Identifier
Created
Classification
Origin
07LJUBLJANA103
2007-02-21 13:46:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ljubljana
Cable title:  

SLOVENIA: 2007 SPECIAL 301 REVIEW - RECOMMENDATION

Tags:  ECON ETRD KIPR SI 
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VZCZCXRO3373
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHLJ #0103/01 0521346
ZNR UUUUU ZZH
P 211346Z FEB 07
FM AMEMBASSY LJUBLJANA
TO RUEHC/SECSTATE WASHDC PRIORITY 5566
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 03 LJUBLJANA 000103 

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EUR/NCE (SSADLE),EB/TPP/IPE (JBOGER)
STATE PLEASE PASS TO USTR LERRION

E.O. 12958: N/A
TAGS: ECON ETRD KIPR SI
SUBJECT: SLOVENIA: 2007 SPECIAL 301 REVIEW - RECOMMENDATION
AGAINST INCLUSION ON WATCHLIST

REF: STATE 07944

UNCLAS SECTION 01 OF 03 LJUBLJANA 000103

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EUR/NCE (SSADLE),EB/TPP/IPE (JBOGER)
STATE PLEASE PASS TO USTR LERRION

E.O. 12958: N/A
TAGS: ECON ETRD KIPR SI
SUBJECT: SLOVENIA: 2007 SPECIAL 301 REVIEW - RECOMMENDATION
AGAINST INCLUSION ON WATCHLIST

REF: STATE 07944


1. (SBU) SUMMARY: As of 2006, Slovenian legislation on
intellectual property rights is fully aligned with EU
legislation, TRIPS and ratified international treaties, and
in practice, U.S. pharmaceutical companies have access to the
Slovene market. Recent efforts by the Government of Slovenia
(GOS) to balance the health-care budget have posed some
problems for "innovative" drug producers. But it appears that
the long-term impact of the legislation will be to expand the
availability of drugs, including innovative drugs, to the
Slovene public. Post is encouraged by the Ministry of
Health's (MOH) recent incorporation of PhRMA and Post's
pricing concerns in a recent regulation. Post believes GOS
cooperation will continue to increase, and that Slovenia does
not warrant inclusion on the Special 301 Watch List. END
SUMMARY.


2. (U) INTELLECTUAL PROPERTY: Slovenia has in place necessary
legal protections for intellectual property rights and
provides adequate protection according to TRIPS standards.
Slovenian legislation provides for different legal measures
within the framework of civil, criminal and administrative
law, which may be used by holders of intellectual property
rights to defend their interests. The Industrial Property
Act(IPA),the Act on Litigation Procedure (ALP) and the Act
on Enforcement of Judgments in Civil Matters and Insurance
(AEJCMI) are generally used in civil litigation and for cases
involving infringement of industrial property rights. In 2007
SIPO revamped its website so that both domestic and foreign
parties can access the most current information regarding
intellectual property issues.


3. (U) COURT PROCEDURES: PhRMA's continued complaint about
slow court procedures in Slovenia is well-founded but does
not reflect the progress that Slovenia has made in the past
few years. In December 2005, the Ministry Of Justice (MOJ)
announced the Lukenda Project, a plan to eliminate judicial
backlog by 2010. The plan called for the hiring of 500
auxiliary court staff, upgrading courtroom technology and
streamlining small claims cases. Results of the Lukenda
project have been encouraging -- increased numbers of cases

have been resolved, average time of proceedings has already
been reduced significantly, and all small claims cases filed
before December 2005 have been adjudicated. Over the next
five years, the program will cut the average processing time
of a case from 18 months to 6 months. Additionally, a number
of alternative dispute resolution mechanisms have been
introduced in order to alleviate pressure on the court
system. The Slovenian Intellectual Property Office (SIPO)
acknowledges deficiencies in Slovenia's legal system, but
denies that current legislation favors domestic
(pharmaceutical or other) industry.


4. (U) To support the efforts of the GOS, Post has funded and
coordinated several training programs for Slovene judges,
prosecutors, and police, with several more to take place in

2007. Post believes that providing US expertise is helping to
create a more efficient judicial system, which could help
improve the speed of case adjudication in the courts.


5. (U) FREE CHOICE OF EXPERTS: If expert testimony is deemed
necessary, the court may designate one or more experts,
generally after consultation with both parties. The court
generally designates a "court expert" - someone already
deemed by the court to have qualifications necessary to
comment authoritatively on the subject of the case - and will
pay the expenses of this expert. It is also possible for the
court to designate a person or institution which is not
considered a "court expert," but an expert in the subject
nonetheless, including a foreign person or institution.
Additionally, experts may be proposed by the parties, but the
costs associated with the proposed expert must be covered by
the proposing party.


