DG Shah
Secretary General
Indian Pharmaceutical Alliance
Some thrive on creating confusion to have their way. The terms Data Exclusivity (DE) and Data Protection (DP) have also been used interchangeably by the originator companies in the pharmaceutical sector to create confusion. But they are different and have significantly different impact on access to medicines and public health.
The term DE is new to India, as it does not figure in the Trade Related Intellectual Property Rights (Trips) Agreement of the WTO. DE stands for exclusivity, that is market monopoly. The originator companies in the pharmaceutical sector claim that India should grant certain period of exclusivity (monopoly) in the market to encourage research and development (R&D) and foreign direct investment. This exclusivity, they further claim, is independent of patent, which grants 20-year monopoly. They justify this demand as reward for generating clinical trial data used to establish safety and efficacy of a new drug “product” (not necessarily new chemical entity).
The history of Trips negotiations reveals that the developed countries had originally asked for six years of DE, when the period of patent protection was 14 years. However, this was dropped from the final text, after the period of product patent protection was raised to 20 years.
The term DP is used in Article 39.3 of the Trips Agreement and is, therefore, not new to India. The Article 39.3 stipulates: “Protection against unfair commercial use of undisclosed test or other data the origination of which involves considerable effort, and is required to be submitted to government or governmental agencies to obtain marketing approval, for products utilising new chemical entities.”
It is important to recognise the distinction between new chemical entities (NCEs) and new drug products. Trips Agreement requires protection of data for NCEs and not for new drug products. Thus, a new drug product (for example a new formulation of a known drug or a new salt or complex of a known drug), if not a new chemical entity, is not entitled to data protection under the Trips Agreement, irrespective of whether clinical trial or other data is required to be submitted for marketing approval.
Secondly, obligation to protect undisclosed test data is applicable to data generated only after the signing of the Trips Agreement, that is, 1 January 1995. Hence, test data generated prior to 1995 shall not be eligible for protection.
Thirdly, it does not specify any period of protection. The current laws in India are adequate to meet these obligations.
Thus, DE stands for extended period of monopoly, whereas DP stands for protection against “unfair commercial use” of data generated for obtaining marketing authorisation for products using new chemical entities.
Canada and the EU built DE in their intellectual property (IP) ecosystem to promote R&D and to attract new investments in their country/region.
But empirical data reveals that the originator companies have not met their expectations. There is flight of R&D from the EU to the US in spite of stronger IP ecosystem, and investment promises to Canada have not yet fructified. On the other hand, DE has become an anti-competitive practice and is delaying generic entry to the detriment of the public health.
Civil society organisations and the generic industry do not favour DE and have cited several other reasons against providing this. They include:
Thus, other than promoting private interests of the originator companies, there is no justification for introducing DE. It is not an obligation. It does not attract foreign direct investment as seen in Canada and the EU. The domestic industry does not need it. On the contrary, it is a hindrance to access and it delays entry of generics into the market. Why should India need DE? All governments design their laws to protect their people and their industry.
Why should it be different for India?
Ranjit Shahani
President, Organisation of Pharmaceutical Producers of India
Public health interest is at the very core of data exclusivity (DE). Patients are the ultimate beneficiaries of all pharmaceutical research and development and lack of data protection could compromise public health. A critically important part of the drug development process is the collation and analysis of data on the safety and effectiveness of new medications.
The primary purpose of any rules concerning developing, manufacturing and distribution of drug products must be to safeguard public health. Indeed, the pharmaceutical industry is built on safe, efficient and effective products meeting medical need.
What is DE? The principle accepted by most countries is that proprietary data should not be disclosed or used for the commercial benefit of third parties. These countries obligate their regulatory authorities to protect the value of this proprietary data by ensuring a specific time during which only the originator can use the data and is protected from use by others. This time is referred to as “Data Exclusivity”.
DE serves as an enabler for companies to bring in new and better medicines to the market. It is the data collated from clinical trials and laboratory testing that needs protection. Clinical trials are performed in three phases where healthy volunteers and patients are tested to find a drug’s safety profile, effectiveness, safe dose range etc and each phase provides data needed to advance to the next, more extensive phase.
Regulatory authorities the world over are demanding longer and more expensive clinical trials in order to ensure the safety of patients and this in turn adds to the costs of developing these new medicines. The research based pharmaceutical industry spends close to Rs 5,500 crore or $1.3 billion to bring a single new drug to market. Furthermore, the time to bring a single new molecule has gone up dramatically taking on an average 10 to 15 years.
In order to fulfil their duty to protect public health, government regulators must be able to review data showing that pharmaceutical products meet their national standards required for being safe and effective for the benefit of the patient. In the major industrialised country markets, the data required is very extensive and, over the last 30 years, there has been a tremendous increase in testing and collection of data by industry for this purpose.
Allowing companies the use of data produced by innovator companies to bring their own drugs to market could seriously compromise the health of patients since these drugs have not gone through the process of actual clinical trials.
Furthermore, local innovators in emerging markets who usually do not have the same capacity as large companies may be more likely to focus their efforts on developments such as new medical uses, new combinations of drugs and new formulations. They, even more especially, would be looking for DE to provide the security for investing their time, money and effort. DE stimulates both local development and foreign investment.
Without DE and in the absence of patent protection, copiers can rely on the innovator’s data to gain market approval at the same time as or, as in some cases, even before the innovator. Therefore, a limited period of effective DE provides the necessary conditions for an inventor or a company to take the risk to make the investment in local distribution, local marketing and sales together with any necessary packaging and manufacture.
There is a fear, albeit unfounded, that DE will likely lead to higher prices for drugs and delay the launch of generic drugs. Experience shows no connection between DE and drug pricing or launch of generic drugs. In fact to the contrary, competition within therapeutic classes and limitations of purchasing power work to keep prices down.
India has potentially the world’s largest market for pharmaceuticals, yet few Indian pharmaceutical companies are working on new medicines that address the specific needs of the Indian patient. Ironically, a large number of Indian pharmaceutical companies are working on new drugs that will meet the needs of patients in countries where there is DE and where their investments will be protected.
India has a desire to grow its pharmaceutical sector. It certainly has the capabilities. However, to reach the next level, and to create the new medicines that will treat the needs of people right here in India, the country needs to create the right environment to stimulate research.
