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Drug Data Exclusivity in India: Innovation Catalyst or Affordability Risk for Indian Pharma?

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For over four decades, India’s pharmaceutical industry has been built on a powerful moral and economic proposition: that life-saving medicines should be affordable, accessible, and globally available from Indian manufacturing prowess. This principle transformed India into the “pharmacy of the developing world.” But as the industry now aspires to move decisively from generics to innovation, a new question has begun to unsettle policymakers, industry leaders, and public-health experts alike:

How should India protect pharmaceutical innovation without diluting its legacy of access?

It is this unresolved tension that has resurfaced sharply following a December 2, 2025, Economic Times report on the sharp divergence between the Ministry of Commerce & Industry and the Ministry of Health & Family Welfare over whether India should formally adopt Drug Data Exclusivity (DDE) norms. What appears at first glance to be a technical regulatory debate is, in reality, a defining policy moment for the future trajectory of Indian pharma.

What Is Drug Data Exclusivity—and How Is It Different from Patents?

Drug data exclusivity, as we know, protects the clinical trial data generated by an innovator company from being referenced by regulators to approve generic versions for a fixed period – typically 5–10 years, depending on the country.

This protection:

  • Exists independent of patent status
  • Can apply even after a patent expires
  • Prevents generics from relying on originator data, forcing them to repeat costly trials

In short:

  • Patents protect inventions
  • Data exclusivity protects information

This distinction is vital – because exclusivity over data can delay competition even when the patent monopoly has legally ended.

How Data Exclusivity Is Often Used to Extend Market Monopoly:

Globally, data exclusivity has increasingly been used not merely as innovation protection – but as a commercial weapon to prolong monopoly pricing.

The Humira Case (AbbVie): A Global Cautionary Tale

Humira is one of the world’s best-selling drugs, generating over USD 200 billion in lifetime revenue. While its primary patent expired in 2016, AbbVie constructed a dense patent thicket supported by regulatory protections, delaying biosimilar competition for years in key markets. During this extended protection:

  • Annual treatment costs exceeded USD 70,000 per patient
  • Biosimilars entered much later than legally necessary
  • Healthcare systems absorbed massive avoidable costs

This pattern - where regulatory exclusivities outlive patents - is exactly what concerns Indian public-health policymakers.

Why the Debate Is So Sensitive in the Indian Context:

India is not just another pharma market. It is:

  • The largest supplier of generic medicines globally
  • A key provider of HIV, TB, oncology, and vaccine supplies to LMIC nations
  • The backbone of India’s own public health programs

Any policy that artificially delays generic entry directly impacts:

  • Government procurement costs
  • Insurance claim ratios
  • Out-of-pocket patient spending
  • Export affordability for Africa, Latin America, and Southeast Asia

In India, monopoly pricing is not an abstract economic concern – it directly determines treatment access at population scale.

Does India Need Data Protection to Encourage Innovation? Yes – but Carefully:

There is no denying a fundamental truth:
Discovering new drugs is expensive, risky, and capital-intensive.

Indian pharma’s next growth phase depends on:

  • New chemical entities (NCEs)
  • Biosimilars with true differentiation
  • Complex injectables
  • Cell & gene therapies

For this shift, global investors and MNC collaborators do seek assurance that proprietary data will not be freely copied immediately. The Commerce Ministry’s argument is therefore not without merit.

The real policy question today is not whether to protect data, but:

How much protection is necessary – without crossing into long-term price monopoly?

The Hidden Danger: Data Exclusivity as the New Patent Thicket:

India has already seen how evergreening strategies can extend monopolies through:

  • Secondary patents
  • Polymorph claims
  • Incremental formulations
  • Combination patents

If long periods of mandatory data exclusivity are added on top, India risks creating:

  • Dual monopolies (patent + data)
  • Effective market lock-outs even after legal patent expiry
  • Price protection without scientific novelty

In practical terms, this could mean:

  • Cancer medicines remaining expensive 10–12 years after original discovery
  • Biosimilars delayed despite manufacturing readiness
  • Insurance penetration becoming unaffordable
  • Public procurement budgets exploding

What Kind of Data Protection Could Work for India – Without Falling into a Monopoly Trap?

This is where India must design a bespoke regulatory architecture, not copy-paste US or EU models.

1. Limited Exclusivity Window Only for First-in-Class Drugs

India could grant 3–5 years of data exclusivity strictly for:

  • First-in-class molecules
  • Novel biological pathways
  • Orphan or rare disease drugs

Not for:

  • Me-too molecules
  • New strengths
  • New dosage forms
  • Fixed-dose combinations without therapeutic novelty

This ensures protection only where real innovation exists.

2. Automatic Public-Health Override Clause

India must retain the unconditional right to:

  • Waive exclusivity during public-health emergencies
  • Apply compulsory access for national programs
  • Support Jan Aushadhi-linked drug expansion

This keeps constitutional right to health superior to commercial protection.

