After accepting
product patent regime in 2005, it now seems India is caving into the
demands of drug MNCs for data-exclusivity. If the government agrees it
will lead to shortage of drugs in the country and prices may skyrocket,.
For the good of many, for the benefit of many”- the ancient system of
Indian medicine believed in this holy principle for thousands of years.
When it came to patient care and treatment, it was always “people
before profits”. Even in the modern age of medicines, India plays a
significant role in global access to medicines as one of the world’s
largest exporter of cheap generic drugs — mainly to poor countries of
Africa and Asia that do not have drug producing abilities.
However, the first major trade-off between “trade and people” in the
Indian pharmaceutical industry came in the form of product patent
regime introduced in January 2005. Until then, as per the original
Indian Patents Act 1970, India did not include protection of product
patents to medicines as part of the country’s policy to ensure
affordable medicine to its people.
So, only process patent was in practice, meaning, drug companies could
get a patent only for the process they followed in making the drug. The
process was patented and not the product. Hence, another company was
allowed the make the same drug, by following a different process other
than the process patented. Manufacturing expertise and ability was the
only requirement to be a part of the industry.
India became a signatory to WTO’s Trade Related Intellectual Property
Rights (TRIPS) in 1995. Coming under TRIPS obligations, India amended
its 1970 Act and consequently introduced product patent regime in 2005,
amidst a flurry of protests by pubic interest groups across the country.
Under the patent regime, a company cannot manufacture and market the
generic version of a new drug until the originator company’s patent
expires, which is for 20 years. This came as a major barrier to entry
for the Indian generic drug industry. Now indications are that the
Government of India is planning to go “one step ahead” and introduce
data exclusivity by amending the Drugs and Cosmetic Act (1940 - DCA).
This is nothing but an “extended patent,” say public interest groups
raising their voice against the issue.
Painful proposal
According to reports, it was in August 2006 that the Committee (for the
Protection of Undisclosed Information under TRIPS) headed by Ms Satwant
Reddy, Secretary, Union Ministry of Chemicals and Fertilisers proposed
for five-year data exclusivity for India. This has created uproar among
the NGOs, patient networks and a part of the pharmaceutical industry
across the country. Opposing the move, these sections have even written
to Prime Minister Manmohan Singh not to take the proposal forward.
Considering the sensitive nature of it, the Committee has so far
postponed taking a call on the issue. Nonetheless, data exclusivity is
now a hanging sword, which may fall heavily on the Indian population
any time, fear its opponents.
Data exclusivity
Currently, in order to get approval to market a new drug in India, the
manufacturing company has to submit to the Drug Controller General of
India (DCGI), results of the clinical trials (conducted on animals and
humans in Phase I, II and III) that prove the safety and efficacy of
the new drug.
These regulations apply only to original drugs (also called brand-named
drugs). The entry of generic drugs (off-patent, bio-equivalent versions
of original drugs) in the market is relatively simpler. When generic
companies are to launch their products, they only have to demonstrate
that their product is therapeutically equivalent to the original. To
fulfil the safety and efficacy requirements, the DCGI relies on the
clinical data submitted by the originator company. The generic
companies need not repeat the expensive and time-consuming clinical
trials.
So, what happens if India grants data exclusivity rights, say for five
years, to originator companies? The originator companies will have an
exclusive right over their clinical data for five years and hence the
DCGI cannot refer to this data during this period to allow generic
drugs to enter the market. This would force generic companies to repeat
expensive clinical trials for any product launch. Since most generic
companies are resource-crunched, they cannot afford such exorbitant
costs, and would rather wait for the drug to emerge out of exclusivity.
This would delay the entry of generic drugs into the market.
That means, in other words, the originator’s patent and monopoly is
automatically extended by five years. “It’s a patent in disguise,” says
Ramya Sheshadri, a Research and Documentation Officer with Lawyers
Collective, Bangalore. Such a provision, according to Dr S D Ravetkar,
Senior Director, Serum Institute of India, Pune, will have severe
implications on the pharmaceutical and biotechnology industry in India
in the long run.
