Impact of Accession on Generics in Candidate Countries

1. Impact of Accession on Generics in Candidate Countries Beata Stepniewska EU Accession Manager EGA 25 February 2003 Prague

2. EGA Representing Europe’sGeneric Medicines Industry • Truly Pan European. • Representing over 500 companies (excluding subsidiaries) and national associations. • Providing employment for over 85,000 people. • Promoting affordability and access to quality pharmaceutical care. • Increasing the science base and export potential of European industry.

3. Czech Rep. Poland Hungary Slovenia Slovak Rep Cyprus Croatia Turkey Bulgaria New members: Rumania Ex- New Yugoslavia Enlargement in the EGA has already been done… Wide representation of generic companies form Candidate Countries

4. Day X is coming…   1st of May 2004  2007 ??? ???

5. Impact of Accession on generics • Accession Treaty • Free movement of goods (chapter 1) • Company law (chapter 5) • New pharmaceutical legislation (Review 2001)

6. Impact of Accession Negotiation on generics • Accession Treaty • SPC • Parallel import • Update of documentation for existing products (transitional period for some countries)

7. SPC in Accession Treaty • Common conditions: • valid basic patent • link to the moment of first Marketing Authorisation (MA) Last change made by COREPER in February • first Marketing Authorisation (MA) in any of the Member States, not in Candidate Country concerned

8. “Potential Candidates for SPC” • Products with the first MA granted • Czech Rep - after 10th of November 1999; • Cyprus - prior to date of Accession • Estonia – prior to date of Accession • Hungary – after 1st of January 2000 • Latvia - prior to date of Accession • Lithuania - prior to date of Accession • Malta- prior to date of Accession • Poland - after 1st of January 2000 • Slovakia - after 1st of January 2000 • Slovenia - prior to date of Accession

9. Parallel import in Accession Treaty • With regard to the Czech, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia or Slovakia the holder of patent or SPC of a pharm. product (…) may relay on the rights granted by that patent or SPC in order to prevent the import and marketing of that product (…) • Any person intending to import or market a pharmaceutical product covered by the above paragraph in a Member state where the product enjoys patent or supplementary protection shall demonstrate to the competent authorities in the application regarding that import that one month’s prior notification has been given to the holder or beneficiary of such protection

10. Update of documentation for existing products • Czech Republic – date of accession • Transitional period for some countries (Poland, Slovenia, Cyprus, Malta, Lithuania) • Renewal in compliance with the acquis and in accordance with the timeframe set out in the attached list or until 31 December 2007 (in Slovenia) or 31 December 2008 (in Poland), whichever is earlier.

11. Impact of new legislation on generics after Accession • New pharmaceutical legislation (Review 2001) • Regulation 2309/93 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Agency for the Evaluation of Medicinal Products • Directive 2001/83 Community code relating to medicinal products for human use • Directive 2001/82 Community code relating to medicinal products for veterinary use

12. Legislative procedure Modified proposal Oct 2002 I Q 2003 Final Text Conciliation

13. Next Steps • European Commission will propose modified proposals (Regulation already published/ March 2003 Directive) • Council of Ministers Working Group to agree Common Position (March 2003 Regulation / III/IV Q 2003 (?) Directive) • Second Reading in European Parliament IV Q 2003 (?) • Revised Common Position of the Council I Q 04? • Conciliation Committee Spring 2004 ?

14. 3 Foundation Stones Access to Affordable Medicines Prescribing Dispensing Practices Efficient Regulatory System Balanced Patent System

15. 3 Basic Principles • Encourage doctors to prescribe and pharmacists to dispense generics; • Ensure that regulatory system enables generic medicines to come on the market immediately after patent expiry; • Create a “balanced” Intellectual Property system which encourages real innovation and not prolongation of monopoly of old innovation

16. How far are these principles affected by modified proposal of Regulation and Directive? Review 2001

17. Review 2001 -Main Issues Affecting Access to Generics • Bolar provision • Export • Data exclusivity • Definition of generic, reference product and EU reference product • Definiton of biosimilar medicinal product • Harmonisation of Product information (SmPC summary of product characteristics) • Autorisation procedure

