Watson Pharmaceuticals announced on 2nd December 2009 that it had completed its acquisition of Arrow Group. Watson announced that it had entered into a definitive agreement to acquire Arrow on 17th June 2009, in a deal that would cost US$1.75 billion in cash and stocks. Watson commented that it believed the transaction would be accretive to cash earnings per share in 2010, as a result of Watson needing a relatively small amount of additional debt to complete the deal. Watson added that the acquisition would create a company with over US$3 billion in annual revenues. Watson's total revenues in the year ended December 2008 were worth over US$2.5 billion, and the firm commented that Arrow's revenues in 2008 were worth over US$650 million.
Arrow Group was founded in 2000, and Watson has commented that it is one of the fastest growing generic pharmaceutical companies in the world, with a compound annual growth rate of 67%, taking its revenues from US$18 million in 2001 to the US$650 million reported last year. The firm has three factories, in Canada, Malta and Brazil, with the first two being FDA and EU-approved. Over the past seven years, Arrow has invested more than US$320 million in product research and development and markets over 100 molecules including more than 50 internally developed products. Arrow claims 60 products developed in six years, with 55 European submissions and 50 in the US. Watson noted that Arrow's product development activities are supported by state-of-the-art R&D centres in Melbourne, Australia, and Toronto, Canada. Watson added that as a result of the acquisition, it was also acquiring a 36% ownership interest in Eden Biodesign, a company which provides development and manufacturing services for early-stage biotech companies. This will provide Watson with a foundation for generic biologics.
Arrow has a presence in the UK, Ireland, France, Germany, Poland, Scandinavia, Slovenia, Malta, South Africa, India, China, Australia, New Zealand, Brazil, the US and Canada. Its US presence is in the form of Cobalt Laboratories, which has gained a number of ANDA approvals in recent years, including three first-time generics: acarbose tablets in May 2008; and topiramate tablets and capsules in March 2009 and April 2009, respectively. However, it is likely to be Arrow's international operations that will be of most interest to Watson. The firm had previously considered its operations to be based predominantly in the US and India, with its key commercial market being the US, and so the acquisition of a company with a presence in so many other countries will increase Watson's scope considerably. So too will the included 36% stake in Eden Biodesign, through which Watson clearly sees scope for entering the biosimilars market. With the growing likelihood of a regulatory biosimilars pathway emerging in the US, it makes sense for a company the size of Watson to seek ways to gain a toehold in this arena before the competitive floodgates are opened.
Ian Platts - Editor, World Generic Markets
Monday, December 21, 2009
Tuesday, December 8, 2009
AARP, PhRMA clash over drug pricing
On 16th November 2009, AARP issued a report that found that manufacturer prices for brand name drugs had risen over the last year, despite a negative general inflation rate. By contrast, the report also found that generic drug prices had fallen over the same period. The report looked at drugs widely used by Medicare Part D beneficiaries; in the case of brand name drugs, the report looked at 219 products, and found that 96% of these had seen price increases, with the remaining 4% seeing no change. Of the top 25 products, as ranked according to prescriptions processed by the Medicare Part D plan provider during 2006, price rises ranged from between 4.8% and 19.7%. The 4.8% rise was for the fourth-ranked drug, Wyeth's Protonix 40 mg tablets (pantoprazole sodium), whilst the 19.7% rise was for Boehringer Ingelheim's Flomax 0.4 mg capsules (tamsulosin hydrochloride), which was ranked at number 17. The top-ranked drug was AstraZeneca's Nexium 40 mg capsules (esomeprazole), which saw a rise of 7.1%, whilst the second-ranked drug, Bristol-Myers Squibb's Plavix 75 mg tablets (clopidogrel bisulphate) saw an increase of 8.2%.
With regard to generics, although AARP's report saw prices decreasing by an average of 8.7%, the breakdown of the top 25 generics paints a slightly different picture. Only four of the top 25 saw any price changes, but in this case, all four had significant price falls. The four were all from Teva Pharmaceutical Industries, and were: simvastatin 20 mg tablets (ranked at number one), which saw a price drop of 77.7%; simvastatin 40 mg tablets (ranked at number two), which saw a price fall of 79.8%; metformin 500 mg tablets (ranked at number four), which saw a drop of 85.2%; and pravastatin 40 mg tablets (ranked at number 10), which saw a drop of 68.9%. Teva accounted for nine of the top 25 drugs, with Sandoz accounting for another nine, and thus between them accounting for 72% of the top 25.
Unsurprisingly, PhRMA, the Pharmaceutical Research and Manufacturers of America organisation, was unimpressed with AARP's report and challenged its findings. Accusing AARP of having a 'skewed view of the world', PhRMA began by arguing that looking at drug prices overlooked the savings they provide in the form of fewer medical procedures needing to be carried out and increased productivity through better prevention and management of diseases. However, turning to the price statistics themselves, PhRMA argued that AARP had taken a selective view, which did not take into account discounts and rebates for brand name drugs. PhRMA noted that the Medicare Trustees had reported that rebates in the Medicare drug prescription programme had reached 20% to 30% for many brand name drugs, and added that there was a 50% discount companies would provide to most seniors and disabled Americans who had reached the 'donut hole' in the Medicare Part D programme. PhRMA was able to provide data from IMS, the Centers for Medicare and Medicaid Services (CMS) and the Congressional Budget Office (CBO) which countered AARP's claims. IMS data showed that prescription drug spending growth had fallen to 1.3% in 2008, whilst the CBO found that drug expenditures grew by 3.2% between 2004 and 2007.
The charges and counter-charges between AARP and PhRMA shows above all that when it comes to healthcare costs, the old maxim remains the case that there are lies, damn lies and statistics. Both organisations can be accused of being selective in their figures, with AARP taking figures that, in not taking into account deals and rebates, provide arguably misleading results. For its own part, PhRMA can also be accused of the same, using figures spread over longer time frames than the AARP report. As is often the case, the truth of the matter no doubt lies somewhere between the two.
Ian Platts, Editor, World Generic Markets
With regard to generics, although AARP's report saw prices decreasing by an average of 8.7%, the breakdown of the top 25 generics paints a slightly different picture. Only four of the top 25 saw any price changes, but in this case, all four had significant price falls. The four were all from Teva Pharmaceutical Industries, and were: simvastatin 20 mg tablets (ranked at number one), which saw a price drop of 77.7%; simvastatin 40 mg tablets (ranked at number two), which saw a price fall of 79.8%; metformin 500 mg tablets (ranked at number four), which saw a drop of 85.2%; and pravastatin 40 mg tablets (ranked at number 10), which saw a drop of 68.9%. Teva accounted for nine of the top 25 drugs, with Sandoz accounting for another nine, and thus between them accounting for 72% of the top 25.
Unsurprisingly, PhRMA, the Pharmaceutical Research and Manufacturers of America organisation, was unimpressed with AARP's report and challenged its findings. Accusing AARP of having a 'skewed view of the world', PhRMA began by arguing that looking at drug prices overlooked the savings they provide in the form of fewer medical procedures needing to be carried out and increased productivity through better prevention and management of diseases. However, turning to the price statistics themselves, PhRMA argued that AARP had taken a selective view, which did not take into account discounts and rebates for brand name drugs. PhRMA noted that the Medicare Trustees had reported that rebates in the Medicare drug prescription programme had reached 20% to 30% for many brand name drugs, and added that there was a 50% discount companies would provide to most seniors and disabled Americans who had reached the 'donut hole' in the Medicare Part D programme. PhRMA was able to provide data from IMS, the Centers for Medicare and Medicaid Services (CMS) and the Congressional Budget Office (CBO) which countered AARP's claims. IMS data showed that prescription drug spending growth had fallen to 1.3% in 2008, whilst the CBO found that drug expenditures grew by 3.2% between 2004 and 2007.
The charges and counter-charges between AARP and PhRMA shows above all that when it comes to healthcare costs, the old maxim remains the case that there are lies, damn lies and statistics. Both organisations can be accused of being selective in their figures, with AARP taking figures that, in not taking into account deals and rebates, provide arguably misleading results. For its own part, PhRMA can also be accused of the same, using figures spread over longer time frames than the AARP report. As is often the case, the truth of the matter no doubt lies somewhere between the two.
Ian Platts, Editor, World Generic Markets
Tuesday, November 24, 2009
Oxfam / HAI criticise EU for threatening access to medicines
Oxfam and Health Action International issued a report in late October 2009 which alleged that the European Union was contradicting world trade rules by pandering to the interests of Big Pharma ahead of the needs of people in less developed countries to gain access to essential medicines. The report, Trading Away Access to Medicines: How the European Union's trade agenda has taken a wrong turn, argues that the EU has become guilty of double standards. It notes that the EU Member States and the European Commission have taken steps to improve access to health services in developing countries, and has acted to reduce the price of medicines within the borders of the EU, but argues that the EU now has a trade agenda which acts directly against these same objectives in developing countries. The report claims that the EU is pushing for a range of intellectual property measures that would support the commercial interests of the pharmaceutical industry whilst damaging the opportunities for innovation and access to medicines in developing countries. The report goes so far as to say that the EU's demands exceed those pursued by the Bush administration in the United States, whose intellectual property policies were criticised for their detrimental effect on developing countries.
In the report, the two organisations urge that the EU adopt a number of positions, including honouring commitments under the Millennium Development Goals, the Doha Declaration on TRIPS and World Health Assembly resolutions on innovation and access to medicines; and ensuring that its trade policy is in line with its development objectives, particularly with regard to access to healthcare and medicines. With regard to intellectual property, the EU should not misuse free trade agreements in order to implement TRIPS-plus rules which place conditions beyond the scope of the TRIPS agreement and its application to medicines in order to extend monopoly protection and limit access to medicines. The EC should stop exerting pressure on governments that attempt to introduce safeguards to protect and promote public health; and should amend its counterfeiting regulation to ensure that it does not have a detrimental impact on developing countries. The EU should also ensure that the Anti-Counterfeiting Trade Agreement (ACTA) does not set a new global standard for intellectual property rules that will impede access to medicines for developing countries; and should identify and support measures to improve access to generic medicines in developing countries, including the UNITAID patent pool for HIV / AIDS drugs.
The report also urges the EU that with respect to research and development, European donors should scale up financial contributions to R&D to address diseases that disproportionately affect people living in developing countries. The EU should also support Product Development Partnerships designed to deliver affordable and effective new products, and should continue building R&D capacity in developing countries. It should also support the implementation of the WHO's Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property, and support the Expert Working Group in its efforts to find new models of innovation. Finally, the EC should take measures to ensure that specific initiatives meet real health needs, and that the EU's regulations on children's medicines can also be to the benefit of developing countries.
As can be seen, the report has a long list of recommendations, and many of them are not new for Oxfam. In the past, however, many of these allegations, such as those regarding TRIPS-plus free trade agreements, have been labelled at the US, and it is interesting that this has now changed. Whether the EU will be any more willing to adopt these recommendations than the US is unlikely. However, there is no doubt that groups such as Oxfam will not stop pushing for change.
