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 parts of its Plan of Action at the World Health Organization, to ensure that public health challenges are addressed and the patent system is supported as a mechanism to promote research and innovation.

USTR has sought to eliminate market access barriers faced by U.S. pharmaceutical companies in many countries and to provide for both affordable health care today and support for the innovation that assures improved health care tomorrow. For example, this year's Special 301 Report highlights concerns regarding market access barriers affecting pharmaceuticals in Algeria and Indonesia.

Other types of measures have the potential to affect market access in this sector, even where a country's IPR regime is adequate. For example, price controls and regulatory and other barriers can discourage the development of new drugs. These barriers may include unreasonable regulatory approval delays, linkages between dispensing and prescribing, and reference pricing or other potentially unfair reimbursement policies. The criteria, rationale, and operation of such measures are often nontransparent, or not fully disclosed to patients or the pharmaceutical companies seeking to market their drugs.

The United States also is seeking to establish or continue dialogues with Organization for Economic Cooperation and Development (OECD) members and other developed economies to address concerns and encourage a common understanding on questions related to innovation in the pharmaceutical sector. For example, the United States-Korea Free Trade Agreement, once in force, would improve access to innovative products and ensure the transparent, predictable, and non-discriminatory pricing and reimbursement of innovative and generic pharmaceutical products, medical devices, and biologics. U.S. industry has expressed concerns regarding the policies of several industrialized trading partners, including Canada, France, Germany, Italy, Japan, New Zealand, and Taiwan, on issues related to innovation in the pharmaceutical sector and other aspects of health care goods and services.

With respect to Japan, pharmaceutical and medical device issues are an integral part of the bilateral regulatory reform discussions. While progress has been made, the United States continues to press for improved transparency, including by ensuring meaningful opportunities for interested stakeholders to provide input into important regulatory, reimbursement, and pricing matters, facilitating the introduction of innovative new pharmaceuticals and medical devices into Japan's market.

The United States remains concerned about Poland's enactment in 2006 of a regulation establishing wholesale and retail processes for drugs, which appears to reduce the official maximum wholesale and retail prices for imported drugs by 13 percent while generally leaving unchanged the prices for drugs of Polish origin. The U.S. pharmaceutical industry reports that this regulation has had a significant impact by reducing prices for numerous products manufactured outside Poland. Poland is in the process of drafting such implementing legislation. The United States shares the EC's concerns over this regulation and will continue to monitor the situation in Poland throughout the coming year.