The manufacture of generic pharmaceuticals in the context of the EU and local legal scenario

Abstract

Development of innovative drugs is a lengthy, risky and expensive enterprise, and the research-based pharmaceutical industry depends uniquely on intellectual property rights, e.g. patents and regulatory data protection to support its investments in drug development activities. After the expiry of the intellectual property rights for the original drugs, generic drugs may-enter the market. A generic drug is a copy of the original drug, sold at a considerable price discount in comparison with the original drug. In the vast majority of cases, the entry on the market by generic drugs results in huge rapid losses of market shares on behalf of the originator. The EU pharmaceutical legislation has recently been revised through the 2001 Pharma Review, which the European Commission, European Parliament and European Council agreed a position, which was adopted by the Parliament in December 2003 and formally agreed by Council in March 2004. On the one hand, recent legislative and regulatory developments on both EU and national level have shifted the scales in favour of generic manufacturers in two distinct respects. Firstly patent rights are being restricted through the inclusion of a Bolar provision in the EU, allowing generic manufacturers to conduct pre-patent-development work in all EU states. Secondly state governments increasingly introduce systems favouring the use of generics, in order to cut down their healthcare budgets. These factors together make EU member states increasingly more attractive to generic drug companies, as it is ideal for the manufacture of drugs whose patent term is about to expire. At first sight, the manufacture of generic medicines would seem to be a clear-cut, straightforward business, however it is totally opposite. Generic pharmaceutical manufacturers are constantly in the middle of patent minefields, where the location, size and type of each mine are constantly changing. In this thesis, pharmaceutical legislation is scrutinized and compared to the earlier legislative situation. The intent is to elucidate as to what liberties, the pharmaceutical legislation affords to the generic world and for how long this situation will last. There is fear that if generic manufacturers are given the upper hand, this would contribute to making investments in pharmaceutical research and development even more hazardous from a risk return perspective.