The election of Barack Obama to become the next President of the United States at the start of November will potentially result in changes for the healthcare industry. Mr Obama had previously indicated his support for increasing access to generics as a means to reduce healthcare costs in the run up to the election, and on his www.change.gov website, the Obama-Biden Plan on healthcare reform includes plans to reduce costs for American families by, "Lower(ing) drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programs, and taking on drug companies that block cheaper generic medicines from the market."
Not surprisingly, both the Generic Pharmaceutical Association (GPhA) and Pharmaceutical Research and Manufacturers of America (PhRMA) have congratulated Mr Obama on his election victory. Equally unsurprisingly, the GPhA has taken the opportunity to remind Mr Obama of his commitment towards increasing access to generics, adding that at the GPhA’s Annual Policy Conference in September, Mr Obama’s health policy advisor added that Mr Obama would also address issues including citizen petitions, free trade agreements and authorised generics as part of his healthcare agenda. The GPhA also added that the President-elect had also expressed support for biosimilars, noting that his campaign had stated that, as President, Mr Obama would support legislation to create a biosimilar approval pathway with as short an exclusivity period as possible to ensure timely consumer access. PhRMA had perhaps less to remind the President-elect of, but commented that the organisation would continue to work with lawmakers on both sides of the aisle and would continue to support policies that encourage and strengthen innovation, improve patient access to medicines and expand healthcare coverage.
Of course, Mr Obama’s administration is still taking shape, and the President-elect will not formally announce the administration until closer to his inauguration in January 2009. However, he has already apparently made a couple of appointments that will be of interest to the healthcare industry in general. Mr Obama has appointed Tom Daschle to be the new HHS Secretary. Mr Daschle, formerly a lawmaker for South Dakota, had been Democratic leader before losing his seat in the Senate in 2004. Mr Daschle had been an early supporter of Mr Obama.
Perhaps more interesting is news that Henry Waxman is to be appointed Chairman of the House Energy and Commerce Committee. PhRMA issued a statement on 20th November 2008 welcoming the chance to work with Mr Waxman, as it had also done for Mr Daschle the day before. However, it would be hard to imagine that PhRMA would have received this news with much enthusiasm. Mr Waxman, co-author of the Hatch-Waxman Act, has long been a supporter of the generic industry, although as the Hatch-Waxman Act has shown, he has been careful to balance this with considerations for the needs of the innovator industry. Mr Waxman has made no secret of his support for improving access to both generic and biosimilar medicines, and will now be chairing a committee that has oversight on healthcare issues. It will be interesting to see what the coming four or eight years will bring.
Ian Platts - Editor, World Generic Markets
Tuesday, December 9, 2008
Monday, December 1, 2008
Busy time for Actavis
The last month has been a busy time for Iceland’s Actavis, a firm which only a few weeks ago had to reassure the industry that it was protected from the crisis enveloping the Icelandic financial system. Towards the end of October, the firm announced that it was formally launching its presence in the French generics market, having been preparing the ground since 2007. Just a few days later the firm announced that it was expanding its presence in India by constructing new solid oral dosage facilities at its existing site in Alathur. The firm added that three construction projects were underway in India, and reported at the same time that it had inaugurated new laboratories at Ticel Bio Park in Chennai, India. Actavis’ physical presence was also boosted on 3rd November, with the news that the firm had opened new expansions to analytical and development laboratories to expand its R&D efforts in Florida.
Actavis has also announced plans to expand through alliances. On 30th October, the firm reported that it had entered into an exclusive distribution agreement for a number of generic products with J&M Pharma, a South Korean-owned and operated pharmaceutical firm. Actavis commented that this would be an important step in its plans to build its presence in the Korean market. A few weeks later, Actavis announced that it had concluded a preliminary agreement with ASKA Pharmaceutical, through which the two firms would establish a joint company through which Actavis could enter the Japanese generic market. Clearly, with the building work in India and the agreements in Korea and Japan, Actavis is looking to the Asia Pacific region to provide new sources of revenue.
Actavis has also been busy with product launches, announcing on 28th October that it had launched its atorvastatin product, Atacor, in Serbia. A few weeks later, on 13th November, the firm announced that it had launched its azithromycin product and Chlamydia testing kit in the United Kingdom.
However, for all these steps forward, Actavis has also found itself taking a step back. On 14th November, the US Department of Justice announced that the US was seeking a permanent injunction to bar Actavis Totowa and Actavis, as well as two of their leading officers, from the manufacture and distribution of generics until Actavis Totowa, the firm’s plant in New Jersey, was in compliance with Good Manufacturing Practices. Actavis Totowa, which had previously been the plant for Amide Pharmaceuticals before Actavis acquired the firm, has not had a good year, finding itself on the wrong side of a number of FDA inspections. The plant and Actavis has also found itself involved in congressional efforts to carry out an investigation into the plant, as part of oversight efforts regarding the FDA. Events came to a head after a batch of Actavis’ digoxin tablets from the plant were found to have double the stated dosage. Although Actavis has put the best spin it can on events, underlining its commitment to work with the FDA to resolve the issues and get the plant back on line, this must nonetheless be a disappointing end to an exciting few weeks for the firm.
Ian Platts - Editor, World Generic Markets
Actavis has also announced plans to expand through alliances. On 30th October, the firm reported that it had entered into an exclusive distribution agreement for a number of generic products with J&M Pharma, a South Korean-owned and operated pharmaceutical firm. Actavis commented that this would be an important step in its plans to build its presence in the Korean market. A few weeks later, Actavis announced that it had concluded a preliminary agreement with ASKA Pharmaceutical, through which the two firms would establish a joint company through which Actavis could enter the Japanese generic market. Clearly, with the building work in India and the agreements in Korea and Japan, Actavis is looking to the Asia Pacific region to provide new sources of revenue.
