After successfully managing the WTO agreement on TRIPs and Public Health in its favour, the US and its powerful drug multinationals are actively pursuing for a data exclusivity provision for drugs in the Indian regulatory system. A handful of top Indian drug companies are also backing this US move, of late. The goal is to convince or force the Indian government to incorporate data exclusivity condition at least into the new patent law of the country expected in place by 2005, if not early. In the US, data exclusivity is given for five years whereas in Europe it is anything between 6 to 10 years.

The research-based US and European pharma companies feel that India should guarantee to a period in which test and clinical data of a new drug filed with regulatory authorities should not be referred to by any other company for obtaining marketing authorization to launch a similar product. Currently, when manufacturers of generics apply for approval of their drug, they claim bioequivalence to the originator's product without conducting clinical trials by themselves. They just make a reference to the originator's submitted data for approval. Regulatory authorities then rely on such data for determining the safety and efficacy of the drug before marketing approval is granted to subsequent applicants. Such a position is justified considering the social and economic costs involved in the repetitive animal and human trials in developing countries. What the MNCs fear is that the generic companies, which usually wait to launch a copycat product soon after the drug goes off patent, may capture their market by using the inventor's clinical data. It is possible that entry of generics would take away a good part of the drug's market because of the lower prices. But on the other hand, data exclusivity will provide a free hand to the originator company to continue with its monopoly pricing for an undesirably longer period. For instance, if five-year data exclusivity is granted in any country, the original inventor could get a market exclusivity for 23 years if the product is introduced in that country in the 18th year of the patent life. Therefore, it is important that if at all India decides to allow data exclusivity provision, that should run concurrently with the expiry of patent. The stand of the US based Pharmaceutical Research and Manufacturers of America that protecting confidentiality of clinical data submitted to the regulators is a an obligation under the Article 39.3 of the TRIPs agreement does not seem to be based on a correct understanding of the provision.