Test data protection for medical inventions

Test data protection is a sui generis intellectual property right that was first developed in the 1980s for pharmaceutical drugs, and has been extended recently to biologic drugs and vaccines.

On September 24, 1984. The U.S. Drug Price Competition and Patent Term Restoration Act of 1984 became law (Public Law 98-417), popularly known as the Hatch-Waxman Act. The legislation created a regulatory pathway that made it easier to register generic drugs by relying upon the evidence of safety and efficacy provided by originators, and limiting regulatory requirements to evidence that generic products are “bioequivalent.” But the Act also provided for patent extensions and an initial period of exclusive rights in pharmaceutical test data. Under the Hatch-Waxman act, a new chemical entity received 5 years of exclusive rights to rely upon test data, and a registration of a new use a drug received 3 years of exclusive rights.

Europe enacted its first test data rules soon after, motivated in part for create regulatory barriers to the sale of generic drugs from Spain and Portugal, when those countries entered the European Union’s common market, and before Spain and Portugal implemented changes in their laws to extend product patent protection to pharmaceutical drugs. For a while the EU had a regime of 6 or 10 years of exclusive rights, depending upon whether the registrations were national or through the EU regulatory system. Later the EU extended the term of exclusive rights for pharmaceutical drugs to systems of 8 to 11 years. The EU would later say that the test data exclusive rights could not be waived, even in cases of abusive prices or medical emergencies.

In recent years, the U.S. and the EU have adopted new procedures for biologic drugs, that create a regulatory pathway for so-called biosimiliar or biogeneric drugs. The US biosimiliar pathway was created in the US in November 2009, as part of the Affordable Health Care for America Act. The rules for the pathway were very controversial, including but not limited to the term of protection, which was extended to 12 years by the Congress, five years longer than the 7 year term proposed by President Obama. The FTC recommended a term of zero years, because the combination of patent protection and barriers to substitution against the originator eliminated the need for any term at all. A number of public health and consumer groups wanted safeguards for abuses of the right, and exceptions for cases when duplicative testing violated norms for medical ethics.

In the Fabrazyme March-in case, the NIH took taken the view that the US rules on test data exclusivity granted an absolute monopoly on the data that could be not waived even when the originator was unable to supply the US market.

In 1980s, the US trade negotiators began to push trading partners, including developing countries, to adopt similiar exclusive rights in test data.

In 1991, the NIH licensed its rights to the test data for Taxol/Paclitaxel, the anti-cancer drug, to Bristol-Myers Squibb (BMS). Because there were no patents on Taxol, rights in the test data were the only barrier to generic competition. The Clinton administration was lobbied by BMS to bring aggressive trade pressures against more than two dozen foreign countries to block generic competition. These disputes often involved arguments over the extent to which the test data would be considered an intellectual property right in the foreign country. Among the targets of these trade pressures were South Africa, Israel, and several countries in Latin America, Asia and Europe.

In the 1994 WTO TRIPS Agreement, there was a limited obligation in Article 39.3, requiring countries to protect “undisclosed test or other data, the origination of which involves a considerable effort . . against unfair commercial use” But the TRIPS obligation was limited to “new chemical entities,” “commercial use,” referenced “undisclosed or other data” and did not require the granting of exclusive rights. The U.S. began a WTO case against Argentina, but dropped the case after reviewing the Argentine legal defense. (DS196, Argentina — Certain Measures on the Protection of Patents and Test Data).

Article 39

1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.

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.

Rather than pursue a dispute in the WTO, the USTR began to press for test data exclusive rights in bilateral trade agreements, and through unilateral trade pressures such as the Special 301 list, or other less transparent pressures, many of which are referenced in wikileaks cables (240 Wikileaks cables on pharmaceutical data exclusivity). Particularly interesting was the discussion in the Vietnam cables, which said “Data exclusivity should be automatic, comprehensive, retroactive and without procedures and formalities,” leading to monopolies even in countries where there are no patents on the drug or vaccine.

On August 2, 2012, Senator Sanders introduced S. 3506, the Ethical Pathway Act of 2012, 112th Congress. The purpose of S.3506 was:

To eliminate requirements to undertake duplicative clinical testing of new pharmaceutical drugs, vaccines, biological products, or medical devices, when such duplication is inconsistent with relevant ethical norms.

The Sanders bill creates an alternative of cost sharing in cases where it is not ethical to repeat experiments involving human subjects. In Europe, such duplicative testing is banned in favor of cost sharing when the tests involve animals, such as dogs or rats.

Some “middle income’ developing countries have asked USTR to consider cost sharing (a policy alternative KEI has advocated) as a less monopolistic approach to dealing with “unfair commercial use” of test data. Switzerland and other countries have accepted this in some FTA agreements, but the US has not.

The US and the European Union has asked India to adopted exclusive rights in test data, and the EU wanted this as part of an India/EU trade agreement. (See: James Love. The production of generic drugs in India: A new trade agreement with the EU would hinder access to drugs in developing countries,” BMJ 2011; 342:d1694.)

At present there is a debate within the Congress and the White House about what norms to press for the Trans Pacific Partnership (TPP) trade agreement, and over a number of technical issues in the U.S. legislation for the biosimiliar pathway. PhRMA and BiO also want the U.S. terms for pharmaceutical test data extended from 5 to 12 years.

Test data in the TPP negotiation

On May 10, 2007, President Bush entered into an agreement with Democrats in the House of Representative to relax certain provisions in bilateral trade deals with developing countries. One of the major concessions was to eliminate the hard obligation for exclusive rights for pharmaceutical test data. By 2012, the Obama White House wanted to backtrack on that agreement, which had only partly been implemented, and return to tough rules on test data exclusivity in the Trans Pacific Partnership (TPP) trade agreement. Also, the Obama Administration is expected to make a proposal for a term of protection for biologic drugs, which have a different term under U.S. law than do other types of drugs. The biologics issue is further complicated by the fact that the Obama Administration budget is based upon cost savings from modifying the U.S. law, and reducing the term of protection for biologics test data from 12 to 7 years, the President’s original preferred term.

Following an extensive and well funded advocacy effort by big drug companies, by Summer 2012 more than 40 U.S. Senators from both leading political parties had asked the Obama Admin to support 12 years of biologics test data protection in the TPP. The White House USTR has reportedly declined to table the 12 years, so far, but is considering doing so.

Some links:

See also the additional links below: