Protecting Test Data - Revisiting At The Time Of Pandemic
The outbreak of Covid-19 has set the eyes of the world towards finding a suitable vaccine for the virus. Data Exclusivity is the period of non-reliance and non-disclosure that is provided to new chemical entities and pharmaceutical composition. There is a difference between what we understand as Data Protection and Data Exclusivity. Both cannot be used interchangeably. As the name suggests, data exclusivity is ‘exclusive’ to the information on clinical trial data that the originator develops. Data protection is the general protection for all sorts of undisclosed information. Moreover, data exclusivity also differs from patents. Even if the patent expires or even there are no patents at all, still data exclusivity will act independently. Data exclusivity rights are sometimes considered stronger right than that of patent, since unlike patent law, the government cannot mould nor have flexibility in terms of administering the data exclusivity framework as it can do in patents, such as compulsory licensing.
[Image Source: Stanford]
Article 39.3 says 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."
The bare reading of Article 39 does not explicitly talk about data exclusivity. But the literal interpretation of Article 39.3 does provide us a reasonable inference to operate on data exclusivity standard. Article 39.3 clearly states that the submission of ‘undisclosed test or other data’, the origination of which involves ‘considerable effort’ shall be protected by the member states. Hence, the obligation will automatically come to play as soon as the originator submits ‘undisclosed data’ involving ‘considerable effort’. Despite the clear indication that the exclusivity regime for the protection of test data was not intended to be the WTO requirement, the developed countries, especially the USA and EU, asserted the interpretation that requires the countries to include data exclusivity framework.
In the US, a drug manufacturer will be debarred from using the information of the original manufacturer, while introducing the generic version of the New Chemical Entity (NCE) for five years under the Hatch Waxman Act. This protection is for 12 years in case, of biologics as mentioned under the Biologics Price Competition and Innovation Act
EU provides for eight years of data exclusivity to the original manufacturer. Moreover, the EU also provides for two years of market exclusivity. And if there is a subsequent new indication being proved over the prior indication then the period will be extended to a further one year. Thereby, the total period will be for either 10 years or 11 years, if any new indication is proved.
In India, we have Drugs and Cosmetic Rules 1945 in which we find the definition of ‘New Drug’ under Rule 122E giving the protection of the new drug for four years from the date of its first approval.
Favouring Generic Substitute- Using test data for registering generic
If this data is used to register generic substitutes, it can have various repercussions. The generic manufacture will be able to rely on the test data generated by the originator, who invested a considerable amount. This implies that the generic manufacture will be allowed to enter without considerable investment thereby giving a huge economic loss to the originator. If the generic has the same production cost as of originator, the generic would be able to sell the product at a significantly lower cost. This gives three options to the generic manufacturer for accessing its market approval. Firstly, generic manufacture should make their test data, investing considerable time and money. Secondly, it can wait for the expiration of the test data protection for the originator. This expiration period depends upon country to country basis. Thirdly, it can license the test data by giving a considerable amount to the originator again investing in it. In whatever option the generic will choose, it has to suffer through a rigorous, time consuming, and expensive processor to wait till the expiration. All this can have a substantial effect on the market entry of the drug, resulting in the delay in accessing cheaper medicine.
Favouring Pharmaceuticals - Stringent protection of test data
Pharmaceuticals companies will be a major supporter of the data exclusivity framework to be adopted by countries, especially developing countries. If we try to analyze the economic perspective of protecting the test data, most of the justification follows the tendency to respond to positive incentives and rewards. Such protection becomes a necessary part for the inventor to further substantiate his efforts and investment. Can it be possible that a pharmaceuticals company will invest in its R&D on the premise that it will not get any protection? The answer to this will be negative. A further argument that the patent or data exclusivity gives the monopoly is flawed. Neither patents nor does data exclusivity provide for monopoly. If there is any monopoly, how can it be possible that two different companies can provide for the same medicine having similar therapeutic equivalents in the market? Any drugs are not so immune that different companies will be prohibited from selling them. Hence, we can frame an opinion that the flawed presumption that we base upon data exclusivity, being a monopolistic practice, is something that is not logically deduced.
Author: Saransh Chaturvedi (an advocate) currently pursuing LLM from Rajiv Gandhi School of Intellectual Property Law (IIT Kharagpur). In case of any queries please contact/write back to us at email@example.com.