[Ip-health] critique of India's proposed data exclusivity/compensation provision

[B.Baker@neu.edu]

=0D
The analysis is intended to educate those who are interested in supporting=
=0D
India activists who are opposing any form of data exclusivity on the basis=
=0D
that it is TRIPS-plus, that it sets a bad international precedent, and that=
=0D
it delays access and adds to the eventual cost of generic medicines.=0D
=0D
A CRITICAL ANALYSIS OF INDIA=E2=80=99S PROBABLE DATA EXCLUSIVITY/DATA COMPE=
NSATION=0D
PROVISIONS=0D
Professor Brook K. Baker, Health GAP, October 20, 2006=0D
=0D
I. INTRODUCTION=0D
=0D
According to recent reports, on August 6, 2006, the Committee for the=0D
Protection of Undisclosed Information under Article 39.3 of the TRIPS=0D
Agreement, under the chairpersonship of Ms. Satwant Reddy, Secretary,=0D
Ministry of Chemicals and Fertilizers, finalized a proposal for a 5-year=0D
term of data exclusivity for India. Although the precise terms of the=0D
proposal have not yet been released to the public, an earlier version=0D
discussed at an Inter Ministerial meeting on May 22, 2006, is likely to=0D
have been adopted. Thus, it is important to analyze the severity of the=0D
wound India is about to inflict upon itself and its own population in terms=
=0D
of future access to affordable generic versions of new medicines. Likewise,=
=0D
it is important to analyze the knock-on affect that reduced access in India=
=0D
will have on poor consumers in other developing countries that have=0D
historically relied on low-price Indian generic medicines of assured=0D
quality, particularly in response to the global AIDS pandemic.=0D
=0D
It would be logical to wonder why drug companies want data exclusivity=0D
rights in India since they have recently won product-patent rights that=0D
grant 20 years of patent protection, which ordinarily block generic=0D
competition. The answer is in fact fairly straight forward =E2=80=93 smalle=
r=0D
research entities and even major drug companies have not always filed=0D
patent application on drug innovations of uncertain value, especially in=0D
developing country markets.(1) Patent applications are expensive because of=
=0D
translation and filing fees and because annual patent maintenance fees.=0D
Since an innovator will ordinarily file its patent application long before=
=0D
safety and efficacy is established via clinical trials, the innovator may=
=0D
not want to waste patent fees on what may be a dead-end product. Whereas=0D
universities, small research companies, and even big pharma firms are=0D
willing to pay patent application and maintenance fees in large markets to=
=0D
hedge their bets and to preserve their monopoly interests, they are less=0D
willing to do so in smaller markets. Moreover, because India did not=0D
granted product patents until very recently, some drug companies responded=
=0D
by delaying introduction of a newer medicine on the market. In essence,=0D
traditional data exclusivity rules would have allowed drug companies to=0D
exclude competitors even where they had not sought or been permitted to=0D
patent their products.=0D
=0D
Data exclusivity provisions, if added to the Indian Drugs and Cosmetic Act,=
=0D
will prevent India=E2=80=99s drug regulatory agency from referencing or oth=
erwise=0D
relying on registration data previously filed by innovator drug companies=
=0D
in order to gain regulatory approval for therapeutically equivalent generic=
=0D
versions. Under data exclusivity rules, the Indian drug regulatory agency=
=0D
will have to pretend that the safety and efficacy of identical follow-on=0D
products cannot be established via proof found in the originator=E2=80=99s =
earlier=0D
submission. As a consequence, generic companies would be forced to repeat=
=0D
time-consuming, expensive, and unethical studies in order to receive=0D
regulatory approval during the five-year period of exclusivity. These added=
=0D
and unnecessary costs, delays, and ethical concerns virtually guarantee=0D
that no generic company will seek registration until the exclusivity period=
=0D
has expired.=0D
=0D
Even with safeguard exceptions for data compensation (discussed further=0D
below), there might still be procedural delays and litigation bottlenecks=
=0D
that could impede access and/or increase the costs of essential generic=0D
products. India could avoid some of these consequences were it to adopt a=
=0D
