Latest News For 'Generic Drugs'
October 1st, 2007
FRANKFURT, Sept 28 (Reuters) - For foreign manufacturers of generic drugs, Germany has been hard to crack because of its complex regulatory system. All of a sudden the door to Europe’s biggest generics market is open.
Keen to curb rising healthcare costs, the government is for the first time allowing public health insurers to choose cheap drugs for patients through a system of tenders, replacing a structure where doctors or pharmacists made the choice of drug brand.
Stada (STAGn.DE: Quote, Profile, Research), Germany’s third biggest generic drugs maker, announced 230 job cuts and a 29 million euro charge on Friday as a direct result of the policy change, and analysts said the move to so-called discount contracts will reshape the market.
“It will change the industry. It’s a whole new game,” said Martin Possienke, a healthcare analyst at brokerage Equinet.
Possienke said local companies like Stada will have to adjust their business models, cutting marketing expenditure, if they want to survive in this new contract system.
“For Germany, this kind of rebate contract will be the future. I expect other public insurers to follow the example of AOK,” he added.
AOK, Germany’s biggest healthcare insurer, launched two tenders this year to select drug suppliers for the 25 million it covers out of Germany’s 70 million publicly insured persons.
Investors are also closely tracking healthcare policy changes in Germany because its neighbours such as the Netherlands and Austria consider German prices before setting their own.
According to industry tracker IMS, the German generic drugs market is worth about 8 billion euros ($11 billion), compared with consultancy Frost & Sullivan’s $17 billion estimate for Europe.
Top German players did not participate in AOK’s first-round tender early this year for fears of margin erosion.
The absence let companies little known in Germany such as Israel’s Teva (TEVA.O: Quote, Profile, Research) (TEVA.TA: Quote, Profile, Research) and Actavis of Iceland snap up several drug contracts with AOK, giving them a crucial platform to tap into the market in Europe’s biggest economy.
Teva is the world’s biggest generic drugs maker, but is so far only a minor player in Germany.
“It’s great that we are now mentioned at the same time as Stada, ratiopharm and Hexal,” Michael Ewers, general manager of Teva Germany, told Reuters.
“In early 2007, 2006, nobody has compared us with them. We were not present at all,” Ewers said.
Stada, family-owned ratiopharm and Novartis’s (NOVN.VX: Quote, Profile, Research) Hexal unit have dominated Germany’s generic drugs market, where about 85 percent of sales went to public insurers.
While the discount system is a boon for new players, local companies are feeling the pinch and can no longer stay on the sidelines to get a slice of the two-year supply contract.
“You can have as much marketing as you want. But if you aren’t winning our contracts, you have a big problem,” said Christopher Hermann, deputy head of AOK Baden-Wuerttemberg.
“The incentives for companies are different now. The focus is on how big a discount you can provide. In one go, you can secure big volume here,” Hermann told Reuters, adding that everybody had participated in the recent second-round tender.
AOK Baden-Wuerttemberg, AOK’s arm in southwestern Germany, is heading the new tender system and plans to detail the winners
– over 700 discount offers for 83 active pharmaceutical — over 700 discount offers for 83 active pharmaceutical ingredients on tender — next week.
For Teva, which has said it has won “a significant increase” in supply contracts in the second round compared with the first, the time to seize the German market has come.
“We understand the new language better than those ugly words like ‘doctors acquisition’, ‘brand building’,” Ewers said, adding that Teva would expand to cope with the new business.
“We don’t need people from Stada or ratiopharm who used to lobby doctors. We need people from health insurers,” he added.
Stada said last week it had secured less than a third of AOK’s latest drug tender, which disappointed investors.
Equinet analyst Possienke said the deals were not enough to protect Stada’s operating margins in Germany and might not even be enough to maintain a stable revenue level.
August 16th, 2007
An Indian court earlier this month ruled against Swiss pharmaceutical company Novartis’ challenge to India’s right to refuse patents on existing medicines. While international aid agency Oxfam and the Interfaith Center on Corporate Responsibility (ICCR), an institutional investor organization, see the verdict as “an important victory for global public health,” Novartis is worried that the “Indian court ruling will discourage investments in innovation needed to bring better medicines to patients.” Novartis is a widely held stock in socially screened portfolios.
The ramifications of this ruling by the High Court in Chennai reach well beyond India to other developing nations, largely because of India’s important role as a manufacturer of generic drugs. Oxfam reports that over two-thirds of the generic drugs made in India are then exported to other developing countries for considerably less cost than the patented brand medicines. Unicef, Doctors Without Boarders, and other aid programs also depend on the low cost generic medicines manufactured in India.
The lawsuit hinged, in large part, on how drug innovation occurs and if slight differences in medicines, i.e. “incremental innovation,” require new patents for the drugs. Novartis brought India to court challenging the constitutionality of the Section 3(d) of the provision of Indian Law that states patent monopolies will be awarded for only “truly innovative medicines” rather than minor changes of existing medicines. The US Supreme Court also recently ruled in favor of stricter criteria for medicine patents.
