National health authorities generally require, as a condition for registering new pharmaceutical products, the submission of test data relating to the quality, safety and efficacy as well as information on the composition and physical and chemical characteristics of the prod-uct.30 Once the data is submitted by the originator company, however, a significant number of regulatory authorities do not require companies seeking registration of generic versions of the original product to repeat the studies that are carried out by the originator company but instead rely on bioequivalence tests to grant marketing approval.
30 Correa (2002), p. xi.
Consequently, while article 39 of the TRIPS Agreement envisages the protection of test data submitted to governments to meet regulatory approval requirements and, in particular, provides that in ensuring the effective protection against unfair competition as provided for in article 10bis of the Paris Convention, "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 data or other data, the origination of which involves a considerable effort, shall protect such data against disclosure",31 to require generic producers to conduct trials on equivalent compounds imposes additional costs which are passed on to the consumer. It can also be said that such a requirement is socially wasteful.32
31 See article 39(3) of the TRIPS Agreement.
32 Abbott (2001), p.29.
In recognition of these factors, among others, article 39 only requires protection of test data relating to new chemical entities and where the origination of the data involved considerable effort and provides for exceptions, such as where disclosure is necessary to protect the public. Article 39 therefore leaves room for each Member to determine how to protect test data. In other words, in so far as generic competition lowers prices and increases availability and access to essential medicines, it is in the public interest to limit the extent of test data protection. The public interest is served as competition is promoted by ensuring that data protection does not become a means of blocking the timely entry of generics into the market.
Test data protection is subject to specific regulations in a number of jurisdictions although the approach differs from jurisdiction to jurisdiction.33 In some developed countries, such as the United States and in the European Union (EU), the regulations provide for exclusive use of test data by the originator company for a limited period of time, while in other jurisdictions such exclusivity is not established and generic medicines can be registered by relying on test data made available to health authorities by the originator company from the time the data is submitted.
33 Correa (2002), p.57.