Novedades  News from the National Law Center for Inter-American Free Trade

Volume 5, Number 1 January 1998

by Alejandro Pérez Serrano

A major transformation in Mexico’s health sector is expected to occur due to last May’s amendment to the Mexican Health Law, which will open the market to generic pharmaceutical drugs. Under the terms of the amendment, physicians are now required to prescribe medicine by its generic and distinctive denomination.

The amendment has raised considerable concern and speculation among the various interested parties within Mexico’s health sector. The strongest opposition to the Health Law amendment has been voiced by the Mexican Association of Pharmaceutical Research (Asociación Mexicana de Industrias de Investigación Farmacéuticas, or AMIIF) on behalf of the research-based pharmaceutical industry. AMIIF has declared that its constituency does not oppose the establishment of a generic drug market in Mexico. Rather, AMIIF contends that the current legal framework does not provide the means for an adequate transition of the market to generic products.

Generic drugs are pharmaceutical products whose patents have expired and are designated by the names of their active ingredients instead of their brand names. Until recently, the generic drug market in Mexico has been extremely limited. Fewer than two dozen products are sold in Mexico under their generic names; they are destined primarily for consumption by the government and public health markets.

A key element of the generic drug industry’s expected expansion is the amendment made to article 225 of the Health Law, which states: “Medicines, for their use and commercialization, must be identified by their generic and distinctive denomination. The generic identification shall be mandatory. The regulatory provisions will determine the way in which the aforementioned denominations must be used in the prescription, publicity, labeling and any other reference.” Issuance of these regulatory provisions was imminent at press time.

According to AMIIF, amended article 225 may negatively affect the value of its member companies’ trademarks, in violation of NAFTA and other international agreements subscribed to by Mexico. AMIIF maintains that the Health Law’s main flaw is its failure to establish the means to guarantee the bioequivalence of the pharmaceutical product — which means that the generic product will act in the body in the same manner, and to the same degree, as the original product.

According to AMIIF, the law also lacks appropriate mechanisms to guarantee the origin and quality of the products. AMIIF believes these defects in the law may serve to open the market to the importation of low quality products, which could ultimately endanger consumers’ health and cause a serious public health problem.

AMIIF contends that physicians should have the option to freely prescribe the active substance and the brand name of the drug, as opposed to being obligated to prescribe medication in its generic form only. This position has been supported by more than 7,000 physicians in Mexico, who requested that the Health Ministry grant them the freedom to prescribe medicine in its generic or brand-name form.

The principal promoter of the Health Law amendment is the Mexican government, which has declared that the new law will help to reduce prices by making generic products more widely available. The reduction in pharmaceutical prices is a government priority because, due to the lack of purchasing power of a vast majority of the population, medicine has become prohibitively expensive for most people. As estimated by the National Academy of Medicine, prices of medicines increased 220% between 1994 and 1997.

After six months of intense negotiations by the pharmaceutical industry, the government and physicians, it appears that a compromise has been reached. Some industries and universities, together with the Health Ministry, have agreed to jointly analyze the bioequivalence and safety of 80 substances expected to enter into the generic market.

Alejandro Pérez Serrano (alejandro@natlaw.com) is a coordinator for the Center's Intellectual Property Project. The Center is conducting a study on the protection of pharmaceuticals and biotechnology in the NAFTA countries as well as a study on enforcement of IP rights in Mexico. An extended version of this article appeared in the Dec. 12 issue of the Inter-American Trade Report.

The Center, in cooperation with the law firm of Steel Hector & Davis, will hold an inter-American banking conference, to promote harmonization of banking practices throughout Latin America. The Banking Conference of the Americas will take place in New York City on June 23-25.

The conference will address banking practices and legislation that Latin American countries are considering adopting or reforming, such as document checking, letters of credit, powers of attorney, asset-based lending and electronic commercial registries.
Secured financing sessions will focus on recommendations that the Center has proposed in connection with efforts to modernize commercial lending secured by movable property in Mexico. These recommendations are intended to be presented this spring to the Mexican Congress for their adoption. It is expected that conference attendees will work to propose draft and adopt similar recommendations in their respective countries.

