Life Sciences Stakeholders Assess Accessing Emerging Markets

PARIS –Life sciences stakeholders at a recent conference explored matters associated with market access in the BRICS (Brazil, Russia, India, China, South Africa) and in the Middle East and North Africa regions.

On 8 October, the Cité Internationale Universitaire in Paris hosted the 5th Edition Emerging Market Access Conference. Presenters focused on countries’ specificities in the regions, notably on price methodologies, innovation and partnerships.

In a session titled, “Focus on Middle East & North Africa Region,” speakers provided studies associated with MENA countries, including an evaluation of pricing methodologies on profits. Levent Yildiz, head of market access, Middle East, Turkey & Africa at Boehringer Ingelheim, presented on “Price is one of the Key Drivers for Profits.” Looking at various pricing methodologies available in the MENA region, Yildiz recommended prices be set under the “Value-to-Customer Approach” for innovative products.

He explained that “International Price Referencing (IPR) is the current system that controls pharmaceutical medications related to healthcare expenditures and prices in the MENA region,” and that such system can be challenging due to management of complexities.

During launch, IPR influences the outward impact on drug prices in reference countries, the prices to the local markets, and the local market pricing impact in other markets within MENA. In other stages, local price revisions cause re-pricing (every two years or five years or at any time due to change in country of origin prices), and variation in production sites.

With regard to price calculation for the referencing country, he added the referencing country formally requires price submission of the reference countries, and therefore takes into account the “price in reference markets.”

According to Yildiz, MENA IPR requires managing 44 countries’ complexities associated with new submissions, re-pricing, production sites, alternatives in production and new pricing policies, which are linked to the certificate of country of origin and a range of differently calculated ex-factory prices.

As a result, Yildiz recommends launching sequences be at the global and MENA levels, so that the outward impact in price changes in reference countries is monitored and calculated ex-post, price in the MENA region is approved earlier than some of those in reference countries, and the price in the country of origin is stable.

With respect to intellectual property policies associated to IPR, he told Intellectual Property Watch: “IPR has helped improve patient access to better quality treatment by making medicines affordable for all, and [regulatory] intervention has ensured that even middle and local income groups have access to health facilities for all conditions, while maintaining the financial sustainability of public health systems.”

“However,” he said, “a variety of reference countries which are not in the same scale of economy with the key MENA countries have been recently included and it leads [to] dramatic and continuous price erosion in the MENA region. In addition, lack of well-established IP regulations hinders pharmaceutical companies to operate efficiently in the region.”

Separately, a session entitled, “Capturing the Brazilian Pharma Opportunity,” on Brazilian pharmaceutical market access, speakers pointed out opportunities in the growth of the Brazilian pharmaceutical sector. This included assessing pharma sector growth opportunities taking into account the role of municipalities, new middle classes, and supportive regulatory environment.

One speaker was Catherine David, founder of Biotika Biotecnologia, a French-Brazilian firm importing biotechnology products and equipment and distributing them to professionals and institutions in the field of scientific research that comply with the Agência Nacional de Vigilância Sanitária (ANVISA) regulatory framework. David said that IP management is not an issue in partnership agreements as rules are flexible. By contrast, she highlighted that regulatory compliance requirements imposed by ANVISA are similar to the European Medicines Agency (EMA) and the US Food and Drug Administration (FDA) requirements and therefore challenging for local manufacturers.

With respect to qualified biotech workers, she declared that “there is a huge lack of Brazilian biotech workforce, therefore making it difficult for biotech to really emerge as an industry in Brazil.”

David said that universities are graduating purely academic scientists rather than biotech engineers who know how to deploy technologies. Additionally, she pointed out that the national biotech industry mostly relies on imported industrial equipment.

She said she foresees foreign geographic mobility to enable training, as well the possibility of hiring trained professionals in the food and beverage industry to transfer knowledge to the pharma sector.

On the absence of national biotech instruments, she recommended foreign investors establish partnerships with the Brazilian machinery industry in the supply chain, and that domestic firms collaborate with foreign firms to acquire knowledge.

And with respect to biosimilars, she said it is one of the biggest opportunities as elsewhere. Yet, although legitimate, the high-standard ANVISA regulatory framework requires significant investment and lead-time to complete all necessary prerequisites to market biotech products.

In the same session, Gustavo Morais, partner at Dannemann Siemsen Advogados, talked about productive development partnerships (PDPs).

A PDP is a form of collaborative innovation model between the Brazilian government, a public laboratory and a private company. In this model, there is a transfer of technology where a public laboratory, in five to 10 years, acquires technology from a private company to exclusively provide drugs or medical devices to the Ministry of Health under compliance with the Brazilian Unified Health System (SUS).  As a result, “the Ministry of Health purchases and grants exclusivity to the public laboratory” acquiring the technology, said Morais. PDPs in reality encourage local manufacturing.

Rules for a PDP framework are flexible, but can follow certain practices.  For instance, with regard to product prices, Morais said that PDP partners set the prices ex-ante (prior to signing a partnership agreement). In addition, according to practice, product prices are often subject to a 5 percent reduction per year.

Morais also referred to the Ministry of Health Public Consultation No.8 of 13 August 2014 that proposed changes to the PDP framework, in particular concerning transparency (Art 37), patent disclosure requirements (Art 15, III), required guarantees from private partners (Art 65) and market division among existing PDPs (Art 17, VI).

Indian pharmaceutical market access was addressed in a session entitled, “Roadmapping the Future of the Indian Pharma Market.” A representative from Dr. Reddy’s Laboratories illustrated the relevance of the Indian manufacturing capacity.

Deepak Sapra, vice president for Global Generics Business Development at Dr. Reddy’s Laboratories, presented on the “Contribution of Indian Pharma to the World Market.”

Sapra highlighted the past and current Indian pharmaceutical industry contribution to APIs (active pharmaceutical ingredients), generics and biosimilars “across a variety of dosage forms.” He told Intellectual Property Watch that this contribution has “impact[ed] most countries in the world,” and explained that the future role of the India pharma contribution “will be on enabling accessibility and affordability globally.”

This will be driven not just by reverse engineering and economies of scale, but also by an ever increasing degree of innovation,” he said. “This will also lead to the development, manufacturing and marketing of patented new products, which will have a meaningful India component to it.”

Sapra also showed Indian export data figures positioning the Indian pharma sector as a global player, specifically in relation to the US and EU markets, emerging economies and Africa. He declared that exports “constitute about 50 percent of Indian pharma`s turnover, a number that is increasing steadily.”

According to his presentation, in the US, the number of India-based API and formulation approvals are the highest after the domestic ones.  Under the US healthcare system, he said, 40 percent of the prescribed generic drugs (which constitute 80 percent of the total volume in the US) are from India. According to him, about a third of all pills trace their origins to India.

Sapra sees the world as the target market for Indian pharmaceutical companies, and not just India. He pointed out that “60% of the world`s vaccines are manufactured in India, representing between 60-80 percent of the annual United Nations vaccine requirements.”

For the future, Sapra foresees increased investment in R&D, improved infrastructure and higher innovation threshold “as being characteristic of top Indian firms, driven by two major factors: strengthening of their own capabilities, [and] collaborations with foreign firms.”

As to challenges to be addressed, he mentioned the perception of IP rights, quality and regulatory concerns. He told Intellectual Property Watch: “India has moved forward very significantly over the past decade towards addressing those issues, and this journey needs to be viewed as work in progress, rather than as a point on an absolute scale.”