After multiple deliberations spanning more than 3 years, a government committee has finally submitted its report on regulatory data protection and Article 39.3 of TRIPS. It finds that Article 39.3 does not require “data exclusivity” and that, at the present moment, it may not be in India’s national interest to grant “data exclusivity” to pharmaceutical drug data. It relies heavily on the Doha Declaration to support this interpretation.
It argues that a “trade secrecy” form of protection is sufficient to comply with Article 39.3 and that India already provides for this (via common law principles). However, it cautiously recommends that since there has been no instance thus far of common law trade secrecy provisions applying to the government, this position be made more explicit in the Drugs and Cosmetics Act.
I had submitted a report to the Committee arguing that the US and EU claim that Article 39.3 requires data exclusivity is a false one and directly at odds with TRIPS negotiating history. However, my reading of Article 39.3 also suggested that a “trade secrecy” form of protection is not sufficient to comply with Article 39.3.
No doubt, this Article is perhaps the most contentious of all TRIPS provisions therefore the most “flexible” one—reflective, perhaps of the fact that pharma companies weren’t as concerned about this Article at the stage of TRIPS negotiation [agro chemicals were pushing harder for this] and there were various disagreements between the US, EU and Japan on this, the three industrial superpowers that dictated the wordings of most of the TRIPS provisions. The compromise position was therefore a very watered down provision, that is now the subject of much interpretation and debate.
The various flexibilities notwithstanding, I argued that Article 39.3 spoke about two distinct standards:
i) Protection against unfair commercial use
ii) Protection against “non disclosure”
Therefore, it is non-sensical and against well known canons of treaty interpretation to argue that the first standard (protection against unfair commercial use) is the same as the second one (non disclosure). And yet, this is exactly what the government report argues —that the term “unfair commercial use” means a trade secrecy form of protection [or a protection against “disclosure”). These are two separate standards, and quite clearly, “unfair commercial use” cannot represent a mere protection against non disclosure.
In sharp contrast with the above recommendation pertaining to pharmaceutical data, the Committee recommends the grant of a 3 year exclusivity term for agro chemicals and a 5 year term for traditional medicines.
I will comment on this in greater detail, once I’ve seen the committee report. In the meantime, I’m banking on the accuracy of Sarah Hiddleston’s report in the Hindu (she’s been doing a great job thus far on various pharma patent issues):
“In an important win for the domestic pharmaceutical industry, a government committee has concluded that there is no need to change the laws that govern drug registration in the country. It has recommended against allowing pharmaceutical companies exclusive rights to clinical trial and other test data they submit when registering a new drug for sale in the country. Instead, it proposed that data be treated as a trade secret under common law. However, it suggested that this might be reviewed after an unspecified period of debate.
The Satwant Reddy Committee, an inter-departmental group, was constituted in February 2004 to review the protection of undisclosed information in the light of intellectual property rights set down by the World Trade Organisation. It submitted its report to the Ministry of Chemicals and Fertilizers on May 31 — the day its chairman, Satwant Reddy, stepped down from office.
It noted that the country was entitled to determine the appropriate method of implementing WTO intellectual property rights recommendations but pointed out that there was a need for transparent legal mechanisms to protect undisclosed test data. As such, it recommended separate provisions for three different sectors. So while it advocated that test data for pharmaceutical drugs be protected as a trade secret under common law, it has recommended giving three years of exclusive rights to test data for companies registering new agro chemicals and five years of exclusive rights to test data for companies registering new traditional medicines. This would effectively give a company that first registers a new product sole access to the market for the duration of the right.
The domestic pharmaceutical industry will avoid the delays, costs, and the ethical black hole of retesting a generic drug. This is because the drugs regulator, which judges how safe and effective a drug is, will continue to be able to refer to the clinical trial data of an original drug to approve generic versions that are chemically the same (bio equivalent).
Multinational pharmaceutical companies, backed by the US and the EU, had lobbied for a five-year data protection term to recoup investments in clinical trials and encourage innovation. They claimed that Indian practice constituted “unfair commercial use” and contravened the internationally agreed guidelines laid down by the World Trade Organisation on intellectual property.
The domestic pharmaceutical industry and public interest groups had opposed this. They argued that it was a means for foreign owned pharma companies to avoid competition and make extra profits on drugs with expiring patents or drugs that were not patented because they lacked innovation. They maintained that WTO intellectual property rights, which award patents for innovation, were being deliberately confused with the separate process of registering drugs.
In committee reasoned, that “there was enough flexibility in the [WTO] TRIPS [trade related aspects of intellectual property rights] Agreement for a country to determine the appropriate means of protecting test data.” It cited paragraph 4 of the Doha declaration, which states that the WTO Agreement should be “interpreted and implemented in a manner supportive of WTO members’ right to protect public health and… promote access to medicines.” It also recommended that in order to ensure confidentiality of data, additions should be made to the Drugs and Cosmetics Act 1940 to specify third party liability for unauthorized use and make data protection enforceable through courts.
However, the committee kept the door open for higher standards of data protection for a pharmaceutical innovator in the future. It suggested a five-year data exclusivity model for discussion with 14 safeguards to prevent excessive monopolies and enable the government to override data protection in the case of a public health emergency.
G.S. Sandhu, Joint Secretary, Department of Chemicals and Fertilizers, which authored the report, said that the future model for pharmaceuticals was not a recommendation but a base from which discussion should begin. He stressed the importance of as wide a debate as possible and said that critical upgrades were necessary in the infrastructure and technical skills of the drug regulator before higher standards of protection could be considered.”