18. ‘Bolar’-type Provision Introduced by EC • ‘Conducting the necessary tests and trials with a view to application to a generic medicinal product shall not be regarded as contrary to patent related rights or to supplementary protection certificates for those medicinal products.’ • The purpose of this provision is to bring the development work back into the EU; it does not affect the date on which the generic product arrives on the market

19. Improved ‘Bolar’ adopted by EP • Submission of an application, submission of samples, granting of a marketing authorisation and all same activities for export added to the Commission’s Bolar provision • Rejection by Commission expected • Partial adoption by Council expected

20. Export Amendment for Developing Countries • Equivalent to Doha amendment as it allows export of generic versions of patented products to countries which have issued a compulsory license • EGA welcomes • Rejection by Commission expected • Adoption by Council – debate expected

21. Data Exclusivity Today • During data exclusivity period health authorities do not accept abridged «generic» applications relying on safety and efficacy data of an originator product used as reference product • d.e. period starts from the date of marketing authorisation of original product in the Community • 6 years in AT, DK, FI, SP, IRL, PT, EL (NO, IS) • 10 years in BE, LU, FR, IT, DE ,NL ,SE ,UK • Candidate Countries – 6 years!!!

22. Data Exclusivity Tomorrow • EC proposal to harmonise at 10 years and extend to 11 years where new indication of significant clinical benefit • EGA has argued for: • Harmonisation at 6 years on basis of significant improvement in IP over past 15 years • 1 year extension only for indications not covered by patent

23. Data Exclusivity • No economic assessment was made by the Commission to arrive at a harmonised period of 10/11 years • No impact assessment on costs to healthcare systems • No right to challenge - as in case of patents • Data exclusivity was initially intended for products which cannot be patented (e.g. natural substance) • Data exclusivity period may be close or even go beyond patent period in certain cases

24. EP Compromise Amendment on Data Exclusivity • 8 years harmonised data exclusivity (i.e. submission and assessment of generic application possible after 8 years) but granting of the marketing authorisation, manufacturing and marketing of the generic only possible after 10/11 years from the first authorisation of the original reference product • Compromise adopted by very large majority (493 in favour, 53 against and 3 abstentions) • Rejection by Commission expected • Council – possible reintroducing of 8 years

25. Additional Data Exclusivity Amendments of EP • 3-years data exclusivity for new indication of well-established substance (i.e. after 10 years of use) major threat as it may lead to 14 years market exclusivity, further ‘vertical’ disharmony within Member States and undermining of national substitution and reimbursement poilicies • Introducing by Commision under disscussion- key issue!! • 3 years data exclusivity for OTC switch • Introducing by Commision expected –Council not fully supportive

26. Definition of Generic • EC definition based on current practice of the MSs and international scientific consensus • Definition amended by EP requiring for the active substance of the generic strict chemical identicality with the active substance of the reference product

27. EP Definition of Generic • ‘Generic medicinal product shall mean a medicinal product which has the same qualitative and quantitative composition in active substance (s) (chemically identical in terms of isomer, complex, crystal polymorphic form, simple ester or salt form of the activemoiety) and the same pharmaceutical form and is bio-equivalent to the reference product, unless it differs significantly from the original product as regards safety and efficacy’

28. EP Definition of Generic • Anticompetitive as it provides excellent tool for originator companies to block generics • Dramatic consequences on national healthcare budgets • Unscientific as different forms of the active moiety can be bioequivalent and have the same safety and efficacy profile

29. Definition of Reference Product (single MA) • Commission’s definition refers to new concept of single marketing authorisation • Consequently additional data exclusivity for e.g. new pharmaceutical forms, strengths is excluded • Single MA concept now rejected by EP • Definition of reference product becomes crucial for access to generics

30. EU Reference Product • EP proposed possibility to be able to refer to a reference product from another MS when absent in first MS • Commission accepted “in principle” • important for accession states in keeping existing products on market/updating dossiers • Important for small CCs • Single market as the EU principle • Solution to prevent strategic withdrawals of originator products • Council expected to be very careful of practical details

