enerics ulletin nforma - Coverage of generics, …...ics acknowledged by the ICH is that “legal...

15 February 2019No.386

Pharma IntelligenceInformaBulletin

Genericsgener icsbul let in .pharmaintel l igence . informa.com

REGULATION

EU Environment Reform May Deter Entry Of Competition, p. 12

SANDOZ

Autonomous Sandoz Set To Be Tighter And Leaner, p. 6

BREXIT

Pharmacovigilance Must Not Be Overlooked As Brexit Looms, p. 10

ICH Sets Out Proposals On Harmonizing Standards For GenericsDAVID WALLACE [email protected]

G lobally-applicable guidance on bioequivalence standards for ge-nerics is being developed by the

International Conference on Harmonisa-tion of Technical Requirements for Reg-istration of Pharmaceuticals for Human Use (ICH), according to a reflection paper just published by the organization.

Initial steps planned by the ICH as part of harmonization efforts on gener-ics include guidelines on bioequivalence standards for non-complex oral dosage forms, followed by guidelines on com-plex dosage forms, as well as the creation of a generics-oriented discussion group that will identify further opportunities for harmonization, including where generics can fit into existing ICH guidelines.

The US Food and Drug Administration

(FDA) had last year proposed that a set of “internationally harmonised guidelines on scientific and technical standards for generic drugs” should be developed through the ICH. (Also see “Global devel-opment path proposed to ICH by FDA” - Ge-nerics Bulletin, 26 Oct, 2018.)

“Harmonization of technical and sci-entific standards for generic drugs pres-ents an opportunity for significant public health benefits by streamlining drug de-velopment across regulatory jurisdictions and increasing patient access globally to high-quality affordable pharmaceuticals,” the ICH stated.

Noting that the ICH would “initiate topics where a need for harmonization seems most feasible and where agree-ment exists among ICH parties”, the orga-

nization nevertheless suggested that “as experience is gained, ICH may refocus its harmonization efforts to more complex topic areas where harmonization may not seem feasible at present”.

While many ICH guidelines are applicable to generics, such as quality guidelines, the organization admitted that “historically ICH has focused on standards for new drugs”.

“As a result, there are areas of great interest to generic drug regulators and developers where internationally harmo-nized guidance is lacking or where inter-national harmonization could potentially lead to improved access to lower-cost ge-neric medicines.”

With generics accounting for more than half of the pharmaceutical market of ICH member and observer regions, “harmonization in this area presents op-portunities for market competition, cost savings, and greater supply, thereby in-creasing patient access to pharmaceuti-cal products globally”, the organization said. “There would be a significant public health benefit in utilizing ICH’s highly ef-ficient and successful process to harmo-nize standards for generic drugs.”

ACCESS, COST AND QUALITY BENEFITSNoting that the current lack of harmo-nized standards for generics “reduces the number of potential markets in which data and information submitted in sup-port of a generic drug marketing applica-tion can be used by a developer to sup-port marketing authorization in another jurisdiction”, the ICH points out that this can lead to monopolies or limited sourc-es of drugs in certain markets due to the additional development burden.

CONTINUED ON PAGE 4

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2 | Generics Bulletin | 15 February 2019 © Informa UK Ltd 2019

I N T H I S I S S U E

from the [email protected]

Global harmonization of bioequivalence stand-ards has taken a step closer to realization this week, after the International Conference on Harmonisation (ICH) published a reflection pa-per setting out proposals on the subject.

While the steps set out by the ICH are ten-tative – comprising initial planned guidelines on non-complex oral drugs and more complex dosage forms, as well as a dedicated discussion group to explore further opportunities to in-clude generics in ICH guidelines (see front cov-er) – they represent an important first for the industry that could open the door to greater harmonization in future.

Elsewhere this week we bring you the latest update on Sandoz’ strategy and its place with-in Novartis (p.6), as the generics firm’s parent company hints at the subsidiary becoming a more autonomous entity that functions as an

independent unit within Novartis.We have also seen a major pushback by the

European off-patent industry against perceived pressure from outside interests that is threaten-ing to derail the long-awaited European waiver for manufacturing during the term of supple-mentary protection certificates (SPCs) as tria-logues between the European Council, Com-mission and Parliament get under way (p.5).

Meanwhile, in the US industry is grap-pling with proposed legislation that would alter the Hatch-Waxman 180-day exclusivity incentive for generics that successfully chal-lenge patents (p.8). And concerns over Brexit continue to loom over Europe, with industry and regulators alike maintaining that phar-macovigilance must not be a casualty of ongo-ing confusion and uncertainty over the future regulatory landscape (p.10).

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COVER / ICH Sets Out Proposals On Harmonizing Standards For Generics

5 Foreign Vested Interest Must Not Sway Away From SPC Waiver

6 Autonomous Sandoz Set To Be Tighter And Leaner

8 US Industry Fears Blocking Bill Would Weaken Exclusivity

10 Amneal’s Stewart Chairs AAM Board

10 Pharmacovigilance Must Not Be Overlooked As Brexit Looms

11 Neuraxpharm Reinforces European CNS Leadership Position With Pharmax Acquisition

12 EU Environment Reform May Deter Entry Of Competition

13 China Steps Closer To Offering An SPC System

13 France’s Biogaran Expands Into Ivory Coast

14 Indoco Works To Unblock Barriers To Growth

15 Industry Welcomes Commission Competition Report

Sandoz Sets Forth On Quest To Raise Its MarginsSandoz is set to undergo a transformation in terms of operational efficiency, geographic footprint and portfolio offering in a bid to lift its operating margin from the mid-teens range towards 20%.

https://bit.ly/2BunlUf

Generic CEOs Need To Act Like Brand Execs, Association Head Says AAM President Davis, a PhRMA veteran, says personal engagement – in addition to lobbying spending – is key to successful policy advocacy.

https://bit.ly/2WY9XAT

Third-Quarter Results Roundup: Several Indian Firms Achieve Double-Digit RisesSeveral Indian firms have enjoyed double-digit sales rises in their financial third quarters ended 31 December 2018, including Torrent, Laurus Labs and Jubilant Life Sciences. Ajanta however did not follow suit, announcing group turnover that slid by almost a fifth after suffering a “challenging” period.

https://bit.ly/2SDmf2f

Azar: International Regulatory Harmonization Will Create More Stable Generic MarketsHHS secretary tells AAM that “fundamental” changes require legislation, but “FDA and our peers are exploring new potential areas for alignment.”

https://bit.ly/2Ik6Vnl

exclusive online content

6 10 13



R E G U L AT I O N

By harmonizing standards, however, developers would be able to use data submitted in one market in support of applications in another. This, the ICH believes, could increase the size of ge-nerics markets and therefore have the knock-on effect of attracting more com-petition from developers, lowering drug costs through greater competition and expanding access.

Cost reductions could also be seen for developers by reducing the number of duplicative bioequivalence studies need-ed to meet different requirements in mul-tiple jurisdictions.

The ICH observed that this could lead to ethical benefits via a reduced number of human subjects being required for studies, and could also reduce the risk of exhaust-ing available human subjects in treatment areas with small patient populations.

“Finally, harmonization may increase the quality of generic medicines by es-tablishing a globally consistent culture of quality and moving compliance with quality standards in a common direc-tion,” the ICH said.

“For example, a pharmaceutical com-pany may have two or more manufactur-ing lines – one that is subject to domes-tic regulatory standards and others that are subject to different foreign regula-tory standards. This potentially results in greater cost, an increase in the likelihood of error in applying the correct regula-tory and scientific standards, and in the complexity of recordkeeping.”

LEGAL AND REGULATORY REGIMES ARE NOT ALIGNED

One obstacle to harmonization for gener-ics acknowledged by the ICH is that “legal and regulatory requirements for generic drugs are not aligned across jurisdictions”.

