On September 9, in Wuhan (China), on the sidelines of the The China International Forum on Fair Competition Policy, a meeting of the BRICS Working Group for the Research of Competition Issues in Pharmaceutical Markets was held. The meeting of the group, chaired by FAS of Russia and the State Administration for Market Regulation of China (SAMR), was the next stage of the international research project of the BRICS Competition Law and Policy Centre on comparative analysis of rules for introducing biotechnological drugs to the BRICS market, which was launched last year. The event was attended by representatives of antitrust authorities of the BRICS countries, heads of pharmaceutical companies from China and Russia, as well as experts from leading BRICS universities.
Alexey Ivanov, Director of the BRICS Competition Law and Policy Centre, and Xu Xinjian, Chief Inspector of Anti-Monopoly, State Administration for Market Regulation (SAMR), welcomed the participants and wished them productive work.
“We will have to discuss very challenging issues of increasing competition in the biologics market and bringing biosimilars jointly developed by the BRICS countries to this market. The Chinese approach to antitrust regulation shows what results can be achieved through the cooperative work of academics and authorities,”
Ivanov said.
Biologics as a class of therapeutic molecules have shown their efficacy in treating a number of chronic and life-threatening diseases in the fields of oncology, rheumatology, endocrinology, dermatology, etc. However, the process of developing biologics is complex and costly, which affects prices for consumers. The average cost of monoclonal antibody therapy ranges from $100,000 to $500,000 per year, and the price of individual biologics can reach $5 million per dose. The launch of generics - biosimilars - will help to increase the availability of such drugs for people in developing countries.
Samir Kulkarni, Professor, Institute of Chemical Technology, Mumbai, India, spoke on the prospects and specifics of the process of development and production of biosimilars in the BRICS countries. According to the professor's data, by 2030 more than 40 biologics will be removed from patent protection, and the projected volume of the biosimilars market by that year is estimated at more than $100 billion. The BRICS countries have an excellent chance to enter this market with their own developments. India, China and Russia have well-developed biopharmaceutical industries and already have experience in the production of biosimilars.
For example, after biosimilars entered the market, the average price of trastuzumab (used to treat breast cancer) decreased by 67%, teriparatide (used to treat osteoporosis) by 70%, the anticancer drug rituximab by 90%, etc.
“We need to harmonize regulations between BRICS countries, simplify regulatory requirements [for the development of biosimilars]. Single-window access to regulations within BRICS can play a significant role in ensuring competition and increasing the availability of biosimilars. Patent regimes can be harmonized and filing and litigation costs can be reduced as much as possible, especially for this category of drugs,”
said Samir Kulkarni.
Mrudula Bele, Associate Professor, MVP Samaj's College Of Pharmacy, India, spoke about opportunities to improve access to medicines under the TRIPS Agreement. Among the available mechanisms are compulsory licensing, introduction of parallel import regime, tightening of patentability requirements, limiting the duration of patents and remedies in case of patent infringement.
The professor separately emphasized that owners of patents for biologics disclose insufficient data in the patent application, which creates obstacles for entering the market of biosimilars - market participants simply lack the information necessary for production of biosimilars.
BRICS countries need to exchange experience in order to develop common rules for regulating the development of medicines and their biosimilars, believes Andrey Tsyganov, Deputy Head of the FAS of Russia.
“We need joint research, mutual registration of medicines, expertise, quality control and, of course, exchange of experience in matters of regulation and price control, as well as antimonopoly law enforcement.”
The Deputy Head of the FAS of Russia also told the working group participants about the tools for balancing the prices of some medicines in Russia and touched upon the problem of intellectual property (IP) rights in the pharmaceutical sector.
“It took more than 10 years to introduce special regulation that allowed us to issue compulsory licenses for the production of some important drugs without the approval of patent holders. This is an important part of our work and public policy,”
Tsyganov emphasized.
Liu Jian, Deputy Director-General, Anti-Monopoly Enforcement Department I, State Administration for Market Regulation (SAMR), explained how the Chinese regulator deals with drug pricing. He noted that SAMR issues guidelines governing the balance between competition and intellectual property issues when it comes to drug pricing. In addition, antitrust compliance plays a positive role in fair pricing in pharmaceutical markets.
Although only 23 biosimilars are currently registered in South Africa, their entry into the market has significantly - in some cases up to 60-70% - reduced the prices of important medicines, Melissa Naidoo, Economist at The Competition Commission of South Africa, said in a report.
“Price analysis has shown that when a biosimilar enters the market at a lower price, the cost of the original drug usually comes down too. And when a second biosimilar comes out, the price difference between it and the original can be as high as 70%. Thus, the entry of a biosimilar to the market gives a positive price effect,”
noted the speaker.
Mr. Tlabo Mabye, Principal Analyst, Competition Commission of South Africa, presented the case of Johnson & Johnson (J&J), which in 2023 slightly changed the formulation of its tuberculosis drug to extend its patent. In response, the regulator initiated an investigation against J&J for possible monopolistically high pricing. J&J then decided not to renew the patent in South Africa and 133 other low- and middle-income countries. The company also agreed to revise its prices to the South African government, reducing them by 45%. The case was dismissed. Such actions by the regulator can achieve a quick result, while antitrust proceedings can last 7-10 years, the South African representative emphasized.
