Journal of Generic Medicines: The Business Journal for the Generic Medicines Sector

This paper provides a summary of recent changes to the legal, regulatory and policy environment affecting generic pharmaceutical manufacturers operating in the Canadian market. It provides a top-line overview of the Canadian pharmaceutical market in terms of generic market share by dollar value and prescriptions filled, and growth in both of those key indicators. This paper describes changes brought into force in October 2006 to regulations of Canada's Patent Act that attempt to limit ‘evergreening’ tactics employed by brand-name drug manufacturers to delay market entry of competing generic products, changes to regulations of Canada's Food and Drugs Act that provide new brand-name pharmaceutical products with eight years of data exclusivity (plus six-month paediatric exclusivity) and the response of the Canadian Generic Pharmaceutical Association (CGPA) to these regulatory changes. This paper also outlines changes to pricing and reimbursement rules for generic pharmaceutical products that are being implemented in the two largest Canadian jurisdictions of Ontario and Québec.

There is little European evidence on how originator and generic medicines set prices in the off-patent market and on the factors that influence pricing strategies. The aim of this study was to examine pricing strategies of originator and generic medicines following patent expiry in Belgium. To this effect, the evolution of the public price of originator and generic medicines was investigated from July 2001 to December 2005. Regression and scenario analyses show that the Belgian off-patent market is a segmented market when it comes to pricing. Pricing strategies are influenced by regulatory aspects, such as successive reductions in reference prices and prescription status of medicines; by market incentives in the form of price competition between generic medicines and competition between originator and generic medicines; by medication class; and by market power of the manufacturer of the originator medicine. Therefore, there is no single pricing strategy that authorities or manufacturers can use to predict the pricing behaviour of originator and generic medicines following patent expiry and to foresee the development of the generic medicines market.

Due diligence is a necessary component of any transaction. One way or another — before the deal or during litigation involving the circumstances of the deal — a company involved in a transaction is going to have to do its due diligence. The objectives of due diligence are: (1) to identify risk to an appropriate level of detail in a due diligence report by understanding the assets of the target, issues relating to the target and how those issues may affect its ability to continue to operate its business and (2) to ensure informed drafting of the transaction documents so that they both shield the parties from liability and ensure the worth/value of a proposed transaction. Risk is identified by recognising hidden or unexpected liabilities and/or major regulatory obstacles to the acquisition. Intellectual property (IP) due diligence is a key component of technology-driven deals. Its purpose is to assess the scope, validity and enforceability of the target company's IP. A due diligence investigation involving generic medicines has specialised requirements. This paper will serve as a guide on how to make the most of IP due diligence in such deals.

In the last 20 or so years various kinds of exclusivity have been introduced in the US, which go beyond the basic patent protection. The most important of these is patent term restoration, but other new incentives introduced include the paediatric extension, exclusivity for drugs with limited patient populations (orphan drugs) and data exclusivity. Since 1988 over 500 products have benefited from patent term restoration and over 130 from the paediatric extension. Of the 40 best selling products in the US in 2006, 26 benefited from patent term restoration and 19 from the paediatric extension, with 29 products benefiting from one or both. The overall impact on these 29 was to increase average effective patent life from 9.2 to 12.8 years, an increase of over three and a half years. About 39 per cent of the top 40 sales of over US$100bn were contributed by patent extensions. It is estimated that patent extensions could account for about 20 per cent of total US pharmaceutical sales in 2006. Although patent term extensions are currently a sizeable contributor to the gross sales revenues of pharmaceutical companies, the evidence suggests that this contribution will fall significantly in the future, principally as a result of the decline in the number of new chemical entities receiving marketing authorisation. The evidence suggests that the US legislation has been more successful in incentivising the generic market, and that while research-based manufacturers have benefited from patent term extensions, these have not prevented the difficulties they now face which derive from more fundamental economic and technological challenges.

The aims of this paper were to identify and review the literature on pharmacists' views and practices on the use of generic medicines. Using appropriate keywords pertaining to the subject matter, an extensive literature search was undertaken using indexing services available in the authors' institution library. These electronic databases were searched for full-text papers written in the English language during the period from 1980 until September 2007. Based on this search, 13 studies were identified. The majority of studies are from the United States, with few from Europe and Asia. All retrieved studies, except one, used quantitative methodology. Most of the studies showed that pharmacists' views and behaviours towards generic medicine utilisation were affected by economic considerations, quality and bioequivalency of generic medications, drug therapeutic class, and other actors (the physicians, the patients, and public health officials). This review suggests that although in general pharmacists were positively inclined towards generic medication use, they have some considerations that determine to what extent they will support generic medicine use. These are economic, scientific, and policy-related considerations that are likely to remain matters for discussion in the future among pharmacists and their professional organisations.