1. iHEA 9th World Congress Sydney, July 8, 2013
Generic Competition in the United States and New Zealand Pharmaceutical Markets: A Comparative Analysis
Bander Balkhi, PharmD International Center for Pharmaceutical Economic and Policy Massachusetts College of Pharmacy & Health Sciences
iHEA 9th World Congress Sydney, July 8, 2013

2. Affordable Medicines Research Institute
Generic Competition in the United States and New Zealand Pharmaceutical Markets: A Comparative Analysis
Enrique Seoane-Vazquez, PhD International Center for Pharmaceutical Economic and Policy
Massachusetts College of Pharmacy & Health Sciences
Rosa Rodriguez-Monguio, PhD School of Public Health and Health Sciences, University of Massachusetts
Sheryl L. Szeinbach, PhD College of Pharmacy, Ohio State University
Bander Balkhi, PharmD
International Center for Pharmaceutical Economic and Policy Massachusetts College of Pharmacy & Health Sciences
Project Funded by
Affordable Medicines Research Institute

3. Outline Introduction Objectives Methods Results Discussion
Conclusions and Limitations

4. Role of Generic Medicines
Generic medicines play an important role in promoting innovation and ensuring affordability of and accessibility to healthcare treatments
Generics may enter the market after patent and market exclusivities expiration
Barriers to generic entry should be eliminated

5. Generic Utilization in Selected Countries (2008)
% Generic Volume
OECD Health Policy Studies, Pharmaceutical Pricing Policies in a Global Market, 2008

6. Pharmaceutical Management Agency (PHARMAC) and Generic Drugs
Decides which drugs are subsidized by the government
One of the most advanced pharmaceutical management systems
Generic drug policy is a critical element of PHARMAC activities
NZ had the lowest prices of patented & generic drugs of 9 developed countries
Source: PHARMAC 2012 Annual Review.

7. The Intellectual Property of Medicines in NZ and US
The US has established a intellectual property regulation that increases the length of patents and exclusivity
New Zealand applies the general patent system to pharmaceuticals
WTO and other multinational trade agreements set a global intellectual property regulation for pharmaceuticals

8. Differences in IP Regulation of Medicines in NZ and US
Same general regulatory patent life
20 years from patent filing
1 year of provisional patent / right of priority from filing in a foreign country
Up to 5 years in patent extension for medicines in the US
Exclusivity (i.e. data protection)
12 years for biologics in the US
3-5 years for new drugs in the US
5 years for new molecular entities in NZ

9. Outline Introduction Objectives Methods Results Discussion
Conclusions and Limitations

10. Objectives
To compare the intellectual property (IP) regulations of pharmaceuticals between the United States (US) and New Zealand (NZ)
To assess the impact of the IP regulations on generic competition in both countries

11. Outline Introduction Objectives Methods Results Discussion
Conclusions and Limitations

12. Sources of Data FDA Orange Book, 2007-2012
US Patent and Trade Mark Office
IMS Health Sales Data, US
The Intellectual Property Office of NZ
NZ Medicines and Medical Devices Safety Authority (Medsafe)
Data updated to Dec 31, 2012

13. Methods Descriptive statistics
Differences in generic competition and generic entry dates
t-test and chi-square test
Significance level set at 0.05

14. Outline Introduction Objectives Methods Results Discussion
Conclusions and Limitations

15. Sample
169 products in the top 125 by $ sales in NZ in the period
13 (7.7%) Not marketed in the US and excluded from analysis
156 (92.3%) products included in the analysis
138 (88.5%) Marketed in NZ and US
18 (11.5%) Biologics

16. Country of First Approval of Branded Products
First Approved in NZ
48 (32.7%)
First Approved in US
98 (66.7%)
Approved at the
Same Time
1 (0.7%)
N=147

17. Generic in Both Countries
Generic Competition
Generic in Both Countries
47 (30.1%)
Generic in US Only
25 (16.0%)
Generic in NZ Only 10 (6.4%)
No Generic
56 (35.9%)
Biologics
18 (11.5%)
N=156

18. Products with Generic Competition
Number of Products
n= 156
33.7%
p= 0.085

19. Time from Patent Expiration to First Generic Entry
Years from Patent Expiration
2.0 ± 2.4 yrs. US NZ
-1.1 ± 2.8 yrs.
p < 0.001

20. NZ Patent Expiration and Generic Entry
After Patent Expiration
42 (97.7%)
Before Patent
Expiration
1 (2.3%)
N=43

21. US Patent Expiration and Generic Entry
Same Day of Patent Expiration
16 (26.7%)
Before Patent
Expiration
24 (40.0%)
After Patent Expiration
20 (33.3%)
N=60

22. Outline Introduction Objectives Methods Results Discussion
Conclusions and Limitations

23. Generic Competition in NZ and the US
The US has more patent and exclusivity protection but faster generic entry
Generic entry prior to patent expiration in the US and after expiration in NZ

24. Generic Competition in NZ and the US
US is the largest market and NZ is one of the smaller markets
Price controls and tendering
Lack of incentives for disputing invalid patents in court in NZ

25. PHARMAC Role in Patent Disputes
Involvement in court patent disputes between pharmaceutical companies
Recent proactive stance
Researching when patents expiration
Considering challenging invalid patents
Dedicated funds to pursue these actions
Source: PHARMAC 2012 Annual Review.

26. Biosimilar Competition
Biologics share of pharmaceutical expenditures is growing
Biologics did not have a pathway for generic approval in the US in the period of the analysis (Patient Protection and Affordable Care Act 2010)
Biosimilars are available in NZ
filgrastim first biosimilar in NZ

27. Outline Introduction Objectives Methods Results Discussion
Conclusions and Limitations

28. Differences in Generic Competition
US had more stringent IP regulation of pharmaceuticals and longer patent and exclusivity monopoly periods
US had more generic competition
Generic entry typically occurred before patent expiration in the US
Patents listed by pharmaceutical companies are often invalid

29. Limitations of the Study
Relatively small sample of products
Difficult to generalize to the rest of products, specially biologics
Need for more research assessing how differences in market characteristics, reimbursement mechanisms and regulation affect generic competition

30. iHEA 9th World Congress Sydney, July 8, 2013
Generic Competition in the United States and New Zealand Pharmaceutical Markets: A Comparative Analysis
Bander Balkhi, PharmD
International Center for Pharmaceutical Economic and Policy Massachusetts College of Pharmacy & Health Sciences
iHEA 9th World Congress Sydney, July 8, 2013