Sustainable Competition:

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Madeleine Stewart
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1 Sustainable Competition: the Magic Formula to Align Public Health and Business Objectives for Access Adrian van den Hoven Director General Medicines for Europe

2 Medicines For Europe VISION Medicines for Europe Vision 2020 Our 5 pillars PATIENTS QUALITY VALUE SUSTAINABILITY PARTNERSHIP

3 Medicines for Europe - Structure

4 The challenges and opportunities for EU

An ageing population Major EU social and economic challenge 129 million patients Modern lifestyle and an ageing population increase prevalence of chronic disease 2014 +50% Population over 65 years

5 An ageing population Major EU social and economic challenge 129 million patients Modern lifestyle and an ageing population increase prevalence of chronic disease % Population over 65 years 191 million patients % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Population Structure by Major Age Groups EU28, (percentage of total population) 18,5 28,1 28,7 65,9 56,9 56,2 15,6 15,0 15, years years 0-14 years Source: Eurostat Population Statistics

6 Billions New medicine costs impacting budget EUR 90 EUR 80 EU Sales (Protected Brands) 15% 10% EUR 70 EUR 60 5% 4% 8% EUR 50 EUR 40 New brands (<2Years) EUR 30 EUR 20 EUR 10 EUR Source: IMS Health, 2016

7 Billions EU pharmaceutical sales EU sales EUR 180 EUR 160 EUR 140 EUR 120 EUR 100 EUR 80 EUR 60 Generics Unprotected Brands Protected EUR 40 EUR 20 EUR Source: IMS Health, 2016

8 Innovative specialty medicines now are targeting smaller populations with significant unmet needs The latter decades of the 20 th century the emergence of targeted therapies driving enhanced value and cost benefit High volume, low cost medicines treating large primary care diseases for the first time The first diseasemodifying specialty treatments AVERAGE PREVALENCE 400 million global patients Since 2010 increased focus on significant areas of unmet need and rare diseases with no effective remedies Niche indications 35 million global patients Notes: Prevalence and Annual cost were categorised into estimated buckets; annual cost takes into account list price at time of launch. Source: QuintilesIMS Thought Leadership Launch Excellence I and V

9 Generic Medicines

10 Generic medicines A Cornerstone of Healthcare Sustainability

Opportunities to increase uptake Protected and

branded generics include copy products in some

11 Opportunities to increase uptake Protected and off-patent marked share (volume) by country, June 2015 Source: IMS Health, MIDAS, Q2 2015, retail and hospital channel Note: Non-original brands and branded generics include copy products in some countries; Generics include INN branded and company branded

12 Biosimilar Medicines

13 Biosimilar Medicines A Cornerstone of Healthcare Sustainability

14 Historically 8% of biologics exposed to biosimilars Historically biosimilar competition restricted but the future is very different Top Biologic Therapy Areas, Europe sales (2016) Hematopoietic Growth Factors 2% Erythropoietins 4% Growth Hormones 2% Autoimmune 20% Adalimumab Etanercept Infliximab Oncologics 20% Rituximab Trastuzumab Antidiabetics 9% Insulin glargine Source: QuintilesIMS MIDAS MAT Q3 2016; Europe excludes Russia and Turkey

15 TD/Capita Access to biological treatments varies greatly European among countries 0,70 0,60 0,61 0,53 0,50 0,40 Bulgaria Romania 0,30 0,23 Poland EU average 0,20 0,10 0,12 0,09 0,06 0,04 0,00 Anti-TNF Infliximab Etanercept Epoetin HGH Fertility GCSF Source: IMS Health, Generics and Biosimilars Report, 2016

+2542% +146% +58% Growth hormone (somatropin) -9% +152% +82% +48% Anti-TNF (infliximab & etanercept)

16 Biosimilar medicines increase patient access Change in # of treatment days (2016 vs. year before biosimilar entrance) HU RO PL EU Epoetin -9% -38% +237% +7% G-CSF (filgrastim) +209% +2542% +146% +58% Growth hormone (somatropin) -9% +152% +82% +48% Anti-TNF (infliximab & etanercept) -6% +12% +7% +26% Fertility (follitropin alfa) +46% - +45% +10% Source: IMS Health, Generics and Biosimilars Report, 2016

18 Value Added Medicines

that address healthcare needs and deliver relevant

19 Value added medicines Rethink, reinvent & optimise medicines Definition Medicines based on known molecules that address healthcare needs and deliver relevant improvements for patients, healthcare professionals and or payers Improvements

20 Value added medicines Rethink, reinvent & optimise medicines How What s in it for

Education and information for healthcare professionals and patients Market Access Prohibit linkage of IP to MA and P&R Avoid extreme pricing models Market Access Priorities

21 Education and information for healthcare professionals and patients Market Access Prohibit linkage of IP to MA and P&R Avoid extreme pricing models Market Access Priorities Support prescription of generic and biosimilar medicines Reduce timelines and uncertainties in patent opposition procedures Accelerate the timelines for pricing and reimbursement

22 Why are there shortages of multisource medicines?

23 ABILITY TO SUPPLY IS NEGATIVELY AFFECTED BY REGULATORY COSTS AND PRICE PRESSURE REGULATORY COMPLIANCE COST GMP / GCP / Variation Regulation PV regulation FMD PRICE Price cuts Tendering External Reference Price Claw-back PATIENTS QUALITY VALUE SUSTAINABILITY PARTNERSHIP

