Rethinking the Role of Clinical Trial Data in International Intellectual Property Law: The Case for a Public Goods Approach
69 Pages Posted: 13 Jul 2009
Date Written: January 1, 2009
This article describes the growth and consequences of new intellectual property rights given to pharmaceutical developers, and it advocates treating clinical trials as a public good. Although the soaring cost of clinical trials is well known and discussed, too little attention is given to the underlying rationale for allowing drug developers to recoup their costs through the new intellectual property rights provided in multilateral, regional, and bilateral agreements. Known in the US as 'market exclusivity' and in Europe as 'data exclusivity,' these rights prohibit would-be generic producers from obtaining regulatory approval based on the original producers’ undisclosed test data. Market and data exclusivity is codified in US and European domestic law as well as the North American Free Trade Agreement (NAFTA) and, to a lesser degree, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Market and data exclusivity is binding an increasing number of developing countries via Free Trade Agreements (FTAs), which hinder developing countries from manufacturing generic drugs. At a minimum, negotiators should replace the norm of exclusive control over data with a liability rule, or take and pay rule, in which generic manufacturers can use original manufacturers’ clinical trial data in exchange for reasonable compensation. A more fundamental solution requires questioning the status quo of proprietary clinical trial data. The conventional wisdom is that market and data exclusivity, and drug developers’ consequent ability to limit competition from generics above and beyond patent protection, are a necessary incentive for drug developers to fund ever more expensive clinical trials. Clinical trial data, however, are public goods that will be undersupplied and over protected so long as private actors provide them. Moreover, manufacturers have an incentive to present clinical trial data so that they support regulatory approval at the expense of public health. Although liability rules are better than the status quo, they would not resolve the problem of treating a public good as proprietary. Governments should thus oversee and fund clinical trials as the public good that they are. Clinical tests should be awarded to the most qualified scientists through a competitive process, financed in part with the decrease in drug costs to governmental health care programs and in part with drug developers’ contributions, selected to maximize social benefit, and made global via intergovernmental bodies to maximize social return. This would reduce the cost of redundant investigations to the global public health system, lower supply costs to drug consumers, and lower the breakeven point for investment in research to discover new drugs.
Keywords: liability rules, clinical trial, clinical trial data, intellectual property, data exclusivity, pharmaceutical
JEL Classification: O34
Suggested Citation: Suggested Citation