3. No “Back-Door” Extension Beyond Patent Life

A strict rule must apply:

If the core patent has expired, data exclusivity cannot reset monopoly.

This prevents situations like:

  • Patent expiry in Year 20
  • Data exclusivity extending till Year 28

Such structures undermine the very logic of patent law.

4. Differential Rules for Small-Molecule Drugs vs Biologics

Biologics involve:

  • Higher R&D risk
  • Greater manufacturing complexity

India could explore:

  • Short exclusivity for chemical drugs
  • Slightly longer (but capped) exclusivity for biologic drugs
    - without mirroring western 12-year biologic lock-ins.

Why Blind Western Replication Will Hurt India:

The US and EU built their exclusivity regimes when:

  • Their innovation ecosystems matured decades ago
  • Public health spending was largely state-covered
  • Insurance penetration was near universal

India’s reality is different:

  • Out-of-pocket expenditure still dominates healthcare
  • Insurance depth is expanding but not universal
  • Government health budgets remain price-sensitive

A western-style exclusivity framework would therefore:

  • Raise medicine prices structurally
  • Shrink export competitiveness
  • Weaken India’s generics leadership
  • Strain Ayushman Bharat-type programs

Strategic Risk: India’s Export Leadership Could Erode:

Nearly 40% of US generics come from India. If:

  • Indian approval timelines slow
  • Domestic generics get delayed by exclusivity
  • Costs rise due to repeated trials

Then:

  • Latin America, Vietnam, and even Africa could gradually replace India as low-cost generic hubs.

Data policy, therefore, is not just a health issue – it is a geopolitical manufacturing strategy question.

A Balanced Policy Can Actually Strengthen Indian Innovation:

If calibrated well, data protection can:

  • Encourage Indian NCE discovery
  • Attract selective global R&D alliances
  • Improve valuation of Indian biotech assets
  • Keep public programs protected
  • Preserve generics growth

But if miscalibrated, it can:

  • Lock patients into long-term high-price regimes
  • Shut MSME generics out
  • Increase healthcare inflation structurally
  • Damage India’s moral leadership in access to medicines

Conclusion: 

India Must Choose Smart Protection, Not Blind Protection

The current Commerce–Health Ministry divergence reflects a deeper ideological conflict:

  • Commerce protects capital
  • Health protects citizens

India’s answer cannot lie at either extreme.

The country must refuse both:

  • Data anarchy that disincentivizes innovation
  • Data absolutism that entrenches monopoly

The correct path, in my view, lies in:

Time-bound, novelty-linked, override-protected, India-specific data protection.

If India gets this balance right, it can become:

  • A true bio-innovation hub
  • Without ceasing to be the pharmacy of the poor

That, I reckon, is the real opportunity before Indian policymakers today.

— By: Tapan J. Ray

Author, commentator, and observer of life beyond the corporate corridors

Sources:

  1. The Economic Times, December report on Commerce & Health Ministries split over Drug Data Exclusivity
  2. US FTC & Senate hearings on AbbVie–Humira patent thicket strategy
  3. WHO reports on TRIPS, data protection & access to medicines
  4. Indian Patents Act, 1970 – Section 3(d) & compulsory licensing provisions
  5. National Pharmaceutical Pricing Authority (NPPA) publications

 

Innovative ‘Medicines Too Damn Expensive’: Health Risk For Billions of People

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Most ‘medicines are too damn expensive. And a key part of the problem is the lack of consistent information about drug pricing. It’s not often that the Trump administration and the anti-poverty NGO Oxfam find themselves singing from the same hymn sheet.’ This was articulated in the article carrying a headline, ‘No One Knows The True Cost Of Medicines, And Blaming Other Countries Won’t Help,’ published by Forbes on March 03, 2019.

In the oldest democracy of the world, on the eve of the last Presidential election, Kaiser Health Tracking Poll, September 2016 captured the public anger on skyrocketing cost of prescription drugs, which they ranked near the top of consumers’ health care concerns. Accordingly, politicians in both parties, including the Presidential candidates, vowed to do something about it.

Ironically, even so close to General Election in the largest democracy of the world, no such data is available, nor it is one of the top priority election issues. Nevertheless, the discontentment of the general public in this area is palpable. The final push of election propaganda of any political party is now unlikely to include health care as one of the key focus areas for them. This is because, many seemingly trivial ones are expected to fetch more votes, as many believe.

In this area, I shall dwell on the ‘mystic’ area of jaw dropping, arbitrary drug pricing, especially for innovative lifesaving drugs – drawing examples from some recent research studies in this area.

