While the discussions on introduction of third amendment to the Patents Act and its 'Dollar toll' on public health are on, there is another area of concern, which needs immediate attention - the data exclusivity. It is certain that the introduction of product patent will increase the price of patented drugs, it is also going to be more certain that the implementation of Article 39 (3) of TRIPs Agreement, the way it is proposed, would keep the generic drugs beyond the reach of common man.
The first causality of implementation of Article 39 (3), engrafted to curb the abuse of patents, would be doing away the compulsory licensing, which is used for the quick introduction of generic drugs in the market, in public interest. Article 39. (3) Of TRIPs, if not interpreted in conformity with the socio-economic conditions of the member states, would be used to block the introduction of generic drugs in the market.
Article 39. (3) states:
"Members when requiring as a condition of approving the marketing of pharmaceutical or of agricultural 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, the 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".
Thus, TRIPs obligates member states to protect the undisclosed test or other data of agricultural and pharmaceutical chemical entities submitted for the market approvals. Pharma MNCs argue that protection of test and trial data under Article 39 (3) is a sui generis protection, like patent protection and gives market exclusivity. According to them, sui generis clause creates proprietary data, which cannot be used by others without the permission (license) of the original owner. The immediate result of such protection is the delay in the introduction of generic drugs in the market as the generic companies cannot relay on the existing data for market approval.
In other words, the government cannot use the earlier data for the subsequent market approvals of generic drugs. The international pharmaceutical lobby groups like Pharmaceutical Research and Manufactures of America (PhRMA) has been lobbying for the data exclusivity legislation in India, ever since the introduction of TRIPS. The Government, a few months back, under the aegis of Department of Chemicals and Petrochemicals, has constituted a Consultative Committee to frame the data exclusivity legislation.
Pharmaceutical multinational corporations (MNCs) justify their demand for data exclusivity mainly on the ground that test and clinical trail data are "very costly, complex and time consuming" and therefore it is a proprietary information. Further, the data exclusivity is a mechanism to recoup the investment in the creation of data by preventing the competitor from using the data especially when there is no patent protection. According to PhRMA, the protection of data is a separate form of intellectual property rights and cannot be mixed with patent protection. Further, all TRIPS members are under an obligation for extending protection to test data by virtue of Article 39 (3) of the TRIPs Agreement. For PhRMA, the data protection is synonymous with market exclusivity (read monopoly). In support the PhRMA relies on the US and the EU statutes, which permit data exclusivity. In the US the data is protected for 5 years. In the EU the protection is for 10 years and it is pre condition for EU membership.
However, data protection under Article 39 (3) is required only in those cases where the submission of data is a pre-condition for market approval. Upshot of the argument is, if a member state decides to do away with requirement of submission of data for market approval, the vigour of Article 39 (3) would not be applicable, thus enough leverage is available to the member states to determine the circumstances under which data submission is required for market approval. Article 39 (3) does not cover the whole data submitted for market approval but protects only "undisclosed" data. Hence, data which is already disclosed to the public through journals, interviews etc. does not require protection. Further, the term " undisclosed " is not defined and therefore, each member has the freedom to define the term suitable to its own socio economic conditions. Protection is applicable only to data of "new chemical entity." Again TRIPs does not provide the definition of the term " new", thus it gives the member states to define the term in a way to reduce the type and number of chemical entities, which fall within the protection clause. Lastly, the obligation is to protect the data against "unfair commercial use".
Hence, the protection available is not against the normal commercial use. In the absence of a universal understanding of the term " unfair commercial use' there is manoeuvring space available to member states to decide the constituent elements of "unfair commercial use". In the normal understanding of the term does not prevent government authorities from using the submitted data for subsequent market approvals because purpose of such use is not commercial but to safeguard the quality and safety of the drug. Article 39 (3) also permits two exceptions viz. 1) when disclosure is necessary to protect public interest. 2) Disclosure of information after taking steps against unfair commercial use. Article 8 of TRIPS Agreement also gives the freedom to regulate the scope of protection to safeguard public health. Using the available manoeuvring space India should reject the concept of data exclusivity and implement Article 39.(3) to facilitate the protection from unfair commercial use.