Examples cited by the ICH include the FDA not allowing generics and reference products to be different oral dosage forms, such as tablets and capsules, while Europe-an regulators allow different dosage forms providing bioequivalence criteria are met.

Also, while the FDA requires a US-reg-istered reference product, the ICH noted, some ICH members allow the use of for-eign-sourced reference products.

“Instead of harmonizing regional le-gal and regulatory requirements,” the

ICH said, “it is proposed to develop and enhance ICH guidelines in scientific and technical areas that would be valuable and achievable across multiple regulato-ry pathways and where there is common interest in harmonization.”

PLANNED GUIDELINES INCLUDE MULTIPLE REFERENCE PRODUCTS

Setting out details of its planned har-monization efforts, the ICH said its first step would be to “develop a series of ICH guidelines on standards for demonstrat-ing equivalence for non-complex dosage forms”. This would start with immediate-release oral dosage forms, “as these prod-ucts constitute a significant portion of submissions to regulatory authorities”.

The guidance is expected to cover bioequivalence study design as well as data analysis, including statistical meth-ods for bioequivalence assessment. “As part of this work, a working group could consider the feasibility of harmonizing bioequivalence standards and work to align them to the extent possible,” the ICH suggests.

“It is noted that such a harmonized bioequivalence study design could be expanded to include additional study arms to accommodate more than one reference product for bridging purposes,” the reflection paper states. “For example, a three-way crossover study may allow generic drug manufacturers to submit data from the same study using one test product in support of marketing approv-al in more than one region.”

Given that requirements to support waivers of bioequivalence studies for non-biostudy strengths are not harmo-nized, the ICH says, “the work under this series of guidelines could include devel-oping harmonized requirements for bio-waivers for additional strengths within a product line”. Meanwhile, “another work stream under this topic may also include harmonization of biowaivers for solutions such as oral and injectable solutions”.

SECOND STAGE WILL ADDRESS COMPLEX DOSAGE FORMS

After ICH guidelines on non-complex dos-age forms are developed, the organization proposes a second set of guidelines to cov-er more complex dosage forms or products.

“One such guideline may address bio-

equivalence studies for modified-release oral dosage forms, which could address scientific considerations such as ‘waivers’ for additional strengths for modified-release products and when partial Area Under the Curve (pAUC) measurements may be important,” the ICH indicates.

“In addition, other guidelines could ad-dress pharmaceutical equivalence and bioequivalence standards for products with complex active pharmaceutical in-gredients such as peptides and oligonu-cleotides, products with complex formu-lations such as liposomal products, locally acting products such as topical dermato-logical and orally inhaled products, and drug-device combination products.”

The ICH believes that such harmoniza-tion could reduce the need for comparative clinical endpoint bioequivalence studies and improve the sensitivity and reproduc-ibility of bioequivalence determinations.

DISCUSSION GROUP TO EXPLORE FURTHER POSSIBILITIES

Turning to further ways in which generics could be included in ICH harmonization efforts, the organization said it planned to establish “as a near-term next step” a discussion group to consider specific ar-eas and opportunities.

The informal generic drug discussion group (IGDG) will be able to conduct a review of existing ICH Guidelines “to as-sess whether there are any gaps in exist-ing guidance for generic drugs and make proposals for revision of ICH Guidelines as necessary”, the ICH proposed. “Given that the harmonization process is re-source-intensive and time-consuming, the discussion group could serve to pri-oritize work areas and ensure that priori-ties are set carefully.”

Responsibilities for the IGDG will include:• Revising the ICH reflection paper

based on regional input;• Establishing “an overarching vision

for the harmonization of generic drug standards under ICH”;

• Identifying new topics for harmoni-zation of generic drug standards;

• Surveying existing ICH guidelines as well as relevant World Health Organi-zation guidelines related to generic drug standards to identify any gaps in guidance for generic drugs;

• Working with the ICH implementation

CONTINUED FROM PAGE 1


R E G U L AT I O N

subcommittee to assess consistency in the regional implementation of ICH guidelines for generic drugs; and

• Prioritizing areas for harmonization and making recommendations to the ICH management committee

“The discussion group will serve for a period of one year,” the ICH indicated. “Thereafter, the ICH management com-mittee will consider whether this discus-sion group should sunset or whether ad-ditional work merits its continuation for another specified term.”

TAKES INTO ACCOUNT OTHER INITIATIVES

As part of its reflection paper, the ICH ac-knowledged that other international col-laborations on issues relating to generics were ongoing.

“For example, the International Gener-ic Drug Regulators Programme (IGDRP), now within the International Pharma-ceutical Regulators Programme (IPRP), has published or provided input into sev-eral informative papers on international guidelines and expectations for generic products,” the ICH noted. (Also see “Regu-latory initiatives consolidate into IPRP” -

Generics Bulletin, 2 Mar, 2018.)In general, the ICH said, the IGDG “should

leverage prior work that has been done to date and take measures to avoid duplica-tion of work that continues in other inter-national fora”.

The ICH reflection paper follows the

election last year of the International Generic and Biosimilar Medicines Asso-ciation (IGBA) as a member of the ICH’s management committee, a milestone that was celebrated by the international off-patent industry body as a “historical moment for our industry”. (Also see “Join-ing ICH committee is ‘milestone’ for IGBA” - Generics Bulletin, 15 Jun, 2018.)

“Having contributed to the ICH work as an interested party during the last 20 years,” the IGBA said at the time, “we can now open a new chapter of engaging fully in the ICH activities of developing the international standards applied to the pharmaceutical industry, including generic and biosimilar manufacturers.”

Nick Cappuccino, IGBA representative to the ICH’s management committee, last year pointed to several areas in which he suggested generics firms could get involved in ICH working groups, such as development and manufacturing guide-lines as well as product lifecycle manage-ment guidance. (Also see “Supporting ICH may harmonise standards” - Generics Bul-letin, 22 Jun, 2018.)

Published online 7 February 2019

“Harmonization in

this area presents

opportunities for

market competition,

cost savings, and

greater supply, thereby

increasing patient access

to pharmaceutical

products globally”

Foreign Vested Interest Must Not Sway Away From SPC WaiverAIDAN FRY [email protected]

O verseas influence should not supplant European interests in promoting its industrial base

through a supplementary protection cer-tificate (SPC) manufacturing waiver, off-patent industry association Medicines for Europe is warning.

“The SPC manufacturing waiver can-not be derailed by foreign vested inter-ests,” Medicines for Europe insisted as the US ambassador to the EU, Gordon Sondland, told Politico in an interview that he was “very concerned” by the proposed measure and accused the EU of “slowly trying to erode” intellectual-property (IP) protection for the origina-tor pharma sector.

Trialogues between the European Council, Commission and Parliament are

underway in a bid to hammer out the details on the extent to which generic and biosimilar manufacturers would be permitted to produce during originators’ SPC terms.

“Medicines for Europe calls on the European Council, Parliament and Com-mission to resist pressure from foreign vested interests to derail the adoption of the SPC manufacturing waiver,” the asso-ciation maintained. “All parties involved in these discussions are well aware that these foreign vested interests fear the competition from EU biosimilar medi-cines manufacturers where we have been pioneers and technology leaders in bringing access to biological medicines for patients.”

Stressing that the purpose of the man-

ufacturing waiver was to “stop the forced delocalization of medicines manufactur-ing outside of Europe while stimulating greater access to medicines at expiry of the SPC”, Medicines for Europe said dis-cussions to date had resulted in “sound trialogue negotiating mandates” being adopted by the Council and Parliament, opening the door for the waiver to be ap-proved during the current legislature.

