Competition authorities should approximate their national regulations of pharmaceutical markets
It is a pressing issue due to the global interest in accessibility of medicinal drugs and fair competition under intensifying innovative activities of pharmaceutical companies
The 10th session of the International Working Group on studying competition issues on pharmaceutical markets took place in Moscow. Representatives of FAS and foreign competition authorities, including South Africa, Brazil, Mongolia, Belarus, China, Japan, Austria and India as well as sectoral experts took part in the key discussion that focused on specifics of the tools of antimonopoly policy that stimulate development of competition in the pharmaceutical sector, providing medicinal drugs to the population and the balance of the antimonopoly law and the patent protection for pharmaceutical companies.
Lately the balance between intellectual rights and antimonopoly regulation has become one of the principal issues for the world pharmaceutical markets. Its importance is determined by the global interests in pharmaceutical market and its development as well as supporting availability of medicinal drugs and fair competition under the conditions of intensive innovative activities of representatives of the pharmaceutical sector.
Opening the session, Deputy Head of FAS Andrey Kashevarov stated: “The session allowed each competition authority to exchange antimonopoly response practices under patent protection of original drugs. The experience of various countries that used forced licensing showed that our colleagues managed to sort out the issues of national security, life and health of the population without harming innovating activities of pharmaceutical companies.
According to President of Italian Competition Authority, Mr. Giovanni Pitruzzella, pharmaceutical companies make big investments in development and clinical trials of medicinal drugs and incur significant costs as a result of which they are very interested in maximally long patent protection of the original drugs, while generic companies wish to start manufacturing those drugs as soon as possible. “Analyzing the state of competition in this field, it is necessary to factor in human rights in the part of drug availability, prices of original drugs, and possibility of using them in the health care system”, emphasized President of Italian Competition Authority. He discussed the high-profile cases of violating the antimonopoly law in drug circulation in Italy, similar to unfair practices in Russia. They include: pharmaceutical manufacturers entering into competition-restricting agreements; abusing dominance in the course of tenders; anticompetitive pricing strategies.
“Pharmaceutical companies are global structures simultaneously operating on hundreds of markets, while state price regulation, drug circulation are of national nature in the countries where such regulation exists. For instance, a pharma holding, using the experience gained in various markets, takes advantages of weaknesses and shortcomings of the national regulations in some countries. The competition authorities – members of the Working Group should approximate their national practices of regulating drug circulation, thus, cutting down the chances of pharmaceutical manufacturers for unfair market conduct”, emphasized Head of FAS Department for Control over Social Sphere and Trade, Timophey Nizhegorodtsev, who moderated the session.
The Federal Antimonopoly Service is creating an information system to analyze drug prices in other countries. The success of the system, enabling the government of different countries to promptly obtain information on the current trends on other markets, will to a considerable extent depend of the level of coordination between the competition authorities – members of the Working Group. FAS representative announced a proposal on entering into an agreement to form an information system for analyzing drug prices in order to verify the obtained information.
Timophey Nizhegorodtsev presented the intermediary findings of an international comparative study of drug prices, conducted to execute an order from the President of the Russian Federation, as a result of which FAS had been able to decrease more than 2000 prices for drugs procured by the state, and achieve at least 5 billion RUB savings. According to Giovanni Pitruzzella, today Russian experience in global monitoring of drug prices has become the best practice.
Commissioner of the Administrative Council for Economic Defence at the Government of the Federative Republic of Brazil, Juan Paulo de Rezende, and Chief Economist, South African Competition Commission, Tulani Mandiriza, made reports on successful use of forced licensing mechanisms in Brazil and South Africa.
An advisor to India Competition Commission, Ms. Jyoti Jindgar, talked about the experience of competition law enforcement in the Indian pharmaceutical sector. According to the advisor, the antimonopoly law in India can require forced licensing if a pharmaceutical company enters into an anticompetitive agreement, if a patent holder imposes unreasonable cooperation conditions and if a company is a market monopolist preventing development of innovations and restricting access to drugs.
Timophey Nizhegorodtsev clarified that forced licensing must be considered, first of all, in the context of the efforts of the antimonopoly body, whose objectives are to ensure competition protection and public well-being. “We should take different measures of antimonopoly response, including measures related to restricting patent protection and forced licensing regarding monopolies formed on the basis of the intellectual law, abusing their intellectual rights, reducing accessibility of medicinal drugs for the population and preventing entry of generics on our markets”, pointed out Head of FAS Department for Control over Social Sphere and Trade.
Initiatives were announced to solve the issues encountered by Brazil: pharmaceutical companies boycotting actions by the national government towards reducing drug prices. It is expedient to discuss implementing a mechanism of public address of a national health care body or the government to manufacturers at large outside the national jurisdiction so manufacturers can evaluate price offers of the government or the health care authority and, if interested, undergo a fast-track registration on the new market.
“We see how prices for the same drugs in different countries are dropping down. Today we continue efforts to implement force licensing in Russia and we do believe that there should be a pricing pressure upon the work of pharmaceutical manufacturers when patents for vital drugs are in the same hands. There are different forces licensing schemes; and such practices in terms of competition and public interests will be an important part of the discussion that will take place at the International Legal Forum in May 2017 in St Petersburg”, emphasized Andrey Kashevarov.