Diabolic Digest
Cure
needed for sick man of Europe
By Khaled Diab
The
European drug industry is looking on with rising alarm as its American rivals pull
further and further ahead in the innovation stakes. Pharmaceutical firms blame
over-regulation in the EU for fuelling a competitive crisis in an increasingly
hostile global market.
July 2002
The European Commission has a number of
initiatives in the pipeline aimed at enabling Europe's industry to close the
transatlantic innovation gap. The Commission's proposed streamlining of drug
approval regulations is currently doing the rounds at the European Parliament.
It has also set up an advisory group known as the G10 to look into the
industry's other gripes (see Page 14).
While welcoming the Commission's efforts, industry figures do not believe its
drive to overhaul regulations goes far enough. They argue that the EU executive
is dancing around some of the core issues.
Drug firms point to market fragmentation, strict state price controls and the
cross-border prescription trade as a drain on the resources industry needs to
be at the cutting edge of innovation.
Tom McKillop, president of industry umbrella group EFPIA, says: "A key
factor in undermining European pharmaceutical competitiveness is parallel trade
in medicines between EU countries."
Despite its limited scope on speeding up and centralising drug approval
procedures and harmonising data protection, the Commission's regulatory review
is, nevertheless, viewed as a significant step forward by industry.
"The industry is under enormous pressure to innovate or die," says
EFPIA director-general Brian Ager. "The proposed regulatory review is
really important because it will set the pace for the European pharmaceuticals
industry for the next ten to 15 years."
The milestone proposals have won the backing of the industry committee and the
environment committee is expected to vote on them in October, once members
have managed to sift through more than 700 amendments on the table.
Nevertheless, as the sheer volume of amendments suggests, MEPs have serious
misgivings about the project. These, in part, reflect civil society concerns,
as well as the reservations of different industry players.
Regulatory data protection (RDP) has proven to be among the most contentious
issues. Whereas a patent protects the chemical structure of a molecule, RDP
shields research work, clinical trials and regulatory documents.
Drug firms already enjoy 20-year patents across the EU, and the Commission is
now proposing to offer a ten-year protection for RDP, plus an extra year
for any significant new use for the drug the firm might discover.
Industry has welcomed these proposals because, companies say, at stake is the
amount of time generic rivals will have to wait before they can gain access to
these crucial documents, which take years of costly research to produce.
They also argue that with spiralling R&D time and complex approval
procedures consuming so much of a molecule's patent life, RDP can sometimes be
their main incentive for innovation.
"We want to strike a balance between the innovative industry and the
generic industry," says Dutch Socialist MEP
Dorette Corbey, who sits on the environment committee.
"We should give the innovative industry protection, but they can't
complain. They have enough protection as is indicated by their high profit
margins.
"Data protection should be reduced, not increased, in the interests of public
health," Corbey adds.
Humanitarian organisations also back the reduction of data protection because
of its knock-on effect on price in developing countries. "Harmonising data
protection upwards is equivalent to extending monopolistic conditions, and that
is a major cause for concern to global prices," says Ellen t' Hoen,
globalisation coordinator for international humanitarian NGO Médecins sans
Frontières.
The environment committee has proposed taking one to four years off the RDP
shelf-life proposed by the Commission.
It has also suggested that data protection and patents should be linked so that
they expire simultaneously.
"These amendments suggest a complex and inappropriate link between the two
forms of protection, and could nullify the benefit of regulatory data
protection in some cases," EFPIA said in a recent communiqué.
The industry also argues that generic manufacturers have already been given
their cut of the action in the form of proposals to allow them to start
preparing their products for market some two years before the patent-holder's
exclusive rights expire.
One area where the views of industry and MEPs appear to converge is on the
issue of how much national control to cede to the EU.
There are currently two drug approval systems running in parallel: the central
system at EU level, via the European Agency for the Evaluation of Medicinal
Products (EMEA) and each member state's national authorities, which operate a
number of so-called 'mutual recognition' systems. While the Commission stresses
that the two systems should continue to operate in tandem, it favours a gradual
migration towards centralised approval.
"We have doubts about this because the European market will lose the
flexibility it has now," says EFPIA's Ager, noting that for major releases
drug giants will favour the more expensive central procedure.
He pointed out, however, that there were drugs with appeal only for some EU
markets and mid-sized firms could not afford registering with the EMEA.
Corbey agrees "there should be a balanced mix between national and central
approval systems to ensure that expertise is maintained on a national
level".
For various reasons, the environment committee and industry have their
reservations about the freedom of information, or advertising provisions, in
the Commission's proposals.
To overcome the dearth of prescription drug information available to European
patients, the Commission is proposing a pilot project where companies will be
allowed to 'advertise' directly to patients about drugs for three test disease
areas.
They will only be allowed to provide 'factual' information about the diseases
(see Page 18). Some MEPs are concerned that liberalisation of the rules
governing the advertising of prescription drugs could lead to abuses by drug
firms looking to up their sales.
"The problem the Parliament has is there is no clear divide between what
constitutes information and what constitutes advertising," Corbey argues.
"This might eventually open the door to in-your-face advertising, like in
the US.
"Everyone agrees that that patients should have information, but this
information should be independent and objective," she adds.
In contrast, drug makers argue that liberating information regulations will be
healthy for patients wanting to learn about the medications available for their
diseases and will aid them in making informed decisions with their doctor.
"Everyone can publish information on a drug except the drug company who
have scientists that have been intimately involved with it for ten years,"
Ager says. "Drug companies are the least likely to mislead patients
because they need to protect their brand image."
Ager criticises the Commission's proposals on information for being
half-hearted and calls for a more radical shake up.
He says that, under a strict system of self-policing and supervision from EMEA,
the industry should be allowed to share its knowledge openly with patients.
This article first appeared in the 25-31 July
2002 edition of the European Voice.
© Copyright 2002 The Economist Newspaper Limited. All rights reserved.
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