community among corporate IP directors of pharmaceutical MNCs. The existence of an epistemic community within the IPR pharmaceutical sector allows corporate IP directors to share similar views and objectives, as well as to secure considerable amounts of inﬂuence when participating in different national regional and international IP forums.

National pharmaceutical associations, such as ABPI and VFA, are a primary channel through which European-based pharmaceutical MNCs engage in IP collective action at the national level. Though operating in different national environments, the ABPI and VFA are guided by the same international IP input and follow similar IP objectives. Both have speciﬁc committees dealing with IPRs: the Intellectual Property Committee in the case of ABPI, and the sub-committees for patents and trademarks, hierarchically located under the Committee of Legal Affairs, in the case of VFA. Members of IP committees in ABPI and VFA are corporate IP directors in pharmaceutical MNCs. Operating as lobbying groups, ABPI and VFA target relevant government departments, such as DTI and DoH in the UK, and the Federal Ministries of Justice, Economics and Technology in Germany. ABPI and VFA also regularly approach MPs, as well as other key groups, such as physicians, consumersʼ associations and patientsʼ advocates. Contacts take place via personal meetings, correspondence, conferences, position papers and so on.

The regional level is the focal point of pharmaceutical IP input and output in Europe. Most important is EFPIA, the primary representative of pharmaceutical MNCs. Having both national associations and pharmaceutical MNCs as members (allowing the latter to maintain a high level of dominance, inﬂuence and voice via direct membership), EFPIA plays a major role in initiating and facilitating the industryʼs IP objectives and strategies. To date, EFPIAʼs Intellectual Property Policy Committee (IPPC), consisting of IP corporate directors, its IP Priority

Action Teams (PATs), chaired by CEOs of pharmaceutical MNCs, and ad hoc work groups are responsible for the dominant portion of pharmaceutical IP objectives in Europe.

Moreover, EFPIAʼs importance as a key IP lobbying group also derives from the complex structure of European IP decision-making processes. Following the conclusion of TRIPs in 1994, the ECJ ruled that the European Community and its member states share joint competence with regard to multilateral IP trade-related negotiations and agreements. The manner in which international IP policy-making is taking place in the EU (formally via the 133 Committee) suggests that there is no single and transparent institution that functions as a focal point for IP inputs and policies. Instead, there are different national and regional channels that formally and practically affect the international IP objectives and strategies of the EU, the most important of which is probably the European Commission (DG Trade).

Given that bodies such as the Commission and the Council of the European Union are crucial to the European IPR decision-making process, both formally and practically, EFPIA is required to operate directly at the regional level in order to secure a more favourable environment for research-based companies.

Focusing on its target audience from the Commission (DG Trade and DG Internal Market), Council of the European Union, MEPs, regulatory authorities (EMEA), physicians, consumer groups and so on, EFPIAʼs IP lobbying activities are extensive, covering a wide range of issues including TRIPs, patents, data exclusivity and trademarks. Such activities, as was discussed in this chapter and will be elaborated on in Chapter 8, have proved highly effective over the past decade.

Internationally, the advanced pharmaceutical industry in Europe takes part in two important forums: IFPMA and INTERPAT. Representing the world- wide research-based pharmaceutical industry and manufacturers of prescription medicines in general (more than 50 national associations in 2000), IFPMA is much broader in scope, dealing with a wide range of issues, including IPRs. Speciﬁcally, the IFPMA, guided by the Intellectual Property Protection Coordination Committee, uses its special consultative position with institutions such as the World Bank, WTO and WIPO in order to promote awareness of the IP demands of pharmaceutical MNCs. It is also one of the industryʼs most dominant information providers regarding IPRs.

Incorporating only pharmaceutical MNCs as members, INTERPAT is a much more specialized forum focusing solely on IPRs. Its role as an international intra-industry forum for IP consultation and collective action is pivotal, as it allows companies to feed homogeneous input to their representatives at the various levels. INTERPAT also strives to resolve internal IP tensions arising from different legislative environments, such as the ʻﬁrst to inventʼ vs. ʻﬁrst to

ﬁleʼ dispute between the US and other developed economies (notably Europe and Japan).

Looking at inter-industry IP relations, pharmaceutical MNCs attach great importance to their ability to join other key industries in the ʻbattleʼ for increased global IP protection. At the regional level, the advanced pharmaceutical industry in Europe has two natural partners: CEFIC and UNICE. The former is the key representative of the European chemical industry. CEFICʼs IP objectives, as set by its High Level Steering Group (HLSG) for Intellectual Property, are similar, if not identical, to those of the advanced pharmaceutical industry. Like EFPIA it allows for direct company membership. In fact, some companies (Novartis, Bayer) are members of both EFPIA and CEFIC, which makes cooperation between the two bodies even more important.

UNICE is the umbrella organization of industry associations and federations in Europe. It receives input from the research-based pharmaceutical and chemical industries and attaches great importance to IPRs. UNICE uses its various IP working groups (intellectual property policy, patents, biotechnology, licences, trademarks and designs, copyrights, TRIPs and data protection), and advocates the creation of a strong IP environment, such as that provided by the TRIPs agreement.

In the international arena, European-based pharmaceutical MNCs cooperate with companies from other industries (for example: telecommunications and ﬁlm industries) via forums such as TABD and the US Intellectual Property Committee (IPC). Operating as a transatlantic business lobbying group, TABD reﬂects, to a large extent, the IP interests of the advanced pharmaceutical industry. TABD IP objectives, as formulated by its IPRs Issues Workgroup, include support for strong patent protection, 10-year period of data exclusivity and opposition to the international exhaustion of IPRs, as well as to the single community trademark.

