PARAGUAY'S NEW PATENT LAW CHEERS LOCAL FIRMS

The new Paraguayan patent law, passed in April 2005, appears to be impacting drug price levels despite the measure's warm welcome by local drug manufacturers. Meanwhile, prices for many leading drugs have remained frozen for as long as five years.

Paraguay remains a major Latin American hub for copy drugs, mainly due to the country's strategic location and very weak intellectual property rights. In 2002, Paraguay postponed the implementation of TRIPS-compliant patent law until 2005. US trade association PhRMA also reports that a December 2004 decree, known as Resolution 577, effectively revoked all prior pharmaceutical patents.

Paraguay's medicines policy is focused on providing low-cost medicines. Accordingly, the patent law allows local manufacturers to use local health authorities to block patent applications. One article of the new amendment obliges drugmakers to publish patent awards in national newspapers, allowing local companies plenty of opportunities to lobby for patents to be overturned. With a lack of data protection safeguards, many research-based firms subsequently find themselves in a vulnerable position.

Meanwhile, local companies account for 70% of the country's US$100mn market, which is reportedly growing at 15% per year. Despite the flexibility of the new patent law, however, drug prices have soared in recent months. Nevertheless, as the government's Price Fixing Committee is comprised of the health regulator, representatives of local manufacturers and drug retailers, Paraguay's drug manufacturing oligopoly appears set to remain entrenched.