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DE RUEHWL #0489/01 1860612
ZNR UUUUU ZZH
O 050612Z JUL 07
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4431
INFO RUEHBY/AMEMBASSY CANBERRA PRIORITY 4877
RUEHNZ/AMCONSUL AUCKLAND PRIORITY 1384
RUEHDN/AMCONSUL SYDNEY PRIORITY 0541
RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY 0157
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEAFCC/FCC WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 03 WELLINGTON 000489 
 
SIPDIS 
 
SIPDIS 
 
EAP/ANP, EB, INR, PACOM FOR J01E/J2/J233/J5/SJFHQ, PASS TO 
USTR, USPTO, COMMERCE FOR ITA 
 
E.O. 12958: N/A 
TAGS: ECON ECPS ETRD KIPR PREL NZ
SUBJECT: STATUS OF RECENT NEW ZEALAND INTELLECTUAL PROPERTY 
AND TELECOMMUNICATION DEVELOPMENTS 
 
REF: WELLINGTON 158 
 
¶1. (U) SUMMARY: New Zealand remains embroiled in a 
politically contentious battle over access to medicines and 
regulatory reform of its pharmaceutical industry. Recent 
legislation aimed at linking a proposed to create a joint 
Australia - New Zealand regulatory body (ANZTPA) along with 
stricter marketing regulations (e.g. labeling standards) for 
pharmaceuticals has failed in Parliament, for now. The 
national drug-funding agency, Pharmac, is currently facing a 
historic legal challenge in the High Court, which has the 
potential to loosen the agency's assessment criteria and 
review processes for determining which new drugs are made 
available to NZ consumers. Broader proposed reforms to bring 
copyrights, patents and trademarks legislation up to 
international standards continue to move slowly forward in 
Parliament. The telecommunications industry is feeling the 
pressure of the Ministry of Communication's attempts to 
advance its liberalization plan and increase market 
competition through unbundling telecommunication services. 
After years of delay, there is renewed hope that New 
Zealand's largest telecom provider, Telecom New Zealand, now 
under new management, will finally implement needed 
liberalization and modernization. End Summary 
 
Reform of Pharmaceuticals still politically contentious 
--------------------------------------------- ---------- 
 
¶2. (U) New Zealand had been working with Australia for more 
than 10 years to develop a joint regulatory scheme for 
therapeutic products and to set up a new trans-Tasman agency, 
in line with a trans-Tasman treaty signed in 2003, called the 
Australia New Zealand Therapeutic Products Authority 
(ANZTPA), to oversee the scheme. This proposed agency would 
have replaced Australia's Therapeutic Goods Administration 
and New Zealand's Medsafe. Expected to have been based in 
Canberra and Wellington, it was designed to be run by a 
managing director and governed by a board overseen by a 
council comprising the two countries' health ministers. It 
would have regulatory authority over all medicines, medical 
and surgical devices, and complementary/alternative 
medicines. This includes prescription and over-the-counter 
medicines, contact lenses, pacemakers, endoscopes, blood 
products and, most controversially, most herbal and 
traditional medicines, sunscreens, homeopathic remedies, 
aromatherapy, vitamins, minerals and other dietary 
supplements In a deliberate concession to NZ political 
sensitivities, it would not regulate- but not products 
prepared by traditional Maori healers for individual clients. 
 
¶3. (U) In mid June, the NZ's Parliamentary select committee 
charged with considering the Therapeutic Products and 
Medicines Bill had been unable to reach agreement, and 
therefore could not recommend the bill be passed. The select 
committee received 895 submissions, three quarters of which 
were from individuals, generally opposed to the regulation. 
Opponents have said regulation would impose unnecessarily 
prohibitive compliance costs that would squeeze out smaller 
producers, limiting consumer choice. Many felt the 
regulations were overly onerous for low-risk therapeutic 
products. The impasse left the bill in the hands of the 
Government to salvage. The bill squeaked through its first 
reading on a vote of 61 to 60, but the Government's ability 
to pass it has been in doubt since independent MPs Taito 
Phillip Field and Gordon Copeland said they would vote 
against it. As of the end of June, the bill effectively died 
after all attempts to find a compromise and reformulate the 
text failed. 
 
¶4. (U) Currently there is minimal regulation of medical 
devices and "complementary" (i.e., non-prescription) 
medicines in New Zealand, which some see as out of step with 
international best practices. The proposed bill also set out 
the direction regulations for advertising of therapeutic 
products in New Zealand. Direct to consumer advertising 
(DTCA) of prescription medicines would have been permitted, 
however under the scheme there would also have been controls 
to ensure consumers are provided with balanced and truthful 
information about the therapeutic health benefits of 
medicines so that they can make more informed choices. 
 
 
WELLINGTON 00000489  002 OF 003 
 
 
Court case could shape future access to medicines 
--------------------------------------------- ---- 
 
¶5. (U) For the first time in NZ, a citizen's group is 
challenging the GNZ's drug-funding agency, Pharmac, in the 
High Court. Seven breast cancer patients and a member of the 
Breast Cancer Aotearoa Coalition, filed documents in the High 
Court of New Zealand on June 29th against Pharmac's decision 
to restrict treatment to a 9-week course of therapy rather 
than funding a full 12 month course of Herceptin for women 
with early stage breast cancer. Cost of a year's treatment 
range between US$75,000 and US$90,000. 
 
