Data
Exclusivity: Implications For Public Health

Amit
Sen Gupta

IN
recent months there has been substantive lobbying by a section of the
pharmaceutical industry in India – led by the multinational sector – and
pressures from the US to provide for what is known as “Data Exclusivity”.
Responding to such lobbying and pressures the government had set up an
inter-ministerial group involving the ministries of Chemicals, Health and
Commerce. It is understood that the group, unable to reach a consensus has now
referred it to the PMO.

Whatever
the current status of deliberations on this issue might be, what is clear is
that there has been little public debate on the issue. That is unfortunate given
that the resolution of the issue can have major consequences regarding access to
new medicines that may be vital for public health.

WHAT
IS DATA EXCLUSIVITY?

Data
exclusivity refers to a practice whereby, for a fixed period of time (usually 5
years), drug regulatory authorities do not allow the data that the originator
company files to get marketing approval, to be used to register a generic
version of the same medicine. It means that if an MNC gets marketing approval
for a drug based on data of clinical trials, the same data cannot be used to
register a drug by an Indian company. The latter, in spite of the fact that it
is wishing to register the same drug, will be forced to conduct fresh clinical
trials before its version of the drug can be registered.

Since
the debate on Data Exclusivity has been linked with a discussion on Patents,
many assume that if national laws allow for Patent protection they also need to
allow for Data Exclusivity. This is entirely incorrect on several grounds.

First,
Patents and Data Exclusivity are two entirely different concepts. In fact the
enforcement of Data Exclusivity can have the biggest impact in situations when
Patents cannot or are not being enforced. Second the TRIPS Agreement, which lays
down conditions for Patent protection does not talk about Data Exclusivity. What
the TRIPS Agreement talks about is “Data Protection”, which is very
different from Data Exclusivity. But the whole issue of Data Protection has been
hijacked by developed countries led by the US and EU and by Pharmaceutical MNCs
in such a manner, that it is being posed that Data Protection is the same as
Data Exclusivity.

To
understand the issues at stake it is necessary to understand how the marketing
of medicines is regulated. Medicines, the world over, are subject to two sets of
rules:
Intellectual Property Rights (IPRs – which include Patent protection)
and registration of drugs before marketing approval. The former is regulated by
a country’s Patent laws while the latter is regulated by the drug regulation
authorities – in India the Drug Controller General of India (DGCI).

In
the case of Patents it is a private right, that it is a right that the Patentee
enjoys and the onus is on the Patentee to ensure that it is not infringed, i.e.
someone else does not make the patented substance during the patent period. If
such an infringement is alleged, the Patentee has to approach the relevant
authorities to take action against the infringer. On the other hand a drug
regulatory authority is a body set up as a public authority. Its function is to
ensure, in public interest, that drugs that are provided with marketing approval
meet the criteria of safety, efficacy and good quality.

FORCING
DRUG REGULATORY AGENCIES TO PROTECT PRIVATE MONOPOLY RIGHTS

Under
the guise of Data Exclusivity, what is really being sought is that drug
regulatory authorities should act on behalf of pharmaceutical companies to
safeguard their monopoly right. They are being asked to reject the application
for marketing of a drug by a local company if it doesn’t submit fresh data
from its own clinical trials. This is clearly a practice that cannot be within
the domain of regulatory agencies. If the same agency has approved a drug based
on clinical data provided by one company, there is no logical reason why the
same drug should be refused marketing approval if another company produces it.
For the issues of safety and efficacy have already been taken care of when the
originator company’s drug was given approval.

Here
it must be understood that drug regulatory agencies can and do insist that the
second company provide data on bio-equivalence – i.e. show that the drug
achieves the same concentration in the human body as for the originator
company’s drug. Or else regulatory agencies make sure that the second company
follows manufacturing practices that ensure a certain quality so that its drug
is similar in properties to the original drug.

DATA
EXCLUSIVITY IS NOT A TRIPS REQUIREMENT

Let
us now turn to the argument that is being used to make a case for providing Data
Exclusivity. The TRIPS agreement mentions the need to provide for what it calls
“Data Protection” under Article 39(3) of the agreement where it says: “
Members, when requiring, as a condition of approving the marketing of
pharmaceutical or of agricultural chemical products that utilise new chemical
entities, the submission of undisclosed test or other data, the origination of
which involves a considerable effort, shall protect such data against unfair
commercial use. In addition, Members shall protect such data against disclosure,
except where necessary to protect the public, or unless steps are taken to
ensure that the data are protected against unfair commercial use”.

