Japan - Which companies have recently announced plans to enter the Japanese generic drug market?

In the first quarter of 2010, both Pfizer and Fujifilm unveiled plans to produce generic drugs.

In February 2010, Pfizer announced that it aims to be the leading manufacturer of generic drugs in Japan, which it plans to enter in 2010. Pfizer unveiled its Japanese generic drug business plan in December 2009 as part of its global move to offset risks on patent drugs. Fujifilm also plans to enter the Japanese generic drug market in 2010 and expects to sell products by spring. The government is currently providing incentives to manufacturers and pharmacists to promote generic drugs in an attempt to reduce the amount spent on branded drugs, and it wants the generic drugs to represent nearly one-third of the pharmaceutical market by 2013.

Further reading - A detailed review of the Japanese pharmaceutical market is available from Espicom: The Pharmaceutical Market: Japan (published May 2010)

South Korea - Why is drug patent protection being threatened in South Korea?

The South Korean legal courts have favoured domestic companies over multinational companies in recent patent cases, under the guidance of a government that is keen to promote branded generic production.

This year, several high profile court cases that have involved multinational pharmaceutical companies trying to protect their drug patents against domestic generic companies, have seen the decision go in favour of the latter.

In April 2010, the Korea Intellectual Property Tribunal invalidated Janssen's patent on Ultracet, claiming that the pain killer contained widely used materials. In March 2010, Pfizer lost its two year legal battle with six local pharmaceutical companies over the patent of Lipitor, its anti-cholesterol drug.

Further reading - A detailed analysis of the South Korean pharmaceutical market is available from Espicom: The Pharmaceutical Market: South Korea (published May 2010)

Brazil - Why is Brazil the most attractive market in Latin America?

The market is stronger due to new regulatory measures, increasing drug consumption and sizeable opportunities in the generic sector.

Increasing regulatory compliance ...

Demand should increase as the country is emerging from the economic downturn much quicker than anticipated. Recent regulatory developments include the implementation of the National Drug Control System, published in November 2009; registration requirements for APIs, published in November 2009; and a new labelling & packaging regulation, published in September 2009. ANVISA is also working on a draft for the regulation of biologic copies; the aim is to encourage local production of these medicines.

Rising purchasing power, fuelling drug consumption ...

The pharmacy sector in dollar values registered a slow growth in 2009 but the outlook is positive, as the population’s purchasing power is increasing. Future OTC sales are expected to be affected by the new advertising regulation, enforced in June 2009, and the new dispensing practices, published in August 2009. One of the new dispensing measures was that OTC medicines could no longer be sold over the counter. This, however, was overturned by ABRAFARMA in October 2009.

Wave of acquisitions in the generic sector ...

Generics sales continue to grow at a higher rate than the overall pharmacy sector, and they are expected to represent 20% of the sector by volume in 2010. In September 2009, it was rumoured that the local generic producer, Neo Química, was being acquired by Pfizer, but instead it was grabbed by the leading OTC company Hypermarcas in December 2009. This was the second major acquisition in the generic sector in 2009, following sanofi-aventis’ acquisition of Medley.

Further reading - A detailed review of the Brazilian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Brazil (published January 2010)

India - Indian firms with sterile injectable expertise targeted by Pfizer and Hospira

Pfizer and Hospira gain injectable generics from Indian firms

The Indian pharmaceutical industry has been targeting the US generics market for some years. More recently, a number of companies have successfully gained FDA approval for a growing portfolio of injectable generics. This relatively exclusive segment of the generics market appears to be gaining a higher profile and Hospira and Pfizer have each found a way of increasing market share by doing deals with Indian manufacturers.

At the end of last year, Hospira agreed to acquire Orchid’s generic injectable finished-dosage form pharmaceuticals business for approximately $400 million. The acquisition included Orchid’s beta-lactam antibiotics manufacturing complex (comprising cephalosporin, penicillin and carbapenem facilities) and pharmaceutical R&D facility at Irungattukottai, Chennai, as well as its generic injectable product portfolio and pipeline. In addition, the companies signed a long-term exclusive agreement for Orchid to supply APIs for the acquired generic injectable pharmaceuticals business.

