Kazakhstan: Institute Of "Data Exclusivity" In Kazakhstan And Its Influence On Activity Of Pharmaceutical Companies

Last Updated: 9 January 2018
Article by Zhanna Abylkhanova

For the Republic of Kazakhstan (hereinafter – "the RK") the notion and institute of "data exclusivity" is a novelty. The legislation on healthcare of the RK envisages conditions on "data exclusivity". However, the legislation does not define of this particular notion.

This circumstance plays a prominent role and has significant consequences both for developers and manufacturers of original drugs and for companies manufacturing generic drugs.

Implementation of a regulation on term of "data exclusivity" was caused by entry of Kazakhstan into the World Trade Organization ("WTO"). Within the frames of entry of the RK into the WTO the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") that is one of fundamental documents, which terms should meet the legislation of all member-countries of the WTO. Therefore, the legislation of Kazakhstan has been amended in accordance to the requirements for memberships of the WTO.

Currently, conditions, which regulate "data exclusivity", are present in Art. 71 (19) of the Code of the Republic of Kazakhstan "On People Health and Healthcare System" No. 193-IV ЗРК as of 18.09.2009 (hereinafter – "The RK Code on Health") and are stated as follows:

"State expert organization in the field of drug, medical products and medical equipment, and state authority in the field of drug, medical products and medical equipment circulation does not allow, without applicant's consent, to disclose and use confidential information in commercial purposes that is provided for state registration of drugs, which information is contained in the application on state registration, examination materials of the drug as well as in the registration dossier of the drug comprising new chemical substances, during six years from the date of state registration of the drug".

In practice, the above-mentioned description of "terms and order of data exclusivity use" arises dozen of questions.

Thus, for example, in the opinion of separate representatives of the "National Centre for Expertise of Drugs, Medical Products and Medical Equipment" of the Ministry of Healthcare of the RK, such proscription only relates to the state authority and expert organization, which conduct examination and registration of the drug in Kazakhstan, and lies in non-disclosure of materials of the registration dossier of the drug within said 6-year term.

In our opinion, we cannot fully agree with this statement, since Article 71 (19) of the the RK Code on Health envisages ban not only of the disclosure of the registration dossier materials by the state expert organization, but also of use of data and information contained therein in commercial purposes both by the expert organization itself and by third parties.

In case of implementation of this provision of "data exclusivity" in the sense as it is interpreted by the expert organization itself and, thus, the relevant state authority, meaning and purpose of "data exclusivity" is lost in the form as it was meant by the legislator and in the form as the institute of "data exclusivity" is used in the law enforcement practice of advanced countries.

Confidentiality of data within the frames of the examination and registration of drugs is implied a priori that was involved by the Order of Minister of Healthcare back in 2009.

Proper interpretation of Article 71 (19) of the RK Code on Health implies that the Examination center (expert organization) and the Committee of pharmacy (state authority) act as subjects, on which the ban of disclosure and use of data in commercial purposes applies, and as subjects, which perform monitoring of compliance with the ban of using data in commercial purposes by third parties

Exactly control and ban of use of data contained in the registration dossier for the original drug by third parties is crucial content of the "data exclusivity" principle.

It is commonly known from everyday practice of activity of pharmaceutical companies that presence of a registered original drug is a mandatory condition for registration of a generic drug that is, in turn, could not be registered without use of confidential information on the original drug in commercial purposes that should fall within protection and ban of use thereof without applicant's consent according to Article 71 (19) of the RK Code on Health.

So what is the "data exclusivity"? Does Article 71 (19) of the RK Code on Health relates to "data exclusivity"?

Following from historical conditions of enforcement of Article 71 (19 и 20) of the RK Code on Health it can be univocally concluded that said provisions are directed to protection of registration certificates holders for original drugs from direct or indirect use of information for registration of the drug provided by them in commercial purposes without their consent.

This conclusion finds its confirmation in numerous scientific articles and applications of official state agents of the RK.

  1. For example, Head of Department of Politics and Evaluation of Healthcare Technologies of the Kazakhstan Medical University of Ongoing Education, General Manager of Kazakhstan agency on Evaluation of Healthcare Technologies and President of Kazakhstan department of ISPOR (International Society For Pharmacoeconomics and Outcomes Research) Kostyuk Aleksandr Vladimirovich in his report "Influence of Kazakhstan entry into the WTO onto the Healthcare System" has described this in details and provides the following definition:

"Data exclusivity represents a regime for protection of data on preclinical researches and clinical trials of an original drug on the basis of which a marketing approval (registration certificate) is received, wherein it is prohibited to refer to data of these studies and researches in the request for receipt of the marketing approval (registration) of a generic drug the term of validity of the certificate. ...

In case when an innovative drug has been filed for registration at the end of patent protection term (for example, in view of conduction of major clinical researches in order to proof safety or in view of a marketing decision of the manufacturing company) this measure allows to receive an additional protection term. Moreover, upon registration of the drug even after end of the duration term of a patent or its absence data still will be saved and nobody will be able to come into the market with a generic drug within the whole data exclusivity period...".

