- Email: [email protected]
European Commission takes on Big Pharma
Comment
European Commission takes on Big Pharma
www.thelancet.com Vol 374 August 22, 2009
Parties share the resulting monopoly profits. Such patent payment agreements hamper free competition and harm consumers. When parties cannot agree on the level of compensation, acquisition by a large multinational is an alternative.2 Thus the new owner acquires control of the introduction of the new generic medicine. Other interventions in the report focus on national authorisation of generic medicines. Before drugs are allowed on the market, authorisation must be obtained. One of the delaying tactics of the large multinationals is to challenge such registration, while holding registration authorities liable for a breach of patent. During the subsequent legal proceedings, most such claims (nearly 60%) will be withdrawn, allowing authorisation and therefore market access but with considerable delay. A similar practice occurs when local authorities are involved in decision making about health-care packages. Another tactic before patent expiration, according to the investigation, is that the large multinationals can opt to introduce a modified formulation of the drug. Put simply, rather than offering the drug in its existing formulation, a slow-release version is produced thereby extending patent rights. Where to go from here? The examples above confirm the reputation of the large multinational drug companies as a group with little social responsibility. This image was confirmed by the 2008 report of the UN’s Special Rapporteur on Health,3 in which he formulated guidelines on the role of the large multinationals to achieve global access to medicines. As early as the consultation stage, major pharmaceutical companies (with some exceptions)
Science Photo Library
For more than a year, European Commissioner Neelie Kroes (taking action against business practices that restrict competition in the European Union) has awaited the conclusion of an investigation of the antitrust behaviour of large multinational drug companies.1 This thorough investigation paints an alarming picture of how the large multinationals bar generic producers from entering the market. The investigation presents a dilemma for the European Commission: how can it create an ideal business environment for pharmaceutical multinationals while at the same time ensuring universal access to drugs? Research into new drugs needs ample patent protection to cover the company’s investments. Patenting new drugs creates a monopoly for innovators, leading to artificially high prices and threatening affordability. Because most prescription drugs are financed by social health insurance, the Member States’ concern is how to achieve low prices. By allowing generic drugs (ie, patent-expired drugs) onto the market, the monopoly of the large multinationals will be eliminated, which will result in lower prices. However, the companies’ practice of preventing generic producers from entering the market1 makes drugs unnecessarily expensive. Such practice forced the European Commission to launch its investigation into the anticompetitive activities of the large multinationals. The results showed that intervention is required to protect consumers’ interests. What did the Commission’s antitrust report find? To protect market share, the large multinationals use several controversial techniques. Effective delaying tactics include litigation for infringement of patent against generic companies and customers, despite patent expirations which render the allegation unfounded. Competitors and customers subsequently abstain from becoming involved in patent infringements. This tactic is open for judicial review, but that will take some time to complete (3 years on average), time which will help the large multinationals delay generic producers from obtaining market access. When it comes to blockbuster drugs, which have a market value of several billion Euros, every month that access is denied is crucial. Another method detailed in the investigation involves the agreement between the large multinationals and generic manufacturers to pay the generic manufacturers compensation for postponing market participation.
599
Comment
failed to cooperate and rejected company responsibilities as formulated in the guidelines. Acknowledgment by the large multinationals of their social responsibility by upholding UN ethics guidelines about essential medicines would be a step in the right direction. Without doubt, the pharmaceutical market cannot survive without such a code of ethics. Even though patent rights require protection, delaying tactics as identified in the Commission’s report should carry sanctions. Additionally, the Member States should step up the introduction of a so-called European patent to replace the current combination of national patents. Supposed patent breaches can be reviewed by the European Patent Office, which will improve the quality of patents and prevent unnecessary delays.