Ian Platts, Editor, World Generic Markets
In the report, the two organisations urge that the EU adopt a number of positions, including honouring commitments under the Millennium Development Goals, the Doha Declaration on TRIPS and World Health Assembly resolutions on innovation and access to medicines; and ensuring that its trade policy is in line with its development objectives, particularly with regard to access to healthcare and medicines. With regard to intellectual property, the EU should not misuse free trade agreements in order to implement TRIPS-plus rules which place conditions beyond the scope of the TRIPS agreement and its application to medicines in order to extend monopoly protection and limit access to medicines. The EC should stop exerting pressure on governments that attempt to introduce safeguards to protect and promote public health; and should amend its counterfeiting regulation to ensure that it does not have a detrimental impact on developing countries. The EU should also ensure that the Anti-Counterfeiting Trade Agreement (ACTA) does not set a new global standard for intellectual property rules that will impede access to medicines for developing countries; and should identify and support measures to improve access to generic medicines in developing countries, including the UNITAID patent pool for HIV / AIDS drugs.
The report also urges the EU that with respect to research and development, European donors should scale up financial contributions to R&D to address diseases that disproportionately affect people living in developing countries. The EU should also support Product Development Partnerships designed to deliver affordable and effective new products, and should continue building R&D capacity in developing countries. It should also support the implementation of the WHO's Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property, and support the Expert Working Group in its efforts to find new models of innovation. Finally, the EC should take measures to ensure that specific initiatives meet real health needs, and that the EU's regulations on children's medicines can also be to the benefit of developing countries.
As can be seen, the report has a long list of recommendations, and many of them are not new for Oxfam. In the past, however, many of these allegations, such as those regarding TRIPS-plus free trade agreements, have been labelled at the US, and it is interesting that this has now changed. Whether the EU will be any more willing to adopt these recommendations than the US is unlikely. However, there is no doubt that groups such as Oxfam will not stop pushing for change.
Ian Platts, Editor, World Generic Markets
Tuesday, November 10, 2009
Of patent pools and regime change
The growing impetus to amend Canada's Access to Medicines Regime (CAMR) has gathered pace, with Canadian Senate committee hearings into Bill S-232, which aims to streamline the regime, now underway. The hearings' opening statements have thrown up an interesting question over whether or not the existing act has actually failed. Critics – of which there are many – of CAMR in its current guise argue that the regime has clearly failed, pointing to the fact that in the five years in which the act has been in law, only one company has been able to use it. That company was Apotex, which used the act to provide a very limited run of antiretrovirals to Rwanda, in two shipments in September 2008 and September 2009. In total, around 14 million doses of a fixed-dose combination product were shipped. However, Apotex has been very vocal about the difficulties the regime produced, and has added that it would not use the process again in its current form, throwing its weight behind efforts to amend CAMR, with the added carrot that it would use an amended regime to produce paediatric antiretrovirals. However, on the other side of the fence, supporters of the current regime point out that it has been used successfully, even if only once. Furthermore, in doing so, this is the only such access to medicines legislation in the world that has worked. The Senate committee asked the question what reasons are behind the regime being so little used. The difficulties in using the regime are certainly one possible answer, and another possibility is that Canadian manufacturers simply cannot compete on price with, for example, Indian or Chinese manufacturers. A further possibility raised in the hearings' opening was that other factors have played a part, particularly the Global Fund to Fight HIV/AIDS, which has provided funds of some US$16 billion. The issue that Canada will need to decide is should CAMR be amended, and if it is, will this make a difference globally?
Another possible route for increasing access to essential medicines is that of developing a patent pool, an idea which also saw a boost recently, with the UK's government indicating support for this measure. The basic aim of a patent pool is that all the patents for essential medicines are made available collectively, enabling generic firms to use them to produce drugs for developing countries, paying the patent owners royalty rates in return. UNITAID has decided in principle to establish a voluntary patent pool for medicines in a decision made in July 2008, but it is a scheme that appears to have gained little traction since. However, in a speech on 12th October 2009, the UK Minister for International Development, Mike Foster, said that the UK government supported UNITAID's efforts, according to Knowledge Ecology International. Mr Foster's comments came a few weeks after Médecins Sans Frontières launched an email campaign targeting nine brand name companies, which between them hold patents for 21 antiretrovirals.
Both of these initiatives are efforts to crack the same problem. However, it is worth bearing in mind that these are not the only options. The branded companies themselves have also made efforts to provide essential medicines to developing countries, providing drugs at cost, or even donating them. Cynics may argue that this is little more than window-dressing, maintaining good public relations, and indeed may well be right, but it does surely reflect an expectation, seen in all these efforts, that developing countries need to be given every option to access essential medicines in order to save the lives of millions.
Ian Platts – Editor, World Generic Markets
Another possible route for increasing access to essential medicines is that of developing a patent pool, an idea which also saw a boost recently, with the UK's government indicating support for this measure. The basic aim of a patent pool is that all the patents for essential medicines are made available collectively, enabling generic firms to use them to produce drugs for developing countries, paying the patent owners royalty rates in return. UNITAID has decided in principle to establish a voluntary patent pool for medicines in a decision made in July 2008, but it is a scheme that appears to have gained little traction since. However, in a speech on 12th October 2009, the UK Minister for International Development, Mike Foster, said that the UK government supported UNITAID's efforts, according to Knowledge Ecology International. Mr Foster's comments came a few weeks after Médecins Sans Frontières launched an email campaign targeting nine brand name companies, which between them hold patents for 21 antiretrovirals.
Both of these initiatives are efforts to crack the same problem. However, it is worth bearing in mind that these are not the only options. The branded companies themselves have also made efforts to provide essential medicines to developing countries, providing drugs at cost, or even donating them. Cynics may argue that this is little more than window-dressing, maintaining good public relations, and indeed may well be right, but it does surely reflect an expectation, seen in all these efforts, that developing countries need to be given every option to access essential medicines in order to save the lives of millions.
Ian Platts – Editor, World Generic Markets
Monday, October 26, 2009
PEPFAR reaches 100th approval
The US Department of Health and Human Services has marked the recent approval of the 100th antiretroviral drug to be approved through the PEPFAR programme. Ironically, by the time the FDA marked the event, the 101st product had already received approval. PEPFAR, the President's Emergency Plan for AIDS Relief, was introduced by President Bush in 2003 and has a remit to work in partnership with host nations through to fiscal year 2013 to support treatment for at least three million people, prevention of 12 million new infections and care for 12 million people, including five million orphans and vulnerable children. The programme allows the FDA to review antiretroviral drug applications on an expedited basis, with the aim of fast-tracking the approval of drugs in order for them to be used in developing countries, rather than the US. Most applications are generic, and most approvals are tentative, as they are for drugs which are still protected by patents in the US, and thus the generics cannot be marketed in the US.
A look at the drugs approved produces an interesting picture. The first to be approved was Barr Laboratories' didanosine capsules, which gained tentative approval on 3rd December 2004. This proved not only to be Barr's first and last drug approved under the PEPFAR programme, but also stands out as the only drug to enter the programme from an American company. In total, 13 companies have provided the 101 drugs, and of those 13, ten are Indian firms. Asides from Barr, the other two firms which are not based in India are Aspen Pharmacare, based in South Africa, and Huahai US, based in China. One of the Indian firms listed, Matrix Laboratories, is now majority-owned by the US' Mylan, but was an entirely Indian firm at the time many of its products were submitted and approved. Matrix also took the honours for both the 100th and 101st drugs to be approved under the programme. The dominance of Indian firms in the lists underscores the role India has carved out in producing generic antiretrovirals, and included in the list are some of the country's largest generic pharmaceutical manufacturers, including Ranbaxy Laboratories and Cipla, as well as smaller companies, such as Aurobindo Pharma, Emcure Pharmaceuticals and Hetero Drugs. Aurobindo has emerged as the company with the most drugs approved under PEPFAR, with 31 of the 101.
Quite why so few US generic firms have had antiretrovirals approved under the PEPFAR programme is curious. A quick look at the FDA's information for approved or tentatively approved antiretrovirals shows that, as with the PEPFAR programme, generic versions of these drugs are dominated by Indian firms, with only Barr and Roxane Laboratories standing out. The most likely reason is undoubtedly money. US firms will need to spend money to develop generic antiretrovirals, especially as many companies do not have any experience with antiretrovirals, and as most of these are still protected by patents in the US and thus cannot be marketed there, there will be no immediate prospect of returns. Of course, the patents will eventually expire, but at that point, home grown firms will have already lost the chance of marketing exclusivity to the multitude of Indian firms which have tentative approvals already; financial returns will therefore be minimal. However, neither the domestic nor international markets for antiretrovirals are getting any smaller, and whilst such drugs may not see the stellar returns promised by blockbusters such as fluoxetine has in the past, they may well provide a small but steady income, particularly in the US and other developed nations.
Ian Platts - Editor, World Generic Markets
A look at the drugs approved produces an interesting picture. The first to be approved was Barr Laboratories' didanosine capsules, which gained tentative approval on 3rd December 2004. This proved not only to be Barr's first and last drug approved under the PEPFAR programme, but also stands out as the only drug to enter the programme from an American company. In total, 13 companies have provided the 101 drugs, and of those 13, ten are Indian firms. Asides from Barr, the other two firms which are not based in India are Aspen Pharmacare, based in South Africa, and Huahai US, based in China. One of the Indian firms listed, Matrix Laboratories, is now majority-owned by the US' Mylan, but was an entirely Indian firm at the time many of its products were submitted and approved. Matrix also took the honours for both the 100th and 101st drugs to be approved under the programme. The dominance of Indian firms in the lists underscores the role India has carved out in producing generic antiretrovirals, and included in the list are some of the country's largest generic pharmaceutical manufacturers, including Ranbaxy Laboratories and Cipla, as well as smaller companies, such as Aurobindo Pharma, Emcure Pharmaceuticals and Hetero Drugs. Aurobindo has emerged as the company with the most drugs approved under PEPFAR, with 31 of the 101.
Quite why so few US generic firms have had antiretrovirals approved under the PEPFAR programme is curious. A quick look at the FDA's information for approved or tentatively approved antiretrovirals shows that, as with the PEPFAR programme, generic versions of these drugs are dominated by Indian firms, with only Barr and Roxane Laboratories standing out. The most likely reason is undoubtedly money. US firms will need to spend money to develop generic antiretrovirals, especially as many companies do not have any experience with antiretrovirals, and as most of these are still protected by patents in the US and thus cannot be marketed there, there will be no immediate prospect of returns. Of course, the patents will eventually expire, but at that point, home grown firms will have already lost the chance of marketing exclusivity to the multitude of Indian firms which have tentative approvals already; financial returns will therefore be minimal. However, neither the domestic nor international markets for antiretrovirals are getting any smaller, and whilst such drugs may not see the stellar returns promised by blockbusters such as fluoxetine has in the past, they may well provide a small but steady income, particularly in the US and other developed nations.
Ian Platts - Editor, World Generic Markets
Friday, October 9, 2009
Goldshield bidding war
A bidding war broke out in September 2009 over Goldshield Group, the UK-based pharmaceutical and consumer health company. The battle is being fought out by two investment vehicles, AIT Investments and Midas Bidco.
