ARGENTINA-UNITED STATES: Pharmaceutical Patenting Mars Idyll

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Feb 29 1996 (IPS) - Relations between Argentina and the United States could not be better said US Secretary of State Warren Christopher on a visit to Buenos Aires, but the issue of medical patents could be just the thing to upset the apple cart.

The sunny outlook is clouded by Argentine delays in imposing royalty payments to United States pharmaceutical companies, who estimate they are losing 540 million dollars per year in unpaid dues from foreign drug producers.

The Argentine pharmaceutical industry has a three billion dollar turn over each year, and more than 50 percent of the market is controlled by national factories who copy formulas and sell their produce cheaper than the imported brand names.

Government, Congress and even the local laboratories agree the law should exist and that the inventors deserve economic recognition, but they disagree on how and how soon the rules should be imposed.

Many fear the foundations are being set for a monopoly.

Pharmaceutical patenting is the only point of the bilateral relationship that the Executive Power of President Carlos Menem has not been able to push past Congress.

Christopher’s two day visit to Buenos Aires formed part of a one week tour of Latin America and the Caribbean, started Sunday 25, ther first such high level mission in Clinton’s four years in power.

Clinton’s disinterest in Latin America was criticised to Christopher in El Salvador – where he met four Central American presidents – Chile and Argentina, and a similar tone is likely to greet him in Brazil and Trinidad and Tobago.

Several regional capitals have stated the present journey is not based on interest for the region, but was planned with an eye on hispanic votes for Clinton’s possible reelection in November.

But in Buenos Aires everything has fairly rolled along, apart from the quibble over patents.

Christopher praised the leadership and economic reforms, stressing the “closer than ever association” between the two countries, granting Argentines the privalege of visa-free entry to the United States – the first Latin American nation to get such treatment.

However, sources in the foreign ministry told IPS the issue which dominated Christoper’s meetings with Menem, Foreign Minister Guido Di Tella and Minister of Economy Domingo Cavallo, was that of medical patenting.

Though the pretext for Christopher’s visit to Buenos Aires was US support for Argentine membership of the Organisation of Economic Trade and Development (OECD), the risk of sanctions will hang over bilateral trade until the nation brings in a law to suit Washington’s wishes.

On the day Christopher arrived, a group of Argentine deputies flew to Washington to defend the patent law approved by both chambers, but as yet unreglamented, to official and private organisms.

The legislators told Undersectretary of Latin American Affairs Ed Casey and Peter Allgeier of the Trade Secretary’s office they were not prepared to change the law as they believe it fits in with World Trade Organisation (WTO) norms.

The most controversial points of the law were how soon royalties would have to be paid and the obligatory entry of foreign companies to the nation.

Argentina’s ruling suggested a five year period to allow local laboratories to prepare for royalty payments, though the WTO authorises up to 10 years and Congress had initially suggested eight.

US embassy resistence and the presidential veto pushed this down to five, though the Northern drug producers want immediate payments.

The Argentine legislators said there was no chance of them retreating further on this point, adding they may insist on the vetoed recommendation that the foreign companies be obliged to set up factories in the country rather than selling their produce as imports.

“If Brazil makes advances on this issue, we must do the same,” governing party deputy Humberto Roggero told Allgeier, a brusque comment which may well have repercussions on the patent dialogue between the two nations.