Actavis has also been busy with product launches, announcing on 28th October that it had launched its atorvastatin product, Atacor, in Serbia. A few weeks later, on 13th November, the firm announced that it had launched its azithromycin product and Chlamydia testing kit in the United Kingdom.
However, for all these steps forward, Actavis has also found itself taking a step back. On 14th November, the US Department of Justice announced that the US was seeking a permanent injunction to bar Actavis Totowa and Actavis, as well as two of their leading officers, from the manufacture and distribution of generics until Actavis Totowa, the firm’s plant in New Jersey, was in compliance with Good Manufacturing Practices. Actavis Totowa, which had previously been the plant for Amide Pharmaceuticals before Actavis acquired the firm, has not had a good year, finding itself on the wrong side of a number of FDA inspections. The plant and Actavis has also found itself involved in congressional efforts to carry out an investigation into the plant, as part of oversight efforts regarding the FDA. Events came to a head after a batch of Actavis’ digoxin tablets from the plant were found to have double the stated dosage. Although Actavis has put the best spin it can on events, underlining its commitment to work with the FDA to resolve the issues and get the plant back on line, this must nonetheless be a disappointing end to an exciting few weeks for the firm.
Ian Platts - Editor, World Generic Markets
Thursday, November 20, 2008
Mixed fortunes for Caraco
Caraco Pharmaceutical Laboratories has found itself with mixed fortunes in recent weeks. According to an article in the Detroit News (see page 4), the firm has plans to boost production at its New Centre manufacturing plant next year with a US$22 million expansion that will see it take on another 600 members of staff, doubling the size of the firm. This is undoubtedly good news both for Caraco and for the Detroit area, and appears to show that this firm at least is confident that it can buck the trend of the looming recession currently threatening the United States and much of the world. The Detroit News’ article came just over a year after Michigan’s governor announced that Caraco was to invest some US$14.5 million in a 140,000 square foot expansion of its manufacturing facilities in Detroit, and these two events show Caraco to be in good health.
That impression was backed up in late October 2008, when Caraco reported its second quarter and six month results for its fiscal 2009 (see page 5). Caraco’s net sales jumped by nearly 200% for the latest second quarter compared to the previous one, and net sale jumped by just over 200% for the first half of the current fiscal year compared to fiscal 2008. Caraco’s second quarter fiscal 2009 results were nearly 18% higher than its first quarter results, which in turn were over 200% higher than the first quarter fiscal 2008 sales. For both its first and second quarter results, Caraco has said that its sales results have been largely down to sales of distributed products under its distribution and sales agreement with Sun Pharma. Clearly, Caraco is enjoying a period of excellent growth.
However, on 3rd November 2008, the company reported a potential spanner in the works. The FDA issued Caraco with a warning letter issued as a follow-up to the last FDA inspection of the Detroit facility in May 2008. At the time, Caraco responded to all of the observations made within 30 days and took corrective action. However, the new warning letter suggests that there were inadequate and untimely investigations by Caraco’s quality control unit; Caraco noted that the FDA considered some of its observations to be repeat observations. Caraco has naturally stressed that it will work to resolve the issues, but at the same time the firm has noted that the FDA could act by withholding approval of pending new drug applications listing the facility as the manufacturer. Were this to happen, it could upset Caraco’s future plans for the Detroit plant.
Ian Platts - Editor, World Generic Markets
That impression was backed up in late October 2008, when Caraco reported its second quarter and six month results for its fiscal 2009 (see page 5). Caraco’s net sales jumped by nearly 200% for the latest second quarter compared to the previous one, and net sale jumped by just over 200% for the first half of the current fiscal year compared to fiscal 2008. Caraco’s second quarter fiscal 2009 results were nearly 18% higher than its first quarter results, which in turn were over 200% higher than the first quarter fiscal 2008 sales. For both its first and second quarter results, Caraco has said that its sales results have been largely down to sales of distributed products under its distribution and sales agreement with Sun Pharma. Clearly, Caraco is enjoying a period of excellent growth.
However, on 3rd November 2008, the company reported a potential spanner in the works. The FDA issued Caraco with a warning letter issued as a follow-up to the last FDA inspection of the Detroit facility in May 2008. At the time, Caraco responded to all of the observations made within 30 days and took corrective action. However, the new warning letter suggests that there were inadequate and untimely investigations by Caraco’s quality control unit; Caraco noted that the FDA considered some of its observations to be repeat observations. Caraco has naturally stressed that it will work to resolve the issues, but at the same time the firm has noted that the FDA could act by withholding approval of pending new drug applications listing the facility as the manufacturer. Were this to happen, it could upset Caraco’s future plans for the Detroit plant.
Ian Platts - Editor, World Generic Markets
Monday, October 20, 2008
Apotex ships first CAMR drugs to Rwanda
Apotex has announced that its first shipment of its triple combination HIV/AIDS drug, Apo-TriAvir, is to be shipped to Rwanda. The news marks the culmination of a long process to enable the Canadian firm to produce a generic cocktail comprising drugs still under patent protection in Canada for sale solely to Rwanda utilising Canada’s Access to Medicines Regime (CAMR), formerly known as the Jean Chrétien Pledge to Africa Act. So far, Rwanda has been the only country to take advantage of the regime, which Canada brought in to align its patent laws with the World Trade Organisation’s framework to enable generic copies of patented drugs to be shipped to countries in need.
Whilst Apotex has been understandably pleased with itself for seeing the process through, it has nonetheless been critical of the Access to Medicines Regime, noting that the regime is too complex and problematic. Apotex is clear that the regime needs to be changed in order for it to be workable, and has previously suggested that it would not be willing to utilise it again in the future. Indeed, the regime has come in for criticism since its conception for being too bureaucratic and long-winded by a number of organisations; the difficulties involved in using it can be seen by the fact that the law has been in place since 2004 and in force since 2005, yet this is the first time it has been used.
