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Biotech / Medical : Eli Lilly -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (220)	5/15/1998 8:17:00 PM
From: Anthony Wong	Respond to of 642

LiLLY Warns China's Failure To Protect Prozac Could Hurt Trade May 15, 1998 9:41 AM By Ian Johnson, Staff Reporter BEIJING -(Dow Jones)- Speaking for the first time since filing a lawsuit in Chinese court to enforce patent protection of its Prozac antidepressant drug, pharmaceutical giant Eli Lilly & Co. told Dow Jones Friday that failure to protect Prozac could hurt foreign investment in China. Lilly's (LLY) decision to go public with its dispute also comes just weeks before President Clinton is due to arrive in China to discuss, among other issues, growing trade problems between China and the U.S. Lilly China operations head Richard Smith said China isn't living up to treaty obligations it signed with the U.S. and the European Union, and unless it changes its way, foreign investors "will be very hesitant to invest" there. Smith said the company's high-profile legal challenge came after U.S. government lobbying efforts had failed to convince the State Pharmaceutical Administration of China to protect Prozac's patent and close down Chinese generic manufacturers of the popular drug. The U.S. Trade Representative and President Clinton have brought up the matter repeatedly with Chinese officials. "The SPAC was not going to change its mind, so we decided to pursue legal action," he said. Other companies have been wary of antagonizing Chinese authorities by filing lawsuits against unfavorable rulings, but Smith said that since the first lawsuit - which Lilly lost - was filed two years ago, the authority has since protected other of the drug maker's products. The sticking point with Prozac is differing interpretations of regulations governing Chinese intellectual-property rights, which are based on a memorandum of understanding between China and the U.S. and EU. The memorandum, and the subsequent regulations, require a drug to enjoy "exclusivity" in its home country, which means some sort of patent or protection, for it to be protected by Chinese law. The Chinese pharmaceutical authority has argued that Prozac doesn't meet the requirements to be protected by the regulations. After the Chinese lower court ruled last year in favor of the government, Lilly filed its current suit in intermediate court. The court held its hearing Thursday and will rule in six weeks. If Lilly loses the case it will probably appeal to the Chinese supreme court, Smith said. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.