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Market AccessMarket Access / Regulation

Catalyst

Initiatives to reduce regulatory burden and allow early access bring good news topharmaceutical companies.

Ref Code: DMKC0099020Downloaded on:Author: Ian Schofield and Tijana Ignjatovic

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Market Access Market Access / Regulation DMKC0099020 | Published on 23/05/2013

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Report reference: DMKC0099020 Published on: 23/05/2013

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CONTENTS

LIST OF FIGURES

LIST OF TABLES

4 EXECUTIVE SUMMARY

5 DRUG APPROVAL AND REGULATORY PROCESSES5 The MHRA is the national body in charge of regulating medicines8 The EU centralized procedure is convenient but expensive8 Decentralized procedure introduced to address disputes in mutual recognition procedure9 References

10 RECENT CHANGES IMPACTING DRUG LICENSING10 BROMI: a UK initiative to reduce regulatory burdens on pharma11 Improving communications between agency and industry12 40 years of UK regulations consolidated by new law12 Regulatory moves underway to allow earlier access to medicines14 References

16 INTELLECTUAL PROPERTY ENVIRONMENT16 UK court determines validity of patents16 Data exclusivity issues in the UK: the 8+2+1 rule18 References

19 DRUG IMPORTATION, PARALLEL TRADE, AND COUNTERFEITS19 UK measures have driven down counterfeit medicines activity21 Drug importation and wholesaling in the UK require special licenses21 A rise in parallel exports has led to shortages of medicines22 References

24 APPENDIX24 About the author

5 Figure 1: Four routes for obtaining market authorization in the UK7 Figure 2: The UK's MHRA application process17 Figure 3: EU – the 8+2+1 market exclusivity rule

6 Table 1: MHRA applications and corresponding fees




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EXECUTIVE SUMMARY The Medicines and Healthcare Products Regulatory Agency (MHRA) is the government bodyresponsible for licensing and other drug regulatory matters. Companies seeking marketingauthorizations in the UK can apply for a national approval through the MHRA, use the agencyas rapporteur via the EU decentralized or mutual recognition systems, or apply to theEuropean Medicines Agency (EMA) for a centralized authorization valid throughout the EU. The MHRA is one of the faster regulatory bodies in the EU, and in 2011–12 met its target ofassessing new Marketing Authorization Applications (MAAs) within 150 days in 98% of cases,and in 100 days in 80% of cases. The fast pace of review means that the UK is often chosenby pharmaceutical companies as the country in which to file for first approval of theirproducts. As in other EU countries, authorizations are initially valid for five years, after whichthey must be renewed Under the wide-ranging “Better Regulation of Medicines Initiative,” the MHRA is workingwith the pharmaceutical industry to streamline the regulatory processes and avoidduplication of tasks. The initiative covers a number of key areas including patient information,marketing authorizations, pharmacovigilance, reclassification of medicines, andcommunications. Moreover, the rules for prescription-only to over-the-counter switches havebeen simplified, following an extensive public consultation in 2012. Two initiatives are underway in the UK to facilitate patient access to new medicines: anadaptive licensing project, which would involve an early “limited approval” followed by anobservation phase and then final approval, and would require changes to the regulatorysystem; and an early access scheme that would apply to a few products each year and wouldoperate within the current regulatory framework. Efforts are being made to tackle shortages of certain medicines due to parallel exporting toother, lower-priced EU markets. A report by the All Party Pharmacy Group (APPG) made anumber of recommendations such as better enforcement of obligations on wholesaler licensesand the forging of a better working relationship between the Department of Health, theMHRA, and those in the supply chain.




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DRUG APPROVAL AND REGULATORY PROCESSES Three classes of medicines are available in the UK:

prescription medicines (Rx) pharmacy-only medicines (dispensed under the supervision of a pharmacist) over-the-counter medicines (OTC; unrestricted medicine, available off-the-shelf).

Before they are classified, drugs need to be approved by the national regulatory authority. The MHRA is the national body in charge of regulating medicines The Medicines and Healthcare Products Regulatory Agency (MHRA) is responsible for licensingmedicines in the UK. It was formed in April 2003 from the merger of the Medicines Control Agencyand the Medical Devices Agency and is funded by fees charged to the pharmaceutical industry,including fees for new drug applications and inspections, and annual fees covering pharmacovigilance,enforcement, and other work relating to maintenance of product licenses. Companies can apply to the MHRA for a national marketing authorization, which is valid in the UKonly. The MHRA can also act as the reference member state for applications made through theEuropean decentralized (DCP) and mutual recognition (MRP) procedures. For EU-wide approval,applications are made to the European Medicines Agency (EMA) under the centralized procedure,although the marketing authorization itself is issued by the European Commission. The four routes forobtaining marketing approval in the UK are illustrated in the figure below.

The nature of the product determines the type of application that is made. Applications for new active

Figure 1: Four routes for obtaining market authorization in the UK

Source: Datamonitor Healthcare




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substances are described as "full applications," while "abridged" or "abbreviated" applications refer toproducts (mostly generics) that contain existing active pharmaceutical ingredients. COST OF REGULATORY FILINGS VARIES ACCORDING TO TYPE OF AUTHORIZATION PROCEDUREUSED The cost of applying for regulatory approval in the UK depends on the type of application made. Feespayable to the MHRA for purely national approvals are shown in the table below.