Clearly, the experiences of the one company that has used the regime would show that changes need to be made to it, and the Canadian Parliament would do well to take another look at the legislation, using Apotex’ experience to see what changes could be made. However, before being quick to condemn, it is worth noting that the regime was introduced after a great deal of consultation from organisations with interests across the spectrum of pharmaceutical manufacturing and distribution. It was created to try to balance the needs of access to affordable drugs against the necessity of protecting patent law, and so it is somewhat inevitable that a law that tries to keep contradictory forces balanced will be difficult to use. Whilst that does not mean that changes cannot be investigated, it does mean that the resulting process will never be likely to please all interested parties. It is also worth noting that however difficult Apotex has found the process, this is still the first time any such law has been used in the world, and Canada still deserves credit for being the first country to try to amend its laws to enable its pharmaceutical manufacturing skills to be used to help developing countries in need. Canada should move to cap this achievement by making the law more workable.i to represent it in Court in an attention-grabbing move. Nevertheless, the firm may need more than PR to help it out of its current predicament.
Ian Platts - Editor, World Generic Markets
Whilst Apotex has been understandably pleased with itself for seeing the process through, it has nonetheless been critical of the Access to Medicines Regime, noting that the regime is too complex and problematic. Apotex is clear that the regime needs to be changed in order for it to be workable, and has previously suggested that it would not be willing to utilise it again in the future. Indeed, the regime has come in for criticism since its conception for being too bureaucratic and long-winded by a number of organisations; the difficulties involved in using it can be seen by the fact that the law has been in place since 2004 and in force since 2005, yet this is the first time it has been used.
Clearly, the experiences of the one company that has used the regime would show that changes need to be made to it, and the Canadian Parliament would do well to take another look at the legislation, using Apotex’ experience to see what changes could be made. However, before being quick to condemn, it is worth noting that the regime was introduced after a great deal of consultation from organisations with interests across the spectrum of pharmaceutical manufacturing and distribution. It was created to try to balance the needs of access to affordable drugs against the necessity of protecting patent law, and so it is somewhat inevitable that a law that tries to keep contradictory forces balanced will be difficult to use. Whilst that does not mean that changes cannot be investigated, it does mean that the resulting process will never be likely to please all interested parties. It is also worth noting that however difficult Apotex has found the process, this is still the first time any such law has been used in the world, and Canada still deserves credit for being the first country to try to amend its laws to enable its pharmaceutical manufacturing skills to be used to help developing countries in need. Canada should move to cap this achievement by making the law more workable.i to represent it in Court in an attention-grabbing move. Nevertheless, the firm may need more than PR to help it out of its current predicament.
Ian Platts - Editor, World Generic Markets
Thursday, September 25, 2008
US FDA issues import alert for key Ranbaxy products
The US FDA has issued two warning letters to Ranbaxy Laboratories and an import alert for generic drugs produced by the company's Dewas and Paonta Sahib plants in India. The warning letters identify the Agency's concerns about deviations from US cGMP requirements, while the import alert covers more than 30 different generic drug products produced in multiple dosage forms at these two locations.
While the FDA noted that it was confident that other manufacturers could meet market demands, and no product recall had been issued, the Wall Street Journal has reported that some drug stores are looking for alternative suppliers and were nervous that if they did switch they would be liable for cost increases due to contract provisions. Meanwhile, other countries have started to look at bans. In New Zealand, for example, the Health Ministry's drug regulatory arm has said that it was checking with regulators abroad to see if audits since then had given it a clean bill of health, though like the FDA it noted that there were no concerns about the medicines themselves and that users should continue taking the drugs.
This is not the first time that Ranbaxy has been in hot water with US regulators, and represents the second time in less than three years FDA has issued a Warning Letter to Ranbaxy. In 2006, FDA cited the Indian firm for violations of US cGMP at its Paonta Sahib facility. Since then, Ranbaxy has been attempting to resolve the issue with US regulators. However, in 2007, US officials seized documents from Ranbaxy's US headquarters in New Jersey. Furthermore, in July 2008, the US Department of Justice claimed that the company submitted false information about stability and bioequivalence to support ANDAs for antiretrovirals distributed by the President’s Emergency Plan for AIDS Relief (PEPFAR) programme. Prominent Congressmen on the US House Committee on Energy and Commerce indicated at the time that they would commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations.
Daiichi Sankyo, which agreed to acquire the majority of the voting capital of Ranbaxy in June, has yet to comment on the latest events, though both firms have previously stressed that the share purchase agreement is binding and final. North America is a significant market for Ranbaxy, however; the region constituted around 26% of the firm’s revenues in 2007. Ranbaxy is already looking aggressive in its attempts to overturn the FDA’s ruling, enlisting former New York mayor Rudy Giuliani to represent it in Court in an attention-grabbing move. Nevertheless, the firm may need more than PR to help it out of its current predicament.
Jonathan Way - Editor, World Generic Markets
While the FDA noted that it was confident that other manufacturers could meet market demands, and no product recall had been issued, the Wall Street Journal has reported that some drug stores are looking for alternative suppliers and were nervous that if they did switch they would be liable for cost increases due to contract provisions. Meanwhile, other countries have started to look at bans. In New Zealand, for example, the Health Ministry's drug regulatory arm has said that it was checking with regulators abroad to see if audits since then had given it a clean bill of health, though like the FDA it noted that there were no concerns about the medicines themselves and that users should continue taking the drugs.
This is not the first time that Ranbaxy has been in hot water with US regulators, and represents the second time in less than three years FDA has issued a Warning Letter to Ranbaxy. In 2006, FDA cited the Indian firm for violations of US cGMP at its Paonta Sahib facility. Since then, Ranbaxy has been attempting to resolve the issue with US regulators. However, in 2007, US officials seized documents from Ranbaxy's US headquarters in New Jersey. Furthermore, in July 2008, the US Department of Justice claimed that the company submitted false information about stability and bioequivalence to support ANDAs for antiretrovirals distributed by the President’s Emergency Plan for AIDS Relief (PEPFAR) programme. Prominent Congressmen on the US House Committee on Energy and Commerce indicated at the time that they would commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations.