Banking operations sessions will address the following:
•UNCITRAL (United Nations Commission on International Trade Law) Convention on Bank Guarantees;
•the U.S. International Council on International Banking Standard Banking Practices for the Examination of Letter of Credit Documents;
•the Institute of International Banking Law and Practice International Standby Letters of Credit Practices Rules; and
•a presentation of the Center’s bankers’ acceptances study.

Speakers will include Dr. Gerold Herrmann, secretary general of UNCITRAL; Dan Taylor, president of the U.S. Council on International Banking; and James Byrne, director of the Institute of International Banking Law and Practice.

Sponsored evening receptions are scheduled for June 23 and 24. The registration fee is $500.00.

For more information or to request a registration form, please contact Constantino Flores (cflores@natlaw.com), the Center’s bankers’ acceptances project coordinator, at 520/623-3389.

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The Center will soon be releasing a new edition of its publications catalog, which will include the Center’s latest releases and mainstays.

Last year was a very productive one for the Center in the area of publications. In October the Center published a new Mexican labor law manual: Mexican and U.S. Labor Law & Practice: A Practical Guide for Maquilas and Other Businesses. Another major book release is expected this year. El Derecho de los Estados Unidos Respecto al Comercio y la Inversión  (to be published by Fondo de Cultura Económica) will be the first volume in a series on U.S commercial and investment law.

Several environmental studies were produced in 1997: The most recent one, “Chemical Emergency Service Capabilities & Constraints Along the U.S.- Mexico Border,” examines emergency services along the border corridor and analyzes laws and regulations relating to this issue. Also released was “U.S. & Mexican Hazardous Waste Site Regulations: A Comparison,” co-authored by Amy Mignella and Mariana Silveira.

 “Transformation of the Maquiladora Industry: The Driving Force Behind the Creation of a NAFTA Regional Economy” was authored by David Eaton, the Center’s maquiladora project coordinator. English and Spanish versions of the study were published.

Finally, Inter-American Trade Report, the Center’s newsletter complementing the InterAmsm Database, has been revised and expanded. The biweekly Report now features news summaries, analysis and commentary regarding issues and laws relating to commerce throughout Latin America.

The new publications catalog is expected to be released by February. To receive a free copy, please contact George Arden (garden@natlaw.com), 1-800-LAW-FIND.

Agenda

On Jan. 5-12, David Gantz, the Center’s associate director, will teach a one-unit winter session course at the University of Arizona College of Law. Entitled “Implementation of the North American Free Trade Agreement,” the course will provide a detailed view of NAFTA’s legal structure, and will focus on the interrelationship of the rules of origin, duty drawback and investment provisions of NAFTA, dispute settlement mechanisms and prospects for expansion of free trade in the hemisphere, with or without “fast-track.”

On Feb. 4-7, Dr.Boris Kozolchyk will participate in the international forum following the VIII Jornada Notarial Iberoamericana, a gathering of public notaries from throughout Latin America, to be held in Veracruz, Mexico. Dr. Kozolchyk will speak on guaranties in the area of personal properties secured financing (garantias mobiliarias) existing in the U.S and Canada.

Development Director Kevin O’Shea and Environment Project Coordinator Amy Mignella visited the Arizona Electric Power Cooperative (AEPC) headquarters in Benson, Arizona in late November. The two Center staff members were given an office tour by L.H. Hamilton, director of business development, to help plan for a potential project examining the regulation of international power transfers. During the visit, both staff  members were shown the company’s power management control room and were also given an afternoon tour of the Willcox coal-burning generation facility.

The Center greatly appreciates being afforded the time and attention of everyone at AEPC and hopes to work closely with company personnel on the international power project.

FEB. 4-7, VERACRUZ, MEX.
VIII Jornada
Notarial Iberoamericana
Public notaries from Latin America and Spain will gather to work on harmonization of legal documents pertaining to their respective fields. Contact: Landero y Coss Esquina Esteban Morales, (29) 32-11-40 or 32-10-45.

FEB. 14-17, MEXICO CITY
Border Trade Alliance International Conference
Mexico City will be the site of committee meetings and an international conference organized by the Border Trade Alliance. Contact: Jill Anderson, 602/250-2970; fax: 602/250-3360; http://www.bta.org.