simple, non-appealable formula for data percentage-based royalties.=0D
However, under more complex market-share compensation rules with required=
=0D
negotiations, market-share assessments, and opposition and appeal=0D
procedures, generic drugs could take years to come onto the market, and=0D
medicines would be more expensive in the interim. Either form of=0D
compensation adds to the eventual cost of medicines. On this ground and on=
=0D
the ground that India can and should be a leader in avoiding TRIPS-plus=0D
measures, India should avoid data-exclusivity even with a compensation=0D
option.=0D
=0D
The WTO TRIPS Agreement does not require data exclusivity, and thus India=
=0D
is not obligated to adopt TRIPS-plus data exclusivity laws. The relevant=0D
portion of the TRIPS Agreement, Article 39.3,(2) only requires protection=
=0D
of expensive, undisclosed data submitted to drug regulatory agencies=0D
against =E2=80=9Cunfair commercial use=E2=80=9D =E2=80=93 basically theft o=
r commercial espionage.=0D
Nowhere does TRIPS state that exclusive rights must be provided for a given=
=0D
period. In fact, TRIPS makes clear that countries may decide for themselves=
=0D
what constitutes =E2=80=9Cunfair commercial use=E2=80=9D and that there are=
 many possible=0D
approaches to satisfy this requirement. Permitting a drug regulatory=0D
authority to do its job =E2=80=93 assuring the quality, safety, and efficac=
y of=0D
medicines =E2=80=93 is not unfair commercial use; it is a mandated public=
=0D
service.(3)=0D
=0D
The World Health Organization=E2=80=99s Commission on Intellectual Property=
 Rights,=0D
Innovation, and Public Health recently reinforced the view that TRIPS does=
=0D
not require data exclusivity:=0D
=0D
Article 39.3, unlike the case of patents, does not require the provision of=
=0D
specific forms of rights. It does not create property rights, nor a right=
=0D
to prevent others from relying on the data for marketing approval of the=0D
same product by a third party or from using the data except when unfair=0D
(dishonest) commercial practices are involved.=0D
=0D
Prior to 1994, the U.S. tried to get its strict version of data exclusivity=
=0D
into the TRIPS Agreement and failed =E2=80=93 developing country negotiator=
s simply=0D
rejected its proposal. This =E2=80=9Clegislative history=E2=80=9D of failur=
e, by itself,=0D
should be enough to scuttle U.S.-inspired arguments that data exclusivity=
=0D
is required. Moreover, many countries have rejected data exclusivity as=0D
requirement of data protection and have instead adopted or continued more=
=0D
minimal forms of TRIPS-compliant data protection. These countries have=0D
never been challenged with a WTO complaint and for good reason =E2=80=93 su=
ch a=0D
complaint would surely be considered unmeritorious. If more proof is=0D
required, the historic WTO Doha Declaration on the TRIPS Agreement and=0D
Public Health ensures the primacy of public health and further ensures that=
=0D
intellectual property rules do not interfere with promoting =E2=80=9Caccess=
 to=0D
medicines for all.=E2=80=9D Even under U.S. law, the Trade Promotion Author=
ity Act=0D
of 2002 =C2=A7 2102(b)(4)(C), the U.S. is required to uphold the Doha=0D
Declaration.=0D
=0D
The dangers of data-exclusivity on access to medicines is clear =E2=80=93 p=
oor=0D
consumers in India and throughout the developing world will have reduced=0D
access to the newest life-saving and life-enhancing medicines that is=0D
routinely available to their rich counterparts. Even though data=0D
exclusivity would not apply to all drugs, it would apply to the newest=0D
medicines (those involving =E2=80=9Cnew chemical entities=E2=80=9D), many o=
f which=0D
represent therapeutic breakthroughs, such as Atazanavir, an important=0D
second-line AIDS medicine, and Tamiflu, a medicine believed to be effective=
=0D
against avian/human influenza. If implemented in the manner proposed, data=
=0D
exclusivity would apply to most of the important new medicines brought to=
=0D
market in India in the future. Moreover, the USTR and the R&D drug industry=
=0D
will continue to seek a shorter period of data exclusivity, usually three=
=0D
years, for new formulations and new uses of known medicines.(4) There=E2=80=
=99s no=0D
reason that Indians should not have access to affordable versions of the=0D
newest and most effective medicines even if those drugs are relatively few=
=0D
in number.=0D
=0D
