After decades of development, the supporting role in the pharmaceutical market in the past – generic drugs – has now become a “blocker” for the growth of pharmaceutical giants. With the increase in R&D costs and the unsatisfactory R&D efficiency, the “Big Bomb” drug patents have expired, and the world’s countries are facing heavy pressure to reduce health care spending, which has forced the global pharmaceutical chain to shift to the generics sector. At the same time, the generics market has been on an upward trend, growing at a rate of 9%. In the global generic drug map, the European market, which was once known for its patented drugs, is increasingly beginning to occupy a prominent position.
Large scale of drug sales
From a global perspective, Europe's total drug sales in 2008 was $247.5 billion, accounting for 32% of global sales, second only to the United States, ranking second in sales value. According to research data released by relevant departments, 6 of the world's top 10 pharmaceutical markets are in the European market.
According to Espicom's report, there are four emerging imitation markets in Europe – France, Portugal, Italy and Spain. In addition, some major EU countries such as the United Kingdom and Belgium have already implemented more tolerant policies on generic drugs in 2005, and even adopted supportive attitudes in some major drug fields to promote the development and use of generic drugs.
The favorable policy environment has led large pharmaceutical companies to compete in the European generics market. Since Novartis acquired Sandoz as the world's largest generic drug company, mergers and acquisitions in the generics sector have never stopped. With the intensification of competition in the entire industry, mergers and acquisitions have become the most effective way for enterprises to increase production capacity and expand and strengthen enterprises. France's Sanofi-Aventis, which has always played an important role in the field of patent medicine, acquired a 25% stake in Zentiva, a Czech generics manufacturer, and invested in generic drugs as a development direction after the expiration of patented drugs; Mylan, USA The company acquired Merck's generics business segment and began expansion of its overseas territory; Israeli generics manufacturer Teva acquired Pfizer's generic drug sales company Dorom in Italy, becoming Italy's largest generic drug manufacturer; Ranbaxy, India The acquisition of the company Terapia of Romania, Ethimed of Belgium and AllenSpA of the Italian generics company of GlaxoSmithKline became the global generic drug company.
Remove barriers for generic applications
For a long time, the biggest obstacle to the entry of generic drugs into the market is the difficulty of registration. It is often subject to the interception and limitation of patented pharmaceutical companies, which is likely to lead to a series of patent infringement problems. However, drugs are different from general commodities. Drugs must go through lengthy administrative examination and approval before they go on the market. If the registration is approved after the expiration of the drug patent period, the patent protection period is invisibly extended, which is obviously unreasonable to the public. Therefore, in order to enable the public to obtain the product quickly after the expiration of the patent patent, the generic drug company needs to conduct research related to the drug before the expiration of the patent right, including production samples and clinical research. Since these production and use behaviors are produced within the validity period of the patent without the permission of the patentee, this is likely to lead to infringement disputes.
In order to prevent the occurrence of infringement to the maximum extent, some developed drug companies such as the United States and the European Union have implemented a patent link system. By setting up infringement checkpoints in the registration process, the patentee is allowed to file a defense to protect the interests of the patentee. . Although this patent link system protects the interests of patent holders, it hinders the participation of generic drugs in competition and has a great negative impact on the application for compulsory licenses. At the same time, the system has also delayed the listing of generic drugs, which is not conducive to protecting public health and improving the accessibility and affordability of drugs. In the 2015 plan proposed by Europe, it is proposed to exempt the registration of generic drugs from patent links and implement a centralized approval process, which will greatly speed up the approval of generic drugs and help the listing of generic drugs. In addition, the plan will give generic drug companies preferential policies in terms of taxation and research and development, and will also promote the development and use of generic drugs.
Opportunities and challenges coexist
When the country became the largest purchaser of drugs, Europe became the most profitable market for generic manufacturers. Because Europe's attitude toward generic drugs is far more moderate than that of the United States and Japan, and the 2015 plan in Europe is bound to bring good development opportunities for generic drugs: on the one hand, the aging of the population in Europe and the United States will inevitably increase the demand for medicine. On the other hand, the price of generic drugs is also quite attractive for EU member states that are working hard to reduce medical costs. This is also an intrinsic driving force for the golden age of generic drugs.
