[Ip-health] Business Standard (India)- 'Do we need data exclusivity ?'

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'Do we need data exclusivity ?'


While protecting the data submitted by pharma firms is touted as
critical for encouraging more R&D, we need to see if this delays the
entry of cheaper

Business Standard / New Delhi December 9, 2009, 0:06 IST

DG Shah
Secretary General
Indian Pharmaceutical Alliance



Some thrive on creating confusion to have their way. The terms Data
Exclusivity (DE) and Data Protection (DP) have also been used
interchangeably by the originator companies in the pharmaceutical sector
to create confusion. But they are different and have significantly
different impact on access to medicines and public health.

The term DE is new to India, as it does not figure in the Trade Related
Intellectual Property Rights (Trips) Agreement of the WTO. DE stands for
exclusivity, that is market monopoly. The originator companies in the
pharmaceutical sector claim that India should grant certain period of
exclusivity (monopoly) in the market to encourage research and
development (R&D) and foreign direct investment. This exclusivity, they
further claim, is independent of patent, which grants 20-year monopoly.
They justify this demand as reward for generating clinical trial data
used to establish safety and efficacy of a new drug "product" (not
necessarily new chemical entity).

The history of Trips negotiations reveals that the developed countries
had originally asked for six years of DE, when the period of patent
protection was 14 years. However, this was dropped from the final text,
after the period of product patent protection was raised to 20 years.

The term DP is used in Article 39.3 of the Trips Agreement and is,
therefore, not new to India. The Article 39.3 stipulates: "Protection
against unfair commercial use of undisclosed test or other data the
origination of which involves considerable effort, and is required to be
submitted to government or governmental agencies to obtain marketing
approval, for products utilising new chemical entities."

It is important to recognise the distinction between new chemical
entities (NCEs) and new drug products. Trips Agreement requires
protection of data for NCEs and not for new drug products. Thus, a new
drug product (for example a new formulation of a known drug or a new
salt or complex of a known drug), if not a new chemical entity, is not
entitled to data protection under the Trips Agreement, irrespective of
whether clinical trial or other data is required to be submitted for
marketing approval.

Secondly, obligation to protect undisclosed test data is applicable to
data generated only after the signing of the Trips Agreement, that is, 1
January 1995. Hence, test data generated prior to 1995 shall not be
eligible for protection.

Thirdly, it does not specify any period of protection. The current laws
in India are adequate to meet these obligations.

Thus, DE stands for extended period of monopoly, whereas DP stands for
protection against "unfair commercial use" of data generated for
obtaining marketing authorisation for products using new chemical
entities.

Canada and the EU built DE in their intellectual property (IP) ecosystem
to promote R&D and to attract new investments in their country/region.

But empirical data reveals that the originator companies have not met
their expectations. There is flight of R&D from the EU to the US in
spite of stronger IP ecosystem, and investment promises to Canada have
not yet fructified. On the other hand, DE has become an anti-competitive
practice and is delaying generic entry to the detriment of the public
health.

Civil society organisations and the generic industry do not favour DE
and have cited several other reasons against providing this. They
include:

 *  Patent can be challenged and invalidated, but there is no such
provision to question the validity of DE; DE is, therefore, seen as
protection for weak patents;
 *  Market exclusivity (monopoly) could be claimed through DE even for
pre-1995 molecules; DE would force duplication of toxicity studies and
clinical trials which is unethical; DE will override Section 107A of the
Patents Act, which allows R&D during the life of the patent (popularly
known as Bolar Exception); and DE will also override Sections 84 to 92A
of the Patents Act, which permit "compulsory licensing" on public health
grounds.

Thus, other than promoting private interests of the originator
companies, there is no justification for introducing DE. It is not an
obligation. It does not attract foreign direct investment as seen in
Canada and the EU. The domestic industry does not need it. On the
contrary, it is a hindrance to access and it delays entry of generics
into the market. Why should India need DE? All governments design their
laws to protect their people and their industry.

Why should it be different for India?

Ranjit Shahani
President, Organisation of Pharmaceutical Producers of India

Public health interest is at the very core of data exclusivity (DE).
Patients are the ultimate beneficiaries of all pharmaceutical research
and development and lack of data protection could compromise public
health. A critically important part of the drug development process is
the collation and analysis of data on the safety and effectiveness of
new medications.

The primary purpose of any rules concerning developing, manufacturing
and distribution of drug products must be to safeguard public health.
Indeed, the pharmaceutical industry is built on safe, efficient and
effective products meeting medical need.

What is DE? The principle accepted by most countries is that proprietary
data should not be disclosed or used for the commercial benefit of third
parties. These countries obligate their regulatory authorities to
protect the value of this proprietary data by ensuring a specific time
during which only the originator can use the data and is protected from
use by others. This time is referred to as "Data Exclusivity".

DE serves as an enabler for companies to bring in new and better
medicines to the market. It is the data collated from clinical trials
and laboratory testing that needs protection. Clinical trials are
performed in three phases where healthy volunteers and patients are
tested to find a drug's safety profile, effectiveness, safe dose range
etc and each phase provides data needed to advance to the next, more
extensive phase.

Regulatory authorities the world over are demanding longer and more
expensive clinical trials in order to ensure the safety of patients and
this in turn adds to the costs of developing these new medicines. The
research based pharmaceutical industry spends close to Rs 5,500 crore or
$1.3 billion to bring a single new drug to market. Furthermore, the time
to bring a single new molecule has gone up dramatically taking on an
average 10 to 15 years.

In order to fulfil their duty to protect public health, government
regulators must be able to review data showing that pharmaceutical
products meet their national standards required for being safe and
effective for the benefit of the patient. In the major industrialised
country markets, the data required is very extensive and, over the last
30 years, there has been a tremendous increase in testing and collection
of data by industry for this purpose.

Allowing companies the use of data produced by innovator companies to
bring their own drugs to market could seriously compromise the health of
patients since these drugs have not gone through the process of actual
clinical trials.

Furthermore, local innovators in emerging markets who usually do not
have the same capacity as large companies may be more likely to focus
their efforts on developments such as new medical uses, new combinations
of drugs and new formulations. They, even more especially, would be
looking for DE to provide the security for investing their time, money
and effort. DE stimulates both local development and foreign investment.

Without DE and in the absence of patent protection, copiers can rely on
the innovator's data to gain market approval at the same time as or, as
in some cases, even before the innovator. Therefore, a limited period of
effective DE provides the necessary conditions for an inventor or a
company to take the risk to make the investment in local distribution,
local marketing and sales together with any necessary packaging and
manufacture.

There is a fear, albeit unfounded, that DE will likely lead to higher
prices for drugs and delay the launch of generic drugs. Experience shows
no connection between DE and drug pricing or launch of generic drugs. In
fact to the contrary, competition within therapeutic classes and
limitations of purchasing power work to keep prices down.

India has potentially the world's largest market for pharmaceuticals,
yet few Indian pharmaceutical companies are working on new medicines
that address the specific needs of the Indian patient. Ironically, a
large number of Indian pharmaceutical companies are working on new drugs
that will meet the needs of patients in countries where there is DE and
where their investments will be protected.

India has a desire to grow its pharmaceutical sector. It certainly has
the capabilities. However, to reach the next level, and to create the
new medicines that will treat the needs of people right here in India,
the country needs to create the right environment to stimulate research.

http://www.business-standard.com/india/news/%5Cdo-we-need-data-exclusivi
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