Hospital Professional News met with Owen McKeon, Country Manager for Mylan and chair of Medicines for Ireland, to discuss biosimilars, Brexit and the new Falsified Medicines Directive
The pharmaceutical industry in Ireland is facing a perfect storm in the first few months of 2019. Uncertainty created by Brexit, the new regulations from the Falsified Medicines Directive and higher HPRA fees have all combined to make manufacturing conditions more challenging.
In this environment it is more important than ever that the voice of the pharma companies is heard at the highest level of government. Medicines for Ireland (MFI), established in 2017, is an organisation comprising many of the leading pharmaceutical companies in Ireland which have united under a common vision for the reform of the national medicines policy.
Owen McKeon is the chair of MFI as well as Country Manager for Mylan and is aware of the historical difficulties that exist here in Ireland in terms of getting policy makers to work with manufacturers.
He said: “MFI was an amalgamation of two previous generic organisations. We are new but this year we are a much stronger organisation. We now have ten companies and are much more focused on getting our message across.”
“That message is that we represent more than 60% of the medicines that are dispensed and yet we have very little representation in terms of talking to the Department of Health or any of the people who are decision makers.
“My background is in originator medicines. I have been in the business for 40 years, it is only in the last few years that I have moved over to the generic side of the business. Before this move I recognised that the industry is much more fluid than before. For instance, Mylan promotes OTC products, biosimilar products, injectables, hospital products and generics; many of the companies in MfI have, like Mylan, a broad-spectrum product portfolio. We represent much more than just the narrow generic area”.
MFI is committed to pushing towards greater competition and added value in the high-volume medicines market. This is particularly evident in their calls for a consistent and cohesive approach to a biosimilars policy.
Mr McKeon said: “We recognise the need to support research and innovation, and the need to keep a patent protection system in place. But there has to be a time limit after which the investment in innovation has been returned and the opportunity should open up to competition. It should be open to governments to save money on those products. That is what the government is trying to do but not very effectively yet.
“If you instance the UK, when a product comes off patent there is a target of switching 90% to generics; similarly, the UK Department of Health generates savings and added value by introducing biosimilar immediately. That should be the goal here in Ireland, releasing much needed funds to the rest of the health budget. There is not the same vision or desire from the Irish government to do this.”
He added: “The HSE want to do this, but if you look at the biosimilar legislation, there is no interchangeability allowed between the originator and the biosimilar. None. So, there is no way we can help release much needed funds, there is neither carrot nor stick change biosimilars.”
“Look at the recent launch of adalimumab – it is the biggest spend that all countries have. In Ireland it is more than €140M a year. That could be halved straightaway, that is not achieved because the only prescriptions available to the new entries into the market are for new patients. So, you have that €140m stuck in the Health budget until we introduce new legislation which says yes you can substitute existing patients on to the new product. Once they do that there will be big savings.
“There is a reticence, a fear and a reluctance on behalf of the Department of Health and we find it hard to engage with them on this issue.
“It is only recently that they have started to engage with us and to some extent that’s our issue as a relatively new organisation. But it also because of the fear of Brexit and the realisation that it might be a good idea to listen to the people who are bringing in the medicines.”
One argument against new legislation on biosimilar medicines is that the bulk of companies which produce originator medicines may find Ireland a less attractive place to do business – but this is firmly rejected by Mr McKeon.
“That is the fear at government level; that these companies are going to move out just because we reduce the price of their medicines by 10%. These are multinational companies which have chosen to set up in Ireland – there is the corporation tax rate here, the use of the English language and we are situated in the right place to deal with global issues between east and west, education is very good and employment law is adaptable and flexible.
“You don’t invest money and resources into a country to pull out, to rehouse everything is a huge logistical problem so that is not going to happen.
“I think there is a lack of knowledge in the Department of Health about how the industry works and they need to have people there to talk to MFI. We represent 60% of the market now, but we could be 90% and reduce the cost of medicine – with the right processes and procedures in place. There is no detriment to patients in doing that.”
The European perspective
Another headache for the generics industry is the patent rule across the EU which states that production of biosimilars cannot begin until the originator has come off patent.
Mr McKeon said: “Outside the EU, manufacturing is way ahead so that the medicine is available from day one when the patent expires. We are shooting ourselves in the foot because the first to market will always have the best market share. Why would generics companies manufacture in the EU when they have to wait? We should be looking to support our industry in Europe and help it grow. ”
Recently the government announced that it had placed twenty-four medicines on a watch-list because they could be subject to shortages in the event of a no-deal Brexit. Mr McKeon said, it typifies the limited consultation with the pharma industry.
“Do you know what the twenty four medicines are, because we don’t? We have had one meeting with a joint committee over Brexit but that has been it so far. There needs to be an awful lot more done and we need to be around a table with the Department and industry, discussing what a no-deal Brexit could mean. They need to be looking at the priority medicines we have and the supply of them.
“Our main fear is transport and the supply of medicines, at the moment everything is coming through the UK. There are a lot of shared packs where 60% is for the UK market and the rest is for the Irish market. That will not be possible with a hard border because everything would have to be repackaged for customs, so it could be a huge problem.
“In the long term, we could have a situation where we do not have access to the same medicines. Manufacturing is managed on a quantity basis – the manufacturer may produce a million tablets, but we in Ireland could never use a million tablets – the UK and Ireland together can however. By working together in that way we keep the supply reliable and the price down.
“If you have to manufacture just 10,000 of these tablets the price will be affected. And if it does not affect the price, it could affect the availability because manufacturing medicine on a small scale at a price that is more expensive than they can be sold at will not be an attractive prospect. If a hard Brexit comes in I think in time you will see some medicine shortages and you might even see medicine withdrawals.”
Falsified Medicines Directive
February saw the introduction of Falsified Medicines Directive (FMD) legislation across the European Union which aims to increase the security of the manufacturing and delivery of medicines, protect patients and prevent falsified medicines from entering the supply chain. The new regulations require manufacturers to place safety features on all medicines and contribute financially to the establishment of an IT verification system that will allow the assessment of the authenticity of a medicine at the time of supply to the patient.
While FMD created a huge logistical challenge for medicines manufacturers, Mr McKeon remains unconvinced of its effectiveness.
“The amount of falsified medicines coming through the legitimate supply chain is minimal. It’s the illegal supply that’s the real issue, often from the internet, and this legislation doesn’t cover online so I think it was a huge amount of work and great expense for probably very little gain.
“Over the coming months there might be teething problems with it in terms of logistics. There has been a ‘use and learn’ phase for the system here in Ireland since last year, but pharmacies have to have a whole new type of scanner, hospitals will need to scan every single product which comes in. I think it is a big change for pharma companies, hospitals and retailers and the costs are mounting.
“What we have seen is all these issues coming at once – Brexit, the FMD and the HPRA deciding they are going to increase the fees by 8%. So, you put that all on manufacturers and what will suffer is supply because if I am trying to sell a product here in Ireland, I need to consider all the other costs associated with bringing that medicine to this market.
“It might not even be my choice. Ireland is a country of 4.5M people. Pharmaceuticals companies operate on a global scale and if it costing them to send medicines here then they may think again. That is why the Irish Government needs to think about these things more laterally and see that they need to get around the table with us to discuss in detail.”