II. CRITIQUE OF INDIA=E2=80=99S FIVE-YEAR DATA EXCLUSIVITY PROPOSAL=0D
=0D
According to available reports, India=E2=80=99s new data exclusivity propos=
al=0D
contains several safeguard provisions and exceptions:=0D
=0D
(1) Application to =E2=80=9Cnew chemical entities only=E2=80=9D;=0D
(2) exclusivity period running from the date of first approval anywhere in=
=0D
the world;=0D
(3) requirement that a registration application be filed in India within=0D
one year of first approval elsewhere;=0D
(4) an exception for emergencies and public health crises;=0D
(5) an exception for drugs of mass consumption, including for HIV/AIDS,=0D
upon payment of a reasonable royalty;=0D
(6) a compensation exception where repeat clinical trials would be=0D
unethical;=0D
(7) an exception for reliance on data submitted elsewhere (rare);=0D
(8) a Bolar provision allowing applications for marketing approval even=0D
during the period of data exclusivity;=0D
(9) price control assurances;=0D
(10) termination of exclusivity following a grant of a voluntary license by=
=0D
the data originator; and=0D
(11) termination of exclusivity upon patent-term expiration.=0D
=0D
This section will analyze and critique each of these so-called safeguard=0D
provisions.=0D
=0D
1. Application to =E2=80=9Cnew chemical entities only=E2=80=9D=0D
=0D
By its express provisions, Article 39.3 requires data protection only for=
=0D
=E2=80=9Cnew chemical entities.=E2=80=9D However, that term is not defined =
in TRIPS and it=0D
is subject to broader or narrower interpretations.=0D
=0D
Under broader interpretations, =E2=80=9Cnewness=E2=80=9D would be considere=
d only in the=0D
context of whether chemical entity has previously been approved in a=0D
pharmaceutical product in the Indian market. Under a stricter or narrower=
=0D
interpretation, =E2=80=9Cnewness=E2=80=9D would be considered in reference =
to any previous=0D
approval or commercialization anywhere in the world. Likewise, newness=0D
could be interpreted liberally or strictly with respect to variations in=0D
the form of the chemical entity. Overly liberal definitions of new chemical=
=0D
entities would encourage evergreening of data exclusivity by introduction=
=0D
of minor variations in the base chemical entity. Strict definitions would=
=0D
provide data exclusivity only once and only for truly unique chemical=0D
entities.=0D
=0D
India=E2=80=99s current regulatory scheme with respect to registration is w=
holly=0D
inadequate.(5) Nonetheless, India remains free to adopt its own=0D
interpretation of =E2=80=9Cnew chemical entity=E2=80=9D and could wisely ch=
oose the=0D
narrowest possible definition,(6) such as the following:=0D
A new chemical entity means a drug that contains no active moiety and which=
=0D
has not been known to exist previously in India or any other part of the=0D
world. For the purpose of this rule, active moiety means the molecule or=0D
ion, excluding those appended portions of the molecule that cause the drug=
=0D
to be an ester, salt (including a salt with hydrogen or coordination=0D
bonds), or other noncovalent derivative (such as a complex, chelate, or=0D
clathrate) of the molecule, responsible for the physiological or=0D
pharmacological action of the drug substance.=0D
However, even this narrow definition could not prevent a likely period of=
=0D
marketing exclusivity for many new and important pharmaceutical products.=
=0D
=0D
2. Exclusivity from the first date of approval anywhere in the world=0D
=0D
The May 22 data-exclusivity proposal contained a provision that the period=
=0D
of data exclusivity would commence from the date of first approval of the=
=0D
new chemical entity for pharmaceutical use anywhere in the world. Drug=0D
companies at present routinely introduce their products first to=0D
rich-country markets in the United States, Europe, and Japan. This=0D
stop-the-clock provision would promote early introduction of the new=0D
product to the Indian market by penalizing drug companies for their own=0D
controllable delays in seeking product registration and marketing approval=
=0D
in India. Although this clause would not eliminate the total five-year=0D
period during which Indian consumers would not have access to the newest=0D
medicines, it would ensure that they did not suffer interminable delays =E2=
=80=93=0D
long delays in seeking approval followed by five long years of data=0D
exclusivity.=0D
=0D
3. Requirement that a registration application be filed within one year of=
