PHARMACEUTICAL INDUSTRY IN EUROPE
5.3.2 The National Level
National pharmaceutical associations are one of the most prominent channels through which pharmaceutical MNCs engage in IP collective action and rent- seeking activities. Representing the interests of research-based companies, including IPRs, national associations such as ABPI (UK), VFA (Germany) and SNIP (France), enable pharmaceutical MNCs to speak in one voice and to act in a unitary manner. Two examples may be given: ABPI and VFA.
The Association of the British Pharmaceutical Industry (ABPI)
ABPI is the main body bringing together prescription-based (branded and generic) pharmaceutical companies in the UK (more than 100 companies in 2000). Aiming to influence and shape policies affecting the pharmaceutical industry, ABPI operates via a network of vertical and horizontal relations, both at the national and international levels. The ABPI works closely with the Department of Health (DoH) and the Department of Trade and Industry (DTI) on
a wide range of pharmaceutical issues concerning the industry, the government and the National Health Service.19
Between 1978 and 2000 the ABPI was involved in issues such as the Pharmaceutical Price Regulation Scheme (PPRS), the DoH 1999 initiative concerning the establishment of a National Institute for Clinical Excellence (NICE), strategies aimed at improving industry competitiveness and so on.20 In April 2000 the ABPI, together with CEOs of pharmaceutical MNCs, became a member of the Pharmaceutical Industry Competitiveness Task Force, established by the DoH. Using four primary work groups, the task force focused on the industryʼs relationship with the British market, IPRs, bio-pharmaceuticals and R&D and medicines licensing in Europe.21 ABPIʼs industry-related activities also involve maintaining close and regular contacts with consumer groups, healthcare professionals, research councils, patientsʼ advocacy groups and MPs.22 It is also a member of the Confederation of British Industry (CBI), hence interacting with other industry associations on a wide range of issues including IPRs.
ABPI incorporates the area of IPRs, in both its strategic and operational levels. Strategy no. 3 of ABPI of 1998 – ensuring a fair commercial return for the pharmaceutical industry operating in the UK – explicitly refers to IPRs:
ʻGATT TRIPs Agreement has the capacity to protect Intellectual Property Rights internationally so as to provide the industry with a more confident base for its investment.ʼ23
At the operational level, ABPI has ten permanent committees dealing with a range of aspects relevant to the industry, one of which is the Intellectual Property Committee (IPC).24 Generally speaking, members of the ABPI-IPC are directors of corporate IP divisions of pharmaceutical companies. The IPC is chaired by one of its members. For example, between 1998 and 2000 the IPC was chaired by the Director of Corporate Intellectual Property of Glaxo Wellcome (today GlaxoSmithKline).25 Official IPC meetings take place five times a year, at which various IP issues (legislation, industry position, present and future IP activities) are discussed.26
The ABPI interacts primarily with the DTI and the Patents Office – the main national bodies responsible for the formulation of the UKʼs global IP position.27 Mechanisms through which the advanced pharmaceutical industry in the UK fed input to national agencies between 1997 and 2000 include:
1. Official meetings which took place twice a year between the ABPI, British Pharma Group, officers of the DTIʼs Trade Policy Section, the Patent Office (Intellectual Property Policy Directorate) and the DoH.
2. Periodical meetings between officers of the DTI, Patent Office, DoH and company representatives.
3. Correspondence, position papers, and personal meetings between ABPI staff and relevant government officials.
In 1998 ABPI targeted a core group of about 250 MPs by sending them explanatory materials, conducted personal meetings and invited MPs to attend professional conferences.28 One corporate IP director argued that the ABPI, as well as individual companies, dedicate special attention to ʻproblematicʼ MPs who do not see eye-to-eye with the industry.29
Influenced mostly by research-based companies, ABPIʼs international IP objectives are typical of the interests of the advanced pharmaceutical industry in Europe. For example, ABPI 1998 IP objectives focused on three issues:30 1. Fighting attempts to shorten the effective life of patent protection. In
particular, ABPI opposed the principle of international exhaustion of IPRs.
