Intellectual Property as such gives a right to control the activities of others and this has a number of implications, which could give rise to issues resting on delicate grounds. The theory behind the patenting system is that the financial reward flowing from the exploitation of the patent and the disclosure of the resulting inventions for public dissemination and use, would encourage innovation and raise the technical level of a nation’s industry, at the same time contributing towards to its trade.
It is pertinent to note that, as a corollary to the protection extended by patents to an invention, these rights do not give any liberty to override public liabilities. In these lines the debate on whether India should go for legislative provision for data exclusivity and whether such provision is TRIPS compliant or not can be examined.
Data exclusivity is the protection of clinical test data submitted to a regulatory agency to prove safety, quality and efficacy of a new drug, and preventing the generic drug manufacturers from relying on this data in their own applications. Thus, when manufacturers of generics apply for approval for their drug and claim bioequivalence, or having a similar molecular structure, to the originator’s product and without conducting tests themselves, they make a reference to the latter’s submitted data for approval, data exclusivity would then ensure that such data may not be referred to for marketing approval for a given number of years. In countries, which have already made provisions granting data exclusivity, it varies from five years (in USA), up to 10 years (amongst European Union members).
The arguments that arise herein are that since test data is too expensive to produce, allowing other companies to rely on that data without cost would be an unfair advantage. The main opposition raised against data exclusivity is that it can act as a patent term extension by providing an additional restriction to producing a generic copy. In this sense data exclusivity guarantees additional market protection for originator pharmaceuticals by preventing health authorities from accepting applications for generic medicines during the period of exclusivity.
This issue assumes significance in the Indian scenario since recently the tussle for the exclusive rights between the MNCs and the domestic players have taken a new turn with the leading Indian players backing the requirement for legislative provision for data exclusivity. It cannot but be said that the support extended is subjective to individual business strategies.
IP rights are the results of utilitarian perceptions. When the company invests its resources to conduct research and develop new drugs and later conduct tests for proving the quality, safety and efficacy of the drug at its own expense, data exclusivity claim for the same cannot be overlooked. Moreover, the aforesaid factors also affect the profits made by the company. From this perspective it is required by the law to provide regimes that will prevent undue appropriation of such data.
Herein it is pertinent to discuss whether data exclusivity provision is TRIPS compliant or not. Article 39 (3) of the TRIPS Agreement reads:
"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 wording in the aforestated provision is very much flexible. It speaks of the requirement by members to protect "data" from "unfair commercial use". This has been however interpreted by countries like U.S. to mean data exclusivity. Firstly it has to be clarified whether "preventing unfair commercial use" can be interpreted to mean granting data exclusivity. The intention behind the provision being to protect the originator’s data from commercial exploitation by another player, it cannot be concluded that it refers to granting data exclusivity. Furthermore these tests are also bound to cause socio-economic impacts since it includes sensitive tests in the nature of human and animal tests.
Howsoever, the current Indian scenario is that the Government is contemplating on granting data exclusivity for non-patentable drugs also (‘Indian pharma majors back drug data exclusivity plan’, Times News Network(Wednesday, August 02, 2006) http://economictimes.indiatimes.com).
If data exclusivity is to be granted, a balanced approach would be that it should be seen that the patent period as well as the period providing such data exclusivity runs concurrently. This is important especially given the significant role India plays as a major supplier of affordable AIDS medicines.
© Lex Orbis 2006
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© Lex Orbis 2006