Despite this, we should also see the unfavorable factors faced by generic pharmaceutical companies. Although EGA intends to develop procedures to speed up the listing of generic drugs, the original patented drug manufacturers are still adopting the “authorized generic drug” tactics in order to protect their maximum profits. (Original patented drug manufacturers independently produce their own products of generic drugs or authorize a generic drug company to produce the first generic drug to share its profits and combat other generic drugs), plus more and more pharmaceutical companies enter In the field of generic drugs, avoiding vicious competition is also a problem that needs serious consideration.
Advantages of Chinese pharmaceutical companies entering Europe
According to China Customs statistics, Europe has always been the main market for the export of pharmaceutical products in China. In recent years, with the increase in the number of CGMP and COS-certified pharmaceutical companies in Europe, the export of Western medicines has also been growing. In 2009, China's exports of Western medicines to Europe increased by more than 30%. Among them, the export of biochemicals to Europe grew rapidly. The number increased by 1667% compared with 2008, and the amount increased by 128% compared with 2008. The amount of exports to Europe also increased by more than 14% year-on-year.
With the implementation of the new European generics plan and the encouragement and use of generic drugs by EU member states, more and more companies are beginning to join the ranks of generic drugs, who will bear the cost in the process of caring up this big cake. The advantage, whoever has the initiative. Due to the low production cost, abundant low-cost labor and technical capabilities, Chinese companies are bound to increase their exports of generic drugs to Europe. At the same time, as European large pharmaceutical companies move to the generic drug market, they will inevitably increase their quality. The demand for cheap raw materials, and China, as the world's largest exporter of APIs, has become the only choice.
European generics new regulation promotes market growth
The 2015 Vision of the European Generic Drugs Association (EGA) proposes to establish a globally competitive generics industry that increases the accessibility and affordability of high-quality medicines to ensure the sustainability of the entire European healthcare market.
At the 9th EGA Scientific and Regulatory Affairs Working Conference in London, EGA Chairman Greg Perry pointed out that since the implementation of the medical reform in 2003, the drug regulatory system has achieved great success, but there is still room for improvement.
Generic drugs are one of the most competitive industries in Europe, accounting for almost 50% of the entire distribution drug market, saving an average of 25 billion to 30 billion euros per year in Europe. However, in order to monopolize the market, patented pharmaceutical companies usually oppose competition and set up a large number of obstacles to block the entry of generic drugs, thus bringing unnecessary delays in the development and introduction of new generic drugs.
EGA intends to implement the following five steps to achieve generic drug development goals:
First, give more incentives to generic companies in terms of R&D and taxation, and encourage biosimilars and clinical trial innovation throughout the industry.
Second, eliminate the barriers to competition for generic drugs. According to the agency's plan, the patent process should be free of patent links and third-party intervention. At the same time, however, procedures should be in place to limit the anti-competitive strategies of patented pharmaceutical companies and unreasonable delays in generic drugs. In terms of innovation, products with less therapeutic value should be distinguished from true therapeutic innovations.
Third, based on the current successful European authorization system, the introduction of better regulatory tools, such as the Decentralized Approval (DCP), to better adopt the Centralized Procedure (CP). (Current generic applications account for 85% of all DCPs and 41% of all CPs).
Fourth, strictly follow the principle of mutual recognition and strengthen coordination of a single market.
5. Increase patient and health care personnel's understanding of generic and biosimilar information throughout Europe.
Perry pointed out that the purpose of implementing a new generic drug program is to create a clear, open market that not only benefits all patients, but also encourages innovation and saves a lot of medical money. In addition, some legal support is needed throughout the reform process, because some reforms can be achieved through the better application of existing laws, while others can only guarantee their legitimacy by enacting new laws.