07.14.11

Not just India: The EU-India trade negotiations and global drug access

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This post was authored by O’Neill Institute summer research assistant Sean Dickson, JD/MPH candidate at the University of Michigan.

Since 2007, the EU and India have been negotiating a bi-lateral free trade agreement (FTA) with quite a few stumbling blocks. The most recent was a declaration by India, delivered via a UNAIDS press release, that it would not implement data exclusivity rules on pharmaceutical testing data as requested by the EU. India’s position as the “pharmacy of the developing world” is based largely on its limited intellectual property (IP) protections for pharmaceuticals, leading it to produce more than 85 percent of the first-line antiretroviral drugs used globally to treat HIV. While data exclusivity provisions would not affect these and other existing generic medicines produced in India, they would inhibit the future development of generic treatments. If implemented, data exclusivity would mean that global access to essential medicines would be based on individual exceptions to patent protections, such as compulsory licensing, rather than a market-driven system of generics.

While generic medicines cannot be introduced until after the patent has expired on the original medicine, data exclusivity often keeps generics from being introduced for much longer because of the testing requirements. Generic compounds are subject to the same regulation as the original medicine – they must prove that they effectively treat the condition and are safe for consumers to receive marketing approval. Because the clinical trial process can be incredibly long and expensive, generic medicines often do not come to market unless they are able to rely on the original medicine’s testing data to prove their safety and efficacy. Under a regime that does not protect original test data, such as India, a generic producer needs only to prove that the generic medicine is bioequivalent to the original, and marketing approval is granted on the basis of the clinical trials from the original drug. With data exclusivity in place, a generic manufacturer would need to replicate the clinical trials process. This testing also raises significant ethical concerns about repeating drug trials on additional persons when the medicine has already been proven effective.

Both the EU and the US advocate for strong data exclusivity regimes, though international law does not require other nations to implement them. Under the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), WTO member states are required to protect undisclosed test data submitted for approval purposes from “unfair commercial use,” but individual countries are allowed to determine what constitutes “unfair use.” The 2001 Doha Declaration reiterated that countries should interpret TRIPS to protect public health, which most commentators have understood to allow individual countries to avoid data exclusivity provisions. However, developing countries are increasingly adopting data exclusivity regimes as conditions of bi-lateral FTAs with the US and the EU, raising concern about the global ability to provide generic medicines for HIV and other diseases that disproportionately affect the global south and east. Because India is the main provider of generic medicines for many of these diseases and has one of the most robust pharmaceutical industries in the developing world, data exclusivity provisions there would have substantial global ramifications.

One of the main critiques of data exclusivity provisions is that they often provide longer protection than patents themselves. For example, in the EU, pharmaceuticals may receive up to 11 years of data exclusivity protection under the 8+2+1 system. In this system, for the first 8 years after marketing authorization, no generic versions can apply for authorization. Medicines receive an additional 2 years of market protection, during which generic products can submit applications for marketing authorization but cannot receive approval, and they can receive a 1 year extension for a new clinical use of the original medicine. While the patent period in the EU is 20 years, the time from patent filing to the time of marketing approval often exceeds 13 years in the EU, making data exclusivity an important tool in extending monopoly pricing of pharmaceuticals. While most EU and US FTAs with developing nations have only 5-year data exclusivity periods, these requirements still reduce the ability of generics to enter the market.

Proponents of data exclusivity frequently argue that the TRIPs agreement provides other methods for countries to have access to essential medicines. These tools, known as “TRIPs flexibilities,” include compulsory licensing, which allows governments to grant a specific producer a license to produce the patented medicine and sell it at a reduced price to the government. However, the process of declaring a compulsory license can be long and does not let the market drive down generic prices. The easiest-used TRIPs flexibility is parallel importation, which allows a country to import generic drugs from a wholesaler in another country without violating the patent protection of drugs sold within the home country. This strategy operates on the idea that a patent holder loses the ability to control the patented molecule once it has been on sold on the market – the patent is “exhausted,” allowing subsequent purchasers to do as they will with the product. It is this flexibility that will be most affected if India adopts a data exclusivity regime, as other countries will not be able to import new generic medicines from India, requiring them to buy medicines from the original producer at monopoly prices.

The imposition of data exclusivity regimes in developing countries is a growing concern, and a stricter IP regime in India would severely injure global efforts to reduce illness and combat HIV. Because India supplies so much of the world’s HIV prevention drugs – over 90 percent of donor-supplied ARVs in many African nations – curbing the ability to produce generic medicines in India has truly global implications. While Western pharmaceutical companies argue that the rising percentage of the global pharmaceutical market controlled by India reduces their profits and investment capital, this should be understood as a call to reform the pharmaceutical innovation system rather than to reduce access to medicines. Strong IP protection may spur innovation in certain settings, but using it to create insurmountable barriers to essential medicines helps no one.

Posted in Global Health, Trade, uncategorized ;

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The views reflected in this blog are those of the individual authors and do not necessarily represent those of the O’Neill Institute for National and Global Health Law or Georgetown University. This blog is solely informational in nature, and not intended as a substitute for competent legal advice from a licensed and retained attorney in your state or country.

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