WORKSHOP ON FLEXIBILITIES IN INTERNATIONAL IP RULES & LOCAL PRODUCTION OF PHARMACEUTICALS FOR SOUTHERN, CENTRAL AND WEST AFRICAN REGION
TRIPS FLEXIBILITIES
SA GENERIC INDUSTRY EXPERIENCE
IP ‐ PHARMACEUTICAL INDUSTRY PERSPECTIVE
RASEELA INDERLALL –
EXECUTIVE DIRECTOR ‐ NAPM
By Raseela Inderlall 08 DECEMBER 2009
CAPE TOWN INDUSTRIAL POLICY
Health Policy
Trade Policy
Addressed affordability &accessibility of
medicines
• National Drug Policy
• Medicines & Related Subst Act
 Mandatory Generic substitution
 Parallel Importation
 Pricing regulations
 Compulsory Licensing
Made more progressive & suitable
for an emerging country
 Amendment to the Patent Act,
 WTO compliant
 Progressive bolar
provision
 Transformation
 Charters
 BBBEE Act / DTi Codes
 Industrial Policy
 NIPF / IPAP
 PPPFA
Current scenario in SA
Current Patent Act No 57 of 1978 (as amended 2002)
•Appropriate for SA:
 balanced social challenges with multilateral, international commitments eg
WTO, GATT, GATS, TRIPS etc
 balance bet innovator reward for invention, investment & risk vs need for
affordable medicines
•Major success for SA:
 Bolar type provision (S 69A) - all sectors not just Pharma!
 Patent period ensures balance – 20 yrs - original research not stifled vs
generic intro’ not delayed
 Provides flexibility - allows for use of safeguards eg
 compulsory licenses (government allows third party to produce patented
product or use patented process without consent of patent owner)
 parallel importation
Current scenario in SA
Patents not examined or evaluated – granted as applied for
Open to abusive ever-greening practices
 No Patent Term Extensions / SPCs
Of no benefit to SA ‐ R&D minimal to none & focus not on diseases of the poor
Clinical trials done out of convenience rather than investment need No Data Exclusivity provisions
Not a requirement of TRIPS
Generic companies respect valid patents, provided public benefits at
the end by full disclosure & ability to freely use invention once the
patent expires (wrt marketing not reg).
Voluntary licenses issued for ARVs on non-exclusive basis – 5 companies
Reaction by MNCs
 Several attempts to undermine BP & gain on 20 yr patent period
 Using Para 6 of Doha to motivate for:
 Patent restoration as consequence of “Regulatory failure” = SPCs
 Various data exclusivity provisions
 Adoption of strategies for Patent ever greening
 Injunctions and multiple stays - sues for infringement (valid or invalid) hence generic approval
delayed, patent period extended
 deliberate misinterpretation of Article 39.3, TRIPS as data exclusivity
 Possible invalidity claims - patent protection ↑– ≥ 25 issued patents & pending applications eg
double patenting.
 Lobbying for inclusion of IP in Regulatory Process
 affidavit of non-patent infringement = contravention of bolar provision
 data protection = not a requirement of TRIPS
 Supplementary Protection Certificates (SPCs) = generics & originator affected by RA delays
 IP = complex
~ will complicate registration process
~ will divert much needed resources away from core function of RA
~ will delay registration and entry of generic medicines
RA cannot be held liable for “patent infringement” - role =to assess safety, quality and efficacy
Challenges for the Generic industry
•
Branded industry protecting revenues by :
 issuing early branded generics – Pseudogenerics
The patentee is not given a statutory right to exploit his own invention, but
rather a statutory right to prevent others from commercially exploiting it.
 issuing new formulations
 Evergreening
•
Biotech based products - will present regulatory and production hurdles
•
Traditional medicine
 growing international trade – viz developing world & industrialized nations.
 Economic and trade value of the knowledge of traditional medicine &
medicinal plants are increasing → concern about protection & ensuring
benefits are fairly & equitably shared
Challenges for the Generic industry
•
•
Patent law - becoming more complex.
MNCs attemping to extend monopolies by patenting not only the basic molecule, but
also :
 other salts of the molecule,
 process of manufacturing the API,
 process of compounding the finished dosage form,
 use of the molecule (additional indications).
 others include copyright protection of their package inserts, etc
SOUTH AFRICA
OTHER COUNTRIES –
NZ/SP/CA/AU
Lacks investigatory system – patents granted Investigates novelty & inventiveness
as applied for
of patents
Patents broader in scope
Patents reduced in scope
Patent revocation cases rare – time
Patent revocation routine & frequent
consuming, costly & no guarantee of success
STANDARDISED PACKAGE INSERTS
• SPIs are beneficial to both the MCC/MRA and pharmaceutical manufacturers
 Streamline registration process
 Support governments’ objectives of increasing access of medicines to
patients
• The use of Product Information or innovator Package Inserts, as published
scientific information, should be allowed for registration purposes, as long as
 no commercial gain from the use of such information.
 the product is not sold prior to patent expiry
• There should be no grounds for objection to the use of scientific information that is
in the public domain.
• MNCs use SPI’s as a tactic to delay generic registration
 SPIs are being delayed due to idle threats from innovator companies in
terms of patents.
 Submit safety updates prior to council meetings where generics are to be
registered (how do they know what is to be tabled??)
