3. TRIPS Data Exclusivity and Access to Medicines
3.2. Is Article 39 About Data Exclusivity?
3.2.1. Elements of Test Data Protection under the TRIPS Agreement
As already
noted above, Article 39.3 provides for test data protection and encapsulates the TRIPS test data protection regime. This regime can be broken down into the following elements:a. the product must utilize new chemical entities (newness requirement);
b. the origination of the undisclosed test data must involve considerable effort (origination requirement)
c. the test data must be protected against unfair commercial use (protection against unfair competition requirement); and
d. the test data must be undisclosed except where necessary to protect the public or where steps are taken against unfair commercial use (non-disclosure obligation and the exceptions).
Newness Requirement
Article 39.3 provides that the pharmaceutical or agricultural chemical product for which protection is sought must utilise new chemical entities. It could be argued that the requirement that the chemical entity is ‘new’ is akin to the requirement for novelty in patent law. If this is the case, then the next question is what is the standard required to satisfy this newness requirement? Since this term is not defined by the TRIPS Agreement it is submitted that countries are at liberty to decide the standard of newness for test data protection that suits their local circumstances. This position is fully in consonance with the provision of
28
89 Article 1.1 of the TRIPS Agreement which provides that members are under no obligation to provide more extensive protection than that required under the Agreement and that they shall be free to determine the suitable method of enforcing the provisions of the Agreement within their legal system and practice.
In the alternative, it has been argued that the concept of ‘newness’ in respect of chemical entities does not relate to the novelty or undisclosed nature of the data but the administrative act of registration.29 In other words, the concept of ‘new’ under Article 39.3 has nothing to do with the patent standard of novelty but registration and the effects of registration of a chemical entity for purposes of its novelty are basically territorial.30 Gervais has described this as the practical approach to defining ‘new’ under Article 39.3.31
He opines that provided that a chemical entity has not been previously submitted for regulatory approval in a given country, it should be considered new and the data generated on it should be eligible for protection.32 To date, there has been no official guidance on which of these differing views should be adopted by Members as fulfilling the ‘newness’ requirement in Article 39.3. Section 201 of the US Food Drugs and Cosmetic Act for instance defines a new drug as:
Any drug (except a new animal drug or an animal feed bearing or containing a new animal drug) the composition of which is such that such drug, as a result of investigations to determine its safety and effectiveness for use under such conditions, has become so recognized, but which has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions.
While using the act of registration as a benchmark for registration is defensible under Article 39, it is nonetheless submitted that the newness requirement in Article 39 should not be based on the act of registration but on the fact that the chemical composition is such that it had not been formerly recognised by people qualified by scientific training and experience to evaluate the drugs as safe and effective for the treatment it has been found to offer. There is also support for the view that Article 39.3 will not cover cases where approval is required for ‘new dosage forms, combinations, new forms of administration, crystalline forms,
29
Pires de Carvalho, above n 18, 397
30 Ibid 397-8 31 Gervais, above n 15, 544-5 32 Gervais, above n 15, 544-5
90 isomers, etc of existing product’,33
as they would not fall within the definition of new chemical entity. In sum, it is submitted that since TRIPS has not given a clear definition of the newness requirement, this is another flexibility and Members may rely on Article 1.1 of the TRIPS Agreement to interpret this in a way conducive to their socio-economic welfare. Origination Requirement
Article 39.3 provides that the origination of test data to be protected must involve considerable efforts. It is generally taken that for pharmaceuticals, the generation of test data in most cases would involve considerable efforts especially in conducting clinical trials.34 It would appear that the reasonable inference to draw from this provision is that the ‘effort’ involved should not only be substantial economically but also in technical and scientific terms.35 On the other hand, this part of the test data protection regime has been criticised as extending IP beyond its boundaries of rewarding the creators of original ideas and new inventions to the protection of investment and not intellectual contribution.36 The protection of investment, according to Correa, should be within the purview of competition law and not IP.37 It is however doubtful if it can be rightly argued that the development of a new invention can be fully separated from the investment that inevitably goes with it. There is also no gainsaying the fact that test data generation involves substantial economic resources and scientific knowledge. It is thus submitted that the ‘considerable effort’ requirement will be easily met in virtually all cases of pharmaceutical test data generation.
