Let go data exclusivity in pharma

Indications are that the government is getting ready to fall in line with the MNC demand for data exclusivity. An official committee which is examining the issue has reportedly favoured a five-year protection for agrochemical makers.

If agro comes, pharma cannot be far behind. The one hope that this will not happen quickly is that it is likely to be vigorously opposed in parliament, the standing committee for the commerce ministry having already strongly come out against it.

Data exclusivity means the data submitted by a patent holder to obtain marketing approval from the regulator for his product cannot be used to benchmark a competing product which has been submitted for approval.

Thus, a patent challenger cannot say that his product is bio-equivalent (equally efficacious) as the patented product but has to undertake the entire process of pre-clinical and clinical trials to again generate the data on the basis of which the product was granted approval in the first place. This effectively extends patent life, stacks up odds against generics products and adds to cost of care.

This is wasteful and is akin to reinventing the wheel. It flies in the face of the basic principle that has guided protection of intellectual property in human society through patents so far.

A patent seeks to put the knowledge implicit in it in the public domain so that the owner of the patent is able to reap rewards through his anti-competitive exclusive marketing right for a limited period (this is his return for risking investment in developing the knowledge) even as the rest of humankind has access to the knowledge to build on it.

The last is critically important for the progress of human knowledge. All knowledge is built on previous knowledge. Take away the earlier knowledge and you ring in a period of dark ages as happened to Europe after the Christian destruction of 'pagan' learning "" classical works and libraries "" in the end of the fourth century.

Free access to knowledge which is around for long is central to the growth of knowledge. The world does not keep paying royalty to the progeny of some ancient India sage who invented the zero every time it uses the zero.

The critical aspect of granting protection to intellectual property is that there has to be a sunset to it. The attempt to globalise the right to data exclusivity needs to be thrown out because it is wasteful (reinvention) and worse.

Britain is currently debating whether it ought to extend copyright beyond 50 years and quite rightly it is being argued that this will not raise incentives for creativity in any way. A songwriter today will not work harder to create more or better songs because his descendants (he himself will likely not be around) will be benefited by copyright lasting for 75 and not 50 years.

The move should be seen for what it is "" a clever attempt by record companies without fresh ideas to perpetuate existing cash flows. Similarly, the issue of data exclusivity should be seen for what it is "" an attempt by big pharma to perpetuate existing cash flows at a time when patent pipelines are drying up.

There is a clear global intellectual consensus to create a balance between innovation, competition and access to affordable medicines. In policy making this means acknowledging the dynamics of the pendulum; when you find, for example, things have swung too far in one direction, move in the opposite.

The US does precisely that. In the eighties it was seriously concerned about the slowdown in innovation and productivity growth and out of that came the Hatch-Waxman Act. The initial aim was to restore incentive for innovation but it eventually ended up promoting drug price competition by laying down the roadmap for the generics industry.

Early in this decade, when the uncontrolled cost of healthcare became an issue in the US, the Greater Access to Affordable Pharmaceuticals Act was conceive and passed by the Senate but was later defeated in the House, bearing testimony to the lobbying power of big pharma among Congressmen under George W Bush. There is every chance that the pendulum will swing again in favour of policy to bring down healthcare costs (promote generics) once President Bush is gone.

US legislators change the rules of the game depending on what they see as the national imperative of the day, moving alternately between the need to promote innovation and industries based on it and the need to provide cheap medicines to the poor. India should do likewise, without being overawed by the theology of property rights.

India currently has twin goals before it "" produce lots of cheap good medicines for its poor and encourage its generics industry where its competitive advantage lies. The day when it needs to root more for IPR with its pharma companies coming up with lots of useful new molecules is still some distance away.

Under the Uruguay round it has some leeway as a developing country in bringing in the provisions of TRIPS of which data exclusivity is a part. But WTO enjoins members to have their own laws uniquely suited to their individual needs (sui generis) and stick to them. If anything, the premium is on transparency.

The current reality is that most of the world has agreed to protect data exclusivity for agro-chemicals. For pharmaceuticals, critically Brazil is holding out and China has done a fudge, officially allowed data exclusivity but creating a ground reality which is considered very opaque.

Israel, which initially strongly resisted the idea later fell in line. It needs daily support on Capitol Hill in a way India does not. Currently it makes sense for India to give in on data exclusivity for agro-chemicals if it must, but certainly not on pharmaceuticals.

Partial tactical retreat (in agro chemicals) can be sensible as you cannot be entirely out of line with the rest of the world. But there are sound reasons for digging in and holding out on pharmaceuticals. India needs cheap medicines and must support its generics industry.

Plus, the emerging Indian market is huge and India should work out a quid pro quo for access to it the way China has across industries but India has not so far.

sub@business-standard.com