Public Hearings on the Medicines and Related Substances Amendment Bill [B44 – 2008] Presentation to the Portfolio Committee on Health Cape Town 6th August 2008

AGENDA NAPM - Who we are NAPM Position on Proposed restructuring NAPM Concerns: IP Two Tier Registration Process Expediting the registration of generics Transition period/phase 4. Conclusion 5. Way forward 6. Q & A

1. NAPM – Who we are Vision Mission The Association aims to champion affordable healthcare by promoting generics Mission Promote the Use of Generics Promote the development of the  South African  Pharmaceutical Industry

NAPM Membership Abex Pharmaceutica Arrow Pharma SA Austell Be-Tabs Biovac Bodene Columbia Dr Reddy’s Laboratories Enaleni/Cipla-Medpro Ferring Medreich SA Merck Generics / Mylan SA Omnimed Pharma Dynamics Pharmafrica Ranbaxy Sandoz Sekpharma Thebe Medicare

2. NAPM Position Restructuring of the RA - supported by industry Why??

Mandate of the Regulatory Authority In line with Medicines Act: Safety Quality Efficacy Issues... Public interest → constitution / government policies √ Pricing → PC - well-established, up & running √ Intellectual Property → Patent Act: ~ conducive to emerging economy √ ~ Support public health issues √

Functioning and processes of SAHPRA Should be: Transparent Independent Accountable Fair Consistent How ?? Role of MoH → Policy setting, commitment = important Scientific process → international standards / best practice = safety, quality & efficacy Conflict of interest → important for good governance - legislate

Role of the Regulatory Authority What ?? Public → guarantee safety, quality & efficacy of all medicines Industry → guarantee certainty in terms of registration timelines/processes Government → support access to medicines ~ timely availability ~ fast track registration ~ National Drug policy - generic medicines - mandatory generic substitution ~ educate patients/health professionals

What is an Effective & Efficient RA ? Is defined by: Scientific Principles Safety Quality Efficacy Timely registration of medicines Timely availability of medicines Well resourced Open 2-way communication Transparent decision making Independence

3. NAPM Concerns 2-stage registration process Intellectual Property Expediting the registration of generics Transition Phase / Period

2-Tier Registration Process Inefficient and Costly An expensive scientific process could result at the end a completely wasted exercise Safety, Quality and Efficacy does translate into public interest Defies principles of transparency Will create uncertainty for industry Complicates registration process - mixes scientific evaluation with broader issues covered elsewhere in legislation Pricing within the PEEU IP covered in the Patent Act Industrial imperatives covered in Industrial Policy within DTi

Intellectual Property - Introduction Access to affordable healthcare is a worldwide challenge Generic medicines play a major role in facilitating access to affordable medicines Introduction & availability is dependent and influenced by the patent term of the innovator, whose abuse or misuse can present a barrier to entry MTT (no generic representation on task team) recommended: “It will be the responsibility of the industry applying for registration of its products to certify that it does not infringe IPR of the country.” “Where the RA receives an application that contains confidential supporting information of an innovative product, the authority has the obligation to keep that information confidential, not to use that information to grant another license.”

Patent System in SA Current Patent Act Progressive TRIPS compliant Protects public health - Supportive of DOHA declaration Balance between innovation and access Current Patent Filing System Patents not examined or evaluated – granted as applied for Open to abusive ever-greening practices Generic companies respect valid patents, provided public benefits at the end by full disclosure & ability to freely use invention once the patent expires (wrt marketing not reg).

Intellectual Property and RA Affidavit of patent non-infringement contravention of section 69A of the Patents Act ~ allowed to develop, research but not make available for sale prior to patent expiry ~ How will the RA deal with non-patent infringing products introduced prior to patent expiry? This will delay introduction of a generic with huge cost implications for the country. question of the validity of patents and/or patent infringement is the sole preserve of the Commissioner of Patents sensitive to abusive ever-greening practices Patent Term Extensions Of no benefit to SA since R&D minimal to none & focus not on diseases of the poor Clinical trials done out of convenience rather than investment need Data Exclusivity Not a requirement of TRIPS

NAPM Position on IP and RA Regulatory delays affect both generics and originator medicines & will be addressed by restructuring of RA IP = complex ~ will complicate registration process ~ will divert much needed resources away from core function of RA ~ will delay registration and entry of generic medicines Generics industry unequivocally supports IPR for as long as the patent is in place and is valid but must allow immediate competition once patent expires hence IPR inclusion is unnecessary - RA cannot be held liable for “patent infringement” when their role is to assess safety, quality and efficacy RA must stick to Scientific Principles - Safety, Efficacy and Quality

Expediting the registration of generics…. National Drug Policy Why ?? promotes access to medicines increases competition How ?? Ensure timely availability of generics Provide for fast track registration with strict timelines Create a dedicated Office for Generic Medicines in the Authority Support National Drug policy ~ encourage use of generic medicines → mandatory generic substitution Educate patients/health professionals

Generic Lifecycle E X1 X2 R 78.00 R 65.00 R 52.00 R 39.00 R 26.00 SAVINGS D B A C D C Y Further generic entry reduces price of generics and originator drugs A reduction of up to 90% for the 250mg Ciprofloxacin Originator price reduced as the effect of genericisation began to take effect.

Volume split between generics and originators (S3 –S7) Ratio progression in volume terms bet originator & generic which is within a range of 35.3% up to 53.5 % evidences the significant volume growth for generics compared to that of originator & the relative pedestrian value growth for generics

Value split between generics and originators (S3 – S7) Ethical = originator MAT is the Moving Average Total from December of one year to December of the next year TRD is the Trend in Percentage Rand Ratio progression in value terms between originators & generics which is within a range of 22, 6% to 25% evidences the reasonably static growth of generic uptake in value terms.

Transition Phase from MCC to SAHPRA Proposed changes = wide reaching - could lead to further registration delays if it is not managed appropriately Management of transition phase/period = vital Existing arrangements and commitments must be honoured Registration queue is maintained Pending registrations are completed Consider phased approach Set Time-lines for implementation Adequate resources should be available and vacancies should be filled

4. Conclusion What needs to be done to facilitate restructuring process: Bill must be clear Bill must contain more detail Non-core functions to be removed: ~ 2-step process must be removed ~ Intellectual Property (IP) Must enable necessary regulations that give effect and support process

5. Way forward Finalise Amendment Bill Enact necessary regulations Direction on transition process

6. Q & A Thank you….