2012: NIH case: exclusive rights in regulatory test data are absolute, even where there are drug shortages

In August 2, 2010, the National Institutes of Health (NIH) was asked to grant an open license to permit manufacture of Fabrazyme, a drug used to treat Fabry disease (more on the march-in case here: http://www.keionline.org/fabrazyme). On December 1, 2010, Francis S. Collins, Director of the NIH issued a determination in the case, rejecting the petition for the NIH to exercise its march-in rights, citing as support for the denial that granting march-in rights would not overcome other barriers, including the exclusive rights in test data.

The case arose following drug shortages of Fabrazyme due to Genzyme Corporation’s manufacturing problems. In mid-2009, Genzyme interrupted its production of Fabrazyme at its Allston facility due to a viral contamination and then again due to a power outage. Due to the production problems, Fabry patients were unable to obtain sufficient quantities of Fabrazyme and in October 2010, the European Medicines Agency (EMA) reported that there was a trend of increased reports of adverse effects directly correlating with the Fabrazyme drug shortage.

Despite a finding that “the patients’ required supply of Fabrzyme cannot be met due to Genzyme’s current manufacturing difficulties,” the NIH refused the petition for march-in rights concluding:

NIH has determined that the information currently available does not warrant a march-in proceeding under 35 U.S.C. 203(a)(2) because, no remedy that is available under the march-in provision would address the problems identified by the requestors due to the shortage of Fabrazyme. The license that Requestors have sought, were it to be granted, is unlikely to increase the supply of alpha-galactosidase A during the term of the ‘804 patent because years of clinical studies would be required before an alternative source could be approved by the FDA.

In essence, the NIH asserts that even were it to grant the march-in request, other manufacturers would not be permitted to produce and sell the drug because of the existing exclusive rights over test data on the drug. The NIH used the barrier of data exclusivity as a reason for rejecting the march-in request.

The result of the NIH decision raises serious questions as to when exclusive rights to test data can be overridden, if not through the grant of a march-in request or compulsory license. DG-Enterprise in 2006 wrote a letter stating that exclusive rights over test data cannot be overridden, even in the case of an emergency.

The US and EU positions regarding exclusive rights over test data are particularly concerning in light of recent trade negotiations. The US and EU consistently push to have provisions on exclusive rights to test data included in the trade agreements. Currently, the US is negotiating a regional trade agreement known as the Trans-Pacific Partnership Agreement (TPPA) involving eight (soon to be ten with the additions of Canada and Mexico) other countries of varying development levels and has tabled proposals requiring exclusive rights over test data. The current “TEAM” proposal does not provide a clear possibility of exception, in sharp contrast to the May 10, 2007 agreement which included language regarding “an exception to the data exclusivity obligation for measures to protect public health in accordance with the Doha Declaration and subsequent protocols for its implementation.”

If the US is successful in having its proposals on exclusive rights over pharmaceutical test data included in the TPPA, lack of exceptions to these rights or mechanisms to challenge these rights could raise serious implications for the availability of drugs, even where a compulsory license is issued. Although patents often have clear methods and procedures under which they can be challenged, rules governing exclusive rights in test data do not always provide the same exceptions. Even when patent barriers are overcome and generic suppliers are available, overcoming drug registration barriers provides another obstacle that patients in need of drugs may not be able to overcome.