André den Exter Institute of Health Policy and Management, Erasmus University Rotterdam/Erasmus Observatory on Health Law, 3000 DR Rotterdam, Netherlands [email protected] I declare that I have no conflicts of interest. 1
2
3
European Commission. Pharmaceutical sector inquiry. July 8, 2009. http:// ec.europa.eu/competition/sectors/pharmaceuticals/inquiry (accessed July 8, 2009). European Commission. DG Competition. Pharmaceutical sector inquiry: preliminary report. Nov 28, 2008. http://ec.europa.eu/competition/ sectors/pharmaceuticals/inquiry (accessed Jan 1, 2009). UN General Secretary. Promotion and protection of human rights: human rights questions, including alternative approaches for improving the effective enjoyment of human rights and fundamental freedoms. The right to health. Aug 11, 2008. http://daccessdds.un.org/doc/ UNDOC/GEN/N08/456/47/PDF/N0845647.pdf?OpenElement (accessed July 9, 2009).
Taking the spice out of legal smoking mixtures At the request of the UK Home Secretary, the Advisory Council for the Misuse of Drugs (ACMD) undertook an investigation1 into the pharmacology and effects of the substance known as spice. In response, the Council’s chairman, David Nutt, wrote to the Home Secretary and recommended legislation to control spice. This recommendation follows accumulating evidence that spice contains synthetic cannabinoid receptor agonists,1 whose effects are similar to those of tetrahydrocannabinol.1 In most cases the ingredients of spice are not clearly identified, or include terms such as baybean, blue lotus, and dwarf skullcap,2 for which there are no safety data.3 Packets are often labelled “not for human consumption” or “plant growth inhibitor”, giving definite cause for concern. Such labelling might be intended to evade attention by the Medicines and Healthcare products Regulatory Agency. The European Monitoring Centre for Drugs and Drug Addiction came to similar conclusions earlier this year.4 Guernsey, where recreational drugs are scarce,5 has banned the import of all smoking mixtures that could be used as a substitute for cannabis (as well as other legal substances designed as alternatives to the illegal recreational drugs) on the basis of a recommendation from the island’s Health and Social Services Department, because of a large number of teenagers misusing these substances. In January of this year, cannabis was reclassified as a class B drug under the Misuse of Drugs Act 1971,6 and 600
the ACMD has now recommended that synthetic cannabinoids be classified in Schedule 1 of the Misuse of Drugs Regulations since they do not have a recognised medicinal use.1 This recommendation is based not only on unknown harms that these substances could cause but also on the psychotropic effects that they do elicit. Spice joins other agents that the ACMD have reviewed, leading to the implementation of restrictions on their sale or consumption. Other legally purchasable agents, seeking to mimic the effects of ecstasy and cocaine, for example, mean that spice is unlikely to be the last to face review. Greta McLachlan University of Leeds School of Medicine, Leeds, UK [email protected] I am on a student placement at The Lancet. 1
2
3
4
5
6
Advisory Council on the Misuse of Drugs. Consideration of the major cannabinoid Agonists. 2009. http://drugs.homeoffice.gov.uk/drugs-laws/ acmd/ (accessed Aug 17, 2009). Ross K. Herbal Highs sold at Camden Market face ban. The London Paper Aug 12, 2009. http://www.thelondonpaper.com/thelondonpaper/news/ london/herbal-highs-sold-at-camden-market-face-ban-0 (accessed Aug 14, 2009). Burley B. Doctors’ worries over legal highs. BBC Newsbeat Oct 7, 2008. http://news.bbc.co.uk/newsbeat/hi/health/newsid_7656000/7656172.stm (accessed Aug 15, 2009). European Monitoring Centre for Drugs and Drug Addiction. Action on new drugs briefing paper: understanding the ‘spice’ phenomenon. 2009. http:// www.emcdda.europa.eu/drug-situation/new-drugs (accessed Aug 17, 2009). Mann N. Shops banned from importing legal highs. The Guernsey Press April 7, 2009. http://www.thisisguernsey.com/2009/04/07/shops-banned-fromimporting-legal-highs/ (accessed Aug 14, 2009). Misuse of drugs act, 1971. http://drugs.homeoffice.gov.uk/drugs-laws/ misuse-of-drugs-act/ (accessed Aug 17, 2009).