Data exclusivity has direct implications on access to drug especially in the case of non patented drugs. According to Prof. Carlos Correa, an expert with south centre, " data protection rules are of particular importance to many developing countries that until recently did not provide patent protection for pharmaceuticals (and to those transitional periods of the WTO's TRIPs Agreement, which still do not provide pharmaceutical patent protection). In these countries, there is large pool of unpatented pharmaceutical products. Data protection systems could, if they provided exclusivity, become a partial substitute for patent protection in these cases and nullify, in practice, the transitional periods granted to developing countries". This observation is particularly important in the case of least developing countries (LDCs), which are not obliged under the TRIPs to provide product patent protection until 2015.
According to James Love, of Consumer Project on Technology, USA , the data exclusivity creates barriers to entry. He illustrates the case of Taxol, a drug marketed by Bristol-Myers ( BMS) version of paclitaxel, which is used to treat breast, ovarian and lung cancer and Kaposi Sarcoma. The drug paclitaxel was discovered and developed by US Government funding. However, the US Government through a contract gave the BMS worldwide exclusive rights to use the data.
The wholesale price charged by BMS was 20 times above than the bulk production cost and generated billions of dollars. Even though there was no patent protection the data exclusivity provisions of the US and the EU law created a barrier to entry for generic manufactures. Thus the data exclusivity protection acted as a substitute to patent production. According to Richard P Rozek a two-year delay in the introduction of generic versions of paclitaxel would cost $1.27 billion to US consumers. This clearly illustrates the impact of data exclusivity on access to drugs.
The Compulsory Licensing Mechanism (CLM ) is the most important mechanism provided in the Indian Patent Act which provides special provision for compulsory license on notifications by central government in circumstances of national emergency or in circumstances of extreme urgency or in case of public non commercial use. This particular section bypass, otherwise cumbersome, procedures involved in the granting of compulsory license.
The aim is the quick introduction of drugs in the market to address a health emergency. India with its 5.1 million persons living with HIV/AIDS (PLHA) is a fit case to declare an health emergency. Introduction of data exclusivity incapacitates the generic companies to introduce the product in the absence of test data for market approvals. As stated above, options before the generic manufacturer is 1) to obtain the test and trial data from the owner of the data by paying a fee 2) to create the data by duplicating the entire trial process. In any case, delay is imminent. This scenario is applicable to all modes of compulsory license as well as revocation of patents.
The inherent US -EU bias in TRIPS to give protection for test and trial data submitted for the marketing approval of agrochemical and pharmaceutical products creates trade barriers to entry of generic manufactures. Further, the data exclusivity would create a 'patent type' protection to many unpatented drugs as well as the drugs for which compulsory license has been issued. In public interest, India should interpret Article 39 (3) in the light of customary International Law and Vienna Convention on Law of Treaties. Such an interpretation would give much space to member states to shape the sui generis system of data protection as per the prevailing socio economic conditions. In the Indian situation, implementation of Article 39(3) should be by amending the Drugs and Cosmetics Act.
Such an approach also ensures that right to health parameters viz. accessibility and affordability are not compromised in the implementation of Article 39 (3). Hence, the task before the law makers is to give operational meaning to terms like considerable effort, unfair commercial use, new chemical entities, protect the public, undisclosed data etc. Such legislation should have an in built mechanism to protect public interest. There should be a provision in the legislation that protection of data on a drug ceases on issuance of compulsory license under the patent act. The idea is that the data protection should not affect the introduction of drugs in market especially when public interest is involved.
P V Dinesh is a lawyer in Supreme Court, and K M Gopakumar, a researcher with JNU.