=0D
first approval anywhere in the world=0D
=0D
A related provision requires that a drug company file its registration=0D
application within one year or thereby lose its right to claim that the=0D
chemical entity is new. In many respects, this provision would operate like=
=0D
the one-year rule in the Paris Treaty, which allows innovators a one-year=
=0D
grace period during which to file patent applications elsewhere in the=0D
world after their initial, first filing. The one-year patent grace period=
=0D
allows the patent applicant to claim novelty and to solve the inevitable=0D
bureaucratic difficulties of multiple filings.=0D
=0D
Although it is a positive restriction to grant drug companies a=0D
one-year-only grace period rather than let them avoid a market for a long=
=0D
time and then still seek data exclusivity long after the drug has been in=
=0D
use elsewhere in the world, the one-year, use-it-or-lose-it grace period=0D
does not ultimately shorten the five-year period of exclusivity.=0D
=0D
4. An exception for emergencies and public health crises=0D
=0D
The proposal is likely to have an express exception for publicly declared=
=0D
emergencies and public health crises. Of course, there will be questions=0D
about who or which agencies will be permitted to declare such emergencies=
=0D
or crises and about their duration, but the larger question is why this=0D
exception should be limited to extreme circumstances. It would be much=0D
preferable if the data exclusivity provision, if any, would include an=0D
express exception for any circumstance in which a compulsory license or=0D
government use order has been issued in compliance with the India Patent=0D
Act as amended in 2005. That Act permits specials procedures for compulsory=
=0D
licenses granted to addressed emergencies and matters of extreme urgency,=
=0D
but it also allows compulsory licenses on many other grounds: government,=
=0D
non-commercial use, public health needs, competition, and export to=0D
countries lacking domestic manufacturing capacity. None of these=0D
flexibilities should be forestalled because of data exclusivity.=0D
=0D
5. An exception for drugs of mass consumption, including for HIV/AIDS, upon=
=0D
payment of a reasonable royalty=0D
=0D
A compensation exception limited to medicines of mass consumption simply=0D
does not make sense. The Gleevec case is a perfect example of a medicine=0D
critical to the survival of a small number of cancer patients and where=0D
monopoly pricing rendered treatment unaffordable except for the richest=0D
minority. In fact, drug prices are often set higher for drugs with small=0D
consumer bases. Patients suffering from relatively rare diseases have the=
=0D
same interests as patients of pandemics in accessing affordable medicines.=
=0D
=0D
If a compensation system makes sense at all =E2=80=93 a contested issue =E2=
=80=93 it only=0D
makes sense if it is potentially available, and affordable, across a broad=
=0D
range of products through an easy to administer system.(7) The major=0D
justification for such a compensation system =E2=80=93 even though it would=
 be=0D
TRIPS-plus =E2=80=93 would be to counteract drug companies=E2=80=99 claims =
that their=0D
investments are being =E2=80=9Ctaken=E2=80=9D without just compensation. Th=
e easiest to=0D
administer system would be one involving a modest percentage royalty fee=0D
based on Indian domestic sales without regard to the drug company=E2=80=99s=
 R&D=0D
investment. A more complicated, and far less desirable, compensation scheme=
=0D
could require computation of relevant research and development expenditures=
=0D
and further calculations of market shares, and might even involve=0D
requirements for royalty negotiations, opposition procedures, and appeals.=
=0D
Such complex compensation schemes, even ones involving arbitration, can be=
=0D
laborious and slow.(8) They also raise a troubling degree of uncertainty=0D
about future costs that can greatly complicate economic forecasting and=0D
market entry by generic companies.=0D
=0D
Any and all royalty or cost-sharing compensation schemes are problematic=0D
when compared to a baseline, TRIPS-compliant right to avoid data=0D
exclusivity altogether. As a preliminary matter, it is well established=0D
that major drug producers recoup their research and development=0D
expenditures in rich country markets in the U.S., Europe, and Japan.(9)=0D
