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|Data Exclusivity Yes or no?
Data exclusivity has become a topic of intense discussions led by large drug companies which are strongly advocating that each member country of WTO should introduce a provision for keeping the data, submitted by them to the market approval authorities, confidential for a fixed period of time. The common argument being forwarded by them is that TRIPS has stipulated a provision for data protection or data exclusivity in respect of drugs and agrochemicals. Let us have a look at the provisions in TRIPS.
TRIPS talks of non-disclosure of data, meaning thereby data exclusivity, in Article 39 dealing with the protection of undisclosed information (trade secrets). One would therefore like to assume that there has to be some link between trade secret and data exclusivity. Protection of undisclosed information or trade secret is one of the seven different forms of intellectual property rights stipulated in TRIPS. These are patents, copyrights, trademarks, industrial designs, geographical indications, protection of IC layout design and protection of undisclosed information. Each one is independent of each other, protects different aspects of an inventive work and extends different rights to the owner. It is therefore evident that patent protection is not linked to protection of trade secret and hence to data exclusivity.
It may be noted that many companies protect their innovative work through trade secret and not through patents, as in patents the whole invention is to be disclosed to public. However, if some one comes out independently with the same information, data, process etc., then it would not be the violation of the rights of the person who has been having the same information etc and maintaining the trade secrecy by keeping it confidential. In other words two different persons can enjoy the same right. This would never happen in case of patents. There is thus an inherent risk in taking the route of trade secret for protecting your innovative work.
Article 39.2 states " Natural and legal persons shall have the possibility of preventing information lawfully with in their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information : a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; b) has commercial value because it is secret; and c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret." (In this context "a manner contrary to honest commercial practices" shall mean at least practices such as breach of contract, breach of confidence and inducement to breach, and includes of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices were involved in acquisition. Whatever has been said in this article is addressed in the Indian law, Contract Act 1872.)
Article 39.3 states " 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."
Article 39.3 deals with a situation when a company, making drugs or agro-chemicals, approaches a regulatory authority for obtaining market clearance for a drug or an agro-chemical. Companies have to submit a lot of information to the concerned authorities such as the Drug Controller of India(DCI) or the Food and Drug Administration(FDA) in USA. The documentation may include among other things test results of different types, methodology and results of clinical trials and chemical details of drugs. It has been reported that the documentation required by FDA for awarding market approval of a new drug could run into few hundred thousands of pages.
Would all the information, data, test results and other details submitted by the companies be protectable through patents or copyrights or industrial design? The answer will certainly be no. At the same time it is difficult to accept that whatever is submitted would necessarily qualify as trade secret. The true spirit behind the TRIPS stipulation would be to give some protection to such types of information, data, etc which a company would have succeeded in protecting (perhaps through trade secret), if it were not to be submitted to authorities.
It may be noted that Article 39.3 stipulates that the information submitted by companies to get market approvals should not be disclosed to avoid unfair commercial use. Due importance should be given to the words unfair and commercial use. Therefore, apparently, TRIPS allows the use of the information in non-commercial use. There are not many choices while exercising this option of non-commercial use. Use of the information in public interest would qualify as non-commercial use. Public interest has not been defined anywhere in TRIPS, so each nation can have its own interpretation of the term but not beyond the normal and fair understanding of the words. However, there could also be some problem in applying the principleof non-commercial use. If a drug is produced on the basis of the data submitted to a market approval authority, it will certainly entail some expenses. Whether the government undertakes the complete production or authorizes some one else to do so, some profits will be involved at some stage of the whole process. Vendors of raw materials, chemicals, machineries, retailers etc. will make their profits in any case. Can this situation be placed outside the realm of unfair commercial use? In a situation demanding governments intervention for serving broad public interest, the ultimate benefits to the society would become the overriding consideration and it should be assumed that all member countries of WTO are sensible enough to understand their responsibility and discharge them. A different situation of State intervention would emerge if issues of safety concerning the drug or agro chemical are under scrutiny.
The advocates for data exclusivity put forward the following points
Many countries have provided in their respective laws a provision for maintaining data exclusivity by the respective market approval authorities. Many developed countries such as USA, countries in Europe, Australia, New Zealand and Andean Group countries have a system for providing data protection. It would thus mean that the results of the invention for which a patent has been granted would not be available to public and R&D agencies for another five years. In some countries there has been a provision of extending the patent term by a maximum of five years if the market approval authority takes undue long time in giving the approval. However, the period specified for the purpose of data exclusivity varies from country to country from 5 years to 10 years. A variation in this period can be seen even within the EU members. The data protection period generally starts after the protection period is over or from the date of market approval. One of the reasons advanced for this exclusivity is an ever increasing time in receiving a market approval for a new drug. It is now estimated to be 15 years, which consumes practically the major portion of the term of the patent.
