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US President Signs Another Executive Order Implementing International Pricing Index Model

  • 15/09/2020
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On 13 September 2020, the US President signed another executive order (the New Order) implementing an international pricing index model (see, attachment). At the same time, he revoked an earlier such order signed at the end of July 2020 (see, Van Bael & Bellis Life Sciences News Alert of 28 July 2020).
The New Order is more a political manifesto than a set of technical rules. It once more bemoans the allegedly unfair price differences for many prescription medicines between the US and other developed nations and posits that US citizens are thus “subsidizing innovation and lower-cost drugs for the rest of the world”. Additionally, the New Order expresses concern about access to medicines in that “high drug prices in the United States also have serious economic and health consequences for patients in need of treatment”.
The New Order seeks to remedy these problems in similar fashion to what the July order tried to achieve and dictates that the price of qualifying medicines should not exceed that of the most-favoured nation price (MFNP) for these medicines. The MFNP is defined as the “lowest price, after adjusting for volume and differences in national gross domestic product, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organisation for Economic Co-operation and Development (OECD) that has a comparable per-capita gross domestic product.”
On that basis, the Secretary of Health and Human Services is directed to develop and test a payment model which implements the MFNP for two categories of medicines. Critics were quick to point out that the elaboration of a payment model does nothing more than signaling the start of a potentially lengthy administrative process. Still, developed nations are again at the receiving end of a strong message that prices for medicines in overseas markets that were developed in the US are likely to go up rather than down, regardless of their actual development costs.


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    • 21/09/2020
    • Articles

    Entry into Force of Second Agreement for Supply of COVID-19 Vaccine between European Commission and Sanofi-GSK

    As part of its European Vaccines Strategy adopted in June 2020 (see, Van Bael & Bellis Life Sciences News Alert of 18 June 2020), the European Commission (the Commission) announced on 18 September 2020 the entry into force of a second agreement providing for access to a potential vaccine against Covid-19 (see, attached press release). The Commission’s partner for the new agreement is Sanofi-GSK which has promised to sell up to 300 million doses of the new vaccine if the product materialises. The agreement would seem to emulate a similar deal with AstraZeneca in that the Commission secures the supply of vaccines for EU Member States and for a range of lower and middle income countries while financing part of the vaccine’s upfront development costs (see, Van Bael & Bellis Life Sciences News Alert of 31 August 2020). The vaccine now forms the subject of clinical trials and may become available in the second half of 2021 if it completes successfully its regulatory trajectory. Sanofi and GlaxoSmithKline are developing a recombinant vaccine against Covid-19 that builds on Sanofi’s S-protein Covid-19 antigen, based on recombinant DNA technology, and GSK’s adjuvant technology. The combined approach is hoped to enhance the immune response and facilitate the production of vaccines on a large scale.

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    • 10/09/2020
    • Articles

    Court of Justice of European Union Is Asked to Rule on Rebranding of Parallel Imported Generic Medicines as Branded Medicines

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    • 09/09/2020
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    French Competition Authority - Genentech, Novartis and Roche Fined EUR 444 million in Saga Involving Wet Age-Related Macular Degeneration

    The French Competition Authority (Autorité de la concurrence or AdC) imposed this morning a fine of EUR 444 million on Genentech, Novartis and Roche on account of the abuse of a collective dominant position in relation to the treatment of wet age-related macular degeneration (AMD) (see, attached French and English versions of press release as well as decision). The AdC thus took an unusual and audacious approach to tackle conduct which the Italian competition authority and courts, with the blessing of the Court of Justice of the European Union (CJEU), had penalised earlier under anti-collusion rules (see, Van Bael & Bellis Life Sciences News Alert of 24 January 2018). Genentech, a Roche subsidiary, developed two medicines from related active substances. The first, Avastin® (bevacizumab), was granted a marketing authorisation (MA) for oncological indications. The second, Lucentis® (ranibizumab), was developed later and was granted an MA specifically for the treatment of ophthalmological conditions such as macular degeneration and glaucoma. However, physicians gradually started to prescribe Avastin® for the treatment of eye conditions. Many health authorities permitted, and later encouraged, this “off-label” use, even after Lucentis® had received its own MA and obtained reimbursement for an ophthalmological indication. In Europe, Genentech licensed out commercialisation rights in Avastin® to Roche, while it granted similar rights in Lucentis® to Novartis. Lucentis® was priced many times higher than Avastin®. Collective dominant position According to the AdC, Genentech, Novartis and Roche had to be considered as a single entity (“une entité collective”) for purposes of applying the competition rules. AdC based its findings on the licensing agreements existing between the parties and the shareholdings between some of them. This is because Novartis holds a non-controlling 33,33% stake in Roche which, in turn, controls Genentech (Roche had 60% of Genentech’s shares until 2009 when it acquired all of that company’s shares) (see, chart at p. 5 of the press release and p. 43 of the decision). The finding of collective dominance by the AdC allowed it to dispense with the search for evidence of collusive conduct among the parties, a path which the Italian authorities had pursued. The three defendants were now regarded as a monolithic entity which the AdC found to be dominant on the French market for the treatment of AMD. The next step was for the AdC to demonstrate abuses of that dominant position by this entity. Abusive conduct The defendants were collectively found guilty of two sets of abusive conduct. First, Novartis mounted a communication campaign targeting ophthalmologists, including key opinion leaders, to explain that Avastin® should not be used for treating eye diseases at the expense of Lucentis®. According to the AdC, this campaign did not amount to a bona fide presentation of Avastin® in the interest of public health, but was rather a self-serving tactic discrediting Avastin® and stoking fears over its use in the ophthalmological field. AdC maintains that the campaign of Novartis was successful and reduced the off-label prescriptions of the product. Second, the three defendants were also found to have directed a series of misleading and “alarmist” messages at various public authorities, thus delaying a critical head-to-head trial comparing Avastin® and Lucentis® and at one point securing the prohibition of the off-label use of Avastin®. Regulatory angle Separately and earlier, the reimbursement of Avastin® for an ophthalmological application not covered by that product’s MA formed the subject of a distinct strand of litigation and also culminated in a judgment of the CJEU which held that under EU law national healthcare insurance systems are allowed to reimburse a medicine for off-label use (see, Van Bael & Bellis Life Sciences News Alert of 21 November 2018).

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