Data Exclusivity institute in Kazakhstan and its influence on pharmaceutical companies
Pharmaceutical Data Exclusivity notion and institute is a legislative novel for the Republic of Kazakhstan (hereinafter - «RK»). The health legislation of RK envisages «data exclusivity» provisions, however, it does not define this particular term. This circumstance plays a prominent role and has significant consequences both for developers and manufacturers of original medicines and for companies manufacturing the generic drugs.
Kazakhstan joining the World Trade Organization («WTO») caused establishment of a regulation on pharmaceutical data exclusivity time period. The Agreement on Trade-Related Aspects of Intellectual Property Rights («TRIPS») was signed as a result above event. TRIPS is one of fundamental documents and legislation of all WTO members must follow its provisions. Therefore, the legislation of Kazakhstan has been amended in accordance with the requirements for WTO members.
Currently, Art. 71 (cl.19) of the Code of the Republic of Kazakhstan «On People’s Health and Healthcare System» as of 18.09.2009 (hereinafter - »The RK Code on Health») stipulates conditions, which regulate «pharmaceutical data exclusivity time period» and are read as follows:
«State expert organization involved into medicines, medical products and medical equipment, and state authority involved into medicines, medical products and medical equipment shall not, without applicant’s consent, disclose and use confidential information for commercial purposes that has been provided for state registration of medicines, as well as information taken from the state registration application, medicine examination materials and medicine registration dossier comprising new chemical substances, during six years from the date of medicine state registration».
In practice, the above-mentioned description of «time periods and procedure of data exclusivity use» raises many questions.
Thus, for example, some representatives of National Centre for Expertise of Medicines, Medical Devices and Medical Equipment of the Ministry of Health of RK, believe that such proscription relates only to the state authority and expert organization, which examine and register medicines in Kazakhstan, and lies in non-disclosure of medicine registration dossier materials within said 6-year term.
In our opinion, one cannot fully agree with this statement, since Article 71 (cl.19) of the RK Code on Health envisages a ban not only for disclosure of the registration dossier materials by the state expert organization, but also for use of data and information contained therein for commercial purposes both by the expert organization and by third parties.
Meaning and purpose of «data exclusivity» as it has been kept in view by the legislator and as the «data exclusivity» institute is used in the law enforcement practice of developed countries is lost when this provision of «data exclusivity» is implemented in the sense as interpreted by the expert organization itself and the responsible state authority accordingly.
Data confidentiality within examination and registration of medicines implies a priori that was established by the Decree of Minister of Healthcare back in 2009.
Proper interpretation of Article 71 (cl.19) of the RK Code on Health implies that the Examination Center and the Pharmacy Committee act as subjects affected with the ban on data disclosure and use for commercial purposes, and as subjects, which monitor third parties’ compliance with the ban on data use for commercial purposes.
Exactly control and impermissibility to use data from the original medicine registration dossier by third parties is crucial content of the «data exclusivity» principle.
It is commonly known from everyday practice of pharmaceutical companies that availability of a registered original medicine is a mandatory condition to register a generic drug, but, in turn, it could not be registered without use of original medicine confidential information for commercial purposes that should fall within protection and ban of use thereof without applicant’s consent according to Article 71 (cl.19) of the RK Code on Health. So what is the «data exclusivity»? Does Article 71 (cl.19) of the RK Code on Health relate to Data Exclusivity?
Following from historical conditions of enforcement of Article 71 (cl.19 and cl. 20) of the RK Code on Health it can be univocally concluded that said provisions are intended to protect the original medicine marketing authorization holders from direct or indirect use for commercial purposes of information provided by them for registration of a medicine without their consent.
This conclusion finds its confirmation in numerous scientific articles and statements of officials of RK.
1. For example, Aleksandr Kostyuk, Head of Politics and Health Technology Assessment Department of the Kazakhstan Medical University of Continuing Education, General Director of Kazakhstan Agency for Health Technology Assessment and President of Kazakhstan ISPOR (International Society For Pharmacoeconomics and Outcomes Research) department, in his report «Influence of Kazakhstan joining the WTO on the Healthcare System» has described this in details and gives the following definition:
«Data exclusivity represents a regime for protection of data on preclinical researches and clinical trials of an original medicine under which a marketing authorization is issued, wherein it is prohibited to refer to data of these studies and researches in the request for the generic drug marketing authorization (registration) within its validity.
In case when an innovative medicine has been filed for registration at the end of patent protection term (for example, in view of major clinical researches to proof the safety or in view of a marketing decision of the manufacturing company) this measure allows to receive an additional protection term. Moreover, upon registration of the medicine even when the patent is expired or unavailable the data will be still protected and nobody will be able to come into the market with a generic drug within the whole data exclusivity period…».
