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Data Exclusivity: Is there a happy medium?


What is Data Exclusivity?

In 1984, the USA was the first country to give legal sanctity to data exclusivity via the Hatch-Waxman Act. Under this new legislation five years of data exclusivity were given to New Molecular Entities (NMEs). Data Exclusivity refers to a practice where for a fixed period of time, regulatory authorities do not allow test data from clinical trials of innovator companies to be used to register a generic version of that drug. Data exclusivity acts as a form of market exclusivity outside of patent rights, which exist as an attempt to safeguard valuable information from third parties that may capitalize on its availability. If a drug’s patent period has expired, data exclusivity will act independently to delay the entry of generic companies wishing to enter the market. Notably, the period of data exclusivity will have no tangible effect if it is within the patent period, because data exclusivity is protected by the patent.

Data Exclusivity in India

Given the relatively young age of data exclusivity it is of little surprise that it continues to be a heavily debated point of contention. In large, opposition for data exclusivity comes from those who profit from the generics market, of which India is currently the largest global provider1. India accounts for 20% of global generic drug exports by volume2 and total sales for Indian generic drug companies grew from nearly $4 billion in 2004 to $17 billion in 20143 (an annualized growth rate of 16%).

With such a vested interest in the generics industry it comes as no surprise that the Government of India has made clear its view that Article 39.3 does not bind her to implement data exclusivity law and that it is under no obligation to enact the law on data exclusivity. The intricate link between data exclusivity drug accessibility and affordability demands that the points of both sides are elucidated.

The Case in Support of Data Exclusivity

  1. Data from clinical trials includes information on quality, efficacy and safety of innovative drugs. This data is acquired as a result of risky and costly investments made by the innovator companies. Granting exclusivity to this data would further incentivize larger pharmaceutical companies to make R&D investments.
  2. Data exclusivity will encourage innovator companies to introduce their drugs into countries that lack patent protection, ultimately increasing accessibility to drugs.
  3. Article 39.3 of TRIPS talks about “unfair commercial use.” This is used by certain parties to claim that unconsented commercial use of such data by generic companies would violate a countries’ obligation under TRIPS.

The case against Data Exclusivity Law

  1. Having to repeat clinical trials in generic drugs will is a time and finance heavy process. Ultimately the additional need for capital will be picked up by payers as it filters into the pricing of generics.
  2. The procedure of evergreening patents means that innovator companies may continuously make minor modifications to their drugs in order to extend their patents lifetime.
  3. Data exclusivity could prevent the registration of generics even where innovator drugs lack patentability. For example, when a pharmaceutical product does not meet the standard of patentability or when no patents are granted, the test data could still be subject to data exclusivity.

The Happy Medium

The happy medium for data exclusivity may be struck by generic manufacturers compensating innovators companies for the use of the data. This would enforce a system where generic companies share the fair cost of bringing a new drug to market with the innovator company. A point of discussion would be the level of suitable compensation and the financial capabilities of generic companies. Ultimately, industry and international consensus should guide these discussions, allowing for the level of compensation to be determined.


  1. Why India Is So Important for Global Pharma
  2. Why India Is So Important for Global Pharma
  3. India’s Generic Drug Manufacturers: Poised for Continued Growth

About the Author

Avneet Heer is an analyst at DrugPatentWatch. She has a degree in biochemistry from the University of Leeds, UK, and also has a wide variety of experiences in the pharmaceutical sector. Previously she worked at UK and Ireland headquarters of Johnson & Johnson in the pharmacovigilance department, where she facilitated an international drug re-launch.

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