Goldshield began life in 1991, gained its first marketing authorisation for a product it had developed itself in 1996, and floated on the London Stock Exchange in 1998. The Group was founded by two brothers, Ajit and Kirti Patel, along with a third partner, Shane Gogerly. In recent years, Goldshield was one of a number of companies to face investigations over alleged price fixing by both the Serious Fraud Office and the NHS. Although the cases ultimately collapsed, the investigations did see both Ajit Patel and Kirti Patel step down from the firm's Board in order to fight allegations levelled at them; Kirti Patel now occupies the position of Group Executive Director in the company. Perhaps ironically, given the legal battles the firm has faced, Goldshield's current Non Executive Chairman is Dr Keith Hellawell, who in previous years was a Chief Constable for two British police forces and in the late 90s was responsible for the UK's anti-drugs policy. For its most recent fiscal year, ended March 2009, Goldshield reported revenues worth £98.4 million (US$156.9 million), with profit after tax of £13.9 million (US$22.1 million). This was a significant improvement on the revenues of £84.9 million and profit after tax of £6.3 million reported for the previous fiscal year.
Ajit Patel is now involved in one of the parties bidding to acquire Goldshield, AIT Investments, which was the first to announce an offer. AIT describes itself as a newly-incorporated company formed by the Fuhrer family for the purpose of implementing the acquisition of Goldshield. The Fuhrers are an Israeli family which own and control the Neopharm group of companies, which market ethical pharmaceuticals and branded consumer healthcare products.
The other bidder for Goldshield is Midas Bidco, an investment vehicle set up by Goldshield's management team; involved in this bid is Goldshield co-founder, Kirti Patel; the two brothers are thus facing off over control of the company they set up and then had to withdraw from in order to fight the price fixing allegations.
AIT commenced bidding for Goldshield with an offer of 440 pence per share, valuing the company at some £162.1 million (US$257.1 million). In response, Midas announced it had put financial backing in place to allow it to make an offer above 440 pence per share. AIT hit back, raising its offer to 450 pence per share, valuing the company at £165.7 million (US$262.8 million). Bidco then upped its offer to 460 pence per share, making the firm worth £169 million (US$268.0 million). In the latest turn, AIT then increased its bid on 2nd October to 480 pence per share, which would value Goldshield at £176.8 million (US$280.4 million). At the time of writing, this is where the bidding rests. However, there is no doubt that the deal, which has pitched two brothers against each other, is not yet done.
Ian Platts - Editor, World Generic Markets
Goldshield began life in 1991, gained its first marketing authorisation for a product it had developed itself in 1996, and floated on the London Stock Exchange in 1998. The Group was founded by two brothers, Ajit and Kirti Patel, along with a third partner, Shane Gogerly. In recent years, Goldshield was one of a number of companies to face investigations over alleged price fixing by both the Serious Fraud Office and the NHS. Although the cases ultimately collapsed, the investigations did see both Ajit Patel and Kirti Patel step down from the firm's Board in order to fight allegations levelled at them; Kirti Patel now occupies the position of Group Executive Director in the company. Perhaps ironically, given the legal battles the firm has faced, Goldshield's current Non Executive Chairman is Dr Keith Hellawell, who in previous years was a Chief Constable for two British police forces and in the late 90s was responsible for the UK's anti-drugs policy. For its most recent fiscal year, ended March 2009, Goldshield reported revenues worth £98.4 million (US$156.9 million), with profit after tax of £13.9 million (US$22.1 million). This was a significant improvement on the revenues of £84.9 million and profit after tax of £6.3 million reported for the previous fiscal year.
Ajit Patel is now involved in one of the parties bidding to acquire Goldshield, AIT Investments, which was the first to announce an offer. AIT describes itself as a newly-incorporated company formed by the Fuhrer family for the purpose of implementing the acquisition of Goldshield. The Fuhrers are an Israeli family which own and control the Neopharm group of companies, which market ethical pharmaceuticals and branded consumer healthcare products.
The other bidder for Goldshield is Midas Bidco, an investment vehicle set up by Goldshield's management team; involved in this bid is Goldshield co-founder, Kirti Patel; the two brothers are thus facing off over control of the company they set up and then had to withdraw from in order to fight the price fixing allegations.
AIT commenced bidding for Goldshield with an offer of 440 pence per share, valuing the company at some £162.1 million (US$257.1 million). In response, Midas announced it had put financial backing in place to allow it to make an offer above 440 pence per share. AIT hit back, raising its offer to 450 pence per share, valuing the company at £165.7 million (US$262.8 million). Bidco then upped its offer to 460 pence per share, making the firm worth £169 million (US$268.0 million). In the latest turn, AIT then increased its bid on 2nd October to 480 pence per share, which would value Goldshield at £176.8 million (US$280.4 million). At the time of writing, this is where the bidding rests. However, there is no doubt that the deal, which has pitched two brothers against each other, is not yet done.
Ian Platts - Editor, World Generic Markets
Friday, September 25, 2009
Grindeks looks to expand
The Latvian firm, Grindeks has made a few announcements recently which reveal the firm is aiming to expand its business. On 19th August, the firm reported that it was considering establishing injections manufacturing in Latvia, and was looking at the territory of Riga Free Port as a possible site to construct a new plant, because of economic incentives and tax allowances offered there. However, the firm added that purchasing an existing plant would also be an option. This was followed on 7th September with an announcement that the firm was considering options to develop its ointment business. Here, Grindeks is looking at two possibilities: either move its existing operations in Tallinn, Estonia, to Latvia, or remain in Tallinn, and presumably develop the plant there. As yet, no decision has been made.
Grindeks has, in recent years, been undertaking an investment programme, and these recent announcements are in line with that. In January 2009, the firm opened a new final dosage forms plant; the firm commented that this had been the largest investment project in the company's history, with LVL9.1 million (US$16.8 million) invested over two years. It is anticipated that the new plant will increase manufacturing productivity and capacity substantially, to 1.5 billion tablets and 500 million capsules per year.
Additionally, in August this year, Grindeks also announced that it had introduced a new active pharmaceutical ingredient, ursodeoxycholic acid, used in the treatment of hepatic and gallstone diseases. The new API represents a new medical therapeutic group for the firm, and has been developed as part of a co-operation agreement with the German firm, Marenis Pharma; once again evidence of Grindeks' plans to expand. The firm also announced it had started construction on a new manufacturing unit with an investment of nearly LVL6 million (US$12.5 million), connected with the development of this API. This again is an important move for the company; Germany is a relatively unexplored territory for Grindeks, whose traditional markets have been those of Central and Eastern Europe, the Baltic States and the CIS. Although Grindeks has co-operated with Merck in Germany, its presence there has been limited. The development of new APIs is of course also significant. Despite the economic turmoil of recent months, Grindeks appears to still be on course to expand its horizons.
Ian Platts – Editor, World Generic Markets
Grindeks has, in recent years, been undertaking an investment programme, and these recent announcements are in line with that. In January 2009, the firm opened a new final dosage forms plant; the firm commented that this had been the largest investment project in the company's history, with LVL9.1 million (US$16.8 million) invested over two years. It is anticipated that the new plant will increase manufacturing productivity and capacity substantially, to 1.5 billion tablets and 500 million capsules per year.
Additionally, in August this year, Grindeks also announced that it had introduced a new active pharmaceutical ingredient, ursodeoxycholic acid, used in the treatment of hepatic and gallstone diseases. The new API represents a new medical therapeutic group for the firm, and has been developed as part of a co-operation agreement with the German firm, Marenis Pharma; once again evidence of Grindeks' plans to expand. The firm also announced it had started construction on a new manufacturing unit with an investment of nearly LVL6 million (US$12.5 million), connected with the development of this API. This again is an important move for the company; Germany is a relatively unexplored territory for Grindeks, whose traditional markets have been those of Central and Eastern Europe, the Baltic States and the CIS. Although Grindeks has co-operated with Merck in Germany, its presence there has been limited. The development of new APIs is of course also significant. Despite the economic turmoil of recent months, Grindeks appears to still be on course to expand its horizons.
Ian Platts – Editor, World Generic Markets
Tuesday, September 8, 2009
Canadian manufacturers squabble over statistics
Canada’s Patented Medicine Prices Review Board (PMPRB) has issued its Annual Report for 2008, leading to claims and counter-claims by the country’s generic and branded industry organisations. The Canadian Generic Pharmaceutical Association (CGPA) used the report to criticise the branded industry, noting that for the eighth year in a row, the branded industry had failed to reach its threshold of 10% of their Canadian revenues being ploughed into Domestic R&D spending; this having been a commitment made by the branded industry in 1987, with the adoption of amendments to the Patent Act. In response, Canada’s Research-Based Pharmaceutical Companies (Rx&D) has sought to play down the last eight years of failing to reach the target, arguing instead that its member companies’ total investments in R&D in Canada over the last 20 years has averaged more than 10% of sales. Of course, both sides are correct in their assertions, depending on how the data is analysed. It is worth noting also that the PMPRB’s report states that Rx&D members accounted for 89.4% of all reported R&D expenditures in 2008, with patentees reporting a total of C$1.3 billion (US$1.2 billion) of R&D expenditures.
However, whilst the overall average for the last 20 years is for over 10% of sales put into domestic R&D, the figures presented by the PMPRB’s report show that the branded industry only met and / or exceeded the 10% figure in eight years, between 1993 and 2000, whilst Rx&D member companies managed to meet and / or exceed the figure in ten years, between 1993 and 2002. Despite the occasional blip, the ratio figure has been falling since those years, having reached 8.1% for all patentees in 2008, and 8.9% for Rx&D members.
Rx&D brought attention to wider issues, noting that the PMPRB’s report also showed that whilst the Consumer Price Index climbed by 2.3% in Canada in 2008, prices for patented medicines rose by only 0.1% during the same period. The organisation added that over the past decade, prices for innovative medicines were around 7% below the international median. However, against that, the report also shows that Canadian prices were the third highest of seven comparator countries, behind only the US and Germany. However, the US was highest by some margin, skewing the figures somewhat.
The PMPRB’s report gives a detailed look at the state of the Canadian branded industry’s finances, but as always, its findings are open to interpretation of the statistics. The claims and counterclaims of both the branded and generic industries hold up when viewed in the right context, despite apparently being at odds with each other. Perhaps then, the value of the report is that it shows that both sides could do better.
Ian Platts - Editor, World Generic Markets
However, whilst the overall average for the last 20 years is for over 10% of sales put into domestic R&D, the figures presented by the PMPRB’s report show that the branded industry only met and / or exceeded the 10% figure in eight years, between 1993 and 2000, whilst Rx&D member companies managed to meet and / or exceed the figure in ten years, between 1993 and 2002. Despite the occasional blip, the ratio figure has been falling since those years, having reached 8.1% for all patentees in 2008, and 8.9% for Rx&D members.
Rx&D brought attention to wider issues, noting that the PMPRB’s report also showed that whilst the Consumer Price Index climbed by 2.3% in Canada in 2008, prices for patented medicines rose by only 0.1% during the same period. The organisation added that over the past decade, prices for innovative medicines were around 7% below the international median. However, against that, the report also shows that Canadian prices were the third highest of seven comparator countries, behind only the US and Germany. However, the US was highest by some margin, skewing the figures somewhat.
The PMPRB’s report gives a detailed look at the state of the Canadian branded industry’s finances, but as always, its findings are open to interpretation of the statistics. The claims and counterclaims of both the branded and generic industries hold up when viewed in the right context, despite apparently being at odds with each other. Perhaps then, the value of the report is that it shows that both sides could do better.