MARCH 5-7, CIUDAD JUÁREZ
Meeting on Border Environment
A gathering for non-government organizations, community-based organizations, government, industry and scholars. Contact: Latin American Area Center, 520/626-8197; bordenv@u.arizona.edu; website: http://w3.arizona.edu/~laac/borconf.htm.

May 6-8, Florianópolis, SC, Brazil
VII South American Law International Meeting
The meeting will feature an analysis of the integration process occurring in South America. Call for papers. Deadline: March 10. Contact: UNISUL VII Meeting Secretariat, tel: (048) 621-3000; e-mail: unisul@unisul.rct-sc.br.

BRAZIL
(see http://www.natlaw.com/brazil/brazil.htm)
•Decreto 3708 Regula a Constituição de Sociedades por Quotas de Responsabilidade Limitada.  10-I-1919.
•Decreto 1.070 Regulamenta o ART.3 da Lei número 8.248, de 23 de outubro de 1991, que  Dispõe sobre Contratações de Bens e Serviços de Informática e Automação pela Administração Federal, nas Condições que Especifica e dá outras providências. 03-III-1994.
•Lei 6.803 Dispõe sobre as Diretrizes Básicas para o Zoneamento Industrial nas Áreas Críticas de Poluição, e dá outras Providências.  03-VII-1980.
•Decreto Lei 1.413 Controle da poluição do meio ambiente provocada por atividades industriais (Law Enforcing Pollution Control Measures through Zoning and Development Control).  14-VIII-1975.
•Lei 7. 347 Disciplina a Ação Civil Pública de Responsabilidade Por Danos Causados ao Meio Ambiente, ao Consumidor, a Bens e Direitos de Valor Artístico, Estético, Histórico, Turístico e Paisagístico (Vetado) e dá outras Providências.  25-VII-1985.
•Lei 9.434 Dispõe sobre a remoção de órgãos, tecidos e partes do corpo humano para fins de transplante e tratamento e dá outras providências.  05-II-1997.

ECUADOR
(see http://www.natlaw.com/ecuador/ecuador.htm)
•Reglamento General a la Ley General de Instituciones del Sistema Financiero. 04-VII-1994.
•Codificación de la Ley de Desarrollo Agrario.
•Ley de Fomento Tributario y Crediticio en favor de las Industrias que se Implanten en la Provincia de Esmeraldas.  06-VIII-1997.
•Ley de Cheques.  20-IX-1975.
•Ley de Concurso Preventivo.  30-IV-1997.
•Ley de Contratación Pública.
•Ley de Comercio Exterior e Inversiones.  22-V-1997.
•Ley de Derechos de Autor.  13-VIII-1976.

MEXICO
(see http://www.natlaw.com/mexico.htm)
•Decreto por el que se reforma el Reglamento de la Ley de Aguas Nacionales.  10-XII-1997.

MEXICO
"Mexico's Gas Import Duty: NAFTA may allow for accelerated reductions, but time is running out,"by George Baker.

BRAZIL
"Derivatives in Bankruptcy:Netting & Cherry Picking," by Levy Salomão Advogados.

COLOMBIA
"Tax Aspects of the Energy Sector," by Alfredo Lewin Figueroa.

FROM THE EDITOR
"Fiscal Reform Vote Imminent in Mexican Congress," by José Felipe García.
 

NOVEDADES
VOL. 5, NO.1

EDITOR
Virginie Drujon-Kippelen
CONTRIBUTING EDITOR
Lisa Button

NOVEDADES is published monthly by the National Law Center for Inter-American Free Trade, a non-profit research and educational corporation whose purpose is to facilitate trade and investment in the Western Hemisphere.

To have your name added or removed from the NOVEDADES mailing list, and/or to receive the newsletter by e-mail, please contact Virginie Drujon-Kippelen at the National Law Center for Inter-American Free Trade, 111 S. Church Ave., Suite 200, Tucson, AZ 85701-1629. Tel: (520) 622-1200; Fax: 520/622-0957; e-mail: vkippelen@natlaw.com. Check past issues of NOVEDADES at  http://www.natlaw.com/novedad.htm.