As a condition for registering pharmaceutical products, national authorities normally require registrants to submit data relating to a drug's quality, safety and efficacy as well as to its physical and chemical characteristics. A particularly important issue is third parties' use of the data for subsequent registration of products similar to those originally registered.
In some jurisdictions, the data submitted for the registration of pharmaceutical (and agrochemical products), are subject to a sui generis system of protection, based on a temporary right to the exclusive use of such data by the first applicant (generally the company that developed a new product). In such a system, other companies (often "generics" manufacturers) cannot rely on the data submitted by the first applicant for the purpose of registering a similar product for commercial use. The rationale for this exclusivity model is to permit the originator of data to recover the investments made for their development. The underlying assumption is that, without such protection, private firms would have no incentive to bear the considerable costs of producing the required data.
In other countries, however, health authorities are permitted to rely on data submitted by the first applicant to process and approve third parties' subsequent applications for a similar product,1 subject to evidence that its physico-chemical attributes are equivalent to those of the first applicant's product. This approach emphasizes that the registration of products should not erect barriers to otherwise legitimate competition. It holds, instead, that the registration system should promote price competition and access to more affordable medicines.
1 In some cases, national authorities ate allowed to rely on the registration made in a foreign country to approve subsequent applications.
The issue of data protection is especially relevant for off-patent products as well as for products, such as biologicals, that are often difficult to patent. In cases where the product is patented, the patent holder can, in principle, exclude any competition during the lifetime of the patent - a period of exclusion which will generally run longer than that afforded by data protections. Data protection rules are of particular importance to many developing countries that until recently did not provide patent protection for pharmaceuticals (and to those under the transitional periods of the WTO's TRIPS Agreement, which still do not provide pharmaceutical patent protection). In these countries, there is a large pool of unpatented pharmaceutical products. Data protection systems could, if they provided exclusivity, become a partial substitute for patent protection in these cases and nullify, in practice, the transitional periods granted to developing countries.
Before the entry into force of the TRIPS Agreement, countries had considerable latitude to determine rules for the protection of test data. The Agreement introduced the first international standard on the subject, as contained in its Article 39.3.2 But the Agreement is not a "uniform law" - it only establishes broad parameters for national rules. An important question is the extent to which the Agreement allows WTO Member countries freedom to apply different approaches for the protection of test data protection and, in particular, the extent to which a competitive model - i.e., protection without exclusivity - is compatible with the minimum standards set forth in Article 39.3.
2 The full text of Article 39.3 reads: "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.
To properly interpret Article 39.3, the Vienna Convention on the Law of the Treaties instructs that the ordinary meaning and context of the terms used, and the object and purpose of the treaty must be carefully considered. The history of the negotiation is also an important complementary element for interpretation (Article 31 (2) of the Vienna Convention).
The first section of this paper describes the different stages of drug development and the testing required for marketing approval of new pharmaceutical products. The second section discusses the rationale for test data protection. The third section examines the conditions, established by Article 39.3 of TRIPS, under which protection must be given to marketing approval data. The fourth section examines the concept of "unfair commercial use" of data - the conduct proscribed by Article 39.3. The fifth section examines the legal means that States may adopt to provide protection against commercial use. The sixth section offers a brief analysis of the negotiating history of Article 39.3, which provides the backdrop for interpretation of the TRIPS Agreement's data protection obligations. A final, concluding section assesses the obligations on countries to provide marketing approval protection under the TRIPS Agreement, and reviews the flexibilities available to Member countries.