THE MHRA BOASTS SHORT APPROVAL TIMES The MHRA's target is to complete assessments of new marketing authorizations (for drugs for the UKmarket only) in 150 days in 98% of cases, and in 100 days in 80% of cases. Both these targets weremet in 2011–12, and indeed overshot: the agency reports that 100% of applications were assessed in150 days, and 94% in 100 days (MHRA, 2012a). Applicants can also apply to have their applicationfast-tracked if they can show that the product will provide a major breakthrough in certain cases,including: the treatment of patients for certain conditions, including chronic, debilitating conditionsor severe or life-threatening diseases for which available treatments are ineffective or inadequate; theemergence of widespread resistance of a disease to currently available medicines; and the emergenceof a new disease entity that has severe or life-threatening effects for which currently availabletreatments are ineffective or inadequate. Fast-tracking of applications can also be used in the event of shortages of medicines and incircumstances where public health is at risk. The fast pace of regulatory review in the UK means that pharmaceutical companies often choose touse the MHRA to file for approval of their products in the UK market. This is reflected by data on the

Table 1: MHRA applications and corresponding fees

Application Fee

Major £100,252 ($148,877)

Abridged complex £27,716 ($43,924)

Abridged standard £10,162 ($16,104)

Abridged simple £2,771 ($4,391)

Source: MHRA, 2012




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EU’s DCP and MRP procedures: in the first half of 2012, 735 such procedures were initiated, with theUK being chosen as reference member state for 115, putting it in third place behind the Netherlandsand Denmark (CMDh, 2012). THE NATIONAL MARKETING AUTHORIZATION APPLICATION PROCESS IN THE UK All marketing authorizations submitted to the UK’s MHRA follow the process outlined in the figurebelow.

Applications made in the UK must use the Common Technical Document (CTD) format, which is alsoused by other EU member states. Electronic CTD (eCTD) applications must be created according to oneof the following specifications: eCTD specification v3.2 EU Module 1 v1.0, or eCTD EU application v1.0.The MHRA also accepts applications in PDF-only format for companies which are not ready to submiteCTD applications (MHRA, 2010). Once a product is registered in the UK, periodic safety update reports (PSURs) must be submitted atset intervals depending on the product's date of marketing authorization. For products authorizedafter 20 November, 2005, PSURs must be submitted twice-yearly for two years, then annually for twoyears, and at three-yearly intervals thereafter. The reports must contain summary information and acritical evaluation of the risk-benefit of the product in the light of new or changing information. Thisdetermines whether further investigations need to be carried out and whether changes need to bemade to the marketing authorization and product information. Initial marketing authorizations in the UK are valid for five years, after which they must be renewed.Applications for renewal must be made at least six months before expiry of the marketingauthorization. Once renewed, the MA will be valid for an unlimited time unless pharmacovigilance

Figure 2: The UK's MHRA application process

Source: Datamonitor Healthcare; MHRA, 2013




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requirements make an additional five-year renewal necessary. Companies do not need to pay a fee forrenewals except in the case of major applications (new active substances) where the UK is thereference member state. In these cases the fee is £10,465 ($16,585), payable for the first renewalonly. UK LICENSE HOLDERS MUST REPORT ADVERSE DRUG REACTIONS TO EUDRAVIGILANCE Once a product is licensed, the UK license holder is obliged to report adverse drug reactions toEudraVigilance, the European data-processing network and database management system for theexchange, processing, and evaluation of individual case safety reports for medicines authorized in theEuropean Economic Area (EudraVigilance, 2010). Within the UK, the MHRA’s "yellow card" scheme enables healthcare professionals to report cases ofsuspected adverse drug reactions, which can be submitted electronically via the MHRA’s website. The EU centralized procedure is convenient but expensive The main advantage of the centralized procedure is that the marketing authorization granted by theEuropean Commission is immediately valid in all EU countries. It is compulsory for biotechnologyproducts, orphan drugs and new active substances for the treatment of AIDS, cancer,neurodegenerative diseases, diabetes, autoimmune diseases, and other immune dysfunctions and viraldiseases. It is also open to medicinal products containing a new active substance never beforeauthorized in the EU, products that can be proven to have a significant therapeutic scientific ortechnical innovation, or where authorization would be in the interests of public health. The basic fee for a company applying to the EMA for marketing authorization through the centralizedprocedure is €267,400 ($336,000), with €26,800 ($33,700) payable for each additional strength orpharmaceutical form and €6,700 ($8,418) for each additional presentation of the same strength andpharmaceutical form, submitted at the same time as the initial application for authorization (EMA,2012). Although there are clearly potential benefits to having a product approved throughout the EU,companies may wish to consider alternative approval routes if they are not confident of gaining acentralized authorization. Decentralized procedure introduced to address disputes in mutual recognition procedure The MRP allows companies that already hold a marketing authorization in one EU member state toask additional countries (termed concerned member states, or CMS) to recognize it and approve theproduct in their countries. The disadvantage of the procedure is that there are frequentlydisagreements between member states over product approval, which can hold up the procedure andlead to delays. In order to tackle this problem, the DCP was introduced in 2005 to bring the member states togetherat the pre-approval stage. Under the DCP, the reference member state prepares an assessment reporton the drug, and then presents this to the regulatory bodies of the other member states involved inthe process. If agreement is reached on this report, the CMS will then issue their own approvals.




