Greg Perry talks about the generics industry with the same passion as he supports his football team, Fulham, which brought him to London from his usual Brussels base at the time of our meeting.
Perry set up the European Generic medicines Association (EGA) in the early days of the generics industry. Its creation was sparked by a late attempt by a small number of companies and associations to challenge the supplementary protection certificate (SPC) that was being introduced in 1992/3. The SPC created an effective patent extension, to a maximum five years, which compensated for the delay between obtaining a patent and getting the product on the market for original products.
In the US, this was achieved in the 1980s with the Hatch-Waxman Act. However, in the US, it included a Bolar provision, which allowed the generic industry to develop its products and seek applications during the patent period. “Europe didn’t get that. They only gave to one side; they did not give to the other. However our industry was not developed enough to obtain it [at that time].
It was decided that we would campaign for a Bolar provision and also to get the generics industry on the map. Back then I couldn’t even get a meeting with the European Commission; nobody wanted to speak to us and we were seen as a fringe industry. We provided no added value. But things have changed dramatically since,” asserts Perry.
Industry Challenges
Perry thinks that the biggest challenge the industry faces is sustainability. Companies are facing extreme price cuts and strong competition in the off-patent sector. “It is very difficult for companies to make any reasonable profit because we are a manufacturing industry, which is capital intensive and needs a lot of investment.
“I think we are excellent manufacturers; we manufacture for the world, even for originator companies through licensing agreements. We have extremely high quality in Europe. However, it comes at a cost, particularly as we have strong regulations for good manufacturing process, quality control and pharmacovigilance. We need to have the freedom to generate profit and invest in the future, yet the fear is that companies won’t be able to because of the downward pressure on price.”
Another challenge the generics industry has is the ability to get a product on the market immediately a patent expires. The EC’s 2009 Pharmaceutical Sector Inquiry clearly identified a series of barriers to correct entry for generics, says Perry: “Some of those are the behaviour of competitors, principally the originators, plus structural problems in the pricing and reimbursement and patent systems that create these unnecessary hurdles. There are questions about the legitimacies of certain litigations used against generic companies. There is the question of how many patents should have been granted in the first place because so many patents are challenged and found not to be innovative or did not have an inventive step, so there is a need to strengthen the quality assessment of patents. These are all things we are addressing in the next five years,” he explains.
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Biography Greg Perry established the European Generic medicines Association (EGA) in 1993 and has been its full-time director general since 1999. Before joining the European generic medicines industry, Perry spent several years advising both corporate clients and non-government organisations on matters of European Union (EU) legislation and policy. He worked in European political affairs, including two years as a parliamentary adviser to members of the European Parliament and was himself a candidate. He was twice awarded scholarships with EU institutions. Perry is also a founding member of the International Generic Pharmaceutical Alliance and has been on its management committee since its creation in 1997. He currently serves on various European and international advisory groups, including the Standing Advisory Committee before the European Patent Office. Prior to launching his European career, Perry worked in the international affairs department of a leading professional association in London and, before that, in the business development department of a UK local authority. He was awarded the Golden Cross of Merit of the Republic of Poland in 2004 for his contribution to industry and European integration. He is one of the few non-Polish citizens to have received this honour. In 2005 he was granted Honorary Life Fellowship of The Organisation for Professionals in Regulatory Affairs (TOPRA) in recognition of his contribution to European pharmaceutical regulatory affairs. Perry holds an MA in European Integration, a BSocSc (Hons) in International Studies and a Diploma in Classical Studies. |
Be positive about biosimilars
It is important that the authorities realise that biosimilars will never have generic-type pricing, according to Perry. “The investments are so much higher than for a generic product; the standards required for showing comparability are so much higher. We don’t challenge the scientific requirements, we think that it is important because we have to ensure quality, safety, efficacy and public confidence,” he continues.
While there are price reductions of between 30 and 90 per cent on generics, the same cannot yet be said of biosimilars because generic manufacturers can afford to offer such low prices. Perry suggests that the EGA and industry need to look at a lower price difference between the originator and the biosimilar before and after it comes off patent.
The second big challenge for the sector is misinformation and misunderstanding. “Through this interview I would ask representatives of the biopharmaceutical industry to take a more positive position on biosimilars, recognising, accepting and telling healthcare professionals of the high standards set by the biosimilar set by the EMA,” says Perry. “This is important because a number of these companies and a number of smaller biopharmaceutical companies will engage in biosimilars. This will be not be the monopoly of generic companies; it is something the whole industry will share and develop in and we must ensure public confidence about patient safety.”
However he believes this is becoming less of an issue and hopes that misinformation will become part of a European code of ethics, which he and others, including EFPIA, are currently developing. “Misinformation,” says Perry, “whether about another company’s product or promoting your own product, really discredits the pharma industry as a whole.”
It is essential for politicians to act to ensure that the pharmaceutical and generic industries are promoted, according to Perry. “I think there has been an enormous lack of concern from the political establishment about manufacturing in Europe and we are a manufacturing industry. We employ 150,000 people and I want to protect those jobs and I want to provide more jobs in Europe in the science field through biosimilars. Not only are we generating a market in Europe, which is taking off slowly because of a lack of incentives at a national level, but there is a huge market outside Europe for off-patent biopharmaceuticals.
