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Increasing access to medicines 169
would be quickly exposed, and the marketability of their future
products would suffer.
Data exclusivity
Another aspect of pre-market regulation is the treatment of the data
submitted to regulatory authorities. These data are submitted on
the basis of ‘data exclusivity,’ an agreement that the authorities will
not release them for a specified period and that during this period
other firms may not rely upon the data as the basis for their applications
for licenses.
This period of data exclusivity varies from 5 to 11 years. 31 Once
it expires, competing companies are free to access and rely upon the
data and thereby avoid having to conduct duplicative research (and
associated costs). 32
It has been alleged that these periods of data exclusivity hinder
generic competition, thereby keeping the price of medicines unnecessarily
high. But while the introduction of competition typically
leads to price reductions on medicines, the net effect will depend on
the impact it has on the incentives to invest in research and development.
Companies invest heavily in the development of the data
they supply to regulators during the approval process. If these data
are then shared with other companies, the value to the originator is
reduced. This erosion of value has negative consequences for the
ability to raise the funds required to conduct future tests, and is
likely to act as a disincentive to companies which might otherwise
bring new, therapeutically beneficial medicines to the marketplace.
33
Unclear rules governing the submission of data to regulatory
authorities will only increase legal disputes between research-based
companies and their generic counterparts. These disputes are
already common and their frivolous costs must now be factored into
the rapidly rising total cost of delivering a drug to the marketplace.
While great effort is being expended towards containing these
costs, the failure properly to address data exclusivity arrangements