Daiichi Sankyo, which agreed to acquire the majority of the voting capital of Ranbaxy in June, has yet to comment on the latest events, though both firms have previously stressed that the share purchase agreement is binding and final. North America is a significant market for Ranbaxy, however; the region constituted around 26% of the firm’s revenues in 2007. Ranbaxy is already looking aggressive in its attempts to overturn the FDA’s ruling, enlisting former New York mayor Rudy Giuliani to represent it in Court in an attention-grabbing move. Nevertheless, the firm may need more than PR to help it out of its current predicament.
Jonathan Way - Editor, World Generic Markets
Wednesday, September 3, 2008
Counterfeit definition debate causes concern in India
World Health Organization attempts to introduce a broader new definition of counterfeit medicines have come under fire from the Indian government. A draft resolution on the new definition was presented at the 61st World Health Assembly in May 2008; this has been the subject of intense discussion, as was a WHO Secretariat report on the matter. The change from the current terminology has been promoted by the International Medical Products Anti-Counterfeiting Taskforce, a WHO unit set up in 2006.
The new definition could cause the registration of drugs in various territories to be an issue, as countries could link the issue of substandard drugs with intellectual property infringement. A major concern of the countries such as India is that legitimate generic medicines may become targets in the enforcement of counterfeit goods. According to a Business Standard report, the Indian Pharmaceutical Association has expressed concern that generic medicines that are legal in some countries could be classified erroneously as fake. This, combined with tougher enforcement of intellectual property rights elsewhere in the world, could mean that goods passing in transit may be seized for being fake, on the grounds that they are not registered.
A decision on the matter is unlikely before May 2009. Before then however, the office of the Drug Controller General of India is likely to come up with its own definition to promote to the WHO; this would incorporate recommendations from domestic manufacturers and is therefore unlikely to be a radical departure from the existing definition.
Perhaps of even more concern to India and other countries in the South Asia region is the new Anti-Counterfeiting Trade Agreement (ACTA) being negotiated between the United States, the European Union, Japan, South Korea, Canada, Mexico, Australia and New Zealand. By negotiating between themselves, these countries could undermine the WHO discussions and could simply ignore India’s objections. Treaty negotiations are still at a preliminary stage however, and no draft has been released to date; while this is a good sign for India that agreement is still not close, the secrecy will not help to allay its fears.
Jonathan Way - Editor, World Generic Markets
The new definition could cause the registration of drugs in various territories to be an issue, as countries could link the issue of substandard drugs with intellectual property infringement. A major concern of the countries such as India is that legitimate generic medicines may become targets in the enforcement of counterfeit goods. According to a Business Standard report, the Indian Pharmaceutical Association has expressed concern that generic medicines that are legal in some countries could be classified erroneously as fake. This, combined with tougher enforcement of intellectual property rights elsewhere in the world, could mean that goods passing in transit may be seized for being fake, on the grounds that they are not registered.
A decision on the matter is unlikely before May 2009. Before then however, the office of the Drug Controller General of India is likely to come up with its own definition to promote to the WHO; this would incorporate recommendations from domestic manufacturers and is therefore unlikely to be a radical departure from the existing definition.
Perhaps of even more concern to India and other countries in the South Asia region is the new Anti-Counterfeiting Trade Agreement (ACTA) being negotiated between the United States, the European Union, Japan, South Korea, Canada, Mexico, Australia and New Zealand. By negotiating between themselves, these countries could undermine the WHO discussions and could simply ignore India’s objections. Treaty negotiations are still at a preliminary stage however, and no draft has been released to date; while this is a good sign for India that agreement is still not close, the secrecy will not help to allay its fears.
Jonathan Way - Editor, World Generic Markets
Tuesday, August 12, 2008
Teva eyes new markets following Barr purchase; DOJ targets Ranbaxy
Teva Pharmaceutical Industries has elaborated on its recent purchase of Barr Pharmaceuticals. The deal, valued at US$7.5 billion, raises interesting questions about Teva’s new scope. The two firms held an acquisition luncheon a few days after the announcement, in which they emphasised the strong strategic fit between the two companies, its expanded product portfolio and pipeline and its increased presence in first-to-file/paragraph IV applications.
Most significantly, Teva discussed its strengthened presence in key global markets; post-takeover, Teva will be able to offer direct sales in more than 60 countries. Eastern and Central Europe were highlighted as areas of strength for the combined firm. Barr and Teva combined would have been ranked fifth in Germany, third in Poland, ninth in Russia and first in Croatia in 2007. The new presence in Europe will be complemented by Teva’s new Spanish capabilities, following the successful completion of Teva’s Bentley Pharmaceutical purchase.
As for future growth opportunities, Teva CEO Shlomo Yanai noted in an interview with the Financial Times that he is now keen to forge a joint venture in Japan to capitalise on the country’s fast-growing generics market. "Right now Japan is more ripe for generics, (but still) difficult to break into," Yanai commented. Japan has traditionally been reluctant to accept generic medicines; the government has been keen to change habits, however, in an attempt to reduce medical costs. Recent rule changes compel generic substitution unless a doctor specifically requests a patented drug on the prescription form.