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Like the MRP, the decentralized procedure is intended for companies that want to gain approval of adrug in some, but not all, of the EU countries, without having to incur the higher costs of thecentralized procedure. However, review periods can be lengthy and there can still be a lack ofconsensus among member states, although this is less likely than with the MRP. In the UK, as of April 2012, the fee for a marketing authorization for a major product using thedecentralized procedure where the UK is the reference member state is £139,235 ($220,656). References CMDH (2012) MRP/DCP New applications 1st January to 30th June 2012. Available fromhttp://www.hma.eu/fileadmin/dateien/Human_Medicines/CMD_h_/Statistics/2012_QI_Statistics_MRP_DCP_Referrals_Rev.pdf [Accessed 7 January, 2013] EMA (2012) Commiss ion Regulat ion No 273/2012 on EMA fees . Avai lable f romhttp://www.ema.europa.eu/docs/en_GB/document_library/Other/2012/03/WC500124905.pdf[Accessed 4 January, 2013] Eud raV ig i l ance ( 2010 ) Manda to r y e -Repo r t i ng E s s en t i a l s . Ava i l ab l e f r om <http://eudravigi lance.emea.europa.eu/human/index.asp [Accessed 30 March, 2010] M H R A ( 2 0 1 2 ) L i c e n s e a p p l i c a t i o n f e e s . A v a i l a b l e f r o mhttp://www.mhra.gov.uk/Howweregulate/Medicines/Licensingofmedicines/Marketingauthorisations/index.htm [Accessed 7 January, 2013] MHRA (2012a) Annual report 2011/2012: Performance against targets. Available fromhttp://www.mhra.gov.uk/idcm2/groups/fin/documents/websiteresources/con172250.pdf [Accessed 7January, 2013] MHRA (2013) Marketing Authorizations. Available fromhttp://www.mhra.gov.uk/Howweregulate/Medicines/Licensingofmedicines/Marketingauthorisations/index.htm [Accessed 2 May, 2013]


http://www.ema.europa.eu/docs/en_GB/document_library/Other/2012/03/WC500124905.pdf

http://eudravigilance.emea.europa.eu/human/index.asp

http://www.mhra.gov.uk/Howweregulate/Medicines/Licensingofmedicines/Marketingauthorisations/index.htm


http://www.mhra.gov.uk/idcm2/groups/fin/documents/websiteresources/con172250.pdf





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RECENT CHANGES IMPACTING DRUG LICENSING BROMI: a UK initiative to reduce regulatory burdens on pharma In order to streamline the regulatory processes and reduce bureaucracy for pharmaceutical andbiotechnology firms, the UK government has established a "Better Regulation" agenda, which is partof a wider EU effort to reduce red tape. As part of this agenda, in 2005 the UK launched the "Better Regulation of Medicines Initiative"(BROMI), which aims to match regulation to risk and use different regulatory tools to deliverproportionate public health safeguards. Originally established to look at regulatory simplification inthe over-the-counter medicines (OTC) area, BROMI was subsequently extended to the wholepharmaceutical industry. According to the Medicines and Healthcare Products Regulatory Agency(MHRA), "the outcome has been to deliver new and updated medicines to patients faster, minimizethe burden on industry, and free up both industry and regulator to focus on innovation and safety"(MHRA, 2012b). BROMI is led by the MHRA in collaboration with the pharmaceutical industry, health professionals,and other government departments. It uses a three-tier regulatory model to determine the level ofregulation appropriate to various types of applications: those that can be self-certified, changesrequiring prior approval, and applications requiring MHRA assessment. It also explores work-sharingmodels to minimize duplication of work, as well as procedural simplifications using IT technologieswhere appropriate. It covers a number of key areas of pharmaceutical regulation, including patient information,marketing authorization, and pharmacovigilance. Two new priority areas have been identified for thecoming years: reclassification of medicines and communications. According to the MHRA, progress has been made in a number of areas. These include the following:

The volume of periodic safety update reports (PSURs) and anonymous single patient reports(ASPRs) sent out to industry has been reduced, with a self-certification scheme now beingapplied to PSURs for purely national authorizations of well-established medicines. A BROMI pharmacovigilance subgroup is looking at transitional measures that will helpreduce the burden on industry of measures being implemented under the new EUpharmacovigilance legislation. In particular, the MHRA would like to facilitate an earlytransition from the Detailed Description of Pharmacovigilance Systems (DDPS) to thePharmacovigilance System Master File (PSMF). All companies can now self-certify very simple variations to their product licenses through a"do-and-tell" procedure, and a faster process is in place for other changes. In view of the success of moves to allow companies to self-certify changes to patientinformation, a change to the situation is envisaged whereby self-certification/notification will




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become the default position for the "vast majority" of changes to patient information; thecurrent positive list of changes accepted as notifications will be superseded by a negative listof changes that must be subject to full assessment. The MHRA says that audits of the self-certification scheme have not highlighted any issues relating to patient safety and that thescheme appears to be working well (MHRA, 2012b).

In 2011 it was decided that the BROMI principles should be extended to the medicines reclassificationprocess, and that a regulatory communications workstream was also needed to look at how improvedcommunications between the MHRA and industry could help to reduce burdens and streamlineregulatory processes. In December 2012, the MHRA launched a new streamlined procedure to speedup the process of moving medicines from prescription-only to OTC status, together with newguidelines. The new guidance is expected to minimize the need for formal engagement during theassessment process by increasing contacts between the agency and the company before submission ofthe reclassification application. The MHRA said that the new process would “speed and streamline theway medicines are made available safely, with benefits for the medicines users, the regulator, and theindustry” (MHRA, 2012g). RULES SIMPLIFIED FOR RX-OTC MEDICINE SWITCHES In December 2012, following an extensive public consultation, the MHRA introduced a new proceduremaking it easier to switch medicines from prescription-only to OTC status (MHRA, 2012c). Theprocedure is underpinned by new guidelines titled "How to change the legal classification of amedicine in the UK," which will:

minimize the need for formal engagement during the assessment process by increasingengagement with applicants before submission and encourage pre-application collaborativework with key stakeholders reduce the types of applications which require engagement with stakeholders during theapplication process minimize the occasions on which expert advice is sought make stakeholder engagement more focused and time-limited.

The guidance includes a section on benefit-risk assessment to help applicants evaluate a candidateswitch product before submission, in order to provide a rationale for the switch to non-prescriptionstatus. Improving communications between agency and industry The communications subgroup is examining how communications between the MHRA and industrycan be improved at different points along regulatory procedures, focusing initially on safety variationsand improving communications to streamline the procedure. One example cited by the agency is acollaborative approach between the MHRA and the British Generic Manufacturers' Association(BGMA) on industry safety communications to healthcare professionals.




