[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[Extensions of Remarks]
[Pages 7208-7209]
[From the U.S. Government Publishing Office, www.gpo.gov]




                RESPONSE TO 2006 USTR SPECIAL 301 REPORT

                                 ______
                                 

                          HON. HENRY A. WAXMAN

                             of california

                    in the house of representatives

                         Thursday, May 4, 2006

  Mr. WAXMAN. Mr. Speaker, last week the USTR issued its annual Special 
301 report evaluating intellectual property laws in foreign countries. 
During this year's review process, I wrote to Ambassador Portman along 
with a bipartisan group of my colleagues raising concern about the 
agency's consideration of complaints by the pharmaceutical industry 
against Israel. PhRMA had called on USTR to elevate Israel to the worst 
designation of ``Priority Foreign Country'' and work to block Israel's 
membership in the OECD because of pharmaceutical IP issues.
  I am glad to see that the USTR chose not to take these drastic steps. 
Such action would have been unwarranted and damaging to an important 
ally. However, I am deeply disappointed that Israel did remain on the 
``Priority Watch List.'' Israel has worked in steadfast consultation 
with the U.S. to adopt broader protections for pharmaceutical products. 
Israeli lawmakers, under the leadership of then-Minister of Trade Ehud 
Olmert, passed legislation that strikes a balance between the need to 
provide strong protections for innovators and timely access to 
affordable treatment for the Israeli public.
  Similar to a U.S. law, commonly referred to as Hatch-Waxman, the 
Israeli system provides patent extensions for delays in the drug 
approval process as well as 5 years of exclusive marketing rights for 
new drugs that enter the market. This is far beyond the level of 
protection required by the World Trade Organization agreement on Trade 
Related Aspects of Intellectual Property (TRIPS). Yet, by keeping 
Israel on the ``Priority Watch List,'' the Special 301 report 
criticizes Israel just as harshly as major IP offenders like China and 
Russia, and more harshly than many other countries with weaker IP 
regimes.
  These inconsistencies raise serious questions about how the agency 
makes its designations. I am particularly concerned about

[[Page 7209]]

the report's inordinate emphasis on the protection of pharmaceutical 
test data submitted for the approval of new drugs. Of the 48 countries 
named in the report, 28 were criticized for inadequate test data 
protection nearly double those cited on this issue in 2001.
  USTR has insisted that the TRIPS ``data protection'' requirement be 
strictly interpreted like a Hatch-Waxman provision that mandates a 5-
year period during which a generic copy cannot be approved. As one of 
the principal authors of that legislation, I find this position at best 
misguided and at worst immoral.
  First, nothing in TRIPS requires any period of ``data protection,'' 
much less 5 years. Article 39.3 of TRIPS only requires protection from 
``unfair commercial use'' and there is certainly no global consensus 
about what that actually means. Second, the U.S. system is not a ``one-
size-fits-all'' solution that is appropriate for all countries. For 
many poor countries, adoption of five years of ``data protection'' will 
deprive their citizens of any and all access to life-saving drugs.
  When Special 301 Report designations become arbitrary and excessive, 
they lose their credibility and effectiveness. It is time for Congress 
to examine the process by which the USTR reviews intellectual property 
protection laws, weighs submissions from industry and related advisory 
committees, and ultimately, how it determines the status of the foreign 
countries in its annual report.

                          ____________________