Regulators Wrestle With Data Exclusivity For Pharmaceuticals Worldwide

By Tatum Anderson for Intellectual Property Watch
A debate over how long to give exclusive rights over data submitted by pharmaceutical companies to governments in order to receive approval to sell a drug in their markets is controversial not only in India, but worldwide.

For years, the Office of the US Trade Representative has blacklisted India for not imposing data exclusivity in its annual “Special 301” report on its trading partners’ protection and enforcement of US intellectual property rights.

The US also has encouraged the addition of data exclusivity into bilateral free trade agreements (FTAs) being negotiated with countries around the world, most recently in Thailand and Malaysia. But while it is used extensively in the United States and Europe, data exclusivity is not law in many countries. An explicit mention of data exclusivity was even removed from the draft of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) because so many countries disagreed, said Shamnad Basheer, a law professor at George Washington University Law School.

Pharmaceutical companies typically submit trial data to the government regulator to prove that their drugs are safe and effective. If approved, they are allowed to sell those drugs in that market.

India, a major market, has recently completed an analysis of data exclusivity (see related story). Currently in India, generic pharmaceutical companies are also able to benefit from this data, although they may not actually see it. If they can prove that their drug is equivalent to an original that has already been approved as safe and effective by the regulator, they also can receive approval to sell it on the Indian market. The regulator is able to use test data produced by the originator pharmaceutical company to prove that a copy made by another is safe.

But originator companies do not want generics to be able to use their data to sell copies of drugs the brand-name producers created. Generics, meanwhile, do not want to spend enormous amounts of money conducting clinical trials. And governments have to take into account the best interests of consumers.

Originator companies think data re-use breaches TRIPS Article 39.3, which calls for member states to “protect data against unfair commercial use.” They believe that the re-use of their data amounts to unfair commercial use.

As a result, they believe that countries like India should introduce data exclusivity, which would prevent a regulatory authority from re-using the test data for a set period of time to approve copycat medicines.

The big pharmaceutical companies see data exclusivity as a vital additional intellectual property tool in addition to patents. It is used extensively in Europe and the US, particularly when drugs cannot be patented – because they are old, but a new use has been found – or if the patent period runs out shortly after the drug hits the market.

Patent periods sometimes run out because it can take so long to bring a product to market, said Jonathan Davies, a patent attorney at Reddie & Grose. Data exclusivity is seen as an extra length of time to recoup costs. “It is expensive enough to do the research for a drug and they put on what it costs to bring a drug to market. Most make their money in the last five years of the patent,” he said.

So without data exclusivity there is little incentive to bring new treatments onto the market.

Eric Noehrenberg of the International Federation of International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) said, “The basis behind data exclusivity is not just incentive but fairness. This data being developed costs hundreds of millions and to allow a competitor to use it is unfair advantage.”

In contrast, Indian health advocates believe that unfair commercial use cannot apply to a government regulator that uses a company’s data to approve a generic company’s drug – as long as the generic manufacturer does not see the data.

Rather, they believe unfair commercial use is the use of test data from unscrupulous sources – if it had been physically stolen from an office, for instance.

In addition, protection against unfair commercial use does automatically mean data exclusivity, they say.

Public health advocates are challenging data exclusivity worldwide because they say it is therefore a “TRIPS-plus” provision that drives up the cost of medicine to those who can least afford it and delays the introduction of vital medicines to the market.

That is because generics are forced to spend enormous amounts of money and time replicating the trials already carried out by the brand-name pharmaceutical industry.

Advocates maintain that these companies will already recoup their costs using adequate patent protection periods and sales in the developed world.

Tatum Anderson may be reached at info@ip-watch.ch.