Ian Platts - Editor, World Generic Markets
Friday, August 21, 2009
Oxfam's fears over ACTA and generics
In a press release issued just before the fifth round of negotiations for the Anti-Counterfeiting Trade Agreement (ACTA) got under way in Morocco, Oxfam warned of its fears that the final agreement could lead to generic firms being subject to criminal prosecutions for sending generics to countries in need (see p. 4). However, the likelihood of such an outcome from ACTA is open to question. Of course, on the face of it, ACTA is not concerned with generic drug markets, or indeed the provision of legitimate drugs, whether branded or generic, to developing countries. According to the Office of the US Trade Representative, its roots lie in a desire to tackle the proliferation of counterfeit and pirated goods around the world. It sprung from preliminary talks in 2006 and 2007, with negotiations beginning in June 2008 involving Australia, Canada, the EU and its 27 member states, Japan, Mexico, Morocco, New Zealand, South Korea, Singapore, Switzerland and the US. The round of discussions in Morocco was the fifth round, with the next round to be held in Korea in November 2009. Negotiations are expected to be completed in 2010.
With regard to Oxfam’s fears, the organisation comments that the secrecy surrounding the talks raises fears that the interests of poorer nations will be ignored, and cites the EU’s recent seizures of generic medicines as evidence. Oxfam argues that the EU is taking the lead in pushing for a deal that would require all participating countries to increase seizures and prosecute companies which produce generics legally for sale in other countries. The organisation claims that this will include countries not directly involved in the negotiations, and notes that only two of the countries involved in negotiations are developing countries. Oxfam argues that this could encourage Big Pharma to file frivolous patents to maintain their monopolies.
The official line on the secrecy surrounding the talks is that this is an accepted practice during trade negotiations which allows views to be exchanged in confidence in order to arrive at a final consensus. The argument that multinational pharmaceutical companies would use the agreements to file ‘frivolous’ patents to prevent generics is questionable. Such a blatant attempt would be a public relations disaster, akin to the backlash seen with the South African patent laws debacle in 2001. It would also fly in the face of patent legislation seen in countries such as Canada, the EU and the US, which has sought to tackle such issues of evergreening. To be successful, ACTA will need to fit in with the existing TRIPS framework; the WTO has consistently been at pains to insist that TRIPS would not get in the way of sending generics to countries in need. However, it is fair to note, as Oxfam does, that EU member states have recently been seizing shipments of generics passing within its borders and headed to developing nations, often under suspicions of patent or trademark infringement, although the shipments have ultimately been allowed to continue their journeys. In addition, US free trade agreements passed in recent years have often been accused of being ‘TRIPS-plus’ in making extra demands regarding intellectual property rights that are not necessarily in line with TRIPS requirements. However, it seems unlikely that preventing shipments of generics would either be the intent or the outcome of the negotiations.
With regard to Oxfam’s fears, the organisation comments that the secrecy surrounding the talks raises fears that the interests of poorer nations will be ignored, and cites the EU’s recent seizures of generic medicines as evidence. Oxfam argues that the EU is taking the lead in pushing for a deal that would require all participating countries to increase seizures and prosecute companies which produce generics legally for sale in other countries. The organisation claims that this will include countries not directly involved in the negotiations, and notes that only two of the countries involved in negotiations are developing countries. Oxfam argues that this could encourage Big Pharma to file frivolous patents to maintain their monopolies.
The official line on the secrecy surrounding the talks is that this is an accepted practice during trade negotiations which allows views to be exchanged in confidence in order to arrive at a final consensus. The argument that multinational pharmaceutical companies would use the agreements to file ‘frivolous’ patents to prevent generics is questionable. Such a blatant attempt would be a public relations disaster, akin to the backlash seen with the South African patent laws debacle in 2001. It would also fly in the face of patent legislation seen in countries such as Canada, the EU and the US, which has sought to tackle such issues of evergreening. To be successful, ACTA will need to fit in with the existing TRIPS framework; the WTO has consistently been at pains to insist that TRIPS would not get in the way of sending generics to countries in need. However, it is fair to note, as Oxfam does, that EU member states have recently been seizing shipments of generics passing within its borders and headed to developing nations, often under suspicions of patent or trademark infringement, although the shipments have ultimately been allowed to continue their journeys. In addition, US free trade agreements passed in recent years have often been accused of being ‘TRIPS-plus’ in making extra demands regarding intellectual property rights that are not necessarily in line with TRIPS requirements. However, it seems unlikely that preventing shipments of generics would either be the intent or the outcome of the negotiations.
Friday, August 14, 2009
Battle lines drawn over biologic data exclusivity
The debate in the US Congress regarding the shape and form of a regulatory pathway for follow-on biologics has taken another step forward in recent months, with battle lines being drawn over the issue of how much of a data exclusivity period innovator biologics should be given. So far, the branded industry’s view is winning over the generic industry’s preference, although the latter is more in line with the White House’s thinking on the matter.
In March 2009, two competing bills were introduced to the House of Representatives concerning the establishment of a follow-on biologic pathway. Chronologically, the first was H.R. 1427, the Promoting Innovation and Access to Life-Saving Medicine Act, introduced by Representatives Henry Waxman, Frank Pallone, Nathan Deal and Jo Ann Emerson; this bill would give original biologics five years of exclusivity, whilst some modifications of existing drugs would get three years, with both periods having the potential to be extended by a year. Just a few days later, a second bill, H.R. 1548, the Pathway for Biosimilars Act, was introduced by Representatives Anna Eshoo, Jay Inslee and Joe Barton. Though the two bills were broadly similar, H.R. 1548 proposed providing up to 14 and a half years of data exclusivity for original biologics. Needless to say, the generic industry supports a shorter period of data exclusivity, whilst the branded industry as represented by BIO, the Biotechnology Industry Organisation, supports a longer period.
At first glance it would seem that H.R. 1427 would be more likely to succeed. Henry Waxman’s name carries weight in the field of generics, as one of the architects of the Hatch-Waxman Act which regulates conventional generics. In addition, Mr Waxman is now chairman of the House Energy and Commerce Committee, through which both bills must pass. Mr Waxman also wrote in June 2009 to the White House regarding a regulatory pathway, and the White House reply indicated a preference for seven years of data exclusivity following a report from the Federal Trade Commission which argued that the 12 to 14 years favoured by the branded industry would diminish innovation and unnecessarily delay generic alternatives.
However, it is becoming clear that a longer exclusivity period, such as that introduced by H.R. 1548, is more likely to become law. Crucially, the Senate HELP Committee voted on 13th July 2009 in favour of a 12-year period of exclusivity, with a vote 16-7 in favour. It also voted down an amendment which would have provided seven years, in line with the opinion of the White House. Welcoming the vote, BIO also noted that support for H.R. 1548 was growing in Congress. The organisation commented that H.R. 1548 had attracted 129 cosponsors, whilst H.R. 1427 had attracted only 13. At last count, H.R. 1548 had 142 cosponsors, whilst H.R. 1427 had 14, but the point is clear: supporters of a longer data exclusivity period outnumber by ten to one supporters of a shorter period. Interestingly, only one Representative, John Conyers, is listed as a cosponsor for both bills.
Organisations in support of a shorter period have dug in, and are already battling both to save H.R. 1427 and to scrap the 12-year period approved by the HELP Committee. Given the position of the White House, that battle is not yet lost, but the clear preference that is emerging from Congress must make the originator industry favourites in the fight.
In March 2009, two competing bills were introduced to the House of Representatives concerning the establishment of a follow-on biologic pathway. Chronologically, the first was H.R. 1427, the Promoting Innovation and Access to Life-Saving Medicine Act, introduced by Representatives Henry Waxman, Frank Pallone, Nathan Deal and Jo Ann Emerson; this bill would give original biologics five years of exclusivity, whilst some modifications of existing drugs would get three years, with both periods having the potential to be extended by a year. Just a few days later, a second bill, H.R. 1548, the Pathway for Biosimilars Act, was introduced by Representatives Anna Eshoo, Jay Inslee and Joe Barton. Though the two bills were broadly similar, H.R. 1548 proposed providing up to 14 and a half years of data exclusivity for original biologics. Needless to say, the generic industry supports a shorter period of data exclusivity, whilst the branded industry as represented by BIO, the Biotechnology Industry Organisation, supports a longer period.
At first glance it would seem that H.R. 1427 would be more likely to succeed. Henry Waxman’s name carries weight in the field of generics, as one of the architects of the Hatch-Waxman Act which regulates conventional generics. In addition, Mr Waxman is now chairman of the House Energy and Commerce Committee, through which both bills must pass. Mr Waxman also wrote in June 2009 to the White House regarding a regulatory pathway, and the White House reply indicated a preference for seven years of data exclusivity following a report from the Federal Trade Commission which argued that the 12 to 14 years favoured by the branded industry would diminish innovation and unnecessarily delay generic alternatives.
However, it is becoming clear that a longer exclusivity period, such as that introduced by H.R. 1548, is more likely to become law. Crucially, the Senate HELP Committee voted on 13th July 2009 in favour of a 12-year period of exclusivity, with a vote 16-7 in favour. It also voted down an amendment which would have provided seven years, in line with the opinion of the White House. Welcoming the vote, BIO also noted that support for H.R. 1548 was growing in Congress. The organisation commented that H.R. 1548 had attracted 129 cosponsors, whilst H.R. 1427 had attracted only 13. At last count, H.R. 1548 had 142 cosponsors, whilst H.R. 1427 had 14, but the point is clear: supporters of a longer data exclusivity period outnumber by ten to one supporters of a shorter period. Interestingly, only one Representative, John Conyers, is listed as a cosponsor for both bills.
Organisations in support of a shorter period have dug in, and are already battling both to save H.R. 1427 and to scrap the 12-year period approved by the HELP Committee. Given the position of the White House, that battle is not yet lost, but the clear preference that is emerging from Congress must make the originator industry favourites in the fight.
Tuesday, July 21, 2009
EC reports antitrust findings
In July 2009, the European Commission announced the findings of its report looking at the pharmaceutical sector. The report was initiated in January 2008, with its preliminary conclusions being announced the following November. The final report has concluded that generic entry in the European Union is being delayed and that there has been a decline in the number of new medicines reaching the market. The report suggested that company practices were amongst the causes, but accepted that other factors were also at play.
The Commission intends to follow the report up with intensified scrutiny of the pharmaceutical sector under EC antitrust laws. It added that certain acts initiated by originator companies would remain subject to competition scrutiny if they were being employed in an anti-competitive way in order to delay generic entry. In addition, defensive patenting strategies that focused on excluding competition without pursuing innovative efforts would also remain under scrutiny. The EC would also monitor agreements between originator and generic companies, in order that such agreements did not limit or delay market entry of generics.
