US-Andean FTA Facing Intellectual Property Hurdles

Throughout the Andean region, problems over patent protection, counterfeit medicines and the enforcement of copyright laws have been key recent factors slowing the market's overall performance. However, it is hoped that the forthcoming US-Andean Free Trade Agreement (FTA) could provide an opening for greater multinational investment, although the issue of patent protection in Ecuador, Bolivia, Peru and Colombia remains problematic.

Regarding Peru, US research-based drugmakers' association PhRMA has claimed that "due to Andean Community pressure, Peru continues to deny second-use patent protection for pharmaceuticals," and the issue has become a sticking point. Ahead of a ninth round of talks scheduled to take place this month, a joint statement by health ministers in each of the Andean community countries reiterated that protection of intellectual property is important for their countries, but that there is also a need to protect public health by enabling access to medicines. Nevertheless, the US government is likely to continue to push for the inclusion of intellectual property provisions in the Andean FTA, as well as lobbying for the elimination of Peru's duties on US exports in the FTA.

With or without the FTA, the Peruvian industry, which receives considerable support from the Peruvian authorities, is likely to see its volume share grow as a result of existing market conditions. Consumer demand for low-priced medicines and generics continues to grow, favouring those local companies that have signed licensing agreements with multinationals seeking entry to the regional market.