May I address the issues raised by Mr Adrian Zahra in "Congratulations to Malta Enterprise" (Classified, The Sunday Times, January 23), where he attempted to mangle my earlier article - "Malta Enterprise goes for the crumbs" (The Sunday Times, January 2).

Mr Zahra declares that "no one in his right mind could be against intellectual property rights". Yet the fact remains that Malta's patent climate is weak, and indeed McKenna and Galea had explicitly stated that "the patent climate in Malta is one of the major factors underpinning the location decisions of generic pharmaceuticals manufacturers".

Mr Zahra tries to cover up what McKenna and Galea explained so well in their Journal of Generic Medicines1 article, namely, that a weak patent climate is to the benefit of generic pharmaceutical manufacturers. This link between a weak patent climate and the benefits enjoyed by generic pharmaceutical manufacturers has also been explained at length in Access Euro Consulting's reports. 2

Mr Zahra sought to obfuscate this point and indeed went so far as to state that: "Fact 4: Patent expiry and generics manufacture is not strongly linked to patent protection and the signing of the European Patent Convention, as I have shown."

Not only has he in fact failed to demonstrate such a "fact" but he is contradicted both by Access Euro Consulting as well as by McKenna and Galea who have all written at length on the significant advantages that accrue to generic pharmaceutical manufacturers from Malta's weak patent climate.

Could it be that Mr Zahra is unaware that, according to Access Euro Consulting, the interests of the generic pharmaceutical manufacturing sector are contrary to Malta's accession to the European Patent Convention? Let me demonstrate:

"There appears to be a very interesting potential business in the development of generic pharmaceutical products, and efforts should be made not to damage this nascent business. In conclusion, therefore, we feel that on balance, Malta should postpone the ratification of the European Patent Convention (EPC) to the latest possible date." 3

"Our investigations revealed only one case where a major employer (200 people) has concerns about the effects of the patent environment. These concerns relate to a dispute between the EU and Canada that has been handled by the WTO Disputes Panel revolving around the extent to which it is possible to develop generic pharmaceutical products ahead of the expiry of patent protection." 4

So much for Fact 4! The link between patent protection and generic pharmaceutical manufacture was made clear years ago. It was therefore Mr Zahra who was not up to speed when he claimed that my article "Malta Enterprise goes for the crumbs" was an "attempt to bring together a number of quite unrelated issues surrounding the pharmaceutical industry."

Oh, they are quite related alright! I cannot fathom how Mr Zahra has been in the dark all these years. Did he read the Access Euro Consulting report, which I had referenced in my article? Did he at least read McKenna and Galea's paper in the Journal of Generic Medicines before rushing in boldly to make short shrift of my earlier article?

If Mr Zahra really stands four-square behind his "Fact 4", how about declaring straight out that he is personally in favour of Malta's accession to the EPC (European Patent Convention), or at least that the generic pharmaceutical manufacturers have nothing to lose from such accession?

Mr Zahra writes: "The true moral (unfortunately for small countries with small markets) is that investment goes where the market (and the money) is. Make the fiscal or business development package worthwhile and you will get investment - no more, no less."

First of all, from a strictly semantic point of view, the first sentence contradicts the second. For in the first sentence he states that investment is principally attracted to where the money is, i.e., where the market is large (and since small countries necessarily have small markets, they are unfortunately stricken and quite unable to thrive); whereas in the second he makes nothing of our small market and declares blithely that all it takes is a good fiscal or business development package.

May I share with Mr Zahra, the Economist Intelligence Unit's opinion on what attracts foreign R&D investment: "Apart from protection for intellectual property (IP), the quality of a country's education system is the most critical factor when companies evaluate countries as locations for R&D investment."3

(Of course, by R&D the Economist Intelligence Unit understands "that part of the business that is so integral to the creation of new products and innovative ideas",4 and not the sort of copycat duplication that masquerades as R&D within generic pharmaceutical companies)

This again proves my point that a strong and robust patent climate is essential if we are to attract serious R&D investment, be it from abroad, or, indeed, even from native sources.

The size of the local market is indeed also a factor in companies' decisions on where to locate R&D. However, since Malta has joined the EU on May 1, 2004, it is no longer bonded to its small domestic market, but rather our country is intrinsically part and parcel of the large EU single market.

Mr Zahra also writes: "There are other multinational brand-name corporations (non-pharmaceutical) present locally such as Microsoft, Coca Cola and Hewlett-Packard - 'weak' patent protection certainly doesn't seem to have bothered them much."

Of course that there are brand-name corporations present locally! I never claimed that there aren't or that there won't be. But they are not here in a R&D capacity! They are here merely to locate mundane production lines principally to satisfy our internal, domestic market, or else because our labour costs are relatively cheap! Is this all that we can offer to the highly educated workforce spilling out from our University?