European-based pharmaceutical MNCs, mostly via UNICE, also cooperate with the US IPC, an organization representing the IP demands of dominant companies across the board (IBM, Pﬁzer, Texas Instruments and so on). Joint position papers (also with Keidanren, Japan), and direct lobbying vis-à-vis institutions such as WIPO, WTO and the Commission, allow European-based pharmaceutical companies to take part in an additional, and sometimes expanded, global IPR front. This is presented as a graphical outline in Figures 5.1 and 5.2.

Overall, the vertical and horizontal IP organizational structure used by the advanced pharmaceutical industry in Europe enables it to operate in a highly efﬁcient and effective manner. This lobbying IP build-up is a key factor in the ability of European-based pharmaceutical MNCs to preserve, and even strengthen, the IP results that have emerged from the TRIPs agreement.

Figure 5.1 The IP organizational structure of the advanced pharmaceutical industry in Europe

Pugatch – Fig 5.1

Intellectual PropertyUS Committee IPRs Issues GroupTABD

Research Based Pharmaceutical MNCs

Corporate IPR Divisions

EFPIA Intellectual Property Policy Committee (IPC)

+ Priority Action Teams (PATs)

CEFIC High Level Steering

Group for IPRs (HSLG)

UNICE Working Groups

on IPRs

INTERPAT Work Groups

on IPRs

IFPMA Intellectual Property

Coordination Committee

International Chamber Commerce

(EU/US) US PhRMA

Intellectual PropertyABPI Committee (IPC)

Committees forVFA Patents and Trademarks

Figure 5.2 Industry–government IP interaction scheme Pugatch – Fig 5.2

Pharmaceutical MNCs

Federal Ministry of Economics and

Technology Federal

Ministry of Justice Department

of Health Department

of Trade and Industry

ABPI VFA

European Commission

DG Trade

European Commission

DG Internal Market EFPIA

Council of the European Union

Article 133 Committee Working Party

on IPRs

European Parliament

INTERPAT IFPMA

Intellectual PropertyWTO and Investment

Division

World Bank WIPO

TABD US IPC

Germany UK

NOTES

1. For simplicityʼs sake, the term ʻindustryʼ is sometimes used here instead of the term ʻadvanced pharmaceutical industry in Europeʼ. It may also refer to the ʻadvanced pharmaceutical industryʼ as a whole, particularly in section 5.2

2. EFPIA (1999d: 3–4)

3. GlaxoWellcomeʼs Chairman, Sir Richard Sykes (2000: 4); see also: Burns and Pilling (1999:

4. Chairman and Chief Executive Ofﬁcer of Merck & Co Inc., Raymond V. Gilmartin (1998)6) 5. VFA (1997: 17–18)

6. IFPMA (1997: 1)

7. EFPIA (1999b), see EFPIA website: http://www.efpia.org; Richardson (1999) 8. IFPMA (1989: 8)

9. EFPIA (June 2000b); EFPIA (1999d; 1999h); Leschly (1997: 51). These views were also expressed in the course of interviews with the corporate IP directors of SmithKline Beecham (16 November 1998), Lilly (28 October 1998) and Glaxo Wellcome (25 November 1998) 10. EFPIA (1999f)

11. Ibid., p. 6

12. Sally (1994: 161–92); Sally (1995: Chapter 4) 13. Sally (1994: 162–6)

14. Ibid., pp. 181–4

15. According to Sally, institutional domestic political economy ʻhighlights the structural linkages between the domains of “government”, “ﬁnance”, “industry” and “labour” in national political economiesʼ (1994: 164)

16. Ibid., p. 184

17. Most of the corporate IP directors interviewed for this study have such a background 18. Haas (1990: 52–60)

19. ABPI (1998: 1); see ABPI (2000a: 1–11)

20. For PPRS see: ABPI Press Release (2000c); ABPI Press Release (1999b); Greenwood and Ronit (1992: 74). For NICE see: ABPI Statement (1999a). For Industry Competitiveness see:

ABPI Press Release (2000b); ABPI Press Release, 2000c) 21. ABPI Press Release (2000b)

22. ABPI (1998: 11) 23. Ibid., p. 7

24. Ibid., pp. 21–36; ABPI (2000a: 34–5);

25. ABPI, 2000a, p. 34

26. Interviews with the Director of Law and Intellectual Property, ABPI (26 October 1998) and with the Director of European Patent Operations, Lilly, (28 October 1998)

27. Department of Trade and Industry, UK (1999) 28. ABPI (1998: 11)

29. Interview with the Manager of Global Intellectual Property, GlaxoWellcome (31 August 1999)

30. ABPI (1998: 29)

31. Parallel imports or parallel trade of patented pharmaceuticals is the importation of patented drugs from low price countries to high price countries without using the services of local patentees or licensees

32. Bolar exemption is discussed in depth in Chapter 8 33. ABPI (1998: 29)

34. VFA (2000b)

35. Interview with the Director of Pharmaceutical Law, Patent and Trademarks, VFA (31 May 2000); see also: Greenwood (1994c: 195–6); Koehler (1997); BPI (1998).

36. VFA (2000b: 35–43)

37. Ibid.; information was also provided by the Director of Pharmaceutical Law, Patents and Trademarks, VFA (31 May 2000); Manager of European Affairs, VFA (13 June 2000), and the Director of Patents Division, Boheringer-Ingelheim (13 June 2000)

38. Ibid.

39. Ibid.

40. Information provided by the Director of Pharmaceutical Law, Patents and Trademarks, VFA;