This is sheer nonsense! Anyone with a fair understanding of Article 39.3 of TRIPS and its negotiating history would appreciate that it does not mandate “data exclusivity”. But first the facts of Syngenta India Ltd vs Union of India (W.P. (C) 8123/2008 ):
Syngenta procured registration for its insecticide that was allegedly useful in tackling the bollworm problem plaguing Indian cotton. Jaishree comes along for a “me too” registration and submits essentially “bio-efficacy” data (asking the government to rely on data already submitted by Syngenta).
Syngenta objects to this and takes the matter finally to court, stating that government rules provide for data exclusivity and the government cannot rely on Syngenta’s data to approve Jaishree’s generic version of the insecticide in question. The matter is a very technical and complex one and really turned on the fact that at the time that Syngenta procured registration for its insecticide, the ‘data exclusivity” rules by the government were not in force. In any case, since Syngenta had “provisional registration” prior to final registration, its supposed data exclusivity period is 3 years from the date of the provisional registration–and this period had lapsed when Jaishree’s generic version came up for registration.
Back to Syngenta’s outlandish claim that Article 39.3 mandates data exclusivity:
Article 39.3 of TRIPS
The Article states as below:
“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new 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 other words, the mandate above is that regulatory data be protected against “unfair commercial use”. This does not however mean that the regulatory data submitted by an innovator cannot be relied upon by the government to approve a generic. It could mean (as I have argued) that the government may use it to approve a generic version, but the generic manufacturer in question has to pay a certain sum of money to the innovator (a “compulsory licensing” scheme of sorts). It could also mean, as others have argued, that the data ought to be only protected against disclosure and fraudulent procurement by another third party.
A close look at the negotiating history of TRIPS would reveal why Syngenta’s argument that Art 39.3 mandates data exclusivity is inherently flawed. An earlier draft of Article 39.3 (the “Brussels draft”) had clear “data exclusivity” language ( “the data shall not be relied upon for a reasonable time..”) which was knocked off in the subsequent TRIPS text. And this clearly demonstrates that the TRIPS negotiators did not wish to impose a “data exclusivity” obligation, but wished to have a more flexible obligation. For more details of this negotiating history etc, see here.
More worryingly perhaps, the petition also argued that the Reddy Committee Report mandated “data exclusivity”. Here is how Justice Bhat captures the mistaken contentions of Syngenta:
“The petitioner argues that …. a Statutory Authority (in this case the Committee) cannot rely on the data submitted by the Originator for approving the second and subsequent applications for the same insecticide. This protection and data exclusivity, however, would be for a limited period and not in perpetuity. The petitioner also alludes to a “Reddy Committee” report, dated 31.05.2007 that endorses TRIPS’ recommendations concluding that the Act and the Rules should be amended…. ”
While Syngenta is right in stating that the Reddy Committee opined that Indian law does not comply with Article 39.3, they are wrong in assuming that the Reddy Committee recommended “data exclusivity” as the only way to comply with Article 39.3. Preventing data from “unfair commercial use” is not the same thing as preventing “reliance” on the data (which is essentially what data exclusivity is all about).
Far from endorsing a “data exclusivity” mandate under Article 39.3, the Reddy Committee Report clearly mentions that such exclusivity is not needed for pharmaceutical data at the moment. However, they propose amendments to the Drugs and Cosmetics Act to ensure that no data wrongfully leaks out of the Drug Controller’s office and falls into the hand of competitors. These proposals are yet to be implemented in India. Round 2 of amendments to the Drugs and Cosmetics Act, setting up the Central Drug Authority (CDA) and dealing with clinical trial regulation etc is on the anvil; and one expects that some of the Reddy recommendations would be implemented through these amendments. (ps: the first set of amendments to the DCA deals with “spurious drugs” and came into force recently).
Interestingly although the Reddy Committee does not recommend “data exclusivity” for pharmaceuticals (at least for the time being), they do so for agro-chemicals and traditional medicines. And since the Syngenta case is really about the approval of an originator pesticide (and its generic version), Syngenta is correct in their view that the Reddy committee recommends data exclusivity at least for agro-chemicals. However, the Reddy committee does not do this out of a fear of the Article 39.3 mandate. Rather, they are of the view that there is broad industry consensus in favour of exclusivity in so far as agro-chemicals were concerned.
Data Exclusivity Through Government Rules
What is even more interesting in this case is that without an amendment to the Insecticides Act, the government introduces data exclusivity through a mere “rule”. Justice Bhat takes them to task noting that this is an ‘essential legislative function” that cannot be subsumed within rule making powers of the government. However, since the vires of these rules was not directly challenged in the litigation, he did not dwell further on this aspect.
However, in keeping with his reputation as a “costly” judge, he imposed a cost of Rs 3.75 lakhs on Sygenta (75,000 per hearing) to be paid to Jaishree, the generic manfacturer for bringing a “speculative” action and inviting “the court to make a policy declaration, which could not have been made under any circumstances.” Also the pendency of the court proceedings delayed the entry of Jaishree into the market and this had to be compensated.
Its interesting that the last few months have seen two similar cases by patentees who attempt to delay generic entry by bringing highly untenable legal claims. The first was the Bayer vs Cipla matter, where Bayer attempted to introduce a patent drug linkage mechanism through the backdoor. And now this agrochemical case involving Syngenta.
But perhaps, it is even more interesting that Justice Ravindra Bhat, the presiding judge in both these cases is clearly not amused by these attempts to use courts to create legislative policy through the backdoor and expresses his displeasure by imposing costs!
On August 11, 2009, a Division Bench of the Delhi High Court upheld Justice Bhat’s order, but it watered down the costs imposed on Syngenta to about Rs 1 lakh.
ps: Thanks to Prashant for bringing this interesting case to my attention.