It has been 3.5 years since Russia joined the World Trade Organization (WTO) and implemented the right of data exclusivity for innovative pharmaceutical products. In this short period of time, the definition of data exclusivity has changed and precedent setting litigation has ensued. In this post, I attempt to delineate the most important events to date regarding data exclusivity in Russia and evaluate its protective potential.

Background

Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) specifies that the members of the WTO shall take the necessary steps to ensure the protection of undisclosed proprietary data submitted to obtain the registration of a pharmaceutical product, the origination of which involved considerable effort.

Upon accession to the WTO, Russia documented its agreement to ensure the protection of undisclosed information and test data in paragraph 2 of the Protocol of Accession of the Russian Federation to the WTO. The right of data exclusivity became effective on August 22, 2012, the official date of Russian Federation accession to the WTO. The concept was later introduced into the article 18 of Federal law № 61-FZ “On the Turnover of Medicines”, a central law for pharmaceutical industry in Russia. According to this new law, data exclusivity was defined as follows:

Receipt, disclosure and use for commercial purposes and for the purposes of medicine state registration of the information of the results of preclinical and clinical studies provided by an applicant for the registration of the medicine is not permitted without the applicant’s consent during 6 years from the date of the medicine state registration.

Concept evolution 

The original definition of data exclusivity did not specify the type of protected medicine (whether the medicine had to be an original/first-ever registered medicine or something else) or how the term was to be split between registration (data) exclusivity and market exclusivity. Since implementation of data exclusivity in 2012, the concept has been actively discussed by the industry players, law firms and other interested parties, and most stakeholders agree that data exclusivity protection alters Russian market attractiveness in the eyes of innovative medicines producers. However, no specific court cases had been instituted and it was not known whether any company had successfully used the right of data exclusivity to protect its product(s) from generic competition (as information regarding extrajudicial dispute resolution procedures was not publically available).

On December 22, 2014, the Russian president signed Federal law № 429-FZ, which introduced certain amendments to the Federal law № 61-FZ “On Circulation of Medicines”. One of the amendments (the effective date of which is January 1, 2016) affects data exclusivity. As a result, beginning January 1, 2016, data exclusivity will be defined as follows:

It is not permitted to use for the commercial purposes the results of pre-clinical trials of medicinal products and clinical trials of medicines, provided by the applicant for state registration of the medicine without his consent for the period of six years from the date of state registration of the reference medicine in the Russian Federation.

Compared to the original definition, the new definition limits the opportunities in which pre-clinical and clinical trial data are eligible for protection. Specifically, their use is prohibited for commercial purposes only. Additionally, data exclusivity is now granted to reference medicines, where a reference medicine is defined as:

 …a medicine which previously has never been registered in Russia, whose quality, efficacy and safety have been confirmed by the results of pre-clinical and clinical trials and which is used for the assessment of bioequivalence or therapeutic equivalence, quality, efficacy and safety of a generic (biosimilar) medicine.

The amendments also specify a division of the six year term between registration* (what is often referred to as “data” exclusivity in other jurisdictions) and market exclusivity: four (registration exclusivity) plus two (market exclusivity) years for generic drugs and three (registration exclusivity) plus three (market exclusivity) years for biosimilars.

* Registration exclusivity is determined from the date of registration of a reference medicine and prohibits a generic/biosimilar applicant from using the protected data of the originator for the purpose of seeking a state registration.

Russian company fights off Novartis in data exclusivity dispute

Early in 2015, Russia saw its very first court case involving data exclusivity. Specifically, Novartis Pharma AG (Novartis) claimed that local company Biointegrator LLC (Biointegrator) violated the prohibition against using Novartis’ preclinical and clinical data during state registration of its product “Nescler”, a generic version of Novartis’ fingolimod (sold under the brand name Gilenya®). Gilenya® is approved for the treatment of relapsing-remitting forms of multiple sclerosis in adults. In the suit, Novartis asked the court to cancel Biointegrator’s state registration.

