Italy - Will the Italian generics market catch up with its European neighbours?

A number of high profile drugs have lost patent protection; will the Italian generic market take off as a result?

The Italian pharmaceutical market is expected to remain one of Europe’s slower growing markets over the next five years. Growth will continue to be constrained by low economic growth, cost containment measures for reimbursable products, reference pricing and an expected expansion of the generics market due to patent expiry on several high volume products.

On the plus side, this may be good news for the generic industry. Even by southern European standards, the Italian generics market is small. Excessive price regulation, long national patent supplementary protection, a lack of incentive distribution margins, confusion between branded and unbranded generics, a perception of generics as second-class drugs and the empowerment of doctors to stop generic substitution are all factors that have traditionally constrained the unbranded generic sector.

The combination of high profile drugs losing patent protection and the need to reduce costs should provide a boost to the generic market. In addition to the blockbusters that have lost patent protection in Italy in the last couple of years, a large number of medicines will lose their national supplementary certificates during 2010. Consumer perception of generics and generic awareness continue to improve. The Italian generic market is also being consolidated by leading generic producers in the country.

However, the generic industry has been coming under increasing pressure from manufacturers of branded products, which have begun to implement price cuts to minimise loss of market share. Significant price reductions have been closing the gap between off-patent brands and unbranded generics. The generic industry still has some way to go, but anticipates continued growth in market share and a progressive alignment with the rest of Europe.

Further reading - An in-depth review of the Italian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Italy (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)

USA - How will the new regulation of biosimilars impact the US pharmaceutical market?

The US pharmaceutical market has opened the market to biosimilars. It remains to be seen what will happen in practice.

In March 2010, the House of Representatives passed H.R. 3590. This is the bill as previously passed by the Senate, with some House amendments. The President signed it into law on 23rd March. H.R. 3590 includes the biosimilar pathway provisions.

Now that the legislation has become law, attention will move to its operation in practice, and it will be interesting to see when it will be used first, and by whom. There are a number of areas to watch: data exclusivity, evergreening, interchangeability and patent resolution.

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

EU – Competition Inquiry Findings Released

The results of the EU Commission’s 18-month long inquiry into anti-competitive conditions in the pharmaceutical industry were released on 8th July 2009.

The inquiry, launched in January 2008, found that generic medicines take too long to reach the market, and this is often due to drug companies using a variety of techniques to extend the commercial life of their products. Between 2000 and 2007, consumers waited an average of seven months for a cheaper generic medicine once the patent had expired, costing 20% in extra spending. The EU Commission called upon member states to do more to boost the uptake of generic medicines, but will also scrutinise the sector more closely and prosecute any companies which violate the competition law.

The first settlement agreement to be investigated is between French-based Servier and a number of generic companies including Teva, Krka, Lupin, Mylan’s Matrix subsidiary and Unichem’s Niche Generics unit, over “possibly restrictive” practices which may have hindered the entry of the generic versions of Servier’s cardiovascular drug perindopril.

The EU Commission is expected to review around 200 such agreements in the coming months.

The inquiry also found that fewer innovative medicines are reaching the market, and that certain drug company’s practices may be contributing to this. The EU Commission said it will monitor the situation closely to identify the factors contributing to the decline in innovation.

The inquiry also concluded that there is an urgent need for an EU patent and patent-litigation system, which will reduce costs and improve efficiency. It will also reduce uncertainty for drug companies, because at present, 30% of patent court cases are conducted in parallel in several member states, and in 11% of cases national courts reach conflicting judgements.

Further reading - Pharmaceutical market profiles are available for all European countries from Espicom: Pharmaceutical Market Reports; Europe