A senior Israeli health official has claimed that US Trade Representative (USTR) Ambassador Susan Schwab has retained Israel as a priority concern on her 2008 Special 301 Report list of intellectual property rights (IPR) violators because the Industry and Trade Ministry withheld important information from other ministers.

Israel first appeared on the USTR’s Priority Watch List of countries which “do not provide an adequate level of IPR protection or enforcement, or market access for persons relying on IP protection” in 2005, and government and industry officials are shocked at its repeat appearance on the new list because of the strenuous steps that were then taken by the Health and Justice Ministries to rectify the situation. These included amending Israel’s patent law to firm up controls over the licensing of generics and were believed to have met US requirements in full.

However, Health Ministry deputy director Yoel Lifschitz claims that Israel is back on the list because the Industry and Trade Ministry concealed from the Health and Justice Ministries requests from the USTR for clarification concerning research-based drugmakers’ claims that the Health Ministry had granted export licenses to generics firms based on product portfolios and IP which were owned by the innovative companies.

According to Mr Lifschitz, the licenses are simply assurances that the products have been made according to Good Manufacturing Practice (GMP) standards, and the Health and Justice Ministries have now informed Ambassador Schwab and her team of this fact.

The USTR report for this year does acknowledge that the US government is “encouraged by recent progress on certain IPR issues in Israel,” including the issue of regulations in 2007 and this year’s policy clarifications on the manufacture of pharmaceuticals for export. However, it remains “seriously concerned” at Israel’s “inadequate level of protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products, and Israel’s laws that adversely affect the term of pharmaceutical protection by effectively reducing the time granted to compensate for delays in obtaining regulatory approval of a drug.”

Mr Lifschitz believes that Industry and Trade Minister Eli Yishai will give in to US demands, which he says are being driven by intensive lobbying by the research-based industry, that Israel should extend the period during which generic copies may not be licensed following the registration of an innovative drug.

US drugmakers claim that Israel’s 2005 patent changes were made to benefit Teva, the world’s leading generic drugmaker and Israel’s biggest firm, while for its part Teva says the Special 301 listing is the result of US industry pressure, reports the Israeli business journal Globes. It quotes Aharon Schwartz, Teva’s vice president for strategic planning, as saying that Israel had reached agreement with the US trade officials for a further five-year period of protection for innovative drugs against generic competition in the Israeli market, provided that exports were not affected.

- As well as Israel, the USTR has placed eight other countries on this year’s Priority Watch List – China, Russia, Argentina, Chile, India, Pakistan, Thailand and Venezuela. The nine nations “will be the subject of particularly intense engagement through bilateral discussion during the coming year," says the Special 301 Report.