2. Also media resources have published a speech of Vice-Minister of Health and Social Development of RK «Joining the WTO will give new motivations for Kazakhstan manufacturing of the pharmaceutical products», which provides a definition of «data exclusivity» as well[i]:
«It is a certain time period, when states undertake to protect data provided by manufacturers to receive an original medicine marketing authorization from unlawful commercial use. In other words, a state should not disclose or rely on these data during registration of generic copies of a pharmaceutical product without preliminary consent of the original medicine manufacturer for a certain time period...».
3. Dossier for a Draft Law of the Republic of Kazakhstan «On Amendments and Additions to Some Legal Acts of the Republic of Kazakhstan in view of joining the World Trade Organization» explains that Article 71 of the RK Code on Health is supplemented with clause 19 and clause 20 «in order to bring into correspondence with Article 39 (cl.3) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and requirements of WTO member-countries about provision of 6-year time period to the original medicine applicant, when during this period no other medicine comprising new chemical substances could be registered with a reference to data about researches and other private information developed by the original medicine applicant [ii].
4. The draft report of Kazakhstan joining the WTO working team contains information that also confirms that Article 71 (cl.19) of the RK Code on Health refers exactly to «data exclusivity»[iii]:
«…Kazakhstan legislation does not allow other parties to make a direct or indirect reference to private data about researches developed and provided by another party for gaining access to the market/registration in Kazakhstan and that since joining the WTO Kazakhstan will take measures providing protection of private information and data on researches corresponding to Article 39(3) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and stipulating that a period of at least six years will be provided for private information and data on researches provided for gaining access to the market/registration in Kazakhstan, i.e. registration of pharmaceutical products, which comprise new chemical substances, to protect from unfair commercial use since Kazakhstan marketing authorization is issued. During this period of protection from unfair commercial use no party or enterprise (public or private), except for the party or enterprise that provided such private information and data about researches, will be able to make a direct or indirect reference to such data in support of a request for gaining access to the market/registration in Kazakhstan without clearly expressed consent of the party or enterprise that provided such private information and data about researches. During this 6-year period any other next request for gaining access to the market/registration will not be accepted unless the applicant provides his/her/its own data (or data used upon consent of owner thereof), which meet the same requirements as the first applicant, and products registered without provision of such data will be removed from the market until such requirements are met.».
Considering the above-mentioned, Article 71 (cl.19) of the RK Code on Health indeed stipulates 6-year term of «data exclusivity» for medicines and ban on use thereof by all third parties without consent of right holder/registration dossier holder.
This «data exclusivity» term is necessary both to protect the interests of the original medicine right holders, who spend considerable finances and efforts for preclinical and clinical studies, development of qualitative safe medicine, and for manufacturers of generic drugs seeking the fair market presence without prejudice to exclusive rights of developers and new chemical formula right owners.
It is worth noting that although the legislation of the Republic of Kazakhstan is in line with the provisions of TRIPS and even contains a provision on the period of exclusivity, in practice the application of this institution is complicated by a restricted approach and simplification to its interpretation by an expert organization and authorized body, as well as by insufficient regulation at the level of delegated legislation. A misinterpretation of the rules on data exclusivity can cause the Kazakhstan market saturation only with generic drugs, since the original medicines will not be able to compete with them on price, which certainly will not contribute to fair competition, and the lack of it will affect negatively first of all the ordinary consumers.
For comparison, Data Exclusivity exists long ago in the European Union (EU) countries and the USA that allows the original medicine right holders to have additional protection term to use their researches for commercial purposes. Thus, in the USA the data exclusivity term is from 5 to 7 years, in the EU countries it is from 8 to 11 years, in Russia it is 6 years.
Data exclusivity institute has appeared in Kazakhstan more recently and we believe that case law for proceedings of legal actions filled by the original medicine marketing authorization holders that started its formation will promote correct applying of this institute in accordance with worldwide practice and its true purpose. The recent case law demonstrates a positive shift in this area and suggests a full practical implementation of the data exclusivity institution, at least in respect of the dispute resolution.
Together with the above-mentioned, it is significantly important to improve the regulatory basis, regulate the data exclusivity provisions in more details, conduct the explanatory works mainly among parties, which are responsible for applying the corresponding provisions in line with their professional duties and functions. Before the correct and unified applying of all Data Exclusivity provisions, the rights and interests of pharmaceutical companies in Kazakhstan cannot be implemented entirely in accordance with the announced state guarantees and obligations of Kazakhstan within the frames of the WTO.
Zhanna Abylkhanova, Patent Attorney of RK
Mukhammadali Makhmudov, Lawyer, Patent Attorney
Ravil Kassilgov, Managing Partner, Kassilgov & Partners