How the generic and biosimilar medicines industry could take advantage of trade opportunities

Abstract

International trade policy initiatives, including trade negotiations and regulatory dialogues, have a rather significant impact on the industry. This is particularly the case for the pharmaceutical sector, which is a highly regulated sector. Non-tariff barriers (NTBs) to trade have a negative effect on generic and biosimilar medicine exporters as they often create an advantage for local companies. To aim at their removal, several actions can be taken by governments both at bilateral level or with the World Trade Organization in the context of its dispute resolution procedures. NTBs can also be addressed in the context of trade agreements or bilateral and plurilateral regulatory dialogues. Regulatory cooperation in trade agreements can produce very positive results for patients, industry and regulators, as the Transatlantic Trade and Investment Partnership Agreement (TTIP) demonstrate.

Keywords

Generic medicines trade policy barriers FTA TTIP CETA NTB single development for biosimilar and complex generic medicines biosimilar regulatory

Non-tariff barriers

Non-tariff barriers (NTBs) to trade have a negative effect on generic medicine exporters as they often create an advantage for local companies. NTBs can be hidden protectionist measures usually only recognized by companies affected or technical experts. To aim at their removal, these barriers should be pointed out to respective governmental bodies that can address them at bilateral level or with the World Trade Organization in the context of its dispute resolution procedures. Barriers to trade have the effect of mitigating growth and restricting market access; therefore companies may find it useful to address specific issues in countries with NTBs through appropriate channels such as, for instance, the European Commission Market Access Advisory Committee (via trade associations or EU Member States delegations) in the EU and the United States Trade Representative (USTR) special 301 report in the US.

The abovementioned Market Access Advisory Committee is led by the European Commission (EU) (DG Trade) and brings together Member States and industry associations to identify and define strategies to remove non-tariff barriers to trade in non-EU countries. These barriers can be purely regulatory hurdles or related to, market access, public procurement, etc. Members of the committee can proactively raise particular issues in third countries or contribute to the Commission’s key barriers lists in specific countries.¹ The generic and biosimilar medicines industries represented by the EGA,² the European Generic and Biosimilar Medicines Association, is involved in this committee and contributes to its work, sometimes also in coordination with other industry associations.

In line with and on the basis of this work, the European generic and biosimilar medicines industries also contribute to the International Generic and Biosimilar Medicines Association (IGBA) submission to the 301 Watch List of the US. The IGBA is an international network of generic and biosimilar medicines associations, committed to promoting generic and biosimilar medicines and exchanging information worldwide.

The Special 301 Report is released annually by the USTR, which points out “countries that deny adequate and effective protection of intellectual property rights (IPR) or deny fair and equitable market access to US persons who rely on intellectual property protection.”^3,4 The Report ranks countries as Priority Foreign Country, Priority Watch List or Watch List.⁵ Countries with trade barriers from a generic and biosimilar medicines industries included in the last IGBA’s recommendation to USTR include, among the others, China, Russia and Vietnam but also Canada which has a particularly complex IP system regulating the market entry of generic and biosimilar medicines manufactures.

EU-India regulatory dialogue

In addition to its activities in the context of international regulatory cooperation fora, the European Commission conducts bilateral Regulatory Dialogues with third countries. Particularly intense are the EU-India Regulatory Dialogue and the EU-China Regulatory Dialogue. In this context, the industry welcomes the work of the Commission and provides technical support when needed. The industry welcomes the resumption of the EU-India Regulatory Dialogue after several years of pause. The last meeting between EU authorities and India took place in 2015. This stronger cooperation is an opportunity to foster regulatory talks eventually leading to early consultations on new regulations, as well as the removal of any trade hurdle. Increased transparency and information exchange between competent and regulatory authorities are also key objectives of bilateral regulatory cooperation dialogues such as this one.

EU-China regulatory dialogue

EU and China regularly hold bilateral regulatory cooperation meetings. At the last EU-China Regulatory Dialogue meeting in Beijing in November 2014, a workshop took place which allowed a constructive exchange between the industry and regulators from both the EU and China. Industry participation to these dialogues are considerably indicative of the positive tendency to adopt multi stakeholder approaches that can only lead to transparent decision making and a constant reduction of regulatory differences between countries.

Free trade agreements (FTA)

FTAs that include pharmaceutical regulatory cooperation with third countries can be particularly positive for the generic and biosimilar medicines industries insofar as they aim to remove, or at least reduce, procedural redundancies and regulatory barriers to trade, which happen to be particularly detrimental for smaller companies. The EC’s DG Trade/DG Sante’ conducts Regulatory Dialogues with third countries. Particularly intense are the EU-India Regulatory Dialogue and the EU-China Regulatory Dialogue. In this context, the industry welcomes the work of the Commission and provides technical support when needed.

Current EU FTAs under negotiation

The generic and biosimilars medicines industries could benefit from trade negotiations that foster regulatory cooperation and removal of NTBs. The European Union is currently negotiating preferential trade agreements with a large number of countries or regions, including the US, Japan, Malaysia, etc. Negotiations for an EU-Canada Comprehensive and Economic Trade Agreement (CETA) were concluded in 2014. The European generic and biosimilar medicines industries have been closely following all EU trade dialogues. Below is a brief description of two of the most debated ones.

