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PhRMA pushes for European Union to be added to USTR’s priority watch list

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By Mari Serebrov
Washington Editor

If brand drugmakers have their way, the EU could be counted among the countries and regions that are the worst in undermining the value of U.S. companies’ intellectual property rights.

Citing the EMA’s proposed trial data disclosure policy, government price controls and the lack of timely patent dispute resolution as factors that reduce the value of patents and create uneven market access for innovator drugs, the Pharmaceutical Research and Manufacturers of America (PhRMA) asked the U.S. Trade Representative (USTR) to put the EU on its priority watch list in the annual Special 301 Report.

The EMA’s proposal to provide nearly unrestricted access to drugmakers’ clinical trial submissions and data “primarily benefits competitors who wish to free-ride off of the investments of innovators,” PhRMA said in comments to the USTR. (See BioWorld Today, Dec. 18, 2013.)

The trade group is especially concerned about proposals to publish clinical study reports (CSRs) in their entirety once the EMA has granted marketing authorization. In the past, the EMA has considered the reports commercially confidential information. Once disclosed in Europe, the CSRs could be used by competitors to seek approvals in other markets such as China, PhRMA pointed out.

If the data-sharing provisions are implemented, they would threaten patient privacy, the integrity of the EU regulatory system and incentives for pharmaceutical R&D, PhRMA said.

Various price controls that limit access to new drugs also are threatening innovators’ intellectual property. For instance, a growing number of EU member states are using therapeutic reference pricing or international reference pricing to push down the cost of drugs, according to the U.S. trade group.

Under therapeutic reference pricing, the price of a new patented drug is based on a group of medicines in the same therapeutic class, including older drugs and generics. “This de facto devalues the worth of the patent, reducing the remuneration a company can receive for an innovative product to the price level of a competing generic medicine,” PhRMA said.

In the other pricing scheme, a government bases its price for a drug on what it’s selling for in other countries. Typically, the comparison countries had a similar economic standing. But now, fiscally strong countries such as Germany are “formally referencing prices in countries with much weaker economies like Greece and Portugal,” PhRMA noted.

Such pricing structures undermine incentives for price differentiation that could improve drug access in poorer countries, contribute to supply shortages via parallel trade and launch delays, the group added.

PhRMA’s other concern – lack of a timely patent resolution mechanism – could become a bigger issue as more biosimilars hit the EU market. Currently, most EU member states don’t allow a patent holder to file an infringement suit until immediately before or after the launch of the potentially infringing drug. This timing doesn’t allow for resolution before the product is launched.

Resolving patent infringement this way “is often lengthy, expensive and can result in significant market loss, even if the end ruling favors the company that produced the original molecule,” PhRMA said.

When a generic or follow-on product remains on the market until infringement is proved, the patent owner suffers harm that can’t be compensated through damage awards. Some EU courts allow pre-trial interim injunctions, but the injunctions are granted in less than half of the relevant cases, the trade group said.

In building its argument to add the EU to the priority watch list, PhRMA also cited the need for more regulatory transparency in the EU and for a change in policy to allow the dissemination of truthful risk/benefit information via Internet sites.

The biopharma industry has voiced concerns about individual EU members in the past, but not the EU as a whole. Finland and Greece have been put on the USTR’s regular watch list in prior years. In addition to those two EU members, PhRMA recommended that Germany, Italy, Romania and Spain be added to the regular watch list this year. (See BioWorld Today, May 9, 2011.)

Other countries PhRMA recommended for the priority watch list are Indonesia, Korea, New Zealand, Thailand, Canada, Hungary, Ukraine, Argentina, Brazil, Chile, Venezuela, Algeria and Morocco. It singled out India and Turkey as the top priority countries and recommended monitoring of China.

TICK SIZE PILOT ADVANCES

An optional pilot program intended to increase liquidity for small biotechs and other public emerging-growth companies moved closer to takeoff this week.

Before leaving Washington for its February break, the House voted 412-4 to pass the Small Cap Liquidity Reform Act, H.R. 3448, which builds on the success of the Jumpstart Our Business Startups Act.

The pilot program would let small companies, with a market cap of less than $750 million, opt to trade at nickel or dime increments rather than penny increments.

“The current one-size-fits-all tick size does not reflect the realities of the market and subjects smaller issuers to the same trading framework as large, multinational companies with exponentially higher trading volumes and market caps,” said Jim Greenwood, president and CEO of the Biotechnology Industry Organization.

Allowing biotechs to choose the tick size that best fits their trading needs would help stimulate capital formation for breakthrough research, he added.

The pilot is one of several provisions proposed by the Equity Capital Formation Task Force. The bill is now awaiting action in the Senate Committee on Banking, Housing and Urban Affairs. (See BioWorld Today, Nov. 13, 2013.)

TWO CHARGED WITH DRUG SMUGGLING

Two Turkish citizens were arrested in Puerto Rico this week after being indicted last month by a federal grand jury on charges of smuggling adulterated and misbranded cancer drugs into the U.S.

Ozkan Semizoglu and Sabahaddin Akman are accused of using false shipping labels to conceal the drugs and describing package contents as gifts, documents or product samples to get them through Customs. They allegedly broke large drug shipments into several smaller packages to reduce the likelihood of seizure, according to the FDA, which lead an international investigation into the counterfeit drugs.

The men each face one conspiracy count and three counts of smuggling illegal drugs into the U.S. Each smuggling charge carries a maximum penalty of 20 years in prison and fines of up to $250,000.

Over the past few years, the FDA has reported a number of incidents involving fake versions of Roche AG’s Altuzan (bevacizumab) being distributed in the U.S. The counterfeit drugs contained no active ingredient. Although it has the same API as Avastin, Altuzan, which is approved in Turkey, is not approved for use in the U.S. (See BioWorld Today, Feb. 16, 2012, and Feb. 7, 2013.)