Should India allow data exclusivity?

DEBATE

Zarir Homi Charna
Independent Pharmaceutical Consultant

It is unfortunate that whenever the issue of data exclusivity (DE) is raised, the Indian Drug Manufacturers' Association (IDMA) and the Indian Pharmaceutical Alliance (IPA) raise the bogey of Article 39.3 of Trade-related Aspects of Intellectual Property Rights (Trips) and hijack the issue.

Their other combined strategy has been to keep perpetuating the myths (mentioned and debunked below) to confuse the bureaucracy into believing that supporting DE would be almost anti-national. The more astute among them, however, are ready to see through the machinations of the "patriots" and are able to separate the wheat from the chaff.

Myth 1: The main aim is to gain extra monopoly over and above the patent's monopoly.

Fact: They are two separate forms of protection. Data protection (DP) is not dependent on the existence of a patent.

Myth 2: DE and market exclusivity are against public interest.

Fact: Data protection will provide the necessary impetus for pharmaceutical innovations. Indian patients will gain from the accelerated access to new medical therapies. It will also speed up the launching of more world-class clinical trials management facilities such as Quintiles, Siro and SRL Ranbaxy.

The biotechnology sector will also benefit tremendously from partnerships and increased integration. McKinsey estimates that India will earn $ 2 billion in the next few years solely from bio-informatics.

Myth 3: IPA and IDMA say that Trips 39.3 mandates that "members should protect such data (1) against unfair commercial use, and...."

Fact: IPA and IDMA want to use the data for their own commercial use. Obviously, they do not want to copy the molecule to manufacture it without profit. Their game plan was exposed when the US finally struck the deal with Brazil, South Africa, Kenya and India in August-September 2003, to supply cheap anti-AIDS drugs, including those under patents, to poor AIDS patients.

The IPA then cried foul because the US had thrown in riders, such as the patented medicines will not be diverted to the originators' country; the shape and colour of the medicines will be different; and so on.

Myth 4: DE will confer double protection once India adopts the product patents regime in 2005.

Fact: DE and patents are merely two forms of intellectual property. Prior to January 2005, Indian and other innovators enjoy no protection of their rights in the domestic market, leave alone "double protection".

Myth 5: DE is a form of patent evergreening.

Fact: The duration of DE is half or less than half the patent's term. Theoretically, if a product gets marketing approval in the 17th year of its patent life, then it gets two years' exclusivity post-patent expiry, if India opts for a five-year DE period.

Myth 6: DE will sound the death knell of generics in India.

Fact: This can be best answered by Ranbaxy: sales of its US subsidiary, Ranbaxy Inc, contributes almost 50 per cent to its total turnover. In the US itself, where the product patent regime and DE provisions are strong, generics contribute 50 per cent of the total pharma sales.

After the DE's expiry, competitors may only show bioequivalence of their product to the originators' drug. So, the cost of generics is lowered while the proprietary nature of the originators' data is respected.

Myth 7: DE will drive prices of essential medicines upwards, threatening access of the vulnerable population to these drugs.

Fact: There is no connection between the two. The National Economic Research Associates, Washington, which studies prices in six therapeutic categories in nine countries "" South Korea, Mexico, Hungary, Taiwan, Brazil, Argentina, Egypt, Jordan and Turkey "" concluded that strengthening intellectual property protection for pharma products has no impact on prices of existing drugs.

If India wants to achieve a turnover of more than $ 25 billion by 2010, apart from the massive benefits that would accrue through outsourced clinical trials, new drug discoveries, research and development and foreign direct investment, key officials will have to do some quick, unbiased thinking like their Chinese counterparts who have mandated DP as follows:

"Article 14: In accordance with Article 35 of implementing Regulation, the government shall not approve a subsequent application, without the express consent of the original applicant, for manufacturing or marketing a drug containing new chemical ingredients which relies on the undisclosed clinical data and other data generated by the original applicant for a period of six years from the date of the original applicant's approval, unless the submitted data is generated by the subsequent applicant itself."

We need to ask ourselves: Should we adopt DP in the interest of India or sacrifice the country's interest for a self-serving industry?

D G Shah
Secretary General, Indian Pharmaceutical Alliance

Data protection means different things to different people. In a recent editorial, a business newspaper thought it was protection of data that is provided to service providers and is sought to make data theft and misappropriation a criminal offence under the Information Technology Act, 2000.

For a regulator in the department of health, it means protection from competitors of clinical trial data filed by an applicant to establish safety and efficacy of a new drug. For the United States Trade Representative (USTR) and its constituency of research-based pharmaceutical industry, it stand for extension of market exclusivity independent of patent status of the product.

It is, therefore, important to first clarify that the data protection in this article relates to the demand by the USTR in the field of pharmaceuticals.

The research-based pharmaceutical industry invests large sums in the development of new drugs. The development work requires clinical trials on animals and humans. The data generated during these clinical trials is used to prove safety and efficacy of a new drug. It is submitted to a regulatory authority such as the Food and Drug Administration (FDA) in the US for seeking marketing approval.

This data is voluminous. It runs into truckloads of papers for one drug. The regulatory authority examines, panalyses and evaluates this data before granting marketing approval for a new drug. This data per se is not disclosed to the public. It is, therefore, called "confidential test data".

The research and development efforts of the inventor are rewarded separately by grant of patent for a period of 20 years. This allows the inventor to enjoy "monopoly" in the market and compensates him for the risk and investment in bringing a new product that is useful to the society. This period was limited to 14 years before the Uruguay Round that agreed to raise it by six years, at the instance of the pharmaceutical lobby, to 20 years to compensate for the increased development costs.

The research-based pharmaceutical industry now claims that the 20-year market exclusivity granted under a patent is for research (of R&D) only, which constitutes only 30 per cent of the R&D cost. It should, therefore, be further compensated for the balance 70 per cent of the R&D cost incurred for the development (D of R&D) effort.

It defies logic why one would ask 20 years for 30 per cent of the cost and only six years for 70 per cent of the cost. Whatever the logic, it is seeking an additional period of market exclusivity, independent of patent, in the guise of data protection. It claims that the only way of protecting "undisclosed test data" is by denying marketing approval to any other applicant, unless the second applicant has independently carried out the requisite trials in animals and humans, and established the safety and efficacy of the drug on its own.

It further claims that even if the "undisclosed test data" is not asked by a regulator in another country (say, the Drugs Controller General of India), and, hence, not even submitted, the regulator should not grant marketing approval for a specified period to any other applicant. Moreover, the regulator should not rely on the approval granted in the US or Europe (information in public domain) even if the patent has expired.

This raises some ethical and moral questions on repeating trials for what is already established, and needs to be considered seriously.

If this demand is accepted, it will lead to an additional period of market exclusivity beyond the life of the patent and can cover not only new products but also old products that are not marketed in the country.

The demand for exclusivity has three major implications. First, it will delay the entry of generics beyond the 20-year period, thereby denying access to cheaper medicines. Thus, it becomes a public health problem. Second, it will affect the pipeline of drugs for the generic industry. The Indian generic industry, which will be dependent on patent expiry post-2005, will be denied the opportunity of early filings where patents have expired. In addition, it could deny access to even a new drug since an additional period of market exclusivity beyond the life of a patent may act as an incentive to delay the launch of a new product in the low-priced markets of India and other developing countries.

The Trips agreement obliges member-countries to protect "undisclosed test data" and not to provide additional period of market exclusivity as claimed by the USTR and the US-based pharmaceutical industry.