Data exclusivity pertains to a clause in the draft agreement that puts a minimum six-year embargo on clinical trial data generated during the testing and development of a drug. File
| Photo Credit: The Hindu

India has rejected the demand for ‘data exclusivity’, as part of ongoing discussions with the European Free Trade Association (EFTA) towards a free trade agreement, Sunil Barthwal, Secretary, Department of Commerce, said on the sidelines of a press briefing on Thursday.

Data exclusivity pertains to a clause in the draft agreement that puts a minimum six-year embargo on clinical trial data generated during the testing and development of a drug. Thus, manufacturers interested in making a copy-cat product would have to generate such data on their own, which is an expensive proposition, or wait out that period before applying to register and sell their version in India. Crucially, this could also apply to drugs that are not patented in India.

India’s generic drug industry has over the years made affordable versions of expensive drugs and become a large, global supplier itself, and such a clause could hamper the industry.

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Demands for data exclusivity have consistently cropped up since 2008 from the European Union and the EFTA — Switzerland, Norway, Iceland, Lichtenstein — as part of trade negotiations with India, but these have been consistently rejected. Switzerland is home to several prominent pharmaceutical companies, some of whom have been involved in litigation in India over generic drugs.

However, as The Hindu reported on Tuesday, a leaked draft of the Trade and Economic Partnership Agreement (TEPA), available on the website bilaterals.org, an organisation that tracks international free trade agreements, suggested that this clause was present in the negotiating text even as India and the EFTA indicated that negotiations were at an “advanced stage”.

“We rejected their demand. We are with our generic industry….There is no fear for any generics industry in India. It is our very important objective for the country as a whole to see that generic drug industry is flourishing. It is contributing significantly in our exports [as] they are also growing. So, we are there to protect the interests of the generic drug industry throughout, so there is no FTA agreement in which we will be going against the industry’s interest,” Mr. Barthwal told reporters.

Concerns that such a clause would affect the availability of new drugs had prompted medical rights group Medicins Sans Frontiers (MSF) to write to Prime Minister Narendra Modi earlier this week on the potential harm from India accepting data exclusivity provisions.

“We welcome the Indian Commerce Ministry’s strong stand against the inclusion of data exclusivity in its trade talks with EFTA,” Farhat Mantoo, Executive Director, MSF South Asia, said in a statement. “We appeal to India to continue to reject all harmful intellectual property provisions in this and other trade deals that may limit India’s supply of affordable generic medicines for millions of people in India and around the world,” Dr. Mantoo said.

“For MSF in particular, these possible changes to India’s national patents and drug regulatory laws could have a significant impact for the future supply of potentially lifesaving medicines. This is because MSF relies on quality-assured vaccines and medicines made in India to treat the people in our care, with its spending on generic medicines procured from India estimated at 95% for HIV, 90% for hepatitis C antivirals, 36% on TB treatments, and 30% on vaccines,” their letter had noted.

A clause in a draft free trade agreement text being negotiated between India and the European Free Trade Association (EFTA) — Switzerland, Iceland, Lichtenstein and Norway — could delay access to affordable, generic versions of patented drugs in India by a minimum of six years, according to documents viewed by The Hindu.

A leaked draft of the Trade and Economic Partnership Agreement (TEPA), available on the website bilaterals.org, an organisation that tracks international free trade agreements, says that within six months of the trade agreement being signed, signatories (in this case the countries) should include a “specific duration” during which applicants (pharmaceutical companies) applying to their country’s regulators for permission to sell a drug would not rely on “undisclosed test data” (in this case data on the drug’s efficacy and impact on people) to gain market approval for at least six years.

There is also a line that suggests this should apply not only to ‘new’ chemical drugs but also a class of drugs called ‘biologics drugs,’ — monoclonal antibodies, vaccine formulations — that involve complex mixtures of organic and inorganic entities, and are harder to make copies of. Many Indian biotechnology companies are developing biologics drugs.

The Hindu has independently confirmed the existence of this clause from sources following international bilateral negotiations.

