Time to pop the bitter pill patent
Malaysia needs to prescribe new rules and practices to cure the ecosystem for generic drugs, say local industry players. It will help bring down healthcare costs.
THE Government will source more generic drugs to cut drug prices – the Health Ministry’s announcement in July was godsend to many, especially those with existing medical conditions and the aged.
However, this is easier said than done according to local pharmaceutical companies.
When it comes to making drugs affordable to the nation, they say the cards are often stacked against them. From being hauled to court to trudging through red tape for drug registration, the going is getting tougher.
A major issue is the patent monopoly that contributes to the high drug prices in the country.
For one, big pharmaceutical companies usually file more patents on the formulation when a drug molecule patent is about to expire, says Universiti Sains Malaysia School of Pharmaceutical Sciences professor Dr Yuen Kah Hay.
Some of the patents filed, such as the method to stabilise a drug in a tablet, are not even valid, alleges Dr Yuen, who has been consulting and collaborating with the industry for 26 years.
But originator companies have their own experts to cover all legal bases, he adds.
“I am stuck because some methods we usually use to formulate generic formulations have been patented even though the knowlege is already in public domain.
“If we use something similar, the originator company will claim we have infringed the patent,” says Dr Yuen, who is leading a generic drug development team in a local pharmaceutical company.
He cites cases of generic companies in the United States and Europe which had taken the risk of using the same patented public knowledge, only to be dragged to court by the innovator companies.
“But the generic companies tend to win the cases because they were able to prove that the knowledge was already in the public domain and hence, the patenting was not valid,” he says.
Local generic companies, however, are usually not able to challenge the patent claims like their counterparts in Europe and the US, says Dr Yuen, as Malaysian companies are smaller and do not have the resources to challenge big multinational companies (MNCs) in court.
He shares about how the company he provided consultation to was dragged to court last year on the charges of infringing a drug patent.
It was ordered to temporarily stop the sales of the generic version of the alendronate drug which treats brittle bones, he says.
The company managed to invalidate the patent but it lost a lot of money despite being awarded damages, he adds: “We spent almost RM1.5mil to fight the case but was awarded damages that covered only about half of that.”
According to Dr Yuen, the company was taken to court for labelling the same dosage regimen – “...once a week...” – as the MNC’s original product, even though the dosage was already published before the MNC patented it. He notes that the MNC had lost their case over the dosage patent in other countries too.
Another method used by MNCs to kill competition is by launching their own generic version of their original drug, says Dr Yuen. This normally occurs when the patent is about to expire.
In June, The Star highlighted a document alleging that a drug-supply monopoly by tendering agents had led to high drug prices in the country. The report linked the monopoly to politicians, high-ranking officials and international pharmaceutical companies. This had led to a call for the Government to initiate a bulk purchase and price control on the country’s drug supplies.
In 2016, Health Ministry figures showed that the ratio of generic medicine and original drugs dispensed in the country was already 60%:40%. Local companies now produce half of the generic drugs in the market, up from 30% in 2016.
No free cures
Ironically, Pharmaceutical companies’s Patient Access Schemes (PASc) – also known as Patent Assistance Programmes (PAP) – which offer cash subsidies and medicines at reduced prices or for free are also to be blamed for keeping drug prices high, says Third World Network legal researcher Karina Yong.
Although these schemes can make medicines available to those who cannot otherwise afford them, they do not deal with the exorbitant costs of new prescription medicines to treat diseases such as cancer, says Yong. “In fact, there is research which raises concerns that PASc/ PAP prevent these high prices from coming down.”
As she points out, there have been instances when such programmes are introduced just as the drug patent is about to expire.
This will “lock in” patients, she says, highlighting a special advisory
It is better to leave pricing to the market and encourage competition. Leonard
bulletin on PAP by the Office of Inspector-General of the US Department of Health and Human Services which pointed out that these programmes can have the practical effect of “locking beneficiaries into the manufacturer’s product, even if there are other equally effective, less costly alternatives. This is done through “steering beneficiaries to particular drugs, providing a financial advantage over competing drugs and reducing beneficiaries-incentives to locate and use less expensive, equally effective drugs.”
The PASc, which essentially supplies medication for patients of cancer and rare diseases to hospitals for free, is currently being reviewed. Meanwhile, the Health Ministry’s pharmacy practice and development division has consulted the National Audit Department to review hospitals’ medication pro- curement practices, particularly on hospital staff accepting free gifts and bonuses in these deals.
