Pharmaceutical technology transfer growing rapidly in past decade: IFPMA
Technology transfer in medicines and vaccines were growing rapidly in the past decade, benefiting both pharmaceutical companies and the health of recipient countries’ population alike, said the International Federation of Pharmaceutical Manufactures and Associations (IFPMA) here on Tuesday.
According to IFPMA spokesperson Guy Willis, today a majority of medicines reaching people in fact came from technology transfer.
On the transferring chain, most of the technology providers are research and development based companies from developed countries, such as Germany, Switzerland and Japan, while the recipients are mainly in middle and low-income countries.
IFPMA studies suggested that the middle-income countries caught more opportunities of pharmaceutical technology transfer, in comparison to the low-income countries who were hindered by lacking many of the enabling conditions.
To facilitate the process, IFPMA has issued a research paper titled “Technology Transfer: a Collaborative Approach to Improve Global Health — the R&D Pharmaceutical Industry Experience,” with over 50 case studies illustrating successful practices.
The paper also identified favorable conditions that contribute to successful transfers, such as market access, sound economic governance, clear development priorities, effective regulations, sufficient skilled workers, and adequate capital market.
IFPMA called on middle- and low-income countries to create “a welcoming policy environment” to boost pharmaceutical technology transfer, and high-income country to increase aid funding for health and healthcare in the developing world.
Big Pharma’s Big Headache
We may be witnessing a slowly developing economic recovery, but that’s little consolation to the pharmaceutical industry. This year, according to the New York Times, drug companies will see annual sales of almost $50 billion evaporate. Why? Because the patents for more than 10 major drug brands will expire.
It’s a reality that has lingered for years. A drug company invests huge amounts of money in R&D and finally wins approval to bring a drug to market under a brand name.
But that drug can only be protected by a patent for a certain number of years; when the patent expires, generic versions of the drug can be sold, almost always at a cheaper price. Take Tylenol, for example, one of the brand names for acetaminophen.
Today, consumers can buy the generic version of acetaminophen, which often sits on a store shelf right next to Tylenol. By law, the generic version must contain the same active ingredients as the brand name, but the generic drug costs less.
While consumers may exhibit some amount of brand loyalty, there aren’t many compelling reasons to keep buying the name brand if a generic works just as well at a lower price. Typically, the price difference in prescription drugs versus generics is even greater, so when a brand name prescription medication “goes generic,” the impact on a drug company can be enormous.
Part of the reason consumers may be less loyal to a brand name drug could be the fact that, oftentimes, the name is nonsensical. This is largely due to regulators, particularly in the United States, who restrict names from being too promissory or suggestive of what the drug can accomplish.
Coming up with a distinctive, easily remembered name — such as a Prozac or Viagra — isn’t as easy as the consumer might think. There are also so many drug names in the marketplace that it is difficult to come up with anything new.
As a result drug companies are likely to propose brand names that are less than meaningful. As Bill Flook commented in Washington Business Journal, “The Food and Drug Administration subjects proposed drug names to intense scrutiny, and drugmakers take pains to make sure a product’s name doesn’t end up delaying its trip to the market.”
Patent expirations and nomenclature are two of the many problems facing a pharmaceutical industry “that just a few years ago was the world’s most profitable business sector but is now under pressure to reinvent itself and shed its dependence on blockbuster drugs,” writes Duff Wilson in the New York Times.
Drug companies are also feeling the heat from insurance companies and the government who, in an effort to control health care costs, want them to keep drug prices reasonable. Recent health care legislation in the US was supported by the pharmaceutical industry, but calls for government price controls.
In addition, the drug companies are not having the kind of success with major drug introductions that they had in the past; the cost associated with testing new drugs is sometimes prohibitive and, in the US, fewer new drugs are being approved. And there’s also some consumer uncertainty in the wake of recalls.
Kenneth I. Kaitin, director of the Center for the Study of Drug Development at Tufts University in Massachusetts, told the New York Times, “This is panic time, this is truly panic time for the industry. I don’t think there’s a company out there that doesn’t realize they don’t have enough products in the pipeline or the portfolio, don’t have enough revenue to sustain their research and development.
What’s the answer? For now, drug companies seem to be trying to solve the problem by buying their way out of it, “essentially paying cash for future revenue as their own research was flagging.” That explains the industry consolidation that has taken place in recent years. Examples include Merck buying Schering-Plough, Pfizer buying Wyeth, Roche buying Genentech, and Sanofi-Aventis buying Genzyme.
Still, “75 percent of all prescriptions in the United States are now low-price, low-profit generic drugs,” and drug companies are under pressure globally to lower the prices of their name brand medications.
This year seems to be just the beginning of a long-term migraine for the pharmaceutical industry.
Supreme Court declines to hear ‘pay-to-delay’ pharma case
The federal government’s decade-long quest to limit pharmaceutical manufacturers’ actions to keep generic medications off the market for a specified time–through deals called “pay-to-delay”–ran into a new challenge Monday: The U.S. Supreme Court, without comment, declined to hear a federal appeals court decision from a year ago that had upheld the practice.
In that earlier ruling, the New York-based appeals court dismissed a legal challenge regarding Bayer AG to pay a potential generic competitor, Teva Pharmaceutical’s Barr Pharmaceuticals, in a 1997 deal to delay introduction of a generic version of Cipro, a popular antibiotic.
However, in an unusual move, the appellate court encouraged the plaintiffs in this case–including pharmacy chains CVS and Rite Aid–to petition for a rehearing en banc, in which all of the appellate judges would hear the case. However, that petition was denied last fall, which lead to attempts for a review from the Supreme Court.
The Federal Trade Commission (FTC) has strongly opposed such “pay-to-delay” deals, which it has estimated to cost consumers as much as $3.5 billion a year in higher prescription drug prices.
The Obama administration also is against these settlements. In the President’s recent budget request, according to a report from The Pharma Letter, he has proposed giving the FTC powers to block these types of agreement between brand-name drug companies and generic drug companies.
Restrictions on “pay-to-delay” were included last year in the initial House healthcare reform bill, but they were excluded in the final healthcare reform law passed last March.
Patents for 11 drugs end, pharma firms brace for loss of sales to generics
Patents of 11 drugs sold in the U.S. are about to end this year. Pharmaceutical companies are bracing for loss of sales to generics on the 11 drugs, which have combined yearly sales of almost $50 billion.
By November, Pfizer’s patent for cholesterol drug Lipitor ends, placing at risk the company’s $10 billion yearly sales on the drug. Pfizer filed for a reissue of Lipitor’s calcium salt patent in January 2007, but the Patent Office rejected the application.
To fill in the anticipated sales gaps, some of the large drug firms bought their competitors during the last 24 months. Pfizer purchased Wyeth for $68 billion, Merck bought Schering-Plough for $41 billion, Genentech sold out to Roche for $46 billion and Sanofi-Aventis bought Genzyme for $20 billion.
An industry expert said that it is now panic time for the pharmaceutical industry on realization that drug firms do not have enough products in their pipeline or portfolio or enough revenue to sustain research and development. They also have to deal with research failures, such as the failed clinical trials of the replacement for Lipitor.
As a consequence, the drug firms reduced 53,000 jobs in 2010, on top of the 61,000 jobs they cut in 2009.
Pfizer, with up to 30 percent reduction on R & D in the next two years, will refocus its efforts on smaller niches in cancer, inflammation, neuroscience and branded generics, according to new Pfizer president Ian Read.
The drug firms’ biggest competitors continues to be generic drugs, which now account for 75 percent of all prescriptions in the U.S.