India, which has over decades, mushroomed a thriving generics drug industry has resisted attempts by foreign pharmaceutical companies to extend monopoly rights over patented drugs. This is mostly because India’s generic drug industry has over the years made affordable versions of expensive drugs and become a large global supply itself. The Indian pharma industry is the third largest in the world and produces over 60,000 generic drugs across 60 therapeutic categories and had an annual turnover of ₹3.4 lakh crore, Minister of State (Chemicals and Fertilizers) Bhagwant Khuba told Parliament in July 2023. It is also the bulwark of the government’s Jan Aushadhi Scheme that allows free drugs to be made available to the poor.

“These effectively means that drugs such as bedaquiline (for TB) under provisions of data exclusivity wouldn’t be available,” said Gopa Kumar, legal researcher, Third World Network. Medicine Sans Frontiers, which works on enabling access to medicines, has written to Prime Minister Narendra Modi on February 9 pointing out concerns over these provisions in the draft TEPA.

In the most recent round of EFTA negotiations that were held in Delhi from January 8-13, media reports suggest that officials from both delegations have moved closer to a deal.

“Balanced solutions”

Swiss Economy Minister Guy Parmelin, who heads the EFTA, posted on X last month after he flew to India on a “last-minute” invitation of India’s Commerce Minister Piyush Goel for negotiations on the TEPA, following which they had reached “balanced solutions” to concerns around the agreement.

While details of these solutions are not public, intellectual property (IPR) concerns are a major sticking point. In an interview to The Hindu in December, Helene Budliger Artieda, Swiss Director of the State Secretariat for Economic Affairs (SECO), and Norwegian Trade Minister Jan Christian Vestre said Minister Goyal had been told that securing the “best possible deal in IPR was a ‘bread and butter issue’“ for EFTA countries. “At this stage we do not wish to comment on the ongoing negotiations. We hope for the agreement to be concluded as soon as possible,” a spokesperson for the Norwegian Embassy told The Hindu.

Patented drugs give exclusive marketing rights to the inventor, or whoever files for the patent first, for 20 years. This has often resulted in essential drugs and medicines being unaffordable in several countries, including in India. Under internationally accepted provisions of compulsory licensing, Indian law allows drug maker to reverse-engineer and sell generic, or copy-cat versions of the drug, after only three years of it being patented in India. This is provided if there is a convincing case that the drug is necessary and unavailable to those who need it because it is too expensive.

‘Data exclusivity’

However this conflict between original inventors of drugs — several of whom have been European pharmaceutical giants — and Indian drug manufacturers, who have largely grown on reverse-engineering these drugs, has frequently played out as contentious litigation. Discovering effective drugs is expensive and time-consuming and pharma companies in the business of drug discovery, have moved to extend the period over which they can claim exclusive rights, and thus profitability, over their most valuable drugs. While claiming new methods of manufacture and furnishing new combinations of the underlying active chemical ingredient of a blockbuster drug are the familiar approach to extend such patentability, an emerging approach is in claiming ‘data exclusivity.’

That means all the data generated during testing the safety and efficacy of a drug — an expensive and time-consuming process — and that usually becomes public knowledge, becomes exclusive to the company. This means the current practice, whereby generic drug makers make a copy-cat, establish that it’s for all practical purposes the same drug and rely on the published clinical trial data to prove that it is safe and effective, ceases to be legal.

This could, say experts, even extend to drugs that have not been patented in India and require generic manufacturers to either wait out the exclusivity period or repeat expensive clinical trials.

For instance, Colchicine, a traditional medicine used for gout saw its price rise by 5000% in the United States after one company was granted data exclusivity rights blocking other companies’ rights to manufacture it.

“Over the last two decades, the fact that India did not have data exclusivity in its law facilitated the affordable entry of new drugs for HIV, tuberculosis (TB) and viral hepatitis, which we have been able to use to treat people in our care. Implementing data exclusivity now has the potential to jeopardise access to essential drugs in general, as well as to delay the approval of generic versions of newer medicines, such as paediatric formulations for new TB drugs for which patents have expired,” said Leena Menghaney, Global IP Adviser, Médecins Sans Frontières (MSF), and an expert on intellectual property laws governing drugs.

The India EFTA text is a broad-ranging agreement that is being negotiated between India and the four countries since 2008 to increase investment by these countries in India and reduce tariffs, on a range of exports from these countries.