“The European establishment, both the government and the Commission, should do everything it possibly can to ensure that its industry gets a fair chunk of that market. The South Koreans have launched an industrial policy for biosimilars with the aim of getting 25 per cent to the market; the Indian government has set up a priority taskforce to make its pharma industry the number one in generics, biosimilars and innovations. I think Europe is lagging behind.”
Perry’s four hopes
Perry and the EGA are campaigning for four points of action. First, he wants the establishment of a global development programme for ICH regions: Europe, Japan and the US. “The originator is frequently identical in Europe and the US because it has been made by the same manufacturer, in the same plant, using the same process, so we shouldn’t need to do one development programme for the US and one for Europe. That would slash costs, make us more competitive abroad and ensure that we are able to provide more affordable products in Europe,” he explains.
Second, Perry wants to see the implementation of a global biosimilar standard based on the comparability programme. He is concerned that countries outside the highly regulated areas will start creating sub-standard products, which could result in quality problems. “It’s about image, public confidence and public safety. We need to have a global standard, so we can move to global development, so that we have a strong, high-quality based industry globally.”
Third, he wants originator companies to think ‘outside the box’. “We cannot develop and manufacture in Europe for non-European markets if the patent is still active in Europe, but non-active outside. We are hindered by the SPC – no other countries outside Europe have this. We are asking for, and are in preliminary discussions to have, some form of mechanism that allows us to manufacture in Europe to become competitive in markets outside Europe. This is a big issue because it needs some rethinking about the SPC. The SPC has come back to haunt us; it was introduced to provide compensation to the originator, but it has ended up strangling our generic industry.”
Perry’s fourth hope is that a European market for biosimilars can be created by introducing demand-side measures to stimulate it. He cited better training for healthcare professionals, so they would understand the high standards of biosimilars and the economic benefits that they can bring. He also wants the introduction of quotas – at a regional, hospital or physician level – so that a certain percentage of medicines used or prescribed are biosimilars. “There are various forms that we have to look at.
At the moment the EC has set up an access group on biosimilars which, in conjunction with the member states and interested parties – including the EGA, EFPIA and EuropaBio – is looking at reasons why the market is limited at the moment and ways that we can promote biosimilars in Europe, such as demand-side measures. At this point, the EGA does not advocate any particular demand-side measure; these have to be negotiated at national level, by a national association because each market varies significantly,” he notes.
Industry Growth
Growth in the generic sector will be generated by patent expiries, the elderly population and oncology, according to Perry. Biosimilars will also be another area of expansion, but the entry requirements are high because investment is high and, as a result, only a handful of generics companies are investing in it.
The other potential area of growth is the world market and the newly developing markets of Russia, China, Middle East and Africa and India, in particular. These countries have rapidly developing professional classes, with spending power comparable to that of Western Europeans.
“Many companies are looking at ways to diversify from Western European commodity markets, which are becoming saturated, and looking at these markets, biosimilars and niche markets. The business model for the whole of the pharmaceutical market is changing and this is happening in generics too, with some differences. This industry has changed dramatically since the organisation was set up in 1993. Then, companies were nationally focused, producing a limited number of high-value generic meds. It has moved from a regional to a national and now to an international industry.
“Companies that I have visited recently are looking at biosimilars, OTCs, incremental innovation. This includes new formulations, new delivery systems, new indications; all this is being looked at and discussed. They are very much looking outside of their markets.”
The shape of the future
The EGA has had many successes, according to Perry. “One of the things we think has helped [the industry] has been the European Patent Office’s initiative to raise quality standards, with which we have been involved. We have made several submissions and we have seen some results in improving the assessment process. On biosimilars, we have made a lot of progress, but we will be looking at various guidelines that we need to work on. There has been a significant change in bioequivalents; we have had the harmonised bioequivalents guidelines.”
Another success has been the establishment and the significant progress in the regulatory path for biosimilars. “It’s a world flagship in this area – the result of negotiations at all levels.”
Perry believes that the legislative environment works a lot better than it did before the 2003/04 regulation change which, he said, has made it a lot easier to operate in the industry, and he believes only a few more tweaks are needed in the future. “In the EGA’s Vision 2015 report, we don’t ask for any significant legislative changes. What we are calling for is some fine-tuning within the existing legislative framework, principally through new guidelines.”
Problems to overcome
He said problems that will be looked at include patent issues. “This association and our members are 100 per cent in favour of patents. We have a problem with patents that are developed for chemical trickery, not for new innovations, or knowingly weak patents that are put into the system to create hurdles to prevent competitive entry.” Perry said that the association will also examine pricing and reimbursement. “There are unnecessary delays; we have to wait more than the standard 90 days because the governments have delayed discussing them. We will be looking at the Price Transparency Directive that is under review by the EC.
“We do have a number of ongoing legislative and soft law developments in progress that will improve on the pharmaceutical law of 2003/04.”
He predicts that one of the biggest challenges in the future will be the Falsified Medicines Directive. “It could become extremely costly for industry, and I am not convinced that it will improve safety for patients. It is something I want to work on,” Perry concluded.
The Interviewer
Liz Wells is deputy editor of PME
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