Any attempt by Yanai and Teva to get into the Japanese generics market is likely to come after Ranbaxy’s entrance via Daiichi Sankyo, which is in the process of buying the Indian firm. The deal between the two is still on track, in spite of recent allegations from the US Department of Justice against Ranbaxy. The DOJ claims that the company submitted false information about stability and bioequivalence to support ANDAs for antiretrovirals distributed by the President’s Emergency Plan for AIDS Relief (PEPFAR) programme. Prominent Congressmen in the US House Committee on Energy and Commerce have now indicated that it will soon commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations. The moves have seemingly not deterred Daiichi however, which has been keen to stress that its share purchase agreement with Ranbaxy is binding and final.
Jonathan Way - Editor, World Generic Markets
Tuesday, August 5, 2008
Authorised generic deals come to the fore
The end of June saw a spate of authorised generic deals in the United States. On 24th June, Barr Laboratories entered into supply and licensing agreements for authorised generic versions of Bayer's Yasmin and YAZ (both drospirenone + ethinyloestradiol) oral contraceptive (OC) products. Under the Yasmin agreement, Bayer will supply Barr with an authorised generic version for launch on 1st July 2008; several years earlier than the last-to-expire Bayer patent listed in the FDA's Orange Book. In March, the US District Court for the District of New Jersey ruled in favour of Barr, in the challenge of the patent listed by Bayer's Yasmin product.
On 30th June 2008, under a supply agreement with Solvay Pharmaceuticals, Watson Pharmaceuticals launched an authorised generic dronabinol. Dronabinol is a generic version of Unimed Pharmaceuticals' (Solvay) Marinol capsules. Under the terms agreed, Solvay will supply the dronabinol capsules to the company's subsidiary, Watson Pharma, which will market, sell and distribute the product in the United States. Solvay will receive a share of the profits from Watson's sales of the generic product in the US market. Further details have not been disclosed.
On the same day, Janssen, a division of Ortho-McNeil-Janssen Pharmaceuticals (Johnson & Johnson), launched an authorised generic version of its antipsychotic agent, Risperdal (risperidone), through Patriot Pharmaceuticals (McNeil-PPC [J&J]). This development is a reaction to the FDA granting final approval for Teva Pharmaceutical Industries' ANDA to market a generic version of the drug. As the first company to file an ANDA containing a Paragraph IV certification for this product, Teva has been awarded a 180-day period of marketing exclusivity and shipment has commenced. Generic risperidone could hurt J&J badly, as sales of the Risperdal franchise totalled US$4,549 million in 2007, accounting for 18.3% of pharmaceutical revenue.
The past three years have seen a growing number of authorised generic agreements in the USA; this recent sudden flurry may create more interest in Congress. The last two sessions of Congress have seen attempts at legislation to ban the practice; S. 438 currently languishes at committee stage in the Senate. The long-anticipated publication of an FTC report on the matter may provide a tipping point in support for the legislation; this was anticipated in 2007, yet has still not materialised. Meanwhile, most branded companies now have a policy of issuing authorised generic licences; in the current economic climate, and with significant patent expiries on the horizon, the practice is unlikely to be halted any time soon.
Jonathan Way - Editor, World Generic Market
On 30th June 2008, under a supply agreement with Solvay Pharmaceuticals, Watson Pharmaceuticals launched an authorised generic dronabinol. Dronabinol is a generic version of Unimed Pharmaceuticals' (Solvay) Marinol capsules. Under the terms agreed, Solvay will supply the dronabinol capsules to the company's subsidiary, Watson Pharma, which will market, sell and distribute the product in the United States. Solvay will receive a share of the profits from Watson's sales of the generic product in the US market. Further details have not been disclosed.
On the same day, Janssen, a division of Ortho-McNeil-Janssen Pharmaceuticals (Johnson & Johnson), launched an authorised generic version of its antipsychotic agent, Risperdal (risperidone), through Patriot Pharmaceuticals (McNeil-PPC [J&J]). This development is a reaction to the FDA granting final approval for Teva Pharmaceutical Industries' ANDA to market a generic version of the drug. As the first company to file an ANDA containing a Paragraph IV certification for this product, Teva has been awarded a 180-day period of marketing exclusivity and shipment has commenced. Generic risperidone could hurt J&J badly, as sales of the Risperdal franchise totalled US$4,549 million in 2007, accounting for 18.3% of pharmaceutical revenue.
The past three years have seen a growing number of authorised generic agreements in the USA; this recent sudden flurry may create more interest in Congress. The last two sessions of Congress have seen attempts at legislation to ban the practice; S. 438 currently languishes at committee stage in the Senate. The long-anticipated publication of an FTC report on the matter may provide a tipping point in support for the legislation; this was anticipated in 2007, yet has still not materialised. Meanwhile, most branded companies now have a policy of issuing authorised generic licences; in the current economic climate, and with significant patent expiries on the horizon, the practice is unlikely to be halted any time soon.
Jonathan Way - Editor, World Generic Market
Tuesday, July 1, 2008
Daiichi shocks industry with Ranbaxy share deal
Daiichi Sankyo and Ranbaxy Laboratories have surprised the pharmaceutical industry by entering into a binding share purchase and share subscription agreement, which will eventually leave Daiichi with a controlling interest in the Indian firm. The deal values Ranbaxy at US$8.5 billion and the total transaction value is expected to be between US$3.4 billion to US$4.6 billion. Daiichi Sankyo and Ranbaxy highlighted the complementary business combination that the link-up would create, noting that it would leave Daiichi with an expanded global reach and strong growth potential by complementing proprietary drugs with generics. Daiichi also hinted that it may shift part of its production to India, commenting that it could achieve further cost competitiveness by optimising its new R&D and manufacturing facilities.
The move represents Daiichi Sankyo's first foray into generic drugs, and contrasts with the strategy adopted by its Japanese rivals: Takeda Pharmaceutical, for example, bought biotech firm Millennium Pharmaceuticals in April, while Eisai bought speciality manufacturer MGI Pharma in December 2007. The Ranbaxy deal should bolster Daiichi’s revenues more quickly however, with income from the acquisition expected from the fiscal year after next.