Why the demand?
The proponents of data exclusivity argue that the originator companies
spend heavily on clinical trials and it is not fair allowing other
companies to use the data, without going through the laborious, costly
process of generating it. They also point out that the Article 39.3 of
TRIPS warrants data exclusivity rights.
However, the opponents’ view has been that, the producers of generic
drugs operate with very low margins and depend on volumes. Forcing them
to repeat costly clinical trials would push them out of the market
depriving millions of people of affordable medicines. Besides, if the
generic drug manufacturers are forced to do the elaborate clinical
trials, the price of the medicine will go up.
As about Article 39.3 of TRIPS, D S Raja Kumar, Advocacy Officer,
Lawyers Collective, Bangalore points out that the Article grants
provision for “data protection” and not “data exclusivity,” as argued
by its advocates. Data protection clause requires protecting clinical
data registered with them from unfair commercial use. Clearly, there is
no “unfair commercial use” by the generic company, as the generic
company does not even have access to it. It is only the Drug Regulatory
Authority which has access to it, and which obviously protects it from
misuse.
A clause for concern
If India falls in line with the demand of multinationals for data
exclusivity clause, it will make life-saving drugs further expensive,
feels Jagannath, an HIV positive activist.
In the view of Shailesh Siroya, Managing Director of Bangalore-based
Bal Pharma, data exclusivity clause may lead to unwanted legal battle
in the pharma industry. A company could make false accusations on
another company of misusing its data, leading to blames, counter-blames
and controversies. This would certainly be detrimental to a sector that
is meant to save the lives of people, he maintains.
There are also apprehensions that even the drugs that are not patented
will also be getting a patent in disguise in the name of data
exclusivity.
Millions of dollars go into the manufacturing of a new drug. Studies
published in 2003 in the Journal of Health Economics report that it
takes on an average $ 800 million to develop a new drug. Clinical
research constitutes a major chunk (about 60-75 per cent) of the total
cost. On an average it takes 10-15 years for a drug before it is
released to the market. Records show that only about 10 developed
countries of the world have the ability to bear such heavy R&D
costs.
Also there is another ethical question involved: How far is it right to
subject a population to repeated testing?
The scene abroad
Many developed countries such as the USA, countries in Europe,
Australia, New Zealand and Andean Group countries have a system for
providing data exclusivity. As per Medecins Sans Frontieres (MSF-
Technical Brief) countries that have agreed to data exclusivity
provisions in free trade agreements with the US include Chile, Costa
Rica, Dominical Republic, El Salvadar, Guatemala, Honduras, Mexico,
Morocco, Nicaragua and Singapore “From the perspective of access to
medicines, it (granting data exclusivity) is a worrying trend;
countries should therefore be vigilant and should not “trade away”
their people’s right to have access to medicines” observes WHO,
(Briefing Note, March 2006).
Led by companies like Dr Reddy’s, Ranbaxy, Cipla and Torrent
Pharmaceuticals, India is in the forefront of global generic drug
industry. The country exports more than half of its pharmaceutical
output to developing countries and has been largely responsible for
reducing the prices of anti-retroviral drugs for HIV/AIDS. For
instance, according to a letter released by Thai Network of People with
HIV/AIDS, Thailand can import the ARV, Kaletra from India, at a cost of
less than Rs 5, 085 ($ 113) per person per month in contrast to
US-based MNC Abbott’s current price of Rs 11, 250 ($ 250) per person
per month.
Health Groups voice concerns that India, by proposing data exclusivity,
is yielding to heavy lobbying by the Pharmaceutical Research and
Manufacturers of America (PhRMA) and the pharmaceutical industry in the
US and other developed countries. With respect to AIDS alone, the
effect would be to threaten the survival of lakhs of patients globally.
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