REGULATIONS | ENFORCEMENT | GLOBALIZATION | SECURITY & INTEGRITY

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PART I Regulations: USA Europe Asia International

PART II Enforcement Globalization Supply chain security Case studies Summary

The role of Asian producers Special 301 report & Priority Watchlist Japan: ICH guidelines Japan: JPMA codes and guidelines Japan: Pharmaceutical Affairs Law India: IPR policy & the Patent Act India: Pricing policies & authority India: Compulsory licensing India: GDP guidelines of 2013 China: IPR & counterfeit products China: Good Supply Practices Russia: emerging market Russia: IPR & pricing policies Russia: 429-FZ

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JAPAN

INDIA & CHINA

Top 25 global brand manufacturers

Takeda Astellas Otsuka Daichi Sankyo Eisai

• Hundreds of approved manufacturing facilities

• Major challenges in drug supply chain integrity and security and IPR protection

• 50% of U.S. drug master files come from India & China

• IPR and trade secret protection & enforcement

• Priority Watch List: India, China, Russia

• Most counterfeit drugs shipped to the U.S. come from India and China

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INDIA

• Priority Watch List in 2015

• IPR Working Group established

• Procedural safeguards to protect trade secrets

• Support of India’s enforcement efforts

• Draft National IPR policy in January 2015

• Securing and enforcing patents

• Greater regulatory coordination

• Situation in counterfeit drugs very troubling

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INDIAN PATENT LAW

An “invention” is any product or process that is novel, has an inventive step, and is capable of industrial

application.

Section 3(d) of India’s Patents Act states that “the mere discovery of a new form of a known substance which

does not result in the enhancement of the known efficacy of that substance” is not considered to be an

“invention”.

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INDIAN COMPULSORY LICENSING LAW

India has made clear that it views compulsory licensing as an important tool of industrial policy.

In the United Nations Framework Convention on Climate Change negotiations, India continues to

identify patents as obstacles to the dissemination of green technologies.

Merck v. Glenmark

Cipla v. Roche

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TRADE SECRETS PROTECTION

• Difficulty in obtaining remedies and damages

• Reliance on contract law

• Theft by business competitor not covered

• Trade secrets disclosed during judicial proceedings

• Theft of undisclosed test data generated in clinical trials

• Significant delays associated with cancellation and opposition proceedings at the Trademark Registry.

• The amount of counterfeit goods remains very troubling.

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LOCALIZATION IN INDIA

• Local manufacturing favored

• Pricing restrictions on more than 500 formulations

• Indigenous medicines can be priced higher

• Compulsory licenses if a patented product is not manufactured in India

• Import restrictions on narcotics

• India is a net exporter of drugs and biologics

• Indian Department of Pharmaceuticals actively promotes Indian products globally

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GMP CERTIFIED PLANTS IN INDIA

• Government support for GMP certification

• Hundreds of WHO, FDA, EDQM, MHRA and TGA compliant plants

• Important exporter of generics and high-value products

• Major share of produce exported to highly regulated markets

• Multiple Warning letters from the FDA recently

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GDP GUIDELINES

Distribution is an essential activity in the integrated supply-chain management

Multiple individuals and entities are responsible

Adequate controls over the entire chain of distribution are essential

Every party involved has to comply with the applicable requirement

Risks: mix-ups, adulteration, contamination, cross-contamination, and degradation.

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GDP GUIDELINES : OBJECTIVES

The objective is to ensure the quality uniqueness of pharmaceutical products during all aspects of the distribution process:

Procurement

Purchasing

Storage

Distribution

Transportation

Documentation

Record-keeping

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GDP GUIDELINES : APPLICABILITY

• Manufacturers of APIs and finished products

• Wholesalers, suppliers, distributors

• Government institutions

• International procurement organizations

• International donor agencies

• Certified bodies

• Logistics providers, traders, transport companies

• Health workers

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Drug & Cosmetics Act of 1940 Cosmetics Rules of 1945 Rules for sale, promotion and distribution of pharmaceuticals

All parties are jointly responsible for

Quality of pharmaceutical products

Integrity of the supply chain

Obligation to collaborate applies to government agencies, customs, regulators and law enforcement

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GDP GUIDELINES : DISTRIBUTORS

• Authorizations for distributors

• Import/export licenses

• Sourcing from authorized persons only

• Supply to authorized persons only

• Subcontractors are held to the same standard

• Organizational charts indicate relationships and responsibilities, linked to job descriptions

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GDP GUIDELINES : PERSONNEL

Designated person

Has to have the authority and responsibility to implement and maintain a quality system