The European Generic medicines Association (EGA) announced that it was welcoming the report, commenting that the final report took the initial findings from November 2008 to the next level. The organisation added that it and its members had worked closely with the EC, seeing the report as an opportunity to address what it considered to be loopholes in the legislative framework. The EGA added that it was urging EU member states to implement the recommendations of the report quickly. Perhaps unsurprisingly, the European Federation of Pharmaceutical Industries and Associations (EFPIA) was less welcoming. However, looking for positives in the report for the branded industry, the EFPIA commented that the final report had represented a welcome shift away from what it had considered to be emotive language used in the preliminary findings. The EFPIA made the argument that it had consistently found that regulatory barriers were causing problems for both the generic and branded industries alike in Europe, adding that it was pleased that the report had backed this up. The organisation added that it welcomed many of the report’s recommendations, including creating a streamlined patent system, which would obviously be of benefit to the branded industry. However, the EFPIA commented that the Commission should use the report to address the issue of competition in the off-patent market, arguing that this was an area which could be reformed to produce savings. These savings could then be reinvested to fund innovative medicines, an idea which would probably not go down well with the EGA.
The EC has been able to produce a report that has something for both the generic and branded industries to take comfort from. The question now will be whether or not the EC will be able to turn the report’s recommendations into actions.
Ian Platts - Editor, World Generic Markets
The Commission intends to follow the report up with intensified scrutiny of the pharmaceutical sector under EC antitrust laws. It added that certain acts initiated by originator companies would remain subject to competition scrutiny if they were being employed in an anti-competitive way in order to delay generic entry. In addition, defensive patenting strategies that focused on excluding competition without pursuing innovative efforts would also remain under scrutiny. The EC would also monitor agreements between originator and generic companies, in order that such agreements did not limit or delay market entry of generics.
The European Generic medicines Association (EGA) announced that it was welcoming the report, commenting that the final report took the initial findings from November 2008 to the next level. The organisation added that it and its members had worked closely with the EC, seeing the report as an opportunity to address what it considered to be loopholes in the legislative framework. The EGA added that it was urging EU member states to implement the recommendations of the report quickly. Perhaps unsurprisingly, the European Federation of Pharmaceutical Industries and Associations (EFPIA) was less welcoming. However, looking for positives in the report for the branded industry, the EFPIA commented that the final report had represented a welcome shift away from what it had considered to be emotive language used in the preliminary findings. The EFPIA made the argument that it had consistently found that regulatory barriers were causing problems for both the generic and branded industries alike in Europe, adding that it was pleased that the report had backed this up. The organisation added that it welcomed many of the report’s recommendations, including creating a streamlined patent system, which would obviously be of benefit to the branded industry. However, the EFPIA commented that the Commission should use the report to address the issue of competition in the off-patent market, arguing that this was an area which could be reformed to produce savings. These savings could then be reinvested to fund innovative medicines, an idea which would probably not go down well with the EGA.
The EC has been able to produce a report that has something for both the generic and branded industries to take comfort from. The question now will be whether or not the EC will be able to turn the report’s recommendations into actions.
Ian Platts - Editor, World Generic Markets
Friday, June 19, 2009
FTC releases follow-on biologic competition report
The Federal Trade Commission released a report on 10th June 2009 investigating the potential effects of follow-on biologic drug competition. The report concluded that developing a regulatory pathway to allow follow-on biologics would be an efficient way to bring lower-priced drugs to the market; this is not the most surprising conclusion that could be reached. However, the report did find that even with such a pathway, the competitive market between pioneer biologics and follow-on biologics would not be likely to follow the same course as the competitive market between branded and generic small molecule drugs, as fostered by the Hatch-Waxman Act. Follow-on biologics would be unlikely to enter the market for products with annual revenues less than US$250 million, and it would be likely that only two or three generic manufacturers would attempt entry for a given pioneer drug. Furthermore, given the costs involved in producing a follow-on product, drugs would be introduced with discounts no larger than between 10% and 30% of the pioneer’s product price. As a result, the pioneer could still expect to retain between 70% and 90% of market share, a far cry from the situation with traditional drugs, when generic entry can reduce market share by similar percentages as the FTC is estimating will be retained.
In that respect, the report does not seem to contain much bad news for the biologic drug industry. However, the industry’s association, BIO, responded to the report by saying that at first glance it was fundamentally flawed, and demonstrating a lack of understanding of the conditions necessary to drive biomedical innovation. This seems a somewhat surprising response to a report that suggests generic competition would not be as damaging to profits for the biologic industry as it has been for traditional medicines, with few competitors and relatively small price discounts. However, the cause of most concern may well reside in the report’s argument that a 12 to 14 year regulatory exclusivity period, as recommended in one of two bills in Congress attempting to create a regulatory pathway for follow-on biologics, would be too long to promote innovation. This appears to be a sticking point for BIO, which argues that even with the limited generic competition suggested by the report, other studies show that pioneer companies would be unable to recoup their costs without a 12 to 14 year exclusivity period. BIO claims to support the development of a regulatory pathway for follow-on biologics, and with two competing bills currently going through Congress to create a pathway, the question is more and more ‘when’ rather than ‘if’. However, as BIO’s response to this report shows, the biologic industry is determined over what form of pathway it will tolerate. The question will be how well the industry will fare in convincing Congress to agree with it.
Ian Platts - Editor, World Generic Markets
In that respect, the report does not seem to contain much bad news for the biologic drug industry. However, the industry’s association, BIO, responded to the report by saying that at first glance it was fundamentally flawed, and demonstrating a lack of understanding of the conditions necessary to drive biomedical innovation. This seems a somewhat surprising response to a report that suggests generic competition would not be as damaging to profits for the biologic industry as it has been for traditional medicines, with few competitors and relatively small price discounts. However, the cause of most concern may well reside in the report’s argument that a 12 to 14 year regulatory exclusivity period, as recommended in one of two bills in Congress attempting to create a regulatory pathway for follow-on biologics, would be too long to promote innovation. This appears to be a sticking point for BIO, which argues that even with the limited generic competition suggested by the report, other studies show that pioneer companies would be unable to recoup their costs without a 12 to 14 year exclusivity period. BIO claims to support the development of a regulatory pathway for follow-on biologics, and with two competing bills currently going through Congress to create a pathway, the question is more and more ‘when’ rather than ‘if’. However, as BIO’s response to this report shows, the biologic industry is determined over what form of pathway it will tolerate. The question will be how well the industry will fare in convincing Congress to agree with it.
Ian Platts - Editor, World Generic Markets
Friday, June 12, 2009
Sandoz acquires Ebewe; Pfizer expands generics agreements
Sandoz’ parent company, Novartis, announced on 20th May 2009 that it was to acquire the specialty generic injectables business of Ebewe Pharma, which would provide Sandoz an opportunity to create a global platform for future growth whilst improving access for patients worldwide to many generic oncology medicines. Under the terms of the deal, Novartis will acquire the business for 925 million euros (US$1.3 billion) in cash; the deal will exclude Ebewe’s separate injectable neurological products business. Sandoz is currently the second largest generic firm in the world, but still some way behind Teva Pharmaceutical Industries in terms of sales. According to Novartis, Ebewe Pharma’s net sales in 2008 were worth 188 million euros (US$267 million), so this acquisition is unlikely to see Sandoz push ahead past Teva. However, this is the firm’s first acquisition in a number of years, which must underline the firm’s belief that Ebewe represents a significant strategic fit.
Ebewe Pharma was founded in Vienna, Austria, in 1934, but relocated its headquarters to Unterach, Austria, in 1945. Between 1956 and 2001, it acted as an affiliate of the BASF Group, and also briefly for Abbott. However, in 2001, the company again became independent. The company specialises in technologies and applications in the fields of specialty pharmaceuticals, neurological products and contract manufacturing. With regard to its specialty products, the firm has focused on the categories of oncology and immunology, and claims to be one of the leading suppliers of parenteral specialty pharmaceuticals. Ebewe has research centres in Austria and the US, and the firm claims that in the area of oncology it offers one of the widest product lines in the industry. Ebewe sells its specialty pharmaceuticals through a network of 20 Ebewe country organisations as well as business partners in over 80 countries. The firm has had nine ANDAs approved in the US recently, between December 2007 and April 2009, with most of them being either CNS drugs or oncology drugs, including paclitaxel and methotrexate sodium.
Separately, but on the same day, Pfizer announced plans to expand its generics portfolio through two agreements with the Indian firm, Aurobindo Pharma and Claris Lifesciences. Pfizer previously entered into agreements with Aurobindo in July 2008 and March 2009, and this latest announcement effectively extends those into new areas. However, the agreement with Claris is new. Under the terms of the agreement, Pfizer has acquired the rights to 15 injectable products covering a number of therapeutic categories, including pain management and anti-infectives. Claris focuses on the production of injectables and claims a presence in over 76 countries. As with Ebewe, Claris has been active in the US generics market in recent years, gaining four ANDA approvals in March and April 2008 for ondansetron, ciprofloxacin and metronidazole. These agreements are an interesting move for Pfizer, which, although has a generics subsidiary in the form of Greenstone, has tended to be more averse to the generics industry than other branded pharmaceutical firms. Pfizer’s keenness to develop its presence in the generics market perhaps reflects difficulties the firm has seen with the branded industry in recent years. Although it has retained its position as the leading branded firm, Pfizer’s sales have been flat for the last few years, with increased generic competition for some of its key products sapping sales.
Ian Platts - Editor, World Generic Markets
Ebewe Pharma was founded in Vienna, Austria, in 1934, but relocated its headquarters to Unterach, Austria, in 1945. Between 1956 and 2001, it acted as an affiliate of the BASF Group, and also briefly for Abbott. However, in 2001, the company again became independent. The company specialises in technologies and applications in the fields of specialty pharmaceuticals, neurological products and contract manufacturing. With regard to its specialty products, the firm has focused on the categories of oncology and immunology, and claims to be one of the leading suppliers of parenteral specialty pharmaceuticals. Ebewe has research centres in Austria and the US, and the firm claims that in the area of oncology it offers one of the widest product lines in the industry. Ebewe sells its specialty pharmaceuticals through a network of 20 Ebewe country organisations as well as business partners in over 80 countries. The firm has had nine ANDAs approved in the US recently, between December 2007 and April 2009, with most of them being either CNS drugs or oncology drugs, including paclitaxel and methotrexate sodium.
Separately, but on the same day, Pfizer announced plans to expand its generics portfolio through two agreements with the Indian firm, Aurobindo Pharma and Claris Lifesciences. Pfizer previously entered into agreements with Aurobindo in July 2008 and March 2009, and this latest announcement effectively extends those into new areas. However, the agreement with Claris is new. Under the terms of the agreement, Pfizer has acquired the rights to 15 injectable products covering a number of therapeutic categories, including pain management and anti-infectives. Claris focuses on the production of injectables and claims a presence in over 76 countries. As with Ebewe, Claris has been active in the US generics market in recent years, gaining four ANDA approvals in March and April 2008 for ondansetron, ciprofloxacin and metronidazole. These agreements are an interesting move for Pfizer, which, although has a generics subsidiary in the form of Greenstone, has tended to be more averse to the generics industry than other branded pharmaceutical firms. Pfizer’s keenness to develop its presence in the generics market perhaps reflects difficulties the firm has seen with the branded industry in recent years. Although it has retained its position as the leading branded firm, Pfizer’s sales have been flat for the last few years, with increased generic competition for some of its key products sapping sales.