  1. Also media resources have published a speech of Vice-Minister of Healthcare and Social Process of the RK "Entry into the WTO will provide new motivations for Kazakh manufacturing of pharma products", which provides a definition of "data exclusivity" as well1:

"It is a certain time period, when countries undertake to protect data provided by manufacturers for receipt of a marketing approval (registration) of the original drug from unlawful commercial use. In other words, country should not disclose or rely on these data during registration of generic copies of a pharmaceutical drug without preliminary agreement of the manufacturer of the original drug for a certain time period...".

  1. In the Dossier for a Draft Law of the Republic of Kazakhstan "On Introduction of Amendments and Additions to Some Legal Acts of the Republic of Kazakhstan in view of entry into the World Trade Organization" it is explained that Article 71 of the Code of the RK on health is supplemented with clause 19 and 20 "in order to bring into correspondence with Article 39 (3) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and requirements of member-countries of the WTO about provision of 6-year time period for the applicant of an original drug, when during this period no other drug comprising new chemical substances could not be registered with a reference to data about researches and other private information developed by the applicant of the original drug2.
  1. In the draft report of the working team for entry of Kazakhstan into the WTO there is information that also confirms that Article 71 (19) of the RK Code on Health refers exactly to "data exclusivity"3

"...Kazakhstan legislation does not allow other parties to make a direct or indirect reference to private data about researches developed and provided by another party for gaining access to the market/registration in the Kazakhstan and that from the moment of entry into the WTO Kazakhstan will take measures providing protection of private information and data on researches corresponding to Article 39(3) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and stipulating that private information and data on researches provided for gaining access to the market/registration in the Kazakhstan, i.e. registration of pharmaceutical products, which comprise new chemical substances, will be granted with a period of at least six years for protection from unfair commercial use starting from the date of provision of approval for commercial distribution in the Kazakhstan. During this period of protection from unfair commercial use no party or enterprise (public or private) except for the party or enterprise that provided such private information and data about researches will not be able to make a direct or indirect reference to such data in support of a request for gaining access to the market/registration in the Kazakhstan without clearly expressed agreement of the party or enterprise that provided such private information and data about researches. During this 6-year period any other followed request for accessing the market/registration will not be accepted except for the cases, when the applicant provides his own data (or data used upon agreement of owner thereof), which meet the same requirements as the first applicant, and products registered without provision of such data will be removed from the market until such requirements are met.".

Considering the above-mentioned, Article 71 (19) of the RK Code on Health indeed stipulates 6-year term of "data exclusivity" for drugs and ban of use thereof by all third parties without consent of right holder of the registration dossier.

This "data exclusivity" term is necessary both for protection of interests of right holders of original drugs, who spend considerable finances and efforts for conduction of preclinical and clinical studies, development of qualitative safe drug, and for manufacturers of generic drugs, which tend to be fairly present in the market without lesion for exclusive rights of developers and right owners for new chemical formulas.

Sorrowfully that foreign companies, after coming to Kazakhstan market, deal with the case that although RK legislation corresponds to the TRIPS provisions and even envisages the condition on "data exclusivity", in practice this institute could not be applied in a full extent only in view of reason of restricted and simplified approach for interpretation thereof. Current interpretation of the existing provision on data exclusivity may lead to that Kazakhstan market will become full of generic drugs, since original drugs will not be able to simply compete with them in regard of price that, of course, will not promote fair competition and its absence will have its negative influence prima facie on ordinary customers.

For comparison, data exclusivity exists long ago in countries of European Union (EU) and the USA that allows to right holders of the original drug to have additional protection term for using their researches in commercial purposes. Thus, in the USA the data exclusivity term is from 5 to 7 years, in the EU countries it is from 8 to 11 years, in Russia it is 6 years.

The institute of "data exclusivity" has appeared in Kazakhstan relatively recently and we believe that case law for proceedings of legal actions of holders of registration certificates for original drugs that started its formation will promote correct applying of this institute in accordance with worldwide practice and its true purpose.

Together with the above-mentioned, it is significantly important to improve the regulatory basis, more detailed regulation of conditions on data exclusivity, conduction of explanatory works mainly among parties, which are responsible for applying corresponding conditions within the frames of their position obligations and functions. Prior to the moment of correct and unite applying of all conditions on data exclusivity, it will not be possible to implement rights and interests of pharmaceutical companies in Kazakhstan in a full extent in accordance with the claimed state guarantees and obligations of Kazakhstan within the frames of the WTO.

Footnotes

1 https://primeminister.kz/ru/news/zdravoohranenie/vstuplenie-v-vto-dast-novye-stimuly-kazahstanskomu-proizvodstvu-farmproduktsii-atsoj

2 http://adilet.zan.kz/rus/docs/P1500000775

3 http://palata.kz/uploads/content/files/ДРГ%20(РУС).doc

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