Instead of focusing on the data exclusivity issue itself, the semantic vector of the case shifted towards determining the actual timing of the submission of the generic dossier. Biointegrator argued that cancellation of the registration was not appropriate because the application for state registration of “Nescler” had been submitted by another company (on April 2, 2012) prior to the date of implementation of data exclusivity provisions (August 22, 2012). Subsequent to these events, ownership rights were transferred from the other company to Biointegrator pursuant to a commercial agreement. In view of these facts, the court of first instance agreed with Biointegrator and rejected Novartis’ request for cancellation.

Undeterred, Novartis appealed. The appeal court held that an application for registration of a generic product submitted by another company did not exempt Biointegrator from liability since the generic company’s abbreviated clinical development (bioequivalence studies) relied on Novartis’ protected data and was initiated after the implementation of the data exclusivity provisions. As a result, the court agreed with Novartis’ arguments and canceled the marketing authorization of the generic product.

Unhappy with the appeal court’s decision, Biointegrator appealed to the court on intellectual rights (Intellectual Rights Court), which ruled for Biointegrator and restored the decision of the first instance court, allowing the generic product to return to the market. The arguments of the Intellectual Rights Court in holding for Biointegrator were as follows.

First, both parties agreed that Biointegrator was liable to follow the corresponding provisions of the Federal law, since the state registration application for “Nescler” was submitted after the date when the provisions for data exclusivity concept became effective. Nonetheless, the panel of judges did not agree with the appeal court that Biointegrator had used Novartis’ protected data, holding that the decision was made in violation of substantive norms. Specifically, the Intellectual Rights Court held that the appeal court incorrectly concluded that the right of data exclusivity covered any information relating to the preclinical and clinical trials of the original medicine. More specifically, according to the Intellectual Rights Court, the Federal law “On Circulation of Medicines” provides for a fast-track registration procedure for generic medicines. It requires that information on the clinical trials of an original medicine be published in specialized sources (namely, scientific journals, etc.) and that documented results of a generic’s bioequivalence/therapeutic equivalence studies be provided. Moreover, the court stated that the “…systematic interpretation of the provisions on data exclusivity suggests that the specified prohibition does not apply to publically available information, including scientific publications, and legislator recognizes the use of such information legitimate”.

The Intellectual Rights Court determined that the effectiveness of the generic product in the treatment of multiple sclerosis was based on information contained in previously published articles describing the results of clinical trials involving Gilenya® (specifically, the articles entitled “A Placebo-Controlled Trial of Oral Fingolimod in Relapsing Multiple Sclerosis” and “Oral Fingolimod or Intramuscular Interferon for Relapsing Multiple Sclerosis”). At the same time, the definition of data exclusivity under the Federal law “On Circulation of Medicines” prohibited the use of the “results of pre-clinical trials of medicinal products and clinical trials of medicines, provided by the applicant for state registration of the medicine”. Unfortunately, Novartis was unable to prove that Biointegrator used undisclosed data from Gilenya®’s registration dossier, which led to the unfavorable decision by the Intellectual Rights Court.

Impact on the industry 

Data exclusivity and intellectual property protection in general are essential for the pharmaceutical industry, where extremely large sums of money are invested in developing highly risky health care solutions. At the same time, maintaining the transparency of clinical trial data is of great significance and is expected by patients, healthcare providers, companies and health authorities around the world. For example, the European Medicines Agency (EMA) bases its scientific opinions on the results of clinical trials carried out and submitted by pharmaceutical companies. Since January 1, 2015, the EMA has been proactive publishing clinical reports submitted as part of marketing-authorization applications for human medicines.

The Novartis case demonstrates that Russian authorities treat the right of data exclusivity only in connection with undisclosed, non-public information of the results of preclinical and clinical trials of an original medicine. Thus far, a very limited number of original medicines have undergone their first-ever clinical development in Russia. Rather, in most of the cases, information on the clinical trials for a medicine is already publically available from a number of sources at the time the originator seeks local registration in Russia. Therefore, the Novartis case may open the way for generic companies to bypass the legal right of originators to protect its data.

Although the Novartis case has its own unique set of facts and stare decisis is not officially practiced in Russia, innovative companies should take note of this case and its implications as an additional risk for their original products in the Russian market. At the end of the day and in the long term, the lack of intellectual property protection in Russia may affect generic producers themselves, as the attractiveness of a market which does not guarantee sufficient protection for innovators will decrease.

We are pleased to present this guest post by Ivan Burkov, Ph.D.