Generic medicines also serve to keep prices low and make them more affordable for patients. Brand-name medicines are able to keep high costs due to patent protection; however, it is pertinent to note that a third of the price goes to cover the cost of advertising – which is ultimately borne by the consumer.
What is a medicinal product?
In Europe, medicinal products are deemed to be goods falling under the EU Commission, DG Enterprise and Industry, and EU Directive 2001/83 on medicines for human use defines a medicinal product as:
(a) any substance or combination of substances presented as having properties for treating or preventing disease in human beings; or
(b) any substance or combination of substances which may be used in or administered to human beings either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis
The European Medicines Agency (EMEA) was set up in 1994 to coordinate the scientific evaluation of the quality, safety and efficacy of medicinal products which undergo an authorization procedure, as well as to provide scientific advice. EMEA is also responsible for approving Centrally Authorized Medicinal Products.
The EU Commission strives to maintain the balance between liberalization of trade through the free movement of goods versus the regulation and control for reasons of public health. There is also the legal protection of the industry through intellectual property, namely patents and trademarks, which allow the pharmaceutical companies a time-frame within which the huge expenditure made throughout the research phases in launching a new product is recouped.
Licensing and Marketing Authorisations
Malta’s accession to the EU in 2004 entailed a legislative overhaul implementing the European Regulations and Directives pertaining to the pharmaceutical sector. The Malta Medicines Authority regulates the safety, quality and efficacy of medicines available on the Maltese market and is responsible for licensing, monitoring and conducting inspections. It is also responsible for ensuring compliance to EU legislation concerning medicinal products for human use.
The Medicines Act and the Medicines (Marketing Authorization) Regulations require that all medicinal products marketed in Malta have a Marketing Authorization (MA) or license granted by the Malta Medicines Authority or by the European Medicines Agency for Centrally Authorized Products. The three main procedures for the granting of a Marketing Authorization in the EU are: National Procedures, European Procedures (Mutual Recognition and Decentralized Procedures) and the Centralized Procedure. To ensure availability of medicines in Malta throughout the legal reform, Malta adopted Article 126(a) of EU Directive 2004/27 (amending Directive 2001/83).
This article was used to enable products authorized in other EU member states to be placed on the Maltese market, thereby enabling the gaps in availability of medicinal products during the period of legal reform to be filled. However this mechanism is not intended to replace the procedures as set out in the directive. Many innovative medicines are authorized through the centralized procedure, involving the submission of a single application to EMEA for a marketing authorisation that is valid simultaneously in all 27 EU member states. This does not mean that these medicines are automatically available on the local market.
The Pharmaceutical Sector Inquiry
The EU Commission, DG Competition, launched a Pharmaceutical Sector Inquiry in 2008 to investigate possible anti-competitive conditions in the pharmaceutical sector. The final report on this inquiry was published in July 2009 and found that it takes too long (an average of seven months from the expiry of patent brand-name drug) for generic medicines to reach the market and that fewer innovative medicines are reaching the market. Furthermore the inquiry outlined the need for a community patent and a specialized patent litigation system.
European Commissioner for Competition, Neelie Kroes, has stated that, “We must have more competition and less red tape in pharmaceuticals. The sector is too important to the health and finances of Europe’s citizens and governments to accept anything less than the best. The inquiry has told us what is wrong with the sector, and now it is time to act. When it comes to generic entry, every week and month of delay costs money to patients and taxpayers. We will not hesitate to apply the antitrust rules where such delays result from anticompetitive practices.”
The European pharmaceutical sector is worth an astounding €214 billion per year – 2 per cent of the EU’s GDP. Europe’s ageing population will only increase the financial constraints on public health budgets. At the same time many patents for the best selling medicines are due to expire in the next few years. This means that Europe will need to ensure that its patients have continued access to innovative, affordable and safe medicines without undue delay.
By Anthia Zammit LL.B Dip.N.P.
anthiazammit@gmail.com
The author is reading for a Doctor of Laws degree at the University of Malta, with an interest in Medical and Pharmaceutical Law. Her dissertation is about the legal regulation of medicines and the pharmaceutical industry.