Drug Data at Issue in Central American Trade Deal

According to an April 1, 2004 report from Intellectual Property Watch, opponents of the U.S.-Dominican Republic-Central American free trade agreement (DR-CAFTA) are raising a number of intellectual property-related concerns, including why it is necessary to include test data protection in agreements with smaller countries where they have not been recognised before.

As discussed in a paper by Carlos María Correa of the University of Buenos Aires, national authorities normally require registrants to submit data relating to a drug's quality, safety and efficacy as well as to its physical and chemical characteristics. A particularly important issue is third parties' use of the data for subsequent registration of products similar to those originally registered. In some jurisdictions, the data submitted for the registration of pharmaceutical (and agrochemical products), are subject to a sui generis system of protection, based on a temporary right to the exclusive use of such data by the first applicant (generally the company that developed a new product). In such a system, other companies (often "generics" manufacturers) cannot rely on the data submitted by the first applicant for the purpose of registering a similar product for commercial use.

Article 39.3 of the Agreement on Trade Related Aspects of Intellectual Property Agreement ("TRIPS") requires governments to provide protection to marketing approval under certain conditions:

Members, when requiring, as a condition of approving the marketing of
pharmaceutical or of agricultural chemical products which utilize new
chemical entities, the submission of undisclosed test or other data, the
origination of which involves a considerable effort, shall protect such data
against unfair commercial use. In addition, Members shall protect such data
against disclosure, except where necessary to protect the public, or unless
steps are taken to ensure that the data are protected against unfair
commercial use.

U.S. Officials argue that the data protection rules are an incentive for early launch of innovative medicines. One such official reportedly addressed a charge made by a Jordanian official at a recent Washington event that the data protection provision has brought mostly increased investment in marketing and sales of foreign-produced products. “What we’ve seen demonstrated in the case is an actual incentive for early launch of the latest medicines,� he reportedly said.