1. 1 Overview of Data Protection, Data Exclusivity and Patent/Registration Linkage Prof. Brook K. Baker, Health GAP Northeastern U. School of Law, Program on Human Rights and the Global Economy UKZN IPR/A2M 2010

2. 2 Introduction to Data Exclusivity and Patent/Registration Linkage Issues Art. 39.3 – Data Protection. TRIPS+ - Data Exclusivity and Patent/Registration Linkage. Successful resistance. U.S. New Trade Policy on data exclusivity and linkage.

3. 3 TRIPS Art. 39.3 SECTION 7: PROTECTION OF UNDISCLOSED INFORMATION, Article 39.3: Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed 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.

4. 4 Art. 39.3 Has Limited Application When is the data itself required? What happens if the regulator relies on the fact of registration elsewhere? What are new chemical entities? What is required if there is disclosed data? What does considerable effort mean?

5. 5 Art. 39.3 – What is “Unfair Commercial Use”? What do the words mean? Where does the idea or legal doctrine come from?

6. Unfair Commercial Use This provision has its origin in trade secret law. Drug companies treat their clinical trial and other data as confidential trade secrets. U.S. law requires that information be treated confidentially. It is generally understood that trade secrets are protected against commercial espionage. Use or reference by a drug regulatory authority to confirm the safety/efficacy of a follow-on product does not entail unfair commercial use. 6

7. 7 Art. 39.3 Requires Protection Against Disclosure Countries must also protect such data against disclosure, except where necessary to protect the public. When is disclosure required to protect the public? Is mandatory, public reporting of clinical trial results necessary to protect the public? Does Article 39.3 say anything at all about not registering generic equivalents or checking the patent status of the first registered medicine?

8. 8 What is Data Exclusivity? Data exclusivity prevents a drug regulatory authority from relying on clinical and other data provided by the first registrant of a medicine, or from relying on the fact of prior product registration in that same country or elsewhere in order to access the safety and efficacy of a therapeutically equivalent follow-on generic medicines so as to allow its registration and marketing. The US seeks 5 years of data exclusivity for new chemical entities plus 3 more years for new uses or formulations. Europe seeks 10 + 1 years.

9. 9 What is Registration/Patent Linkage? Patent/registration linkage prevents a drug regulatory authority from registering a generic equivalent of a previously registered medicine if the patent holder of that medicines makes any claim that the medicine is patent protected. Linkage, at a minimum, require notice to the patent holder and a stay of registration pending a court challenge.

10. 10 Why Do Drug Companies Want Data Exclusivity and Linkage? Drug companies spend significant $ on R&D for new indications and formulations and think these investments should be protected. Drug companies often don’t file patent applications in smaller and poor markets for unproven drug candidates that have a.1% chance of being marketed, and thus these drugs lack patent protections. Data exclusivity could be interpreted as offering such complete protection that it prevents a product produced according to a compulsory license from being registered (EU standard).

11. 11 Add’l Reasons Truly innovative medicines take a very long time to come to the market thereby reducing the period of patent protection (patent term extensions help). Evergreening strategies don’t always work when patent standards are applied rigorously. Biotech product are not always patentable given exceptions from patenting life-forms.

12. 12 Why Do Drug Companies Want Linkage? Linkage rules could be interpreted to interfere with the right to register a generic equivalent during the entire 20- year patent term even if the patent is weak and even if a compulsory license has been issued. Linkage turns drug regulatory authorities into patent enforcement agencies.

13. 13 U.S. Practice – Data Exclusivity Historically, U.S. had absolute data exclusivity. Generics had to reproduce clinical trials meaning that very few generics came to the market Hatch-Waxman Act gave first-registrant patent extensions, limited but absolute data exclusivity, and patent/registration linkage in exchange for ending absolute data exclusivity.

14. 14 U.S. Practice – Data Exclusivity New chemical entities are entitled to five years of data exclusivity. Filing for registration during the five year term is only allowed when claiming patent invalidity or non-infringement and then only after four years. NDAs for new indications, new formulations, and new combinations are ordinarily entitled to three years of exclusivity if at least one new clinical investigation is essential to regulatory approval.