At the beginning of this year, Pfizer and Strides Arcolab entered into a collaboration whereby Pfizer will commercialise off-patent sterile injectable and oral products in the US through its Established Products Business Unit. The companies believe that this is a highly complementary collaboration, which is expected to deliver 40 off-patent products, many of which are oncology therapeutics, to healthcare providers and patients in the US, by joining Pfizer's solid commercial infrastructure with Strides' high-quality manufacturing capabilities. The first of the products commercialised under this collaboration are expected to be launched this year.

Pfizer is obviously keen to work with Indian manufacturers to provide a boost into the injectable generics market. In May 2009, Pfizer entered into a commercialisation agreement with Claris Lifesciences, under which the firm acquired the rights to 15 injectable products that have lost patent protection in major markets, covering a wide range of therapeutic areas including anti-infectives and pain management. The products will be marketed under the Pfizer brand in the US, where the deal is exclusive; Claris will continue to market the products elsewhere.

Further reading - A detailed review of the Indian pharmaceutical market is available from Espicom: The Pharmaceutical Market: India (published January 2010)

UK - How will the economic recession affect the UK pharmaceutical market?

Reductions in health spending and industry job cuts could have an impact on the market, but an ageing population and a health service under pressure will guarantee an increasing demand for pharmaceuticals.

The UK pharmaceutical market is set to experience moderate growth over the coming years, tempered slightly by the effects of the economic recession. Public spending cuts are likely, as public debt continues to increase, and health expenditure is set to suffer as a result. In 2010 the NHS budget is £102.3 billion, but this could fall by 2.5 to 3.0 per cent per annum from 2011/12. This follows a period of huge growth in health spending under the Labour government, which has seen the NHS budget almost triple. However, the NHS is well equipped to deal with the financial shortage, as it has seen marked improvements in recent years.

Many pharmaceutical companies have announced job cuts worldwide in recent months, in an effort to reduce costs, and many staff based in the UK are likely to be affected. These companies include Eli Lilly, GlaxoSmithKline, AstraZeneca and Pfizer. Job cuts are to be expected considering the economic climate, as well as upcoming challenges for these companies, including patent expiries, increased generic competition and slowing innovation.

A number of key pharmaceutical and biologic products are going off patent in the coming years, which will strengthen the generics market. Despite budget constraints, increased pressure on the NHS to cope with the health needs of an ageing population will lead to a rise in demand for pharmaceuticals, and a willingness to invest in new therapies to ensure effective treatments.

Further reading - An in-depth analysis of the UK pharmaceutical market is available from Espicom: The Pharmaceutical Market: United Kingdom (published January 2010)

UK - NICE Rejects Appeal Over Kidney Cancer Drugs

The National Institute for Health and Clinical Excellence (NICE) has rejected an appeal to make Avastin (bevacizumab), Nexavar (sorafenib) and Torisel (temsirolimus) available on the NHS for patients with renal cancer.

NICE issued guidance on 26th August 2009, which does not recommend Roche’s Avastin, Bayer’s Nexavar and Wyeth’s Torisel as a first-line treatment for advanced and/or metastatic renal cell carcinoma. NICE has also refused approval on the NHS for the use of Nexavar and Sutent (sunitinib) as secondary treatment options.

In August 2008, all four drugs were rejected as first-line treatments, but NICE changed its mind about Pfizer’s Sutent in March 2009, approving it for NHS use. However, NICE still rejected the other three drugs because they were not considered to be a cost effective use of NHS resources. An appeal was lodged against the Final Appraisal Determination by Roche, Wyeth, the James Whale Fund for Kidney Cancer and a joint appeal from Rarer Cancer Forum and Macmillan Cancer Support, but these have not been upheld.

