As per reports, Modi – government is considering a proposal to grant data exclusivity (DE) for agrochemicals for a period of 5 years. This could be a precursor to grant of similar dispensation for pharmaceuticals.
The development may come as a pleasant surprise to US and EU based multinationals in both these segments who – backed by their respective governments – have been pitching for this for a long time but constantly rebuffed by Indian lawmakers thus far, ostensibly on the ground that grant of DE would be TRIPs (trade related intellectual property rights) plus.
So, what does the TRIPs agreement of WTO (1995) which India implemented vide an amendment to the Indian Patent Act (2005) – after leveraging the 10 year window available for developing countries – proscribe in regard to DE?
The Article 39.3 of the TRIPs agreement states as under:-
“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural products, which utilize new chemical entities, the submission of un-disclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.”
In February, 2004, the government had set up an inter-ministerial committee under chairmanship of Secretary, department of chemicals & petrochemicals to “consider the steps to be taken in the context of the provisions of the Article 39.3 of TRIPs Agreement for protection of un-disclosed test or other data submitted to the Regulator for seeking market approval of agrochemicals and pharmaceuticals.”
In its report submitted on May 31, 2007, the committee recommended 3 years of DE for agrochemicals and 5 years of DE for traditional medicines. It also suggested protection of information against un-authorized disclosure/use of agrochemicals and pharmaceuticals. The committee recommended amendment to the Insecticides Act (1968) and Drugs and Cosmetics Act (1940) to give effect to the recommendations.
In Pesticides Management Bill (PMB) introduced in Rajya Sabha in 2008, government included DE provision for 3 years. This was subject to a proviso that protection period would start from date of first registration any where in the world. However, Standing Committee on Agriculture (SCA) (Feb, 2009) recommended DE for 5 years to commence from date of first registration in India.
Even as Modi – dispensation is contemplating DE for 5 years, it must also ensure that proviso in PMB is changed to provide for DE to start from date of registration in India. Or else, protection will be meaningless as new products are generally launched in India after time gaps from date of first launch any where in world. This could even be zero if the gap is equal to period of DE or more.
For instance, if date of first registration anywhere in world is 2015 and product launch in India is in 2020, then as per PMB proviso effective protection will end in 2020. In other words, ‘me too’ registrations will be granted in the year innovator gets market approval leaving latter vulnerable to unfair commercial use.
One may argue as to why DE should at all be granted for old molecules? Such an argument is flawed. One must not mix up DE with patent. A patent is intended to reward efforts leading to discovery of a new molecule. DE on the other hand is connected with efforts that commence after discovery and continue right up to the stage of commercialization.
For market access, apart from generating data to demonstrate safety and efficacy of product, innovator has to maintain continuous interface with regulator all through its life cycle (latter can call for additional data any time). As regards patent, it is a matter of choice whether he would like to seek/maintain it in any country.
When, an innovation gets patented, entire knowledge associated with it comes in public domain. In contrast, data submitted to regulator for getting market approval is proprietary. It is given in good faith and government is duty bound to ensure that it is not unfairly used by others to seek market access.
Unlike patent which offers market exclusivity (ME) to the patentee during the term of patent (no one can produce/import, stock and sell without his prior permission/authorization), data protection does not offer ‘ME’ as subsequent applicant can enter the market by conducting studies and generating his own data.
Clearly, DE is a fundamentally different form of IP than patent. Irrespective of whether a molecule is new or old, patented or not, any one seeking market approval must conduct studies and generate data to demonstrate its safety and efficacy to Registration Committee (RC). Even for a product already in use abroad, RC insists on generating data locally.
So when Article 39.3 stipulates protection against ‘unfair commercial use’ of such data origination of which involves a considerable effort, this can be achieved only by granting a period of exclusivity or DE to begin from the date of market approval in India. That sense was adequately captured by SCA in its recommendation and must be reflected in the bill.
The concern raised by domestic industry that this will delay launch of generics/copycats is untenable. The very rationale of granting DE is to delay entry of ‘me too’ so that a company which has invested heavily in generating data gets a chance to recover expenses and also gear farmers to proper use through ‘stewardship’.
Indeed, DE is particularly relevant for old molecules (already in use abroad and therefore, may not be eligible for patent grant in India) that are launched in India, as for new molecules any way, the much longer period of patent protection (20 years) will keep unfair competition from generics at bay.
Even so, it is a misnomer to say that only MNCs stand to gain from DE. Domestic companies too can avail of the benefit provided they make efforts and get registration on the strength of their own data. But, they can’t have the cake and eat it too i.e. invest nothing in data generation and yet, get market access from day one.
To enable farmer’s access to better and eco-friendly crop protection products to minimize losses, increase quality of agri-produce and give a boost to research and development, government should expedite passage of PMB with 5 years DE from date of registration in India. This will also improve India’s perception about our compliance with TRIPs agreement of WTO.