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Data Exclusivity: A Weapon Against Generics

Issued: February 01 2011

In order to qualify for medical use, a new chemical entity undergoes a series of clinical trials to evaluate the efficacy and safety of the drugs. The process is tedious and requires extraordinary efforts and investment. The series of clinical trials include various levels of regulations, and a large volume of data is obtained during this painstaking process.

The data, which includes results of pharmaceutical and toxicological tests and clinical trials, is the property of proprietor of the entity, which in conducting the trial has invested huge amount of effort, time and money. Therefore, some countries allow such entities to reap the rewards of its efforts by enjoying “data exclusivity.” Data exclusivity is a kind of protection which bestows upon the proprietor exclusive rights over the data, whereby the regulatory authority cannot be requested by a third party, which is seeking marketing approval for a generic version, to rely on the data already submitted by the originator of the new chemical entity at the time of granting the marketing approval for the product.

A few countries and communities in the world have legislation for data exclusivity. However, such a protection is granted only for a specific time period. The Hatch-Waxman Act, for example, established a five-year data exclusivity period in the United States. European Directive 2004/27/EC allows a 10-year period from the date of a drug’s first European marketing authorization. Canada has a six-year period of data exclusivity, and Australian law allows the innovator to enjoy five years of data exclusivity.

Data protection is internationally sanctioned by TRIPS in Article 39.1, which requires members to protect data submitted to governments or government agencies in accordance with Paragraph 3. TRIPS Article 39.3 mandates that “members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize 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.”

Further, according to Paragraph 4 of the Doha Declaration, the provisions are to be “interpreted and implemented in a manner supportive of WTO Members right to protect public health and, in particular, to promote access to medicines for all.” TRIPS does not specifically provide for exclusive rights to the originator of the data for a given period. Some countries have obviously gone beyond TRIPS provisions, referred to as “TRIPS-Plus.”

As per Rule 122A of the Drug & Cosmetics Act of India, an importer of a new drug, when applying for permission for marketing approval, is required to submit data including the results of local clinical trials carried out in accordance with the guidelines. However, the requirement of submitting the results of local clinical trials may be dispensed with if the drug is of such a nature that the Licensing Authority may, in public interest, decide to grant such permission on the basis of data available from other countries.

Also, the submission of certain requirements may be modified or relaxed in case of new drugs approved and marketed for several years in other countries if the authority is satisfied that there is adequate published evidence regarding the safety of drug. However, when granting marketing approval for generics, the Drug controller General of India may take the data submitted by the originator and the data of bio equivalence studies conducted by the generics entity into consideration. Thus, if India, too, promulgates a law for data exclusivity, approval of a generic drug would only be possible after the expiration of data exclusivity period.

India has emerged as one of the leading generic drug producers in the world and is rightfully hailed as the pharmacy of the third world. The Indian pharmaceutical industry has earned a distinction of supplying the Indian domestic market, the least-developed nations and the most-developed nations alike with good quality generic drugs at highly-competitive and affordable prices. The global pharmaceutical giants have been making concerted efforts to scuttle this by strongly lobbying the Indian Government to introduce TRIPS-Plus provisions under the garb of harmonization of patent- and other pharmaceuticals related legislation or as a part of free trade agreements between respective governments.

A free trade agreement is presently under negotiation between India and the European Union. It has been reported that the agreement would include strict adherence to EU data exclusivity provisions and will affect production of generic medicines in India, putting at risk the health and even lives of millions of HIV patients, especially in poor countries.

The EU has denied that the free trade agreement currently under negotiations between India and the EU is intended to restrict the ability of India to continue to manufacture and supply the generic medicines for domestic market and exports. According to EU officials, it has proposed provisions to ensure that the agreement would not inhibit India’s freedom to produce and export generics to other developing countries in accordance with the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health. However, notwithstanding EU assurances, it is believed that the EU is unlikely to allow trading partner India to violate data exclusivity period provisions for the manufacture of generic drugs for public health needs.

Lall Lahiri & Salhotra
LLS House, Plot No. B-28,
Sector - 32, Institutional Area,
Gurgaon - 122001, National Capital
Region, India
T: +91 124 2382202, 2382203
F: +91 124 4036823, 2384898

About the Author

Anuradha Salhotra is managing partner and a founder of Lall Lahiri & Salhotra. With experience of more than 26 years in handling all forms of intellectual property rights, Salhotra is regarded as an authority on intellectual property law in India due to her experience in protecting and enforcing IP rights. She is a sought after advisor in areas of licensing, technology transfer and prosecution work for both trademarks and copyright.


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