Drug company profits continue to soar and continue to exceed R&D=0D
investments even though there has not been data exclusivity or compensation=
=0D
in most developing countries. Moreover, what drug companies call necessary=
=0D
and related research and development is a highly contested matter. Much=0D
drug research is focused on me-too drugs, on efforts to increase market=0D
share, and on efforts to make misleading claims for expanded use. Finally,=
=0D
research and development incentives from Indian market sales are=0D
insignificant on a global scale =E2=80=93 the entire subcontinent comprises=
 less=0D
than 1.3% of global pharmaceutical sales. Indeed, Africa and Asia combined=
=0D
total only 5.1% of global sales and all developing countries lumped=0D
together total roughly 11% of the global market.=0D
=0D
In sum, the most desirable outcome would be no data exclusivity and no data=
=0D
compensation. India should be a global leader in resisting TRIPS-plus=0D
measures, particularly on a voluntary basis. If India stands up and resists=
=0D
U.S.-sponsored pressure for data exclusivity that will embolden other=0D
developing countries, including those involved in U.S. free trade=0D
negotiations.=0D
=0D
6. A compensation exception where repeat clinical trials would be unethical=
=0D
=0D
The truth of the matter is that clinical trials for generic equivalents of=
=0D
previously approved pharmaceutical products will always be unethical.=0D
Clinical trials are only justified where there is a legitimate scientific=
=0D
inquiry concerning the safety and efficacy of an investigational new=0D
product. However, once that safety and efficacy of the new product has been=
=0D
established the only scientifically valid studies of the follow-on=0D
equivalent are whether it is produced according to required quality=0D
standards and whether it is therapeutically equivalent to the original=0D
product, usually via bio-equivalence studies. The clinical-trial exception=
=0D
makes it sound like there is some subset of medicines where unnecessary and=
=0D
duplicative trials are ethical. To the contrary, exposing human subjects to=
=0D
placebo-based clinical trials when the drug being investigated is already=
=0D
known to be safe and effective is a gross violation of human rights and=0D
investigational ethics and enormous waste of medical and economic=0D
resources. It should not be tolerated let alone condoned.=0D
=0D
7. A rare exception for reliance on data submitted elsewhere=0D
=0D
India may well be advised to amend its drug regulatory scheme to permit=0D
more reliance on previous registration by stringent drug regulatory=0D
authorities or even on WHO pre-qualification. Vicarious reliance on the=0D
work of other highly capable drug regulatory authorities would reduce the=
=0D
burden on Indian regulators and also speed up the approval process. At=0D
present, India requires separate clinical trials on Indian patients, but=0D
this requirement seems unnecessary in the vast majority of cases. There is=
=0D
little need for India-specific studies to establish safety and efficacy for=
=0D
Indian people whose human biological diversity (and fundamental similarity)=
=0D
closely matches that in the rest of the world.=0D
=0D
Reliance on foreign registration may certainly be beneficial in=0D
circumstances where a pharmaceutical product has not yet been brought to=0D
the Indian market and a generic producer stands ready to produce, import,=
=0D
or sell the product in India. (Note: the product=E2=80=99s patent status in=
 India=0D
may adversely affect such an effort.) Alternatively, an importer could be=
=0D
seeking to use parallel importation rights to import a previously=0D
unregistered brand-name product. These producers or importers who are=0D
striving to bring new drugs to the Indian market should not be forestalled=
=0D
by the originator=E2=80=99s reluctance or delay in seeking approval in Indi=
a. Thus,=0D
the idea that this should be a rare exception is probably misguided, though=
=0D
it is also true that data exclusivity would not be an issue if there were a=
=0D
more than one year delay in an Indian application for data exclusivity (see=
=0D
point 3 above).=0D
=0D
8. A Bolar provision allowing applications for marketing approval even=0D
during the period of data exclusivity=0D
=0D
The proposal is likely to contain a research exception and an exception to=
=0D
permit applications for marketing approval during the period of data=0D
