A basic element of data protection is the obligation imposed on third parties not to disclose the data; that is, to keep them confidential.
Some health specialists have argued against any concealment of data submitted for the approval of pharmaceuticals (Olilla and Hamminki, 1996, p. 169). In their view, non-disclosure contradicts the right of the public to be informed about the efficacy and safety of approved pharmaceuticals. According to this opinion, the concealment of data on clinical, pharmacological and toxicological experiments retards the development of knowledge, and poses risks that consumers of a drug may be injured unnecessarily. Since confidentiality prevents the scientific community from scrutinizing the scientific basis of a licensing decision, it is not possible to determine whether there is commercial bias in the information, or whether it meets high standards. Drug companies have an interest in not publishing research that is not favourable to their products, and may even try to hinder the publication of such studies (Dukes, 1996, p. 149).
Other experts emphasize that health authorities should be able to use and rely on registration data submitted for similar products, or on the existence of a prior registration elsewhere.3 If the regulatory body is not free, when assessing a file, to use all the knowledge available to it, including data from other files and published information, a great deal of repetitive toxicological and clinical investigation will be required, which will be wasteful and in the case of animal testing, ethically questionable (Dukes, 1996, p. 146).
3 In this case, the authority bases its decision on the fact that a foreign country has granted registration, and on the proof of equivalence in terms of the physical and chemical characteristics and other relevant attributes of the product.
According to this position, when the authorities already know the characteristics and effects of the product (due to the first registration), it is not rational from the society's point of view to duplicate tests to recreate existing information. All that the authorities need for the second application is confirmation that the second product is similar to the first product. How to prove similarity is a matter for national regulation; some countries require bio-equivalence and bio-availability tests, while others are satisfied with the proof of chemical similarity and prior registration.
This position is also grounded in the pro-competitive effects of low entry barriers for pharmaceutical products. If producers (particularly generics manufacturers) are obliged to repeat long and costly testing, competition will be reduced because of time delays and, more importantly, because some small and medium firms - especially local firms in developing countries - will lack the resources to undertake such testing. This reduces competition and the affordability of medicines that - by definition - are off-patent and, therefore, should be broadly available at the lowest possible price.
The research-based industry has, however, argued for stronger test data protection, using both equity and health policy arguments. The industry position argues that the manufacturer has invested, often heavily, in conducting tests and deserves a return on investment. Where patent law fails to provide protection (for example, because the patent on an active component is shortly to expire, or because the drug is based on a combination of known substances used in novel manner) data exclusivity is a necessary barrier to competitors rapidly producing and registering an exact copy of the drug.
In accordance with this view,
"equity demands that protection be provided for data, which can cost the original submitter several million dollars to produce. Disclosing this data to the public or allowing its use by another applicant unfairly denies the compiler of the data the value of its efforts and grants an economic advantage to later applicants for marketing approval, enabling them to avoid the cost of developing test data for their own products. Countries that allow such unfair advantages to later applicants discourage developers of new pharmaceuticals and agricultural chemicals from seeking to introduce their state-of-the-art products in the country's market. So, not only is such protection required by the TRIPS Agreement, it is both equitable and wise from a public and health policy standpoint" (Priapantja, 2000, p. 4).
Finally, consumer groups such as the Trans-Atlantic Consumer Dialogue have proposed that, since data exclusivity is intended to protect investment, companies seeking data exclusivity should be required to disclose the amount actually invested. This would enhance transparency and allow the establishment of a relation between the actual investment and the protection provided (WHO, 2000, p. 40).
In the light of these contrasting approaches, a key issue is the extent to which, under the TRIPS Agreement, Member countries are obliged to provide exclusivity, and whether authorities can rely on the data from a prior registration or on a registration made in a foreign country.