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Trading on 'undisclosed information'

In the absence of any guidance in TRIPS, it would be difficult for the authorities concerned to decide which information is to be treated as `undisclosed', says N. B. Zaveri.

THE GOVERNMENT of India is under pressure from multinational drug companies to introduce provisions for protection of "undisclosed information'' on patented pharmaceuticals for the purpose of compliance with Art 39 of the GATT (General Agreement on Tariff and Trade)/WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS).

If the Government gives in to the pressure, then the Indian generic pharmaceutical industry would be weakend and all the gains of the Doha Declaration on TRIPS and Public Health on compulsory licensing could be negated.

Before a new (patented) drug enters the market, it is put through a series of studies and trials: animal studies, pre-clinical and clinical studies, Phase 1, 2 and 3 trials and more. The results of these trials and studies are submitted to the Drugs Controller, whose approval is based on the data provided. If a generic manufacturer were to be given a compulsory licence in accordance with the TRIPS agreement and the Doha Declaration, then the drug that this firm produces would also need to be approved by the Drugs Controller.

An "equivalence'' will have to be demonstrated between the patented and generic versions. If the generic producer and the Drugs Controller are not allowed to use the data provided earlier (on grounds of protection of `undisclosed information'), then the data will have to be generated all over again by the new manufacturer by conducting studies and trials — this could take two to three years, which would defeat the very purpose of the Doha Declaration. The intention of the MNCs is therefore clear: Use the provisions of Article 39 of TRIPS to regain the ground lost in the Doha Declaration.

`Undisclosed information' is now recognised in Art 39 of TRIPS Agreement as an intellectual property to be effectively protected against unfair competition as provided in Art 10 bis of Paris Convention. TRIPS makes special provision in respect of `data submitted to governments or government agencies' `as a condition of approving the marketing of pharmaceutical or agricultural chemical products, which utilise new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort.' The protection is to be given against disclosures `except where necessary to protect the public, unless steps are taken to ensure that the data are protected against unfair commercial use.'

The entire exercise of approving a product for marketing is intended to protect people against irrational or harmful drugs, and to regulate the use of drugs as protection against wrongful use. This is essentially a matter of public interest. It is therefore, necessary that there should be complete transparency in the record and reports of the tests and trials that have been carried out. Only this will ensure that sufficient care has been taken for the safety and efficacy of the drugs that have been approved.

In the Vincent case (AIR 1987 SC 990) the Supreme Court has stressed this aspect.

"The issues raised are of vital importance as they related to maintenance of approved standards of drugs in general. The issues that fall for consideration are not only relating to technical and specialised matters relating to therapeutic value, justification and harmful side effect of drugs but also involve examination of the correctness of action taken by the government on the basis of advice; the matter also involves the interest of manufacturers and traders of drugs as also the interest of patients who require drugs for their treatment.'' (Emphasis added)

The Court therefore ruled —

"Every indigenous drug manufacturer must have an obligation by law to disclose the formula of preparation and other statutory information in the national language and at least one or two other languages, keeping in view the place of manufacture of the drug and the area of its circulation. Any statutory warning to be administrated should also follow the same course.'' (Para 24)

Cases have been reported of actual bribing by the MNC drug manufacturers of even doctors and health authorities to have their drug approved in some countries. Many cases of approval of harmful or irrational drugs have occurred even in the U.S. and drugs have had to be withdrawn from the market. The right to information, inspection of the test/trial data and reports submitted for marketing approval facilitate an independent scrutiny and act as safeguards against any collusion between the claimant and the licensing authorities.

Principle of proportionality

The risk to patients from a wrongly approved drug facilitated by non-disclosure of information is much too great, compared to any loss of extra benefits, which a prior drug manufacturer may derive from such non-disclosure. It would therefore be `unfair' and unconstitutional not to permit disclosure.

On the face of it, claim of protection for `data exclusivity' does not satisfy certain requirements will have to be met under Art 39.3 of TRIPS:

For Art 39, the information should be `undisclosed' — The word `undisclosed' has not been defined. As such this is a matter of flexibility. In the absence of any guidance in TRIPS, it would be difficult for the authorities concerned to decide which information is to be treated as `undisclosed'. It is therefore permissible and necessary for countries to provide legislative guidelines for the purpose. Information collected or reported by medical workers in public hospitals can never be treated as undisclosed. So also, how can information already `disclosed' before a regulatory authority elsewhere in the world (whether published or not), be treated as `undisclosed'?

Protection is required against `unfair commercial use'. Here again, the authority will have to decide whether the intended use is fair or unfair. As it is related to unfair competition as provided in Art 10 bis of Paris Convention, any use which is intended to provide fair competition, has to be accepted as fair for this purpose. If a compulsory licence is granted to a generic manufacturer under statutory provisions, particularly to provide alternative source of supply in sufficient quantities and at affordable prices, the fairness of the cause is obvious and established. The SC judgment referred to above also support the view that it would be just, fair, and absolutely necessary in public interest that such information should be disclosed, and unfair not to do so.

(The author is an advocate specialising in patent issues)

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