According to this principle, once an IP owner has sold his product in one country he has exhausted his right to prevent the resale of that product to other countries. In other words, international exhaustion is equal to parallel trade in IP-related products.31 ABPI also sought to prevent generic companies from conducting clinical tests on patented pharmaceutical products (so called Bolar exemptions).32
2. Setting a 10-year period of data exclusivity to the international IP system (the TRIPs agreement).
3. Preventing the use of generic names as a substitute for trademarks.33 As discussed later, ABPI objectives reflect, and derive from, the regional IP position of the advanced pharmaceutical industry in Europe.
Verband Forschender Arzneimittelhersteller (VFA)
Established in 1994 the VFA represents 37 research-based pharmaceutical MNCs in Germany (1999).34 Among its members are companies such as Merck, Bayer, GlaxoSmithKline and so on. Historically, the introduction of the German cost containment legislation (Gesundheitsstrukturgesetz – GSG) in January 1993 was one of the primary reasons for establishing the VFA by research- based companies. At the time, the seven major German-based pharmaceutical companies were dissatisfied with the performance of the Bundesverband der Pharmazeutischen Industrie (BPI), the veteran German pharmaceutical association.35 The research-based companies felt that a conflict of interests existed between themselves and other BPI members, particularly medium and small-sized companies.
Similarly to the ABPI, the VFA operates through various departments and committees which deal with a wide range of issues related to the industry.
At present, (1998–2000) the Department of Legal Affairs (specifically, the Division of Pharmaceutical Law, Patents and Trademarks) is the main unit
responsible for VFAʼs IP activities.36 The department is guided by the decisions of two sub-committees for IPRs, one on patents and one on trademarks, both of which are hierarchically located under the Committee for Legal Affairs (Rights).37 As with the ABPIʼs Intellectual Property Committee, members of the VFAʼs patent and trademark committees are usually directors of corporate IP divisions in pharmaceutical MNCs. For instance, during the period 1999 to 2000, the corporate directors of patents and trademarks divisions in Boehringer Ingellheim and Bayer AG chaired the sub-committees for patents and trademarks respectively.38 Members of the patent and trademarks committees meet at least three times a year.39
The VFAʼs IP objectives for the years 1999–2000 were as follows:
(1) implementation of EU Directive 98/44 on patents for biotechnological inventions; (2) fighting the international exhaustion of patent rights; (3) strengthening data exclusivity, that is placing a 10-year period of exclusivity;
(4) protecting IPRs in the context of EU enlargement, and (5) Safeguarding trademarks (branded products) vis-à-vis generic names.40
In carrying out its informational and lobbying activities, VFA maintains close contact with the Federal Ministries of Justice, Health, Economics and Technology, Economic Cooperation and Development and with the Ministry of Education and Research. With respect to IP-related matters, the Ministry of Justice is the primary contact (specifically, the Divisions of Commercial and Economic Law, International Law and Legal Development and the German Patent and Trademark Office). The Ministry of Justice coordinates and facilitates Germanyʼs position on IPRs and TRIPs, as well as representing Germany on the TRIPs Council. On issues concerning WTO the VFA also maintains contact with the Directorate-General of External Economic Policy and European Integration Policy (DG V) of the Ministry of Economics and Technology.
VFAʼs activities include correspondence and regular meetings with officials from the above ministries. However, industry and government meetings do not take place on a formal basis. Rather they occur when there is a need to discuss some specific issue, such as the industry position on gene patenting (TRIPs Article 27.3.b).41 One government official noted that the research- based pharmaceutical industry is one of the best informed industries on patent issues. In some cases, he noted, the industry provided government officials with information of which they are not aware or to which they do not have access.42 Finally, the VFA and its committee members also maintain close contacts with German and European MPs and MEPs.
Thus, while representing the interests of pharmaceutical MNCs, national pharmaceutical associations are guided by the same international IP inputs and formulate almost identical IP objectives. As a result, their IP structures, functions and operations are similar, regardless of the national environment in which they operate.
5.3.3 The Regional Level – the European Federation of