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    Home > Medical News > Latest Medical News > GSK uses "delay fees" to restrict competition and fined how old-brand pharmaceutical companies do it under the patent cliff

    GSK uses "delay fees" to restrict competition and fined how old-brand pharmaceutical companies do it under the patent cliff

    • Last Update: 2021-07-29
    • Source: Internet
    • Author: User
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    A few days ago, the State Administration for Market Regulation issued a report on the official website of the UK Competition and Market Authority penalizing companies such as GlaxoSmithKline (GSK) for reverse payments

    .


    According to news, on May 10, 2021, the British Competition and Markets Authority (CMA) imposed penalties on companies such as GlaxoSmithKline for reverse payments

    .
    The Competition Appeal Tribunal ruled that the CMA maintained that GSK and some generic drug suppliers violated the competition law, and reduced the fines originally determined by the CMA by 27.
    1 million pounds to 22.
    2 million pounds (approximately RMB 201 million) )

    .
    In addition, Merck was fined 3,894,100 pounds (approximately 3,538,900 yuan), and Jalai was fined 1,28,500 pounds (approximately 9,333,600 yuan)

    .


    Under the patent cliff, use "delay fees" to protect monopoly status


    The drug involved in patent litigation this time is paroxetine, which is a drug to relieve depression

    .
    Paroxetine was launched in 1991

    .
    In foreign countries, the drug has a broad spectrum of indications for depression and anxiety

    .
    It was approved by the FDA in December 1992, and the trade name is Paxil

    .
    It was listed in China in 1995, and its product name is Sailorte

    .


    It is reported that the GSK "reverse payment behavior" incident was first exposed in 2013

    .
    In order to ensure the high price and market share of paroxetine, GSK paid a total of 50 million pounds to a number of generic drug suppliers from 2001 to 2004, and asked competitors to postpone their entry into the paroxetine market

    .


    Statistics show that in 2000, the global sales of paroxetine was 2.
    356 billion U.
    S.
    dollars.
    By 2003, the global market for the drug had exceeded 3 billion U.
    S.
    dollars

    .
    However, as the patent for the drug expired in 2004, generic drugs began to compete.
    In 2004, the global sales of paroxetine fell by 39% to only US$1.
    9 billion

    .
    It can be seen that the emergence of generic drugs has brought an extremely significant blow to the original research drug manufacturers

    .


    Patented drugs enjoy market exclusivity during the patent protection period.
    The price can be determined entirely by the pharmaceutical manufacturer, and the production and sales of the product are also monopolized by the pharmaceutical manufacturer

    .
    The entry of generic drug factories has brought substantial impact on drug prices, making the market shift from monopoly to price-based competition

    .
    However, the R&D investment of generic drugs is much lower than that of the original drugs, and the price of drugs participating in market competition is also at a relatively low level, so it has a more competitive advantage

    .
    Since the 21st century, with the expiration of many patented drugs around the world, original drug manufacturers have had to formulate strategies to deal with the pressure of Lilube Slope

    .


    Private settlement with generic drug manufacturers through the use of "delay fees" is one of the means

    .
    In addition to GSK, there are no shortage of other companies that have taken this measure

    .
    AbbVie’s method of delaying the entry of Humira biosimilars into the U.
    S.
    market and increasing the price of its drug Humira during the patent protection period to protect the monopoly of the drug is also under investigation by the U.
    S.
    Congress

    .


      The self-developed rate of return is low, and mergers and acquisitions have become an effective way for pipeline expansion


    Asset acquisition is another way for original research drug companies to save themselves when facing patent expiration

    .
    This includes two aspects:


    The first is to target generic drug manufacturers and directly collect the enemy’s income under their command;


    The second is for new drug companies to make up for their shortcomings by expanding their product pipelines

    .
    Among them, the desire for new product lines is more urgent

    .


    A typical example is Pfizer's acquisition of Wyeth for US$68 billion in 2009

    .
    The purpose of its acquisition is to strengthen its sales channel layout and avoid the impact of revenue from the patent cliff

    .


    According to data, at that time, Pfizer's three blockbuster drugs for hypertension and angina pectoris (Norvasc), allergy treatment drug Zyrtec (Zyrtec) and anti-cancer drug irinotecan (Camptosar), three blockbuster drugs expired due to patent expiration.
    The loss is estimated to reach 2.
    6 billion US dollars

    .
    Lipitor, whose patent expired in March 2010, is also expected to lose 41% of its current sales revenue in the next twelve years

    .
    Similarly, the two products of Wyeth's antidepressant drug Effexor and Protonix for angina pectoris will also expire in 2010 and 2011, respectively

    .


    Unexpectedly, the two difficult companies coming together did not aggravate the hardship

    .
    Through this acquisition, Pfizer has obtained the vaccine Prevnar produced by Wyeth and some other products that are not threatened by generic drugs

    .
    In addition, by reducing sales and marketing teams, billions of dollars in operating costs can be saved

    .
    Pfizer, which was originally a giant in chemical medicine, has also transformed into a giant in the biomedical field

    .


    According to the data of the world's top 12 pharmaceutical companies analyzed by the Deloitte Health Solutions Center, the return on investment in the pharmaceutical industry in 2019 is only 1.
    8%, which is the lowest level since 2010

    .
    In fact, judging from the data shown in ten reports, the rate of return on R&D investment of pharmaceutical companies has been on a downward trend over the past ten years

    .


    The plummeting rate of return on investment may be one of the main reasons why the original research drug companies choose to purchase small, streamlined, and potential product pipelines at a high price when their patents expire

    .
    By acquiring innovative drug companies to obtain valuable products, it can effectively avoid the losses caused by the failure of self-research of innovative drugs by enterprises, and at the same time, it can greatly shorten the investment cycle of new drugs

    .
    In recent years, such acquisitions abound

    .


    In recent years, new targets and new treatment methods have continued to emerge.
    However, in the face of the current situation where the rate of return on independent research and development is not as good as that of small pharmaceutical companies, established pharmaceutical companies are also inclined to M&A, or similarly, obtaining new projects by way of license in.

    .
    However, with the prosperity of this trend, how will the independent R&D strength of the companies that craze money in this mode be maintained?

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