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Using a BROMI approach, new safety information on a generic medicine was centrally co-ordinated bythe BGMA on behalf of 12 companies, then approved by the MHRA and distributed to healthcareprofessionals in one communication. Given that the costs of a single direct healthcare professionalcommunication can be around £30,000 ($47,543), the savings in this case amount to some £350,000($554,671), while health professionals receive a single set of information that is more likely to be readand acted on. This new BROMI approach could be of increasing benefit to industry, regulators, andhealthcare professionals in view of changes to the pharmacovigilance legislation, which are likely tolead to an increase in communications resulting from EU-wide safety reviews (MHRA, 2012b). 40 years of UK regulations consolidated by new law In another move to streamline the UK's complex drug regulatory framework, the governmentpublished the Human Medicines Regulations 2012, which consolidate and simplify more than 40years' worth of medicines legislation. The regulations, which became effective on 14 August, 2012,replaced most of the Medicines Act 1968 and around 200 statutory instruments that the MHRA saidhad been "cluttering up the statute book and complicating the law" (Brizmohun, 2012). The UKindustry body, the Association of the British Pharmaceutical Industry (ABPI), said that theconsolidated legislation would be "much clearer going forward," and that the ABPI had provided"significant input" into the consolidation process. The Proprietary Association of Great Britain (PAGB),representing manufacturers of non-prescription drugs, said the text was "more user-friendly" andwould help to reduce unnecessary regulatory burdens for companies. Regulatory moves underway to allow earlier access to medicines A number of regulatory initiatives are being undertaken in the UK to increase early access to certaininnovative medicines, particularly those being developed by smaller companies. Plans for newlicensing approaches and an early access scheme were laid out in the December 2011 Strategy for UKLife Sciences published by the Department for Business Innovation and Skills (BIS) (BIS, 2011). ADAPTIVE LICENSING Following the publication of the strategy, the MHRA established a group to develop proposals forregulatory innovation, which led to the development of the adaptive licensing project. The aim is toestablish a pilot program looking at an iterative development and data-gathering approach duringclinical development of a new, innovative drug. If results from early studies were encouraging, theproduct could be made available and granted "limited approval." This would be followed by anobservational phase during which the product would be used strictly within its licensed indications. Ifthe product's promise was confirmed in the observational phase, a full license would be granted(Kenny, 2012). According to the UK industry body, the ABPI, adaptive licensing would only be used in certaincircumstances, such as where early indications of efficacy were strong, and in certain areas such asrare diseases and personalized medicine (Kenny & Sharma, 2012). Progress with the project was described in the December 2012 progress report on implementing the




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life sciences strategy, which said that the expert group had been meeting regularly and had agreed ona tripartite work program covering the following areas:

examining how existing flexibilities in EU regulations can be used to bring forward innovativedrugs, including discussion of the most efficient use of data-gathering methods exploring options at a national level to help companies maximize the potential of existingdrug licensing processes looking at potential candidate products for an adaptive licensing approach.

An adaptive licensing pilot is being planned but details have not yet been revealed. The MHRA said itexpected to make more information available during the course of 2013 (Sharma, 2012). Any movetowards adaptive licensing would need agreement at the EU level as well as changes to the regulatoryframework, so the project is being pursued in tandem with the European Medicines Agency (EMA),which said in November 2012 that it was ready to test such a procedure and was waiting forcompanies to come forward (Brizmohun, 2012a). EARLY ACCESS Another related, but separate, approach to getting new medicines to market more quickly is the UK'sproposed early access scheme. This scheme was first developed following a scientific meeting inSeptember 2007 as part of a series of events held by the Ministerial Industry Strategy Group (MISG) tolook at emerging regulatory issues to which new approaches might be needed. Development of thescheme was put on hold in 2011 as a result of other initiatives that were under way in the NHS,including the development of the Cancer Drugs Fund, but preparations for its introduction, possiblywithin the year, have restarted. The aim of the scheme, on which a public consultation was held in 2012, is to make certain medicinesavailable once they have completed late-stage clinical trials but before they have been granted amarketing authorization. The MHRA would issue a scientific opinion on the benefits and risks ofpromising new medicines for life-threatening, chronic, or seriously debilitating conditions for whichthere are no adequate treatment options. This would happen about a year before the licensing processwas completed: generally at the end of Phase III trials, but exceptionally at an earlier stage based onPhase II data. The agency would complete the initial assessment within 30 days of receipt of the application for anopinion, followed by 15 days for further questions to the applicant, and a further 30 days to finalizethe opinion, which would be valid for one year and renewable if necessary. A fee of £29,000 ($45,958)would be payable for renewing applications under the scheme. The non-statutory scheme will beentirely voluntary, and will operate within the existing regulatory structures (this differs fromadaptive licensing, which would require a change to EU legislation). The scheme would provide accessto the product around a year earlier than normal, although any products granted early access wouldstill have to go on an obtain a full marketing authorization (MHRA, 2012d).




