The Pharmaceutical Research and Manufacturers of America (PhRMA) 2010 Special 301 submission (a 200 plus page document) systematically lists in great detail, grievances against 41 countries for, in its view, the insufficient implementation and enforcement of national IP legislation.
A primary focus of attention and frequent “area of concern” in the submission is the inadequate protection of pharmaceutical regulatory data. Regulatory data refers to test and clinical trial data generated by drug developers and submitted as requisite evidence of safety and efficacy for the successful registration of a product. While data protection can take many forms, data exclusivity regimes grant a period of exclusive rights to the originator during which generic manufacturers are banned from relying on the original data to meet registration standards of safety and efficacy. In its submission, PhRMA relentlessly advocates for, indeed makes demands of several countries to implement data exclusivity provisions that go far beyond their obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
As noted by KEI and others in submissions to USTR, a number of public health and development NGOs have been highly critical of data exclusivity regimes, citing the large barriers to the introduction of generic medicines, and the conflicts between data exclusivity and medical ethics, when generic firms are required to replicate experiments with humans where the results of trials are already known. KEI will focus on the issue of pharmaceutical test data protection in its testimony on the Special 301 list on March 3, 2010.
Below are country-specific statements on this subject from PhRMA’s submission:
PhRMA has singled out THAILAND by recommending that it be identified as a Priority Foreign Country
PhRMA encourages Thailand to (1) implement new regulations that do not permit generics producers to rely directly or indirectly on the originators’ data, unless consent has been provided by the originator, for the approval of generic pharmaceutical products during the designated period of exclusivity; (2) bring Thailand’s regulations in line with international best practices by making clear that trade secret protection is provided to all confidential material whenever it is received by officials; (3) extend data protection to new dosage forms, new indications, etc; and (4) require Thai FDA officials to protect information provided in confidence by the originator by ensuring that information is not improperly made public or made available for use or reliance by a subsequent producer of a generic pharmaceutical product.
CHINA, recommended for Section 306 monitoring:
The Implementation Regulation of the Drug Administration Law and the Drug Registration Regulation establish a six-year period of protection for test data of products containing a new chemical ingredient against unfair commercial use. The State Food and Drug Administration (SFDA) is the organization in China responsible for upholding this law. Unfortunately, the current law is ambiguous as to how data protection is implemented. For example, certain key concepts such as “new chemical ingredient” and “unfair commercial use” are undefined.
China’s regulatory procedures permit the SFDA to grant marketing approval to products that have previously been approved outside of China. Non-originator applicants can submit published material and reference regulatory decisions by foreign regulatory agencies as justification for approval. Limited local clinical trials are also required.
PhRMA views China’s deference to published material and regulatory decisions by agencies outside of China as reliance on undisclosed clinical data developed by originator companies. Published data merely summarize the data included in the original filing and alone are usually insufficient to prove the safety and efficacy of a product. The original data were necessary to demonstrate the safety and efficacy of the product. Reliance on summary data or approvals in countries outside of China gives an unfair commercial advantage to non-originator companies because non-originator companies do not incur the cost of generating their own clinical data to prove safety and efficacy. Such reliance may create safety concerns around generic products for which inadequate safety data are available to the Government of China.
The following countries have been recommended for inclusion on the Priority Watch List
By linking approval in other countries that require the submission of confidential test and other data to its own drug approval process, India, in effect, uses those countries as its agents. In effect, India relies on test data submitted by originators to another country. This indirect reliance results in unfair commercial use prohibited by TRIPS.
However, our members still have concerns about the potential loss of data protection under the new regulations if the innovator drug is not being marketed in Canada. Additionally, PhRMA notes that the new Canadian data protection regime is now subject to two legal challenges by the generic industry, which were heard together at the Federal Court in December 2008. On July 17, 2009, the Federal Court dismissed these challenges, but the generic industry has appealed the decision.37 It is anticipated that the appeal decision will be rendered in 2010.
