Europe’s Devious Attempt to Re-Enshrine Data Monopolies in the EU-India FTA

Source: IP Health

8-Feb 2012

Big Pharma and its proxies in the offices of US and EU trade representatives love patent monopolies, but they increasingly seek data monopolies as well. Formally known as “data exclusivity,” the data monopolies sought by pharmaceutical giants prevent drug regulatory authorities from registering or granting marketing approval of generic equivalents of previously registered medicines. Although the safety and efficacy of generic medicines should be conclusively established by drug regulators once they confirm that the generic is indeed “equivalent to” the original product, data exclusivity requires drug regulators to ignore the data previously filed or even the fact of prior registration. Instead, in order to gain marketing approval, even when a patent monopoly does not exist, the generic company would be required to conduct costly, lengthy, and presumptively unethical human clinical trials to re-establish what is already known – that the generic equivalent is safe and efficacious in addressing one or more health conditions.

In the US, data monopolies (data exclusivity) has an original term of 5 years, but that term can be lengthened by 3-years whenever new clinical trial data is submitted in support of new uses, new dosages, new formulations, etc.  In the EU, data exclusivity is longer yet, with an initial term of 10 years, with the possibility of a further 1-year extension.

India negotiators in the pending EU-India Free Trade Agreement have steadfastly refused to accede to Europe’s demand that India formally adopt data exclusivity.  Bolstered by an international campaign, led by Indian activists, Indian negotiators have said “no” over and over again, eventually causing Europe to announce that it has at least temporarily dropped its demand for data exclusivity (and its demand for patent term extensions as well).

But Big Pharma and Europe are persistent.  Their new strategy is to demand that the EU-India FTA contain the language of TRIPS Article 39.3, which, on its face, merely demands protection against unwarranted disclosure of test data and against “unfair commercial use.”  However, this demand, seemingly innocuous (after all, why shouldn’t India accept what it is already bound to do under the 1994 WTO TRIPS Agreement?), is in fact dangerous.  Why?  Because the EU, like the US, willfully and consistently misinterprets Art. 39.3 to require data exclusivity/monopolies. Because Europe would be permitted to initiate direct trade disputes against India under a ratified FTA, it would have a greater chance of winning approval for its interpretation of Art. 39.3 in a bilateral panel than it would in a multilateral WTO panel.

Notably, neither the US nor the EU has ever formally filed a trade dispute at the WTO because of alleged violations of Art. 39.3.  They have failed to do so for one simple reason – they would lose, first and foremost because proposals for data exclusivity were explicitly rejected during TRIPS negotiations and secondly because many WTO members eschew data monopolies.  (Note:  the US did impose unilateral trade sanctions against Argentina in 1997 in retaliation against its refusal to adopt data exclusivity.)

Europe is betting that it might have better luck within a bilateral FTA framework than in the WTO. Accordingly, the demand for inclusion of Art. 39.3 language is in fact deviously dangerous rather than merely repetitive.

Professor Brook K. Baker

Health GAP (Global Access Project) Northeastern U. School of Law Program on Human Rights and the Global Economy 400 Huntington Ave. Boston, MA 02115 USA Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa 617-373-3217 (cell) 617-259-0760 (fax) 617-373-5056 b.baker@neu.edu