exclusivity even though the actual grant will not occur until after the=0D
period expires. Clearly, it is desirable to allow follow-on producers to=0D
conduct research on product formulation, conduct stability experiments, and=
=0D
undertake bioequivalence studies. This advance work can permit the generic=
=0D
company to prepare a registration dossier for submission to the drug=0D
regulatory agency even during the period of exclusivity. Under the proposal=
=0D
the drug regulatory authority will be permitted to examine the application=
=0D
and rely on data previously filed by the data originator, but the drug=0D
regulatory authority will only be permitted to grant tentative approval.=0D
Final approval will be granted only after the period of exclusivity=0D
expires, but at the very least the new product might be brought onto the=0D
market very quickly rather than having to wait for an additional period of=
=0D
regulatory delay.=0D
=0D
9. Vague price control assurances=0D
=0D
Under the proposal, the Government says it will create a suitable mechanism=
=0D
to ensure that the prices of such new drugs continue to remain reasonable=
=0D
so that there is a wider coverage as far as the patients are concerned. The=
=0D
details of this mechanism are unspecified, and without specifications the=
=0D
threat of price controls offers little protection against the threat of=0D
rising drug prices, especially since the record of Indian price controls is=
=0D
not entirely reassuring. Moreover, since Indians continue to pay for the=0D
majority of drug costs out-of-pocket, higher prices will inevitably lead to=
=0D
lower usage, especially for poor Indian who live on less than $2/day.=0D
=0D
10. Termination of exclusivity following a grant of a voluntary license by=
=0D
the data originator=0D
=0D
Any authorization of a generic by the data exclusivity holder would=0D
automatically terminate data exclusivity for all producers. Whether the=0D
authorization applies only to voluntary licensees or whether it also covers=
=0D
the data holder=E2=80=99s launch of a generic version of its own product is=
=0D
uncertain. In the U.S., drug companies are beginning to launch official=0D
generic versions of their own drugs shortly before patent expiration in=0D
order to gain market share in the generic and in some instances to prevent=
=0D
a competing generic from gaining six months of exclusivity under U.S. law.=
=0D
There is no comparable, first-generic entrant rule in India, but the=0D
proposed provision is designed to prevent de facto market share control by=
=0D
the data holder and therefore to encourage entry by multiple generic=0D
competitors. This competition will have a favorable impact on prices.=0D
=0D
11. Termination of the period of data exclusivity upon termination of the=
=0D
patent term.=0D
=0D
India is proposing to ensure that the period of data exclusivity never=0D
extends beyond the term of patent protection. This clause could be=0D
significant for products that enter the market very late in their patent=0D
term =E2=80=93 a condition that may apply in the short term to drugs in the=
 Indian=0D
=E2=80=9Cmailbox=E2=80=9D if there are additional long delays in granting p=
atents=0D
(post-1995 innovations have been held in India=E2=80=99s mailbox until the =
new 2005=0D
Patent Act Amendments.) This provision directly contradicts terms that the=
=0D
U.S. is seeking in its free trade agreement negotiations, so India might=0D
receive blow-back from U.S. authorities and PhRMA officials.(10)=0D
=0D
III. CONCLUSION=0D
=0D
India has attempted to soften the perverse effects of its unnecessary=0D
adoption of data exclusivity by engrafting multiple safeguard provisions=0D
and exceptions. Although it is true that these provisions ameliorate the=0D
harshest features of the proposal and grant some exceptions to data=0D
exclusivity, individually and collectively they do not mean that India is=
=0D
making a wise policy choice. The TRIPS Agreement does not require a grant=
=0D
of data exclusivity nor does the interest of India=E2=80=99s own pharmaceut=
ical=0D
industry, which does not currently invest strongly in new chemical entity=
=0D
research and which can recoup its investments through data exclusivity=0D
granted in the U.S. and Europe. By granting data exclusivity, even with=0D
safeguards, India is allowing another form of monopoly market protection=0D
that will inevitably result in higher prices. Even worse, in some=0D