PhRMA member companies urge the U.S. Government to request that Canadian authorities continue to vigorously defend the 2006 amendments to the data protection regime.
ISRAEL (see Israel’s extended data exclusivity terms under the February 18, 2010 understanding reached between Israel and the United States pertaining to its 2009 Special 301 Out-of-Cycle Review)
The Government of Israel often argues that the rationale for this mechanism is to encourage multinational companies to expedite local submission of their innovation. Yet the damaging combination of substandard data protection with the current inefficiencies of pharmaceutical registration in Israel (described below) compromises the interests of patients by slowing delivery of new products to Israel in a timely manner, as well as eliminating valuable data protection time needed by the innovator to receive a legitimate return on its investment.
Simultaneously, circumvention of the principle of national territoriality provides local generic companies with an unfair commercial advantage when exporting their generic products to the major markets in the U.S. and Europe. Israel therefore creates an unacceptable situation, in which the interests of US research-based companies are being jeopardized both in Israel and globally. While the data protection periods of U.S. innovators are being subject to intentional eroding policies by the Government of Israel, local Israeli innovators enjoy the full term of protection provided in the United States.
As a member of the World Trade Organization, Israel was required to fully implement TRIPS, no later than January 1, 2000. TRIPS Article 39.3 obligates WTO members to protect data submitted to prove safety and efficacy by innovative pharmaceutical companies against unfair commercial use. This protection is typically provided by regimes known as “data exclusivity” or regulatory data protection.
Only in March 2005 did Israel enact legislation after drawn-out negotiations with the U.S. Government. However, the enacted legislation is inadequate in providing effective data protection for data. The legislation, for instance, curtailed the period and scope of non-reliance on the data, while at the same time effectively permitting reliance on the originators’ dossiers for export.
Article 47D(2) of the Pharmacist Ordinance allows the Ministry of Health to rely on the innovator’s data to register generic products during the exclusivity period. More importantly, the Ministry of Health can rely on the registration data to approve the export of generic products to other markets. This sub-standard type of protection ensures that local generic companies enjoy an unfair competitive advantage over their U.S. and other generic competitors when submitting generic products for registration in other markets.
While the United States precludes filing for generic marketing approval for five years (four years with a patent challenge) and the EU allows approvals after 10 years (and prohibits filing for marketing approval for eight years), Article 47D (b) (2) leads to a protection period significantly shorter than five years in Israel. It provides either five years of exclusivity from the day of product registration in Israel, or 5.5 years of exclusivity from the day of the earliest registration in any of the ‘Recognized Countries’ (as stipulated by the Pharmacists Ordinance), whichever is shorter. However, because Israel ties data protection to the term granted in the “Recognized Countries,” as explained above, the effective term of regulatory data protection in Israel today is less than five years. This is because it currently takes the Ministry of Health between 15 and 18 months on average, to approve a new pharmaceutical product in Israel, from the day it was registered in a Recognized Country.
Moreover, Article 47(D) of the Pharmacist Ordinance offers no protection for new indications, while the legislation in the United States and in the EU provide three years and one year, respectively. In addition, the United States provides three years exclusivity for new dosage forms.
Poland was required to provide innovative pharmaceuticals the European “8/2/1” term of data protection prior to its 2004 accession. Instead of passing legislation to establish this protection, the Polish Government submitted a derogation request that was refused in 2004 by the EU. The EU reiterated the need for full implementation of “8/2/1” data protection in 2008. Continued engagement on this issue by the U.S. Government and its EU counterparts is needed to ensure effective implementation.
Russia has not yet enacted Regulatory Data Protection (RDP) legislation, despite its international commitments to do so. The United States-Russia Bilateral IPR Agreement of November 19, 2006 obligated Russia to provide at least six years of RDP as part of its World Trade Organization accession. The Agreement stated that the Government of Russia commits to work with the Duma to enact legislation and implementing regulations providing that undisclosed information submitted to obtain marketing approval, i.e., registration of pharmaceutical products, would be protected against unfair commercial use for a period of at least six years starting from the date of grant of marketing approval in the Russian Federation.
