VZCZCXYZ0000
RR RUEHWEB

DE RUEHKV #1056/01 1540752
ZNR UUUUU ZZH
R 020752Z JUN 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC 5713
INFO RUEAWJA/DEPT OF JUSTICE WASHDC
RUCPDOC/USDOC WASHDC
RUEHSF/AMEMBASSY SOFIA 0035

UNCLAS KYIV 001056 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/UMB AND EB/TPP/IPE 
STATE PLEASE PASS TO USTR FOR BURKHEAD/GROVES 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK 
USDOC FOR CLDP 
SOFIA FOR MLAMBERTI 
 
E.O. 12958: DECL: N/A 
TAGS: ETRD KIPR ECON UP
SUBJECT: UKRAINE CONTINUES DIALOGUE WITH PHARMACEUTICAL 
INDUSTRY ON IPR ISSUES 
 
REFS: A) KYIV 456 
 
      B) KYIV 110 
      C) 2007 KYIV 2865 
      D) 2007 KYIV 1780 
      E) 2007 KYIV 1452 
 
Treat as Sensitive but Unclassified.  Not for Internet. 
 
¶1. (SBU) Summary: The GOU held a public roundtable on May 
28 to discuss IPR enforcement issues of importance to the 
pharmaceutical industry.  GOU reps said they were now 
implementing the data exclusivity provisions agreed to as 
part of Ukraine's accession to the WTO, but admitted that 
generic drugs were sometimes still able to improperly 
receive market approval.  There was some dispute over the 
role that executive branch agencies should be playing in 
regulating pharmaceutical approvals as opposed to the 
judiciary, but the GOU committed to do what it could to 
bolster enforcement.  End Summary. 
 
¶2. (U) EconOff attended a May 28 roundtable entitled "Legal 
Enforcement and Protection of Medicines," hosted by the 
State Department of Intellectual Property (SDIP), Ukraine's 
lead agency for intellectual property rights (IPR) issues. 
The roundtable brought together officials from SDIP, the 
Ministry of Health, and the State Pharmacological Center -- 
responsible for registering new pharmaceutical drugs (i.e. 
granting market approval) -- with representatives of the 
pharmaceutical industry, mostly local patent lawyers 
employed by large international firms.  The event was a 
follow-up to a November 2007 meeting of the U.S.-Ukraine 
Enforcement Cooperation Group (ECG) that focused on similar 
issues (ref C). 
 
Enforcing WTO Rules... 
---------------------- 
 
¶3. (U) Volodymyr Dmytryshyn, SDIP Deputy Chairman, 
emphasized the importance of improving IPR enforcement in 
the pharmaceutical sector in order to both protect the 
rights of companies operating in Ukraine and to ensure that 
Ukrainians have access to safe, quality medicines. 
Dmytryshyn and Olga Baula, 1st Deputy Chairperson of the 
State Pharmacological Center, noted Ukraine's accession to 
the WTO on May 16 and said that the GOU was now enforcing 
the five-year data exclusivity provisions agreed to as part 
of WTO accession negotiations. 
 
¶4. (SBU) Baula said that the State Pharmacological Center 
was doing its best to make its drug registration system as 
transparent as possible, noting that new applications were 
now publicly available on the internet.  (Note: Poor access 
to applications had previously been a primary complaint of 
pharmaceutical companies.  End note.)  She added that the 
State Pharmacological Center was trying to develop a cadre 
of its own experts, recognizing that the current situation, 
with some of its staff working part-time in the private 
sector, created the potential for a conflict of interests. 
 
... But a Data Exclusivity Loophole Remains 
------------------------------------------- 
 
¶5. (U) Baula admitted, however, that a problem remained in 
the enforcement of the data exclusivity provisions.  She 
said that generic producers were occasionally beating the 
original manufacturer to the Ukrainian market with 
applications to register their drugs.  In such cases, said 
Baula, with no application from the innovative drug 
producer on file, the generic would be registered even 
though its clinical test data would presumably come from a 
third party, and the five-year data exclusivity period 
could not be enforced.  Michael Doubinsky, a well-respected 
patent attorney who often advises the GOU, noted that other 
countries, including Russia, had tackled such problems and 
argued that Ukraine needed to make systematic changes to 
ensure that a generic drug could not get registered by the 
State Pharmacological Center before the original. 
 
Patent Linkage Also Needs Strengthening 
--------------------------------------- 
 
¶6. (U) Doubinsky added that, despite the improvements made 
as part of WTO accession, there was still a gap between 
 
patent applications and pharmaceutical registration rules. 
Too often a generic drug was able to improperly receive 
market approval when the patent of the original producer 
was still valid, said Doubinsky.  Baula responded that the 
State Pharmacological Center was not responsible for 
verifying the validity of patents, a task that fell to SDIP 
and the courts, before registering a drug. 
 
Reliance on Courts? 
------------------- 
 
¶7. (U) Doubinsky argued that relying on court litigation 
was not an efficient strategy, as patent cases often lasted 
as long as three years, and companies were loath to file a 
case against the State Pharmacological Center for fear of 
upsetting the principal government regulator.  Iryna 
Vasylenko, Head of SDIP's Legal Division, noted that courts 
officially had up to 1,460 days to rule on a patent case 
and that some judges still lacked the necessary expertise. 
 
¶8. (SBU) One local patent attorney criticized the USG for 
pressuring GOU agencies to defend the IP rights of U.S. 
pharmaceutical companies; such companies, he said, should 
use the Ukrainian court system.  EconOff responded that, 
while the USG was calling on Ukraine to improve protection 
of IP rights, it was up to Ukraine to decide how best to do 
so.  EconOff recognized that courts should play an 
important, although not solitary, role. 
 
Comment: Signs of Progress 
-------------------------- 
 
¶9. (U) That the GOU is now initiating public discussions 
with industry to explore how to improve IPR enforcement 
testifies to Ukraine's real progress over the last few 
years.  Ukraine's system of granting market access to 
pharmaceutical drugs remains imperfect, but the GOU appears 
serious about improving it.  Dmytryshyn, for example, said 
in his closing statements that the GOU recognized "the gap" 
between patent approvals and pharmaceutical registration 
and would work to eliminate it. 
 
¶10. (SBU) Contrary to the criticism directed at the USG, 
Post has long recognized the critical role of the courts in 
bolstering IPR enforcement and has targeted much of its IPR 
technical assistance on training Ukrainian judges (refs A- 
B, D-E).  Unfortunately, however, defending IP rights in 
Ukrainian courts remains costly, lengthy, and risky, as 
many judges lack the expertise needed to properly 
adjudicate IPR cases, and as corruption in the courts is 
still widespread.  Post believes that the path to enhanced 
IPR enforcement lies in improving the performance of both 
the relevant GOU agencies and the courts. 
 
TAYLOR