AmCham arrow Publications arrow Topics Archive arrow Topics Archive 2004 arrow Vol.34- No.4 arrow Issues: Keeping Data Confidential
Issues: Keeping Data Confidential PDF Print E-mail

Taiwan's unwillingness to enact a law protecting proprietary pharmaceutical data could lead to a WTO trade-dispute case.

 

For the world's major pharmaceutical-manufacturing companies, which must devote huge sums of money to research for developing new drugs, protection of the proprietary information resulting from that research is a vital necessity. To provide that protection effectively, the multinational manufacturers have argued that Taiwan must put in place a system of "data exclusivity." Such a system, by statute or regulation, would bar the unfair commercial use of confidential data for a specified period of time. In the United States the period is five years and in the European Union 10 years.

The manufacturers -- as well as international industry organizations and foreign governments acting in their support -- maintain that the requirement for such government action is more than a moral obligation. They point to the specific mention of pharmaceutical products in an international agreement under the World Trade Organization (WTO). Known as TRIPS (for Trade-Related Aspects of Intellectual Property Rights), the agreement requires WTO member countries to ensure that drug companies' confidential data is not leaked to competitors.

The American and European Chambers in Taipei, the U.S. government, and the European Union have all called on Taiwan to recognize its responsibility under TRIPS without delay. But under pressure from the domestic drug companies, the Bureau of Pharmaceutical Affairs under Taiwan's Department of Health has held to the position that Taiwan is not required to enact a data-exclusivity law as a matter of WTO compliance. It has continued to contend that the goal of data protection can be accomplished through existing laws, including the Trade Secrets Act and the Government Officials Service Act.

The industry and its supports have responded that those laws address only part of the TRIPS obligation -- the portion regarding protection of trade secrets -- but do not adequately define the government's responsibility to prevent unfair commercial use of data and to take action against violators when infringement occurs. The research-oriented pharmaceutical companies say that the current system has already been shown to be ineffective. They complain that data provided to government as part of their applications for approval of new drugs regularly winds up in the hands of the domestic pharmaceutical industry association, which circulates it among its members.

If not quickly resolved, the issue could wind up as a formal trade dispute against Taiwan in the WTO. The European Union has already been considering initiating such a case.
 
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