Dealing with regulations in the healthcare industryBaker & McKenzie European Pharma Meeting , 14.06.2013, Zurich

Thomas B. Cueni, Secretary General Interpharma

Agenda1. Today‘s main challenges for the industry

2. Patent settlement agreements (“Pay-for-delay”)

3. Inherent tension between national health policy (administered prices) and free flow of goods

4. Clinical trial data transparency

5. Compliance & HCP/HCO Disclosure Code

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Today‘s main challenges for the industry Policy and regulatory environment

Euro-zone crisis Single focus on cost-containment Missing growth agenda Market access delays Dogmatic competition law approach!

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Patent settlement agreements (PLSAs)

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PLSAs and “pay-for-delay” Conclusion of Commission’s Pharmaceutical Sector Inquiry (2009-2011)

seemed to be pragmatic Commission dropped certain previous investigations into pay-for-delay

cases in March 2012 due to lack of evidence (AstraZeneca) or withdrawal of the complaint by a rival company (GSK)

DG Competition is still investigating a number of PLSAs between pharmaceutical companies and generic manufacturers

Court decision in the first case is expected in June 2013 anti-competitive? abusive use? value transfer = restriction of competition “by object”? irreparable harm

legal uncertainty!

Patent settlement agreements (PLSAs)

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Patent rights encourage innovation and settlements of genuine patent disputes are generally efficiency enhancing PLSAs are by nature efficiency enhancing

Patent litigation in Europe is fact intensive, complex and often highly unpredictable litigation in multiple jurisdictions real risks of divergent outcomes

How to deal with generic competitors “launching at risk”? innovators have much to lose!

Case-by-case approach to assess PLSAs should be limited to: fraud in obtaining the patent no sham cases restrictions exceed the scope of the patent

Inherent tension between price control and free flow of goods

Conclusions from OECD study: International price referencing

is the most widely used approach (22/30 OECD countries) to cap prices (or reimbursement levels) of innovative medicines;

is perceived by public authorities as a means to assess the appropriateness of the proposed or actual price in relation to what is paid elsewhere;

requires an explicit or implicit notion about how pharmaceutical prices ought to differ across countries, and how they should be similar;

the rationale for selecting particular benchmark countries is not always explicit.

The use of IRP by EU member states and the pricing rule used

Source: CRA analysis. Note that international reference pricing is not applied to all products in every country. For example, in Germany it is only applied in particular circumstances.

FINLAND

AUSTRIA

ITALY

SPAIN

SWEDEN

NORWAY

GERMANY

FRANCE

PORTUGAL

HUNGARYROMANIA

BULGARIA

DENMARK

POLAND

U. K.

CZECH

SLOVAKIA

GREECE

ANDORRA

NETH.

BELGIUM

IRELAND

SERBIA

ALBANIA

LITHUANIA

LATVIA

ESTONIA

LUX.

MONTENEGRO

BOSNIA

CROATIA

SLOVENIA

SWITZERLAND

MACEDONIA

MediterraneanSea

NorthSea

AegeanSea

EnglishChannel

AdriaticSea

BalticSea

Helsinki

KrakowPrague

Bern

Hammerfest

Stockholm

Oslo

Copenhagen

Frankfurt

Berlin Warsaw

Vilnius

Riga

London

Dublin

Belfast

Paris

MadridLisbon

Barcelona

Milan

Rome

Naples

Venice

Bucharest

Budapest

CRETE

Athens

Geneva

Munich

Marseille

Bruxelles

Amsterdam

Belgrade

Vienna

Sarajevo

Tallinn

Zagreb

KEY:AverageLowestNone

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Problem has been acknowledged…

„…a similar price level leads to a different level of affordability depending on the economic situation of each Member State. Attention could be given to measures that allow companies to offer medicines at affordable prices in each EU market.“

„Member States are not interested in fixing prices of products that are only transiting through their territory to be utilised within other Member States. They should, therefore, abstain from fixing prices for products that will not be used within their territory and that will not impact on their national budgets…“

Source: Recommendation on P&R policies from High Level Pharmaceutical Forum

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…but short-term politics still prevail

Pharmaceutical policy making serves multiple objectives that must be balanced with one another to arrive at the policy mix that best reflects national priorities: affordable access to effective medicines vs. strong pressure for public

cost-containment; inherent trade-off between static and dynamic efficiency

static efficiency, in which consumer welfare is maximised by getting the most health value from today’s expenditures, as constrained by the limits of present technological capability

dynamic efficiency, in which the R&D incentives serve to generate growth in the capacity to prevent health conditions and cure diseases in the future.

Getting the best possible price or lowest possible expenditures for pharmaceutical products in the market today may mean having fewer and less innovative alternatives for the future.

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Static vs. dynamic efficiency

Inherent tension between price control and free flow of goodsFollowing ECJ Lélos Judgement of 16 September 2008 on the Greek

reference concerning quota systems (Cases C-468/06 to C-478/06) Companies even in they hold a dominant position must be in a position

to take steps (to limit parallel trade) that are reasonable and in proportion to the need to protect its own commercial interests

Judgments acknowledge right for companies to „protect their commercial interests“ – but there is no waivering yet from dogma of unhindered free flow of goods, or call to refrain from international price referencing

Revisit current legislative frameworkCJEU judgments give flexibility to companies – but don’t solve the problem

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Food for thought

Clinical trial data transparency Access to clinical-trial data

European Medicines Agency (EMA) announced that it will proactively publish clinical-trial data and transparency

Pharmaceutical industry recognises the need to establish a way forward

But how? A number of practical and policy issues need to be addressed before

complex data sets can be made available: rules of engagement good analysis practice last but not least: legal aspects

Principles for clinical trial data sharing PRIVACY: safeguarding the privacy of patients INTEGRITY: respecting the integrity of national regulatory systems INNOVATION: Maintaining incentives for research and innovation

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Compliance & HCP / HCO Disclosure Code

Increased regulation of interactions between pharmaceutical companies and HCP/HCOs at national level: Legal provisions: Denmark, France, Portugal, Slovakia Self-regulatory provisions: the Netherlands, UK Disclosure activities outside Europe: Japan, US (Sunshine Act)

Different approaches are in place at national level

EFPIA HCP/HCO Disclosure Code EFPIA brings together the 33 European national pharmaceutical industry

associations as well as 39 leading companies Much external focus on transparency, particularly related to the pharma

industries past-actions and also future commitments Monetary threshold on “Meals & Drinks” as well as prohibition of

“Gifts” Data Privacy Requirements must be checked at national level

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Interpharma, Petersgraben 35, Postfach, 4003 Basel, www.interpharma.ch

Thank you for your attention!

thomas.cueni@interpharma.ch