Managerial and technical personnel

Have to have the authority and resources to carry out their duties

Personnel shall not be subject to pressures that would compromise quality of the product

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GDP GUIDELINES : PROCEDURES

Safety of personnel and property

Protective garment (high-potency products)

Environmental protection

Product integrity

Initial and continuing training on GDP:

• Product handling

• Product safety and security

• Product identification

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GDP GUIDELINES : RESPONSIBLE PERSON

Responsible person for each distribution site

Implementation and maintenance of a quality

system

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GDP GUIDELINES : CAPA

Deviations from established procedures:

Document

Investigate

Implement CAPA

Procedures for procurement and release

Sourcing

Supply

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GOOD STORAGE PRACTICES

Unusable and hazardous products separate

Storage conditions as labeled by manufacturer

Non-compliance shall be investigated

Precautions against spillage, breakage, theft

Narcotics in secure containers

Container labels contain all necessary info

Procedures for dispatch to ensure traceability

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GDP: RECORDKEEPING

Data integrity and veracity

Validation and backup

Handling of detected spurious products

Notification requirements

Audits and self-inspections

Corrective and preventative measures

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CHINA IPR AND INNOVATION COMMITMENTS

Joint Commission on Commerce and Trade (JCCT)

U.S. - China strategic and economic dialogue (S&ED)

The WTO Dispute Settlement Body ruling (March 2009):

• Denial of copyright protection violates the TRIPS Agreement;

• Seized counterfeit goods cannot be publicly auctioned after only removing the spurious trademark.

• Criminal enforcement measures must reflect and respond to the realities of the commercial marketplace

• In March 2010, China announced that it had implemented the rulings.

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USTR SPECIAL 301 REPORT: CHINA

• Priority Watch List in 2015

• Commitment of China to protect and enforce IPR

• Ongoing overhaul of Chinese IPR laws

• Major source of counterfeit pharmaceuticals

• China and India are the main source of counterfeit pharmaceuticals shipped in the U.S.

• China ships counterfeit drugs also to Africa

• Counterfeit drugs are a major public health problem.

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IPR VIOLATIONS IN CHINA

Patents

Copyrights

Trademarks

Trade secrets

Data from clinical trials

Some manufactures declared pharmaceuticals as ordinary chemicals

China is a major source of harmful pharmaceuticals

In July 2014 China announced commitment to stricter regulatory control of bulk APIs

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IPR VIOLATIONS IN CHINA

Patents

Copyrights

Trademarks

Trade secrets

Data from clinical trials

Some manufactures declared pharmaceuticals as ordinary chemicals

China is a major source of harmful pharmaceuticals

In July 2014 China announced commitment to stricter regulatory control of bulk APIs

Pressure to transfer IPR to a Chinese entity

Declared intention: To promote indigenous innovation

Develop strategic industries

Pressure methods: Eligibility to subsidies, tax preferences

Deny or delay market access

Effective remedies insufficient

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ECONOMIC ESPIONAGE

Patents

Copyrights

Trademarks

Trade secrets

Data from clinical trials

The Office of the National Counterintelligence Executive (ONCIX) have reported specific gaps in trade secret protection and enforcement, particularly in China.

ONCIX: “Foreign Spies Stealing U.S. Economic Secrets in Cyberspace” states that “Chinese actors are the world’s most active and persistent perpetrators of economic espionage.”

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IPR: GRADUAL IMPROVEMENT

Patents

Copyrights

Trademarks

Trade secrets

Data from clinical trials

• 2011: China completed its Special Intellectual Property Rights Campaign

• National Leading Group on IPR infringement

• 2014: Revised Trademark Law

• 2015: amendments to the Patent Law

• AUCL – Anti-Unfair Competition Law proceeding very slowly (since 1993)

• Special IP courts launched as a pilot program

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GOOD SUPPLY PRACTICES 2013

I: General provisions

II: Quality Management for Wholesalers

• Quality Management System, Organization and Responsibility, Personnel Training, System Document, Facilities and Equipment, Calibration, Validation, Computer Systems, Procurement, Receiving, Acceptance, Storage, Transportation, Delivery, Sales

III: Quality Management for Retail of Pharmaceuticals

• Quality Management and Responsibility, Personnel, Documents, Facilities, Equipment, Purchase and Acceptance, Display and Storage, Sales and After-Sales Management

IV: Supplementary Provisions

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GOOD SUPPLY PRACTICES 2013 WHOLESALE QUALITY MANAGEMENT

QMS Organization & Responsibilities Personnel and Training QMS Documentation Facilities and Equipment Calibration and Validation Computer System