15. 15 U.S. Practice – Linkage Orange Book patent/registration linkage system: Owners of registered medicines file all applicable patent claims in the FDA’s Orange Book. Generic applicants must allege no relevant patent, patent expiration, or invalidity/non-infringement. In the later case, the patent holder is notified, given 45 days to file an infringement action, which results in a 30-month interdict.

16. 16 European Practice Europe historically had a 6-10 years of data exclusivity. Revised Directive 2004/27/EC introduced an 8+2+1 formula that grants absolute data exclusivity for 8 years, allows early working and registration during a two-year window (but no marketing), and grants an addition 1 year of exclusivity for new therapies offering significant clinical benefits compared to existing medicines. Although Europe introduced early working, it still does not mandate linkage.

17. 17 Drug Companies Control the Timing of Registration Applications Drug companies currently exercise complete control over their decisions to register their products. They register quickly in rich and big market countries, but slowly or not at all in poorer and smaller countries. Prevailing data exclusivity rules contain no incentives for early registration.

18. 18 USTR 2003 Special 301 Report Highlights Data Exclusivity “One... key implementation priority that we have focused on in this review is the implementation of Article 39.3, which requires WTO Members to protect test data submitted by drug companies to health authorities against disclosure of that data and against ‘unfair commercial use’ of that data. [T]he original applicant should be entitled to a period of exclusivity.... During this period of exclusivity, the data cannot be relied upon by regulatory officials to approve similar products.”

19. 19 2002-07 Special 301 Reports Highlight DE & Linkage Even after signing the Doha Declaration, which guarantee the right of access to medicine for all, the U.S. complained about a lack of data exclusivity and/or patent/registration linkage in 2002-2007 Special 301 Watch Lists 134 times.

20. 20 US Trade Agreements Routinely Seek Data Exclusivity and Linkage Since 2000, the US has concluded FTAs that include data exclusivity and linkage provisions with Australia, Bahrain, Chile, Columbia, Jordan, Korea, Oman, Morocco, Panama, Peru, Singapore, and the six Central American parties to CAFTA (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua). The US been negotiating similar terms with other countries, but those FTA negotiations are either ongoing or temporarily suspended: Thailand US-SACU (Botswana, Lesotho, Namibia, South Africa and Swaziland). Malaysia United Arab Emirates The most recent FTAs involving Peru, Columbia, and Panama are being renegotiated pursuant to the New Trade Policy, including on data exclusivity and linkage issues.

21. 21 USTR/PhRMA Are Seeking Even Stronger forms of Data Exclusivity In some of its recent agreements, the USTR is seeking protection for disclosed as well as undisclosed data. Some agreement apply to new pharmaceutical products – broader than new chemical entities. Some agreements seeks 3-year exclusivity for new uses/formulations. Agreements seek protection from reliance on the fact of foreign registration. Agreements seek absence of time periods within which the product must be submitted for registration.

22. EU is seeking data exclusivity in its EPAs Data exclusivity referenced in negotiations with Andean countries and India. Length is not always clear, but presumably 10 + 1 years. 22

23. 23 Activists fought against DE, linkage and other TRIPS-plus provisions in Thailand “Following a week-long negotiation that fell short of U.S. goals and was marred by Thai protests, the U.S. chief negotiator said today (Jan. 13) that the Bush Administration needs to reevaluate efforts to negotiate a free-trade agreement with Thailand.” WSJ 1/12/06

24. 24 New Trade Policy for America (2007) The New Trade Policy for America (May 11, 2007) included improved data exclusivity and linkages provisions: No mandatory patent-registration linkage Tightened standards and limited concurrency for data exclusivity and An explicit exception to data exclusivity when a compulsory license is issued or when access to medicines is needed in a no-patent situation.

25. 25 Other Proposals for Taming Data Exclusivity Liability rule – royalties for data use/reliance based on economic value, usually waived where a compulsory license with royalties has already been filed. Express compulsory license and public health exceptions, even in no patent situations. Concurrency and sunset rules – use-it or lose- it.

26. 26 It’s Better to Avoid Data Exclusivity and Linkage Altogether US and Big Pharma will continue to try to seek data exclusivity and linkage through 301 Special Watch List, GSP preferences/withdrawals, technical assistance, commercial lobbying/ threats, and trade negotiations. Fighting data exclusivity and linkage is important for access to medicines and should be a priority for A2M activists.