“This case has always been about gaining clarity on how innovation is valued and protected in India,” said Carrie Scott, spokesperson for Novartis. “Medical progress occurs through incremental innovation, and Section 3(d) excludes these important developments, ultimately denying patients in India new and better medicines. Effective patent systems help patients because incentives are in place that stimulate long-term research and development efforts needed to develop better medicines and ground-breaking therapies like Glivec.”
However, some drug companies practice “evergreening” with their products, the act of seeking to extend the market exclusivity of a product by introducing small changes that do not offer therapeutic value just before a patent expires. “Evergreening” and “incremental innovation” can be confused. The idea that medicines are developed through incremental innovation is also heavily debated.
The World Trade Organization (WTO) in 1994 confirmed the Agreement on Trade Related Intellectual Property (TRIPS) to balance the rights of developing countries to protect public health and the rights of intellectual property. In 2001, developing and developed nations met again over TRIPS to clarify the agreement. India’s provision is safeguarded by TRIPS, Oxfam reports.
“We are satisfied with the ruling,” said Rohit Malpani, Policy Advisor for Oxfam America. “It seems some pharmaceutical companies think they are beyond TRIPS. As they enter developing nations, they need to create a middle ground to offer medicines. Their approaches need to be voluntary, company-by-company, and medicine-by-medicine. In developing countries, drug companies could have tiered pricing within the country and between countries.”
Oxfam and ICCR saw the Novartis court challenge as a threat to millions of people in developing countries too poor to buy patented medicines. Besides risking public health, Oxfam and ICCR believe the lawsuit threatens to damage Novartis’ reputation in developed and developing countries.
Almost half a million people signed petitions that asked Novartis to pull the case. Oxfam also noted that between 80-90,000 emails and telephone calls were placed to Novartis. Some are worried that there might be a backlash against the company or even a regulatory backlash, lowering its stock price. Emerging markets like India could also see a backlash against the drug maker.
“We felt that if Novartis won the case in India, it would have serious impact in developing nations,” said Lauren Compere, Co-chair of the Access to Health Working Group of the ICCR and Director of Shareholder Advocacy at Boston Common Asset Management. “We are looking at the patents that support the manufacturing of generic pandemic medicines in India. This is a test case for TB, HIV/AIDS and anti-viral drugs that have a big impact in that part of the world. The crux of the issue is patent on non-innovative drugs.”
However, the irony is that currently Novartis doesn’t sell Glivec in India and 99% of the patients prescribed Glivec in India receive it free from Novartis through its Glivec International Patient Assistance Program ( GIPAP.)
Novartis reported that its access-to-medicine programs reached over 33 million patients worldwide in 2006, with contributions totaling nearly a billion Swiss francs. This represented some 2% of its total net sales donated to patients and research into neglected diseases.
Scott told SocialFunds.com, “This case did not threaten the supply of medicines from India to poor countries given the safeguards already in place. Medicines are made available through tiered-pricing solutions, public-private partnerships, shared contribution models and donation programs.”
However, giving away free drugs is not the issue, as much as the 7,500 patients who have received free Glivec might appreciate it. “Medical philanthropy is not sustainable for developing nations,” said Oxfams’s Malpani, “Countries need to have functioning public health care systems.”
“In India, Novartis is faced with a globalization dilemma that characterizes many emerging economic powers today: two markets within one country. India has a booming middle class on one hand, and a vast number of extremely poor people on the other,” said Novartis’ spokesperson Scott. “As a result, in India, we are pursuing a dual, patient-focused strategy. We are aware of the many obstacles poor patients face regarding access to medical care there. At the same time, we take affluent India seriously as a formidable world power with all the rights and obligations that such status brings with it. ”
The Indian court has deferred to the WTO to resolve the question on TRIPS compliance. The Glivec patent appeal is still not decided and the Intellectual Property Appellate Board (IPAB) review continues as a separate proceeding. Although the drug maker could appeal to the Indian Supreme court or ask the Swiss government to present it before the World Court, Novartis told SocialFunds.com the company will likely not appeal the decision. What happens next will be probably be behind the scene, with harder lobbying by Novartis and other drug companies of the Indian government to rewrite laws.
July 30th, 2007
WASHINGTON — The Food and Drug Administration, beset by a lack of funding and staffing, is failing to keep up with the growing volume of generic drug applications and meet its obligation to approve the lower-cost prescription medicines in a timely fashion.
Although the FDA gave the go- ahead to more than 500 generic drugs last year, the agency’s backlog of pending applications grew to 1,291 last month, from 780 at the end of 2005. The median approval time for new generic applications has been stalled at more than 16 months for several years, despite a statutory requirement that generic drugs be reviewed within 180 days.