In July 2009, the Ministry of Health (MoH) placed on its official website a new draft bill “On turnover of medicines”, envisaging cardinal changes in regulatory issues like registration processes, marketing authorization, clinical trials, etc. The new bill proposes to replace the current statute, FZ 86 “On Medicines.” Article 29 of the bill would allow generics seeking marketing authorization for their copies to rely on published data or bioequivalence studies for approval. The publications relied upon contain summaries of underlying data that remain undisclosed. Reliance on such publications is therefore reliance on undisclosed data.
The latest version of the bill, approved by the Duma in its first reading on January 29, 2010, however, does not contain any provisions for RDP. The bill should be amended to prohibit registration, for six years from the marketing authorization of the originator, of any application that relies on innovator data (published or otherwise) or making reference to an original product through a bioequivalence study.
In 2005, the Government of Turkey took positive steps toward establishing protection for the commercially valuable data generated by innovator companies and now provides for RDP for a minimum period of six years for products registered in the EU. The period of RDP currently begins on the first date of marketing authorization in any country of the European Customs Union (ECU). The Health Ministry has said that products first registered in any country of the ECU between 1 January 2001 and 31 December 2004 would benefit from the RDP regulation if there were no generic or generic application of that product in Turkey prior to 31 December 2004.
The EU Commission has inquired on multiple occasions how this regulation applies to up to 55 medicines registered in the EU and Turkey between 2001-2005, but to our knowledge, it has not received a clear and firm explanation from the Government. The lack of a clear response has been a major concern to the EU Commission, which has insisted that Turkey should provide RDP for all products registered in the EU after 2001, consistent with its European Customs Union and WTO/TRIPS obligations.
While even a minimum six-year period is a welcome step, the implementation in Turkey is problematic because the six-year protection period commences from the date when a product first gains registration in any country of the ECU. Inefficiencies of the regulatory system in Turkey also have the effect of significantly diminishing RDP in Turkey. Inefficient regulatory procedures that do not fully comply today with the EU Transparency Directive erode the period of protection for new medicines by delaying market access. Effective RDP is reduced to as little as two to three years in some cases, resulting in an environment where incentives for innovators to undertake risky and expensive research are undermined.
Application of RDP today in Turkey is clearly out of step with European standards and must be amended to commence upon registration in Turkey.
Furthermore, Turkey does not today provide RDP for combination products. However, Directive 2004/27/EC article 10 /bis recognizes RDP for combination products. The European Commission’s NOTICE TO APPLICANTS, VOLUME 2A, Procedures for Marketing Authorisation, CHAPTER 1, MARKETING AUTHORISATION dated November 2005, section 5.5 gives guidance on the implementation of Article 10(b) in relation to combination products. Turkey’s refusal to apply RDP to combination products is thus counter to established practice in Europe today. In addition, it is unclear how Turkey will harmonize its six-year RDP term to meet the requirements of the system established in the EU, which allows an effective data protection period of up to 11 years from the time of the first registration in the EU. Turkey has stated its aspiration to join the EU as a full member sometime after 2015. In this case, Turkey’s trading partners, led by the EU but also with the engagement of U.S. trade negotiators, should inquire how Turkey plans to harmonize its current regime to allow protection of up to 11 years (8/2/1).
Finally, the current regulation inappropriately ties the term of RDP to patents relating to the product. For patented products, the protection period cannot extend beyond the period granted for patents in Turkey, an exception not consistent with RDP in the ECU today.
If data are submitted directly to Argentine officials, one provision of the Law requires that the data are protected against “dishonest” use and disclosure. But another provision requires Argentine officials to rely on the same data submitted by others, in contradiction of TRIPS Article 39.3. Moreover, the Law does not define “dishonest” use and does not provide sufficient details (such as term of protection) to provide a sound legal basis for protection, under the TRIPS Article 39.3, even if the provision requiring reliance was deleted.