31. Definition of Biosimilar Product • Unethical, anticompetitive and unscientific defintion suggested by EP (full dossier in any case) • Rejection by the Commission expected • Definition being developed by CPMP Biotech WP expected to be accepted by Commission and Council • New legal/regulatory framework introduced into Annex I of Directive 2001/83/EC (case-by-case approach)

32. Other Regulatory Issues • Scope of Centralised Procedure – all NCEs obliged to use CP • Validity of MA • MA renewal once, after 5 years • MA – expiry after 3 years if product not marketed • Area still not sufficiently covered by new proposal • Harmonisation of SmPCs • Usage patent

33. Harmonisation of SmPCs (Summary of product characteristics) • Harmonisation of product information is major issue as 50% of generic MRP applications are withdrawn or have reduced indications • Legal provision for harmonisation introduced by Commission • It is crucial that harmonisation of reference products takes place before expiration of data exclusivity period

34. ’Vertical’ Harmonisation • Even if harmonisation process becomes successful, vertical disharmony will not disappearbecause of second medical use patents and possible new data exclusivity on new minor indications • Use Patents “Catch 22” situation: • If patented use included in SmPC then breach of patent • If not included, breach of public health or no reimbursement and substitution status!

35. Why should we fight for generics in CCs?

36. Generic Medicines Critical for New EU Members’ Health Care System • Average GDP per capita in Candidate Countries (CCs) is 5 times lower than EU average. • Real spending per capita on health in CCs is <400Euros compared to >1,600 Euros in EU

37. Access to Generics in Europe • Generic Market Share (2002) • Germany 23% Value 36% Volume • UK 13% Value 42.% Volume • Denmark 15% Value 57% Volume • Netherlands 14% Value 37% Volume • Ireland 8% Value 12% Volume • Spain, Italy, 2-3% Value 2-5% Volume Portugal • CEE (average) 30% Value 70% Volume

38. Generics 70% of Volume for 30% of Costs C V C V

39. 4 Key Reasons to promote Generic Medicines • Increases access to health (generics are usually 20-80% of original price) • Competition stimulates innovation • Provides “headroom” for innovation - savings from using generics can help health budgets pay for new expensive products. • Stimulates local production and pharmaceutical development

40. Major Savings • In the European Union Over 12 Billion Euros saved per year by use of generic medicines • By 2004 35% of top molecules’ patents expire = increases savings potential G G

41. Generic Availability Needs Government Action • Access to generic medicines requires supportive government measures because: • Demand is stimulated by prescribing and dispensing habits not by purchasers • Supply is dependent on Regulatory and IP practices G

42. EU is ata crossroads • 20 years patent + indications, formulation design patents. • Strategic Withdrawals • Restrictive definitions for generics and bio-generics • Standard DE 11 years • OTC Switch exclusivity • Indication exclusivity • Pediatric exclusivity • Geriatric exclusivity • +…. uncompetitive industry, low affordability, unstable H-C budget • 20 years patent protection • Real Bolar • No more SPCs • Balanced Exclusivity • Harmonised SmPC • Real innovation promoted competitive industry, affordability, stable budget

43. New EU Medicines Law being developed Candidate Countries must seek to influence now! Still a chance!!! • First common position of the Council III/IVQ 03– observers from CCs after signature of the Treaty (16th of April 2003) • IVQ 03/IQ 04 (?) Second Reading of European Parliament (EP) – influence from National Parliaments (interparliamentary cooperation) • Conciliation Spring 04 ? • Accession 1 May 2004 • New law starts Spring 2005? Too late!! Ministers of Health from CCs

44. In 2003 EGA together with New EU Members are working for… • 6 years/8 years compromise Data Exclusivity. • No data exclusvity for minor new indications. • Appropriate defintions for generic. • Framework for Bio-comparable products. • Harmonised SmPCs. • Resolving « is/has been authorised » problem. • An EU Bolar provision. • An EU reference product.

45. Thank You ! A E G CZ