identified circumstances, it will prevent effective utilization of=0D
TRIPS-compliant flexibilities by preventing domestic registration of=0D
medicines for which compulsory licenses have been granted. Although the=0D
adverse policy consequences of this self-inflicted wound will fall=0D
primarily on poor Indian consumers, the adverse consequences could be felt=
=0D
in other developing countries as well. To the extent that Indian generic=0D
producers rely on marketing rights in India in order to produce medicines=
=0D
for exportation, domestic data exclusivity rules can deter generic entry=0D
into the production-for-export market. Likewise, since some countries=0D
require registration in the manufacturing country before granting marketing=
=0D
approval for an imported drug, data exclusivity in India may further delay=
=0D
life-saving access to generic medicines in other developing countries.=0D
=0D
The best outcome would be for patients, public health and human rights=0D
practitioners, AIDS activists, and other progressive political forces in=0D
India to combine forces in opposing the adoption of data exclusivity.=0D
International activists should support Indian opponents in their campaign=
=0D
to resist U.S. and drug company pressure on India and to defeat data=0D
exclusivity during the legislative process. This is a matter of urgency as=
=0D
lives are at stake.=0D
=0D
Endnotes:=0D
=0D
(1) See, Shoibal Mukherjee, Here=E2=80=99s a penny for your pill (8 August =
2006)=0D
available at=0D
http://www.hindustantimes.com/onlineCDA/PFVersion.jsp?article=3Dhttp://10.8=
1.141.122=0D
/news/181_1764059,00020008.htm#.=0D
=0D
(2) Article 39.3 of the trips Agreement reads:=0D
=0D
Member when requiring, as a condition of approving the marketing of=0D
pharmaceutical or of agricultural chemical products with utilize new=0D
chemical entries, the submission of undisclosed test or other data, the=0D
origination of which involves a considerable effort, shall protect such=0D
data against unfair commercial use. In addition, Members shall protect such=
=0D
data against disclosure, except where necessary to protect the public or=0D
unless steps are taken to ensure that the data are protected against unfair=
=0D
commercial use.=0D
=0D
(3) Carlos Correa, Protection of Data Submitted for the Registration of=0D
Pharmaceuticals: Implementing the Standards of the TRIPS Agreement (2002);=
=0D
cf. Aaron X. Fellmeth, Secrecy, Monopoly, and Access to Pharmaceuticals in=
=0D
International Trade Law: Protection of Marketing Approval Data under the=0D
TRIPS Agreement, 45 Harv. Int=E2=80=99l L.J. 443 (2004); contra G. Lee Skil=
lington=0D
& Eric M. Solovy, The Protection of Test and Other Data Required by Article=
=0D
39.3 of the TRIPS Agreement, 24 Nw. J. Int=E2=80=99l L. & Bus. 1 (2003).=0D
=0D
(4) Drug companies justify getting data exclusivity for new uses and new=0D
formulations of old chemical entities to incentivize clinical trials into=
=0D
expanded uses of previous medicines and into development of more=0D
patient-friendly formulations. In some countries, such new uses and new=0D
formulations will be patentable, but not under India=E2=80=99s 2005 Patent =
Act,=0D
unless they show significant therapeutic advantages. Accordingly, gaining=
=0D
three-year exclusivity will be a high priority goal for the pharmaceutical=
=0D
lobby and its USTR proxies =E2=80=93 it will be the only way they can gain =
monopoly=0D
status and market exclusivity for some of their unpatentable products.=0D
=0D
(5) Under Rule 122-E of the DCA Rules (1945), a =E2=80=9Cnew drug=E2=80=9D =
is defined as:=0D
(a) a bulk drug substance which has not been used in the country to any=0D
significant extent and has not been recognised as safe and effective by the=
=0D
licensing authority; (b) a drug that is already approved by the licensing=
=0D
authority which is now proposed to be marketed with modified or new claims,=
=0D
namely, indications, dosage, dosage form (including sustained release=0D
dosage form), route of administration; or (c) a fixed dose combination of=
=0D
two or more drugs, individually approved for certain claims, which are now=
=0D
proposed to be combined for the first time in a fixed ratio, or if the=0D
ratio of ingredients in an already marketed combination is proposed to be=
=0D
changed, with certain claims, namely, indications, dosage, dosage form=0D