24 EXAMPLE OF PRICE PRESSURE ROMANIA: 2000 MEDICINES WITHDRAWN! External reference pricing and clawback tax reduce access to medicines European Commission (DG ECFIN): Joint Report on Health Care and Long-Term Care Systems & Fiscal Sustainability While overspending is recovered via the claw-back tax ( ), it has led to withdrawals of generic medicines from the market. PATIENTS QUALITY VALUE SUSTAINABILITY PARTNERSHIP

CREATING AND MAINTAINING A MULTI-SOURCE MARKET MORE MANUFACTURERS = LESS

administrative and cost burden of keeping products in the market Ensure

available market stock information MITIGATE SHORTAGES Specific measures

25 CREATING AND MAINTAINING A MULTI-SOURCE MARKET MORE MANUFACTURERS = LESS SHORTAGES PREVENT SHORTAGES Improve regulatory efficiency to reduce administrative and cost burden of keeping products in the market Ensure market predictability Address negative impact of parallel trade Manage available market stock information MITIGATE SHORTAGES Specific measures to mitigate imminent shortage PATIENTS QUALITY VALUE SUSTAINABILITY PARTNERSHIP

26 Sustainability of healthcare systems driven by sustainable competition Off-patent competition brings sustainability to healthcare systems cost-efficiency and patient access there are additional opportunities to stimulate competition better procurement of medicines for generic, biosimilar and value-added medicines improved pricing & reimbursement policies of offpatent medicines market stability & predictability increased uptake of biosimilar medicines

27 The importance of pharmaceutical manufacturing Medicines supply: 62% of Rx medicines (2016) rising to 75% (est.2020) High skill jobs: direct jobs/450 sites across Europe. New complex technology plants (biotech, complex value added) & dense SME network. R&D: 126 R&D sites. Pharmaceutical R&D is connected to manufacturing technology proximity. Export opportunities: EU technology & medicines sought after worldwide (eg. Biosimilar, value added, complex formulations) EU security: How much reliance on foreign production?

28 The Supplementary Protection Certificate (SPC) Patent protection: 20 years Supplementary Protection Certificate (SPC): extends exclusivity of patented products by up to 5 years Compensates for Marketing Authorisation delays in Europe Generic & Biosimilar medicines companies cannot produce for commercial purposes where SPC is in place Unintended effect: EU manufacturers forced to outsource in order to market in unprotected territories

29 EU: longest protection period worldwide D I S E A S E M O L E C U L E S E X P I R Y D A T E S EU USA KOREA CHINA INDIA CANADA Cancer (kidney) SORAFENIB 21/07/ /01/ /09/ /01/ /01/ /01/2020 Cancer (Leukaemia, gastro intestinal, etc) IMATINIB 21/12/ /07/ /06/ /04/2013 NA 01/04/2013 Cancer (lung, pancreas) ERLOTINIB 21/03/ /05/ /10/ /03/ /03/ /06/2015 Cancer (mostly breast) PERTUZUMAB 23/06/ /07/ /06/ /06/2020 NA 23/06/2020 Cancer (renal) SUNITINIB 24/07/ /02/ /02/ /02/2021 Revoked 15/02/2021 Cancer (renal) TEMSIROLIMUS 14/04/ /08/ /04/ /04/2015 NA 14/04/2015 Cancer bone BAZEDOXIFENE 16/04/ /04/ /12/ /04/2017 NA Expired Cancer collateral effects FOSAPREPITANT 28/02/ /03/2019 Rejected 28/02/2015 Expired 28/02/2015 Cancer colon Sources: Medicines for Europe Company Members AFLIBERCEPT (ZALTRAP) 01/02/ /12/ /12/ /12/ /12/ /12/2025 Cancer lung AFATINIB 12/12/ /01/ /02/ /12/ /12/ /12/2021 Cancer lung GEFITINIB 04/03/ /05/ /12/ /04/ /04/ /04/2016 Cardio disease DRONEDARONE 06/08/ /07/ /09/2015 Expired Expired 24/07/2011 Cardio vascular PRASUGREL 27/02/ /10/ /12/ /09/2012 NA 08/09/2012 Cardiovascular (blood clots) RIVAROXABAN 02/10/ /08/ /10/ /12/ /12/ /12/2020 Cardiovascular diseases IVABRADINE 25/03/ /09/2012 Expired Expired Expired 25/09/2012 Chemo collateral effects APREPITANT 13/05/ /04/ /12/ /12/2014 NA 13/12/2014 For 86 molecules out of 107 analyzed protection expires in EU last

31 SPC manufacturing waiver Where are we? EU-Canada Trade Agreement (CETA) (Sept 2014) Introduces patent extension in Canada Allows export waiver (Canada introduced it) EP Resolutions call for SPC manufacturing waiver to stimulate competitiveness of EU industry on re-industrialising Europe (Jan 2014 Butikofer) on IPR protection in non-eu countries (June Mosca) on Single Market Strategy (May 2016 Comi) on Access to Medicines (Feb 2017 Cabezon Ruiz) Commission Single Market Strategy - 28 Oct Proposes SPC manufacturing waiver Publication of Charles River Associate Study 5 Oct additional direct jobs 9.5 billion net sales for EU pharma industry 3.1 billion savings to EU pharma spending Commission Public Consultation 12 Oct 2017/4 Jan 2018

32 The EU needs an SPC manufacturing waiver Europe needs to increase competition and supply of medicines. Europe needs thousands of Jobs & Economic Growth. High skill pharmaceutical R&D and manufacturing should be back into the EU. Need for rapid introduction of an SPC Manufacturing Waiver!

33 Thank you

SPC Manufacturing Waiver Note

SPC Manufacturing Waiver Note What is an SPC? In the EU, a Supplementary Protection Certificate (SPC) extends the protection of patented medicines by up to 5 years to compensate the time lost in obtaining