Financial Daily from THE HINDU group of publications
Monday, Mar 08, 2004
Agri-Biz & Commodities - Pesticides
Pesticide MNCs seek 5-10 year `data exclusivity'
New Delhi , March 7
MULTINATIONAL crop protection chemical majors are lobbying hard for a 5-10 year period protection or `exclusivity' on the test data relating to new pesticide molecules, which they are now obliged to submit to the Government to obtain authorisation for marketing in the country.
The demand aimed at tackling `unfair' competition from domestic `me-too' generic agro-chemical manufacturers is broadly in line with what their counterparts in the drugs/pharma industry have been seeking.
Currently, Section 9 (3) of the Insecticides Act, 1968 mandates any manufacturer or importer wanting to introduce a new pesticide to obtain approval from a Registration Committee under the Agriculture Ministry. The registrant, in turn, has to furnish detailed information (typically running to 20,000 or more pages) pertaining to the chemistry, toxicology, bio-efficacy and maximum residue limits (MRL) of the proposed molecule, which also covers the data generated during field trials here.
The Committee, "after satisfying itself that the insecticide conforms to the claims made by the importer or by the manufacturer", then issues a registration certificate.
As of now, there are 184 pesticides registered for use in the country, the bulk of which are proprietary molecules of multinationals, for which they were also the original Section 9 (3) registrants here. These include the more recent, `new generation' molecules touted to be relatively environment-friendly, by virtue of requiring lesser number of sprays for producing the same impact.
While the original registrant has to provide detailed test data to the authorities, there is no such stringent binding, however, on subsequent `me-too' registrants desiring to import or manufacture the same pesticide under Section 9 (4) of the Act. Section 9 (4) registrants seeking to manufacture formulations of the already registered molecules do not have to submit any data.
Even with regard to the technical material, the `me-too' applicant has to only demonstrate the similarity of the molecular structure of his pesticide with the original molecule. "In addition, he has to submit minimal bio-efficacy and toxicological data, which runs to a few hundred pages, at the most", claimed an official of a leading agro-chemical MNC affiliate.
As a result, for almost every molecule originally registered by an MNC here, there are several `me-too' manufacturers today. Take Imidacloprid, an insecticide for seed treatment and foliar application, registered in 1999 by Bayer India.
This molecule is now produced by a host of domestic companies, including Rallis India Ltd, Nagarjuna Agrichem Ltd, Sudarshan Chemical Industries, Excel Industries, Jaysynth Dyechem Ltd, Bhagirdha Chemicals and Bhaskar Agro Chemicals Ltd, who have all been granted registration for technical indigenous manufacture under Section 9 (4).
The same is true for Sulfosulfuron, a wheat herbicide that Monsanto launched in the 1998-99 rabi season under the `Leader' brand. Today, the list of `me-too' manufacturers of this molecule include United Phosphorous, Nagarjuna, Gharda Chemicals and Atul Ltd. Atul has similarly received the nod to indigenously manufacture Metsulfuron methyl, for which E.I. Dupont India was the original Section 9 (3) registrant.
Acetamiprid an insecticide sprayed against sucking pests in cotton and originally registered by De-Nocil, a Dow Chemicals subsidiary is now also manufactured by Rallis and Gharda Chemicals.
The MNCs contend that the absence of protection for the voluminous test data that they are statutorily obliged to submit to the registration authorities for their pesticides "allows other companies to access this information and come out with the same or similar molecules".
Moreover, since the `me-too' registrants do not have to incur the costs involved in developing the molecule and generating the detailed field trial data, they are able to reverse engineer and market the same pesticide at much lower prices.
"What we want is a 5-10 year period of data exclusivity during which the Government respects the confidentiality of the test data furnished by any agro-chemical company for a particular molecule.
Over this period, applicable from the day of according registration, this data cannot be referred to by another company. Besides, we are seeking a minimum time gap for granting me-too registration for any pesticide, subsequent to its original registration under Section 9 (3). This interval will help us recover the cost of R&D and data generation", the official added.
What the WTO agreement says
Article 39.3 of the World Trade Organisation's (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), to which India is a signatory, provides that "members, when requiring as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilise new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use".
In addition, "members shall protect such data against disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against unfair commercial use".
While member-countries are obliged to provide data exclusivity to protect against "unfair commercial use", the Article does not, however, explicitly stipulate any specific period for such exclusivity to ensure that "undisclosed test data" is not misappropriated. This is unlike the 20-year protection period given in respect of product patents from the date of filing and to extend to all products, for which patents were filed after January 1, 1995. The country is also required to formally institute a product patent regime from January 1, 2005.
If the Government were to accept the demand for granting a 5-10 year period of data exclusivity, over and above the mandatory 20-year protection on patents, it would mean going beyond even TRIPS and inviting allegations of "sell-off to the global pharma and agro-chemical lobby". It is precisely for this reason that the Commerce Ministry, which, only last year, said to be favourably inclined to a 3-5 year data exclusivity period, has suddenly developed cold feet and passed on the buck to the administrative ministries concerned Agriculture and the Department of Chemicals 1& Petrochemicals.
Opponents of data exclusivity say that the granting of product patents provides sufficient protection against `me-too' generic producers, who will, from next year onwards, not be able to manufacture any drug or pesticide that has been patented after January 1, 1995.
It is a different matter though that most of the `new generation' pesticides introduced by multinationals in the country in the last 4-5 years pertain to molecules that were patented prior to 1995. The gap between the filing of patent for a product and for its actual introduction in the marketplace is usually in the region of 8-10 years. Providing data exclusivity would, in a sense, extend protection to any newly introduced pesticide, irrespective of whether or not it enjoys patent rights.
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