www.thelancet.com Vol 374 August 22, 2009
European Commission takes on Big Pharma
www.thelancet.com Vol 374 August 22, 2009
Parties share the resulting monopoly profits. Such patent payment agreements hamper free competition and harm consumers. When parties cannot agree on the level of compensation, acquisition by a large multinational is an alternative.2 Thus the new owner acquires control of the introduction of the new generic medicine. Other interventions in the report focus on national authorisation of generic medicines. Before drugs are allowed on the market, authorisation must be obtained. One of the delaying tactics of the large multinationals is to challenge such registration, while holding registration authorities liable for a breach of patent. During the subsequent legal proceedings, most such claims (nearly 60%) will be withdrawn, allowing authorisation and therefore market access but with considerable delay. A similar practice occurs when local authorities are involved in decision making about health-care packages. Another tactic before patent expiration, according to the investigation, is that the large multinationals can opt to introduce a modified formulation of the drug. Put simply, rather than offering the drug in its existing formulation, a slow-release version is produced thereby extending patent rights. Where to go from here? The examples above confirm the reputation of the large multinational drug companies as a group with little social responsibility. This image was confirmed by the 2008 report of the UN’s Special Rapporteur on Health,3 in which he formulated guidelines on the role of the large multinationals to achieve global access to medicines. As early as the consultation stage, major pharmaceutical companies (with some exceptions)
Science Photo Library
For more than a year, European Commissioner Neelie Kroes (taking action against business practices that restrict competition in the European Union) has awaited the conclusion of an investigation of the antitrust behaviour of large multinational drug companies.1 This thorough investigation paints an alarming picture of how the large multinationals bar generic producers from entering the market. The investigation presents a dilemma for the European Commission: how can it create an ideal business environment for pharmaceutical multinationals while at the same time ensuring universal access to drugs? Research into new drugs needs ample patent protection to cover the company’s investments. Patenting new drugs creates a monopoly for innovators, leading to artificially high prices and threatening affordability. Because most prescription drugs are financed by social health insurance, the Member States’ concern is how to achieve low prices. By allowing generic drugs (ie, patent-expired drugs) onto the market, the monopoly of the large multinationals will be eliminated, which will result in lower prices. However, the companies’ practice of preventing generic producers from entering the market1 makes drugs unnecessarily expensive. Such practice forced the European Commission to launch its investigation into the anticompetitive activities of the large multinationals. The results showed that intervention is required to protect consumers’ interests. What did the Commission’s antitrust report find? To protect market share, the large multinationals use several controversial techniques. Effective delaying tactics include litigation for infringement of patent against generic companies and customers, despite patent expirations which render the allegation unfounded. Competitors and customers subsequently abstain from becoming involved in patent infringements. This tactic is open for judicial review, but that will take some time to complete (3 years on average), time which will help the large multinationals delay generic producers from obtaining market access. When it comes to blockbuster drugs, which have a market value of several billion Euros, every month that access is denied is crucial. Another method detailed in the investigation involves the agreement between the large multinationals and generic manufacturers to pay the generic manufacturers compensation for postponing market participation.
599
Comment
failed to cooperate and rejected company responsibilities as formulated in the guidelines. Acknowledgment by the large multinationals of their social responsibility by upholding UN ethics guidelines about essential medicines would be a step in the right direction. Without doubt, the pharmaceutical market cannot survive without such a code of ethics. Even though patent rights require protection, delaying tactics as identified in the Commission’s report should carry sanctions. Additionally, the Member States should step up the introduction of a so-called European patent to replace the current combination of national patents. Supposed patent breaches can be reviewed by the European Patent Office, which will improve the quality of patents and prevent unnecessary delays.