My main point was (as I have indeed stated towards the conclusion of my article) that our weak patent climate coveted by generic pharmaceutical manufacturers is killing off "the country's business potential in all kinds of truly innovative business, not just in the pharmaceutical field, but right across the board in all sectors of manufacture".

Here I was talking about Malta's own native-born potential for innovative ideas that can take the global market by storm, if only we benefitted from a robust patent environment.

To clarify further, I had opined that brand-name manufacturers would have been a better choice than generic manufacturers, because the former do not suffocate innovation by lobbying to undermine the patent climate, as generic manufacturers have managed to do.

Does anybody realise that of all the EU member countries, Malta's patent climate is really the weakest? The concerns of generic pharmaceutical manufactures have swayed influential bodies like Malta Enterprise and Access Euro Consulting, so that our patent climate has been thoroughly undermined through our self-enforced exclusion from the EPC and PCT networks.

Mr Zahra writes: "His use of the term 'brand-name manufacturers' is incorrect since he actually means 'originator drug manufacturers'." I would agree with him that perhaps "originator drug manufacturers" is perhaps more intelligible. Yet, in international modern English, it is the term "brand-name manufacturers" that is used and that was why I used it.

For instance, the Blue Cross Blue Shield of Michigan clearly defines a "brand-name" drug as follows: "The brand name is the name under which the product is originally sold. A brand name is protected by a patent for up to 20 years. When the patent expires, other manufacturers can produce the generic equivalent of the brand and sell it under its generic, or chemical, name." 7

Thence the distinction in modern English between brand-name, and generic, drugs. Consequentially, it was Mr Zahra who was being out of touch with current pharmaceutical terminology, leading him to write, referring to me, "having thoroughly confused his issues (innovation, brand names and originators, generic pharmaceuticals and patents)". There was no confusion at all from my side, only a lack of knowledge on Mr Zahra's part.

Mr Zahra also writes: "Contrary to what [he] asserts, there is no 'open enmity' between brand-name and generic manufacturers." Really now! Mr Zahra continues to explain that sometimes brand-name and generic manufacturers co-operate between themselves and that these two categories sometimes overlap.

This is like saying that no enmity exists between our country's two principal political parties, because sometimes they reach consensus, and because they sometimes co-operate. Very politically correct, but it is a complete occlusion as far as I am concerned.

In a very prosaic turn, Mr Zahra likened my comparing of Ranbaxy against Pfizer, to "comparing Brussels sprouts with cabbages and rubbishing the former on the merits of their size!" May I remind him that both Ranbaxy and Pfizer are pharmaceutical manufacturers. My point (or moral) there was that "the most profitable pharmaceutical companies in the world are the patent-protected brand-name manufacturers, not the generic manufacturers who simply copy pharmaceutical products."

And this point is completely true. It was rather Mr Zahra who misled readers by intimating that this morale is not the case! A look at the world's topmost 20 pharmaceutical firms (as ranked in terms of their worldwide sales) would amply suffice to show the industrial dominance that patent-protected firms enjoy even in the pharmaceutical sector.

Mr Zahra has correctly surmised that I consider it imperative that Malta accedes to the EPC without any further waste of time. Indeed, by the term "strengthening of intellectual property rights in Malta", what I had in mind was accession by Malta to both the EPC and PCT, as soon as possible.

Nowhere did I suggest that patents should not expire eventually, so Mr Zahra did not need to labour that point so much. Mr Zahra also made the argument that if it were not for "the threat of generic competition", the prices of medicines may spiral out of control.

Mr Zahra can rest assured that accession to the EPC and/or PCT will not remove such a "threat of generic competition" as a safeguard against the hypothetical possibility that national health becomes unaffordable due to the high cost of medicines. The Doha Agreement reached by the WTO's General Council on August 30, 2003, makes sure of that.

In conclusion, I strongly urge Mr Zahra that in future he takes my references seriously and actually follow them up before rushing to claim that "Mr Gatt saw fit to mix fact, half-truths, misconceptions together". If he had deigned to inform himself, as I have done, through the references that I had listed, he would have known that my article was in fact backed up by very solid, and authoritative sources and would possibly have refrained from speaking ill of them in his conclusion.

References

1. "The Manufacture of Generic Pharmaceuticals in Malta : A First Step", published in the Journal of Generic Medicines, Vol. 2, no. 1 (October 2004), pages 63-70 .

2. These reports can be read online at the MIC Websiste at www.mic.org.mt/Malta-EU/studies/studies_mes.htm

3. "Full report" document (by Access Euro Consulting), section 3.3, page 8.

4. Ibid., Chapter 11, page 55.

5. "Scattering the seeds of invention: The globalisation of research and development", a white paper issued by The Economist Intelligence Unit, September 2004, under the sponsorship of the Scottish Development International, page 3.

6. Ibid., page 3.

7. www.bcbsm.com/faqs