By Park Si-soo

An association of foreign drug companies said Thursday it will file a suit against the government with the World Trade Organization (WTO) if the National Assembly passes a pending medical bill.

It argues that passage of the bill will jeopardize patent holders’ operations.

The bill, proposed by Rep. Kim Yong-ig of the main opposition New Politics Alliance for Democracy, suggests pharmaceutical patent holders return 30 percent of their profits during the last nine months of their fiscal year if they lose a patent lawsuit with generic drug makers.

The penalty is set to be applied retrospectively and the National Health Insurance Service (NHIS) decides the amount of profit subject to return under the bill.

Most patent holders of innovative drugs that become primary targets for copying are non-Korean companies.

“The bill is extremely unfavorable to foreign drug makers. Thus it should be withdrawn,” Lee Sang-suk, vice chairman of the Korean Research-based Pharma Industry Association (KRPIA), representing 36 foreign drug companies here, told The Korea Times. “Two key problems with the bill are retrospective application and giving the NHIS the right to decide the amount of profit subject to return.”

The association had been in talks with the health ministry to revise the bill in a way that reduces its negative impact on foreign pharmaceutical firms here. But Lee did not elaborate, citing the sensitivity of the issue.

“We are trying to protect our members’ interest,” Lee said. “If it fails, however, we don’t rule out the possibility that we will take the case to the WTO.”

KRPIA Chairman Kim Oak-yeon, who leads Janssen Korea, seemed determined to block the bill’s passage.

“The bill contains elements that are against the Constitution. Therefore, it should be withdrawn,” Kim was quoted as saying in a report. “If the existing bill is passed without any requested change, we will take all measures available, including a legal fight, to nullify the done deal.”

The controversial bill was proposed as a back-up measure for the Seoul-Washington free trade agreement.

The Korean Intellectual Property Office said there are more than 1,800 pending cases that will turn against foreign patent holders if the bill is passed.

“A clear guideline should be drawn as early as possible,” said a patent attorney. “Otherwise, the market will be dragged into deeper and deeper chaos.”

SOURCE: The Korea Times