In a shot in the arm for Indian drugmakers, the trade and competition commissions of the European Union (EU), the US, and Italy are cracking down on unfair competition practices adopted by multinational pharma companies to extend their monopoly and delay low-cost generics from reaching consumers.
Innovator companies are using a variety of instruments to extent the commercial life of their drugs and prolong the entry of generics, or cheaper but legal copycat versions, for as long as possible, the EU Commission-Competition has found in its inquiry recently.
This prompted EU competition commissioner Neelie Kroes on Wednesday to call for stricter regulation of the so-called 'Big Pharma' companies and warned of potential steep fines if they continue their efforts to block cheaper drugs even as the world battles increasing healthcare costs on the one hand and a global economic slowdown on the other.
Kroes' statements have been roundly welcomed by Indian pharma denizens. Experts said these moves would surely help mitigate problems such as repeated seizures of generics that Indian companies faced.
India is a key exporter of generics, with drugs worth Rs 35,402 crore being sold overseas between April 2008 and February 2009, as per data by the Pharmaceutical Export Promotion Council, which is under the ministry of commerce.
India's main markets are the US, the UK, Germany and Holland.
"Any move to encourage generics is definitely good news for us. Whether it is pure generics, branded generics or authorised generics, India stands to gain from any pro-generics regulation," an official of Aurobindo Pharma said.
Surprise inspections were staged by the EU Competition Commission at several companies, including Pfizer, Wyeth and GlaxoSmithKline, as part of the inquiry.
The delaying tactics by Big Pharma leads to patients waiting for months after expiry of patents to get generics, which cost anywhere between 40% and 80% less than innovator products.
The Pharmaceutical Sector Inquiry Report, which was commissioned by the EU Commission-Competition, and which has now been adopted, also takes note of 'evergreening'– a technique used to extend market monopoly of a patented product by bringing out frivolous changes and seeking patents on them.
Though it does not actually mention the term 'evergreening', it details the primary patents and secondary patents which Big Pharma seek, said an intellectual property (IP) expert based in New Delhi, who is closely monitoring the report. He did not wish to be named.
The EU Commission is not the only one that has taken notice of these practices of Big Pharma. The Federal Trade Commission of the US is also taking measures to knock down the unfair practices used by innovator companies to delay entry of generics.
"Likewise, the Italian Trade Commission is also calling for steps to make generics readily available to the consumers," said the IP expert.
The EU inquiry, which began in January 2008, was aimed at finding out why generic entry seemed to be delayed and the Commission intends to intensify its scrutiny of the pharmaceutical sector under the European Commission Treaty antitrust law.
In the last few months, there have 16 instances of seizures of Indian generics at the Dutch airport, which were actually headed, to countries in Latin America on counterfeiting charges.
As recently as in May, antibiotic amoxicillin was seized in Frankfurt, Germany on charges of being counterfeit.
"There have been incidences wherein Indian generics have been seized at EU ports en route to countries like Brazil, Colombia, on charges of counterfeiting and patent infringement. The multinationals and the developed nations were pushing in strategies to basically thwart Indian generics," said an industry professional who has worked with several MNC drug-makers.
He further said the commissions are realising the need for low cost drugs, in these times of recession and flaring costs.
As per industry estimates, the European pharma market is worth $279 billion of sales, per annum. While the US market is worth approximately $300 billion, of which about $48 billion constitute generics.
EU competition commissioner Neelie Kroes on Wednesday called for stricter regulation of the so-called 'Big Pharma' companies.
She warned of potential steep fines if they continue their efforts to block cheaper drugs
The move comes even as the world battles increasing healthcare costs on the one hand and a global economic slowdown on the other.