Protection against Unfair Competition Requirement
Article 39.3 requires national drug regulatory authorities to protect information submitted to them against unfair commercial use to the extent that such information remains undisclosed. It should be noted that the test data regime under Article 39.3 is essentially for regulatory approval for marketing pharmaceutical or agricultural products. It does not entail selling or offering data for sale.38 To that extent, the point has been made that ‘commercial use can only mean granting marketing approval to competing goods without the consent of the first registrant’.39 As Pires de Carvalho argues:
33 Correa, above n 11,379, 34 Gervais, above n 15, p545 35 UNCTAD-ICTSD, 531 36 Correa, above n 11, 380 37 Ibid 38
TRIPS Agreement Article 39
39
91
The whole idea of Article 39.3 is to prohibit parasitic behaviour or free riding. Any measures, such as relying on bioequivalence tests or other abridged procedures that alleviate the second registrant from obligations that have been imposed to the first registrant should be deemed as such.
On the other hand, Correa has argued that the concept of ‘unfair’ is relative to the values of a particular community and varies among Members.40 He posits that even though the use by government may have commercial implications, it still does not amount to a commercial activity but a defensible State practice.41 He thus highlights the following as things countries may do without violating Article 39.3:
a. Require the second-entrant to produce its own testing data or to obtain an authorization of use from the ‘originator’ of the data;
b. Allow the second-entrant to rely on the ‘originator’s’ data against payment of compensation;
c. Use the ‘originator’s’ data in order to technically examine second-entry applications. In this case, the authority directly relies on the originator’s data; d. Require the second-entrant to prove that his product is similar to an already
registered product, without having to examine and rely upon the ‘originator’s’ data.42
Hiroko Yamane also takes a similar view, positing that Article 39.3 only requires Members to prevent the disclosure of data submitted to regulatory bodies to competitors and does not entail more than the protection against unfair commercial use by competitors.43 It is however submitted that use of test data under (c) and (d) above will be inconsistent with Article 39.3 as that will involve reliance on the originator’s data which may also amount to an unfair commercial practice. Any use of the test data without the owner’s consent will therefore be inconsistent with Article 39.
As mentioned earlier, one unsavoury effect of restraining drug regulatory authorities from granting marketing approval on the basis of bioequivalence is the problem of having to 40 Correa, above n11, 381 41 Ibid 383 42 Ibid 384 43
92 substantially repeat toxicological and clinical trials which will not only be profligate but also ethically problematic.44 Nonetheless, it is very doubtful indeed that Article 39 can be construed as being limited to protection against unfair commercial use by competitors. It would appear that reliance on the first registrant’s test data for the purposes of granting marketing approval to a generic company, whether state owned or not, would run afoul of the tenor of the provision.
Non-Disclosure Obligation and the Public Protection Exception
Where generic companies rely on data that are publicly available, Article 39 will not apply, as the requirement is that the information must be undisclosed to qualify for protection. This provision is, however, subject to the public protectionexception in Article 39.3.45 The implication of this exception is that Members may disclose such information where necessary to protect public health or interest or where certain steps have been taken to adequately protect the disclosed data against unfair commercial use or competition. The TRIPS Agreement does not provide guidance on when it will be ‘necessary to protect the public’. Professor Correa has opined that this provision is subject to a necessity test.46 Deference may be given to Members in determining when such necessity arises but a Member invoking the provision may have to bear a very onerous burden of proof, should the measure taken be challenged.47
There is some support for the view that disclosure may be allowed to enable a compulsory licensee to acquire marketing approval, especially where the licence is issued to correct anti- competitive practices or to meet the demands of public health.48 This is examined further below in the section on data exclusivity and compulsory licensing.49 It is important to note that Article 39 does not provide for a set duration of test data protection and it would seem such protection may continue indefinitely until the data can no longer be considered ‘undisclosed’. The generally accepted term of protection, from the current practice amongst Members, is five to ten years.50 It has been suggested that terms of protection should be decided on a case-by-case basis, taking into account the resources committed to the
44
UNCTAD-ICTSD, above n10, 531
45
Article 39.3, TRIPS Agreement.
46 Correa, above n 11, 380. 47 Ibid. 48 UNCTAD-ICSTD, above n 10, 532. 49
See section 3.3 below.
50
IFPMA, A Review of Existing Data Exclusivity Legislation in Selected Countries (International Association of Pharmaceutical Manufacturers Association, 2002).
93 generation of the test data and its novelty, but subject to a maximum protection period to avoid abuses.51