“All parties involved in these discussions are well aware that these foreign vested

interests fear the competition from EU biosimilar medicines

manufacturers where we have been pioneers and technology

leaders in bringing access to biological medicines for

patients” - Medicines for Europe



I N T E L L E C T UA L P R O P E R T Y

DIFFERENCES REMAIN AMONG TRIALOGUE ON DETAILS

At present, the trialogue members have not reached full alignment on several de-tails, including on whether generics and biosimilars developers should be permit-ted to stockpile finished products during the SPC term for launch in the EU imme-diately upon SPC expiry. Such a stockpil-ing provision was omitted from a Council mandate for negotiations with the Parlia-ment that was approved last month. (Also see “European Council Brings SPC Manu-facturing Waiver A Step Closer” - Generics Bulletin, 17 Jan, 2019.)

But days later, the Parliament’s legal committee, JURI, proposed a two-year stockpiling window within the SPC term, a measure that Medicines for Europe hailed as “a positive step forward”. (Also see “Two-Year Stockpiling Provision ‘Vastly Improves’ European SPC Waiver” - Generics Bulletin, 25 Jan, 2019.)

“The Parliament’s support for EU day-1 launch stockpiling is fully consistent with the data in the Commission impact as-sessment and related Charles River Asso-ciates study, and is widely supported by stakeholders in the healthcare commu-nity responsible for access to medicines,” Medicines for Europe maintained.

The off-patent association stressed that the same impact assessment and study had evaluated the impact on the

originator industry to be zero, as origina-tors would, as at present, maintain their SPC monopoly for up to five years. It referenced the impact assessment state-ment from May last year that a statutory derogation to allow stockpiling would be “the most effective and simplest option to tackle the problems identified.”

“The SPC manufacturing waiver will bring tremendous benefits to Europe in terms of manufacturing, jobs and medicines access with no demonstrable downsides,” argued Medicines for Eu-rope’s director general, Adrian van den Hoven. “Foreign vested interests should not be allowed to interfere in a transpar-ent EU legislative process where all stake-holders were consulted and involved. The future of Europe’s medicines supply is dependent on this EU decision and we trust in the resolve of our democracy to do what is right for Europe.”

But Europe’s originator industry is de-termined to fight off the SPC waiver pro-posals that it sees as weakening “Europe’s world-class protection of IP rights”.

In an open letter to European institu-tions, president of European originators’ body Efpia, Stefan Oschmann, says that the branded industry is “extremely con-cerned that the proposal for the SPC man-ufacturing waiver will put patient access to medical innovation, highly skilled jobs and investment at risk”.

“International competition to attract life-science investment is growing significantly and there is a great deal at stake for Eu-rope,” writes Oschmann, who is also chair-man and CEO of Germany’s Merck KGaA. “A strong IP system remains crucial for compa-nies deciding where to make their research and development investments.”

Commenting specifically on the pro-posal by the Parliament’s JURI committee to allow generic and biosimilar stockpiling two years before SPC expiry, Oschmann complained that this idea had “not been subject to any impact assessment”.

And the committee’s suggestion of bringing forward the waiver’s implemen-tation date to January 2021, rather than the Council’s suggestion of 1 July 2022, also met with the Efpia president’s disap-proval. “The proposed application date sets a dangerous precedent for retroac-tive application, impairing vested rights acquired as a result of significant invest-ments by our companies,” he warned.


“The proposed application date sets a dangerous precedent for retroactive application, impairing vested rights acquired as a result of significant investments by our companies” - Efpia

Autonomous Sandoz Set To Be Tighter And LeanerAIDAN FRY [email protected]

O ptimizing its manufacturing and supply-chain infrastructure, consolidating its regional pres-

ence into the most promising markets, and “more heavily reshaping the portfolio towards biosimilars and hard-to-make ge-

nerics” are the three core elements that will take Sandoz from its current position as the world’s second-largest generics player to “a position where we can grow sustain-ably in the medium to long term”, Vas Nara-simhan, CEO of parent group Novartis, told

investors as he unveiled annual results.“Taken together over the next 18

months,” Narasimhan stated, “we plan to make Sandoz an autonomous unit within Novartis to enable us to compete in what is an increasingly dynamic and challeng-ing global generics environment.”

“We consider Sandoz an integral part of Novartis,” Narasimhan told investors, stress-ing that his position had not changed since he clarified at the J.P. Morgan Healthcare Conference at the start of this year that the generics and biosimilars division remained “an important part of Novartis”. (Also see “Transformed Sandoz Is Important Part Of Novartis” - Generics Bulletin, 9 Jan, 2019.)

“We’re focused on transforming the

“We’re focused on transforming the business, making it an autonomous entity over the next 18 months that is able to compete as an independent unit within Novartis” - Vas Narasimhan


S T R AT E G Y

business, making it an autonomous en-tity over the next 18 months that is able to compete as an independent unit with-in Novartis,” he continued. “That’s where our complete focus is at the moment,” he said, promising a “significant transforma-tion” for Sandoz in terms of cost struc-ture, geographic focus and product port-folio. The “de-integration of Sandoz” from the rest of Novartis would take around 18 months, he forecasted. “After we com-plete all of that, then I think we can have further conversations about where we want to head from there.”

CARVE-OUT FOCUS ON BUSINESS SERVICES AND MANUFACTURING

“In terms of the Sandoz carve-out, really where we focus on is on business services and manufacturing,” Narasimhan eluci-dated, adding that it was “very early days” for the project. Novartis’ primary near-term priority for the first half of 2019, he said, was spinning off its Alcon ophthalmics division.

“And then we’ll turn to Sandoz and try to enable Sandoz to be an autonomous unit,” he continued. “There will be stand-up costs of course associated with some of these areas within Sandoz,” he admit-ted, but insisted these should not prevent the division from aiming to improve its profit margins. In 2018, Sandoz improved its gross margin by 2.4 percentage points to 46.3%, but its operating margin slipped slightly to 13.5%.

Addressing the first of the three ele-ments of Sandoz’ transformation, a “heavy focus on manufacturing footprint optimi-zation”, Narasimhan said this formed part of a group-wide efficiency drive that had seen Novartis transform 16 plants over the past year, including by exiting eight sites.

“With respect to the manufacturing overlap today between Innovative Medi-cines and Sandoz, there’s two principal places of overlap: one is packaging, where it’s easy to dis-intermediate the overlap; and the other is in biologics production, where the same plants cover Cosentyx (secukinumab), Ilaris (canakinumab) and other parts of our Innovative Medicines portfolio as cover our biosimilars. But we believe we can manage that through sup-ply agreement internally once we move to the separated state,” he explained.

During the course of 2018, Novartis di-vested Sandoz’ development and manu-

facturing site in Boucherville, Canada, to Avara in a deal that included an agreement to secure supplies of key products for Canada. A Sandoz US plant in Broomfield, Colorado, that the group slated for closure in October 2017 is scheduled to cease pro-duction this year.

SELLING US SOLID-DOSE AND SKINCARE TO AUROBINDO

Three US manufacturing plants in North Carolina and New York, as well as a der-matology development center, will trans-fer to Aurobindo Pharma as part of a deal to divest to the Indian company Sandoz’ US solid-dose generics and dermatology business for up to US$1.0 billion. (Also see “Sandoz deal bolsters Aurobindo on derma” - Generics Bulletin, 23 Nov, 2018.) Novartis’ chief financial officer Harry Kirsch said “a reasonable forecast assumption” would be that the transaction will close in the third quarter of 2019.

