| Author (Person) | Carstens, Karen |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.9, No.42, 11.12.03, p19 |
| Publication Date | 11/12/2003 |
| Content Type | News |
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By Karen Carstens Date: 11/12/03 A SWEEPING overhaul of the European Union's pharmaceuticals' legislation looks set to be wrapped up just in time for Christmas. If everyone plays their cards right, a second reading plenary vote scheduled for 17 December in the European Parliament could put the finishing touches on the package that has come to be known simply as 'pharma'. Comprised of two directives and a regulation adopted by the European Commission in 2001, it covers the authorization, registration and supervision of both human and veterinary medicines. Moreover, it is the first time specific requirements for a new breed of promising medicines produced by biotechnology would have been introduced into Union law. The biggest bone of contention, as pharma has wended its way through the EU policy pipeline, has been 'data protection', a confusing concept that sets the sector apart from most other industries. The European Federation of Pharmaceutical Industries and Associations (Efpia), along with French conservative MEP Françoise Grossetête, rapporteur for the two 'pharma' directives, fought in a first reading last year for a ten-year data-protection period, plus an additional year for new uses of the same drug ('indications' in pharma-speak). But the so-called '8+2+1' formula (see panel below) is the one that will now be put to the final plenary vote. The European Generics Association (EGA) points out that the US has a five-year data-protection period and spends far more than Europe on research. It also says that many major 'EU' companies are actually wholly or partially US-based (most notably their research anddevelopment divisions). Roy Gentry, the EGA's Parliamentary liaison officer, said: "The US government provides &036;27 billion (Û22 billion) annually to the National Institutes of Health (NIH). The European Commission provides about Û1-2 billion annually." According to Efpia, of the new medicines launched between 1998 and 2002, 70% were from the US, 18% from Europe, 4% from Japan and 8% from elsewhere. "We were the leading industry in the world, but we lost a lot of ground in the 1990s," said Efpia spokesman Christophe de CallataØ, adding that 1997 was the turning point. "The US market is now twice the size of the European one - it's exploding in the US and we are losing the battle." Efpia argues that European pharma firms need a longer data-protection period because prices are controlled by most governments in Europe, which also impose 'cost-containment strategies' at the beginning of a product's life cycle. That means profits do not initially accrue as rapidly as in the US. Delays in market access for new products and wide price differentials that spark 'artificial' parallel trade flows (see Page 26) are also thorns in the side of pharma firms. "So it is a bit like comparing apples and oranges," Efpia government affairs manager Andreas Preising said of the EU versus the US regulatory environment. Gentry, however, predicted that while European pharma firms are expected to "see a dip" in profits after 2004, once a new batch of biotech medicines hits the market post-2007, their already comfortable profit margins look set to increase again. Moreover, he said, "their research costs are not incurred here, but in the US", where more public funds and "really good tax breaks" are available. Most new compounds, he added, are actually originated by the likes of NIH or universities: "Only 14% of their [the global pharma industry's] total investment is in basic research. They are mostly developing a substance that's already been discovered, so it's really more 'product development' than true research." In 2000, 43.9% of medicines consumed in the EU came from the US, and 32.7% from Switzerland, according to a Dutch study. If imports from Japan, China, Israel and Australia are added to the equation, some 90% came from outside the EU, which is a net exporter of pharmaceuticals. 'New' Europe, meanwhile, is a historical hotbed of generic pharma production. Back in the old communist days, Poland and Hungary, two of the ten countries that will join the EU next May, were home to generics manufacturers that produced drugs for the entire Soviet bloc. Data protection was about as widespread as cable TV, ie non-existent. In their accession talks with Brussels, the new member states agreed to 'the lesser of two evils' in signing up to six-year data-protection periods (as opposed to the ten-year periods that currently exist in some EU countries). Now, however, many observer MEPs from the new member states feel their hands have been unfairly tied during the debate as they will not have full Parliament voting rights until May 2004. This has led some to speculate that industry has been trying to 'rush' the package through, to keep the accession countries out of the process. The health ministers of the ten incoming member states - where generic medicines comprise up to 70% of all drugs prescribed by volume, but only 30% of pharmaceutical costs - in September signed a declaration in Milan raising concerns about the prospect of the longer data-protection period envisaged by the '8+2+1' formula. Dutch Socialist MEP Dorette Corbey is their best friend in Parliament. But an amendment she tabled at a November environment committee vote on the pharma package - that would have allowed new states to maintain a data- protection period of six years if public health were affected - was struck down. Meanwhile, UK MEP and environment committee chairwoman Caroline Jackson has written to Enterprise Commissioner Erkki Liikanen, urging him to conduct a comprehensive impact assessment study of the new data protection regime in the accession states. But Liikanen replied that this would probably be neither feasible nor yield accurate results at this stage of the game. While a few observer MEPs have since publicly distanced themselves from the debate, some 95 out of 162 last month signed a petition expressing their disgruntlement. The pharma review "will unjustifiably delay patient access to affordable generic medicines and increase the financial burden on our health care systems", they claimed. Corbey said she would table the amendment again, and that a compromise whereby the accession countries would not be affected for at least a decade looked likely. If the pharmaceuticals package avoids going into conciliation, it could be adopted by February 2004, and become law in member states by 2006. Under this scenario, according to Efpia, its data protection provisions will have no impact on the availability of generic drugs in the enlarged EU until 2012 (for countries which now have six years data protection), or until 2016 (for countries with ten years). In addition, Efpia claimed in a statement: "Even in 2012, the data protection provisions of the legislation will only affect the small number of completely new drugs that are approved each year - these represent less than 1% of the products on the EU market." And this is perhaps the biggest crisis facing the traditional pharma industry right now: coming up with new products and bringing them to market. But that's another story... It seems likely that agreement on a package of pharmaceuticals legislation will be agreed by the European Parliament before Christmas 2003. The two directives and a regulation were adopted by the European Commission in 2001 and have become known simply as 'pharma'. The proposals cover the authorisation, registration and supervision of both human and veterinary medicines. |
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