NICE said Avastin costs £,5,982 per patient for the first six-week cycle and £6,117 for subsequent six-week cycles (around £53,000 per patient per year). Nexavar is £2,980.47 for 112 tablets while Torisel costs £620 per vial.

The guidance will be considered for review in June 2011.

Further reading - An in-depth review of the UK pharmaceutical market, including more information on NICE, is available from Espicom: The Pharmaceutical Market: United Kingdom (published June 2009)

UK - NICE Stands by Guidance on Anti-Cholinesterase Drugs

The National Institute for Health and Clinical Excellence (NICE) released guidance on anti-cholinesterase drugs in June 2009, recommending them for NHS patients with moderate Alzheimer’s disease only.

This is the same conclusion the watchdog reached in 2005, but NICE admitted that there had been errors in the initial economic model used to determine the cost-effectiveness of the drugs.

The guidance applies to Aricept (donezepil), marketed by Eisai and Pfizer, Novartis’ Exelon (rivastigmine) and Shire’s Reminyl (galantamine).

Eisai and Pfizer fought the original decision, arguing that the treatment should also be available to patients with mild Alzheimer’s disease. However, they will not appeal the latest guidance.

Further reading - An in-depth analysis of the UK pharmaceutical market, including some background information about NICE, is available from Espicom: The Pharmaceutical Market: United Kingdom (published March 2009)

Pfizer expands generics agreements with Indian companies

On 20th May 2009, Pfizer announced that it had entered into licensing agreements with two Indian pharmaceutical companies, Aurobindo Pharma and Claris Lifesciences, which would strengthen Pfizer’s position in emerging markets and expand its portfolio of medicines in its Established Products Business Unit. The agreement with Aurobindo expands a series of earlier agreements between the two, announced on 3rd March 2009, in which the two firms would work to commercialise medicines that are no longer protected by patents and have lost market exclusivity in the US and Europe. Pfizer’s Established Products Business Unit was launched in 2008 as part of the firm’s initiative to create smaller, more accountable business units aligned with customer needs.

Pfizer commented that its expanded agreements with Aurobindo would grow its product portfolio within emerging markets to reflect the market dynamics and commercial interests of over 70 countries. Under the terms of the agreement, Pfizer has acquired the rights to 55 solid oral dosage products and five sterile injectable products for patients in over 70 emerging market countries. The products include antibiotics and anti-infectives, and cover a broad range of therapeutic categories, such as cardiovascular and central nervous system disorders. Pfizer will commercialise the 60 products in phases, tailoring its approach for different regions. Financial terms of the deal were not disclosed. In the agreements announced in March 2009, Pfizer acquired the rights to 39 generic solid oral dose products in the US and 20 in Europe, along with an additional 11 in France. The products were to be commercialised in the US through Pfizer’s Greenstone subsidiary. Pfizer also acquired the rights to 12 sterile injectable products in the US and Europe. These agreements in turn were an expansion of an existing five-product US deal that Pfizer and Aurobindo entered into in July 2008.

With regard to Claris Lifesciences, Pfizer entered an agreement to commercialise sterile injectable medicines after the products have lost patent protection and have lost market exclusivity in North America, Europe, Australia and New Zealand. Under the terms of the agreement, Pfizer acquired the rights to 15 injectable products covering a wide range of therapeutic areas including anti-infectives and pain management. As with the Aurobindo agreements, financial terms of the deal were not disclosed.

Pfizer commented that to date, 128 non-Pfizer products, consisting of 98 solid oral dose and 30 sterile injectables, had been added to its portfolio of established brands. Pfizer added that its global annual sales of established products are worth around US$10 billion.

Background information on Aurobindo Pharma and Claris Lifesciences can be found in The Indian Pharmaceutical Industry 2009: Diversification, Expansion & Ambitions, published by Espicom in May 2009. In addition, Espicom has recently updated The Pharmaceutical Market: India, which provides a detailed review of the Indian pharmaceutical market.