It
may be noted that TRIPS does not mention “data exclusivity” but “data
protection”. There is a clear distinction that must be made between the two
– in the former case it’s a concept involving monopoly right for a period
over test data whereas in the latter case no such monopoly right is involved.
Experts have argued that if regulatory agencies do not share the data with other
companies or make it public, the requirements under TRIPS are met. Carlos
Correa, noted Patents expert has argued this point thus: “The protection conferred to data submitted for the marketing
approval of the product (in accordance with Article 39.3) of the TRIPS Agreement
has been another problematic issue in some countries. The Agreement does not
oblige to recognize any kind of exclusivity on data submitted for approval,
since the protection should be granted under the discipline of “unfair
competition”…. Once data on a new drug have been submitted, their use by a
national health authority to study and approve a subsequent application on the
basis of similarity, does not entail a violation of the confidentiality
obligation under the Agreement“.

But
as the IPR debate has taught us so well logic and legal considerations are often
not the only considerations when pharmaceutical MNCs, backed by the US and the
EU, wish to push through changes in law that affect sovereign nations. They are
attempting today to push through laws similar to those in existence in the US
and the EU – allowing for Data Exclusivity for periods up to five years. The
urgency with which the US, especially, is pursuing this can be gauged from the
fact that every Bilateral or Regional Free Trade Agreement that the US is
signing today has a clause that provides for Data Exclusivity. Data Exclusivity
has thus become the prominent “TRIPS Plus” (i.e. measures that go beyond the
TRIPS Agreement) measure that the US is pressing for.

IMPACT
OF PROVIDING FOR DATA EXCLUSIVITY

There
are various dimensions in the interest that pharmaceutical companies have in
pressing for data exclusivity. First, it allows them monopoly power even in
situations where a country is not required to provide patent protection. This is
true for all Least Developing Countries (LDCs) who do not need to allow Patents
in medicines till 2016. In their case, Data Exclusivity allows companies to have
a “patent like” monopoly for a certain period – usually at least 5 years.
While 5 years may seem a small period compared to the patent period of 20 years
mandated by TRIPS, it must be understood that data exclusivity comes after
marketing approval, i.e. usually after 5-7 years of the filing of a patent. So
it really covers up to half or more of a patent period, and importantly, it
covers the period when the benefits of monopoly protections are maximum.
Further, the US is also pressing for Data Exclusivity for the new use of an
existing drug, which can push the monopoly enjoyed by the originator company
beyond the 20 year patent period if the new use is “discovered” just when a
patent is about to expire.

For
countries like India where Patents on medicines are now allowed the effect can
be of a different kind. The instrument available in India to curb the monopoly
of MNCs is the use of a compulsory license. It is a license that the government
can issue after 3 years of patent grant, if it is found that the Patented drug
is not available, or it is too expensive, or the development of domestic
industry or an expert market is hampered. Such a license would allow domestic
companies to manufacture the Patented drug in the country, after paying a small
royalty to the originator company. But if India allows for Data Exclusivity,
such a license would be useful as the DGCI would then insist that Indian
companies conduct fresh clinical trials before getting marketing approval. Such
trials are expensive and would add to the cost of the drug, and would be time
consuming and delay the introduction of the drug. Most importantly such trials
would be unethical. If we know that a drug is useful and it is safe, to conduct
the trials again on human beings is not ethical.

OPPOSE
ANY AMENDMENT

IN PARLIAMENT

There
are, thus, clear reasons why India need not allow for Data Exclusivity – it is
neither a requirement under TRIPS, nor is it something that serves national
interest. It is unfortunate that the government should seriously consider
amending domestic laws under pressure from the US and MNCs in the pharmaceutical
sector. To allow for Data Exclusivity the government will have to amend the
Drugs and Cosmetics Act. Such an amendment needs to be approved by Parliament
and it is hoped that Parliament shall reject such an amendment.