If data are not submitted directly to Argentine officials, competitors may obtain marketing approval by relying on prior approvals in other countries based on the submission there of undisclosed test and other data. In short, Argentine officials essentially use the review in these countries as their review. Argentina is obligated to ensure that such approvals are consistent with TRIPS Article 39.3, by preventing reliance for a period of time after the approval of the product associated with the submitted data.
Because Chile’s existing norms (contained in Law 19,996 and Health Decree 153/2005) do not clearly define what constitutes “disclosure” of test data, they enable the Chilean Government wrongly to deny exclusive use of such data based on prior partial disclosures either by the data owner itself (occasionally undertaken in the interest of transparency) or by foreign health regulatory agencies. The current regulations protect pharmaceutical test data primarily against physical disclosure, and do not unambiguously protect them against unfair commercial use, understood as direct or indirect reliance on such data by an unauthorized third party in order to obtain a sanitary registration for a similar product. In several cases, the current rules have permitted the ISP to accept sanitary registration applications for pharmaceutical products characterized as “new,” even though the applications relied on test data belonging to a third party that had not authorized such reliance. Chile’s data protection system imposes grounds for revocation or denial of the right to exclusive use that are not stated in TRIPS or Chile’s bilateral trade agreements with the EU and the United States. These conditions significantly weaken the applicability and usefulness of the available data protection.
In November 2008, the Health Ministry made available an updated draft of its new data protection regulation (intended to replace Health Decree 153/2005), initially published for public comment the previous April. If approved and enacted, the November 2008 text would have corrected several of the most important deficiencies in Chile’s current regulatory framework for RDP. Specifically, the November 2008 draft would have established that:
Prior partial data disclosures made by foreign regulatory agencies or international organizations will not negate the “undisclosed” nature of the data. Sanitary registration applications for products identified as “new” (as opposed to “similar”) must be supported by complete data dossiers. All data submitted that relate to safety or efficacy will receive protection. To obtain data protection, the applicant for sanitary registration must provide a sworn statement that it owns the data or has owner’s authorization. Data would qualify automatically for protection, provided that they refer to an eligible chemical entity and that the applicant complies with the required formalities – thereby eliminating the ISP’s authority to make case-by-case determinations of whether the data are in fact “undisclosed.”
The new draft regulation did not address the statutory deficiencies regarding RDP contained in Law 19,996, correction of which would require new legislation. The most important deficiencies relate to the overly restrictive definition of what constitutes a “new chemical entity,” and the various TRIPS-inconsistent grounds for denial or revocation of protection.
Unfortunately, several of the elements of the November 2008 draft were weakened significantly in the latest draft, which the Health Ministry sent to the CGR for legal review in September 2009. Specifically, the new text – unlike the previous one – does not state unambiguously that prior partial disclosures of data by foreign regulatory agencies or international organizations cannot be cited to justify denial of data protection in Chile. In addition, the new text would permit the ISP publicly to disclose protected data on broad and vague grounds (“… in order to provide guidance or warnings regarding the appropriate use of the medicine”).
Although the current regulatory text includes some provisions that would modestly strengthen Chile’s data protection regime, it would leave untouched or fail adequately to remedy other important deficiencies in the current system. For this reason, it is PhRMA’s position that enactment and implementation of the decree, in its present form, would not suffice to justify Chile’s removal from the USTR Priority Watch List.
According to data compiled by the CIF, since January 1, 2000 (the World Trade Organization’s deadline for Chile to subscribe to and implement TRIPS, which requires the establishment of data protection), the ISP has granted premature sanitary registrations to 10 imitative pharmaceutical products, relying, without due authorization, on test data belonging to other companies. Five of these cases have occurred since December 2005, when Chile adopted domestic legislation establishing data protection, and two have occurred since January 8, 2007, when Chile was first placed on USTR´s Priority Watch List.