High drug prices and associated health risks for billions of people:

New Oxfam research paper, titled: ‘Harmful Side Effects: How drug companies undermine global health,’ published on September 18, 2018, ferreted out some facts, which, in general terms, aren’t a big surprise for many. It highlighted the following:

  • Abbott, Johnson & Johnson, Merck and Pfizer – systematically hide their profits in overseas tax havens.
  • By charging very high prices for their products, they appear to deprive developing countries more than USD 100 million every year – money that is urgently needed to meet health needs of people in these countries.
  • In the UK, these four companies may be underpaying around £125m of tax each year.
  • These corporations also deploy massive lobbying operations to influence trade, tax and health policies in their favor and give their damaging behavior greater apparent legitimacy.
  • Tax dodging, high prices and political influencing by pharmaceutical companies exacerbate the yawning gap between rich and poor, between men and women, and between advanced economies and developing ones.

The impact of this situation is profound and is likely to further escalate, if left unchecked, the reason being self-regulation of pharma industry is far from desirable in this area.

As discussed in the article, titled ‘Why Rising Drug Prices May Be the Biggest Risk to Your Health,’ published in Healthline on July 18, 2018, left unchecked, the rising cost of prescription drugs could cripple healthcare, as well as raise health risks for millions of people. Although this specific article was penned in the American context, it is also relevant in India, especially for lifesaving patented drugs, for treating many serious ailments, such as cancer.

Is pharma pricing arbitrary?

The answer to this question seems to be no less than an emphatic ‘yes’. Vindicating this point, the above Forbes article says: ‘It’s a myth that the costs of medicines need to be high, to cover the research & development costs of pharmaceutical companies.’

Explaining it further, the paper underscored, ‘Prices in the pharma industry aren’t set based on a particular acceptable level of profit, or in relation to the cost of production. They’re established based on a calculation of the absolute maximum that enough people are willing to pay.’

The myth: ‘High R&D cost is the reason for high drug price’: 

Curiously, ample evidences indicate that this often-repeated argument of the drug companies’, is indeed a myth. To illustrate the point, I am quoting below just a few examples, as available from both independent and also the industry sources that would bust this myth:

  • Several research studies show that actual R&D cost to discover and develop a New Molecular Entity (NME) is much less than what the pharma and biotech industry claims. Again, in another article, titled ‘The R&D Factor: One of the Greatest Myths of the Industry,” published in this blog on March 25, 2013, I also quoted the erstwhile CEO of GlaxoSmithKline (GSK) on this subject. He clearly enunciated in an interview with Reuters that: “US $1 billion price tag for R&D was an average figure that includes money spent on drugs that ultimately fail… If you stop failing so often, you massively reduce the cost of drug development… It’s entirely achievable.”
  • In addition, according to the BMJ report: ‘More than four fifths of all funds for basic research to discover new drugs and vaccines come from public sources,’ and not incurred by respective drug companies.
  • Interestingly, other research data reveals that ‘drug companies spend far more on marketing drugs – in some cases twice as much – than on developing them.’ This was published by the BBC New with details, in an article, titled ‘Pharmaceutical industry gets high on fat profits.’

World Health Organization (WHO) recommends transparency in drug pricing:

The report of the United Nations Secretary-General’s High-Level Panel on ‘Access to Medicines’ released on September 14, 2016 emphasized the need of transparency in this area of the pharma sector. It recommended, governments should require manufacturers and distributors to disclose to drug regulatory and procurement authorities information pertaining to:

  • The costs of R&D, production, marketing and distribution of health technology being procured or given marketing approval to each expense category separated; and
  • Any public funding received in the development of any health technology, including tax credits, subsidies and grants.

But the bottom-line is, not much, if any, progress has been made by any UN member countries participating in this study. The overall situation today still remains as it has always been.

Conclusion:

The Oxfam report, as mentioned above, captures how arbitrarily fixed exorbitant drug pricing, creates a profound adverse impact on the lives of billions of people in developing and underdeveloped countries. Let me quote here only one such example from this report corroborating this point. It underlined that the breast cancer drug trastuzumab, costing around USD 38,000 for a 12-month course, is almost five times the average income for a South African household. The situation in India for such drugs, I reckon, is no quite different.

To make drug pricing transparent for all, the paper recommends, “attacking that system of secrecy around R&D costs is key.” Pharma players have erected a wall around them, as it were, by giving reasons, such as, ‘commercial secret, commercial information, no we can’t find out about this’…if you question intellectual property, it’s like you’re questioning God.” The report adds.

In India, the near-term solution for greater access to new and innovative lifesaving drugs to patients, is to implement a transparent patented drug pricing policy mechanism in the country. This is clearly enshrined in the current national pharma policy document, but has not seen the light of the day, just yet.

In the battle against disease, life-threatening ailments are getting increasingly more complex to treat, warranting newer and innovative medicines. But these ‘drugs are too damn expensive’.

In the midst of this complicated scenario, billions of people across the world are getting a sense of being trapped between ‘the devil and the deep blue sea.’Occasional price tweaking of such drugs by the regulator are no more than ‘palliative’ measures. Whereas, a long-term solution to this important issue by the policy makers are now absolutely necessary for public health interest, especially in a country like India.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.