International Max Planck Research School for Competition and Innovation WIPO – Owais Hassan Shaikh IMPRS-CI 2010 Data Exclusivity Provisions in Selected Free Trade Agreements: Do They Allow Originator Pharmaceutical Companies to Delay Entry in Different National Markets as Part of Life Cycle Management of Specific Pharmaceuticals?

Owais H. Shaikh IMPRS-CI A period where a submitter of clinical trial data, submitted as part of an approval application of a new drug can preclude generics as well as national drug regulatory authority from using it to approve subsequent generic applications What is Data exclusivity? Negotiated between two or more (regional) countries Avoid problems of ‘negative consensus’ at WTO Circumvent the impasse in WTO Ministerial Rounds Address the issues where TRIPS or other IP treaties are silent or ambiguous MFN makes FTA provisions applicable to all trading partners of an FTA country Why are FTAs important? 2

Owais H. Shaikh IMPRS-CI If a Party requires or permits,... the submission of evidence of prior marketing approval (of originator’s medicine) in the other territory, the Party shall not, without the consent of a person that previously submitted the safety or efficacy information to obtain marketing approval in the other territory, authorize another to market a same or a similar product based on:... (ii) evidence of prior marketing approval in the other territory; for at least five years for pharmaceutical products from the date of marketing approval of the new product in the Party. (Art. 14.9(b) US-Bahrain FTA) If a Party permit,... third persons to submit evidence of prior marketing approval (of originator medicine from another territory)... the Party shall not permit third persons, without the consent of the person who previously submitted information..., to market the same or a similar product on the basis of..., for at least five years,..., from the date of marketing approval by the Party, or the other territory, whichever is late. (Art (c) US-Australia FTA) Art (b) US-Korea; Art US-Morocco; Article (b) US-Oman and Article US-Singapore. 3 The other side of the coin: Access to Originator Medicine

Owais H. Shaikh IMPRS-CI 2010 Assumptions for the scenarios: 1.Originator company only considers data exclusivity for making market entry; 2.No patent or other exclusivities are pending; 3.For originator there are no costs and revenues equal profits; 4.‘National exhaustion’; 5.Once generic competition starts, increase/decrease in the market is distributed according to existing market shares; 6.Identical market size in all parties; 7.Drug Authorities take one year (period) to approve both medicines; 8.Generic companies take one year (period) to come up with a bio-equivalent pharmaceutical; and 9.Period of data exclusivity is five years in all parties. Six Scenarios 4

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 0: No Data Exclusivity No data exclusivity protection in the FTA. Simultaneous filing of originator Marketing Approval (MA) application in all parties. 5

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 1: Data exclusivity in the FTA including preclusion on reliance on prior foreign marketing approval. Filing of originator MA application in country A first. 6

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 2: Data exclusivity in the FTA including preclusion on reliance on prior foreign marketing approval. Simultaneous filing of originator MA application in all parties. 7

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 3: Data exclusivity protection in the FTA but no preclusion on reliance on prior marketing approval. Filing of originator MA application in country A first. 8

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 4: CAFTA-DR model Data exclusivity in the FTA including preclusion on reliance on prior foreign marketing approval. Subsequent filings within 5 years of the earlier approval to get protection. Filing of originator MA application in country A first. 9

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 5: NAFTA model Data exclusivity in the FTA including preclusion on reliance on prior foreign marketing approval. Where approval granted on the basis of prior approval, data exclusivity periods in starts from the date of first approval. 10

Owais H. Shaikh IMPRS-CI 2010 Six Scenarios Scenario 6: Panama-Colombia-Peru model If a party grants approval in a specific time period, say in six or twelve months, the data exclusivity period in that party starts from the date of prior foreign marketing approval. Where the Drug Authority takes longer, the period of data exclusivity starts a fresh in that party. However, where the originator files after the end of its exclusivity period in the earlier party and the subsequent party’s DRA approves the application within time, data exclusivity in not available. 11

Owais H. Shaikh IMPRS-CI 2010 Impact on Originator Medicines Revenues 12

Owais H. Shaikh IMPRS-CI 2010 Findings Scenario 2 is best for access to medicine in the presence of general data exclusivity provisions and provisions precluding reliance on foreign marketing approvals. Scenario 2 is the most profitable as it allows originator company to enjoy periods of monopoly in all parties. 13

Owais H. Shaikh IMPRS-CI 2010 Conclusion & Recommendations No preclusion on reliance on foreign marketing approval. If no reliance allowed then a limiting period must be adopted in FTAs In the presence of data exclusivity periods, it is optimal for the originator and for access to medicine that originator applies in all parties at the same time. If possible, NAFTA-style pegging period be introduced for increased access to affordable medicine. Centralized approval mechanism may be adopted in an FTA. Generic pharmaceutical applications should be allowed with in the data exclusivity period and not after it ends. 14

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