According to CAVEME [the local pharmaceutical R&D Association, Cámara Venezolana del Medicamento], since 2002, over 20 “copy” products corresponding to original medicines that should have each been covered under a five-year term of data protection, obtained registration from the health authorities (Venezuelan National Institute of Health (INH)). Individual research-based pharmaceutical companies filed challenges against the Government in courts to enforce data protection, with no results to date. Many companies also acted directly against marketers of the copy products at the Venezuelan Antitrust Agency (Procompetencia), but all claims of unfair competition were dismissed. Claims were also brought by pharmaceutical companies in the Administrative Courts and then to the Supreme Court of Justice. Both courts denied preliminary remedies and continue to process claims with no decision in sight.
On June 6, 2005, CAVEME sued the Venezuelan National Institute of Health for not granting the data protection stipulated by TRIPS Article 39.3. The claim was accepted by the Court in 2006, but a decision has not been issued.
The new drug registration regime, issued in late October 2008, has incorporated some protections for regulatory test data and patents. No confidential data shall be incorporated in the registration dossier, unless specifically asked for by the committee. In this case, the committee would provide written consent to protect data from disclosure. The applicant is to state that the data submitted pertains to its product, that the applicant owns the data, or that the data was obtained from publicly available sources. Lebanon patent submissions and certificates are to be included in the registration dossier. PhRMA is still awaiting the proper implementation of these provisions.
A comprehensive provision preventing unfair reliance on valuable undisclosed information and data (as it pertains to a regulatory approval requirement), is required in order to protect the intellectual property rights of research–based pharmaceutical companies. PhRMA members have engaged in an active dialogue with the Ministry of Economy and Trade (MOET) over a new Unfair Competition Law. The MOET has taken the position that publication of any data in a medical journal or on the Internet would constitute a disclosure of the data (even though the underlying data are not disclosed), thus permitting the MOH to approve generics at any time after the innovator. An effort was made to inform MOET that publication of preliminary test data and results is ethically sound and helps inform the medical community as early as possible about scientific progress. PhRMA has also explained that publication of results does not
substitute for safety and efficacy data submitted in support of product licensing.
To be TRIPS-consistent, MOH should protect regulatory test data from unfair commercial use during the data protection period by refusing marketing approval for pharmaceutical product applications filed by third parties that rely on the same data or conclusions without the consent of the party that produced the data. In addition, MOH should protect such data from disclosure except where necessary to protect the public health.
The Pakistani Government is currently in the process of notifying a Statutory Regulation Order (SRO) of the draft law that would extend protection to pharmaceutical test data. PhRMA member companies are now waiting for the SRO notification and look forward to working with the Pakistani Government to ensure that this meets Pakistan’s international obligations and provides full protection for pharmaceutical intellectual property.
The following countries were recommended to the Watch List
Although the revised Pharmaceutical Affairs Law provides for five years of data protection, it only covers new chemical entity products and does not cover new indications. In addition, the current law limits the applicability of data protection to registrations filed within three years from the first approval granted anywhere in the world for a product based on that new chemical entity. Linking the availability of data protection in Taiwan to the date of any other market launch is not consistent with the objectives of data protection rights and may not effectively prohibit unfair commercial use.
Although the Health Regulatory Agency (Consejo Superior de Salud Pública –CSSP) has taken steps to grant and apply data protection, operational and other limitations at the CSSP jeopardize effective enforcement. In addition, the decree contains confusing language on the scope of protection, resulting in restrictive coverage.
Limited coordination between the Industry and Commerce Ministry and the Health Ministry regarding the CAFTA-DR implementation process is evident. Meanwhile, a lack of information at the Health Ministry on its obligations under the treaty, in addition to the presence of confusing and technically limited language in the implementing legislation, generate great uncertainty regarding data protection.