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Very few medicines – possibly only one or two a year – would likely be eligible for the scheme,according to the MHRA. Nonetheless, a number of questions arise regarding the scheme, such as thedevelopment stage at which medicines should qualify (ie after Phase III or earlier), and what shouldhappen to patients receiving a medicine under the scheme if the product subsequently failed to gain amarketing authorization. Other issues relating to drug availability will also need to be addressed as part of the scheme,including questions relating to pricing and cost-effective NHS funding of new drugs. It would, forexample, be up to NHS purchasers to decide whether such treatments should be funded: as theywould not be formally licensed, they would not fall within the scope of the Pharmaceutical PriceRegulation Scheme (PPRS), nor is there any other central ring-fenced NHS funding for the proposedscheme. The consultation made a number of proposals for determining the price that might be paidfor such unlicensed medicines to ensure the scheme meets the cost-effectiveness requirement, suchas a National Institute for Health and Clinical Excellence (NICE) cost-effectiveness review, a cap onthe cost of the new product, free pricing by the manufacturer, or provision of the drug free of charge. The MHRA said that it planned to provide details of the stakeholder responses to the consultationsometime during 2013 (Sharma, 2012). In the meantime, a number of academic and other bodies havesubmitted responses, although it does not appear as if any companies or industry bodies have done so.The Royal College of Physicians in Edinburgh, for example, said that the end of Phase III trials wouldseem the most appropriate time for a product to enter the scheme, as by that stage a reasonableamount of safety and efficacy data would have been supplemented by data on how to use the drug inspecial risk groups. It said that it would not favor review based on Phase II data alone as safety datawould be limited at that stage, and it would probably impact on recruitment to Phase III trials. As forwhat should happen if a drug fails to receive marketing authorization, it said that patients receivingthe drug should continue to do so if the prescriber felt it was of benefit and acceptably safe (RCPE,2012). References BIS (2011) Strategy for UK Life Sciences. Available fromhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/32457/11-1429-strategy-for-uk-life-sciences.pdf [Accessed 9 January, 2013] Brizmohun, N (2012) New law consolidating over 40 years of UK drugs legislation enters into force.Available fromhttp://www.rajpharma.com/search.do;jsessionid=1F77592DD7A05E27422EF4334AC1090D?pageNumber=1&sectionName=home&articleGroupName=* [Accessed 3 January, 2013] Brizmohun, N (2012a) Guido Rasi: a day in the life of the EMA's executive director. Available fromhttp://www.rajpharma.com/productsector/pharmaceuticals/Guido-Rasi-a-day-in-the-life-of-the-European-Medicines-Agencys-executive-director-337664?autnID=/contentstore/rajpharma/codex/bd931e78-3a0c-11e2-968f-8d7669f37d2e.xml [Accessed 7 January, 2013]


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http://www.rajpharma.com/search.do;jsessionid=1F77592DD7A05E27422EF4334AC1090D?pageNumber=1&sectionName=home&articleGroupName=*

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Kenny, M (2012) Adaptive licensing – the cure for an ailing drug regulatory system? Available fromhttp://www.rajpharma.com/productsector/pharmaceuticals/Adaptive-licensing---the-cure-for-an-ailing-drug-regulatory-system-337672?autnID=/contentstore/rajpharma/codex/1dd7c8d3-3a33-11e2-968f-8d7669f37d2e.xml [Accessed 7 January, 2013] Kenny, M and Sharma, V (2012) UK pharma keen to explore adaptive licensing with MHRA, EMA.Available from http://www.rajpharma.com/productsector/pharmaceuticals/UK-pharma-keen-to-explore-adaptive-licensing-with-MHRA-EMA-338528?autnID=/contentstore/rajpharma/codex/16b4aaff-4b72-11e2-87fb-f1a3e14bcfeb.xml [Accessed 7 January, 2012] MHRA (2012b) 5th BROMI progress report. Available fromhttp://www.mhra.gov.uk/NewsCentre/Pressreleases/ CON146678 [Accessed 4 January, 2013] MHRA (2012c) New OTC switching procedure. Available from http://www.mhra.gov.uk/NewsCentre/Pressreleases/CON213182 [Accessed 3 January, 2013] MHRA (2012d) Consultation on a proposal to introduce an early access medicines scheme in the UK.Available from http://www.mhra.gov.uk/home/groups/es-policy/documents/websiteresources/con173756.pdf [Accessed 8 January, 2013] MHRA (2012g) Importing unlicensed medicines. Available fromhttp://www.mhra.gov.uk/Howweregulate/Medicines/Importingandexportingmedicines/Importingunlicensedmedicines/index.htm [Accessed 4 January, 2013] RCPE (2012) Response to consultation on a proposal to introduce an early access to medicines schemein the UK. Available from http://www.rcpe.ac.uk/policy/2012/mlx-376.php [Accessed 2 May, 2013] Sharma, V (2012) UK pilot project on adaptive licensing for drugs still taking shape; more details in2013. Available from http://www.rajpharma.com/productsector/pharmaceuticals/UK-pilot-project-on-adaptive-licensing-for-drugs-still-taking-shape-more-details-in-2013-338374?autnID=/contentstore/rajpharma/codex/4ea481ba-4919-11e2-87fb-f1a3e14bcfeb.xml [Accessed 9 January, 2013]


http://www.rajpharma.com/productsector/pharmaceuticals/Adaptive-licensing---the-cure-for-an-ailing-drug-regulatory-system-337672?autnID=/contentstore/rajpharma/codex/1dd7c8d3-3a33-11e2-968f-8d7669f37d2e.xml



http://www.rajpharma.com/productsector/pharmaceuticals/UK-pharma-keen-to-explore-adaptive-licensing-with-MHRA-EMA-338528?autnID=/contentstore/rajpharma/codex/16b4aaff-4b72-11e2-87fb-f1a3e14bcfeb.xml



http://www.mhra.gov.uk/NewsCentre/Pressreleases/%20CON146678

http://www.mhra.gov.uk/%20NewsCentre/Pressreleases/CON213182

http://www.mhra.gov.uk/%20NewsCentre/Pressreleases/CON213182

http://www.mhra.gov.uk/home/groups/es-policy/documents/websiteresources/con173756.pdf

http://www.mhra.gov.uk/home/groups/es-policy/documents/websiteresources/con173756.pdf

http://www.mhra.gov.uk/Howweregulate/Medicines/Importingandexportingmedicines/Importingunlicensedmedicines/index.htm


http://www.rcpe.ac.uk/policy/2012/mlx-376.php

http://www.rajpharma.com/productsector/pharmaceuticals/UK-pilot-project-on-adaptive-licensing-for-drugs-still-taking-shape-more-details-in-2013-338374?autnID=/contentstore/rajpharma/codex/4ea481ba-4919-11e2-87fb-f1a3e14bcfeb.xml