6. (U) PIPELINE PROTECTION: Pipeline protection is not a
TRIPS obligation. Slovenia introduced patent protection on
January 1, 1993. Prior to this, there was no protection
either in Slovenia or the former Socialist Republic of
Yugoslavia of which Slovenia was a part until June 25, 1991.
At the other end of the spectrum, Slovenia introduced the
possibility of supplementary protection certificates in 1993.
Since May 1, 2004, when Slovenia joined the EU, supplementary
protection certificates have been granted in accordance with
European regulations. Patent holders have the possibility to
claim prolonged protection for a product after the expiration
of patent protection.

LJUBLJANA 00000103 002 OF 003




7. (U) MARKET ACCESS BARRIERS: The GOS has been focused on
controlling government spending in preparation for joining
the euro zone (which it accomplished in January 2007). The
Ministry of Health's (MOH) goal, as part of health-care
reforms, was to control healthcare costs. In January 2007,
the MOH adopted some changes to drug reimbursement
procedures. Slovenia now employs a pricing and reimbursement
system based on manufacturer prices for drugs in Germany,
France, and Austria (previously it used Germany, France and
Italy as its reference points),taking into account
Slovenia's lower GDP. While PhRMA acknowledges that
regulating pricing at the manufacturer level increases
transparency, it is still dissatisfied with the reimbursement
procedure. Slovenian officials question PhRMA's claim that
the reimbursement procedures followed in Slovenia fall under
the guidelines of the EU directives on transparency. Post
understands that Slovenia's program, while perhaps not ideal,
is a legitimate formula not unlike those used in other EU
member states.


8. (U) Slovenia's approach on drug pricing has been an effort
to find a balance between the use of innovative and generic
drugs. Contacts at the MOH have told Post that PhRMA's
complaint on favoring domestic producers over foreign was not
justified and that the pricing measures were not specifically
aimed at foreign producers. Post understands that domestic
Slovene generic producers also are experiencing increased
competition with the introduction of lower priced generic
drugs from India.


9. (U) PRICING: PhRMA complains that Slovenia is
inconsistently and non-transparently applying the Anatomical
Therapeutic Chemical (ATC) and Defined Daily Dose (DDD)
systems. Post understands that the MOH uses the ATC/DDD as
indicators, not exclusive determinants, of price. Contacts at
the Ministry tell Post that there is no law or legal
procedure prohibiting physicians from prescribing any drug
approved for use in Slovenia. However, the system will only
reimburse up to the value of the lowest-priced drug on the
Interchangeable Drug List (IDL). This system would not affect
any new, innovative drugs brought to market before the patent
protection period ran out and generics became competitive.


10. (U) The MOH has told Post in the past that the changes
in regulations have all been adopted in order to control
healthcare costs and make decision-making more transparent.
These decisions have significantly decreased the annual
percentage rise in the Government's expenditures on
healthcare. Post understands that the Ministry sees this
current period as one of adjustment. Health Minister Andrej
Brucan, as he unveiled the new pricing regulations on January
23, stated that his goal is to use the increased savings to
improve health services and to spend more on innovative drugs.


11. (SBU) COMMENT: In general, it appears that the GOS is
meeting its obligations under TRIPS and the 24 other treaties
on intellectual property and patents to which it is party.
With membership in the EU, there is added pressure to conform
to European norms, and it is Post's opinion that Slovenia is
making progress and will continue to do so in good faith,
even if in some areas it has yet to achieve this goal. The
most significant problem, by far, is an overburdened court
system, which is also the target of many calls for reform
from all sectors of society. COM continues to make judicial
reform a theme in his discussions with senior government
officials and representatives of the judicial system. Post's
success in facilitating judicial training should also help
Slovenia in its efforts to improve the efficiency of its
courts. In addition to the IPR complaints, PhRMA has pointed
to the problem of market access and drug cost reimbursement
policies in the Slovene health system. There is agreement on
all sides that the reimbursement mechanism employed by the
Slovene health system has disadvantaged some innovative drug
producers in some categories in the short run. This
development, however, should be viewed in the context of the
overall need for the GOS to balance its budget, bring down
inflation, and root itself in the euro zone, which it joined
in January 2007. The measures were not undertaken with a goal
of favoring domestic producers of generic drugs, and
according to the GOS, Slovenia's system is similar to the
majority of EU members' systems.


12. (SBU) Post hopes this information will be helpful in
stimulating a well-informed discussion of PhRMA's claims.
Post is committed to promoting a fair, open and transparent
market for U.S. pharmaceuticals. We are in regular contact

LJUBLJANA 00000103 003 OF 003


with the local PhRMA and are prepared to engage further with
the GOS on all of the issues raised by PhRMA. For 2007,
utilizing lessons learned when PhRMA and Post successfully
engaged the GOS to ensure a fairer pricing plan, PhRMA and
Post are working together to proactively promote fair market
access and find the most effective ways in which PhRMA and
Post can lobby the GOS. We look forward to engaging in
further dialogue on this issue, and, as always, we welcome
guidance from both USTR and the Department. END COMMENT.

ROBERTSON