[Commons-Law] Market exclusivity beyond patents for drugs?
Via: "Prabhu Ram"
> Economic Times
Market exclusivity beyond patents for drugs?
KG NARENDRANATH
TIMES NEWS NETWORK[ MONDAY, MAY 28, 2007 03:37:31 AM]
Three governments from the emerging world namely Thailand, Brazil and
Malaysia have, although in varying degrees, shown aggression in recent
months in the seizure of pharmaceutical patents, causing their
supporters in the world to expect a cascade of governments to follow
suit, and considerable anxiety among the enthusiasts of intellectual
property rights (IPRs).
That contrary to what some quarters expected the World Health
Organisation's annual assembly last week did not formally endorse
Thailand's action came as big relief to the world's biggest drug
companies—Big Pharma—which apprehend if such actions go scot-free and
the trend is buttressed, then, to their detriment, violation of
multilaterally-ratified IPR laws would eventually become a global
norm. Already, the Big Pharma is slightly week on their knees, having
been deprived of the consistent and easy support they used to get from
the US government, which is seen to be embracing the politically
popular policy of lending a big hand to the generics industry.
This week, the Indian government is likely to take a call on a related
issue—"data protection", an obligation on governments under an
allegedly ambiguous provision of the Trade-Related Intellectual
property Rights (TRIPS) agreement.
A committee at the senior bureaucrats' level has been sitting on the
vexing issue since February 2004, only to realise that it can hardly
reach a consensus. Fresh efforts are now being made for a patch-up as
the official at the chair—Satwant Reddy, secretary, department of
chemicals—is keen to get the work done, before she demits office on
Thursday.
What does data protection (also referred to as data exclusivity) stand
for? Article 39.3 of the WTO's TRIPS agreement requires the member
countries of the world body to ensure that "undisclosed test or other
data" concerning products using new chemical entities (NCEs), which
the pioneer applicant has to submit to the regulator for marketing
approval, is not subjected to unfair commercial use by a third party.
The provision itself is rather vaguely expressed, giving its potential
beneficiaries and those who oppose it room to variously interpret it.
It may be right to say that what the data protection provision seeks
to achieve is avoid frustration of an otherwise deserving IPR through
leakage and resultant unfair use of the relevant data by a third
party. In that sense, it will at the best facilitate or even reinforce
a good patent but won't extend its tenure. And nobody quiet opposes
such a legal instrument to ensure deserving patents.
The problem, however, is that almost all developed countries and even
China and Korea went beyond what the TRIPS agreement mandated, to give
a "period of data protection" (which is nothing but market
exclusivity) to the pioneer applicant, which, considering the way
patent systems work, would sometimes lead to extension of patent
tenure beyond the stipulated 20 years. For instance, the US gives
five-year data protection, the EU 10 years, Canada eight years and
China six years. So, a precedent has been created.
For the last few years, New Delhi has been under intense pressure by
Big Pharma and their political patrons in the West to provide for in
its laws something similar. Generally speaking, the Indian drug
industry, including most of the big companies, whose present
capability lies in the development and manufacture of cheaper generics
than core innovation, has been strongly countering this pressure.
So, what is important is what the government thinks. The 15-member
committee headed by Ms Reddy was itself the result of seemingly
irresolvable inter-ministerial differences. The PMO was behind its
formation. Once it was clear it's split down the middle, a group of
three secretaries—scientific and industrial research department
secretary RA Mashelkar, commerce secretary GK Pillai and Ms Reddy—went
into a huddle in November 2006. This group, according to sources,
concluded that India could, toeing the line of the West, give the
pioneer applicant in pharmaceutical and agrochemical sectors not only
protection of data from unfair commercial use but also a period of
protection, which according to some analysts, mean "not only
protection of data but also protection from competition". This
three-member group has, however, not been able to take others in the
panel on board so far and hence the deadlock.
The panel, which has had extensive consultations with all
stakeholders, has almost agreed on giving five-years' "market
exclusivity" for NCE products in the agrochemical sector and also for
new products in the herbal segment. However, most members of the
committee, including the representatives from the health and industry
departments and independent experts, are strongly opposed to giving
such market exclusivity in pharmaceuticals which is a "sensitive
sector".
What is so harmful about the period of protection or market
exclusivity? Usually, after a patent is granted for an NCE, it takes
eight-nine years on an average for various developmental studies,
including testing the substance in animals, and another three years or
so for trying it in humans. Even if the drug hits the US, the EU or
Canadian market in the 11th or 12th year of the grant of patent, its
introduction in Indian or Malaysian or Chinese market could well take
another five-six years.
