Continuing the discussion on the proposed introduction of data exclusivity in India, in Part II of his three-part post, Arnav examines its potential implications for domestic innovation, access to medicines, foreign investment, and the conduct of clinical trials. He also questions whether data exclusivity would address the underlying challenges facing India’s clinical trial ecosystem, and whether the promised benefits would justify the costs to public health and the domestic pharmaceutical industry.
[Part II] The Trial of Data Exclusivity
By Arnav Kaman
Phase II: The Policy Dimensions of Data Exclusivity
- Innovation
OPPI argues that introducing data exclusivity is the instrumental push required for “incentivising and bringing innovative drugs” to the country. Without a data exclusivity regime, they and other proponents of DE argue there are no substantial incentives for conducting local clinical trials and innovating in India. One account tells us of an instance where an Indian Pharma company’s local clinical data was used for approval by another bigger Indian Pharma company (paywalled). A DE regime would increase domestic investment into conducting our own trials and developing domestic NCEs or Biologics.
Yet, OPPI represents big pharma’s MNCs, and if foreign investment into India from big pharma grows due to protection of clinical data, will there even be space left for domestic innovation to flourish? Irony will have it that, before the TRIPS era, these MNCs of the West flourished partly due to the lack of a data exclusivity regime in their countries. Note that while a DE regime brings in additional protection and reward for the first mover, since there is no disclosure of the data (unlike patents) there is no contribution to the public knowledge or ability of the domestic market from DE. The additional protection of DE will certainly not drastically alter domestic innovation to transition into an innovation hub overnight either. Especially without additional safeguards and incentives for domestic local innovation, the DE regime will not stimulate the field alone.
- Access
The additional protection granted from data exclusivity terms will allow innovator companies to enjoy a safe and long monopoly. During the term of the patent, the likelihood of breaking the patent through litigation or post-grant opposition still exists. But no such mechanism exists to break data exclusivity terms. The only alternative to these medicines would be for generic alternatives to generate their own safety and efficacy data, which in turn would increase the price of the generic drugs, if done.
While the exact figures elude us, it’s clear that generating data for new drugs or biologics is a great capital investment, cost, and risk, which would deter many generics from attempting trials in the first place. On the other hand, for Indian companies that do wade into conducting clinical trials, it would lead to a drastic price increase of generic equivalents of new drugs. Worse, it’s not even clear whether any of the benefits of the innovation would be worth the loss to patient access.
- Foreign Investment
It is well known now that the international community, including both the EU and the US, has attempted to pressure India into implementing a data exclusivity regime through trade deals and bilateral negotiations. India has stood firm for many years, supporting its generic industry against this pressure. While one year of the India-EFTA TEPA was recently celebrated, it’s best to remember that the record of understanding also requires reconsideration of “the issues relating to protection of undisclosed information from unfair commercial use” after one year in force. Big Pharma MNCs (here) have publicly stated their wish for India to “reform” their pharmaceutical laws, introduce data exclusivity, and the government is seemingly conducting many closed-door meetings with these lobbies. It’s also delicate timing, as noted here, that in the next seven years, blockbuster drugs estimated at about 300 billion USD are to go off-patent. Thus, any additional protection they can garner is crucial for such companies maintaining their profits. But the introduction of such additional protection would come at the great cost of patient access, damage to our domestic industry, as well as losing control of our own regulatory autonomy.
- Safety & Efficacy Data/ Increasing Local Trials
Lastly, comes the big question of whether or not data exclusivity would improve the safety and efficacy of drugs. The role of ethnicity seems to have a role in certain instances of drug metabolism and pharmacokinetics, and thus clinical trial investigators must ensure a broad racial representation while developing treatments. For example: Warfarin doses need to be different for each race.
Prashant Reddy had argued that even with the requirements of diversity by regulatory boards, there is a marked lack of the diverse Indian population in clinical trials, which results in the approval of drugs that may not be optimised with our diverse population in mind. Thus, introducing data exclusivity can incentivize conducting local trials and providing for more safety and efficacy data for the specific socio-economic-genetic context of the Indian subcontinent.
This argument, however, is already contradictory when you consider India’s frequent approval of new drugs that have been approved abroad by waiving local trials and only requiring minimal BA/BE trials and bridging studies. Big pharma MNCs are innovating for foreign populations already, and if the mechanism of local trial waivers exists, it is unlikely they will conduct local trials once more in India. As noted in part I, you can’t have data exclusivity and local waivers at the same time. Nonetheless, there’s still a worthwhile question to be considered about the current state of clinical trials in India.
While it is true that Indian populations are woefully underrepresented in certain clinical trials, such as those for rare diseases, it is no longer true that there are, by any metric, too few clinical trials taking place in India. Looking at the global data (here), not only are there a great number of trials here, in fact, but India has also now officially overtaken the US in the number of clinical trials registered this past year. This includes both trials undertaken by Indian pharma companies and MNCs setting their clinical trials in India. But we must be clear as to what kinds of trials are taking place here.
India does not have many early Phase 0 or Phase I human trials (Most Indian companies themselves chose to undertake Phase I abroad). Phase III trials make up the bulk of registered trials here. While Phase I of clinical trials require a smaller set of healthy participants who need close monitoring and specialized facilities for observation, Phase III involves much greater patient populations across multiple hospitals. India, as has been observed by experts, does not have the facilities required for Phase I trials. But then why do both Indian companies and MNCs opt for India for late-phase clinical trials? Why has there been a great rise in clinical trials in India?
Because India has a large patient pool with an abysmally low rate of compensation and lax regulations. The extremely low rate of compensation for injury or death in clinical trials in India have been noted before and lead to the reform of compensation calculation in 2013 along with new guidelines in the NDCTR 2019, which is still riddled with complications. The most pressing of all being that the base amount of 8 Lakhs has not been updated for inflation in the past 13 years! Even with the new changes brought in, deaths in clinical trials are still a common occurrence (here) and their compensation remains contentious especially with the lack of insurance measures. Professor Basheer wrote about how drug companies exploited the lax regulatory standards of the country almost 10 years ago (here) and that continues to be the case. The regulatory oversight burden of compliance with the NDCT Rules and Good Clinical Practice has been passed onto ethics committees, privately established by hospitals or private institutions registered with the CDSCO. It’s not an uncommon practice for these ethics committees not to be doing their duties(!), the CDSCO cancelled the registration of seven ethics committees this July due to non-compliance. This has not deterred the increasing investment of MNCs to conduct clinical trials in India. Bristol Meyers Squibb has invested 100 million dollars in an early stage drug development center in Hyderabad and Roche’s Partnership with the CDSCO is only two examples of an uptick in foreign investment. The data generated in India is not only used for approvals here but is part of a larger multinational pipeline for approvals of new drugs all over the world, so a country where life is compensated cheaply and regulation is lax is already a goldmine.
In light of this, does the country really need DE to incentivize more local clinical trials? The problem facing Indian trials is not one of quantity but that of quality, which DE will be unable to directly affect. If India wants to become a country with not just more clinical trials but specifically more early trials, first we have to manage quality at a smaller scale before we can scale up.
The analysis of these various dimensions and considerations asks the question that must be answered before any policy implementation: Will the trade-off be worth it? There are genuine concerns about the current domestic pharma industry, but data exclusivity need not be the only answer. Part III will examine what alternatives might exist to answer some of these concerns.