Ian Platts - Editor, World Generic Markets
Friday, May 29, 2009
FDA releases budget request as GPhA shows generic savings
On 7th May 2009, the FDA announced its budget request for fiscal year 2010. The agency has requested a budget of US$3.2 billion overall, representing an increase of 19% over the current FDA fiscal year budget. Much of the request focuses on two major initiatives for FY2010: Protecting America’s Food Supply and Safer Medical Products. However, the request also includes proposals for four new user fees; one of these relates to generic drugs. The issue of introducing generic drug user fees has been around for a while, and the Generic Pharmaceutical Association (GPhA) responded to the proposal with the same views it has expressed when the issue has come round before. The organisation commented that the generic industry is open to user fees, but with the caveat that there would need to be guarantees that the fees would aid in the timely review and approval of generic applications.
Specifically, the GPhA has identified what it considers to be core issues, which it claims have been around for over a decade. These include the citizen petition process, scientific, regulatory and legal consultations, enhanced communication, more inspection resources and the accountability and structure of the Office of Generic Drugs (OGD). The organisation cites as an example that in 2007, the brand industry held 2,200 meetings with the FDA, yet the generic industry had only seven meetings, making the argument that unless the FDA and the industry communicate more effectively, generics will not get to consumers faster. The organisation added that generic applications that are subject to scientific, regulatory or legal consults can remain stuck in limbo for months, if not years, which again results in products being delayed entry to the market. The GPhA has acknowledged that the FDA needs more resources to review and approve generics, but argues that increasing resources alone will not help; instead, the agency also needs to tackle the underlying problem of timely consumer access. For its part, the FDA has released figures which show that the Center for Drug Evaluation and Research (CDER) has seen a dramatic increase in its workload, with the number of ANDAs almost doubling over the past five years, whilst its staffing levels have increased at a much slower rate. In FY2008, CDER approved or tentatively approved 598 applications, and received 830 ANDAs. This compared to 310 approvals or tentative approvals and 307 receipts in FY2001. Interestingly, the number of receipts in FY2008 was down slightly, compared to the 880 received in FY2007, marking the first dip since before FY2001.
It can surely be no coincidence that on the same day that the FDA released its budget request, the GPhA also released details of a report it commissioned from IMS Health showing that generics had saved the American healthcare system more than US$734 billion in the last decade. The report also showed around US$121 billion was saved in 2008 alone. The report was commissioned as part of efforts to mark the 25th anniversary of the passing of the Hatch-Waxman Act, but the timing and its message that generics save money, seems to be more aimed at pushing for an increase of funding for the FDA’s generic drugs function. Preferably, it seems, through tax money rather than user fees from the industry.
Ian Platts - Editor, World Generic Markets
Specifically, the GPhA has identified what it considers to be core issues, which it claims have been around for over a decade. These include the citizen petition process, scientific, regulatory and legal consultations, enhanced communication, more inspection resources and the accountability and structure of the Office of Generic Drugs (OGD). The organisation cites as an example that in 2007, the brand industry held 2,200 meetings with the FDA, yet the generic industry had only seven meetings, making the argument that unless the FDA and the industry communicate more effectively, generics will not get to consumers faster. The organisation added that generic applications that are subject to scientific, regulatory or legal consults can remain stuck in limbo for months, if not years, which again results in products being delayed entry to the market. The GPhA has acknowledged that the FDA needs more resources to review and approve generics, but argues that increasing resources alone will not help; instead, the agency also needs to tackle the underlying problem of timely consumer access. For its part, the FDA has released figures which show that the Center for Drug Evaluation and Research (CDER) has seen a dramatic increase in its workload, with the number of ANDAs almost doubling over the past five years, whilst its staffing levels have increased at a much slower rate. In FY2008, CDER approved or tentatively approved 598 applications, and received 830 ANDAs. This compared to 310 approvals or tentative approvals and 307 receipts in FY2001. Interestingly, the number of receipts in FY2008 was down slightly, compared to the 880 received in FY2007, marking the first dip since before FY2001.
It can surely be no coincidence that on the same day that the FDA released its budget request, the GPhA also released details of a report it commissioned from IMS Health showing that generics had saved the American healthcare system more than US$734 billion in the last decade. The report also showed around US$121 billion was saved in 2008 alone. The report was commissioned as part of efforts to mark the 25th anniversary of the passing of the Hatch-Waxman Act, but the timing and its message that generics save money, seems to be more aimed at pushing for an increase of funding for the FDA’s generic drugs function. Preferably, it seems, through tax money rather than user fees from the industry.
Ian Platts - Editor, World Generic Markets
Thursday, May 14, 2009
Ontario government takes action against generic firms
In late April, the Ontario government’s Ministry of Health and Long-Term Care announced it was taking legal action against seven generic firms, along with a number of pharmacies and wholesalers, for allegedly massaging professional allowances by re-selling drugs. Professional allowances are monies that generic drug manufacturers pay pharmacies for buying their prescription drug products, and the Ontario government has alleged that a number of firms were involved in a scheme whereby pharmacies bought greater stocks than they needed, claiming the monies against the stock, then returning what was not needed to wholesalers, which then also claimed monies for the returned stock. The seven companies involved included Taro Pharmaceuticals, Cobalt Pharmaceuticals, Genpharm, Teva’s subsidiary, Novopharm, Pharmascience, Sandoz Canada and ratiopharm. In total, the seven received Rebate Penalty Orders worth C$3.5 million (US$3.0 million), with Taro penalised the least, at C$22,512.68, and Genpharm and Novopharm the most, at C$1,791,957.71 and C$1,202,958.88, respectively.
The Ontario government explained that the professional allowances system had been shaken up as part of changes made by Bill 102 to the legislation that governs Ontario’s publicly funded drug programmes. For the Ontario Drug Benefit market, manufacturers could provide and pharmacies receive up to 20% of generic drug product sales per pharmacy in professional allowances. The allowances must then be used for activities outlined in the regulations, such as patient care that benefits customers. There was no limit on the amount of professional allowances relating to the private market. Drug manufacturers are required to report to the Ministry of Health and Long-Term Care the amount of professional allowances paid, and pharmacies the amount received. Pharmacies are also required to report on how the allowances are spent. Any professional allowance payment not meeting the regulated requirements would be regarded as a rebate, and prohibited. The Ministry reviewed these reports and found discrepancies between the figures being given by generic firms and those being given by pharmacies, and this led to a series of audits being carried out at 14 locations, including three generic drug firms, five wholesalers and six pharmacies.
According to local reports, manufacturers claimed to have paid C$332 million (US$284 million) in rebates, whilst pharmacies claimed to have received only C$145 million (US$124 million). In view of this, the decision to fine the seven generic firms just C$3.5 million in total and all parties involved C$33.8 million (US$28.9 million) surely does not serve as much of a disincentive.
Ian Platts - Editor, World Generic Markets
The Ontario government explained that the professional allowances system had been shaken up as part of changes made by Bill 102 to the legislation that governs Ontario’s publicly funded drug programmes. For the Ontario Drug Benefit market, manufacturers could provide and pharmacies receive up to 20% of generic drug product sales per pharmacy in professional allowances. The allowances must then be used for activities outlined in the regulations, such as patient care that benefits customers. There was no limit on the amount of professional allowances relating to the private market. Drug manufacturers are required to report to the Ministry of Health and Long-Term Care the amount of professional allowances paid, and pharmacies the amount received. Pharmacies are also required to report on how the allowances are spent. Any professional allowance payment not meeting the regulated requirements would be regarded as a rebate, and prohibited. The Ministry reviewed these reports and found discrepancies between the figures being given by generic firms and those being given by pharmacies, and this led to a series of audits being carried out at 14 locations, including three generic drug firms, five wholesalers and six pharmacies.
According to local reports, manufacturers claimed to have paid C$332 million (US$284 million) in rebates, whilst pharmacies claimed to have received only C$145 million (US$124 million). In view of this, the decision to fine the seven generic firms just C$3.5 million in total and all parties involved C$33.8 million (US$28.9 million) surely does not serve as much of a disincentive.
Ian Platts - Editor, World Generic Markets
Tuesday, April 14, 2009
Congress pushes for biosimilars pathway
March 2009 saw the US Congress turn its attention to the issue of creating a regulatory pathway for biosimilars (see p. 11). However, two competing visions have emerged, both originating in the House of Representatives, and predictably, one is favoured by the generics industry whilst the other is favoured by the biotech industry. First out of the blocks was a bipartisan bill, H.R. 1427, Promoting Innovation and Access to Life-Saving Medicine Act, introduced by Henry Waxman, Nathan Deal, Frank Pallone and Jo Ann Emerson. With Mr Waxman‟s name on the bill, it is no surprise that the generic industry favour this bill. However, within days, a second bill, H.R. 1548, the Pathway for Biosimilars Act, was introduced, again by a bipartisan group of representatives, including Anna Eshoo, Jay Inslee and Joe Barton. This bill has won the approval of BIO.
Both bills are broadly similar, basically attempting to set out a regulatory pathway on the same lines as the Hatch-Waxman Act. However, there is one essential difference between the two: H.R. 1427 gives original biologics five years of exclusivity, with certain modifications of existing drugs getting three years. These periods can be extended for up to a year. Meanwhile, H.R. 1548 provides up to 14 ½ years of data exclusivity for new biologics. It is clear why the generics industry would favour one bill whilst the biologic industry would favour the other. This also suggests the two competing bills are the result of lobbying by the various industry interests. This is backed up by the fact that Representative Inslee represents a Seattle-area district with a strong biotech sector. In addition, Mr Inslee also serves on the House Energy and Commerce Committee, as does Ms Eshoo and Mr Barton, who is the ranking member of the committee. However, the committee is chaired by Mr Waxman, who can also call on support from his cosponsors, Mr Pallone and Mr Deal, so clearly the two bills will be the subject of considerable debate. How the two bills fare in the committee stage will be an interesting battle of wills.
Outside of Congress, the various proponents and opponents of the two bills have shown differing approaches in how they are trying to sell their arguments. BIO has said that it has safety concerns over H.R. 1427, whilst applauds the alternative bill, H.R. 1548, for being safer. However, it seems likely that BIO‟s more immediate concern is over the length of data protection, which is a legitimate concern for the industry, but not necessarily one that will fly with the general public. BIO also expresses concern that H.R. 1427 would jeopardise biotech jobs, noting that the industry supports 7.5 million jobs in America, with these jobs generally being highly paid, and therefore good contributors to the economy. Conversely, the GPhA also uses the economy angle in its support of H.R. 1427, arguing that the bill would help the economy by strengthening healthcare whilst reducing costs to the public. The GPhA adds that the bill is supported by consumer, business and labour organisations. Both sides recognise that a regulatory pathway for biosimilars is inevitable. However, what shape that legislation will ultimately take is less clear, and will seemingly depend on political skills and an ability to convince public opinion.
Ian Platts - Editor, World Generic Markets
Both bills are broadly similar, basically attempting to set out a regulatory pathway on the same lines as the Hatch-Waxman Act. However, there is one essential difference between the two: H.R. 1427 gives original biologics five years of exclusivity, with certain modifications of existing drugs getting three years. These periods can be extended for up to a year. Meanwhile, H.R. 1548 provides up to 14 ½ years of data exclusivity for new biologics. It is clear why the generics industry would favour one bill whilst the biologic industry would favour the other. This also suggests the two competing bills are the result of lobbying by the various industry interests. This is backed up by the fact that Representative Inslee represents a Seattle-area district with a strong biotech sector. In addition, Mr Inslee also serves on the House Energy and Commerce Committee, as does Ms Eshoo and Mr Barton, who is the ranking member of the committee. However, the committee is chaired by Mr Waxman, who can also call on support from his cosponsors, Mr Pallone and Mr Deal, so clearly the two bills will be the subject of considerable debate. How the two bills fare in the committee stage will be an interesting battle of wills.
