India's reservation in allowing Data Exclusivity along with the proposed new patent law in drug industry is causing concern to multinational drug companies, according to Dr. Jacques J. Gorlin, consulting economist & global expert on IPR. In a presentation made at the R&D and DE Round Table organized by the Organisation of Pharmaceutical Producers of India (OPPI), Dr. Gorlin spoke about apprehension of the MNCs about the reverse engineering skills of Indian companies and how it was affecting the businesses of MNCs around the world.

"Both generic and the originator get to market their products. Yet, generic obtains economic benefit at the expense of the considerable human, economic and scientific work done by the originator," argued Dr. Gorlin.

In most countries a data exclusivity time frame of 5 to 10 years is allowed after the marketing approval for a product is given. During this period the test and the clinical trial data of the originator may not be passed on to another company to obtain a marketing authorization.

"If DE comes into existence, MNCs will at least benefit by 5-10 years of exclusivity during which the generic manufacturers will not be able to make versions of the product in that time frame," he said.

TRIPS Article 39.3 imposes obligation on government to respect confidentiality of the information that it receives and not to rely on the data for a fixed period of time.

The presentation clearly expects Indian government to frame DE for a period ranging from 5 -10 years, during which the government health authorities respect confidentiality of the data. Only after this time expires, a generic company is allowed to refer to the data, which then have to only show the bio-equivalence of their product to the originator's drug. This will lower the cost of the generics at the same time respect the proprietary nature of the original inventor's data.

According to Dr. Gorlin, India has been losing on research-based investments to countries like China, Egypt and Jordan just for not having a sincere approach on DE. "China has DE period of six years. Singapore, Australia, New Zealand, Egypt, Canada, Mexico and Colombia have a DE period of five years respectively," he said.
"Singapore is getting an annual investment of $ 4 billion alone for clinical trials because of its adoption of DE," said Susan K. Finston, Associate vice-president, PhRMA, Washington.

"Once India adopts a strict DE regime, investments for full size tests and clinical trials in sectors like CVS, oncology and diabetes would flow from the MNCs," assured Dr. Gorlin.

US is having five years of exclusivity from the date of registration. Currently the DE period is 6-10 years for European countries. Chances are that the period of exclusivity in Europe will be harmonized to 10 years.

According to Dr. Gorlin, the business of generic manufacturers will be affected only till the period of exclusivity after which these companies would launch the generic version just by demonstrating the bio-equivalence of the product. However, DE will have a marginal impact on the only generic manufacturers and small-scale companies. According to him, there is no connection with DE and prices of drugs.

"As per US-based NERA's studies on six developing countries who implemented DE, more or less impacted pharma prices in these countries. In countries like Jordan and Egypt on the contrary, saw the prices falling," he said.

Protection is the key to company decisions on location of clinical trials. After the implementation of rules for clinical trials, India's technological and R&D base will expand with resultant economic benefits. "McKinsey estimates that bio-informatics, where India's leadership in IT is put in service of the biotechnology sector will earn India up to $ 2 billion in the next few years," concluded Dr. Gorlin.