Data exclusivity (DE) creates a new system of monopoly power—not required under the TRIPS Agreement and separate from patents—that blocks the registration and marketing approval of generic medicines for at least five years.
In order for a medicine to be sold in a country, it must be registered with the national drug regulatory authority, which is charged with reviewing its safety and efficacy based on clinical trial data. Regulators generally rely on the data produced by patent-holding pharmaceutical companies to approve generic versions of medicines. But DE prevents regulators from referring to this data to determine the safety and efficacy of a generic. Even when there’s no patent on a medicine, DE prevents generic competition because the regulators can’t refer to the data needed to determine its safety and efficacy.
The only alternative for generic competitors when DE is in place is to repeat the clinical trial to prove the drug’s safety and efficacy. Yet doing this research violates medical ethics because clinical trial methodologies would require some patients be given placebos even though the safety and clinical validity of the medicine being tested is already established. This practice is unethical.