Outside of Congress, the various proponents and opponents of the two bills have shown differing approaches in how they are trying to sell their arguments. BIO has said that it has safety concerns over H.R. 1427, whilst applauds the alternative bill, H.R. 1548, for being safer. However, it seems likely that BIO‟s more immediate concern is over the length of data protection, which is a legitimate concern for the industry, but not necessarily one that will fly with the general public. BIO also expresses concern that H.R. 1427 would jeopardise biotech jobs, noting that the industry supports 7.5 million jobs in America, with these jobs generally being highly paid, and therefore good contributors to the economy. Conversely, the GPhA also uses the economy angle in its support of H.R. 1427, arguing that the bill would help the economy by strengthening healthcare whilst reducing costs to the public. The GPhA adds that the bill is supported by consumer, business and labour organisations. Both sides recognise that a regulatory pathway for biosimilars is inevitable. However, what shape that legislation will ultimately take is less clear, and will seemingly depend on political skills and an ability to convince public opinion.
Ian Platts - Editor, World Generic Markets
Thursday, March 26, 2009
Despite speculation, Actavis branches out
Despite the ongoing speculation over the firm’s future, Actavis was busy in March branching out into new geographies. On 9th March 2009, the firm announced that it had entered the Irish market, with plans that will see the creation of up to 25 new jobs, and on 12th March, the firm and Japan’s ASKA Pharmaceutical signed a legal agreement to establish a joint company in Japan. Despite the headline, Actavis’ arrival in Ireland is not entirely new; a unit was set up there in 2008, and currently employs 11 people. However, Actavis’ presence in Ireland was relatively limited, and the new push will boost Actavis’ operations in the country. The firm aims to quickly ramp up its offering in Ireland in all channels, including hospital-specific, prescription and OTC drugs, and Actavis has stated that it has set double-digit growth targets for its first post-announcement year in the country, with an aim to rapidly expand its sales and marketing team in the coming months. Actavis is keen to play up its economic plus-points, noting in its announcement that its generics offer a reduction of up to 60% on the cost of drugs, ramming home the point by adding that there is a potential to save over 22 million euros (US$28.4 million) on six of the 20 new products it plans to launch in Ireland this year. Adding to the argument, Actavis was able to announce on the same day that it was launching gemcitabine in Ireland, along with other parts of Europe, on the day of patent expiry. This, the firm claims, could create savings in Ireland of 1.8 million euros (US$2.3 million), if all currently gemcitabine sales were switched to Actavis’ generic. However, whether such potential savings could be achieved is debateable; Ireland has low generic drug usage rates, and a government that has not shown much interest in changing this.
The move into Japan is entirely new for Actavis, however, and will see the firm set up business in a country it has had no previous business interests in. The agreement between Actavis and ASKA was first announced in November 2008, when the two firms concluded a preliminary agreement to establish a joint venture, to be called Actavis ASKA. Actavis will be the minority partner in the venture, holding 45% of its stocks, with ASKA holding the 55% stake. Japan has tended to be a somewhat difficult market for generic firms; it is second only to the United States in terms of healthcare spending, but the nation as a whole has always favoured the use of branded pharmaceuticals, with the result that generics have only managed to gain a toehold in the country. However, the situation has potential to change through the Japanese government, which, keen to reduce healthcare costs, introduced a generic substitution measure in April 2008, as part of an ongoing effort to increase generic market share in terms of volume. Although Actavis and ASKA have remained tight-lipped over what products will be marketed, the aim of the joint venture is for ASKA to enter the generics market using Actavis’ portfolio.
Ian Platts - Editor, World Generic Markets
The move into Japan is entirely new for Actavis, however, and will see the firm set up business in a country it has had no previous business interests in. The agreement between Actavis and ASKA was first announced in November 2008, when the two firms concluded a preliminary agreement to establish a joint venture, to be called Actavis ASKA. Actavis will be the minority partner in the venture, holding 45% of its stocks, with ASKA holding the 55% stake. Japan has tended to be a somewhat difficult market for generic firms; it is second only to the United States in terms of healthcare spending, but the nation as a whole has always favoured the use of branded pharmaceuticals, with the result that generics have only managed to gain a toehold in the country. However, the situation has potential to change through the Japanese government, which, keen to reduce healthcare costs, introduced a generic substitution measure in April 2008, as part of an ongoing effort to increase generic market share in terms of volume. Although Actavis and ASKA have remained tight-lipped over what products will be marketed, the aim of the joint venture is for ASKA to enter the generics market using Actavis’ portfolio.
Ian Platts - Editor, World Generic Markets
Friday, March 13, 2009
Biosimilars in the US a step closer?
President Obama has released his budget proposals, including those for the Department of Health and Human Services. The proposal would provide US$76.8 billion to the HHS, whilst the FDA is requesting nearly US$2.4 billion, an increase of 5.7% over the budget that the agency received for the current fiscal year. Not surprisingly, much of the focus on the healthcare aspects of the budget have been on the headline-grabbing issues, such as healthcare reform and the doubling of funding for cancer research. However, another aspect of the budget which deserves attention is its proposal to establish a regulatory pathway to approve generic biologics.
This has long been a thorny issue for the United States with the result that the country has lagged behind the European Union, where a basic approval pathway for biosimilars has been hammered out. Progress on the issue in the US has never been forthcoming, with the opposing sides of the argument clashing on all issues surrounding biosimilars, from their safety and efficacy to the length of data exclusivity periods for biologic products. Whilst none of the parties may have actually said that they do not want biosimilars allowed, the efforts to torpedo any attempt to create a pathway have spoken volumes.
With the new budget proposal specifically seeking to create a regulatory pathway, the question of whether this logjam can be broken has to be asked. President Obama has a focus on healthcare issues in general, with an intention to make the system more cost-effective and widen coverage for more Americans. Mr Obama’s nomination, albeit a second attempt after Tom Daschle, of Kathleen Sebelius, currently the Governor of Kansas, to the post of Secretary of Health and Human Services can be seen to underscore a determination to make changes. Ms Sebelius is a popular Democratic governor in a Republican-dominated state, a position which suggests that bipartisan working has been an essential element of Ms Sebelius’ job, and in turn suggests the same approach will be used should she become the head of the HHS. Thus the job would be taken by somebody with experience in successfully negotiating between staunchly opposed interests, which would surely be essential in any effort to produce a working regulatory pathway for biosimilars. Prior to this nomination, Henry Waxman was voted by the Democratic Caucus to become Chairman of the Committee on Energy and Commerce, which will have oversight on healthcare issues. Mr Waxman has long been known to support establishing a regulatory pathway for biosimilars, and his appointment must surely up the ante.
However, this is an issue which has long confounded its advocates, and whilst the political landscape may have moved to more fertile grounds for creating a pathway, the arguments against it have not been diminished. The issue of biosimilar safety will continue to be a problem, particularly for a litigious nation; entrenched arguments over data exclusivity will not now go away, and the savings through generic biologics will still be pitted against costs to American innovative companies and their employees. The push to create a pathway may have taken one step forward, but there still remains plenty of opportunity for its opponents to claw two steps back.
Ian Platts - Editor, World Generic Markets
This has long been a thorny issue for the United States with the result that the country has lagged behind the European Union, where a basic approval pathway for biosimilars has been hammered out. Progress on the issue in the US has never been forthcoming, with the opposing sides of the argument clashing on all issues surrounding biosimilars, from their safety and efficacy to the length of data exclusivity periods for biologic products. Whilst none of the parties may have actually said that they do not want biosimilars allowed, the efforts to torpedo any attempt to create a pathway have spoken volumes.
With the new budget proposal specifically seeking to create a regulatory pathway, the question of whether this logjam can be broken has to be asked. President Obama has a focus on healthcare issues in general, with an intention to make the system more cost-effective and widen coverage for more Americans. Mr Obama’s nomination, albeit a second attempt after Tom Daschle, of Kathleen Sebelius, currently the Governor of Kansas, to the post of Secretary of Health and Human Services can be seen to underscore a determination to make changes. Ms Sebelius is a popular Democratic governor in a Republican-dominated state, a position which suggests that bipartisan working has been an essential element of Ms Sebelius’ job, and in turn suggests the same approach will be used should she become the head of the HHS. Thus the job would be taken by somebody with experience in successfully negotiating between staunchly opposed interests, which would surely be essential in any effort to produce a working regulatory pathway for biosimilars. Prior to this nomination, Henry Waxman was voted by the Democratic Caucus to become Chairman of the Committee on Energy and Commerce, which will have oversight on healthcare issues. Mr Waxman has long been known to support establishing a regulatory pathway for biosimilars, and his appointment must surely up the ante.
However, this is an issue which has long confounded its advocates, and whilst the political landscape may have moved to more fertile grounds for creating a pathway, the arguments against it have not been diminished. The issue of biosimilar safety will continue to be a problem, particularly for a litigious nation; entrenched arguments over data exclusivity will not now go away, and the savings through generic biologics will still be pitted against costs to American innovative companies and their employees. The push to create a pathway may have taken one step forward, but there still remains plenty of opportunity for its opponents to claw two steps back.
Ian Platts - Editor, World Generic Markets
Wednesday, February 18, 2009
FTC files testosterone gel complaint
On 2nd February 2009, the Federal Trade Commission announced that it had filed a complaint against brand firm Solvay Pharmaceuticals and generic firms Watson Pharmaceuticals, Par Pharmaceutical Companies and Par’s partner, Paddock Laboratories regarding Solvay’s AndroGel testosterone gel product. The FTC has alleged that the companies violated section 5(a) of the FTC Act, arguing that Solvay entered into agreements with the firms which led to Solvay paying them in return for their not launching generic versions of AndroGel. The FTC’s actions see it return to a familiar and frustrating battle in which it argues that such payment arrangements are anti-competitive, whilst the companies involved argue the exact opposite.
The FTC’s position has for a long time been that agreements in which a branded company essentially pays a generic competitor not to launch a competing product hampers competition and is thus illegal. As an example, in 2001, the FTC brought a lawsuit against Schering-Plough, Upsher-Smith Laboratories and American Home Products alleging such payments regarding Schering’s potassium chloride product, K-Dur 20. Despite settling with AHP, the FTC found little success in the case, with an FTC Administrative Law Judge finding the agreement had been lawful. This led to the FTC overturning the decision, despite it having been made by an FTC judge. However, in 2005, a federal appellate court again found in favour of the companies, and the decision has so far stuck. This, along with another similar decision in 2005 has led to a raft of payment agreements in the years since, which the FTC still contends harms competition by prolonging monopolies.
