Legal protection for innovations (ie, the protection of intellectual property) constitutes a fundamental tool for generating the proper incentives for investment in research and development (R&D). On the contrary, poor protection and restrictive criteria discourage investment in this area. It is evident that there is a direct relationship between a country's legal system and the conditions for general economic development.

It is clear that a relationship between the law and economics exists. In this regard, for instance, Douglas C North – winner of the Nobel Prize for economics – states that institutions are more important than technology when it comes to explaining economic development, as institutions provide the infrastructure that enables the acceleration of the rate of innovation and consequent economic development.

In contrast, as held by influential commentators, gratuitous use of innovations by IP end users discourages competition in the creative sphere. Instead, when advantage is taken of the income required to promote innovation, the potential for creativity is destroyed, which consequently damages society in general.

Test data protection

In Argentina, the legislation that regulates the protection of test data (Law 24,766 – the Confidentiality Law, Executive Order 150/92) does not provide adequate test data protection to pharmaceutical specialties as required in Section 39(3) of the Trade-Related Aspects of Intellectual Property Rights Agreement, because it allows third-party reliance on information concerning the safety and efficacy of products without the consent of the originator of the data.

The health authorities have not seized the opportunity provided by the aforementioned Section 39(3) to demand the submission of scientific-technological data in exchange for the protection of its fair commercial use.

Reasons for lack of enforcement

Among the main reasons that explain the lack of enforcement of test data protection at a health authority level is the fact that the health authorities consider test data protection to be an IP right that benefits only the private holder, without taking into account that such protection acts as a unique incentive to promote R&D as well as to improve the quality of medicine.

Benefits of test data protection

A serious problem in developing countries is the lack of pharmaceutical products to treat conditions or diseases that are not normally found in developed countries or when a disease affects only a small group of patients in developed countries, but a large number in developing countries. In this situation, the potential markets in developed countries would not always be enough to encourage the spending required to research and test such medicines.

Test data protection is a relevant incentive that can be offered in this situation by developing countries. Adequate test data protection in both developed and developing countries will create the proper incentives through the creation of a larger market of consumers.

For further information on this topic please contact Daniel R Zuccherino at Obligado & Cia by telephone (+54 11 4114 1100) or email ( The Obligado & Cia website can be accessed at

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