Generic drugs do not have to go through a detailed evaluation process as the suitability of a generic drug is established by using the principle of equivalence. It is argued that such a decision implicitly makes use of the data generated and submitted by the drug company, which had obtained the initial patent for the new drug. Obviously, in the light of this interpretation the introduction of generic drugs will be delayed by five years enabling the present manufacturer of the drug an additional time to market the drug in an exclusive manner and generate more profits. Reasonableness of profits as against profiteering should be taken as a major factor in determining whether an additional period should be provided for data exclusivity or not. Perhaps the concerned parties i.e., the drug companies must establish through data that they have failed to make reasonable profit in the absence of provision for data exclusivity and due to early introduction of generic drugs. Further, from the point of view of developing countries it may derail the process of introducing generic drugs, which are substantially cheaper.
Further, the question of research in generic drugs may be considered in a different manner. It is known that generic drugs dont require the same amount of documents; in fact it would be a very small fraction. Why should anyone be interested in the results of the original drug? There would be enough evidence developed over years from the usage of the original drug establishing the suitability of the molecule or formulation.
There would have been reasons for putting this aspect under the heading of trade secrets and obviously, the bottom line would be to avoid unfair competition and breach of confidence. If we extend the principles of trade secrets, it would be essential to determine whether the data, information etc. in question is really a secret or not. The authority responsible for issuing market approval may not have the means to verify this. Therefore, one is expecting the authority to take on a responsibility (legal) for something whose eligibility is not established. As mentioned above, the protection can be enjoyed for an infinite time if the secret can be kept a secret. At the same time you cannot deny another person to enjoy the same knowledge if arrived at independently. However, as trade secret can be kept a secret for an infinite time, what would stop drug companies in asking for a much longer data exclusivity? A basic question can be raised regarding the appropriateness of including the matter of data exclusivity under Article 39 dealing primarily with protection of undisclosed information.
It may be noted that at some stage in countries like Great Britain, Germany and Australia, public concern was raised about secrecy of the data. The following reasons are advanced against data exclusivity: -
Non-disclosure contradicts the right of the public to be informed about the efficacy and safety of the approved drug. Since confidentiality would prevent the scientific community from scrutinizing the scientific basis of a licensing decision, it is difficult to determine the commercial bias of the decision. In fact there has been a report in the Scientific American (February 2003) that some drug companies conceal the data in respect of a drug not fovouring the efficacy of the drug. FDA approved Lotronex (Alosetron hydrochloride), a drug manufactured by Glaxo Smithkline. Clinical trials in women had revealed that 41% of patients taking the drug had some relief as did 29% taking a Placebo. These tests were carried out at Mayo Clinic in Rochester. These results did not compare effects of two medicines during the first month of taking medicines. It is reported that both medicines have the same efficacy during the first month. By not showing this data Mayo Clinic and hence the manufacturer claimed that Alosetron was superior to Placebo. Apparently, irritable bowel syndrome (IBS) for which the drug Lotronex is prescribed, does not require a long term treatment and perhaps the efficacy of the drug in the first month may be the crucial factor.
Health authorities should be able to use and rely on registration data submitted for similar products or on existence of a prior registration data elsewhere. If the freedom is not there, a lot of repetitive work, including clinical investigation, will have to be carried out, which may be unethical.
Generic drugs may become very expensive, which would not be in interest of developing countries.
It is reported that drug companies from abroad are targeting India for clinical trials. One has to take a view on whether the data of Indian patients should be kept away from genuine Indian researchers or not. Evidently, as a matter of public policy it may be difficult to treat the data as official secret by many countries. Developing countries will have to evolve methods to maintain the confidentiality of data. If the approval authority happens to be part of the government, the procedures followed by governments to keep things away from easy access would be generally adequate to maintain the exclusivity. It may be difficult to haul up governments if some one from inside (lets say) misuses the information. There are deterrents available to take care of such offences within the system. The above position will be substantially strengthened if countries have laws encouraging and protecting contracts, confidence and information.