EU-Canada Comprehensive economic and trade agreement

In September 2014, the former EC President Barroso and his Canadian counterpart publicly announced the official conclusion of the technical negotiations for a Comprehensive Economic and Trade Agreement (CETA). The CETA represents an innovative trade agreement as it is the first trade deal putting particular focus on regulatory cooperation objectives. The pharmaceutical sector, however, is particularly central with regard to the IP measures introduced in this agreement. Indeed, Canada accepted to introduce in its legislation a patent term restoration⁶ limited to a maximum of two years with the possibility for both parties of providing for an export exception under the extension period. The latter provision represents an opportunity for the Canadian and European generic and biosimilar medicines producers, which, if implemented, will have the chance to start producing locally generic and biosimilar medicines during the patent extension with the aim of exporting their products to countries where no patent or patent extension is in place. For Europe, should an export exception be introduced, this would create thousands of new European jobs, new companies and manufacturing plants, as well as significant economic growth. A study conducted by Prof. Sergio Simoes, Faculty of Pharmacy, University of Coimbra, demonstrates that in the period between 2014 and 2022 the EU generic industry would create more than 64,000 high-tech jobs in EU, 36 new companies, with a €5.2 billion business value.⁷

Transatlantic trade and investment partnership

The EU and the US are conducting trade negotiations aimed at a Transatlantic Trade and Investment Partnership (TTIP). The attention, engagement and ambition of negotiators from both sides is paramount to reach agreements in the following impactful points related to the pharmaceutical chapter: Mutual recognition of good manufacturing practice (GMP), single development for biosimilar medicines and single development for complex generic medicines.

Within the mutual recognition of GMP Inspections chapter, the EMA and EU national authorities are exchanging information with the FDA to align on high standards for inspections and reduce unnecessary duplications for industry and regulators. A mutual recognition of GMP inspection would allow a more efficient use of regulatory resources as well as more resources devoted towards inspections in emerging markets.

Single development for biosimilar and complex generic medicines

The pharmaceutical industry has become a global industry; both regulators and industry need a more efficient use of available resources to guarantee patient access to quality, safe and effective medicines. Divergences in regulatory frameworks between regions have emerged as a key hurdle and as such, regulatory convergence is a key opportunity to improve efficiency in the regulatory system. Whereas similar or equivalent medicinal products are being authorized and marketed in multiple countries and regions in the world, regulatory frameworks and practices do not yet reflect the globalization of the industry. Marketing authorization applicants face multiple regulatory requirements leading them to perform clinical trials for each region concerned, unnecessarily repeating study programs and involving numerous patients for the same medicinal products.

A single development program for both biosimilar and complex generic medicines (i.e. injectable, respiratory products, patches, etc.) would promote the reduction of unethical repetition of studies, the reduction of clinical development costs and increased patient access to quality, safe and effective medicines.

Currently, an applicant for a marketing authorization in both would have to carry out two distinct clinical trial programs. Single EU-US development program for complex generic medicines and biosimilar, while reducing unnecessary and unethical duplicative clinical trials, would reduce development costs up to 35 million Euro and up to 40 million Euro respectively.

Some results of the ongoing EU-US regulatory cooperation on biosimilar medicines are already tangible, with the recent EU guidelines and US guidance allowing single development, and the first biosimilar product recently approved in the US. In addition, it is interesting to notice that, since the adoption of the EU overarching guideline allowing single development, 75% of the biosimilars applications in Europe are aimed to follow the single development pathway.

In conclusion, the TTIP negotiation has the potential to bring more value for patients. It allows for the promotion worldwide of high scientific standards along with a significant potential for EU and US global cooperation. The hope is that the ongoing constructive TTIP regulatory cooperation on generic and biosimilar medicines will represent a future benchmark for other international FTAs.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Author biographies

David Jauch is responsible for government relations within Global Regulatory Affairs of Fresenius Kabi. He is the Chair of the Trade Policy Committee, the Board of European Generics and Biosimilars Medicines Association (EGA) as well as a member of several other Committees of the EGA. Also, David is a member of the regulatory committee of the German Pharmaceutical Industry Association (BPI). After David’s studies in Business at the University of Stuttgart in Germany, Tongji University in China and Seoul National University in Korea, he joined Fresenius Kabi.

Sergio Napolitano before joining the EGA, worked in the Directorate General for External Policies of the European Parliament where he was part of the Secretariat of the Committee on International Trade (INTA). In 2012, he authored a Report of the European Parliament on “The Role of the Congress in Shaping the US Trade Policy”. He previously worked in the Trade Policy Department of the Permanent Representation of Italy to the EU on multilateral, plurilateral and bilateral trade negotiations, EU investment policy and IPR. Sergio Napolitano is qualified for mediator certification in most American states. He holds a degree in Law from the University of Naples Suor Orsola Benincasa, an Erasmus Diploma at the Université Paris-Sorbonne, and a LL.M. on EU and European Public Law from the University College of London (UCL).

References

DG Trade website MAAC.

http://www.egagenerics.com/ (accessed 6 December 2015).

IGPA Press release.

USTR website 301 Special report.

The patent term restoration that will be introduced in Canada is similar in its effects to the European Supplementary Protection Certificate (SPC).

Vicente

Simoes

. Manufacturing and export provisions: impact on the competitiveness of European pharmaceutical manufacturers and on the creation of jobs in Europe. J Gener Med 2014; 11: 35–47.