Procurement Receiving and Acceptance Storage and Maintenance Sales Delivery from Storage Transportation and Delivery After-sales Management

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GOOD SUPPLY PRACTICES 2013 RETAIL QUALITY MANAGEMENT

Quality Management and Responsibility Personnel Management Documents Facilities and Equipment Purchase and Acceptance Display and Storage Sales Management After-sales Management

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GOOD SUPPLY PRACTICES 2013 REVISED GSP GUIDELINES

Organization: R&R

Most requirements similar to ICH GDP Guidelines

Additional requirements:

Handling of traditional Chinese medicines

Ban on concurrent employment

Handling of Adverse Drug Reaction reports

Environment and personal health

Education requirements

Senior high school for most roles

Responsible Person has to be a licensed pharmacist

Specialized training for drugs under special control, refrigerated & frozen drugs

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GOOD SUPPLY PRACTICES 2013 REVISED GSP GUIDELINES

Organization: R&R

Most requirements similar to ICH GDP Guidelines

Additional requirements:

Handling of traditional Chinese medicines

Ban on concurrent employment

Handling of Adverse Drug Reaction reports

Environment and personal health

Education requirements

Senior high school for most roles

Responsible Person has to be a licensed pharmacist

Specialized training for drugs under special control, refrigerated & frozen drugs

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GOOD SUPPLY PRACTICES 2013 Article 62 and 64 documents

Business documents required from suppliers

QA agreement: • Responsibilities of both parties • Detailed specifications of materials traded • Conditions of storage and transport • Responsibility for quality assurance

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GOOD SUPPLY PRACTICES 2013

Display of medicinal products

Display of drugs Rx and OTC separately

Rx drugs cannot be on an open shelf

Dangerous drugs cannot be displayed

Provisions on Sanctions Pharmaceutical Administration Law

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RUSSIAN PHARMACEUTICAL SECTOR

2013: Emerging market, significant investment from pharma sector

After 2014: Significant slowdown due to Western sanctions

Prices regulated for 608 drugs

Russia dependent on pharmaceutical imports

• 80% drugs imported as finished products

• 20% manufactured from imported APIs

EY survey: 70% of those surveyed assert that the

current political and economic situation and

the imposition of sanctions have had no

impact on their business.

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RUSSIA: MARKET ACCESS

Building local manufacturing capabilities Partnership with Russian companies

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RUSSIA: LOCALIZATION

53% 26%

21% complete-cycle manufacturing inRussia

buy existing facilities or organize jointventures

modernize own production bases

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RUSSIA: COUNTERFEIT PHARMACEUTICALS

• Priority Watch List in 2015

• IPR protection and enforcement, notably copyright infringement and trademark counterfeiting

• Lack of enforcement

• Online pharmacies a major problem

• WTO Working Party Report: unauthorized disclosure of proprietary test data

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RUSSIA: Act No. 429-FZ of 12/2014

Federal Law on amendment of the Federal Law On Circulation of Pharmaceuticals No. 429-FZ

• Amendments to No 61-FZ of 2010

• Criminalized pharmaceutical counterfeiting and distribution of fake and adulterated pharmaceuticals

• Requirement to conform to GMP since January 2014

• New definitions: biological MPs, immune-biologic MPs, biotech MPs, gene-therapy MPs, orphan drugs, homeopathic products, reference medicinal product

• Clinical trials separated from registrations

• New grounds for cancellation of registration

• Interchangeability of pharmaceuticals

• Registration obligation on MAH

• Pricing and reimbursement for essential medicines

• Cease and desist order for illegal pharmacies

• Reference medicinal product

• Clarified powers of federal authorities

• Fast track for first three

• Procedure for determining interchangeability

• Parameters for comparison

• Bioequivalence studies not required for products that have been on the market for > 20 years

• Russian national registry

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RUSSIA: Act 429-FZ of 12/2014

• Reference medicinal product

• Clarified powers of federal authorities

• Fast track for first three

• Procedure for determining interchangeability

• Parameters for comparison

• Bioequivalence studies not required for products that have been on the market for > 20 years

• Russian national registry

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RUSSIA: Good Distribution Practice

Good Distribution Practice

Good Practice of Storage and Transportation

GMP is a licensing requirement since 2014

GMP compliance not formally confirmed

• Counterfeit and adulterated products undetectable

• GMP certificates since July 2015

• Adulterated and counterfeit drugs undetectable

Amendments must be specified in government decrees

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