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INTELLECTUAL PROPERTY ENVIRONMENT UK court determines validity of patents Pharmaceutical companies wishing to obtain patent protection for their products in Europe need toapply to the European Patent Office (EPO). Once a European patent is granted, the applicant mustvalidate the patent in each country where it is to be enforced. Alternatively, companies may apply fora patent that is valid in the UK only at the Intellectual Property Office (European Commission, 2009). The UK court is required to determine the validity of patents in the UK because there is no unifiedpatent litigation system in the EU. The disadvantage of this is that legal action to enforce or invalidatea patent or any non-infringement ruling has to be brought before the national courts of each countryconcerned, which means that multiple court procedures must take place, at considerable cost to bothchallengers and enforcers. There is also a risk of differing judgments in different member states. Onthe other hand, companies can protect their product against generics in each individual market andlower their risk of losing protection in the whole EU market in one go. Divergences regarding the validity of a patent can also exist between national courts and the EPO. Inthe UK, a patent may be upheld by the EPO but be held invalid by the national court, either before orafter the EPO has given its final ruling. However, in other member states national courts may decideto stay the proceedings until after the EPO has given a final ruling in order to take that ruling intoaccount (European Commission, 2009). In order to address the problems of differing judgments, delays, and high patenting costs, efforts havebeen underway for several decades to introduce an EU patent with unitary effect. The legislation onthe patent and the associated translation arrangements was finally approved by EU legislators at theend of 2012, together with a unitary patent court to deal with patent litigation matters. Aninternational agreement on the patent court is expected to be ratified by the end of 2013, and thefirst unitary patents issued in 2014 (Schofield, 2012). SUPPLEMENTARY PROTECTION CERTIFICATES GIVE EXTRA PROTECTION Supplementary protection certificates (SPCs) were introduced in the EU in 1992, via Regulation1768/92, to compensate for the delay in the commercial exploitation of a medicinal product resultingfrom the time taken in the drug registration process. SPCs extend the period of effective patentprotection by up to five years after patent expiry, to a maximum of 15 years from the date of theproduct’s first marketing authorization in the EU. Data exclusivity issues in the UK: the 8+2+1 rule Under the EU's "8+2+1" rule, all new chemical entities approved by any member state by anyprocedure enjoy eight years of data exclusivity, after which a generic marketing authorizationapplication can be submitted, plus a further two years of market exclusivity during which a competinggeneric cannot be launched. This 10-year exclusivity period can be extended by an additional year if,during the first eight years, the marketing authorization holder obtains an authorization for one or




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more indications that will bring a significant benefit compared with existing therapies. The process issummarized below.

The European legislation also stipulates that well-established/old products are entitled to a one-yeardata protection period if they are granted approval for a new therapeutic indication. The applicantmust establish that significant preclinical or clinical studies were carried out to demonstrate thesafety and/or efficacy of the new indication. This provision covers only the use of the new indication,and can only be used once. One year of data exclusivity can be given for products switching from prescription to over-the-counter status, on the basis of significant preclinical tests or clinical trials. PEDIATRIC SPC EXTENSION PROVIDES ADDITIONAL MARKET EXCLUSIVITY PERIOD A pediatric provision came into effect in the EU in January 2007 under the Pediatric Regulation (No1901/2006), allowing companies that undertake pediatric studies to benefit from a six-monthextension of the product's SPC, regardless of whether or not the study was successful. The key points of the pediatric legislation in the EU are as follows:

Studies in children must be based on a pediatric investigation plan (PIP). Execution of the PIP is required for all new approvals (unless the disease does not occur inchildren or the testing cannot be done in children, in which case exemption/waivers can begranted. Studies have to be performed if there is a potential therapeutic benefit to children. PIPs must be submitted early, around the time that Phase II clinical development begins. Development of pediatric indications must not lead to delayed marketing authorization for

Figure 3: EU – the 8+2+1 market exclusivity rule

Source: Datamonitor Healthcare




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adults. References European Commission (2009) Pharmaceutical Sector Inquiry Final Report. Available fromhttp://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/staff_working_paper_part1.pdf[Accessed 2 May, 2013] Schofield I (2012) First EU patents in 2014, hopefully: but doubts expressed over timelines. Availablefrom http://www.scripintelligence.com/policyregulation/First-EU-patents-in-2014-hopefully-but-doubts-expressed-over-timelines-338330 [Accessed 4 January, 2013]


http://www.scripintelligence.com/policyregulation/First-EU-patents-in-2014-hopefully-but-doubts-expressed-over-timelines-338330

http://www.scripintelligence.com/policyregulation/First-EU-patents-in-2014-hopefully-but-doubts-expressed-over-timelines-338330



