Domestic pharmaceutical companies have won a significant victory, with a key committee of the government declining to change drug laws that currently allow them to make copycat versions of drugs by effectively using data filed by the patent-holder.
The committee has refrained from granting drug makers exclusive use of chemical, test and other data they file with regulators while applying for drug approvals. Instead, it has recommended that data submitted by a drug maker be treated as a trade secret and get the same legal protection accorded to such confidential data.
This is a big win for domestic pharmaceutical companies. They can continue with a current practice where, while applying for approvals for their own copycat versions of popular drugs, they can refer the regulator to the data provided by the patent-holder. The companies still won’t have access to the data, but they get to use it to their benefit.
The recommendations are a strong rebuff to interests lobbying on behalf of foreign-owned drug makers that have been asking for a minimum of five years’ “data protection” period, during which a pharmaceutical company that has spent millions of dollars researching and testing a drug has its data protected by the regulator.
Under this proposal, subsequent drug applicants making copycat versions of the drug would have been required to generate drug safety and efficacy data on their own and not piggyback on the “innovator” company’s filings.
Multinational drug firms cited India’s obligation under Article 39(3) in Trade Related Aspects of Intellectual Property Rights agreement which asked every member nation to protect data “from unfair commercial use.”
Indian drug makers fiercely opposed this demand—labelling this as yet another tactic to fend off “generic” or off-patent drugs—as it would have meant spending crores of rupees and several years before they could come up with cheaper copies of the “data-protected” medicines.
Currently, companies that produce such copies of drugs only have to prove that the medicine works on a patient in the same manner as the innovator firm’s product. The drugs regulator—Drugs Controller General of India—then compares this with the original drug maker’s data before approving it or turning the application down.
The government committee submitted its report to the ministry of commerce and industry just before its chairperson Satwant Reddy retired as secretary of the ministry of chemicals and fertilizers on Thursday. The issue had the drug industry split right down the middle with the domestic and multinational pharmaceutical camps pitted against each other for over two years.
The chairman of the local unit of Novartis AG expressed disappointment. “The report is just a recommendation by Satwant Reddy committee. It is not a law,” said Ranjit Shahani, who is also the president of industry lobby Organization of Pharmaceutical Producers of India and is a vocal advocate of data protection. “This is not giving the right signal to research-based pharma companies. It is clearly a setback for investments coming to India,” he added. A recent spate of investments in China by Novartis and GlaxoSmithKline Plc. were spurred by that country’s clear policy of providing a six-year data protection, he added.
D.G. Shah, the secretary general of Indian Pharmaceutical Alliance, a trade body representing domestic drug makers, said the committee’s recommendations “recognize the national need for a calibrated approach to intellectual property and (has) given due importance to public health concerns”. The government will next discuss the committee’s recommendations before amending India’s Drug and Cosmetics Act, 1940.
The committee’s report, however, did hold out some promise to innovator companies. It recommended a “transition period” during which the drug regulatory regime can be strengthened and the public and the industry educated before moving to a five-year data protection regime.
“A calibrated approach with a transitional period” is best suited to India, the report said, but stopped short of specifying a time frame for the transition. “India adopted the product patent regime from 1 January 2005 and had a 10-year transition period there as well. The same reasoning applies here, too,” said a senior official in the department of chemicals and petrochemicals, asking not to be identified because the report has not yet been discussed within the government.
By terming drug data as a trade secret, this official said, any violation can then be challenged and damages asked for in a court of law.
“In case data has been obtained fraudulently by the second or subsequent applicants, it should be considered an unfair commercial use and should not be accepted by the drug regulator. Liability of third parties in case of use without consent of the trade secret information (should) be enforced through courts (and) should be clearly spelt out,” the committee recommended.
“Liability of the third parties in case of unauthorized use of test data of the originator (innovator company) should be made explicit in these laws (Drugs and Cosmetics Act and the Insecticides Act, 1968) and it should be enforceable through courts,” it suggested.
The committee recommended data protection of three years for agrochemicals data and five years for traditional medicine. “There is a need for different forms of data protection for the three groups (drugs, agrochemicals and traditional medicine) as the nature of the three products are different and the data they generate is also different,” explained the government official. “Traditional medicines are not patentable mostly, as they are made out of known substances and this is the only protection they can be given to spur research into finding newer products for different ailments.” Up to 70% of India’s population uses these products, the official said, quoting a World Health Organization study.
If the recommendations are accepted by the government and made a law, those most affected will be multinational drug makers such as Pfizer Inc., Novartis, GlaxoSmithKline and Eli Lilly & Co. Gainers from the status-quo approach of the committee will be all Indian pharmaceuticals companies, big and small.
In agrochemicals, foreign-owned pesticides and agrochemicals makers such as Bayer AG, DuPont and Syngenta will be beneficiaries. The committee set safeguards about when the data protection can be revoked, as in case of a national public health emergency, environmental crisis or when the product is being exorbitantly priced or in severe short supply.
The report, in its checks and balances, has also provided for price negotiations of agrochemicals that receive data protection. For both agrochemicals and traditional medicine, data protected will not exceed the patent life. This implies that if a patented agrochemical product gets marketing approval in the 18th year of its patent, the data protection period will be only till the 20th year and not the 21st year. This, the government official said, takes care of the concern that innovators may use data protection as a mechanism to get monopoly beyond their share of patent life.