A SENIOR Commerce Ministry official said he hopes a draft law easing intellectual property restrictions on imports and exports of essential medicines will encourage major manufacturers of generic drugs to set up operations in Cambodia.
The Law on Compulsory Licensing for Public Health will be submitted to the Council of Ministers "soon" and is expected to be passed by the National Assembly by the end of this year, said Var Rath San, director of the Ministry of Commerce's Department of Intellectual Property Rights, which drafted the law.
The law would bring Cambodia into line with World Trade Organisation (WTO) regulations allowing developing countries to bypass patents when importing and exporting drugs used to treat serious diseases such as malaria and HIV.
"Hopefully, foreign investors and large foreign pharmaceutical firms that are not eligible to produce generic drugs at home will come to set up factories to produce generic drugs for local and overseas pharmaceutical markets," he said.
The WTO's 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) allows developing countries to issue a compulsory licence to drug manufacturers, allowing them to produce a patented drug without the consent of the patent owner.
A "proper fee" must be paid to the patent holder, but the fee is determined by the government according to its ability to pay.
However, compulsory licences under the TRIPs agreement could not be used to import drugs, making the agreement useless for countries without the capacity to manufacture the essential medicines.
This problem was addressed by the 2003 Doha Declaration on TRIPS and Public Health, which decided that compulsory licences could be issued in developed countries for the manufacture of patented drugs, provided they were exported to countries that were on the United Nation's list of least-developed countries or had per-capita incomes of less than $745 a year.
The declaration also allows least-developed countries to waive export constraints when exporting generic drugs within a regional trade agreement.
Ministry of Health Secretary of State Chou Yin Sim said the law will help expand the pharmaceutical manufacturing sector in Cambodia.
"I believe that when this law is in force it will be a tool to attract investors," he said.
Seven small pharmaceutical enterprises operating in Cambodia together produce around 20 percent of the medicines used in the country.