This is because the test and other data will have to be submitted to
the regulators in these countries who will independently take a call
on them, according to their rules, even as they largely rely on
approval of the primary data by the regulators in the West. The Indian
regulator would ask for a repeat of some of the tests, including last
phase of trials in humans.
So, in practice, even if the inventor has got the patents
simultaneously in the US and in India, the drug would normally hit the
US market in the 11th year after patent grant while it could reach
Indian market only in the 17th year. A five-year market exclusivity
since such market launch—which means that the information on the
product would not be available to a generic drug-maker for even
researching on it during the period—effectively leads to an extension
of the patent to the 22nd year, if not beyond that.
Can India deny such market exclusivity? It can if it has the political
will. "Mentioning a period of protection is not TRIPS-mandated. If we
allow that for even agrochemicals, that could move us to a slippery
slope," says an independent expert in the Reddy committee. Although
most countries in the West have allowed market exclusivity, New Delhi
won't be without company if denies it. Brazil and South Africa have
not conceded any period of protection. Says an industry official:
"India could consider protection coterminous with the expiry of patent
or first disclosure of data in any WTO member country."
The independent expert says remedy against leakage of the data without
any reference to period of protection would do. For this, the Drugs &
Cosmetic Rules could be amended, because the Right to Information Act
could supersede the Official Secrets Act, which would have otherwise
been enough. The industry official emphasised that as TRIPS requires
giving data protection to only NCE products, the Indian law should
clearly restrict it to such products. He has a point given the drying
down of the global NCE pipeline, the fortunes of the global pharma
industry seems to be predominantly generics-driven, at least in the
medium term, and Indian industry has a clear advantage in capturing
more of this rapidly growing market.
The industry should not be incapacitated by the urge to play to the
galleries, when there isn't actually a multilateral obligation to give
market exclusivity of the sort given by the countries in West.A
government official familiar with the committee's current thinking
said: "Pharmaceuticals could be given differential treatment as the
sector is sensitive due to public health issues involved." But would
it be defensible to give five-years' data protection for agrochemicals
and at the same time deny that to pharmaceuticals?
(c)Bennett, Coleman and Co., Ltd. All rights reserved.
> Economic Times
Market exclusivity beyond patents for drugs?
KG NARENDRANATH
TIMES NEWS NETWORK[ MONDAY, MAY 28, 2007 03:37:31 AM]
Three governments from the emerging world namely Thailand, Brazil and
Malaysia have, although in varying degrees, shown aggression in recent
months in the seizure of pharmaceutical patents, causing their
supporters in the world to expect a cascade of governments to follow
suit, and considerable anxiety among the enthusiasts of intellectual
property rights (IPRs).
That contrary to what some quarters expected the World Health
Organisation's annual assembly last week did not formally endorse
Thailand's action came as big relief to the world's biggest drug
companies—Big Pharma—which apprehend if such actions go scot-free and
the trend is buttressed, then, to their detriment, violation of
multilaterally-ratified IPR laws would eventually become a global
norm. Already, the Big Pharma is slightly week on their knees, having
been deprived of the consistent and easy support they used to get from
the US government, which is seen to be embracing the politically
popular policy of lending a big hand to the generics industry.
This week, the Indian government is likely to take a call on a related
issue—"data protection", an obligation on governments under an
allegedly ambiguous provision of the Trade-Related Intellectual
property Rights (TRIPS) agreement.
A committee at the senior bureaucrats' level has been sitting on the
vexing issue since February 2004, only to realise that it can hardly
reach a consensus. Fresh efforts are now being made for a patch-up as
the official at the chair—Satwant Reddy, secretary, department of
chemicals—is keen to get the work done, before she demits office on
Thursday.
What does data protection (also referred to as data exclusivity) stand
for? Article 39.3 of the WTO's TRIPS agreement requires the member
countries of the world body to ensure that "undisclosed test or other
data" concerning products using new chemical entities (NCEs), which
the pioneer applicant has to submit to the regulator for marketing
approval, is not subjected to unfair commercial use by a third party.
The provision itself is rather vaguely expressed, giving its potential
beneficiaries and those who oppose it room to variously interpret it.
It may be right to say that what the data protection provision seeks
to achieve is avoid frustration of an otherwise deserving IPR through
leakage and resultant unfair use of the relevant data by a third
party. In that sense, it will at the best facilitate or even reinforce
a good patent but won't extend its tenure. And nobody quiet opposes
such a legal instrument to ensure deserving patents.
