Copyright infringement not intended

Picture Courtesy: Indian Express

Context:

The Indian government appears to be considering implementing “data exclusivity” in the pharmaceutical drugs sector.

What is Data Exclusivity?

Data exclusivity is a regulatory protection granted to innovator pharmaceutical companies over the clinical trial data they generate to prove the safety and efficacy of a new drug. During the exclusivity period, drug regulators cannot rely on this data to approve generic versions of the same medicine.

In simple terms, even if a patent has expired or is weak, generic manufacturers cannot obtain marketing approval unless they wait for the exclusivity period to end, or independently conduct full-scale clinical trials, which are expensive, time-consuming, and often ethically questionable. 

How Data Exclusivity works in practice?

• When an innovator company develops a new drug, it submits extensive clinical trial data to regulators such as the Central Drugs Standard Control Organization (CDSCO).
• Normally, once the patent expires, a generic company can rely on this existing data and only conduct bioequivalence studies to show that its drug works in the same way.
• Data exclusivity blocks this pathway, delaying the entry of generics even after patent expiry.

Difference between Patent Protection and Data Exclusivity:

Why India’s Pharma Industry opposes data exclusivity?

• India’s pharmaceutical strength is anchored in its generic drugs industry, which supplies nearly 20% of global generic medicines by volume and ensures the availability of affordable medicines to low- and middle-income countries.
• The absence of data exclusivity has enabled Indian pharmaceutical companies to enter markets swiftly after patent expiry, a factor that has earned India the reputation of being the “pharmacy of the developing world.”
• Industry stakeholders argue that introducing data exclusivity would delay the entry of generic medicines, even in cases where drugs are already off-patent, thereby extending monopolies through regulatory means.
• Such delays are expected to increase medicine prices both within India and in export markets, undermining access to essential drugs.
• Over time, this could reduce the export competitiveness of Indian pharmaceutical companies, many of which rely almost entirely on generics rather than original drug discovery.

Current Status of Generic drugs:

• Globally, the generic drugs market is substantial, estimated at around USD 468 billion in 2025 and projected to grow to about USD 728 billion by 2034, driven by affordability, patent expirations, and government support for generics.
• Government schemes like the Pradhan Mantri Bhartiya Janaushadhi Pariyojana operate thousands of stores offering generics at much lower prices than branded counterparts, improving affordability domestically.
• Generics dominate medicine access globally, accounting for nearly 20% of global generic drug supply by volume from India.
• India’s pharmaceutical ecosystem is overwhelmingly generics-driven, with around 90% of domestic manufacturers focused on generic formulations rather than new drug discovery, making timely generic entry crucial for industry viability.

What are the broader consequences of drug exclusivity?

Public health implications: Drug exclusivity can delay the entry of generic medicines even after patent expiry, which is critical in India where over 60% of total health expenditure is out-of-pocket, thereby directly affecting access to affordable treatment for chronic and life-threatening diseases.

Economic and affordability implications: By extending monopoly pricing, drug exclusivity can significantly increase medicine costs, placing pressure on government procurement programmes such as Pradhan Mantri Bhartiya Janaushadhi Pariyojana, which currently operates over 10,000 Janaushadhi Kendras to supply low-cost generic medicines to the population.

Impact on the Generic drug industry: India’s pharmaceutical sector, where nearly 90% of companies are engaged in generic drug manufacturing, depends on quick post-patent entry, and data exclusivity could weaken this model by raising entry barriers and reducing export competitiveness in markets that rely heavily on Indian generics. 

Ethical implications: Data exclusivity may force generic manufacturers to repeat clinical trials, raising ethical concerns about unnecessary human experimentation, especially when safety and efficacy have already been established by the originator company. 

Legal and regulatory implications: By creating a regulatory monopoly independent of patents, drug exclusivity can weaken public-interest safeguards such as compulsory licensing and limit the role of regulators like the Central Drugs Standard Control Organization, whose mandate prioritises safety, efficacy, and access over commercial exclusivity. 

Trade and international obligations: Although data exclusivity is often demanded in trade negotiations, there is no binding requirement under the WTO-TRIPS Agreement, administered by the World Trade Organization, making its adoption a policy choice rather than an international legal necessity. 

Way Forward:

• Balancing innovation with public health: India should pursue a calibrated approach that incentivises pharmaceutical innovation while safeguarding affordable access to medicines, in line with its constitutional obligation to protect public health. 

• Avoid blanket data exclusivity: Rather than introducing uniform data exclusivity, India can continue its case-by-case regulatory approach, ensuring that generic entry is not delayed for off-patent or essential medicines. 

• Strengthen existing TRIPS flexibilities: India should reinforce the use of safeguards such as compulsory licensing and patent opposition, which are permitted under WTO-TRIPS and crucial for maintaining medicine affordability. 

• Public Funding for clinical research: The government can expand publicly funded and collaborative clinical trials, allowing shared access to trial data so that innovation is rewarded without creating private monopolies over regulatory data. 

• Protect the Generics-led industry: Policy decisions should explicitly recognise that nearly 90% of Indian pharmaceutical firms depend on generics, and therefore ensure fast-track approval pathways based on bioequivalence through regulators like the Central Drugs Standard Control Organization. 

Conclusion:

The debate on data exclusivity highlights a critical policy trade-off for India between attracting investment and safeguarding access to affordable medicines. While stronger regulatory protections may appeal to global innovators, introducing data exclusivity risks delaying generic drug entry, raising medicine prices, and weakening India’s generics-led pharmaceutical model. In the absence of any binding international obligation, India’s approach must prioritise public health, protect its role as the pharmacy of the developing world, and ensure that innovation incentives do not come at the cost of equitable access to essential medicines.

Source: Indian Express