What is Data Exclusivity?

Data exclusivity is a form of protection available to manufacturers of prescription drugs, barring generic competitors from using the results of clinical trials performed by the drug developer in their own applications to regulatory agencies requesting permission to sell drugs. This protection lasts for a limited time, with the time frame depending on the nation. Companies with drugs in development argue that people should not be allowed to use their trial data without paying for it when they are applying for permission to sell competing generic formulations. Generic manufacturers believe data exclusivity keeps drug prices high, making it harder for low income people to access medications.

Clinical trials are expensive and can take a very long time. Companies invest a great deal of time and money in these trials for the purpose of determining if a medication is safe and finding out what conditions it can treat. Pharmaceutical companies may treat this data as proprietary, because it pertains to brand-name medications they make, and they want to recoup the process of drug discovery and research.

Companies can already obtain patents to protect the sales of their drug for a set period of time. Data exclusivity adds another layer of regulation. Companies with generic drugs may know their drugs are safe because of the original clinical trial results, but they cannot rely on those results when they apply to regulators to get permission to produce and sell their medications. They either need to run their own trials, or wait for the data exclusivity to expire so they can turn to the research from the original company.

This is a form of patent and trademark protection. For pharmaceutical companies, drug development is very costly, and many of the compounds drug companies invest in never make it to clinical trials, let alone the open market. If a competitor can immediately benefit from their research and sell a generic version at a lower price, the original company will have trouble finding buyers for the drug, and cannot hope to make up the expenses associated with producing it.

People concerned about the affordability of drugs in developing nations and low income communities argue that while patent protection and tools like data exclusivity are reasonable, they can hinder drug accessibility. Some people cannot afford to pay the list price for brand-name medications and may lose out on access to treatment, when a pharmaceutical company could produce a pharmacologically identical generic and offer it at a lower price. These patients must wait for drugs to go off patent, or hope that a drug company can negotiate a special license to produce generics for use in a specific region.