Mexico should take conclusive actions towards reforming data protection in a manner that guarantees alignment with NAFTA and meets its TRIPS obligations. Prompt conclusion of those actions still under development is anticipated by PhRMA members.
As of the date these comments were prepared, no draft proposal for effective enforcement of patent linkage or test data protection were known to exist.
Peru has approved Legislative Decree 1072 and Supreme Decree 02-2009-SA, providing for 5 years of data protection. Nevertheless, the following deficiencies remain a concern:
Exclusion by the Government of Peru of biotechnological pharmaceuticals as products eligible for data protection. DIGEMID does not grant data protection to biotechnological pharmaceuticals. Its theory is the USPTPA does not obligate the parties to protect these kinds of products because, according to its interpretation; they do not contain chemical entities. This is a false distinction from both technical and legal perspectives. PhRMA believes that excluding products of biological origin from the scope of data protection violates the obligation contained in Article 16.10 of the USPTPA, as well as LD 1072 and its implementing regulation. Biotechnological pharmaceutical products also require safety and efficacy studies and, as such, merit test data protection, as for non-biotechnological pharmaceuticals. DIGEMID has approved a Sanitary Registration Form that encloses an affidavit of non-disclosure of the data on the safety and efficacy of the product. If the affidavit is not executed, no protection will be granted. Months ago, officials had orally warned that no protection will be granted if a single part, abstract or conclusion of the studies is disclosed. Fortunately, the health authority stated more recently that as long as a single piece of information is still undisclosed, it will protect the product for the 5-year period. Nevertheless, uncertainty remains, and PhRMA requests that the U.S. Government closely monitor this implementation issue.
PhRMA member companies are concerned by the authorities failure to provide effective data exclusivity for a period of at least five years from the date of marketing authorization of the innovator product in Saudi Arabia. SFDA should enforce Article 5 of a Council of Ministers’ Trade Secrets Protection Regulation (decision number 50, dated 25/2/1426 H, April 4, 2005). Pursuant to Article 5, the submission of undisclosed test or other data, obtained as a result of substantial efforts, needed for marketing approval of drugs or agricultural products, shall be protected by the competent authority against unfair commercial use for at least five years from the approval date.
The Kingdom of Saudi Arabia has not shown compliance with its regulations (and WTO commitments). Under its protocol of Accession to the WTO, authorities acknowledged that “These Regulations provided for protection of undisclosed tests and other data submitted to obtain approval of a pharmaceutical or agricultural chemical against unfair commercial use for a minimum period of five years from the date of obtaining the approval including the establishment of the base price. No person other than the person who submitted such data could, without the explicit consent of the person who submitted the data, rely on such data in support of an application for product approval. Any subsequent application for marketing approval would not be granted a market authorization unless the applicant submitted its own data, meeting the same requirements applied to the initial applicant, or had the permission of the person initially submitting the data to rely on such data.
Member companies have approached Saudi authorities over the need to enforce their data protection regulations. Authorities insist they are not sharing the content of the drug registration file of the innovator product. However, they may be relying on the data of innovator drugs to approve local copies. An effective system of pharmaceutical data protection requires “non-reliance” on regulatory test data for a fixed period of time. In other words, the data may not be used to support or review other applications for marketing approval for a set amount of time unless authorized by the original submitter of the data.
Data protection should be provided to innovative pharmaceutical products whether or not they are patented in Saudi Arabia. Saudi regulatory authorities should keep generic copies of pioneer drugs off the market during the period of data exclusivity. In the absence of a registered patent, a copy may, of course, receive marketing approval during the data protection period, provided its manufacturer conducts its own pre-clinical and clinical trials and independently seeks marketing authorization from regulatory authorities.
In 2009, PhRMA sponsored a day-long training program focused on pharmaceutical data protection. USPTO and a representative from the EU participated in the event. Officials from the Saudi Food and Drug Agency and the Ministries of Economy and Health also participated in the event.