Beyond this move to exit large parts of the US retail generics market, Sandoz and Novartis have to date disclosed few details of how the division will refocus its geo-graphic presence and “reallocate resources to priority, high-growth and higher profit-ability countries”. However, divisional head Richard Francis recently told Generics Bul-letin that he viewed an increasingly open Chinese market as hugely promising as part of a selective approach to expanding in Asia, while there were also considerable opportunities in Latin America. (Also see “Sandoz Sees Market Opening Up In China” - Generics Bulletin, 17 Dec, 2018.)

“Even beyond the Aurobindo trans-action,” Narasimhan commented, “we’ll be looking at other geographies where we may want to focus away from to en-able us to really be positioned in markets where we can drive solid performance over the medium to long term.”

Noting that Sandoz currently of-fered around 25,000 stock-keeping units (SKUs), Narasimhan said Sandoz’ “goal over the course of this geographic fo-cusing is to exit some of the SKUs that we either think are not going to be as valuable and hopefully also reduce the complexity of the overall operation. And so combined, we think both the Sandoz sharpening of focus as well as our overall broader effort to rationalize our footprint will get us to a better place in terms of

manufacturing costs, gross margins, in-ventory level and cash-conversion cycle.”

“We’ll be rationalizing our SKUs and stepping out of some geographies, which we don’t see as long-term growth drivers of the top and bottom line,” Francis rein-forced, acknowledging that this would temper Sandoz’ growth during the trans-formation initiative.

Addressing the transformation plan’s third element, reshaping the portfolio to-wards more differentiated products such as value-added medicines, Francis high-lighted two deals that Sandoz had done in 2018 to bolster its biosimilars pipeline: forming an alliance with India’s Biocon to develop next-generation biosimilars in the immunology and oncology arenas

(Also see “Sandoz and Biocon strike global biosimilars alliance” - Generics Bulletin, 26 Jan, 2018.); and towards the end of last year entering into an agreement with Chi-na’s Gan & Lee for three biosimilar insulins intended for marketing in the EU, US and other key territories. (Also see “Sandoz Forms Insulin Biosimilars Deal With Gan & Lee” - Generics Bulletin, 19 Dec, 2018.)

Challenged by an investor on why Sandoz had reversed its prior aversion to competing in the insulins space given the relatively low margins and the huge scale needed to compete, Francis said the alliance with Gan & Lee reflected not only the business opportunity and clini-cal need for diabetes treatments, but also the opportunity for the division to lever-age its infrastructure.

CHINESE ALLIANCE OPENS UP OPTIONS ON INSULINS

“I think the exciting thing about the insulin market is, one, this is a huge market, over US$10 billion net sales and growing in the US,” Francis remarked. “We’re also seeing the pricing of that market continue to go up, so it has been growing year-on-year.”

Sandoz, he said, believed it was un-likely that “disruptive innovation” would

“We’ll be rationalizing our SKUs and stepping out of some geographies, which we don’t see as long-term growth drivers of the top and bottom line” - Richard Francis



R E G U L AT I O N

transform the standard of care in the diabetes market. And whereas histori-cally the division had been wary of com-mitting the capital investment in manu-facturing needed to supply the huge volumes required of a successful player in this field, the alliance enabled Sandoz to capitalize on Gan & Lee’s existing “first-rate manufacturing capability” in China.

“We don’t see any significant dis-syn-ergies as we become more autonomous within Novartis. We don’t believe that’s going to impact us and our ability to grow margins” - Richard Francis

By combining the vast production ca-pacity with Sandoz’ existing commercial infrastructure, the partners would be able to bring insulins to market cost effectively. “Because there’s no innovation coming forward, we actually think this is an attrac-tive market,” Francis commented, adding that the sector had become more attrac-tive as other players made strategic deci-sions to pull out.

Commenting on Sandoz’ medium-term prospects, Francis expressed confidence that the geographic streamlining, portfolio pruning and investment in higher-margin products such as biosimilars would pro-vide opportunities for margin expansion.

And while close collaboration with the patented Innovative Medicines division had brought certain operating synergies, Francis said “we also found out as we ex-ecuted there were things we would call dis-synergies based on the model that we need to compete in a generics marketplace”.

“We don’t see any significant dis-syner-gies as we become more autonomous with-in Novartis. We don’t believe that’s going to impact us and our ability to grow margins,” he stated, highlighting the work underway to separate and spin off Alcon as “a good methodology that we can follow”.


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US Industry Fears Blocking Bill Would Weaken ExclusivityAIDAN FRY [email protected]

U S generics suppliers have voiced “serious concerns” about a House bill that would trigger 180-day ge-

neric market exclusivity if a second or sub-sequent generic filer was eligible for final approval, but for the 180-day exclusivity.

Tabled by Congressmen Buddy Carter and Kurt Schrader, the bipartisan draft H.R.938 Bringing Low-cost Options and Competition while Keeping Incentives for New Generics (BLOCKING) Act seeks to reduce drug prices by preventing the first generic filer to challenge patents listed against the reference brand from ‘park-ing’ their reward of 180 days of generic market exclusivity. They claim that some generics filers are parking this exclusivity before obtaining final abbreviated new drug application (ANDA) approval from the US Food and Drug Administration (FDA) and marketing the generic, thereby deterring competition by more than the

180 days foreseen in the statute.“Under the BLOCKING Act,” Carter and

Schrader explained, “if a second generic drug application is blocked from receiv-ing approval solely due to a first generic drug manufacturer parking their exclu-sivity at the tentative approval stage, the 180 days immediately begins to run, pre-venting limitless delays for other gener-ics to come to the market.”

The Congressmen pointed out that their draft act mirrored a proposal to “speed de-velopment of more affordable generics to spur competition” that was included in the US administration’s fiscal 2019 budget pro-posal. (Also see “Trump’s US price policy aims to remove barriers” - Generics Bulletin, 18 May, 2018.) Carter claimed the H.R.938 bill en-joyed support from President Donald Trump and bipartisan members of Congress.

But the US Association for Accessible Medicines (AAM) has told Schrader that the BLOCKING Act, if enacted, would “have the unintended impact of reducing competi-tion in the prescription drug market and thus lead to patients continuing to pay the high cost of brand-name drugs for longer”.

According to the trade association rep-resenting the generics and biosimilars industry, the “misguided” proposed legis-lation would “undermine the only incen-tive provided to generic manufacturers to challenge the patent thickets created by brand-name drug companies”. The 180-day exclusivity reward for challenging pat-ents had, the AAM stressed, helped to de-liver savings of more than US$1.8 trillion over the past decade, including US$265 billion in 2017 alone. (Also see “US access in jeopardy despite rising savings” - Generics Bulletin, 13 Jul, 2018.)

“Challenging weak or questionable pat-ents is an expensive endeavor without any guarantee of success,” the association’s president and CEO, Chip Davis argues in a letter sent to Schrader. “When one consid-ers the patent thickets established around the top-selling brand-name drugs, it is fair to question whether patients will in a timely manner be able to benefit from competition from more affordable, FDA-approved generics and biosimilars.”

NO EVIDENCE PROVIDED TO SUPPORT EXCLUSIVITY CHANGES

“No evidence has been provided to date to justify changes to the 180-day exclu-sivity for first generics,” Davis asserts. He points out that Congress’ concerns about potentially parked exclusivity terms had been “adequately addressed” by the 2003 Medicare Modernization Act (MMA), spe-cifically by current law that states: “If FDA concludes that a first applicant is not ac-tively pursuing approval of its ANDA, FDA may immediately approve an ANDA(s) of a subsequent applicants (s) if the ANDA(s) is otherwise eligible for approval.”

Rather than weakening the 180-day exclusivity incentive, the AAM believes

“Challenging weak or questionable patents is an expensive endeavor without any guarantee of success” - AAM’s Chip Davis


R E G U L AT I O N

legislators would be better served by ad-dressing the thickets of patents thrown up around blockbuster brands that I-MAK research showed as delaying com-petition by up to 38 years. “In 2017 alone,” notes Davis, “the top-12 grossing brand-name drugs were granted 71 patents on average for each drug.”

