CONCEPT OF DATA EXCLUSIVITY AND INDIA'S GROWTH AS GENERIC DRUG MANUFACTURER

The term "data exclusivity" refers to the protection of data (information) submitted to regulatory authorities or governmental agencies from third-party access. The data, in general, provides information for obtaining marketing clearances for application materials. For instance, a clinical trial report that discloses research trials conducted on people for the assessment of medical or behavioral intervention and is submitted to the government may be in support of a drug application. The information is normally needed to demonstrate the drug's safety and efficacy.

The basis of data exclusivity can be traced back to the principles of unfair competition, which were established by the Paris Convention, which is governed by WIPO under Article 10 bis and includes effective defense against unfair competition. Furthermore, when the WTO was established, the principle of data protection was introduced through Article 39 of the TRIPS agreement, which elaborated on the protection of "undisclosed information" and "data submitted to governments or governmental agencies" as part of members' obligations to create protection.

The second condition in Article 39 of the TRIPS Agreement is data exclusivity, which refers to the confidentiality of data sent to regulators, states, or public agencies.

Currently, the Indian regulatory system allows for a four-year cycle of data exclusivity after the first approval of a "new drug" or its inclusion in the Indian Pharmacopoeia (an official book of standards for drugs produced and/or sold in India). Section 122E of the Indian Drugs and Cosmetics Act, 1940, grants data exclusivity for a total of four years from the date of approval for a new drug. A "new drug" is not necessarily a proprietary drug, but rather one that has never been widely used in the world. A new drug is a medication that has not been accepted or licensed in India, or a drug that has recently been licensed and authorized for marketing, or a combination of drugs that have been individually approved but sold together, or vaccines and r-DNA related drugs.

If a generic version application is submitted during this "protected time," the generic manufacturer/applicant must include new clinical evidence on the generic drug's "safety" and "efficacy". As a result, there is no patent connection in India, and filing or processing applications by regulatory authorities during the duration of a patent on drug composition is not prohibited under Indian law.

The process of bringing a new medication to market begins in a testing lab and ends with 4 phases of clinical trials to prove the drug's effectiveness and safety to domestic regulators. It can be a very expensive process. The generics Regulators are able to approve generic drug applications based on pre-submitted clinical trial data rather than needing to conduct separate clinical trials, allowing players to put rival products in the market at a fraction of the cost. As a result, the contours of data exclusivity have important policy consequences.

Around 2016, the Central Government proposed amending Rule 122E of the Drugs & Cosmetics Act, 1945 to extend the data exclusivity period from four to 10 years, but the Indian Pharmaceutical Alliance, a group of Indian generic drug manufacturers, vehemently opposed the move claiming that such an extension would severely limit the availability of low-cost, affordable generic medicines in India. Following that, there had been no further discussion on the topic.

Furthermore, while the Indian patent laws and other legal frameworks support generic drug producers, the government has only amended national laws to the extent that it is necessary to comply with multilateral or bilateral treaties. For example, India's product patent regime for drugs was only implemented in 2005 to comply with the commitment India made when it joined the WTO/TRIPS in 1995. The TRIPS-related changes to patent laws were limited to the minimum requirements and did not include TRIPS + standards.

In conclusion, there are no provisions for patent term extensions on any grounds, and the court's infringement exceptions are construed liberally when it comes to drug patents.

Bolar provisions, for example, have been construed rather liberally by the courts from time to time to allow the selling, export and import of patented drugs within the duration of the patent if the seller, exporter and buyer agree that the purchased material will only be used for data creation. Though no clear case laws authorize "stockpiling", it appears that the courts can accept "stockpiling" because patent term extensions are prohibited. Even if a drug does not qualify for patent protection, data exclusivity is available as long as it counts as a "new drug" under Rule 122E.

A longer data exclusivity duration will necessitate longer clinical trials and higher costs for generic manufacturers to develop generic versions. As a result, generic manufacturers will find it more difficult to launch generic versions.