SUMMARY ‐ SPI’s
140
Number of products with no SPI to date
120
117
100
80
75
60
53
40
18
20
9
3
0
0-12 months
13-18 months
19-24 months
25-30 months
31-36 months
>36 months
Time since submission
277 of the 568 submissions in the backlog have not received an SPI to date
PSEUDOGENERICS
•
Increasing Trend in SA: Sanofi Aventis, Pfizer, GSK, Servier, Lilly, Jansen
Cilag etc
•
Significant threat to the generic industry
 unfair competition
 Gain first to market advantage by launching prior to patent expiry.
 No development costs.
 Capitalize on originator brand equity and hence have lower marketing
and selling costs - lower Doctor and patient resistance.
 disincentive for true generics to enter the market
 reduced competition
•
Could impact on:

Viability and sustainability of generic industry

affordability and accessibility of generics over time
Generic Lifecycle
Ciprofloxacin 250mg Tabs after Generic
introduction
E
X1
SAVINGS
SAVINGS
A BC
D C D
R 78.00
R 65.00
R 52.00
R 39.00
R 26.00
Y
Generic
Pricing
Originator
Pricing
Y
ea
r1
Y
ea
r2
Y
ea
r3
Y
ea
r4
Y
ea
r5
Y
ea
r6
Y
ea
r7
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
X2
Further generic entry reduces price of generics and originator drugs
• A reduction of up to 90% for the 250mg Ciprofloxacin
•Originator price reduced as the effect of genericisation begins to take effect.
Average generic prices as % of originator in SA market (2000 – 2006)
7 0 .0 %
6 3 .8 %
6 2 .1 %
6 2 .9 %
5 9 .7 %
6 0 .0 %
5 2 .5 %
4 8 .7 %
5 0 .5 %
4 8 .8 %
5 0 .0 %
4 0 .0 %
3 0 .0 %
2 0 .0 %
1 0 .0 %
06
20
O
ct
:A
ug
20
ug
t: A
S
ep
:A
ct
O
05
04
20
ug
ay
M
Fe
b:
:J
pr
A
20
04
03
un
20
02
ul
20
ct
O
ct
O
pr
A
•
•
:J
ul
20
:J
20
:M
ay
00
01
0 .0 %
Ratio of generic to originator price has decreased consistently over time
Extent of decrease is dependant on number of generic entrants in the SA Spend On Medicines In Line With International Benchmarks & OECD Benchmarks
12.30%
US
12.80%
Australia
14.10%
Germany
15.70%
South Africa
*
**( 2005-6 CMS
= 13.45%)
OECD Average
17.70%
Canada
17.70%
18.90%
France
21.10%
Italy
22.80%
Spain
0%
5%
10%
15%
20%
25%
Sources: OECD Health Report 2006 (Data 2004), *South Africa 2005-6 CMS Annual Report Figure 12, Pg 50 (Includes
Dispensing Fees), ** South Africa 2005-6 CMS Annual Report Pg 88,89,90 Annexure I, Pg 99 Annexure K (Includes
Dispensing Fees)
Average Generic prices as % of originator price in
Comparator Countries
100%
86.0%
90%
80%
72.1%
70%
58.6%
60%
50%
61.4%
44.9%
40%
30%
20%
30
5
27
26
49
10%
0%
Average for same
form & strength
South Africa
Average for same
form & strength
Canada
Average for same
form & strength
New Zealand
Average for same
form & strength
Spain
Average for same
form & strength
Australia
•Average SA generic prices lower than their counterparts
•Average SA generic price 44.9 % of originator as compared to Australia (86%)
Medicines spend has declined since 2001 and
is now at 1997 levels
CMS report 2005-2006
Medicines Contribution To Healthcare
Expenditure Over Time
CMS Annual Report 2000-6
Medicines spend has shown a year on year decline
Costs of launching a new generic into the SA
Market
Licensing and
Registration
Costs
Bioequivalence
and Stability
Studies
Legal Costs
and Possible
Court Defences
Development
of New
Dossier
New
Manufacturing
Site Costs
New Generic
Global
Economies
Of Scale API
Cost of
Developing
API Source
Source of API
Controlled by
Multinational
Value split between generics and originators
(S3 – S7)
ETHICALS %of RX Market*
GENERICS %of Rx Market*
25.0
MAT DEC/06
R TRD %
75.0
22.7
MAT DEC/05
R TRD %
77.3
23.9
MAT DEC/04
R TRD %
76.1
24.7
MAT DEC/03
R TRD %
75.3
22.6
MAT DEC/02
R TRD%
77.4
0
10
20
30
40
50
60
70
80
90
Ethical = originator
MAT is the Moving Average Total from December of one year to December of the next year
TRD is the Trend in Percentage Rand
•In real terms, price ratio of generics to originators has significantly reduced
•Range of 22, 6% to 25% evidences reasonably static growth of generic uptake in
value terms.
Volume split between generics and
originators (S3 –S7)
GENERICS % of Rx Market*
ETHICALS % of RX Market*
MAT DEC/06
UN %
46.5
53.5
MAT DEC/05
UN %
50.3
49.7
MAT DEC/04
UN %
55.7
44.3
MAT DEC/03
UN %
60.6
39.4
MAT DEC/02
UN %
64.7
35.3
0
10
20
30
40
50
60
70
•Growth from 35.3% to 53.5% evidences the significant volume growth for
generics compared to that of originator & the relative pedestrian value growth for
generics
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
LCD/MNF
(Million)
Impact Analysis: Protection Expiry by year
South Africa
60
50
40
30
20
10