Maintaining that he had “long been committed to lowering drug costs”, Ore-gon Democrat Schrader highlighted that a bill which he had tabled had passed as the FDA Reauthorization Act of 2017. Last year, the legislation had seen its “first successes” with the approval of the first generic potassium chloride oral solu-

tions under Competitive Generic Therapy (CGT) designations.

Schrader is also sponsoring legislation that would impose fines on companies that knowingly misclassify a brand drug as a generic so as to qualify for a lower rebate percentage on the Average Manu-facturer Price (AMP) under the Medicaid Drug Rebate Program.

Drug rebates are very much in the crosshairs of the authorities in Washing-ton D.C. Department of Health and Hu-man Services (HHS) Secretary Alex Azar recently proposed a rule “to lower pre-scription drug prices and out-of-pocket costs by encouraging manufacturers to pass discounts directly on to patients and bringing new transparency to prescrip-tion drug markets”.

The 123-page proposed rule would expressly exclude from safe-harbor pro-tection under the Anti-Kickback Statute rebates on prescription drugs paid by manufacturers to pharmacy benefit man-agers (PBMs), Medicare Part D plans and Medicaid managed-care organizations.

TRANSPARENCY INTO SECTOR SHROUDED IN SECRECY FOR DECADES

It would create a new safe harbor for pre-scription drug discounts offered directly to patients, as well as fixed-fee service ar-rangements between manufacturers and PBMs. According to the HHS, its plan would “provide a historic new level of transpar-ency to a system that has been shrouded in secrecy for decades”.

“Under the proposed rule,” the HHS ex-plained, “prescription drug rebates that today amount to, on average, 26 to 30 per-cent of a drug’s list price may be passed on directly to patients and reflected in what they pay at the pharmacy counter. By en-

couraging negotiated discounts that are reflected in cost-sharing methods like co-insurance, used for many expensive drugs in Medicare Part D, the proposal is projected to provide the greatest benefits to seniors with high drug costs.”

In an explanatory factsheet, the HHS contends that “the current rebate system discourages the use of safe, effective lower-priced generics and biosimilars”, not least because a growing number of Part D plans have moved generics and biosimilars into non-preferred tiers because insurers and plan sponsors can extract higher rebates on branded small molecules and biologics. By increasing the size of the rebates they pay on a drug or groups of drugs to PBMS and insurers, originators can maintain ex-clusive formulary positions and deter ge-neric and biosimilar competition.

“Excluding rival drugs with ‘rebate walls’ or ‘bundled rebates’ distorts our free-mar-ket system, discourages generic competi-tion and biosimilar adoption, and causes patients to pay more out of pocket,” the HHS argues.

The proposed rebate reforms form part of President Donald Trump’s blue-print for cutting prescription drug prices, in part by “cutting down on practices that impede the approval and marketing of generic drugs and biosimilars, which are expected to be made competitive by the preplacement of rebates with up-front discounts”.

Initial reaction to the HHS proposal from the off-patent sector has been posi-tive. “AAM applauds the Administration’s efforts to reduce high brand drug costs for patients,” the industry body stated. “Too often, brand-drug companies are using rebate traps to block patient access to more affordable generic or biosimilar medicines. We look forward to reviewing the proposal and working with the admin-istration to ensure that America’s patients have access to more affordable generic and biosimilar therapies.”

Originators also gave a cautious wel-come. “This proposal would help to fix the misaligned incentives in the system that currently result in insurers and PBMs favoring medicines with high list prices,” commented brand industry body PhRMA, which has just named Sanofi chief Olivier Brandicourt as board chairman.

BROAD SUPPORT FOR REBATE REFORM FROM ORIGINATORS

“Our current healthcare system results in patients often paying cost-sharing based on the list price, regardless of the discount their insurer receives. We need to ensure that the $150 billion in nego-tiated rebates and discounts are used to lower costs for patients at the pharmacy,” PhRMA maintained.

But while originators pushed the blame for high out-of-pocket costs onto the pay-ers and middlemen, PBM lobbying group the Pharmaceutical Care Management Association (PCMA) insisted that “drug-makers alone set and raise prices”.

The PCMA raised concerns that “elimi-nating the longstanding safe-harbor pro-tection for drug manufacturer rebates to PBMs would increase drug costs and force Medicare beneficiaries to pay higher pre-miums and out-of-pocket expenses, un-less there is a viable alternative for PBMs to negotiate on behalf of beneficiaries”.


DRAFT LEGISLATION THAT AIMS TO UNBLOCK COMPETITION BY WEAKENING 180-DAY GENERIC MARKET EXCLUSIVITY IS WORRYING US INDUSTRY



P E O P L E

Amneal’s Stewart Chairs AAM BoardDAVID WALLACE [email protected]

T he US Association for Accessible Medicines (AAM) has named Amneal president Bob Stewart as its 2019 board chairman, as the association holds its annual meeting in

New Orleans this week. The move comes less than a year after Am-neal completed its merger with Impax to become what it claims is the fifth-largest generics player by US sales. (Also see “Amneal and Impax to divest 10 to close deal” - Generics Bulletin, 4 May, 2018.)

Stewart oversees an AAM board that also includes as vice-chair

Lupin’s Alok Sonig, CEO of the firm’s US generics operations and global head of generics R&D and biosimilars. Meanwhile, Carol Lynch – president of Sandoz US and head of North America for Sandoz – will serve as AAM treasurer.

Other members of the 22-strong AAM board include 3M Health Care’s Silvia Perez; Accord’s Gerry Price; American Re-gent’s Harsher Singh; and Apotex’ Jeff Watson.

Jeff Gardner of Argentum, Aurobindo’s Hunter Murdock and Bausch’s Barbara Purcell also sit on the board, alongside Cipla’s Nikhil Lalwani, Dr Reddy’s Vanessa Brill, Fresenius Kabi’s John Ducker, Glenmark’s Bob Matsuk and Hikma’s Brian Hoffman.

Mayne Pharma’s Scott Richards, Mylan’s Marcie McClintic Coates and Rhodes Pharmaceuticals’ Vince Mancinelli round out the board membership, along with Sagent’s Peter Kaemmerer, Sun Pharma’s Stephen Manzano, Teva’s Brendan O’Grady and Zydus’ Joe Renner.

The AAM continues to be led by president and CEO Chip Davis.


Pharmacovigilance Must Not Be Overlooked As Brexit LoomsDAVID WALLACE [email protected]

“B rexit is not in the interest of patient safety.” This state-ment, voiced by Wendy Huisman, succinctly captured the mood of the room at Medicines for Europe’s 2019

Pharmacovigilance conference held in London, UK, last week.Huisman – senior pharmacovigilance consultant at Vigifit,

and former qualified person responsible for pharmacovigilance (QPPV) for the EU at Teva, as well as the former chair of Medi-cines for Europe’s pharmacovigilance working group – was far from the only person to speak out on the subject, with industry and regulators alike forming a consensus that the UK’s imminent departure from the EU is unlikely to make pharmacovigilance any smoother for healthcare stakeholders in Europe.

However, all agreed it was essential that a strong emphasis con-tinue to be placed on effective pharmacovigilance to prevent it from being overshadowed as industry grapples with preparations for Brexit, as the planned 29 March 2019 departure date looms.

‘BUSINESS AS USUAL’ DESPITE ‘CHALLENGING TIMES’Sabine Straus, chair of the pharmacovigilance risk assessment committee (PRAC) within the European Medicines Agency (EMA), acknowledged that “for everybody at the moment, Brexit is the most important thing in our minds”. However, she main-tained that throughout the Brexit process EU pharmacovigilance systems would continue in “business as usual” mode.

