The Article 39 (3) of the TRIPS Agreement states that-
“Members, when requiring, as a condition of approving the marketing of pharmaceutical or ofÂ agricultural chemical products, which utilize new chemical entities, the submission of undisclosedÂ test or other data, the origination of which involves a considerable effort, shall protect suchÂ data against unfair commercial use. In addition, Members shall protect such data againstÂ disclosure, except where necessary to protect the public or unless steps are taken to ensure thatÂ the data are protected against unfair commercial use.”
In other words it is the protection of clinical test data submitted to a regulatory agency toÂ prove safety, quality and efficacy of a new drug and preventing the generic drug manufacturersÂ from relying on this data in their own applications.
Data exclusivity provides the originator a certain period of time after the approval of theÂ application during which it restrains the authority to assess any other generic application. TheÂ time period is known as Âperiod of market exclusivityÂ. In EU this has been granted for 10 yearsÂ in totality & for 5 years in US.
The generic drug applications are always submitted for approval on their own merits based upon theÂ requirements set-out in the respective laws of the country. Generic drug manufacturers certainlyÂ can not take data from the originatorÂs application. However, their efficacy of data and otherÂ testings in the generic application can be evaluated by the authority against the original
application, only after the expiry of exclusivity period.
This has been criticized mainly on the ground that it can act as a patent term extension byÂ providing an additional restriction to producing a generic copy however the intention behind theÂ regulation is to protect to protect the originatorÂs data from commercial exploitation by anotherÂ player.
In India, which is a major supplier of generic drugs to the world (especially developingÂ countries) Âdata exclusivityÂ has been an issue of enormous debate recently. It has been reportedÂ that Indian government is also considering grant of exclusivity right for non-patentable drugs.