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Trade and patent changes could increase healthcare costs by $100bn, CPHI annual report warns


Patients may need to wait an extra five or 10 years to access generic medicines, according to the latest CPhI annual report.

The report evaluates the effects of regulatory divergence, trade agreements and IP rights over the next five years and includes expert comments from Dilip Shah, CEO of Vision Consulting Group, and Bikash Chatterjee, president and chief science officer at Pharmatech Associates.

In the report, Shah argues that patients will need to wait longer to access generic medicines due to the global trend towards patent term restoration and extension. Shah gives the example that Regional Comprehensive Economic Partnership (RCEP) texts are looking to redefine the period of protection for a patent holder up 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 company] to gain consent from patent holder prior to use of data in (generic) marketing approval. CETA between the EU and Canada has similar patent restoration as does EU-Japan economic partnership agreement,” Shah said.

This could result in longer term consequences for the industry, Shah states, forcing consumers and governments to fundamentally reform how medicines are reimbursed.  More so, Shah forecasts that healthcare costs could potentially rise globally by as much as $100 billion over the next five years. From this, it may be that the patented pharma industry will come under sustained pressure over the next decade to reduce prices.

The report also includes a paper on regulatory philosophy divergence and innovation convergence in the next decade’ by Bikash Chatterjee, who suggests that China’s rate of advancement is still accelerating and that we can very quickly expect full harmonisation with ICH standards.

This will result in China’s overall standards improving quickly, according to Chatterjee, and poor quality manufacturers dropping out of the market in the next two to three years.

Chaterjee also foresees the convergence of technology and innovation acting in parallel to the ways that regulators evaluate products.

“We have seen ground-breaking drug therapies and diagnostics approved in the last five years that position regulatory bodies to embrace these new innovations. Whether risk is managed via enhanced control and oversight, such as with the EUs GDPR legislation, or is a by-product of intelligently gathered real-world data, as provided under the US’s 21st Century Cures Act, the regulatory evaluation in each framework required to evaluate these new technologies will be grounded in today’s scientific tools and analytic techniques. Technology is playing an increasingly large role in improving rates of attrition. Over the next five years, big data will catalyse drug discovery with R&D leading to quicker advancement of more targeted therapies” Chatterjee said.

CPhI brand director Europe, Orhan Caglayan added: “CPhI Worldwide, where 45,000 executives combine their knowledge, is widely seen as a bellwether of industry trends and analysis. Our Annual Report experts show China is now making great strides in harmonising 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. 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.”



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