Interestingly, Daiichi is following the model of Novartis by incorporating generic sales into its structure; this strategy has the obvious benefit of maximising the full pharmaceutical life-cycle of products, and also hedges the inherent riskiness of new molecules with a more steady supply of generics. The model follows long-term assumptions over the future of the industry, where a handful of global players will dominate, crowding out all competitors bar the smaller niche-orientated firms.
This major deal in many ways mirrors the divestiture of Merck Generics last spring. That deal saw a brandname manufacturer look to sell its generics division; the race to buy the firm was eventually won by Mylan Laboratories, which had to fight off competition from a number of other major generic firms. These included Ranbaxy, which was an early contender, along with Teva Pharmaceutical Industries and Actavis. At the time, it seemed these three companies would be in the forefront of bidding for the next big generics target; ironically, Ranbaxy itself has now become a target. That flurry of activity after the initial Merck Generics bid could indicate a similar bidding process for Ranbaxy; indeed rumours have since circulated that Pfizer may bid for the remaining shares. However, without the support of the Singh family, Ranbaxy’s largest and controlling shareholders, a counterbid may prove difficult. For now, Daiichi remains in the vanguard.
Jonathan Way - Editor, World Generic Markets
Thursday, June 19, 2008
Sun and Taro squabble over merger agreement
Taro Pharmaceutical Industries and Sun Pharmaceutical Industries have become embroiled in an increasingly bitter row over a merger agreement between the two companies (see p. 19). Taro’s Board of Directors was first to act, announcing that it had unanimously voted to terminate the 18th May 2007 merger agreement with Sun, as the agreement provided for a termination from either party after 31st December 2007. Sun responded by refuting this claim, and noting its scepticism of Taro’s ability to turn itself around after its financial crisis early in 2007; Sun has also reacted angrily to suggestions that Taro may sell its Irish operations, as these were to play a key part in its post-merger operations.
Taro noted on 29th May that the merger is no longer in the best interests of the company. Its management board felt that the deal did not reflect the ‘dramatic operational and financial turnaround’ that the company has achieved since last year. The firm also felt that the operational constraints in the agreement were interfering with the company's ability to manage its business for the benefit of all of its stakeholders, and that, but for some of these constraints, Taro's profitability and cash resources could have been higher at present.
Sensing Taro’s reluctance to go ahead with the merger deal, Sun upped its offer per share from US$7.75 to US$10.25. After Taro went public over the matter, Sun questioned how the Israeli firm could afford not to make the deal, noting that if Sun had not injected US$60 million into the company in the last year, Taro would have virtually negative cash. The Indian firm also commented that it made every effort to fulfil its obligations under the agreement, and that Taro had ignored its attempts to discuss an increase in the merger consideration.
Taro’s termination of the deal is surprising, given the financial struggles that beset it before Sun agreed to refinance US$224 million of its net debt last year. It had suffered a turbulent time prior to the Sun deal: finance reporting problems led to the firm having to restate its financial results for 2003 and 2004, a move which eventually contributed to the resignation of its Senior Vice President and Chief Financial Officer and its delisting from the NASDAQ Global Select Market. The financial reporting problems and lower than expected results for 2006 led to concerns over Taro’s loans, leaving it with little other choice than to accept Sun’s offer. Whether Taro has accomplished enough in the last year to gain the upper hand in its dealings against Sun it remains to be seen. Either way, the fallout could hit both companies hard when the full financial ramifications are understood.
Jonathan Way - Editor, World Generic Markets
Taro noted on 29th May that the merger is no longer in the best interests of the company. Its management board felt that the deal did not reflect the ‘dramatic operational and financial turnaround’ that the company has achieved since last year. The firm also felt that the operational constraints in the agreement were interfering with the company's ability to manage its business for the benefit of all of its stakeholders, and that, but for some of these constraints, Taro's profitability and cash resources could have been higher at present.
Sensing Taro’s reluctance to go ahead with the merger deal, Sun upped its offer per share from US$7.75 to US$10.25. After Taro went public over the matter, Sun questioned how the Israeli firm could afford not to make the deal, noting that if Sun had not injected US$60 million into the company in the last year, Taro would have virtually negative cash. The Indian firm also commented that it made every effort to fulfil its obligations under the agreement, and that Taro had ignored its attempts to discuss an increase in the merger consideration.
Taro’s termination of the deal is surprising, given the financial struggles that beset it before Sun agreed to refinance US$224 million of its net debt last year. It had suffered a turbulent time prior to the Sun deal: finance reporting problems led to the firm having to restate its financial results for 2003 and 2004, a move which eventually contributed to the resignation of its Senior Vice President and Chief Financial Officer and its delisting from the NASDAQ Global Select Market. The financial reporting problems and lower than expected results for 2006 led to concerns over Taro’s loans, leaving it with little other choice than to accept Sun’s offer. Whether Taro has accomplished enough in the last year to gain the upper hand in its dealings against Sun it remains to be seen. Either way, the fallout could hit both companies hard when the full financial ramifications are understood.
Jonathan Way - Editor, World Generic Markets
Friday, May 16, 2008
Intellectual protection issues come to the fore
Intellectual property issues have been a hot topic for various governments over the last few weeks, with significant developments occurring in Brazil, the Philippines and India. Earlier in April, the Brazil Health Ministry declared the antirretroviral drug tenofovir to be in the ‘public interest’, signalling its willingness to import a generic version of the medicine. The Health Ministry’s declaration indicates that the patent for the drug could be rejected due to its high price; this could then lead to negotiations over the import of a generic version.
At the end of last month, the Philippines also turned against branded manufacturers, with its Congress approving a bill that strongly promotes generic medicines. The new law, which still requires approval from the President, will allow limited parallel importation, should help to prevent incremental innovation, will allow local generic firms to register their versions before patent expiry, and could permit the use of compulsory licences for the public good.