“These are very challenging times,” Straus admitted, not least

due to the EMA’s relocation from London to Amsterdam as a di-rect result of the Brexit process – a move which has resulted in staff losses and certain agency activities being dropped or mini-mised. However, she insisted, assurances had been received that “everything is in excellent working order” to prepare for Brexit.

“There will be some hiccups,” Straus conceded, but the EMA was aware of the issues involved and would prepare as much as possible to overcome them, she said. Meanwhile, she indicated, companies must also do their part to make the Brexit process as smooth as possible.

From industry’s perspective, said Susana Almeida – Medicines for Europe’s clinical development and safety director – the big-gest challenge in preparing for the separation of the UK and EU was the continuing high level of uncertainty over the exact form that Brexit would take, and the timeframes involved given the various possible permutations.

Companies were cognizant of the need to prepare for a ‘worst-case scenario’, and the potential need to act upon it, Almeida said. But she indicated that there was a “fine balance” to be struck between companies needing to be prepared and not wanting to make significant structural changes unless absolutely necessary.

THE AAM HAS ANNOUNCED WHO WILL BE

FILLING THE SEATS ON ITS 2019 BOARD


R E G U L AT I O N

“What we would all like to have right now is a little more cer-tainty,” she summarised.

Nevertheless, Almeida remained confident that pharmacovig-ilance concerns would not be drowned out amid all of the other regulatory considerations swirling around Brexit. While it was not a “sexy” subject, she conceded, it had not been overlooked.

But the action needed by industry to address the various pharmacovigilance concerns related to Brexit would ultimately depend on the specific path chosen for the UK’s departure, Al-meida emphasized. “Until that is clear, we cannot be specific.”

DIGITAL TECHNOLOGY OFFERS DATA OPPORTUNITIESInsisting that efficient pharmacovigilance was “paramount for the safe use of medicines”, Adrian van den Hoven, director gen-eral of Medicines for Europe, observed that “industry and regula-tors have a shared responsibility to ensure that this system re-mains effective and efficient”.

“We commend the regulatory community on the close coop-eration to achieve results for patients who rely on medicines,” he said, suggesting that “we need to accelerate the use of struc-tured data to streamline and focus pharmacovigilance systems on patient needs”.

Pointing to the opportunities offered by ‘big data’, Almeida ac-

knowledged that industry needed more sophisticated tools to turn this into information that it could use.

While some companies were further along than others in be-ing prepared for this, she observed that things were moving fast in this area, and predicted that “in one or two years, we will see that a lot has changed”, suggesting that there would be a quick transformation in terms of industry’s ability to capture and inter-pret large digital data sets.

This would include finding the most efficient ways of reducing ‘background noise’ and identifying data that is relevant, she said, suggesting that ensuring good data was being used to make de-cisions was “one of the challenges we have right now”.

“Digital technologies offer the promise of more pharmacovigi-lance data from different sources, provided we can improve the ca-pacity of the EMA pharmacovigilance system to better filter essen-tial and non-essential information sent to companies for review,” Medicines for Europe stated. “The EMA-industry dialogue should step up its efforts to streamline the functioning of the system.”

“As we move into an increasingly patient-centered future, sim-plification and improved communication should be at the heart of our pharmacovigilance strategy.”


Neuraxpharm Reinforces European CNS Leadership Position With Pharmax AcquisitionGRACE MONTGOMERY [email protected]

N euraxpharm has expanded its pan-European footprint in Central and Eastern Europe (CEE) after acquiring central nervous system (CNS) specialty pharmaceutical

company Farmax from SVUS Pharma for an undisclosed fee.Located in Hradec Králové, Czech Republic, Farmax was the com-

mercial division of SVUS Pharma, a pharmaceutical packaging and la-belling specialist. Farmax has been renamed Neuraxpharm Bohemia and will commercialize its products under the Neuraxpharm brand.

With “a strong distribution presence in the Czech Republic and Slovakia, as well as a small presence in Hungary”, Farmax described itself as a sales and marketing leader in both branded and non-branded generics pharmaceuticals for CNS disorders, including Zolpinox (zolpidem). The carve-out from SVUS Pharma also commercializes OTC nutraceuticals.

“Leveraging its proprietary salesforce in the Czech Republic, Slovakia and Hungary, Neuraxpharm Bohemia plans to quickly offer new and differentiated products to local patients and healthcare providers based on the group’s broad CNS portfolio,” noted Neuraxpharm.

“We truly believe that this acquisition will strengthen our lead-ing position in the European CNS market and provide us direct access to the CEE markets with our own salesforce,” commented Jörg Thomas Dierks, Neuraxpharm’s chief executive officer (CEO). “Entering the CEE region is one of the pillars of the Neuraxpharm strategy as these markets offer an attractive growth potential.”

“I am delighted to join Neuraxpharm and become part of a leading European CNS franchise,” stated Lukáš Jirka, former SVUS Pharma general manager and now general manager at Neurax-pharm Bohemia. “I am very proud of SVUS Pharma’s achievements in the Czech Republic and the whole CEE region. We will certainly contribute with our expertise in the CNS area to make the Neurax-pharm group an even stronger player in the European CNS market.”

MOVE FOLLOWS RECENT REBRANDDeveloping and selling both generic and branded pharmaceu-ticals, Neuraxpharm has a “direct presence in Germany, Spain, Italy, France, Poland, Czech Republic, Slovakia and Hungary”.

The Apax Partners-backed European CNS specialist used to be called NuPharm, up until last October when it rebranded to Neur-axpharm, in an “exciting new chapter” for the company that “posi-tions Neuraxpharm as a single and differentiated CNS-oriented firm within the European pharmaceutical industry” (Also see “Nupharm rebrands itself to Neuraxpharm” - Generics Bulletin, 19 Oct, 2018.).

That same month, Neuraxpharm rebranded its Italian subsidiary FB Health to Neuraxpharm Italy. Located in Ascoli Piceno, the firm focuses on the prevention and treatment of diseases in neurology, geriatrics, psychiatry and child neuropsychiatry, and “has a 100% CNS-oriented portfolio of nutraceuticals and branded generics”.




R E G U L AT I O N

EU Environment Reform May Deter Entry Of Competition AIDAN FRY [email protected]

D raft reforms to environment risk assessments (ERAs) for pharmaceuticals in the European Union (EU) could deter generic launches and reduce competition, Mylan’s senior

registration manager, Geraldine Moore, warned during Medi-cines for Europe’s 2019 Regulatory Affairs Conference. Rather, she proposed, the focus should be on targeting high-risk products and improving provisions for disposing of unused drugs.

Representing industry during the conference held in London, UK, on 31 January and 1 February, Moore cautioned that costs of up to €1.0 million (US$1.1 million) per product for conduct-ing ERAs would impose “a huge burden” on a European generics industry that was already struggling with the dual effects of the UK’s Brexit withdrawal from the EU and the costs and complex-ity of implementing the EU’s Falsified Medicines Directive (FMD) from this month. Without the necessary expertise in-house, she added, smaller players could be forced to seek help from exter-nal consultants at considerable cost.

COSTS COULD RENDER PRODUCTS NOT COMMERCIALLY VIABLE“Increasing costs at the same time as FMD and Brexit changes may result in some products [becoming] no longer commercial-ly viable,” she cautioned. Given that conducting ERAs to assess the potential environment risk of a given medicine could take up to two years, Moore said there was a danger that fewer generics entering EU markets could limit patient access to medicines.

