The Drug Registration Battlefield: U.S. Trade Policy Erects New, Nearly Impenetrable Barriers to Lower-Cost Generic Medicines of Assured Quality

Brook K. Baker, Health GAP
February 16, 2004

Activists have won important battles to expand TRIPS flexibilities for accessing more affordable AIDS medicines by partial abrogation of patent rights. Although many battles continue on this front, including battles in current and pending bilateral and regional trade agreements, as many people have noted there is a new, and perhaps even more important battle to be waged regarding the registration of generic medicines of assured quality. It is the thesis of this short paper that registration is the new battlefield and that the U.S. has already secured some unfortunate precedents in its pursuit of pharmaceutical hegemony. We must in turn develop a smart and aggressive strategy for turning the tide.
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Because poor quality medicines can have serious consequences for health, most countries have adopted exacting quality, safety, and efficacy standards that require prior regulatory approval before a medicine can be distributed within domestic markets. Although some countries cooperate in regional registration agreements and although others rely on foreign registration by stringent drug regulatory authorities, the vast majority of countries require separate submission of safety/efficacy data as a pre-condition to registration and eventual sale of medicine. Proprietary drug companies routinely amass voluminous documentation of safety and efficacy as part of their research and development of new drugs and they submit that information, on a confidential basis, to drug regulatory authorities. Generic companies are loath to undertake duplicative, costly, and time-consuming clinical trials and thus ordinarily rely on registration data submitted by the prior entrant to establish the bio-equivalence of the generic follow-on.

Although TRIPS permits this practice, despite the provisions of Article 39.3 providing some measure of data protection, there are several practical and legal barriers to the registration of generic medicines in developing countries. First, as discussed further below, more and more developing countries are being forced to grant "data exclusivity rights" which prevent a generic producer from relying on previously submitted "confidential" clinical data for a period of five years even for the limited purpose of establishing bio-equivalence. Second, even when expedited bio-equivalence data is permitted, registration is time-consuming and costly, especially in relation to the anticipated volume of sales in small markets. Third, many of the poorest developing countries have inadequately staffed and/or corrupt registration authorities, which means that requests for registration can languish for years. Fourth, and even worse, some of these authorities are so inept that their stamp of approval is unreliable. As a consequence, some countries and some multilateral and bilateral procurement guidelines require registration by a "stringent" regulatory authority. Paradoxically, however, generic producers ordinarily have no incentive to register in countries that have stringent regulatory agencies because those same countries ordinarily refuse permission to sell the generic until patent expiration. And these stringent standard can introduce requirements that produce no real net gain in quality, safety, or efficacy. Indeed there is danger lurking in current efforts by some countries to harmonize drug registration at a "platinum" standard that will unnecessarily prevent dynamic competition from generic producers.

The most troubling new barrier in access to medicines arises because major drug companies and their champion in U.S. and E.U. trade offices are increasingly turning to data exclusivity and patent/registration linkages as their newest and sharpest tools for securing market hegemony. For example, in nearly all of its recent and pending bilateral and regional trade agreements, the U.S. is seeking data exclusivity for confidential drug registration data that a company submits on a new drug entity, even when that entity is not itself separately patented. Once a country grants five years of data exclusivity on U.S. terms, generic producers are completely precluded from relying on the pre-existing data to establish the bio-equivalence of their medicines. Thus, in order to establish the quality, safety, and efficacy for purposes of registering a product, the generic company would have to duplicate time-consuming, expensive, and ultimately wasteful clinical trials. Since it would not make sense to do so for time reasons alone ? clinical trials ordinarily take 6-8 years to complete ? data exclusivity spells a death knell to an effective import/export compulsory license scheme for the first five years that a new drug is on the market.

A five-year drug embargo is bad enough, but in addition the U.S. is also succeeding in linking drug registration to patent status. For example, Chapter Fifteen Article 15.10.3 of CAFTA provides:

"Where a Party permits, as a condition of approving the marketing of a pharmaceutical product, persons, other than the person originally submitting safety or efficacy information, to rely on evidence or information concerning the safety and efficacy of a product that was previously approved, such as evidence of prior marketing approval in the Party or in another territory, that Party:

  1. shall implement measure in its marketing approval process to prevent such other persons from marketing a product covered by a patent claiming the product or its approved during the term of that patent, unless by consent or acquiescence of the patent owner; and
  2. if the Party permits a third person to request marketing approval of a product during the term of a patent identified as claiming the product or its approved use, it shall provide that the patent owner be informed of such request and the identity of any such other person." (last accessed Feb. 16, 2004).

This provision, although it permits registration applications during the term of a patent, requires notification of such an application to the patent holder, who can thereafter make mischief for the applicant. Even worse, the new clause precludes actual registration until patent expiration. Unless there is an implied limitation in this text permitting registration of medicines produced compulsory licenses, the U.S. may have succeeded in euthenizing both the Doha Declaration and the August 30 Implementation Agreement in one fell swoop. Sure, countries can theoretically bypass patents, but then they confront an insurmountable registration barrier that precludes registration for any remaining term of a patent even after the five-year data exclusivity term has concluded!

Accordingly, the realities of drug registration can derail or postpone access to lower cost, generic medicines even when patent rights are circumvented pursuant to flexibilities within TRIPS and its progeny. One hopeful measure in this regard is the WHO Pre-Qualification Program that is assuring the safety, efficacy and quality of specific medicines produced by specific manufacturers at specific facilities. WHO has already pre-qualified several generic producers of antiretroviral medicines and in addition has pre-qualified a short list of fixed-dose combination generics which are not otherwise available from the proprietary industry. This pre-qualification will prove useful, however, only if the threat of data exclusivity and patent/registration linkage is neutralized..

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