TPP: Are Data Exclusivity Provisions Reasonable?

Prepared by José Luis Cárdenas T., LL.B., LL.M. & Ph.D. December 2012 TPP: Are Data Exclusivity Provisions Reasonable?

Agenda • Causality between IPR & Pharma R&D • Myths on Data Exclusivity • Justification of DE • Reasonable Standard vs TPP • TPP's DE Structure • DE Evergreening • Conclusions

Clear Causality Between IP Rights & Pharmaceutical R&D? Trips Source: Bernard Munos, Lessons from 60 years of pharmaceutical innovation, Nature Reviews Drug Discovery 8, 959-968 (December 2009)

Myths on Data Exclusivity • Data Exclusivity doesn't additionally affect generic competition when there's a patent blocking market entry … • If this would be truth, why trying to expend Data Exclusivity … here are some thoughts:

Different Blocking Effects … Design Around Non-infringing API Clear boundaries Patent Scope = Claims Higher Blocking Effect than patents!!! Evendesign-aroundproducts & non- infringingAPIsneedtomakereferencetoprotected (pre) clinical data Costs = DE vsPatents Data Exclusivity Whatabout Bolar?

Justification? • Are exclusionary rights of patents not sufficient? • “without a data exclusivity period, there would be little incentive to invest in developing and marketing new product candidates with few remaining years of patent protection or with uncertain forms of protection” (Grabowski 2007); • few pharmaceuticals benefit from the extra protection of data exclusivity beyond patent expiry (Pugatch 2004). • (Social returns) – (social costs) > 0

The Standard • Data Exclusivity should only prevent unfair commercial use of undisclosed (pre) clinical data, the origination of which involves a considerable effort, requested by regulatory agencies to show safety and efficacy of a New Chemical Entity (NCE) = Chile-US FTA: • Undisclosed • (Pre) clinical data = safety & efficacy • Considerable effort • Requested • NCE

Undisclosed? • Art. 39.3 Trips "[…] the submission of undisclosed test or other data […]" • Based on trade secret = reasonable efforts to maintain secrecy.

Undisclosed & TPP? • This requirement is not considered: • “[…] submission of information concerning the safety or efficacy […]” [Art. 9 (2)(a)]; • “[…] submission of evidence concerning the safety or efficacy […]” [Art. 9 (2)(b)]; • “[…] submission of new clinical information […]” [Art. 9 (2)(c)]; and • “[…] submission of evidence concerning new clinical information […]” [Art. 9 (2)(d)]

(Pre) clinical data = safety & efficacy • More expensive tests (on-going debate)

(Pre) clinical data = safety & efficacy (S&E) & TPP • “[…] submission of information concerning the safety or efficacy […]” [Art. 9 (2)(a)]; • “[…] submission of evidence concerning the safety or efficacy […]” [Art. 9 (2)(b)]; • “[…] submission of new clinical information […]” [Art. 9 (2)(c)]; and • “[…] submission of evidence concerning new clinical information […]” [Art. 9 (2)(d)]

(Pre) clinical data = safety & efficacy (S&E) • Why relaxing the standard from S&E to New Clinical Information (New CI)? • Is the financial effort relevant? • Social return of additional DE should be higher than the social cost of less competition …

Considerable effort & TPP • Should be a financial effort, worth to be rewarded; only considered in 1 of 4 DE cases: • “[…] submission of information concerning the safety or efficacy of the product, the origination of which involves a considerable effort” [Art. 9 (2)(a)];

Requested? • Only information requested by the Regulatory Agencies, should be protected. • Should be assumed that requested information is the essential to show S&E. • The requested-standard is the limit between essential and superfluous tests.

Requested & TPP • Said requirement is relaxed by using the wording "[i]f a Party requires or permits" [Art. 9 (2)(a)-(d)] • Merely permitted information/evidence should be deemed superfluous. • Why rewarding/protecting it?

NCE? • A New Chemical Entity (NCE) can be defined as "a compound which, previously, hasn't been described in scientific literature".* * Source: School of Biological & Chemical Sciences, Queen Mary, University of London

NCE? • The FDA defines a new chemical entity as "a drug that contains no active moiety that has been approved by FDA in any other application submitted under section 505(b) of the Act."

NCE? • The meaning of "active moiety" being: • "the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance."

NCE? • Could be deemed an undisputed innovation • Novelty requirement? • Inventive step? • Seems reasonable to reward/protect it.

NCE & TPP • Said requirement is relaxed by using the terms: • "New pharmaceutical product" [Art. 9 (2)(a)-(b)]; • “Pharmaceutical product" [Art. 9 (2)(c)-(d)]. • What's the justification? • Only if social return is higher than the social cost ...

TPP's DE Structure New Pharmaceutical Product Relaxing Relaxing Pharmaceutical Product

TPP = DE Evergreening? S&E-based DE 5+ years New CI-based DE 3+ years New CI-based DE 3+ years No time bar for submission = uncertainties for generics: delays market entry!

Conclusions • Stronger IP do not necessary mean more pharmaceutical R&D. • No clear justification for DE, unless net social benefit • DE has higher blocking effect that patents. • TPP relaxes most of the reasonable standards of DE.

Conclusions • TPP could lead to DE Evergreening strategies, which could unreasonable affect generic market entry and access to affordable medicines.

Thank you! Joseluis.cardenas@asilfa.cl

TPP: Are Data Exclusivity Provisions Reasonable?