Conversely, one region which has traditionally been without strong intellectual protection laws for years, India, is now looking to clamp down on marketing approvals of drugs already patented. The Drug Controller General of India has published a reference guide and hopes to co-ordinate with the Ministry of Health to create an integrated approach which will link patents together. Following this, the DCGI will then prevent any approvals for generic versions of patented drugs. To date, patent linkage in India has proven difficult, as it has been impeded by a decentralised and inefficient drug approval structure. Unsurprisingly, domestic firms in the country are against such moves, arguing that they will be unworkable in practice.
The motivation behind moves to promote generics through intellectual property reforms are clearly motivated by the high costs of patented drugs. Interestingly, think-tank African Liberty has recently questioned the link, noting that low uptake of drugs was more likely caused by poor infrastructure. Either way, governments in developing countries are likely to continue putting pressure on IP rules, as weakening them in favour of generics appears to provide them with a quicker fix to long term drug expenditure problems.
Jonathan Way - Editor, World Generic Markets
At the end of last month, the Philippines also turned against branded manufacturers, with its Congress approving a bill that strongly promotes generic medicines. The new law, which still requires approval from the President, will allow limited parallel importation, should help to prevent incremental innovation, will allow local generic firms to register their versions before patent expiry, and could permit the use of compulsory licences for the public good.
Conversely, one region which has traditionally been without strong intellectual protection laws for years, India, is now looking to clamp down on marketing approvals of drugs already patented. The Drug Controller General of India has published a reference guide and hopes to co-ordinate with the Ministry of Health to create an integrated approach which will link patents together. Following this, the DCGI will then prevent any approvals for generic versions of patented drugs. To date, patent linkage in India has proven difficult, as it has been impeded by a decentralised and inefficient drug approval structure. Unsurprisingly, domestic firms in the country are against such moves, arguing that they will be unworkable in practice.
The motivation behind moves to promote generics through intellectual property reforms are clearly motivated by the high costs of patented drugs. Interestingly, think-tank African Liberty has recently questioned the link, noting that low uptake of drugs was more likely caused by poor infrastructure. Either way, governments in developing countries are likely to continue putting pressure on IP rules, as weakening them in favour of generics appears to provide them with a quicker fix to long term drug expenditure problems.
Jonathan Way - Editor, World Generic Markets
Friday, May 2, 2008
Biosimilars Business Review, April 2008
Europe saw another positive move in February 2008, when the EMEA recommended approval for three GCSF biosimilars. Marketing can begin once the European Commission issues final approval in April 2008. This will mark Teva’s first biosimilar approval in the EU; the company is developing its biosimilar activities apace, as demonstrated by the recently-announced purchase of CoGenesys.
An indication of attitudes to biosimilars in the European marketplace was given by the publication of a report by a UK parliamentary panel into the subject in January. It indicated a general lack of awareness of biosimilars within the Department of Health and the wider health service, and came down strongly against the allowance of substitution. Shortly afterwards, the MHRA issued a brief guidance stating that it is ‘good practice’ to prescribe by brand name only. The parliamentary panel issued a number of other recommendations, none of which will be particularly welcome to the biosimilar industry.
In the USA, the wind has changed, for the time being at least. The running is now being made by the originator industry, which has decided its best interests are served by passing legislation this year rather than delaying; the political environment may be less favourable in 2009. Hence the specific mention of biosimilar regulations in President Bush’s budget request, and the public support given by BIO to the new Barton-Eshoo bill in the House. In contrast, the biosimilar industry has become more cautious, calculating that it can get a better bill after the November 2008 elections. With Congress finely balanced and a real lack of consensus over the issue of market exclusivity, it would be brave indeed to predict the creation of a pathway this year.
Andrew Crofts – Editor, Biosimilars Business Review
An indication of attitudes to biosimilars in the European marketplace was given by the publication of a report by a UK parliamentary panel into the subject in January. It indicated a general lack of awareness of biosimilars within the Department of Health and the wider health service, and came down strongly against the allowance of substitution. Shortly afterwards, the MHRA issued a brief guidance stating that it is ‘good practice’ to prescribe by brand name only. The parliamentary panel issued a number of other recommendations, none of which will be particularly welcome to the biosimilar industry.
In the USA, the wind has changed, for the time being at least. The running is now being made by the originator industry, which has decided its best interests are served by passing legislation this year rather than delaying; the political environment may be less favourable in 2009. Hence the specific mention of biosimilar regulations in President Bush’s budget request, and the public support given by BIO to the new Barton-Eshoo bill in the House. In contrast, the biosimilar industry has become more cautious, calculating that it can get a better bill after the November 2008 elections. With Congress finely balanced and a real lack of consensus over the issue of market exclusivity, it would be brave indeed to predict the creation of a pathway this year.
Andrew Crofts – Editor, Biosimilars Business Review
Europe gets nervous over biosimilar rules
The United Kingdom is currently debating new biosimilar rules, as part of a movement amongst European countries to limit how centralised biosimilar approvals are prescribed. Recommendations put forward include prescription of biosimilars by brand names only, an urgent ban on substitution "until effective safeguards can be relied on", and applying the Medicine and Healthcare Regulatory Authority’s black triangle symbol "be applied to all biosimilar drugs and that, at two-year or other periodic review, that symbol should remain unless the safety evidence is clear that it can be removed".
Changes to prescription rules follow advice from the EMEA in June 2007 that biosimilars cannot be considered identical to their biological reference products. However, while the agency can issue advice, prescription policies are set at a national level; this has led to European countries diluting the strength of the original centralised rules, mainly due to safety fears caused by biosimilar complexity and subtle differences from originator products. According to the European Generic medicines Association (EGA), fifteen countries across Europe have brought in new rules to prevent the automatic substitution of biological medicines by biosimilars, including France, Spain, the Netherlands and Norway.