The problem, however, is that almost all developed countries and even
China and Korea went beyond what the TRIPS agreement mandated, to give
a "period of data protection" (which is nothing but market
exclusivity) to the pioneer applicant, which, considering the way
patent systems work, would sometimes lead to extension of patent
tenure beyond the stipulated 20 years. For instance, the US gives
five-year data protection, the EU 10 years, Canada eight years and
China six years. So, a precedent has been created.
For the last few years, New Delhi has been under intense pressure by
Big Pharma and their political patrons in the West to provide for in
its laws something similar. Generally speaking, the Indian drug
industry, including most of the big companies, whose present
capability lies in the development and manufacture of cheaper generics
than core innovation, has been strongly countering this pressure.
So, what is important is what the government thinks. The 15-member
committee headed by Ms Reddy was itself the result of seemingly
irresolvable inter-ministerial differences. The PMO was behind its
formation. Once it was clear it's split down the middle, a group of
three secretaries—scientific and industrial research department
secretary RA Mashelkar, commerce secretary GK Pillai and Ms Reddy—went
into a huddle in November 2006. This group, according to sources,
concluded that India could, toeing the line of the West, give the
pioneer applicant in pharmaceutical and agrochemical sectors not only
protection of data from unfair commercial use but also a period of
protection, which according to some analysts, mean "not only
protection of data but also protection from competition". This
three-member group has, however, not been able to take others in the
panel on board so far and hence the deadlock.
The panel, which has had extensive consultations with all
stakeholders, has almost agreed on giving five-years' "market
exclusivity" for NCE products in the agrochemical sector and also for
new products in the herbal segment. However, most members of the
committee, including the representatives from the health and industry
departments and independent experts, are strongly opposed to giving
such market exclusivity in pharmaceuticals which is a "sensitive
sector".
What is so harmful about the period of protection or market
exclusivity? Usually, after a patent is granted for an NCE, it takes
eight-nine years on an average for various developmental studies,
including testing the substance in animals, and another three years or
so for trying it in humans. Even if the drug hits the US, the EU or
Canadian market in the 11th or 12th year of the grant of patent, its
introduction in Indian or Malaysian or Chinese market could well take
another five-six years.
This is because the test and other data will have to be submitted to
the regulators in these countries who will independently take a call
on them, according to their rules, even as they largely rely on
approval of the primary data by the regulators in the West. The Indian
regulator would ask for a repeat of some of the tests, including last
phase of trials in humans.
So, in practice, even if the inventor has got the patents
simultaneously in the US and in India, the drug would normally hit the
US market in the 11th year after patent grant while it could reach
Indian market only in the 17th year. A five-year market exclusivity
since such market launch—which means that the information on the
product would not be available to a generic drug-maker for even
researching on it during the period—effectively leads to an extension
of the patent to the 22nd year, if not beyond that.
Can India deny such market exclusivity? It can if it has the political
will. "Mentioning a period of protection is not TRIPS-mandated. If we
allow that for even agrochemicals, that could move us to a slippery
slope," says an independent expert in the Reddy committee. Although
most countries in the West have allowed market exclusivity, New Delhi
won't be without company if denies it. Brazil and South Africa have
not conceded any period of protection. Says an industry official:
"India could consider protection coterminous with the expiry of patent
or first disclosure of data in any WTO member country."
The independent expert says remedy against leakage of the data without
any reference to period of protection would do. For this, the Drugs &
Cosmetic Rules could be amended, because the Right to Information Act
could supersede the Official Secrets Act, which would have otherwise
been enough. The industry official emphasised that as TRIPS requires
giving data protection to only NCE products, the Indian law should
clearly restrict it to such products. He has a point given the drying
down of the global NCE pipeline, the fortunes of the global pharma
industry seems to be predominantly generics-driven, at least in the
medium term, and Indian industry has a clear advantage in capturing
more of this rapidly growing market.
The industry should not be incapacitated by the urge to play to the
galleries, when there isn't actually a multilateral obligation to give
market exclusivity of the sort given by the countries in West.A
government official familiar with the committee's current thinking
said: "Pharmaceuticals could be given differential treatment as the
sector is sensitive due to public health issues involved." But would
it be defensible to give five-years' data protection for agrochemicals
and at the same time deny that to pharmaceuticals?
(c)Bennett, Coleman and Co., Ltd. All rights reserved.
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