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DRUG IMPORTATION, PARALLEL TRADE, AND COUNTERFEITS UK measures have driven down counterfeit medicines activity The risk of falsified or counterfeit medicines entering the market continues to preoccupy the industryand authorities in the UK and Europe, albeit to a lesser extent than in other areas of the world,particularly developing countries where less stringent regulations make the infiltration of fake drugsmuch easier. Moreover, the true extent of the falsified medicines problem is difficult to estimatebecause of the variety of information sources and methods used, and the use of different terms todefine such products (counterfeit, falsified, spurious, etc). Various initiatives are being pursued to tackle the trade at both national and international levels,although the current piecemeal approach to prevention, detection, and enforcement leaves much tobe desired. These initiatives include: IMPACT (International Medical Products Anti-CounterfeitingTaskforce, with the controversial involvement of the World Health Organization); the draft Council ofEurope Medicrime convention, which focuses on detection and enforcement of sanctions; and the EU'sFalsified Medicines Directive (FMD), which came into force on 2 January, 2013, and imposes a numberof new requirements on stakeholders. At the industry level, a number of European trade bodies including the European Federation ofPharmaceutical Industries and Associations (EFPIA) have grouped together to establish a track andtrace system for medicines in the European supply chain. However, a rival system is being developedby the Council of Europe, and it is not clear whether one will prevail, or whether the two will combineor run separately. The UK Medicines and Healthcare Products Regulatory Agency (MHRA) says that its "Falsified MedicalProducts Strategy," which was first launched in November 2007 and has just been renewed for the2012–15 period, has resulted in a marked reduction in known incidents of falsified medical productspenetrating the UK supply chain. Since 2007, when 2.1 million doses of falsified medicines labeled for the treatment of prostate cancer,heart disease, and schizophrenia were imported into the UK as parallel traded products, the MHRA hasissued just one recall (2009) for a batch of falsified product for chronic asthma, which wasintercepted at a wholesaler's warehouse. In 2008 and 2011 there were two cases of authenticproducts packed in falsified packaging being illegally sold into the EU from the UK, but these wereintercepted at the wholesale level before being sold on to pharmacies. According to the MHRA, theselast two cases lend some support to the theory that the increase in parallel exporting from the UK asa result of exchange rate fluctuations has brought "a different set of challenges in its wake" (MHRA,2012e). Since 2006, the MHRA has convened a twice-yearly meeting of the Anti-Counterfeit Stakeholders(ACS) group, whose membership comprises trade associations for pharmaceutical manufacturers,wholesalers, parallel traders, generics manufacturers, and the Pharmaceutical Security Institute (PSI).




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While incidents of falsified medicines in the UK are rare, the country is still attractive tocounterfeiters, with consignments of falsified high-value medical products being seized en route tothe country. According to the MHRA: "There is no room for complacency: high value medical productswith a high turnover combine with large and complex supply chains to maintain the UK as anattractive and lucrative market for falsified medical products." In addition, seizures of falsified medicines supplied through the unregulated supply chain, mainlythrough illegal websites, have continued. Indeed, the use of the Internet to sell fake medicines is oneof the most pressing problems facing regulators and law enforcement agencies. EU LEGISLATION REQUIRES REGULATORY CHANGES TO TACKLE COUNTERFEITS Since the MHRA first published its anti-counterfeiting strategy, new EU rules on tackling falsifiedmedicines have been introduced. Under the Falsified Medicines Directive, which was published on 1July, 2011, the UK, like all other EU member states, had to put its provisions into effect by 2 January,2013 (Official Journal of the European Union, 2011). The directive includes a wide range of provisions covering both the legal supply chain and unlicensedInternet pharmacies:

Wholesalers must report any suspect batches of falsified medicines, record batch numbers ofmedicines they handle, maintain a quality system describing their responsibilities, processesand risk management systems, and verify that wholesalers they buy medicines from have avalid wholesale dealer's license. Manufacturers of pharmaceuticals will need to verify compliance with good manufacturingpractice and good distribution practice by their suppliers of active pharmaceutical ingredients(APIs) and certain excipients. APIs imported from non-EU countries must meet EU GMP-equivalent standards. There will be clear obligations for inspections of brokers, wholesalers, and manufacturers ofAPIs and excipients, with an explicit obligation on member states to introduce penalties forinfringing the provisions of the directive. Pharmaceutical product packs will have to carry a safety feature or unique identifier that canbe verified by IT systems in the distribution chain. There will be exemptions for some productsjudged to be at low risk of falsification. EU implementation of this legislation is still to outlinethe kind of safety feature to be attached to packs (such as a bar code or 2D bar matrix code). There will be a special logo that licensed Internet pharmacies will be required to display ontheir websites, and each member state will have to have its own national website listingthose who are entitled to supply medicines to patients via the Internet. In the UK, legitimateonline pharmacies can already be identified by a logo confirming that they have beenapproved by the pharmacy regulatory body, the Royal Pharmaceutical Society of Great Britain.

The MHRA says it is working with stakeholders to ensure a smooth implementation of the new




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provisions from January 2013. Drug importation and wholesaling in the UK require special licenses Anyone engaged in the procurement, holding, or wholesale distribution of medicinal products forhuman use sourced in the UK or another European Economic Area (EEA) state must have a wholesaledealer’s license, unless exempt. Application forms for this license are available on the MHRA website(MHRA, 2012f). In order to import licensed medicines from within the EEA, a wholesale dealer’slicense is required. For unlicensed medicines imported for individual patients, a separate wholesale dealer's license forimporting and handling unlicensed drugs is needed for imports within the EEA, and a Manufacturer's"Specials" License for imports from outside the EEA (MHRA, 2012g). Importation cannot take place if the importer has been informed by the MHRA within 28 days of thedate of the MHRA’s acknowledgement letter that it objects to the importation, which it may do if: ithas concerns about the safety or quality of the product; there is an equivalent licensed medicinalproduct available that meets the needs of the individual patient; or the agency is not satisfied thatthere is a "special need" for the supply to an individual patient (MHRA, 2012g). For companies wishing to export prescription drugs or medicines from the UK to other countries, theimporting country may require an export certificate as well as a wholesale dealer’s import license.There are four types of export certificate that can be issued by the MHRA (MHRA, 2012i):

Certificate of a pharmaceutical product – Includes detailed information about the product. Certificate of manufacturing status – Certifies that named sites meet good manufacturingpractice requirements agreed on a specified manufacturing license number. Certificate of licensing status – Can be issued for licensed and unlicensed products; containsless information than a certificate of a pharmaceutical product and can list up to 10 productsper certificate. Certificate for the importation of a pharmaceutical constituent – States that a chemical canbe used as an ingredient of a pharmaceutical product in the UK.

