[Ip-health] Data Exclusivity and national interest

[Riaz K Tayob]

Date:05/10/2006  URL:
http://www.thehindu.com/2006/10/05/stories/2006100502911100.htm

Opinion - News Analysis

Data Exclusivity and national interest

Sarah Hiddleston

In an exercise in non-transparency, the UPA Government is set to concede
Data Exclusivity privileges to pharmaceutical multinationals and amend
drug registration laws without public debate.

IN A major win for multinational pharmaceutical companies, the
government looks set to alter the laws that govern drug registration in
India to accommodate controversial Data Exclusivity (DE) provisions.
After more than four months of debate behind closed doors, the Satwant
Reddy interministerial committee is expected to recommend that India's
drug regulatory authority is enlisted in the protection of
multinationals' clinical trial data for five years.

The Drugs Controller General of India (DCGI) will be prevented from
checking the safety of generic competitor drugs against an originator's
clinical trial data through theoretical proof of bioequivalence.
Multinational companies, backed by the United States, claim that this
constitutes "unfair commercial use" under the ambiguous Article 39.3 of
the World Trade Organisation's Trade Related aspects of Intellectual
Property Rights (TRIPS) agreement. Opponents, referring to the opinion
of legal experts, contend that this clause was meant to prevent
industrial espionage and not provide exclusive rights. They argue that
DE will force generic competitors to delay the production of generics at
low prices, and that this is not only anti-competitive but has serious
implications for the price and availability of medicines.

The minutes of the committee meeting of September 6, which are with The
Hindu , show that representatives from the Departments of Health,
Economic Affairs and the ICMR strongly oppose DE measures for the
reasons stated above. In response the Department of Industrial Policy
and Promotion has suggested seven safeguards.

Four of the safeguards go some way towards limiting the scope of DE
provisions. Two allay fears of blanket application regardless of the
innovativeness of the drug or public health emergencies; they restrict
application to "new chemical entities not previously used in any other
application" and allow for a waiver in compulsory licensing cases. Two
other safeguards act against the incentives DE would create to a) delay
the introduction of originator drugs into the Indian market, and b) sell
them at high prices; they date the start of the DE period from the first
date of marketing exclusivity anywhere in the world and recommend price
checks to ensure accessibility.

The remaining safeguards, however, fail to address the issues they
attempt to resolve. Further, they highlight the complications involved
in attempting to integrate two different legal and regulatory systems
with separate functions, namely patent protection and market registration.

First, DE will apply with "prospective effect" only to new chemical
entities developed after India's accession to the WTO in 1995. However,
104 drugs with patents registered before 1995 remain liable to DE laws
because their first market approval dates fall in 2005 and 2006. These
include the newest and most effective drugs for a raft of diseases
including diabetes and HIV/AIDS. So despite the pledge to apply DE with
prospective effect, retrospective application will, in fact, continue.

Secondly, the period of the DE protection term will not exceed the
patent term. However, this creates a link between drug registration and
patent registration that is administratively difficult and ethically
questionable. It will require the DCGI to verify the patent status of
each product and develop the expertise to assess whether the patent is
valid and will be infringed. It also provides a loophole for DE on drugs
with patents that are later challenged and proven invalid. More
importantly, this link will require the DGCI, a national regulatory
body, to stand in judgment on a private right; patents should be
enforced by the right holders, not a government authority.

Thirdly, a mechanism will enable the domestic pharmaceutical industry to
manufacture generic drugs for export to countries without DE laws, but
deny market access in India itself. However, since it is the combination
of the domestic and the export market that provides the incentive to
produce generic drugs, detaching these may make their operations
economically unviable. It also says much about where the government's
priorities lie =97 in the name of commercial enterprise people elsewhere
will be able to access low-cost drugs manufactured in India, but the
country's own people will have to wait.

The Satwant Reddy Committee report will be submitted within the next 15
days, after which a draft bill amending the Drugs and Cosmetics Act will
be drawn up.

Recognising the difficulties of grounding the changes in the grey area
of Article 39.3, the committee is instead likely to justify DE in terms
of India's national interest.

If the Government is genuinely committed to acting in the national
interest, it should make the amendments public and invite democratic debate=
.

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