Data exclusivity is a different and distinct type of protection from what is offered by the Indian patent system. A patent may be awarded for an invention that is a new product or new method, requiring an innovative phase, and capable of industrial use, according to the Patent Act of 1970. Even if a new version of an existing drug is not patentable, it qualifies as a "new drug" under Section 122E of the Drugs and Cosmetics Rules of 1945. As a result, any other company requesting marketing approval for such a new medication within the four-year timeframe will be expected to include independent clinical evidence. Consequently, data exclusivity and patent rights are mutually exclusive with distinct safeguards.

For example, while a new drug's patent protection will be for 20 years, data exclusivity for clinical research data is for four years. And if a new drug is determined to be non-patentable, data exclusivity rights will be valid for the standard four years.

Following the expiration of the four-year term, subsequent manufacturers may obtain permission from state licensing authorities (rather than the Central Drugs Standard Control Organisation [CDSCO], as was necessary during the data exclusivity period) to manufacture the formulation while relying on existing data submitted by the original manufacturer. This allows subsequent manufacturers to carry rival drugs to the market at a lower cost and quicker, which is one of the main drivers of the generics drugs industry's growth in India and a key contributor to expanding global healthcare access.

The Hatch-Waxman Act in the United States has shown that access to clinical testing data will lead to innovation among generic manufacturers, who can use the data to develop cheaper and safer drugs. The availability of many brands promote healthy market competition and avoid monopolization, which benefits the customer.

The crux of this debate is determining how long data exclusivity should last to strike a balance between incentivizing creativity and allowing generic manufacturers to offer cheaper alternatives. To this end, India's existing data exclusivity duration of four years, which is shorter than international norms and the stance of developed countries, can be credited with the growth and success of the Indian generic pharmaceutical industry, as well as the alleviation of some of the world's access to medicine issues.

The other, more complex view of data exclusivity is based on the need to demonstrate the effectiveness and protection of generic drugs through separate and effective clinical trials, which include bioavailability and bioequivalence studies. This requirement is currently met under Indian rules, which mandate generic drug manufacturers to demonstrate bioavailability and bioequivalence of their products to existing drugs to obtain regulatory approval. However, some clauses allow certain assessments to be waived in the public interest.

The issue here is that waivers of the bioavailability and bioequivalence criteria can often negatively affect because the effectiveness and reaction of the drugs in the local community may not be fully understood. Bioequivalence trials, in any case, are normally conducted on a limited number of subjects and at a fraction of the expense of a full-fledged clinical trial.

In 2012, a Parliamentary Standing Committee report highlighted the troubling pattern of CDSCO automatically approving products without conducting bioavailability or bioequivalence tests. Following that, in 2013, the Ranjit Roy Chaudhury Report proposed that bioequivalence trials be made mandatory before market approval is given for any generic medication, except for highly soluble molecules, as is the case in the United States.

These guidelines, however, were quietly dropped because the Drugs Consultative Committee (DCC) believed that mandatory bioequivalence testing could not be made mandatory by way of a regulation that would apply uniformly because Indian generic manufacturers lacked the infrastructure to carry out the plan. The DCC agreed that bioavailability/bioequivalence tests should be needed only when there are concerns about patient safety and variable bioavailability.

Although gaining access to low-cost generic drugs remains a priority, this cannot be accomplished at the expense of generic drug quality or protection. A shortage of resources cannot be a sufficient excuse to waive generic drug bioequivalence checks. Also, regardless of data exclusivity, there is a case to be made for rethinking the position on mandatory bioavailability/bioequivalence testing for generic drugs in the post-data exclusivity era.

The proposal to increase the exclusivity duration for clinical trial data from 4 to 10 years was discussed by the Drug Technical Advisory Board (DTAB), a committee that advises the government on all technical matters. While this proposal was not approved, the DTAB proposed that regulatory authorities ensure that adequate testing has been conducted and that the product's protection has been identified through bio-equivalence studies.

It is important to note that data exclusivity not only balances the conflicting desires of medication innovators and generic producers but also protects medicine customers. Any policy initiative in India on this front must always aim to effectively counterbalance these competing interests so that the balance does not tip too heavily in benefit of one over the other. To this end, the DTAB's decision to maintain the current data exclusivity equilibrium and instead concentrate on evaluating drug protection through bio-equivalence tests is a positive move.