This article is written by Annu Gond, in her 5th year of B.A.LL.B from Pt.Som Chandra Dwivedi Vidhi Mahavidyalaya,Prayagraj, during her internship at LeDroit India.
List of topics covered in this article
- Abstract
- Introduction
- Patent and data exclusivity
- Article 39.3 of TRIPS AGREEMENT
- Data exclusivity laws in some country
- Data Exclusivity and Benefits to Innovator
- Data Exclusivity in India
- Conclusion
Keywords: Data Exclusivity, TRIPS Agreement, Article 39.3 of TRIPS
Abstract
Legal issues surrounding data exclusivity and intellectual property rights (IPR) in the pharmaceutical sector involve a global debate over incentivizing innovation versus ensuring access to affordable medicines, rooted in interpretations of international agreements like TRIPS Article 39.3 and national health policies. While patents protect novel inventions for a fixed period, data exclusivity is a regulatory right preventing reliance on originator data for generic approval, effectively blocking market entry even if patents expire.
Data exclusivity refers to the time period after
approval of a new drug before a competitor can rely
on data submitted in the original approval process for
its own filing to the FDA.Data exclusivity is a protection instrument for pharmaceutical companies’
independent of any other form of intellectual property
right (IPR). Unlike market exclusivity, it does not
directly prevent from launching a drug on the market,
but prevents a drug agency from approving an
application of subsequent applicants (generic
companies) based on the data submitted by a first
applicant (innovator company).
Introduction
Data exclusivity is currently the most debatable issue of pharmaceutical intellectual property. Data exclusivity is becoming an additional form of IP protection for research based pharmaceutical companies. Companies involved in research and development (R&D) spend a considerable amount of time and money on the discovery of new products. It is estimated that around $897USD are required for the development of a new molecule and major share of research and development expenditure is on generation of pre-clinical and clinical trial data for approval of new drug.The data thus generated is submitted to Drug Regulatory Authorities as a pre-requisite for marketing approval of the (NCE). This entire process may take about 12-13 years. Hence effective patent life is about 7-8 years or even less. The research data or test data which is generated during the R & D process of a new drug is proprietary to the innovator.
Patents and Data Exclusivity
While data exclusivity and patents are the two most
critical and, hence, relevant IPR for the
pharmaceutical industry, they are distinct forms of
protection; protection of one right is neither
dependent on the other nor linked to the other in any
intrinsic way and any linkage between the two
contravenes TRIPS. In view of Pugatch, ‘the underlying logic of data exclusivity suggests that it is
an expression of trade secrets and, as such, should be
independent of patents’. The logic that data
exclusivity is an expression of trade secret is not
plausible as data exclusivity is submitted to the
regulatory authorities for approval to market a product whereas underlying concept behind trade secret is that information regarding invention or discovery is not known to any other person than the innovator. Hence, it is important to note that patents and data exclusivity are independent of each other.
Article 39.3 of TRIPS Agreement
Article 39.3 of TRIPS reads as ‘Members when
requiring, as a condition of approving marketing of
pharmaceutical or of agricultural chemical products
which utilize new chemical entities, 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. Article 39.3 aims to protect and safeguard pharmaceutical registration test data which is submitted to regulatory authorities for
marketing approval of new medicine. But ambiguous
nature of Article 39.3 of TRIPS Agreement has
created confusion with reference to the interpretation
of Article 39.3 in the context of data exclusivity or
Data protection. Correa has identified five points
with reference to Article 39.3 of TRIPS agreement. In
his analysis Correa has stated that the inclusion of test
data in the TRIPS Agreement as a category of
‘intellectual property’ does not determine the nature
of the protection conferred. According to Correa, the
Article 39.3 conditions for protection are:
Data Necessary for Marketing Approval
The first sentence of Article 39.3 of TRIPS states
‘Members, when requiring, as a condition of
approving the marketing of…’ means the obligation of
data protection arises only when the regulatory
authorities of member countries require submission of
test data for market approval of new drug molecule or
new chemical entity. Data submitted voluntarily or
in excess by the innovator does not fall under
Article 39.3.
Protected Data
Article 39.3 protects the written data which details
the results of safety and efficacy testing of drugs and agrochemicals which pertain to human, animals and
plant health. These ‘other’ data may include
manufacturing, conservation and packaging methods
and conditions but to the extent that submission of
this information is necessary for marketing approval
of a new drug.
Undisclosed Data
To qualify for protection under Article 39.3, the
pertinent information must be ‘undisclosed’. The
information which is in public domain does not fall
under Article 39.3 of TRIPS. While a substantial part
of the information on tests relating to safety and
efficacy of approved drugs becomes publicly
available – because the information is published in
scientific journals, or made public by the health
authority.
New Chemical Entities
The data submitted to drug regulatory authorities
must correspond to a new chemical entity to be
eligible for protection under Article 39.3 of TRIPS
Agreement. The Agreement does not define the term
‘new’. Article 39.3 does not clarify either whether
newness should be absolute (universal) or relative
(local), that is, whether ‘new’ would mean the first
application in the world or in the Member country
where it was filed.
Data Exclusivity Laws in Some Countries
United States
In 1984, the US became the first country to enact
data exclusivity legislation. Under the Hatch-Waxman
Act, applications for approval of new drugs receive
5 years of data exclusivity. Applications for the
approval of new indications for an existing drug
receive 3 years of data exclusivity.
New Zealand
In New Zealand period for data exclusivity is for
5 years. New Zealand does not provide data
exclusivity for new uses or formulations of old active
ingredients.
