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A Substantive Dialogue Between Global Pharmaceutical Players and BRICS Economies on the Rules of Fair and Equitable Competition
6 June 2019
11:00—12:15
KEY CONCLUSIONS
The pharmaceutical market is regulated to keep medicines affordable

In Russia we have made rather big inroads in improving medicine provision for the population, and have transitioned to more understandable, clearer rules. There has been a very positive shift in pricing. <...> We have seen a shift in discussions on intellectual rights, and compulsory patents — Andrey Tsarikovskiy, Stats-Secretary, Deputy Head of the FAS Russia.

For Russia today, one of the most complex and sensitive questions is how to effectively provide medicines to the largest possible demographic and give them access to the latest drugs on the one hand, while also protecting the commercial interests of big pharma on the other — Aleksey Ivanov, Director, Institute of Law and Development HSE - Skolkovo, Director, BRICS Antimonopoly Centre, National Research University Higher School of Economics .

As a pharmaceutical company, together with the regulator, we do share responsibility for health, and I think it is also perfectly OK for regulators – or competition authorities for that matter – to also hold the pharmaceutical industry accountable for accepting that shared responsibility — Hans Duijf, Vice-President, Russia and Belarus, Novo Nordisk.

Providing licences to local drug producers is an important tool for improving medicine provision

The two multinationals involved [in an unfair pricing case] – GSK and PI – settled with us on the terms that they would allow manufacturers to sub-license local manufacturers to produce these [HIV] drugs in South Africa, not just for the South African market, but for the regional market. <...> In the immediate aftermath of the settlement – within three years – we saw a price drop of over 50%. We also saw a significant increase in the purchasing of these drugs by the state. <...> With the intervention, we saw life expectancy improving in South Africa by an average of about 10 year, from about 51 to somewhere about 61 for HIV-AIDS-affected people. <...> We have seen a lot of babies being born HIV-AIDS-free, being born by HIV-positive parents — Tembinkosi Bonakele, Commissioner, Competition Commission of South Africa.

ISSUES
The populations of developing countries have low access to innovative drugs

For developing countries, the problem that they have got is they have limited ability to make inventions. In a sense, their only pathway to deal with questions of drugs is through generics. <...> It is interesting that an UNCTAD report suggests that in the United States alone, the average price of generic drugs is as much as 86% less than their brand-name counterparts. In the South African case, <...> a 2006 study showed that the branded drugs to treat HIV-AIDS fell by more than 50% between 2002 and 2006, and the generic equivalent was even cheaper — Dennis Davis, Judge, President, Competition Appeals Court of South Africa.

We do not have the funds to ensure that all patients are able to access innovative products — Natalia Kolerova, General Manager, Oncology Department, Russia, Ukraine and CIS, Novartis AG.

Pharmaceutical companies are violating the rules of competition

Recently, we found that big pharma’s possible anti-competitive behaviour mainly occurred in the monopoly of API [Active Pharmaceutical Ingredients] supply — Zhao Chunlei, Director of Monopoly Agreement Office, Anti-Monopoly Bureau, State Administration for Market Regulation of People’s Republic of China (SAMR).

The pharma companies are saying that they are mere spectators, that they have nothing to do with the distribution arm, but having said that, recently commissioners came out with a case where there is some understanding between the pharma companies and the distribution companies to not only restrict the entry of stockists and retailers, but also to fix the trade margins at every point of the distribution supply chain — Payal Malik, Economics Adviser, Head of the Economics Division, Competition Commission of the Republic of India.

Fluctuations in regulatory rules

For regulators it is important that they also stick to the rules, ideally they stick to the rules that they set themselves. <…> In the real world we do see that regulators are very quick to change the rules just because there is a certain situation — Matthias Wernicke, General Manager, Merck Biopharma Russia and CIS .

In terms of the regulatory framework, we need there to be clear and understandable rules. However, it is often the case that rules are based on spur-of-the-moment populist decisions — Dmitry Morozov, General Director, BIOCAD.

SOLUTIONS
Unifying regulatory rules for the BRICS pharmaceutical market

If some rules outlining principles are made to generally cover all BRICS nations <...> then pharmaceutical companies will find it much easier to operate, and it will be much easier for us with regards regulation — Andrey Tsarikovskiy, Stats-Secretary, Deputy Head of the FAS Russia.

Our main objective <...> is to standardize our actions and unify them throughout the BRICS nations, and to hold dialogue between all regulators and pharmaceutical companies in the interests of the people — Andrey Tsarikovskiy, Stats-Secretary, Deputy Head of the FAS Russia.

Determining the criteria for compulsory licensing

Yes, there is a place for compulsory licensing, but the criteria should be clearly defined, understandable, and not applicable in such a wide range as instances as is being discussed currently — Irina Panarina, General Manager, Russia and Eurasia, AstraZeneca.

There should absolutely be compulsory licensing in Russia, but under the condition that it only happens in critical situations. This must come under the purview of the Federal Antimonopoly Service, like it does in the US and other civilized nations — Vikram Singh Punia, President, Pharmasyntez.

The government as set the criteria: there may be recourse to compulsory licensing during an epidemic — Anna Numerova, Partner, Egorov Puginsky Afanasiev & Partners.

Supporting investment in developing innovative drugs

The competition authority in India recognizes that it has to incentivize innovation, and that pharmaceutical companies should continue to invest in high-risk and research and development — Payal Malik, Economics Adviser, Head of the Economics Division, Competition Commission of the Republic of India.

Regarding competition and innovation, I think that it is widely acknowledged that innovation is an important source for improving consumer welfare — Zhao Chunlei, Director of Monopoly Agreement Office, Anti-Monopoly Bureau, State Administration for Market Regulation of People’s Republic of China (SAMR).

What we ned to do more and more is show the value of our innovation – show that this is not a cost, this is an investment. In many cases, we can do those calculations through health economics, so we welcome further collaboration in this space as well — Marwan Aqar, General Director, MSD Pharmaceuticals; Managing Director, MSD Russia, Belarus and Kazakhstan .

The material was prepared by the Russian news agency TASS