(With inputs from Suhasini Haidar)

 Currently, there are approximately 330 Swiss companies in India, creating more than 1,70,000 jobs. More than half of them manufacture in India and export from there worldwide.
| Photo Credit: Reuters, The Hindu

Four-nation bloc EFTA is looking at significant reduction in trade barriers on sectors such as machine tools, advanced chemicals, pharma, chocolates, Norwegian and Icelandic fish in the proposed free trade agreement with India, a Swiss minister said.

Swiss State Secretary for Economic Affairs Helene Budliger Artieda also said that with India, the EFTA grouping is aiming for an ambitious and comprehensive agreement in trade in goods, services and protection of intellectual property rights (IPRs).

India and European Free Trade Association (EFTA) states – Iceland, Liechtenstein, Norway, and Switzerland – are negotiating a Trade and Economic Partnership Agreement (TEPA) with a view to boosting economic ties between the two regions.

Negotiations on the agreement were officially launched in January 2008. 13 rounds of negotiations were held until autumn 2013 before the talks were put on hold. After talks were resumed in October 2016, a number of rounds have taken place.

“Regarding trade in goods, India applies high tariffs on many of the EFTA countries’ exports. We obviously look for a substantial reduction of trade barriers, particularly for such high-value-added products as machine tools, advanced chemicals and pharmaceuticals, Swiss chocolate, Norwegian and Icelandic fish, and so on. This is our main focus,” Artieda told PTI in an e-mailed interview.

EFTA has 29 free trade agreements (FTAs) with 40 partner countries including Canada, Chile, China, Mexico, and Korea.

Replying to a question whether Switzerland is seeking zero import duty on gold from India under TEPA, she said, “We understand that gold is a very sensitive topic for our Indian colleagues and the ultimate goal of each negotiation is to find a good balance respecting the key interests and sensitivities of both sides”.

Gold has a large footprint in the India-Switzerland bilateral trade, which stood at $17.14 billion in 2022-23. Out of this, imports stood at $15.8 billion in that fiscal.

On any deadline for concluding the talks, the Swiss minister said negotiations for TEPA have been going on for more than 15 years and a lot of effort from both sides has been made during the past few months in order to conclude these negotiations swiftly.

“We should seize this excellent momentum and continue to work constructively towards a successful conclusion of a mutually beneficial agreement in the coming weeks,” Artieda said.

She added that the agreement and a new bilateral investment treaty would send out a clear message to the Swiss and Indian businesses to further exploit the potential.

“The conclusion of these agreements is clearly the next important step for both our countries,” the minister said. Replying to a question about ways to increase Swiss investments into India, she said Swiss companies are determined to invest in India and governments can foster conducive conditions to enable it and the trade pact is the cornerstone of these efforts.

“At the moment, high customs duties are an impediment for trade and hence, for further investments. Swiss companies are known for being innovative. Therefore, an adequate protection of IPRs can play a major role in companies’ strategic long-term decisions to invest in India,” the minister added.

The Swiss companies, she said, interested in investing more in India come from different kinds of sectors like MEM (machinery, electrical and metal), pharmaceutical, finance, construction, sustainable technologies and cleantech industry and ICT services.

Currently, there are approximately 330 Swiss companies in India, creating more than 1,70,000 jobs. More than half of them manufacture in India and export from there worldwide.

“There is immense potential for collaboration in the development of infrastructures – notably railways, water/waste management and renewable energies – and areas such as clean technologies,” she said.

On India-Switzerland innovation platform, the Swiss minister said that the platform will be officially launched on October 30 during a three-day Indo-Swiss Dialogue on Antimicrobial Resistance (AMR) at the National Center for Biological Sciences.

“The goal of the innovation platform is to grow our collaboration in a more strategic way in areas that are of importance to both our countries, such as health, sustainability, and digital transformation,” she added.

A free trade agreement between the two regions is officially dubbed as TEPA. Under such pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

EFTA countries are not part of the European Union (EU). It is an inter-governmental organisation for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European Community.

India’s exports to EFTA countries during 2022-23 stood at $1.92 billion as against $1.74 billion in 2021-22. Imports aggregated at $16.74 billion during the last fiscal as compared to $25.5 billion in 2021-22.

The trade gap is in favour of the EFTA group, according to the data of the commerce ministry.