¶6. (U) This case challenges Pharmac's approval processes and 
assessment criteria for drugs that are funded under the 
national health care system. It is indicative of increasing 
public dissatisfaction with the GNZ limiting access to 
pharmaceuticals through the single drug-funding agency. If 
successful the case would force a revision of Pharmac's 
approval processes and assessment criteria, potentially 
increasing market access for US companies. 
 
Copyright legislation still under scrutiny 
------------------------------------------ 
 
¶7. (U) The Copyright Amendment Bill currently remains under 
the consideration of the Parliamentary Commerce Select 
Committee. The bill amends the Copyright Act 1994 (the Act) 
intended to clarify the application of existing rights and 
update the Act to take account of changes in recent 
technology and international treaty obligations. The 
Committee has received an extension for ongoing 
deliberations, and it is not expected to return the bill to 
the parliament for a third and final reading before the end 
of July. 
 
Patent legislation expected to meet little resistance 
--------------------------------------------- -------- 
 
¶8. (U) The new draft patent bill has been remained on the 
parliamentary docket for some time now, but according to a 
source at the Ministry of Economic Development (MED), it will 
most likely be introduced over the next three months and no 
later than the end of this year. Modeled largely after 
current British patent law, the GNZ drafters had hoped to 
capture the UK's experience in conforming to its patent 
regime to EU standards. An unofficial preliminary draft 
version of the bill, called an "exposure draft," was 
initially released in 2005 and received only technical 
comments as to the form of the bill. These have been reviewed 
and applied as appropriate. Despite the bill's long gestation 
period, MED attorneys responsible for drafting feel that the 
bill is likely to pass with little additional modification. 
 
Trademarks - GNZ moving towards WIPO compliance 
--------------------------------------------- --- 
 
¶9. (U) MED is also currently amending existing trademark 
legislation to incorporate recent World Intellectual Property 
Organization (WIPO) treaties. These amendments are expected 
to bring GNZ in compliance with the recent WIPO trademark 
treaties otherwise referred to as the Madrid, Singapore and 
Nice treaties. Under the new legislation, investigation and 
enforcement provisions will be enhanced, and compliance 
responsibilities will be given to directly to MED, which will 
have the enhanced capacity to properly investigate claims and 
enforce regulations. MED expects to have the bill fully 
drafted by the end of 2007 and introduced to parliament by 
beginning of 2008. 
 
Telecommunications reform in flux 
--------------------------------- 
 
¶10. (U) In December 2006 the parliament passed a program of 
market reforms - The Telecommunications Amendment Act - and 
introduced a timetable for restructuring the state-owned 
telecommunications enterprise, Telecom NZ, which includes 
enhanced competition through unbundling local loop (LLU), 
local loop co-location and bitstream access. An industry-wide 
process to determine the terms for unbundling started in 
February 2007.  Though Telecom NZ remains on track to meet 
 
WELLINGTON 00000489  003 OF 003 
 
 
the government's timetable for unbundling, Telecom NZ 
executives did submit a request for an extension of their 
time frame for LLU. The Commerce Commission (ComCom - 
functions similar to FCC) rejected Telecom NZ's request. This 
action on the part of GNZ is seen by industry analysts as a 
sign that the GNZ wants no furthers delays and its 
relationship with Telecom NZ is no longer business as usual. 
 
¶11. (U) On 1 May 2007, the Ministry of Communications (a part 
of the Ministry of Economic Development - MED) invited 
comment on Telecom's proposal to separate wholesale and 
retail operations as it implements local loop unbundling (LLU 
terms open to public comment as of June 13). ComCom is 
expected to finish a first round draft of terms by end of 
July based on the industry submissions although some market 
analysts remain pessimistic about pace of liberalization. 
Some have commented that, despite MED's efforts at 
modernization, the lack of technological investment over the 
past 25 years remains a hurdle in upgrading current 
infrastructure. 
 
¶12. (U) Finally, Telecom NZ has just appointed United 
Kingdom's Telco executive Dr Paul Reynolds as its new chief 
executive to succeed Theresa Gattung. Reynolds is currently 
chief executive of BT (British Telecom) Wholesale, an arm of 
UK-based Telco and information technology firm - BT Group. 
Although Post is unsure of Reynolds' ultimate plans regarding 
Telecom NZ modernization, he does have a reputation as an 
agent of change while at BT. This has led to renewed hope in 
local government and industry that Telecom NZ will finally 
implement needed liberalization and modernization. 
 
 
¶13. (U) COMMENT: Although recent media reports reveal that 
the left-leaning Government and the small right-wing ACT 
Party have tacitly agreed to have an open dialogue regarding 
the Therapeutic Products and Medicines bill, Post believes it 
is unlikely to result in a political union to support the 
bill. (Note. If Labour secured ACT's two votes in Parliament 
it would have enough votes to pass the bill through 
Parliament. End Note.) It is likely that the ideological gulf 
between Labour and ACT on the issue of regulation - Labour is 
pro-regulation and ACT is fervently anti-regulation - would 
be a step too far for the two parties to team up and support 
this particular bill. Post believes that ACT's motivation was 
less to do with working with Labour to progress this 
particular bill and more to do with heightening the party's 
profile. END COMMENT. 
MCCORMICK