Given its entrenched view on the matter, it is no surprise that the FTC has again made a complaint. However, the current argument concerning AndroGel does not appear to shed any new light on the issue, and as a result, it seems unlikely that the FTC will succeed this time, either. On the face of it, the FTC’s case is quite sound – Watson gained FDA approval for a generic version of AndroGel in 2006 following the end of the Hatch-Waxman 30-month stay of approval, and Par after that, but did not launch, instead coming to an agreement with Solvay to postpone. However, as always, the devil is in the detail. The patent at the heart of the dispute expires in 2020, with paediatric exclusivity until 2021. Yet, the agreements see generic versions being launched from 2015; the FTC rightfully points out that this is nine years after Watson gained approval, but the firms also rightfully point out that it is five years before the patent expires. The key problem is that although ANDAs were filed with Paragraph IV certifications against the patent, the issue was settled out of court and so the validity of the patent was never tested. As a result, the patent remains in force, which backs up the companies’ argument that the settlement has enabled generic competition ahead of schedule and is therefore pro-competitive. It is hard to see how the FTC can manoeuvre around this problem, and whilst it argues, and probably correctly, that the generic firms entered the agreement not out of respect for Solvay’s patent, but because of the payments Solvay offered, with the patent untested in court, the facts as they stand do not back this up. Unless the FTC can produce compelling evidence, its suspicions will remain nothing more than a hunch.
Ian Platts - Editor, World Generic Markets
The FTC’s position has for a long time been that agreements in which a branded company essentially pays a generic competitor not to launch a competing product hampers competition and is thus illegal. As an example, in 2001, the FTC brought a lawsuit against Schering-Plough, Upsher-Smith Laboratories and American Home Products alleging such payments regarding Schering’s potassium chloride product, K-Dur 20. Despite settling with AHP, the FTC found little success in the case, with an FTC Administrative Law Judge finding the agreement had been lawful. This led to the FTC overturning the decision, despite it having been made by an FTC judge. However, in 2005, a federal appellate court again found in favour of the companies, and the decision has so far stuck. This, along with another similar decision in 2005 has led to a raft of payment agreements in the years since, which the FTC still contends harms competition by prolonging monopolies.
Given its entrenched view on the matter, it is no surprise that the FTC has again made a complaint. However, the current argument concerning AndroGel does not appear to shed any new light on the issue, and as a result, it seems unlikely that the FTC will succeed this time, either. On the face of it, the FTC’s case is quite sound – Watson gained FDA approval for a generic version of AndroGel in 2006 following the end of the Hatch-Waxman 30-month stay of approval, and Par after that, but did not launch, instead coming to an agreement with Solvay to postpone. However, as always, the devil is in the detail. The patent at the heart of the dispute expires in 2020, with paediatric exclusivity until 2021. Yet, the agreements see generic versions being launched from 2015; the FTC rightfully points out that this is nine years after Watson gained approval, but the firms also rightfully point out that it is five years before the patent expires. The key problem is that although ANDAs were filed with Paragraph IV certifications against the patent, the issue was settled out of court and so the validity of the patent was never tested. As a result, the patent remains in force, which backs up the companies’ argument that the settlement has enabled generic competition ahead of schedule and is therefore pro-competitive. It is hard to see how the FTC can manoeuvre around this problem, and whilst it argues, and probably correctly, that the generic firms entered the agreement not out of respect for Solvay’s patent, but because of the payments Solvay offered, with the patent untested in court, the facts as they stand do not back this up. Unless the FTC can produce compelling evidence, its suspicions will remain nothing more than a hunch.
Ian Platts - Editor, World Generic Markets
Friday, January 30, 2009
Warner Chilcott end Femcon and Loestrin generic challenges
Warner Chilcott has been able to resovle a number of litigation cases against its proprietary oral contraceptives, Femcon Fe and Loestrin 24 Fe. Femcon was a chewable version of Ovcon 35, an oral contraceptive that has been on the market since before 1982. The chewable version was approved by the FDA in November 2003, and was the first chewable oral contraceptive, manufactured by Bristol-Myers Squibb and marketed by Warner Chilcott. The chewable version of Ovcon 35 was granted three years exclusivity in late 2003, to expire in November 2006, and a patent was granted for the drug which does not expire until 6th April 2019. In the case of Lostrin 24, Galen originally acquired the Loestrin brand from Pfizer, and in early 2006 was granted approval for Loestrin 24 Fe; that product is protected by a patent listed in the FDA’s Orange Book which is set to expire in July 2014.
Despite the long lead times left on the two patents protecting the two oral contraceptives, Warner Chilcott has faced generic challengers for both. Barr Laboratories filed an ANDA for a generic version of Femcon Fe in April 2007, leading to a patent challenge initiated that summer. Watson Pharmaceuticals also filed an ANDA for a generic version in 2007, leading to a lawsuit filed against it in October 2007. In the case of Loestrin 24 Fe, Warner Chilcott filed a lawsuit in the US District Court of New Jersey alleging patent infringement almost as son as the drug had entered the market, with a case against Berlex and Schering AG. Warner Chilcott alleged the firms were infringing Loestrin’s patent by marketing their YAZ oral contraceptive. A few months later, in June 2006, Warner Chilcott received an ANDA notice from Watson Laboratories notifying of an application to market a generic version of the oral contraceptive, leading to another lawsuit in the New Jersey court alleging patent infringement. The YAZ litigation was settled early, in November 2006, with Schering making payments to Warner Chilcott.
Now, in a series of agreements over December 2008 and January 2009, Warner Chilcott has settled the litigation with Barr and Watson (see p. 8). The settlement with Barr concerns Femcon Fe, and gives Barr the option to launch its generic version in 2012, seven years ahead of the 2019 patent expiration. Warner Chilcott also entered into a patent settlement agreement with Watson regarding Femcon Fe. Under the terms of this, Watson will have to wait until 180 days after Barr launches its version, or January 2013, whichever comes earlier. With regard to Loestrin 24 Fe, an agreement has been made with Watson whereby Watson will be able to commence marketing its version in January 2014, or earlier if another generic enters the market. It is interesting to note that once again, a settlement has been made which effectively allows a generic firm to launch its version as an authorised generic in order to sabotage sales from a third party.
Ian Platts - Editor, World Generic Markets
Despite the long lead times left on the two patents protecting the two oral contraceptives, Warner Chilcott has faced generic challengers for both. Barr Laboratories filed an ANDA for a generic version of Femcon Fe in April 2007, leading to a patent challenge initiated that summer. Watson Pharmaceuticals also filed an ANDA for a generic version in 2007, leading to a lawsuit filed against it in October 2007. In the case of Loestrin 24 Fe, Warner Chilcott filed a lawsuit in the US District Court of New Jersey alleging patent infringement almost as son as the drug had entered the market, with a case against Berlex and Schering AG. Warner Chilcott alleged the firms were infringing Loestrin’s patent by marketing their YAZ oral contraceptive. A few months later, in June 2006, Warner Chilcott received an ANDA notice from Watson Laboratories notifying of an application to market a generic version of the oral contraceptive, leading to another lawsuit in the New Jersey court alleging patent infringement. The YAZ litigation was settled early, in November 2006, with Schering making payments to Warner Chilcott.
Now, in a series of agreements over December 2008 and January 2009, Warner Chilcott has settled the litigation with Barr and Watson (see p. 8). The settlement with Barr concerns Femcon Fe, and gives Barr the option to launch its generic version in 2012, seven years ahead of the 2019 patent expiration. Warner Chilcott also entered into a patent settlement agreement with Watson regarding Femcon Fe. Under the terms of this, Watson will have to wait until 180 days after Barr launches its version, or January 2013, whichever comes earlier. With regard to Loestrin 24 Fe, an agreement has been made with Watson whereby Watson will be able to commence marketing its version in January 2014, or earlier if another generic enters the market. It is interesting to note that once again, a settlement has been made which effectively allows a generic firm to launch its version as an authorised generic in order to sabotage sales from a third party.
Ian Platts - Editor, World Generic Markets
Friday, January 2, 2009
UK government announces new pricing plans
The UK government has announced a new deal with the pharmaceutical industry which will bring in a flexible pricing scheme. Although the announcement relates to the Pharmaceutical Price Regulation Scheme (PPRS), which in turn deals with the branded industry rather than generics, the news is of interest because the agreement further enshrines the place of generics in the NHS' spending plans. Of particular interest is the agreement covering pricing. In the original deal between government and industry announced in June 2008, a saving of 5% in the cost of drugs sold to the NHS was included, which was to be made up of a base price cut for all branded drugs of 2%, combined with measures to reduce the price of out of patent drugs where a generic exists and a further variable price cut. This has now been changed to include a 3.9% price cut and a plan for the Department of Health to introduce generic substitution, whereby pharmacists will be able to dispense a generic against a prescription for a branded drug unless the physician has specified the branded drug to be used. However, the measure will not be introduced before January 2010, a year after the rest of the agreement comes into force, because of the discussions and system changes that would be required. Further price adjustments will then come in each year with the aim of reaching the original 5% cut envisaged. However, the precise effect of generic substitution is unknown, and expected savings have been based on models, and so it is expected that a cut of exactly 5% is unlikely to be achieved; further discussions will therefore be undertaken to keep the scheme on track.
The agreement has been reached with the Association of the British Pharmaceutical Industry (ABPI), and on the face of it represents something of a change of heart for the organisation. Generic substitution - prescribing a generic without the specific consent of a doctor - has been illegal in the UK, and if a doctor has prescribed by a brand name, then the brand version must be dispensed. Not surprisingly, this is a stance that has been defended by the ABPI, which has previously argued that generic substitution would undermine doctors‟ relationships with their patients and could compromise patient health by disrupting the choice of medication selected by the doctor. Whilst the validity of such claims are clearly part of a much wider debate between generics and branded drugs, the stance will nonetheless have been very handy for the ABPI, given that prescribing of generics in Britain has been far higher than in other EU countries, and amongst the highest in the world, and is a trend that has continued to rise. As a result, the ABPI agreeing to at least discuss generic substitution would seem to be a significant change. However, on the other side of the coin, because over 80% of prescriptions are already written generically, it is questionable how much the branded industry would really stand to lose, as the rate suggests doctors already write generic prescriptions unless they specifically want a branded drug used.
Ian Platts - Editor, World Generic Markets
The agreement has been reached with the Association of the British Pharmaceutical Industry (ABPI), and on the face of it represents something of a change of heart for the organisation. Generic substitution - prescribing a generic without the specific consent of a doctor - has been illegal in the UK, and if a doctor has prescribed by a brand name, then the brand version must be dispensed. Not surprisingly, this is a stance that has been defended by the ABPI, which has previously argued that generic substitution would undermine doctors‟ relationships with their patients and could compromise patient health by disrupting the choice of medication selected by the doctor. Whilst the validity of such claims are clearly part of a much wider debate between generics and branded drugs, the stance will nonetheless have been very handy for the ABPI, given that prescribing of generics in Britain has been far higher than in other EU countries, and amongst the highest in the world, and is a trend that has continued to rise. As a result, the ABPI agreeing to at least discuss generic substitution would seem to be a significant change. However, on the other side of the coin, because over 80% of prescriptions are already written generically, it is questionable how much the branded industry would really stand to lose, as the rate suggests doctors already write generic prescriptions unless they specifically want a branded drug used.
Ian Platts - Editor, World Generic Markets
Subscribe to:
Posts (Atom)