Unfair competition
Local companies are also disadvantaged by unfair laws says CCM Duopharma Biotech Berhad CEO Leonard Ariff Abdul Shatar.
Local companies are barred by law to produce generic drugs or biosimilars (which involves genetic manipulation of cells of microorganisms in their production) before a patent expires. Importers of generics from other countries, however, are not subjected to this ruling, putting local generic/biosimilar players at a disadvantage, he says.
“As patents seem to expire overseas earlier than Malaysia, a generic company based overseas, and which has already commercialised the generic product in its home country, is able to provide validation batch data earlier and launch in Malaysia the day after patent expiry,” says Leonard.
Local players lose out as time is needed to manufacture commercial batches, which can be anything between three to six months for “commercial” raw material purchases and manufacturing slots, he says.
To complete registration of a generic product, the National Pharmaceutical Regulatory Agency requires three commercial validation batches for it to look at the safety, efficacy and quality of the products before they are released in the market but the law does not allow local generic and biosimilars companies to start producing commercial batches until the patent expires, he says.
Although there are some legal exemptions known as “Bolar provisions” to allow for the commercial manufacturing of generic versions prior to patent expiry, these provi- sions are untested judicially in Malaysia, he adds.
Meanwhile, Malaysian drug manufacturers also face unfair competition locally and regionally due to Malaysia’s fair and open policy for drugs coming into the country, says Dr Yuen.
The company he collaborates with exports to other countries too, but some neighbouring countries are not as open, he says.
For example, the Thai authorities requires bioequivalence studies be conducted using Thai subjects although they did not specify in black and white, while Malaysia does not impose such a requirement on them when their products enter Malaysia, while Indonesia requires a joint-venture with a partner there, he says. (see sidebar)
“All these are trade barriers. The Asean harmonisation is just talk. There is hardly any harmonisation. We are fair to other countries but they are not fair to us,” he laments.
Another challenge is that the product registration term which lasts for only a limited number of years and has to be renewed upon expiry, says Dr Yuen.
In Vietnam, the company he represents could not sell some of its product for more than six months after the expiry date. He claims the renewal was also deliberately delayed, which resulted in them losing out to competitors. “Doing business in other countries is getting harder because of many more regulatory hurdles,” he says. Unfortunately, the Malaysian market is too small.
Even registration or obtaining market authorisation of drug products poses many challenges, he adds.
One has to file a dossier and it takes one to three years to get approved – each product has to be registered separately and companies have to pay for each product
registration.
According to Dr Yuen, the registration cost of generic drugs in some neighbouring countries are also expensive: in Malaysia, the cost of registering one generic drug is about RM2,200 but Singapore charges S$4,400 (RM13,334), Thailand about US$4,000 (RM16,533) and the Philippines US$1,500 (RM6,200).
Finding solutions
The National Pharmaceutical Regulatory Agency, the judiciary and the Intellectual Property Corporation of Malaysia (MyIPO) need to smoothen the introduction of local generics into the market, urges Leonard, especially by reviewing the patenting process in the country.
Proposing for the Health Ministry to sit with the Domestic Trade and Consumer Affairs Ministry to look at the existing patents’ registration process and see what can be done to facilitate it, he alleges that MyIPO’s lack of expertise in patent grants for one, has led to wide-ranging patents being approved in Malaysia compared with those overseas.
Recently, The Star reported that the Third World Network has urged the Government to look into removing patent barriers that contribute to high drug prices in the country. Unnecessary patent monopoly and additional patents that extend monopolies beyond 20 years have pushed up the cost of some crucial medications, said its programmes director Chee Yoke Ling.
On keeping drug prices affordable, Leonard feels price control will not be effective as it is difficult to manage some 20,000 drugs in Malaysia.
Moreover, if it is not conducive for companies to recover their cost of investments, they may decide not to introduce the drugs to the country and this would be a loss to patients, he says. “My view is, it is better to leave pricing to the market and encourage competition.”
Leonard believes useful lessons can be drawn from India – with its growing generic drug industry – which has a Chemicals and Pharmaceuticals Ministry, responsible for identifying the issues impacting the country’s pharmaceutical industry.
It has identified patents as a main issue, says Leonard.
“For many years, India fought against recognising the process methods for patenting. They only recognise molecular patents. They are strict in defining patents,” he says, stressing that Malaysia should seriously look into these criteria.
Our local pharmaceutical industry can help make medicines more affordable to our people. Dr Yuen