(including sustained release dosage form), and route of administration. For=
=0D
the purpose of the Rules, all vaccines shall be new drugs unless otherwise=
=0D
certified and a new drug shall continue to be considered a new drug for a=
=0D
period of four years from the date of first approval or its inclusion in=0D
the Indian Pharmacopoeia, whichever is earlier.=0D
=0D
(6) See, Initiative for Medicines, Access & Knowledge, The Impact of=0D
Article 39.3 in India: A Practical Perspective, 30 (2006); cf.=0D
http://www.fda.gov/cder/about/smallbiz/exclusivity.htm.=0D
=0D
(7) Judit Rius Sanjuan, James Love & Robert Weissman, A cost sharing model=
=0D
to protect investments in pharmaceutical test data, CPTech Policy Brief No.=
=0D
1 (Revised: 18 May 2006).=0D
=0D
(8) I-MAK, supra note 6, has listed the following questions and concerns:=
=0D
=E2=80=A2 How royalty standards are set. This would include identifying and=
=0D
explicitly setting out the costs that would be subject to compensation. For=
=0D
example, guidelines should be provided that clarify whether costs relating=
=0D
to failed trials form part of an assessment for compensation.=0D
=E2=80=A2 What mechanisms would be utilised for government verification of=
=0D
originator claims, possibly including the creation of a specific authority=
=0D
set up under the Ministry of Health and/or Drug Controller General in=0D
India.=0D
=E2=80=A2 How to catalyse access to undisclosed information relating to the=
 cost of=0D
clinical trials and market-share data.=0D
=E2=80=A2 What laws exist relating to the discovery of costs of clinical tr=
ials and=0D
market share data.=0D
=E2=80=A2 How to devise mechanisms that will monitor effectively the amount=
 of=0D
compensation the originator will receive, and whether the amount exceeds=0D
the original investment.=0D
=E2=80=A2 What cap should be set on compensation and the percentage of orig=
inal=0D
investment that can be recouped by originator, e.g. 80% as suggested by=0D
Fellmeth. Effectiveness and Procedural Aspects of Arbitration/Litigation=0D
=E2=80=A2 How to ensure that production of medicines is permitted during=0D
arbitration and litigation so that extended administrative procedures do=0D
not become a bar to competition.=0D
=E2=80=A2 Whether a specialist arbitration panel composed of public health =
experts=0D
is needed for such arbitration.=0D
=E2=80=A2 How to prevent delay by expediting arbitration and litigation in=
=0D
compensation cases.=0D
=E2=80=A2 How and whether appeals can be made from arbitration decisions.=
=0D
=E2=80=A2 What the relative bargaining position of different market players=
 is=0D
likely to be at the commencement of arbitration, and how this will affect=
=0D
competition.=0D
=E2=80=A2 How to prevent =E2=80=9Cgaming=E2=80=9D of a market share system=
=E2=80=94for example, where an=0D
originator refrains from selling a drug after obtaining marketing approval,=
=0D
the generic company pays 100% of the costs of the data for that drug.=0D
=E2=80=A2 What the impact of artificial barriers will be to market entry on=
=0D
economic growth.=0D
=E2=80=A2 Whether Indian industry is able to share in the costs of original=
=0D
investment, given that clinical trials will often have been conducted in=0D
the United States or Europe where costs are much greater, and whether the=
=0D
expense for Indian manufacturers would be prohibitive.=0D
=E2=80=A2 How market share will be measured, and when will it be measured, =
because=0D
if assessments are not predictable, Indian manufacturers will not be able=
=0D
to assess risks or costs/benefits and make informed business decisions.=0D
=E2=80=A2 Which Ministry will be responsible for monitoring implementation =
of the=0D
cost-sharing model, and other significant administrative aspects of this=0D
model, and how cumbersome these burdens will be to implement in practice.To=
 this list one could add questions about whether market share will be=0D
based on dollar volume of sales or pill volume of sales and how India would=
=0D
acknowledge or assess market share of later entrants?=0D
=0D
(9) See Donald W. Light & Joel Lexchin, Foreign Free Riders and the High=0D
Prices of U.S. Patented Drugs, 331 British Med. J, 958-60 (2005).=0D
=0D
(10) One of the primary rationales for data exclusivity from the U.S.=0D
perspective is that it allows a guaranteed period of market exclusivity and=
=0D
monopoly pricing even if a patent was never filed or if a granted patent=0D
has expired.=0D