Whereas the current ERA guideline EMA/CHMP/SWP/4447 that had been in effect since 2006 allowed for waiving the re-quirement for environmental study data if justified, such as for generic marketing authorization applications (MAAs), Moore observed that this exception had been deleted in the revision draft that is open for comment until 30 June this year.

The German Environment Agency’s Ines Rönnefahrt explained that the study-data waiver approach had been deleted because

it was not in line with a requirement in Article 8 of Directive 2001/83/EC that MAAs – including generic filings under Article 10 of the Directive – must be accompanied by an evaluation of the potential environmental risks posed by that medicinal product.

But Moore pointed out that draft guideline made clear that the ERA was not a criterion for refusing to grant an MAA. “For the cost,” she asked, “what is the added value of an ERA? Will this be-come an administrative exercise without any increased benefit in protecting the environment?”

“Information derived from ERAs is not currently used to develop risk-mitigation strategies to protect the environment,” she observed.

Highlighting the prospect of several companies generating essentially the same data at the same time as they pursued MAAs for the same active ingredient, Moore questioned wheth-er it was ethical to expose animals to such unnecessary repeat testing. And while the draft guideline encouraged sharing of ERA data to avoid repeating studies, such as by cross-referencing originators’ data by consent through letters of access, it was not clear how this would work in practice.

ORIGINATORS UNDER NO OBLIGATION TO SHARE DATAAstraZeneca’s Jason Snape said his company was making its en-vironmental data publicly available and intended to issue letters of access for free, but he acknowledged that other originators could charge and were under no obligation to share data. While most active pharmaceutical ingredients (APIs) posed “low or in-significant environmental risk”, he highlighted “regulatory data gaps” for many bulk drugs that pre-dated the original ERA guide-line coming into effect in 2006.

Describing 90% of APIs as presenting a low risk to the envi-ronment, Moore advocated for a targeted approach that would require ERAs for high-risk molecules such as antibiotics and en-docrine active substances (EAS).

A more effective means of protecting the environment, she proposed, would be to improve awareness and usage of un-used medicine disposal schemes that were commonplace throughout the EU. A reminder on all pack labelling to consult the package information leaflet on appropriate ways to dis-pose of the drug would help in this respect, she recommended, as would measures to reduce over-prescribing and enhance patient compliance.


“Will this become an administrative

exercise without any increased benefit

in protecting the environment?” -

Mylan’s Geraldine Moore

Generics Bulletin

Visit https://pharmaintelligence.informa.com/generics-bulletin


I N T E L L E C T UA L P R O P E R T Y

China Steps Closer To Offering An SPC SystemAIDAN FRY [email protected]

S upplementary protection certificates (SPCs) have taken a step closer to being implemented in China after the Na-tional People’s Congress completed a one-month public

consultation period on draft amendments to the Chinese Patent Law. The proposed amendments form part of a broader move towards stronger intellectual property (IP) protection in China that also includes pharmaceutical data exclusivity.

Acting on a State Council resolution, China’s National Medical Products Administration (NMPA) proposed a general framework for patent linkage and data protection. Building on that frame-work, the national People’s Congress in early January launched its one-month consultation on amending patent law.

According to the local offices of law firm Marks & Clark, Article 43 of the draft amendments allows for novel drugs introduced to the Chinese market concurrently with overseas markets to be eligible for protection certificates with a maximum term of five years. The remaining patent term, including the extension, is to be no greater than 14 years.

Marks & Clark believes it is likely that the National People’s Congress will review the draft amendments “at least once more, so it remains to be seen whether the SPC provisions will be sus-tained and/or revised”.

POSSIBILITY OF FIRST-MOVER GENERIC EXCLUSIVITYVarious proposals for extending China’s current six-year data protection regime have been put forward, including plans for a 12-year term for novel biologics that would mirror provisions in

the US. Generic market exclusivity to reward successful patent challenges, akin to the US Hatch-Waxman 180-day exclusivity, has also been mooted, but Marks & Clark believes “it is likely that this protection term will not be specified until the detailed provi-sions of the patent-linkage system are set forth”.

A recent National Health Commission on introducing patent link-age was, Marks & Clark observes, “somewhat cautious” in merely stat-ing that the Chinese government would “gradually explore a patent-linkage system”. “The draft amendments to the Patent Law released on 4 January 2019 do not mention patent linkage,” the law firm notes.

And while ideas around stays on generic approval of up to 24 months have been floated, “there is a lack of clarity as to how this proposed regime would be implemented in actual practice”.


France’s Biogaran Expands Into Ivory CoastDAVID WALLACE [email protected]

F rance’s Biogaran has launched operations in Ivory Coast, in a move that the Servier subsidiary expects to act as a gateway to further expand into “all French-speaking West

and Central African countries”.Emmanuel Le Doeuff, Biogaran’s general manager and interna-

tional affairs director, said Ivory Coast was “an ideal base for our deployment in French-speaking West and Central Africa”, thanks to “an encouraging business climate and strong logistical facilities”.

The move adds to Biogaran’s existing presence in Africa via its Nigerian drug production and distribution company, Swipha, acquired in 2017.

Biogaran – which enjoyed gross sales of €1.25 billion (US$1.43 bil-lion) in 2018, leading it to describe itself as “the French leader in ge-neric drugs” – said it had kicked off its Ivory Coast unit by launching 14 drugs in the market, of the firm’s total range of more than 800.

The portfolio launched in Ivory Coast comprises medicines import-ed into the African country from France, “manufactured in strict accor-dance with European standards” and available at “a fair price”, Biogaran emphasized, also stressing the strict bioequivalence of its portfolio.

DIABETES AND HYPERTENSION DRUGS“Biogaran’s drugs portfolio covers a wide range of diseases that are increasingly present on the African continent such as dia-betes, high blood pressure and bacterial infections,” the French company noted, adding that “11 of the 14 drugs sold by Bioga-ran are labeled essential and responding to public health chal-lenges, according to the World Health Organization (WHO).”

Explaining its portfolio choices, Biogaran said 5.7% of the population in Ivory Coast suffered from diabetes and 21.7% from high blood pressure, according to WHO data.

“In African countries in general, the prevalence of cardiovascu-lar diseases is increasing sharply and patient care is sometimes insufficient,” the firm noted, also pointing to the penetration of counterfeits as “reaching an alarming rate”, with 100,000 deaths caused in Africa annually by counterfeits according to the WHO.

As part of its emerging markets presence, Biogaran also has a presence in Brazil through its Pharlab subsidiary.




S T R AT E G Y

Indoco Works To Unblock Barriers To GrowthAIDAN FRY [email protected]

Indoco Remedies is struggling to con-vince the US Food and Drug Administra-tion (FDA) that its facilities in Goa, India,

meets compliance standards. An FDA inspection of the firm’s Goa Plant I oral-dose plant concluded from 17-25 January resulted in six ‘Form 483’ observations.

Meanwhile, Indoco is awaiting a full good manufacturing practice (GMP) in-spection of Goa Plant I by the UK’s Medi-cines and Healthcare products Regulato-ry Agency (MHRA). The UK regulator had previously restricted a GMP license for the facility after discovering problems.

The Indian firm insisted none of the FDA’s six observations at Goa Plant I were “critical nature” and pledged to respond within the stipulated 15-day timeframe.

“Most of these observations are related to areas of improvement needed in docu-mentation and review procedures,” manag-ing director Aditi Kare Panandikar revealed. “These observations and recommendations will help us further improve our quality sys-tems in the plant, which in turn will give a boost to revenues from the US market.”

Indoco stressed that the site would continue to supply to the US products that had already received FDA approval as the firm awaited approval of its pend-ing abbreviated new drug applications (ANDAs). To date, the Indian company has secured 10 ANDA approvals, but it has an-other 37 filed and pending FDA approval.

