Ending drug registration apartheid: taming data exclusivity and patent/registration linkage.

I. INTRODUCTION: WHY REGISTRATION-RELATED DATA EXCLUSIVITY AND PATENT/REGISTRATION LINKAGE ARE SO IMPORTANT TO BIG PHARMA AND SO DANGEROUS FOR DEVELOPING COUNTRIES The pharmaceutical industry's dependence on intellectual property rights (IPRs), especially patents, to exclude competitors and thereby recoup past expenditures,1 incentivize future investments in research and development (R&D), and maximize profits2 is well known. Although initially content to solidify patent rights in the rich-country markets of North America, Europe, and Japan, in the last quarter of the 20th century the industry has increasingly turned its attention to emerging markets in Latin America, Asia, and even Africa as sites of future market expansion. Big middle-income countries like Brazil, India, China, and Indonesia have growing middle classes that increasingly favor allopathic medicine over the more traditional medicines of their elders. Obtaining monopoly rights in these growing markets could help the pharmaceutical industry weather the storm of increased consumer, business, and government blow-back against supra-competitive drug prices charged in rich country markets. Although patents are powerful weapons in the industry's IPR arsenal, they are an imperfect solution for its attempt to secure durable monopoly protections on a global scale. From the industry's perspective, the problems with patent-related monopolies are four-fold. First, the most innovative, truly revolutionary products involving new chemical entities ordinarily take a very long time to come to market because of extensive pre-marketing product development and clinical trials.3 Patent term extensions designed to compensate for product-development and regulatory delays4 help companies recapture some of their rights to exclude, but extension provisions are subject to stringent upper limits,5 meaning that patent terms are often too short to secure market exclusivity during the entire period of the medicine's therapeutic advantage. Second, evergreening strategies6 - efforts to extend the period of patent protections through incremental modifications to the product - may help maintain monopolies, but many of these modifications may not meet patent criteria even under the lenient standards of novelty, nonobviousness, and utility applied in the U.S. Although overworked patent examiners might initially accept such patents, they are highly vulnerable to legal challenge from generic competitors eager to enter lucrative First World markets. Third, because patent applications on new chemical entities are usually filed very early in the process of drug candidate selection (and deselection) to ensure meeting novelty requirements and to establish priority, the patent holder must file multiple patents, many of them soon-to-bedoomed, early-stage prospects, and it must do so in each and every country where it wants patent protections. Since patent applications are costly in terms of legal, filing, and maintenance fees, and because patent specification and language requirements vary country-to-country, patent-holders must make shrewd cost-benefit assessments that typically involve deciding against filing patent applications in small-country and poor-country markets.7 Accordingly, patent claims are ordinarily perfected and maintained only in rich countries and big middle-income countries and in countries that have pharmaceutical manufacturing capacity.8 Fourth, bio-tech products are not always patentable, given permissible exceptions from patenting life forms in some countries.9 For these products, data exclusivity is the only way to ensure market exclusivity. Historically, pharmaceutical patent holders in the United States did not have to rely on patents alone to exclude competition. Until 1984, drug companies could treat undisclosed clinical trial and other data that that they submitted to the Food and Drug Administration [FDA] as trade secrets.10 The FDA in turn treated this information as confidential and refused to allow generic producers to rely on, or reference the information in order to obtain marketing approval for their therapeutically equivalent products. …