Japan
A formal data exclusivity regime is not in place in
Japan. Instead Japan has a system of ‘re-examination’
system under Article 14-4 of the Pharmaceutical
Affairs Law which is similar to data exclusivity. In
Japan, the system of ‘re-examination’ grants
exclusivity for new drugs for 8 years, 4-6 years for
new indication or routes of drug and 10 years for
orphan drugs.
China
Under Article 35 of the Implementing Regulations
of the Drug Administration Law of 4 August 2002,
China provides 6 years of data exclusivity as from the
date of marketing approval.
Australia
Australia provides for 5 years data exclusivity for
NCE only.
European Union
In the EU, Directive 65/65 provides a period of
data protection of either 6 or 10 years depending on
the Member State at issue. The larger Member States
provide 10 years, while the smaller provide only
6 years. However, for products which are approved
through the centralized procedure, Regulation
2309/93 provides a 10 year period of data
protection.The 6 to 10 year range for national
registrations reflects differences between the national
regulatory regimes of the EU members. The EU is
considering harmonizing protection to 10 years for all
national registrations under 8+2+1 formula, which
has 8 years of data exclusivity with 2 years of marketing exclusivity that can be further extended by an additional one year, if during the first 8 years of those ten years, the innovator obtains authorization for one or more therapeutic indications.
Brazil
Brazil grants exclusivity for five years.
Mexico
Data exclusivity rights are mentioned in Articles 82
and 86 bis of the Mexican Industrial Property Law
(MIPL) and in Numeral 167 bis of the Health
Supplies Regulations (HSR).Mexico provides for
5 years of data exclusivity.
Data Exclusivity and Benefits to Innovator
An Example In certain exceptional cases it is observed that ‘data exclusivity’ helps innovator companies to recover investments made on discovering and developing a new drug. An example is Aventis’s innovative drug Leflunomide (Arava®) for Rheumatoid Arthritis, which took 17 years from discovery to commercialization. In the absence of data exclusivity, the investment cost would have to be recovered in 3 years. Long time lag – from development to commercialization – may not be the case with every medicine or company. Hence, it would not be prudent to say that data exclusivity provisions are required.
Data Exclusivity in India
It is argued that provisions of data exclusivity
would jeopardize availability of generic medicines to
millions of poor in developing countries. According
to Gopakumar Nair introduction of data exclusivity
in pharma field, would adversely affect at least
partially, the hitherto proven capabilities of Indian
generic industry. Consequently, there will
undoubtedly be a short term monopoly and adverse
pricing scenario impacting public health interests. At
present, India does not recognize data exclusivity
provisions. It is said that data exclusivity provisions,
if added to the Indian Drugs and Cosmetic Act, will
prevent India’s drug regulatory agency from
referencing or otherwise relying on registration data
previously filed by innovator drug companies in order
to gain regulatory approval for therapeutically
equivalent generic versions. On the other hand,
Organization of Pharmaceutical Producers of India
(OPPI) had suggested for 5 years data protection
provision from the date of marketing approval in
India. In order to assist the Department of
Chemicals and Petrochemicals (Ministry of
Chemicals and Fertilizers), Government of India
constituted an Inter-Ministerial Consultative
Committee on 19 February 2004 to study data
protection provisions as outlined in Article 39.3 of
TRIPS. The committee was entrusted with the task to
submit its recommendations related to data protection
provisions in India. The committee headed by Mrs
Satwant Reddy, Secretary to Government of India had
looked into the matter of granting data protection for
pharmaceutical products. After deliberations and
consultations with several stakeholders such as
representatives of concerned departments and experts
in the field, various groups/ delegations from industry,
non-government bodies and other interested persons
the committee has recommended for 5 years of data
protection in India for pharmaceutical products.The
Committee has also suggested for several safeguards
with respect to data protection for pharmaceutical
products. One of the noteworthy exemptions is related
to drugs used for life threatening diseases such as
HIV/AIDS. The exemption states, Drugs for life
threatening diseases like HIV/AIDS may be exempted
from the provisions of fixed period data protection.
The Committee has also suggested for ‘transitional
period’ for upgradation of physical infrastructure and
technical skills with respect to providing data
protection but the duration of the period is not stated.
Conclusion
The issue of data exclusivity is quite debatable as
several issues are attached to it. These issues are
concerned with availability of generic medicines
especially in developing countries particularly those
having a high population of patients with HIV/AIDS.
The debate revolves around the interpretation of
Article 39.3 of TRIPS Agreement and whether the
said article obliges for data exclusivity or not.
Developed countries like the US and the EU try to
enforce provisions of data exclusivity in the form of
Free Trade Agreements with developing countries.
Doha Declaration on TRIPS and Public Health has
ascertained the rights of member countries to enact
legislation that helps them to protect public health.
Developing countries need to maximize benefits of
this flexibility accorded to them and put patients
rights of access to economical healthcare ahead of
economic rights of patents. India is now regarded as a
global supplier of quality generic medicines. Thus
India must take a more liberal view of data exclusivity provisions and ensure that flexibilities in TRIPS Agreement are utilized fully. The legal issues surrounding data exclusivity (DE) and intellectual property rights (IPR) in the pharmaceutical sector center on the fundamental tension between incentivizing innovation by originator companies and ensuring affordable public access to medicines, especially in developing countries. The legal framework for data exclusivity and IPR in pharmaceuticals remains highly contested, with a need for a globally coordinated approach that balances the competing interests of innovation incentives, market competition, and equitable access to healthcare.