This contrasts with the approach in the United States, which has not even got so far as creating a biosimilar pathway. However, events in Europe are an indication that the US may also run into difficulties with biosimilar prescription rules following the approval of its own biosimilar legislation. This itself is currently on hold, as a suitable compromise between originator and biosimilar firms has not yet been reached. Interestingly, the forces pushing for legislation sooner have recently been reversed, with the branded industry keen to get a bill through Congress before President Bush leaves office.
The US and European biosimilar agendas are notably different at present, united only by lingering uncertainties remaining in both. This is likely to remain the case in the short term, due to a number of factors such as safety fears and the high costs of producing biological drugs in any form. The boom year for the biosimilar industry will not arrive until 2012 at the earliest, when a much higher proportion of biological drugs start to come off patent. At that time, the financial incentives of promoting biosimilars will be hard for governments to ignore, while experience of biosimilars should lead to more uniformity in safety rules.
Jonathan Way - Editor, World Generic Markets
Changes to prescription rules follow advice from the EMEA in June 2007 that biosimilars cannot be considered identical to their biological reference products. However, while the agency can issue advice, prescription policies are set at a national level; this has led to European countries diluting the strength of the original centralised rules, mainly due to safety fears caused by biosimilar complexity and subtle differences from originator products. According to the European Generic medicines Association (EGA), fifteen countries across Europe have brought in new rules to prevent the automatic substitution of biological medicines by biosimilars, including France, Spain, the Netherlands and Norway.
This contrasts with the approach in the United States, which has not even got so far as creating a biosimilar pathway. However, events in Europe are an indication that the US may also run into difficulties with biosimilar prescription rules following the approval of its own biosimilar legislation. This itself is currently on hold, as a suitable compromise between originator and biosimilar firms has not yet been reached. Interestingly, the forces pushing for legislation sooner have recently been reversed, with the branded industry keen to get a bill through Congress before President Bush leaves office.
The US and European biosimilar agendas are notably different at present, united only by lingering uncertainties remaining in both. This is likely to remain the case in the short term, due to a number of factors such as safety fears and the high costs of producing biological drugs in any form. The boom year for the biosimilar industry will not arrive until 2012 at the earliest, when a much higher proportion of biological drugs start to come off patent. At that time, the financial incentives of promoting biosimilars will be hard for governments to ignore, while experience of biosimilars should lead to more uniformity in safety rules.
Jonathan Way - Editor, World Generic Markets
Teva buys Bentley
Teva Pharmaceutical Industries has agreed to acquire Bentley Pharmaceuticals for US$360 million. US-based Bentley manufactures both branded generic and generic products; its principal market is Spain, though it also sells generic pharmaceuticals in other parts of the EU. These efforts are supported by finished dosage and API manufacturing facilities. Teva noted that it intends to make Bentley's generic pharmaceutical operations serve as the platform on which Teva hopes to build a leading position in Spain.
The Bentley purchase follows a string of investments from Teva in the region. In January, the Israeli manufacturer announced its plans to expand its operations in Hungary, with an investment of US$100 million at its Debrecen site. It then announced in March that it is expanding its operations in Ireland, with a €65 million (US$99.6 million) investment in its existing Waterford facilities in the southeast of the country. Later in the month, meanwhile, Teva’s IVAX unit revealed that it is to spend CZK1 billion (US$60.7 million) to expand its Opava plant in north Moravia, Czech Republic. This aggressive European expansion follows Teva CEO Shlomo Yanai’s recent comments that Teva should double its revenues by 2012; clearly, the new CEO feels that Europe is where the firm’s immediate priorities lie.
Teva’s European expansion is being mirrored by Aurobindo Pharma, which has just announced that it is to purchase the Italian operations of German pharmaceutical company TAD Pharmaceuticals. The TAD Italy purchase is Aurobindo’s third in Europe, following the purchase of Milpharm, and Pharmacin International in 2006 and 2007.
The latest acquisitions correlate with industry insiders’ predictions that a handful of generic manufacturers will lead the drive towards consolidation; Aurobindo will be hoping to be amongst this group, while Teva will certainly feature. Both have adopted a similar strategy of targeting markets where generics are less well established, i.e. Italy and Spain. It will be interesting to see if this tactic is more fruitful than a focus on established markets, where firms have recently been struggling to digest acquisitions.
Jonathan Way - Editor, World Generic Markets
The Bentley purchase follows a string of investments from Teva in the region. In January, the Israeli manufacturer announced its plans to expand its operations in Hungary, with an investment of US$100 million at its Debrecen site. It then announced in March that it is expanding its operations in Ireland, with a €65 million (US$99.6 million) investment in its existing Waterford facilities in the southeast of the country. Later in the month, meanwhile, Teva’s IVAX unit revealed that it is to spend CZK1 billion (US$60.7 million) to expand its Opava plant in north Moravia, Czech Republic. This aggressive European expansion follows Teva CEO Shlomo Yanai’s recent comments that Teva should double its revenues by 2012; clearly, the new CEO feels that Europe is where the firm’s immediate priorities lie.
Teva’s European expansion is being mirrored by Aurobindo Pharma, which has just announced that it is to purchase the Italian operations of German pharmaceutical company TAD Pharmaceuticals. The TAD Italy purchase is Aurobindo’s third in Europe, following the purchase of Milpharm, and Pharmacin International in 2006 and 2007.
The latest acquisitions correlate with industry insiders’ predictions that a handful of generic manufacturers will lead the drive towards consolidation; Aurobindo will be hoping to be amongst this group, while Teva will certainly feature. Both have adopted a similar strategy of targeting markets where generics are less well established, i.e. Italy and Spain. It will be interesting to see if this tactic is more fruitful than a focus on established markets, where firms have recently been struggling to digest acquisitions.
Jonathan Way - Editor, World Generic Markets
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