22 April 2008

Jordan Benefits from Intellectual Property Reforms

Pharmaceutical sector, economy thrives after reforms in Jordan

Jordan's Hikma is the first Arab pharmaceutical company to export one of its products to the U.S. market. (© Reuters)

(The following article is taken from the U.S. Department of State publication, Focus on Intellectual Property Rights.)

Jordan Benefits from Intellectual Property Reforms
By Jeanne Holden

Intellectual property rights (IPR) protection can be a powerful tool for economic growth. In Jordan, for example, recent intellectual property reforms have greatly benefited that country's economy in general and its pharmaceutical sector in particular. Jordan's pharmaceutical sector has gained new export markets and has started to engage in innovative research. New health sectors, such as contract clinical research, have emerged, and health-sector employment has grown.

Jordan joined the World Trade Organization (WTO) in 2000, becoming its 136th member. In 2001, it entered the U.S.-Jordan Free Trade Agreement (FTA), the first such agreement between the United States and an Arab trading partner. Through these agreements, the government of the Hashemite Kingdom of Jordan continued a process of comprehensive economic reforms that had been underway for about a decade. In fact, Jordan passed several new laws to improve protection of intellectual property rights prior to its accession to the WTO. "The government of Jordan has embarked on an aggressive program to transform the country from a dependence on foreign aid to success in the era of globalized trade. Trade agreements, legal reforms, and a strong IPR protection regime are all a part of that strategy," according to U.S. Embassy Charge d'Affaires David Hale in Amman, Jordan.

Laws consistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) now protect trade secrets, plant varieties, and semiconductor chip designs in Jordan. Registration of copyrights, patents, and trademarks is required. Copyrights are registered at the National Library and patents are registered with the Registrar of Patents and Trademarks, both part of Jordan's Ministry of Industry and Trade. Jordan has signed the Patent Cooperation Treaty and the protocol relating to the Madrid Agreement Concerning the Registration of Marks, but ratification was still pending in early 2005. Jordan has also acceded to the World Intellectual Property Organization (WIPO) treaties on copyrights (WCT) and performances and phonographs (WPPT).

Jordan's pharmaceutical industry abides by the new TRIPS-consistent patent law. In addition, with the signing of the U.S.-Jordan FTA, Jordan committed to even stronger enforcement of intellectual property rights, particularly in the pharmaceutical sector. According to Economic and Trade Officer Greg Lawless at the U.S. Embassy in Amman, intellectual property rights enforcement has improved in Jordan. "Effective enforcement mechanisms and legal procedures, still not completed, are undergoing further refinement," he said. Although significant challenges remain, Jordan's enforcement action against audio/video and software piracy is growing in quantity and improving its capability to target problem areas, he added.

According to the Pharmaceutical Manufacturers Association of America (PhRMA), the U.S.-Jordan FTA has made Jordan's market more appealing for pharmaceutical research and development, as well as for sales and licensing agreements. The benefits of the U.S.-Jordan FTA for industry include expanded data protection, elimination of exclusions from patentability for biotechnology inventions, and limitations on compulsory licensing.

In October 2001, PhRMA established an office in Amman to serve the Middle East and North Africa region. It was PhRMA's first presence in the region. Jordan's commitment to free trade and high-standard business practices were decisive factors in the decision, according to Susan Finston, PhRMA's associate vice president. "Jordan was the place where in less than 45 business days we could open an office, get credentials, and have all of the infrastructure and the legal permits that we needed for business," she said.

Many PhRMA members have established or expanded their commercial activities in Amman, including American Home Products, Astra-Zeneca, Sanofi-Aventis, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, Janssen-Cilag, Merck Sharp & Dohme, Novartis, Organon, Roche, Pfizer, and Schering-Plough.

Several PhRMA members are conducting clinical trials and entering into co-marketing and/or licensing agreements with Jordanian companies. According to the International Intellectual Property Institute (IIPI), a nonprofit economic development organization and think tank based in Washington, D.C., Bristol-Myers Squibb initiated a three-year, 5,000-patient cardiovascular risk factor study in Jordan in 2001. Moreover, PhRMA reports that, in 2004 alone, its member companies carried out 19 clinical trials in Jordan for conditions such as cancer, osteoporosis, diabetes, and cardiovascular disease.

Through clinical trials, it is hoped that more innovative pharmaceutical products will eventually be made available to Jordan's citizens. Rapid introduction of new products would also benefit Jordan's medical tourism sector (a term referring to people who travel to other regions or countries in search of health-care options). According to a recent IIPI report, medical tourism represents two-thirds of total tourism revenues in Jordan. The October 2004 report, Establishing Globally Competitive Pharmaceutical and Biotechnology Industries in Jordan, stressed that clinical trials are enhancing physician and hospital skills and, in the process, further enhancing economic growth in medical tourism. It said that a recent survey of patients identified medical expertise of physicians as the main reason medical tourists come to Jordan.

IIPI produced the report in partnership with the Achievement of Market Friendly Initiatives and Results (AMIR) Program, a project funded by the U.S. Agency for International Development (USAID). According to the U.S. Embassy in Amman, USAID has provided significant amounts of technical assistance to the Jordanian public and private sectors in support of intellectual property rights improvements during the past five years, including assistance in crafting laws and regulations.

At the request of the government of Jordan, USAID also is providing technical assistance to improve the regulatory environment for patents and trademarks. USAID continues to support Jordan's implementation and enforcement of the new intellectual property laws by working with the Jordan Intellectual Property Association (JIPA). JIPA is hosting training programs for the National Library, customs authorities, and the private sector.

"The adoption of stronger intellectual property protection is helping to transform Jordan into the leading knowledge economy in the region," the IIPI report concluded. Growth in Jordan's pharmaceutical and biomedical technology industries has been strong since the implementation of a stronger intellectual property regime, it says. Health-service contributions to the Jordanian gross domestic product (GDP) grew from 2.8 percent in 1997 to 3.5 percent in 2001, and health-services employment has grown 52 percent since 1997, the report said.

The international research-based pharmaceutical industry has greatly increased direct employment in Jordan since 2000, according to the IIPI report. Pfizer said it doubled the number of its local employees. Sanofi-Aventis and Novartis tripled their local labor forces, and Merck increased its employment in Jordan by 500 percent. The IIPI report said this growing multinational presence contributes added value to Jordan's society through activities such as marketing and distribution, sales-force training, and educating health-care professionals and the public. Merck, for example, held some 75 educational programs and academic meetings in Jordan in 2004.

The IIPI report found that Jordan's generic pharmaceutical companies also benefited from stronger intellectual property laws, with drug exports from local Jordanian firms growing 30 percent from 1999 to 2002. Jordan's exports in pharmaceuticals in 2004 will top U.S. $200 million, according to estimates provided by the U.S. Embassy in Amman. When combined with domestic output, total production by pharmaceutical firms easily will be over U.S. $300 million. "This represents a significant improvement over 2003, a year in which economic growth was affected by regional conflicts," Lawless said.

Jordan's experience suggests that intellectual property rights protection can be a powerful tool for economic growth. "Market size, population, geography: None of these is destiny," declared Susan Finston. "Destiny resides in the political will of governments to take up the important challenge of economic reform."

[Jeanne Holden is a free-lance writer with expertise in economics and IP issues. She worked as a writer-editor in the U.S. Information Agency for 17 years.]