Paediatric Extensions costing NHS hundreds of millions

Published on Friday, 14 December 2012 12:42
Posted by Scott Buckler

Patent extensions being evoked under the EU Paediatric Regulation are disproportionally "rewarding" drug companies and are conservatively estimated to have cost the NHS approximately £300million over the past three years while providing little significant benefit to younger patients

Research by the British Generic Manufacturers' Association (BGMA) - the UK trade body representing 90% of the generic supply market - shows that originator companies are generating huge financial returns through extended patents completely out of kilter with the cost and benefit of the work put in.

Unless modifications are made to the EU regulation, it is estimated a further £500million could be unnecessarily spent by the NHS over the next five years before an economic impact report is due to be published in 2017.

Under current EU paediatric legislation, originator companies can apply for an extension to the Supplementary Protection Certificate (SPC), which has already extended the patent period. In order to gain an additional six-months market exclusivity, companies have to research their medicine for use on children and provide information on the results.

The 'reward' to the company for carrying out this work is a further six months of overall patent protection from generic competition for the medicine as a whole, not just the paediatric versions. This means companies can achieve returns of hundreds of millions of pounds for an investment of as little as one or two million to carry out the paediatric research.

Warwick Smith, Director General, British Generic Manufacturers Association, said:

"It is morally right that paediatric uses of medicines should be researched and licensed. We do not object to there being a financial incentive, if one is needed, to encourage companies to do this work. It just seems that such a high return on such comparatively low investment is beyond all reasonable scale and proportionality. If unchecked this could cost the NHS a further £500 million over the next five years.

"There are many examples of a pharmaceutical company being granted an extension of patent in exchange for a paediatric trial of a drug and it raises important questions about the regulation and its current parameters.

"This blunt approach to regulation is costing the NHS hundreds of millions of pounds and we believe a more tailored approach is necessary. In cases such as Pfizer's blockbuster LipitorTM we estimate the extension of patent protection through an SPC cost an additional £150million - all paid for by the NHS and the UK tax-payer.

"And importantly, we do not appear to be seeing many new formulations for children or totally new uses for unmet clinical need. Indeed, most paediatric medicinal versions have the same or similar uses as for adults."

The BGMA has researched SPC extensions granted over the past three years and conservatively estimated that they have cost the NHS a total of £284million. The below table details different examples looking purely at the UK market.

Warwick Smith added: "We believe that, as an alternative to extending the SPC, different branding and reimbursement regimes may be required to ensure that there is a proportionate and effective incentive."

"This could include an enhanced system of tax credits or bespoke reimbursement regimes, or direct grants. Medicines that may only be used in very low volumes, and are likely to be uneconomic to develop under 'normal' pricing arrangements, could be reimbursed at higher levels to takes into account their societal value."

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