Pharmaceutical Pricing And Market Access (GW4575M)
Summary
Summary Pharmaceutical Pricing and market access, readings summaries and learning goals
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Course
Pharmaceutical Pricing And Market Access (GW4575M)
Institution
Erasmus Universiteit Rotterdam (EUR)
This document includes summaries for each required reading of the course: "Pharmaceutical pricing and market access" GW4575M . It also includes the learning goals for each week with the main points made in the working groups. Each article is summarized separately.
Pharmaceutical Pricing And Market Access (GW4575M)
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The learning goals (underlined) of each week are presented at the beginning of each section. Some
are directly answered, the others are answered in the summaries of the readings for that specific
week.
Week 1
Learning goals:
What is the life cycle of a drug? What are the different phases of drug development?
Development, introduction, growth, maturity, decline
Development refers to the discovery (R&D) of a drug and its preclinical and clinical phases.
Preclinical refers mainly to laboratory exploration and animal testing, while clinical to human
testing. The clinical stage is dived in:
Phase I (pharmacokinetics, safety, toxicity, dosage) usually lasts 12-18 months and is carried out
on 20-80 healthy volunteers to determine safety and dosage.
Phase II (efficacy and safety) takes <24 months, 100-300 patients.
Phase III (further safety and efficacy in larger groups). Up to 5000 patients to monitor adverse
reactions and long-term use.
Phase IV (also known as post-marketing testing or pharmacovigilance) monitors side effects on
“real life” patients and is not part of the development stage.
Decline will depend on:
- Availability of substitutes (which also depends on the difficulty of reproduction (eg.
Biological molecules are harder to replicate)
- Brand loyalty
- Hospital or over the counter drug
What is a patent? What is secondary patent protection?
A patent is a form of legal protection (also referred as legal exclusivity) that safeguards unique
innovations from imitations. Applying too early might not be beneficial in terms of patent
duration, doing it too late gives ground to competition. Patents’ main purpose is to stimulate
innovation since through patents temporary monopolies are created during which the
manufacturer can make a profit to recoup costs of research and development R&D,
manufacturing, distribution, and to invest in innovation.
Different from legal exclusivity is regulatory exclusivity. RE, differently from LE, cannot be
challenged in courts. Also, since Patent protection effectively safeguards a drug for 7-8 years
(considering 13 years of pre-commercialization), regulatory exclusivity compensates for those
drugs that receive marketing authorization with less than 8 years of patent life left.
There are different channels to achieve regulatory exclusivity: The orphan drug act in the US,
grants 7 years of market exclusivity.
In Europe:
a) Data exclusivity
Current European regulations provide 8 years of data exclusivity for pharmaceutical products. The
period of exclusivity commences from the first marketing authorisation date
b) Market exclusivity
,The 8-year data exclusivity period is followed by a 2-year market exclusivity period. Ostensibly, this
provides the innovator company with a 10-year period from the time of obtaining regulatory
approval wherein market entry of a competitor is prohibited.
If the drug receives Orphan designation, then it can receive 10 years of market exclusivity.
Usually, generics can submit their applications at the end of DE/ME.
Secondary patent: patents that are filed on other aspects of active ingredients such as different
dosage forms, formulations, production methods, new route of administration. The original one
still expires, and generics might take over. However, if the secondary patent is filed and approved
patients might prefer it over the now old generic. Secondary patent-protection is valid for 20
years, but new trials and application are needed.
Supplementary patent / Supplementary protection certificate: intended to compensate, partly,
for the delay to the commercial exploitation of an invention caused by the time elapsed between
the date on which the application for the patent was filed and the date on which the first MA in
the EU was granted. May not exceed 5 years (5.5 if pediatric)
How do patents affect the LC of a drug?
They generate a monopoly, usually decline starts when patent expires (patent cliff)
How do patents affect innovation?
- In theory it motivates companies to innovate. They stimulate innovation
- There is no hard evidence that companies need patents to innovate
- It is cheaper for companies to have legal costs (litigations and patent application) than
conduct new RCT
- There is evidence that the first entrant in the market will make profits, regardless of
patents
How does drug approval work? How long does it take to get market access?
FDA / EMA: it takes about one year. There exists a voluntary scheme for accelerated procedures
(PRIME)
In Europe, for most drugs, companies need to apply through a centralized procedure to EMA. All
medicinal products need to obtain a market authorization before they can be placed on the
market (obtain regulatory approval). Procedures can be centralized (EMA) or at the national level.
How do pharmaceutical companies extend drugs LC? Why focus on patent prolongation?
- Expansive, defensive, and preparative strategies
- Patent prolongation: secondary and supplementary patents (evergreening)
- Own / licensed generics: In the US authorized generics can still be launched within the first
180 days market exclusivity period of the first generic
- Maintain premium price and focus on laggards
- Going Over The Counter OTC by making a low dose formulation
- Litigations
- Pay-for-delay (although paying generics for staying out of the market has been deemed as
illegal by most Courts)
,Hering:
The proper use of lifecycle management (LCM) is an inevitable factor for pharmaceutical
companies to shorten time-to-market and to delay market withdrawal of their products. The
lifecycle starts with the discovery of a potential compound. The potential compound undergoes
preclinical and clinical trials to evaluate its quality, efficacy and safety. After successful clinical
trials, the pharmaceutical company can submit the necessary documentation to receive the
market approval from responsible regulatory agencies. If the medicinal product is approved, it can
enter the market. The commercialization starts with a period of fast growth until the market share
reaches a maturity stage. The end of a medicinal product is characterized by a decline phase as a
result of adverse side effects or economic factors, leading to the market withdrawal of the
product. Crucial question in LC management is: how can time-to-market be shortened to maximize
any patent protection?
, LC management strategies:
R&D phase (Internal Strategies): These include closing the gap between R&D and production
through cross-sectional teams, installing functions that are responsible over the entire LC.
Moreover, R&D should make use of computer simulations and open-source drug discovery.
Research about follow-up indications can extend the range of treatable diseases.
Patent protection lasts 20 years and patent application are usually submitted at the beginning of
the development phase. Since 12-13 are needed to bring the drug to the market, there are only 7-
8 years remaining for commercialization (ideally). Companies can optimize patents through patent
term restoration, patent extension, trademarking, litigations.
Phase I (pharmacokinetics, safety, toxicity, dosage) usually lasts 12-18 months. Phase II (efficacy
and safety) takes <24 months. Phase III (further safety and efficacy in larger groups). Clinical trials
are often outsourced to Contract research organisations CROs. Phase IV (pharmacovigilance)
monitors side effects on “real life” patients. Within the EU, clinical trials must be conducted
following Directive 2001/20/EC. This directive regulates the application of good clinical practice
(GCP) and the execution of clinical trials. In the EU, one can choose to submit a marketing
authorization application for the entire EU by a centralized procedure or for selected countries by
a mutual recognition procedure Approval by EMA (FDA in the US) usually takes about 1 year.
Commercialization phase:
Process design is essential for a successful commercial manufacturing process, typically this is
done during Phase III and is implemented after a successful finish.
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