WARNING LETTER ISSUED IN MARCH 2017

The company’s attempts to get its US pipeline moving has been hampered by a warning letter that the FDA issued against its Goa Plant II and III facilities in late-March 2017, effectively halting ANDA approvals from these sites. Having re-inspected the Goa Plant II sterile formulations factory in November last year, the FDA issued two Form 483 observations. “The compliance response has been submitted and an es-tablishment inspection report (EIR) is ex-pected,” Indoco commented, adding that it had in the meantime received from the FDA a prior approval supplement (PAS) for brimonidine 0.2% eye drops.

Starved of new product approvals, In-doco’s US Formulations sales tumbled by two-thirds to Rs26 million (US$0.36 mil-lion) in the firm’s financial third quarter ended 31 December 2018. With Euro-pean sales down by just over two-fifths to Rs313 million, the Indian company’s total Exports Formulations sales slipped by 31% to Rs685 million as it also suf-fered reverses in emerging markets, as well as in its South Africa, Australia and New Zealand region.

The European shortfall was due in part to the restricted GMP license for the Goa Plant I oral-dose site issued by the UK’s MHRA. Following a check by an indepen-dent EU qualified person on progress at the plant, Indoco said the MHRA had in October 2018 conducted a ‘focus audit’ with no critical observations. In a bid to reinstate EU-level GMP certification of the site, the EU qualified person in late January this year conducted a full GMP audit, and the Indian firm is now await-ing a further MHRA inspection.

Indoco admitted that the MHRA’s re-stricted license had given rise to ramifica-tions beyond the EU. Under a recognition agreement with the MHRA, Ukraine’s regula-tory authority had taken similar action and in mid-December last year inspected Goa Plant I. “The company awaits the inspection report, on resolution of which supplies to Ukraine will commence,” Indoco stated as it reported third-quarter Emerging Markets Formula-tions sales 5% lower at Rs204 million.

AUSTRALIA AUDITED GOA PLANT II STERILES SITE

Formulations turnover in South Africa, Australia and New Zealand slid by 11% to Rs142 million. Indoco said it had submit-ted a compliance response to an inspec-tion report resulting from an audit in May 2018 of its Goa Plant II steriles facility by Australia’s Therapeutic Goods Adminis-tration (TGA). The same site had in Sep-tember passed an MHRA audit “with no critical observations”.

Shortly afterwards, in October, the MHRA also audited the company’s facilities in Baddi, India – its existing Plant I site as well as the Plant III facility acquired from Micro Labs – “with no critical observation”. “While Baddi Plant I will continue to supply to Eu-rope,” Indoco explained, “Baddi Plant III will add significant value to sales in the EU once

“Most of these

observations are related

to areas of improvement

needed in documentation

and review procedures” -

Indoco

FACILITY DEFICIENCIES HIGHLIGHTED BY INSPECTORS FROM BOTH THE US AND THE EU ARE THWARTING INDOCO’S HOPES OF GENERATING GROWTH FROM HIGHLY REGULATED MARKETS


R E G U L AT I O N

approval from the MHRA is received.”The Indian firm’s domestic Formulations

sales slipped by 2% to Rs1.52 billion, due in large part to lower respiratory sales. In-doco was recently forced to publicly deny Indian media reports that it was looking to divest parts of its domestic Formulations business, such as its Oxipod (cefpodox-ime) antibiotic brand.

But Indian sales ahead by more than a quarter helped to swell Indoco’s global active pharmaceutical ingredient (API) sales by two-fifths to Rs222 million. How-ever, even with stronger sales from its bulk drugs and contract research opera-tions, the Indian group’s total turnover still declined by nearly a tenth to Rs2.48 billion. Indoco’s pre-tax profit plum-meted by 84% to Rs39 million, even after cutting its research and development spending by 14% to Rs124 million, equiv-alent to 5.0% of group turnover.

“We are in the process of regulatory resolutions, due to which our sales con-tinue to get affected,” Panandikar ac-knowledged. “We expect the business performance to start looking up from the next financial year.”


Third-quarter sales

Third-quarter sales

Rs1525m

Rs685m

Rs80mRs142m

Rs47m

Indian Formulations Export Formulations

Indian API Export API Contract Research

Nine-Month sales

Nine-Month sales

Rs4612m

Rs1628m

Rs223mRs348m

Rs153m



Indoco Remedies' sales in the three months and nine months ended 31 December 2018

Indoco Remedies’ sales in the three months and nine months ended 31 December 2018

Third-quarter sales

Third-quarter sales

Rs1525m

Rs685m

Rs80mRs142m

Rs47m



Nine-Month sales

Nine-Month sales

Rs4612m

Rs1628m

Rs223mRs348m

Rs153m



Indoco Remedies' sales in the three months and nine months ended 31 December 2018

Industry Welcomes Commission Competition ReportDAVID WALLACE [email protected]

A report on historical competition-law enforcement activities under-taken at the EU and national level,

published by the European Commission, has been welcomed by off-patent indus-try association Medicines for Europe.

Adrian van den Hoven, director general of Medicines for Europe, said the report “shows the important role that competition rules play in the pharmaceutical sector”.

“Building on the excellent work of the European Commission sector inquiry of 2009 and the results of this Report,” van den Hoven said, “Medicines for Europe is ready to support the European Com-mission and national competent au-thorities in removing barriers to proper competition – such as patent linkages or disparagement practices – and focus on policies and incentives to stimulate more competition in the off-patent sec-tor. This is going to result in better access for patients and sustainable healthcare systems throughout Europe.”

The report’s compilation of pharmaceu-tical competition law cases is part of the Health Council Conclusions of June 2016 on strengthening the balance in the phar-maceutical systems in the EU, which were in part aimed at ensuring timely access to generics and biosimilars.

“The report provides valuable informa-tion on how to prevent unnecessary and unlawful delays to generic and biosimilar medicines competition,” Medicines for Eu-rope said. “Competition law scrutiny is es-sential to prevent misuse of the regulatory system to delay competition, including the spread of misleading information to deni-grate generic and biosimilar medicines.”

RESPONDS TO COUNCIL AND PARLIAMENT CONCERNS

The Commission said its report “was drafted to describe, in response to the concerns raised separately by the Council and the European Parliament, the contri-bution that competition law enforcement can make to achieving the objectives of affordable and innovative medicines”.

Summarising historical actions taken by the Commission and national competition authorities on fair prices for medicines, the report notes that “well over 100 cases” had been investigated between 2009 and 2017, with 29 decisions adopted against unlaw-ful practices in the supply of medicines.

Anti-competitive practices investigat-ed and sanctioned include delaying the market entry of generics, fixing prices and carving up markets, excessive pric-ing, and so-called ‘pay-for-delay’ deals in which generics firms receive a benefit from the originator for staying off the market with a competing product.

“These decisions imposed fines total-ling over €1 billion (US$1.15 billion), or made binding companies’ commitments to remedy their anti-competitive behav-iour,” the Commission noted.

The Commission also observed that it had reviewed more than 80 mergers in the pharmaceutical sector, with “con-cerns detected” in 19 cases “where merg-ers could have led to price increases, in particular for generic products or biosim-ilar products”, leading to the Commission requiring divestments.

“The antitrust and merger cases cited in the report show that the pharmaceu-tical sector requires close scrutiny by competition authorities,” the Commission concluded. “The enforcement record of the Commission and the national com-petition authorities provides a solid basis for competition authorities to continue working and focusing their enforcement efforts in the sector.”

“However, while the cases discussed in the report show that competition law enforcement helps to safeguard compe-tition on prices and to stimulate innova-tion, there are limits to what competition law can do. In particular, continuous ef-forts by all stakeholders are needed to address the societal challenge of ensur-ing sustainable access to affordable and innovative medicines.”



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