A few weeks ago, Commerce and Industry Minister Piyush Goyal quoted a Swiss official as saying that India might attract investments of $150 billion, if it adopted data exclusivity. The minister was hinting at a rethink of the long-held policy of limiting proprietary prerogatives—exclusive manufacturing and marketing rights—for innovators of pharmaceutical drugs and agrochemicals to the defined period of patent protection. Under domestic laws, third parties are allowed to rely on the innovators’ data submitted to the regulators, for their own commercial ventures, including for launch of the so-called “me-too” products.
The minister’s comments came in the context of a reference to data exclusivity in India’s new free trade agreement (FTA) with the European Free Trade Association and mounting pressure from the US and European Union to use the proposed bilateral trade pacts with them to relax the “public safeguard” provisions in the country’s intellectual property right laws.
New Delhi thoughtfully built these provisions—mainly Section 3(d) and the fully Trade-Related Aspects of Intellectual Property Rights-compliant “compulsory licensing”—into the Patents Act, when it was amended in 2005 to introduce “product patents” in pharmaceuticals.
This let India’s generic industry continue to flourish and make available high-quality affordable drugs and vaccines to the domestic and world markets. Section 3(d) restricts (secondary) patents on “known molecules” only if these are proven to have significantly enhanced the efficacy of the relevant medicine. It hasn’t come in the way of real improvements on known drugs, while it has many a times frustrated unjustified attempts to secure multiple patents on the same product. In practice, India invoked compulsory licence only once in 2012, and that helped drastically reduce the price of a patented cancer medicine. The country cannot be accused of willfully or flagrantly violating innovators’ rights.
As for data exclusivity, the safeguard comes in the form of an exemption under the Drugs and Cosmetics Act from the requirement of separate clinical trial data for approving subsequent versions of “new drugs”, or products first approved for marketing less than four years ago. Against this background, the proposal in a recent discussion paper released by the Central Drugs Standard Control Organisation to make it obligatory for subsequent applicants to produce their own clinical trial data (rather than just establishing bioequivalence with the original drug) amounts to complete reversal of the policy of restricted data exclusivity.
In fact, India had refused to allow data exclusivity under the recently signed India-UK FTA. It is important to judiciously draw the line between the twin objectives of rewarding innovation and ensuring the fruits of drug research reach mankind, without undue restrictions. Big Pharma has in recent decades been going slow on fundamental drug research, while outsourcing this largely to start-ups and publicly funded institutions. They merely do horizon scanning to identify commercially promising new chemical entities and buy them out. The claims about cost of new drug development are found to be vastly exaggerated.
In recent years, India has seen some investments in back-end R&D, such as market research and data analytics. The tools of artificial intelligence in this area may further alter the geographical profile of drug R&D. However, rather than pinning hopes solely on Big Pharma’s investments, India would do well to raise its own public spend on R&D and strengthen its drug industry to find novel cures for diseases afflicting its genetically diverse population. The government must be doubly cautious before closing the easier regulatory pathways available for the country’s uniquely endowed generic drug industry.
