Experts Suggest Trade and Patent Changes Could Increase Healthcare Cost by $100 Billion

On Sept. 17, 2018, CPhI Worldwide released the second part of its annual report, which evaluates the effects of regulatory divergence, trade agreements, and intellectual property rights (IPRs) over the next five years.

In the second half of the report, two annual report experts, Dilip Shah, CEO of Vision Consulting Group, and Bikash Chatterjee, president and chief science officer at Pharmatech Associates, review the impact of IPRs, trade agreements, and regulatory divergence, suggesting the implications of both could have profound impacts globally.

In his paper on IPRs and trade agreements, Shah argues that the global trend toward patent term restoration and extension will result in patients needing to wait an extra 5–10 years to access generic versions of medicines. In many cases, Regional Comprehensive Economic Partnership (RCEP) texts seek to redefine the protection period to 20 years from the date of marketing approval.

“For example, ‘patent linkage’ under Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) will require [generic-drug companies] to gain consent from patent holders prior to use of data in [generic-drug] marketing approval. The Comprehensive Economic and Trade Agreement between the European Union (EU) and Canada has similar patent restoration as does [the] EU-Japan economic partnership agreement,” commented Shah.

However, Shah believes this may result in longer term consequences for the industry with consumers and governments forcing a fundamental reform of how medicines are reimbursed. Over the course of the next five years, Shah predicts that healthcare costs could potentially rise globally by as much as $100 billion, according to an estimate based on savings from generics in the United States reported by Association for Accessible Medicines (AAM).The implications for the patented pharma industry is that it is likely to come under sustained pressure in the medium term (hence 5­­–10 years) to reduce prices.

In Chatterjee’s paper on regulatory philosophy divergence and innovation convergence in the next decade, he predicts China’s rate of advancement is still accelerating and that we can quickly expect full harmonization with ICH standards. The next result will be that China’s overall standards will improve quickly and poor-quality manufacturers will drop out of the market in the next two to three years.

“Our annual report experts show China is now making great strides in harmonizing with international standards, so it will be interesting to see over the next few years if its reputation in our annual report league tables continues to improve,” said CPhI Brand Director Europe, Orhan Caglayan in a company press release.“However, the effects of patent extensions, whilst clearly beneficial for big pharma, may mean there are a number of late entering generics companies. But what is most exciting is the impact big data could have on bringing process improvements to market as well as in drug discovery.”

The CPhI 2018 Annual Report, which will include more than 10 expert contributions and the CPhI manufacturing and bio leagues tables, will be released at CPhI Worldwide, Oct. 9–11, 2018, in Madrid, Spain. 

CPhI and Pharmaceutical Technology are UBM (part of Informa plc) brands.

Source: CPhI Worldwide