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Trade Agreements Compliance Program

Pharmaceuticals Exports Continue to
Portugal, Thanks to ITA
Introduction

Trade Agreement: WTO-TRIPS

The Department of Commerce’s International Trade Administration (ITA) helped
Merck Sharp & Dohme (MSD), a New Jersey-based global pharmaceuticals
company, and other U.S. healthcare providers reach an agreement with the
Portuguese government that will enable these companies to continue to export
their products to Portugal and help provide a more open, competitive business
environment that could attract new investment.

Trade Barrier: IPR: Patent,
Government Procurement
Industry: Healthcare Products
Company: Merck Sharp & Dohme, NJ

Why it Matters
While Portugal represents a relatively small export market for the United States, major innovative pharmaceutical
companies, including MSD, have had a significant presence there during the last decade. In 2011, for example, U.S.
companies exported over $8 million in pharmaceutical goods and over-the-counter medicines to Portugal.

The Problem
U.S. healthcare companies have faced an increasing array of challenges in Portugal during the last five years that
include numerous and sometimes conflicting government rules and up to $1 billion in unpaid hospital debt for
pharmaceutical goods. These concerns were exacerbated by Portugal’s necessary, but difficult, Bailout Agreement
with the European Union and the International Monetary Fund in 2011 that limited the government’s ability to address
these issues, particularly the outstanding hospital debt. Some U.S. pharmaceutical companies in Portugal were forced
to consider closing their Portugal operations and moving their investments elsewhere.

The Solution
ITA moved quickly to respond to industry’s concerns by opening opportunities for industry and the Portuguese
Government to fully understand each other’s challenges and, together, explore ways to work through these issues.
ITA helped turned those discussions into a regular government-industry dialogue that enabled the government to
address the industry’s concerns while cutting costs and creating a strong investment climate. ITA’s work lead to a May
2012 agreement between the Portuguese Government and pharmaceutical industry that commits the government to
streamlining its healthcare rules; and paying its debt to industry. In return, industry identified ways in which it could
partner with the government in reducing healthcare costs. The agreement represents a victory that will enable U.S.
companies to continue exporting their innovative pharmaceutical goods to consumers in Portugal.

Have You Encountered a Foreign Government-Imposed Trade Barrier?
Contact us today! Trade.gov/TANC

“It is a big success for everyone - for the patients, for the Minister, for the industry.”
Leonardo Santarelli, Portugal Country Manager, Merck Sharpe and Dohme

1207-00-02-08