Medicine will remain affordable, pharmaceutical industry assures

Sun2Surf: PETALING JAYA: The pharmaceutical industry has given some measure of assurance to parties concerned with the impact of a Free Trade Agreement(FTA) with the US on access to affordable medicines.
Among the main concerns over the current (FTA) negotiations between Malaysia and the United States were on data exclusivity and its effect on access to affordable medicines, especially anti-retroviral drugs for people living with HIV/AIDS.
Speaking from the perspective of pharmaceutical companies at a forum last Friday (Sept 8, 2006), Pfizer Malaysia managing director John Latham highlighted the positive growth of the generics industry in countries such as Australia and Singapore after an FTA with the US.
The US-Australia FTA was signed in 2004. According to data from IMS Health, generic medicines accounted for 15% of the Australian government spending on drugs in 2005 when in 1994, it was just 2%. This is expected to rise to 25% in the long-term and hit a market value of RM4.5 billion by 2010. (IMS Health is a global source for pharmaceutical market intelligence.)
Furthermore, the net profit of one of Australia's newest generic companies, Arrow Pharmaceuticals, grew at 54% in 2004 compared with 39% in 2003. Another generics company, Alphapharm, was the market leader by volume and ranked second in market share by value in 2005 which placed it ahead of overseas-based companies.
Singapore, which also signed the FTA in 2004, saw an increase in the number of generics in the market from 784 in 2003 to 847 in 2004 and 941 in 2005, contributing to a total of 21% increase in generics from 2003-2005. During the same period, the number of branded drugs increased by 15%.
According to Latham, among the reasons for the growth in generics in these countries were preferential policies towards generics, growth in exports, new product launches and expiry of patents of innovator drugs.
On the negative impact of data exclusivity on drug prices, Latham cited Colombia where there had been similar concerns over the intellectual property tool. An IMS study in Columbia found no impact on price nor a change in pharmaceutical industry trends after almost three years of data exclusivity.
It was predicted that data exclusivity (a period where companies generating research data holds exclusive rights over that data) would cause the generics industry to lose 71% of their market share or wipe them out altogether.
On the contrary, three years after, the volumes of the generics industry increased from 53% to 61% while volumes of branded drugs decreased from 46% to 38%.
At the same time, the value of generics increased from 34% to 39% while the value of branded drugs declined from 65% to 60%.
On concerns that data exclusivity will remove a government's right to negotiate medicine prices, Latham stressed that no country thus far, where data exclusivity has been implemented, has given up its ability to invoke sovereign rights in a healthcare emergency.
"Prices are determined by market forces, competition and pricing policies and an enhanced intellectual property environment does not impact the government's ability to negotiate medicine prices. Sovereign rights is not affected by an FTA," he said.
Countries in the Asia Pacific which observe data exclusivity include Australia, New Zealand, China, Japan, Singapore, Taiwan and South Korea. The period of protection ranges from five to 10 years.
Responding to claims that prices of drugs increase annually by over 20%, Latham said: "Average annual price increase for Pfizer in Malaysia is around 2%. Merck, Sharp and Dohme (MSD) has had two rounds of price cuts on their HIV drugs since 2001."
MSD has reduced price of HIV drugs by 78% in 2001 and another 10% last year.
Pharmaceutical companies also support the government's efforts in distributing free anti-retroviral drugs by selling it at a lower market price to the government.