IMPORTANT TECHNICAL NOTICE: This week's story about pharmacuticals in Buenos Aires does not contain voice over translations. Stations wishing to provide such translations may wish to call their attention to the following script for help with such voice overs. We apologize for the error.

Argentina already has a farmaceutical patent law on the books, as do its neighbors Brazil and Uruguay. The law was passed with the approval of the US government in 1995, and includes a five-year amnesty on royalty payments that ends in October. But the US farmeceutical lobby has gotten more aggressive since then. US companies are afraid their Argentine counterparts won't start paying later this year, and that Argentine law won't act against these potential pirates. US drug makers also want to limit Argentina's access to patented drug recipes, so they can keep importing their products at current price levels, which are some of the highest in the world. In the past few years, Brazil and Uruguay -- part of the southern cone's trade bloc, Mercosur -- have added a clause to their patent laws that gives local companies the right to produce a drug on home soil, if a multinational refuses to do it. Argentina also wants to add this clause to prevent foreign drug companies from closing their south American labs and importing the drugs at high prices. Pablo Challu of the Argentine drug lobby says that's crazyS

Challu - "If the patent holder doesn't want to manufacture in argentina, he has that right. But, what if someone wants to manufacture in Argentina? As long as his rights are respected, that is, that the company is paying royaltiesS So, the clause is totally logical. Brazil has said that it won't touch that clause, which seems appropriate to us. We're just saying that to prevent companies moving to Brazil, that we have the same clause. Uruguay already added that clause and Paraguay is about to also."

Challu says the US wants to implement a law that would allow exclusive production rights to patent holders, with no obligation to share the recipe under any circumstancesS

Challu - "The only way to understand that this clause is conflictual, is to realize that they want to have a monpoly in the market! The sensibility, legitimacy and legality of these points is so clear that anyone who opposes them, wants to end up with a monopoly and charge the highest possible prices."

Mercosur countries are willing to give multinational companies their shot at producing the needed drugs, but insist on being able make them locally if the patent holder refuses. The US secretarty of Commerce, William Daley, came to Brazil and Argentina in February, and one if his main concerns was pressing the patent issue. The issue is so important to the US in the region that president Clinton nearly appointed a former farmaceutical lobbyist to fill the vacant ambassador seat in Buenos Aires late last year. During his visit, Daley defended the US positionS

Daley -- "Some people believe -- mistakenly believe in our opinion -- that a strong patent law or strong intellectual property protection somehow raises the price of farmaceuticals. The fact of the matter is, in a very competitive market, you have lower prices."

Members of the Argentine congress are trying to make changes in the patent law before the amnesty ends, in hopes of protecting local labs, and denying the US exclusive rights to drug manufacturing. Congressman, Juan Pablo Baylac says other countries that have followed the US formula have lost all their national labs.

Baylac --"Countries where they've started to enact such patent laws, as in Chile and Mexico, have seen a near disappearance of national iundustry, and many foreign laboratories have set up shop in other places with more market potential, with the objective of exporting medicine to Chile. In fact, in Argentina, there are many foreign and national labs who ended up exporting to Chile."

University of Buenos Aires law Professor Carlos Correa, who specializes in intellectual property rights, says patents were originally meant to do more than protect profits.

Correa - "Patents are used simply as an export monopoly. That is, they have the patent so that they can be the exclusive importer of the product. In their origin, patents have had a more important role than that, which is to promote the health industry and the transfer of technology. So this clause really has to be de-dramatized, and seen as a sort of balancing factor with other countries in the region, especially Brazil."

Local legislators and companies insist the US has lost perspective on the patent issue, and that the United States Trade representative, who asked the World Trade Organization to review the case, has become beholden to busniess interests, without concern to US foreign policy objectives, like promoting development in democratic countries. Argentine companies are sure the WTO will side with them, once the panel makes its decision by early August.

In Buenos Aires, I'm Travis Lea for Free Speech Radio News.

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