Xie Fang, Deputy Director-General, Anti-Monopoly Enforcement Department II, SAMR, told the participants of the working group about SAMR's work on controlling economic concentration on pharmaceutical markets. He also noted that the agency pays great attention to fair pricing of pharmaceutical products and emphasized the need to strengthen cooperation on these issues within the BRICS framework.
Song Xiaoting, Professor, Shanghai International College of Intellectual Property, developed the theme of the correlation between intellectual rights and public interest. Intellectual rights by their nature are private rights, a kind of legal monopoly, their owner has a legitimate interest to use them for their intended purpose. However, in the case of drug patents, we are talking about national health care, i.e. already about public rights. In this situation, competition law mechanisms should be used to smooth the balance between intellectual property rights and competition and public health issues. Especially in a situation where the right holder abuses its exclusive rights and creates obstacles to consumer access to medical products.
Entry into the generic market is facilitated by the Bolar Provision, which allows generic and biosimilar drug manufacturers to develop generic drugs and perform all necessary research and preparatory work before patents on competitors' products expire. The application of this provision and its analogs simplifies the process of drug approval and bringing generic drugs to market immediately after patent expiration, said Ning Lizhi, Professor, Law School of Wuhan University; Director, Institute of Intellectual Property and Competition Law. In this way, the patent holder is deprived of the de facto opportunity to extend the patent term. In China, this practice is not yet widespread and the Bolar Provision mechanism remains insufficiently transparent for pharmaceutical manufacturers.
Local legislation needs to be reformed to balance the interests of manufacturers of original drugs and biosimilars, as well as to protect patients' rights, which should not be infringed upon by the right holder of the referent drug, Ning Lizhi is convinced.
Roman Ivanov, Vice Rector, Sirius University of Science and Technology, Russia, described mechanisms for overcoming barriers for biologics to enter the Russian market in his report. He noted that this year the Russian Ministry of Health decided to accept the results of Phase III clinical trials of biosimilars conducted abroad for approval of biosimilars in Russia. Prior to that, all BRICS producers of biosimilars had to conduct repeated Phase III clinical trials in Russia, which required more time and resources.
“I think that all clinical trials that are conducted in any BRICS country or in any ICH (International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use - ed.) country should be accepted by the regulatory authorities in our country and this will really speed up the market entry for local biosimilars,”
Ivanov said. He also advocated parallel conduct of the Phase I and Phase III clinical trials, conditional marketing approval based on analytical comparability and Phase I clinical trial results and Phase II in progress, and prevention of excessive patent protection for original drugs.
The overall goal of BRICS competition authorities is to provide greater flexibility and reduce regulatory burdens without compromising the quality, safety and efficacy of biosimilars, said Ujjwal Kumar, Associate Director & Deputy Head, CUTS International, India. He called attention to problems such as “patent thickets” that hinder the development of biosimilars and insufficient disclosure by originator manufacturers when filing a patent application.
“The original intent of a patent was for the innovator to disclose enough information so that it could be used for manufacturing after the patent expires. There is a requirement of industrial applicability when patents are granted, but then why are we saying that we don't have enough knowledge to develop such drugs?”
Vitor Ido, Professor of Commercial Law, University of São Paulo (USP), Brazil, addressed the controversial aspects of antitrust regulation of intellectual property (IP) rights in Brazil. In the mid-1990s, Brazil enacted an Industrial Property Law that allowed companies to extend pharmaceutical patents for up to 40 years. In 2021, Brazil's Supreme Court ruled that the automatic patent term extension mechanism was unconstitutional and criticized the practice of “evergreen” patenting.
“Today, the IP rights abuse is considered in Brazilian law as a form of anti-competitive practice, and the mechanism of compulsory licensing is provided as a remedy,”
noted the speaker. He also mentioned the case of the drug sofosbuvir, used in the treatment of hepatitis C. After the approval of the US pharmaceutical corporation Gilead's patent for sofosbuvir in January 2019, the average price of the drug rose from R$64 ($16) to R$986 ($240). A complaint was filed with CADE accusing Gilead of abusing the drug's patent rights, after which the company lowered prices.
“There was no problem with sofosbuvir in Egypt and Argentina because there the patent was not even granted there due to stricter patentability criteria. It is very clear in Brazil that there is a cause for a lot of concern with respect to patentability trends and biologicals. This concerns not only the broadening of scope, but also drafting terms that are increasingly blurry and difficult to read and do not really disclose the techniques,”
emphasized Vitor Ido.
The meeting concluded with a presentation by Ms. Rowan Abdalla, Economic Researcher in the Economic Concentrations Department, Egyptian Competition Authority , on the specifics of regulating biologics in Egypt. According to a study cited by Ms. Aziz, the savings from the use of biosimilars between 2023 and 2027 will amount to more than 18.9 billion Egyptian pounds (around $390 million).
“Treating diseases common in Egypt such as cancer, diabetes and cardiovascular diseases can be a significant financial burden for patients and the healthcare system overall. The promotion of biosimilars and price competition will lead to increased patient access to affordable and effective biologic drugs and may contribute to lowering their cost,”
stressed the representative of Egypt.
Currently, within the framework of the BRICS Working Group on the for the Research of Competition Issues in Pharmaceutical Markets, with the support of the BRICS Competition Law and Policy Centre, a corresponding study of competition issues in the biosimilars market is being conducted. As part of the research that brings together policy researchers and pharmaceutical experts from several developing countries, it is planned to summarize the experience of BRICS countries and prepare a report on the results.
