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Finnish Pharma Association Points Finger at P&R Body Over IP Rights
8 May 08
Finland's Intellectual Property laws are once again in the spotlight as the Pharmaceuticals Pricing Board (PBB) has made a controversial reimbursement decision on two antipsychotic drugs.
Global Insight Perspective | | Significance | Following a PBB's decision to adopt temporary reimbursement status on two antipsychotic drugs, the industry association argues that this is against patient's best interest and the "generic substitution principles encouraging innovation." | Implications | One on-patent drug was dropped from the reimbursement list as a cheaper generic version was introduced onto the market, while the second drug will be reassessed later this year as market conditions may have changed by then. The decision brings into the spotlight Finland's easily circumvented IP laws. | Outlook | Regardless of whether the decision was necessary on economic grounds, the PBB did not shy away from a controversial reimbursement decision. While Europe has only put limited pressure onto Finland to clean up its act on IP protection, manufacturers may decide that the return on investment in the country is not worth it, which could limit the country's access to innovative medicines. |
Pharma Industry Finland (PIF) is naming and shaming the country's Pharmaceuticals Pricing Board (PPB) over its reimbursement decision on two patented antipsychotic drugs. Although the PIF does not name the two medicines, they are believed to be Eli Lilly's (U.S.) Zyprexa (olanzapine) and AstraZeneca's (U.K.) Seroquel (quetiapine). PIF emphasises that the decision has resulted in Seroquel not being reimbursed anymore, despite having a valid patent, because a cheaper generic version has entered the market, while the PPB is seemingly banking on a similar development to occur for Zyprexa. PIF argues that the PPB's decision is against patients' interests and undermines the principle of reward for innovation in the country. PIF calls for a change in the Health Insurance Act so that a medicine cannot see its reimbursement status revised until it falls off-patent. The PPB's controversial move stems from Finland's weaker Intellectual Property (IP) laws compared to its European counterparts. IP protection for pharmaceuticals is relatively new in the country, since prior to 1 January 1995 pharmaceuticals could not apply for a patent in Finland. At the moment, the majority of patent-protected medicinal products in the country only hold an analogous-process patent, which can be legally circumvented by the generic firm using a production method that is different from the original method. This allows copycat versions of drugs to enter the market while the original medicine is still patent-protected. Outlook and Implications This is not the first time that the PPB has made a ruthless decision when it comes to reimbursement. In 2006, the body set a price limit for generic medicines at 40% under the price of the original product and decided that original medicines be removed from the reimbursement list if their manufacturers refused to align their price on the generic price. Interestingly, this time round, its decision could be going against the 2005 Medicine Act, which exempted innovative drugs from the generic-substitution regime if they were protected in Finland by an analogous-process patent and by a product patent in at least five European Economic Area (E.E.A) countries. This of course raises the question of IP protection in the country and incentives for innovation. Although things have gotten better, there is still some way to go before the country is up to shape with its European counterparts. This will impede R&D in the country and could prompt foreign manufacturers not to market their drugs in Finland if the return on investment is not lucrative enough. One look at Finland's expenditure on drugs explains why the PPB targeted Zyprexa and Seroquel. Central Nervous System (CNS) medicines have traditionally topped the spending league tables in the country, with 2006 spending amounting to 334 million euro (US$516.5 million). That year, CNS drugs accounted for 19.2% of the country's total medicine bill. In 2007, three antipsychotic drugs were among Finland's top 10 best-selling medicines. Zyprexa, Seroquel and Johnson & Johnson's (U.S.) Risperdal (risperidone) ranked respectively as first, third, and fifth bestsellers, with combined sales of 75.9 million euro. Seroquel was dropped from the reimbursement list as its wholesale price was 40% higher than the generic version produced by domestic firm Orion Pharma (see United Kingdom – Finland: 31 December 2007: Early Court Ruling in Favour of Orion in AstraZeneca's Lawsuit on Generic Seroquel, Casodex). Whether the PPB's decision holds under scrutiny is another matter. Indeed, in 2007, sales of reimbursable medicines grew by 3.7% year-on-year (y/y) to 1,080 million euro, well below the market average of 6.2% y/y and the governmental targets of 5%. According to PIF, sales of reimbursable medicines grew by 2.2% y/y in 2006 and 3.8% y/y in 2005. As a percentage of GDP, Finland's health expenditure is middle-ranking alongside other (Western and Eastern) European countries and below the OECD average with total health expenditure as a share of GDP checking in at 5.9% in 2005. Despite relatively low healthcare spending, further cost-containment measures are on the cards in the country (see Finland: 26 February 2008: Finland Considers Generic Reference Price Scheme).
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