The fee charged is the same for each type of certificate but varies according to the service levelrequested and the number of original copies required. A rise in parallel exports has led to shortages of medicines Parallel trade – whereby licensed importers can acquire drugs in a low-cost EU member state and sellthem in another where prices are higher – is legal under EU law and has been embraced by somecountries as a means of restraining the growth in healthcare costs. R&D-based companies strongly oppose parallel trading and have used various strategies to combat




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the practice, such as limiting supplies to wholesalers in lower-priced countries and instituting dual-price policies with one price for drugs sold domestically and a higher one for those destined forexport, although some of these efforts have been challenged in the courts. A number ofpharmaceutical companies have experimented with direct-to-pharmacy (DTP) distribution to exertcontrol over their supply chains by restricting distribution and limiting the impact of parallel trade, amove which has caused considerable vexation among wholesalers. However, many believe that themain motive for companies to adopt DTP distribution is to achieve greater control of their supplychain and the monetary benefit this brings. Before the recession, drug prices in the UK were among the highest in Europe, and the country saw ahigh level of parallel imports. But the arrival of the recession, the weaker pound, and price cuts underthe Pharmaceutical Price Regulation Scheme (PPRS) starting from February 2009 resulted in a declinein the cost of drugs in the UK and a concomitant rise in parallel exports to other countries. The change in the dynamics of UK parallel trade resulted in some medicine shortages from 2009onwards, with about 20 brands reported to be in short supply. In November 2011, the All-PartyPharmacy Group (APPG) announced that it would conduct a full-scale inquiry into the problem, sayingthat shortages of prescription drugs were "a daily challenge" for pharmacies in the UK (Bruce, 2011). The APPG report, delivered in March 2012, found that the shortages of prescription drugs experiencedover the previous four years had been caused mainly by "the export of medicines intended for the UKmarket to other EU countries" (APPG, 2012). The report said that while the group had no objection tothe export of medicines in principle, the inquiry had thrown up evidence that "patients are sufferingand that pharmacists' time and resources are being diverted away from patient care as a result ofmedicines being in short supply." The report noted that the medicines supply chain had tried to address the problem by implementingquotas and alternative supply mechanisms, and that the Department of Health had also setobligations for supply chain participants and issued some best practice documents, but that theseefforts had proved "ineffective." The APPG made a number of recommendations, including:

ensuring the MHRA improves its efforts to enforce obligations on wholesaler licenses implementing better collaborative working among the Department of Health, the MHRA, andsupply chain representatives making quota arrangements simpler and more transparent increasing buffer stock held by wholesalers extending current legislation requiring the maintenance of continued supply to short-linewholesalers and other entities in the supply chain (APPG, 2012).

References APPG (2012) Report of the APPG inquiry into medicines. Available from




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http://www.appg.org.uk/APPG%20Pharmacy%20-%20Report%20of%20Inquiry%20Into%20NHS%20Medicines%20Shortages.pdf [Accessed 4 January,2013] Bruce, F (2011) UK announces full inquiry into medicines shortages. Available fromhttp://www.scripintelligence.com/policyregulation/UK-announces-full-inquiry-into-medicines-shortages-323956 [Accessed 4 January, 2013] MHRA (2012g) Importing unlicensed medicines. Available fromhttp://www.mhra.gov.uk/Howweregulate/Medicines/Importingandexportingmedicines/Importingunlicensedmedicines/index.htm [Accessed 4 January, 2013] MHRA (2012e) Falsified Medical Products Strategy. Available from http://www.mhra.gov.uk/home/groups/ei/documents/websiteresources/con149816.pdf [Accessed 8 January, 2013] MHRA (2012i) Exporting medicines. Available fromhttp://www.mhra.gov.uk/Howweregulate/Medicines/Importingandexportingmedicines/Exportingmedicines/index.htm [Accessed 2 May, 2013] Official Journal of the European Union (2011) Directive 2011/62/EU of the European Parliament andof the Council of 8 June 2011. Available from http://ec.europa.eu/health/files/eudralex/vol-1/dir_2011_62/dir_2011_62_en.pdf [Accessed 2 May, 2013]


http://www.appg.org.uk/APPG%20Pharmacy%20-%20Report%20of%20Inquiry%20Into%20NHS%20Medicines%20Shortages.pdf

http://www.appg.org.uk/APPG%20Pharmacy%20-%20Report%20of%20Inquiry%20Into%20NHS%20Medicines%20Shortages.pdf

http://www.scripintelligence.com/policyregulation/UK-announces-full-inquiry-into-medicines-shortages-323956

http://www.scripintelligence.com/policyregulation/UK-announces-full-inquiry-into-medicines-shortages-323956



http://www.mhra.gov.uk/

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http://ec.europa.eu/health/files/eudralex/vol-1/dir_2011_62/dir_2011_62_en.pdf



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APPENDIX About the author Ian Schofield writes on a range of issues affecting the pharmaceutical industry, with a focus on EUregulatory, political, and scientific affairs. Having graduated in modern languages at the University ofBath, he joined Scrip World Pharmaceutical News as a reporter in 1985, covering the French andItalian markets, later becoming Deputy European Editor with responsibility for regulatory affairs at EUand national level. He subsequently became the newsletter's Deputy Editor, a post he held until 2005,when he took on the role of Consultant Editor to a number of Informa publications including Scripand the Regulatory Affairs Journal. In July 2008 Ian became a Principal Analyst for Informa BusinessInformation, covering issues such as advanced therapies, biosimilars and generics, orphan drugs,antibiotic resistance, and counterfeit medicines. As well as writing news, features, and analysis forScrip Intelligence and its sister publication Scrip Regulatory Affairs, he also produces tailored reportsfor the Ask the Analyst service.


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