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Data Exclusivity and national interest

Sarah Hiddleston

In an exercise in non-transparency, the UPA Government is set to concede Data Exclusivity privileges to pharmaceutical multinationals and amend drug registration laws without public debate.

IN A major win for multinational pharmaceutical companies, the government looks set to alter the laws that govern drug registration in India to accommodate controversial Data Exclusivity (DE) provisions. After more than four months of debate behind closed doors, the Satwant Reddy interministerial committee is expected to recommend that India's drug regulatory authority is enlisted in the protection of multinationals' clinical trial data for five years.

The Drugs Controller General of India (DCGI) will be prevented from checking the safety of generic competitor drugs against an originator's clinical trial data through theoretical proof of bioequivalence. Multinational companies, backed by the United States, claim that this constitutes "unfair commercial use" under the ambiguous Article 39.3 of the World Trade Organisation's Trade Related aspects of Intellectual Property Rights (TRIPS) agreement. Opponents, referring to the opinion of legal experts, contend that this clause was meant to prevent industrial espionage and not provide exclusive rights. They argue that DE will force generic competitors to delay the production of generics at low prices, and that this is not only anti-competitive but has serious implications for the price and availability of medicines.

The minutes of the committee meeting of September 6, which are with The Hindu , show that representatives from the Departments of Health, Economic Affairs and the ICMR strongly oppose DE measures for the reasons stated above. In response the Department of Industrial Policy and Promotion has suggested seven safeguards.

Four of the safeguards go some way towards limiting the scope of DE provisions. Two allay fears of blanket application regardless of the innovativeness of the drug or public health emergencies; they restrict application to "new chemical entities not previously used in any other application" and allow for a waiver in compulsory licensing cases. Two other safeguards act against the incentives DE would create to a) delay the introduction of originator drugs into the Indian market, and b) sell them at high prices; they date the start of the DE period from the first date of marketing exclusivity anywhere in the world and recommend price checks to ensure accessibility.

The remaining safeguards, however, fail to address the issues they attempt to resolve. Further, they highlight the complications involved in attempting to integrate two different legal and regulatory systems with separate functions, namely patent protection and market registration.

First, DE will apply with "prospective effect" only to new chemical entities developed after India's accession to the WTO in 1995. However, 104 drugs with patents registered before 1995 remain liable to DE laws because their first market approval dates fall in 2005 and 2006. These include the newest and most effective drugs for a raft of diseases including diabetes and HIV/AIDS. So despite the pledge to apply DE with prospective effect, retrospective application will, in fact, continue.

Secondly, the period of the DE protection term will not exceed the patent term. However, this creates a link between drug registration and patent registration that is administratively difficult and ethically questionable. It will require the DCGI to verify the patent status of each product and develop the expertise to assess whether the patent is valid and will be infringed. It also provides a loophole for DE on drugs with patents that are later challenged and proven invalid. More importantly, this link will require the DGCI, a national regulatory body, to stand in judgment on a private right; patents should be enforced by the right holders, not a government authority.

Thirdly, a mechanism will enable the domestic pharmaceutical industry to manufacture generic drugs for export to countries without DE laws, but deny market access in India itself. However, since it is the combination of the domestic and the export market that provides the incentive to produce generic drugs, detaching these may make their operations economically unviable. It also says much about where the government's priorities lie — in the name of commercial enterprise people elsewhere will be able to access low-cost drugs manufactured in India, but the country's own people will have to wait.

The Satwant Reddy Committee report will be submitted within the next 15 days, after which a draft bill amending the Drugs and Cosmetics Act will be drawn up.

Recognising the difficulties of grounding the changes in the grey area of Article 39.3, the committee is instead likely to justify DE in terms of India's national interest.

If the Government is genuinely committed to acting in the national interest, it should make the amendments public and invite democratic debate.

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