Generics — which now account for more than 60 percent of all prescriptions written in the United States — are copies of expensive brand-name medicines, often selling at prices 20 percent to 80 percent lower than the originals. According to the National Association of Chain Drug Stores, the average retail price of a brand-name drug in 2006 was $111.02, while the average price of a generic was $32.23.
“The impact of the (FDA) delays is higher costs for consumers,” said William Vaughan, a senior health policy expert for Consumers Union.
Gary Buehler, director of the FDA’s Office of Generic Drugs, said his staff is “working as efficiently as it can” with the resources available to approve new generics.
“Unfortunately, we are not processing as many applications as we are getting, and that is the reason we have a backlog,” he said in an interview last week.
Buehler said his office will end up receiving between 800 and 900 generic drug applications this year, with little chance of getting out from under the heavy caseload.
Ira Loss, a senior pharmaceuti cal analyst for Washington Analysis, an investment research firm, said the Bush administration and Congress have shortchanged the FDA and consumers by not provid ing adequate revenue for the agency to do its job.
“The simple answer is the FDA is underfunded, and part of underfunding is in the generic drug area, where application numbers are increasing,” Loss said. “This has the effect of not reducing the drug prices as quickly as otherwise might be the case.”
When a brand-name drug patent expires, generic pharmaceutical companies seek FDA approval to market their version of the innova tor’s medicine. The generic firms must show their medicines are the same as the brand-name drug in chemical composition, dosage, safety, strength, how it is taken, quality, performance and intended use.
July 26th, 2007
Rwanda is the first country to come forward and ask for Canada’s help in supplying cheaply priced, generic drugs to fight HIV/AIDS.
Three years ago, Canada’s Access to Medicines Regime was created with the intention of supplying inexpensive medication to developing nations to fight public health threats.
Not one pill has been exported due to bureaucratic red tape and flaws in the legislation.
The central African nation notified the World Trade Organization on July 17 that it asked Canada to supply about 18 million tablets of Apo-triAvir, a triple combination AIDS medication made by Canadian generic drug giant Apotex Inc., over the next two years.
That’s a year’s supply of drugs for 260,000 people, said Elie Betito, Apotex director of public and government affairs.
But now that Rwanda has come forward and stated its intention to buy the medication, it doesn’t mean Apotex can just make and ship the drugs.
The generic firm must get permission from two brand name drug companies, Boehringer Ingelheim (Canada) Ltd. and GlaxoSmithKline Inc., which make the drugs used in Apo-triAvir, to move forward.
Ian Mills, president and CEO of Boehringer Ingelheim (Canada) Ltd., said the company just sent a letter to Apotex yesterday allowing them to proceed.
GlaxoSmithKline’s Leanne Kitchen-Clarke, director of corporate communications and stakeholder relations, said the company had been contacted by Apotex and was “working diligently” on its response.
Under the legislation that was originally passed in 2004, a voluntary licence is granted to the generic firm to make the drugs. The process is strewn with obstacles.
“Yes, they can give you the approval initially but they can withdraw it at any time,” Betito said. “Nothing is simple, nothing is certain.”
Last August at the International AIDS conference in Toronto, federal Health Minister Tony Clement ordered an immediate review of the legislation.
In April there were three days of committee hearings, but a report won’t be debated in Parliament until mid-September at the earliest.
The voluntary licensing requirement makes the process largely unworkable, Betito said.
“We’ve told the federal government, if you’ve got a country, just do a compulsory licence, just do it and get it done. But no one has done anything.”
Richard Elliott, deputy director of the Canadian HIV/AIDS Legal Network, called Rwanda’s intention to use the Access to Medicines Regime an important first step.
“We are being cautious in our optimism,” he said.
“This is the closest we’ve come so far to seeing the regime achieve what it’s meant to do.”
July 26th, 2007
While it may be easier on your wallet to buy the generic version of the drugs you need, are they just as good for your health as the brand names?
You may not know it, but chances are if you filled a prescription in the last year, you have probably taken a generic drug.
Of the close to 4 billion prescriptions dispensed in the United States last year, a whopping 61% of them were filled with generics, and that number is on the rise.
Despite their increased presence in medicine cabinets across the country, public opinion of generic drugs is still mixed.
Skepticism can be found on websites like ‘the people’s pharmacy’, where consumers post messages about problems when switching from brand to generic drugs.
While experts agree that patients’ complaints should not be taken lightly, some argue the stigma attached to generic medications can often cause a placebo affect.
“When generic substitution occurs, there may be a change in the color or shape of pill and that tends to heighten concern,” said Dr. Roger L. Williams.
“We began hearing from people that generics were not working as well as we hoped they’d be. They said, ‘My blood pressure started to go up when I went on a generic.’ Or, ‘My blood sugar went up.’ Or, ‘My diabetes wasn’t controlled as well,” added Pharmacologist Joe Graedon.
Proponents of generic medications insist their drugs are as safe and effective as brand name products and cost 30 to 80% less.
They also say generic medicines are highly regulated by the FDA.