Data Exclusivity Drug Regulation Patent

IPA Alleges that New Rule Change will Bring in a Data Exclusivity Regime – Here’s Why I Think it Does no Such Thing


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In a report published yesterday in the Bombay edition of the Times of India it has been alleged that the government is proposing a rule change to the Drugs & Cosmetics Rules, 1945 to introduce:

 “a form of ‘data exclusivity’, a provision which will potentially give protection to Big Pharma, thereby delaying generic competition and hence impacting access and affordability of drugs.”

The source of this information as per the news report is D.G. Shah, the spokesperson of the Indian Pharmaceutical Alliance (IPA), a lobby group for the biggest Indian generic pharmaceutical companies.

A data exclusivity regime is a form of IP protection which prohibits competitors from depending on the clinical data of the innovator to gain marketing approval. For example, if the innovator were to get approval for a new drug in 2005 and India had a data exclusivity regime of 10 years, it would mean that no generic could gain regulatory approval for 10 years based on the clinical data generated by the innovator. Theoretically, this would require the generic to repeat all the clinical trials but that is an expensive proposition and will most likely not be approved by any ethics committee because of obvious ethical concerns. Therefore the innovator enjoys marketing exclusivity for ten years even if it doesn’t own a patent for the particular drug. The aim of a data exclusivity regime is to recoup the costs of the innovator company spent on clinical trials. In most cases, the drug is also covered by a patent which runs for much longer than the data exclusivity term. Yet given the relative simplicity of the data exclusivity regime, innovators prefer this form of protection in countries like India where patent enforcement is difficult.

The Indian government has consistently maintained that Article 39.3 of TRIPS does not require WTO members to enact a data exclusivity measure. In recent years there have been reports of the issue coming up in some FTA negotiations and the government emphatically rejecting such a demand. So any information that the government is introducing a data exclusivity regime is going to send shock waves across the industry.

The alleged change that is to be discussed at an upcoming meeting of the DTAB is Rule 122E of the Drugs & Cosmetics Rule, 1945 which currently states that a “a new drug shall continue to be considered as new drug for a period of four years from the date of its first approval”. The new proposal as per the media reports quoting Shah, proposes to extend the period from 4 years to 10 years. That is to say a new drug will maintain its ‘new drug’ status for a period of 10 years rather than 4 years.

Let me explain why I don’t think this results in any kind of data exclusivity term.

The implications of the ‘new drug’ status

In the context of the Drugs & Cosmetics Act, 1940 a ‘new drug’ is defined in Rule 122E as a drug which has not been previously approved in India. This status is maintained for a 4 year term. During these 4 years, any person seeking to manufacture this new drug in India has to comply with certain regulatory requirements specified in Rule 122B of the Drugs & Cosmetics Rules. In specific, this rule requires all applicants to submit data specified in Appendix I to Schedule Y of the Drugs & Cosmetics Rules. I reproduce the relevant part of the provision as follows:

“(2) The manufacturer of a new drug under sub-rule (1) when applying for approval to the Licensing Authority mentioned in the said sub-rule, shall submit data as given in Appendix 1 to Schedule Y including the results of clinical trials carried out in the country in accordance with the guideline specified in Schedule Y”

Appendix I to Schedule Y, is too long to reproduce here but this provision basically requires all data from Phase I, Phase II & Phase III clinical trials. This covers all testing from the lab to full-scale clinical trials on actual patients. Since Phase III clinical trials are expensive to be replicated, Schedule Y allows applicants to conduct only “therapeutic confirmatory trials” in India on a smaller set of patients. The purpose of these trials is to judge the therapeutic efficacy of such drugs on Indian patients because most clinical trials outside the country are conducted on Caucasians or other races, whose bodies may react to drugs differently. However all these clinical trials may be waived by the DCGI as per a different provision of Rule 122E(3). This provision states:

Provided that the requirement of submitting the results of local clinical trials may not be necessary if the drug is of such nature that the Licensing Authority may, in public interest, decide to grant such permission on the basis of data available from other countries:

Provided further that the submission of requirements relating to Animal Toxicology, Reproduction studies, Teratogenic studies, Perinatal studies, Mutagenicity and Carnicogenicity may be modified or relaxed in case of new drugs approved and marketed for several years in other countries if he is satisfied that there is adequate published evidence regarding the safety of the drug, subject to the other provisions of these rules.

From the 59th Report of the Parliamentary Standing Committee on Health it is quite clear that these waivers are almost the rule and no generic company actually conducts confirmatory clinical trials for the purpose of getting approvals in India.

So what information are applicants required to submit to get approvals? From what I know, they are required to submit only bioequivalence (BE) and bioavailability (BA) studies which are also mentioned in Schedule Y and for which there is no waiver. BA/BE tests are meant to confirm that the generic drug as synthesized by the generic manufacturer has the same effect on the human body as the innovator’s drug. Basically these tests are aimed at testing whether the drug dissolves in the blood stream at the same rate as the innovator’s. Once it is established that these drugs are bioequivalent, a doctor can prescribe the generic in place of the innovator drug.

These tests are conducted on 50-70 healthy people and not patients and cost a small fraction of full-fledged clinical trials. Yet, Indian Clinical Research Organisations (CROs) like GVK Bio, Alkem laboratories and Vimta have been caught fudging even these simple BA/BE studies, mostly on behalf of Indian companies.

As per Indian law, these BA/BE studies are not required after the ‘new drug’ status expires when generics are required to approach only state regulators and not the central regulator. This has been a prickly issue because in effect several generics enter only after the 4 year period, which means several Indians are consuming drugs which have never been tested on even healthy humans. After the Ranjit Roy Choudhary Committee recommended making these BA/BE studies compulsory for all generics, the DCC took up the issue for consultation – this committee ended up rejecting the demand on the grounds that India didn’t have the infrastructure to conduct such tests but strongly recommended that these tests be conducted for exports because neither the US nor the EU will accept any generic that has not been proved bioequivalent. To me this is the biggest scandal in drug regulatory law because all developed countries and even the WHO mandatorily require BE testing for all generics. Surprisingly none of the public health groups in India seem to think of this as a major public health issue.

So what are the implications of extending the definition of new drug from 4 years to 10 years?

Not much changes for generics except that they will have to conduct BA/BE studies if they are entering the market within 10 years (rather than the previous 4 years). Ideally, this should be a requirement for perpetuity, the 4 year rule doesn’t make any sense. The remaining requirements for clinical trials are anyway waived by the DCGI in virtually all cases.

So does this rule change create a data exclusivity measure in that it prevents generics from entering the market by depending on the innovator’s data? The answer is no. Generics can still depend on the innovator’s data to apply for waivers from conducting any clinical trials.  This rule change does not preclude that possibility. They will have to conduct BA/BE studies.

I therefore cannot understand why the IPA is making this out to be an issue of data exclusivity. My guess is that their member companies aren’t looking forward to the BA/BE requirement for a period of 10 years rather than a period of 4 years.

Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in Indian academia. He is currently a Research Associate at Applied Research Centre for Intellectual Assets and the Law in Asia (ARCIALA), Singapore Management University.

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