André den Exter Institute of Health Policy and Management, Erasmus University Rotterdam/Erasmus Observatory on Health Law, 3000 DR Rotterdam, Netherlands [email protected] I declare that I have no conflicts of interest. 1
2
3
European Commission. Pharmaceutical sector inquiry. July 8, 2009. http:// ec.europa.eu/competition/sectors/pharmaceuticals/inquiry (accessed July 8, 2009). European Commission. DG Competition. Pharmaceutical sector inquiry: preliminary report. Nov 28, 2008. http://ec.europa.eu/competition/ sectors/pharmaceuticals/inquiry (accessed Jan 1, 2009). UN General Secretary. Promotion and protection of human rights: human rights questions, including alternative approaches for improving the effective enjoyment of human rights and fundamental freedoms. The right to health. Aug 11, 2008. http://daccessdds.un.org/doc/ UNDOC/GEN/N08/456/47/PDF/N0845647.pdf?OpenElement (accessed July 9, 2009).
Taking the spice out of legal smoking mixtures At the request of the UK Home Secretary, the Advisory Council for the Misuse of Drugs (ACMD) undertook an investigation1 into the pharmacology and effects of the substance known as spice. In response, the Council’s chairman, David Nutt, wrote to the Home Secretary and recommended legislation to control spice. This recommendation follows accumulating evidence that spice contains synthetic cannabinoid receptor agonists,1 whose effects are similar to those of tetrahydrocannabinol.1 In most cases the ingredients of spice are not clearly identified, or include terms such as baybean, blue lotus, and dwarf skullcap,2 for which there are no safety data.3 Packets are often labelled “not for human consumption” or “plant growth inhibitor”, giving definite cause for concern. Such labelling might be intended to evade attention by the Medicines and Healthcare products Regulatory Agency. The European Monitoring Centre for Drugs and Drug Addiction came to similar conclusions earlier this year.4 Guernsey, where recreational drugs are scarce,5 has banned the import of all smoking mixtures that could be used as a substitute for cannabis (as well as other legal substances designed as alternatives to the illegal recreational drugs) on the basis of a recommendation from the island’s Health and Social Services Department, because of a large number of teenagers misusing these substances. In January of this year, cannabis was reclassified as a class B drug under the Misuse of Drugs Act 1971,6 and 600
the ACMD has now recommended that synthetic cannabinoids be classified in Schedule 1 of the Misuse of Drugs Regulations since they do not have a recognised medicinal use.1 This recommendation is based not only on unknown harms that these substances could cause but also on the psychotropic effects that they do elicit. Spice joins other agents that the ACMD have reviewed, leading to the implementation of restrictions on their sale or consumption. Other legally purchasable agents, seeking to mimic the effects of ecstasy and cocaine, for example, mean that spice is unlikely to be the last to face review. Greta McLachlan University of Leeds School of Medicine, Leeds, UK [email protected] I am on a student placement at The Lancet. 1
2
3
4
5
6
Advisory Council on the Misuse of Drugs. Consideration of the major cannabinoid Agonists. 2009. http://drugs.homeoffice.gov.uk/drugs-laws/ acmd/ (accessed Aug 17, 2009). Ross K. Herbal Highs sold at Camden Market face ban. The London Paper Aug 12, 2009. http://www.thelondonpaper.com/thelondonpaper/news/ london/herbal-highs-sold-at-camden-market-face-ban-0 (accessed Aug 14, 2009). Burley B. Doctors’ worries over legal highs. BBC Newsbeat Oct 7, 2008. http://news.bbc.co.uk/newsbeat/hi/health/newsid_7656000/7656172.stm (accessed Aug 15, 2009). European Monitoring Centre for Drugs and Drug Addiction. Action on new drugs briefing paper: understanding the ‘spice’ phenomenon. 2009. http:// www.emcdda.europa.eu/drug-situation/new-drugs (accessed Aug 17, 2009). Mann N. Shops banned from importing legal highs. The Guernsey Press April 7, 2009. http://www.thisisguernsey.com/2009/04/07/shops-banned-fromimporting-legal-highs/ (accessed Aug 14, 2009). Misuse of drugs act, 1971. http://drugs.homeoffice.gov.uk/drugs-laws/ misuse-of-drugs-act/ (accessed Aug 17, 2009).
www.thelancet.com Vol 374 August 22, 2009