Dealing with regulations in the healthcare industry Baker & McKenzie European Pharma Meeting, , Zurich Thomas B. Cueni, Secretary General Interpharma

Agenda 1. Today‘s main challenges for the industry 2. Patent settlement agreements (“Pay-for-delay”) 3. Inherent tension between national health policy (administered prices) and free flow of goods 4. Clinical trial data transparency 5. Compliance & HCP/HCO Disclosure Code Dealing with regulations in the healthcare industry14. June 2013 | page 2/12

Today‘s main challenges for the industry Policy and regulatory environment Euro-zone crisis Single focus on cost-containment Missing growth agenda Market access delays Dogmatic competition law approach! Dealing with regulations in the healthcare industry14. June 2013 | page 3/12

Patent settlement agreements (PLSAs) Dealing with regulations in the healthcare industry14. June 2013 | page 4/12 PLSAs and “pay-for-delay” Conclusion of Commission’s Pharmaceutical Sector Inquiry ( ) seemed to be pragmatic Commission dropped certain previous investigations into pay-for-delay cases in March 2012 due to lack of evidence (AstraZeneca) or withdrawal of the complaint by a rival company (GSK) DG Competition is still investigating a number of PLSAs between pharmaceutical companies and generic manufacturers Court decision in the first case is expected in June 2013 anti-competitive? abusive use? value transfer = restriction of competition “by object”? irreparable harm  legal uncertainty!

Patent settlement agreements (PLSAs) Dealing with regulations in the healthcare industry14. June 2013 | page 5/12 Patent rights encourage innovation and settlements of genuine patent disputes are generally efficiency enhancing PLSAs are by nature efficiency enhancing Patent litigation in Europe is fact intensive, complex and often highly unpredictable litigation in multiple jurisdictions real risks of divergent outcomes How to deal with generic competitors “launching at risk”? innovators have much to lose! Case-by-case approach to assess PLSAs should be limited to: fraud in obtaining the patent no sham cases restrictions exceed the scope of the patent

Inherent tension between price control and free flow of goods Conclusions from OECD study: International price referencing is the most widely used approach (22/30 OECD countries) to cap prices (or reimbursement levels) of innovative medicines; is perceived by public authorities as a means to assess the appropriateness of the proposed or actual price in relation to what is paid elsewhere; requires an explicit or implicit notion about how pharmaceutical prices ought to differ across countries, and how they should be similar; the rationale for selecting particular benchmark countries is not always explicit. Dealing with regulations in the healthcare industry14. June 2013 | page 6/12

Problem has been acknowledged… „…a similar price level leads to a different level of affordability depending on the economic situation of each Member State. Attention could be given to measures that allow companies to offer medicines at affordable prices in each EU market.“ „Member States are not interested in fixing prices of products that are only transiting through their territory to be utilised within other Member States. They should, therefore, abstain from fixing prices for products that will not be used within their territory and that will not impact on their national budgets…“ Source: Recommendation on P&R policies from High Level Pharmaceutical Forum Dealing with regulations in the healthcare industry14. June 2013 | page 7/12

…but short-term politics still prevail Pharmaceutical policy making serves multiple objectives that must be balanced with one another to arrive at the policy mix that best reflects national priorities: affordable access to effective medicines vs. strong pressure for public cost-containment; inherent trade-off between static and dynamic efficiency static efficiency, in which consumer welfare is maximised by getting the most health value from today’s expenditures, as constrained by the limits of present technological capability dynamic efficiency, in which the R&D incentives serve to generate growth in the capacity to prevent health conditions and cure diseases in the future.  Getting the best possible price or lowest possible expenditures for pharmaceutical products in the market today may mean having fewer and less innovative alternatives for the future. Dealing with regulations in the healthcare industry14. June 2013 | page 8/12 Static vs. dynamic efficiency

Inherent tension between price control and free flow of goods Following ECJ Lélos Judgement of 16 September 2008 on the Greek reference concerning quota systems (Cases C-468/06 to C- 478/06) Companies even in they hold a dominant position must be in a position to take steps (to limit parallel trade) that are reasonable and in proportion to the need to protect its own commercial interests Judgments acknowledge right for companies to „protect their commercial interests“ – but there is no waivering yet from dogma of unhindered free flow of goods, or call to refrain from international price referencing  Revisit current legislative framework CJEU judgments give flexibility to companies – but don’t solve the problem Dealing with regulations in the healthcare industry14. June 2013 | page 9/12

Dealing with regulations in the healthcare industry14. June 2013 | page 10/12 Food for thought

Clinical trial data transparency Access to clinical-trial data European Medicines Agency (EMA) announced that it will proactively publish clinical-trial data and transparency Pharmaceutical industry recognises the need to establish a way forward But how? A number of practical and policy issues need to be addressed before complex data sets can be made available: rules of engagement good analysis practice last but not least: legal aspects Principles for clinical trial data sharing PRIVACY: safeguarding the privacy of patients INTEGRITY: respecting the integrity of national regulatory systems INNOVATION: Maintaining incentives for research and innovation Dealing with regulations in the healthcare industry14. June 2013 | page 11/12

Compliance & HCP / HCO Disclosure Code Increased regulation of interactions between pharmaceutical companies and HCP/HCOs at national level: Legal provisions: Denmark, France, Portugal, Slovakia Self-regulatory provisions: the Netherlands, UK Disclosure activities outside Europe: Japan, US (Sunshine Act)  Different approaches are in place at national level EFPIA HCP/HCO Disclosure Code EFPIA brings together the 33 European national pharmaceutical industry associations as well as 39 leading companies Much external focus on transparency, particularly related to the pharma industries past-actions and also future commitments Monetary threshold on “Meals & Drinks” as well as prohibition of “Gifts”  Data Privacy Requirements must be checked at national level (including: legislation, regulations and jurisprudence) Dealing with regulations in the healthcare industry14. June 2013 | page 12/12

Interpharma, Petersgraben 35, Postfach, 4003 Basel, Thank you for your attention!