Business vultures

In my article "Malta Enterprise goes for the crumbs" (The Sunday Times, January 2), I publicised the fact that "Malta Enterprise is trying hard to accommodate copycat generic pharmaceutical manufacturers, whose business set-up basically consists of swooping onto the market of brand-name pharmaceutical manufacturers, as soon as the latter's patents expire."

In their reply, carried the following Sunday, Malta Enterprise's Mario Galea and Ann McKenna stated that "the analogy of the 'generic vultures swooping on to the market of the brand holders' is nothing but preposterous". The analogy was preposterous, according to them, because "the ethical companies have themselves diversified into generics" and "the EU itself is introducing the Bolar provisions into its legislation to encourage the production of generics within the member states".

Lo and behold, barely a month passed and we are now informed from the horse's mouth of the real deal, albeit in less prosaic a fashion. Malta Enterprise's Ms Vella (in a report by Vanessa Macdonald, The Times Business supplement, February 24) let it rip that "Companies need to release their production at a certain time on a certain day. They [i.e., generic pharmaceutical manufacturers] need to flood the market as soon as the patent for a drug has expired."

Exchange the word "flood" for "swoop onto" (which in this context has exactly the same meaning), and represent the generic industry by "vultures" who sense the death of a patent in the air, and you get my original analogy, which Mr Galea and Ms McKenna were so quick to strike down as preposterous.

My analogy was correct and very revealing. There was nothing remotely preposterous about it - a fact which Ms Vella's statement emphatically confirms. It was rather Mr Galea and Ms McKenna who should stand corrected.

I do not believe that Mr Galea and Ms McKenna, who are said to be working closely with the generics pharmaceutical industry, do not really understand the modus operandi of this business. There must be another reason for their original refutation of my analogy.

With respect to the diversification into generics by the brand-name manufacturers, Simon King, writing on a PricewaterhouseCoopers Web page, had this to say:

"Growth in generics has brought new meaning to the phrase 'portfolio management' and branded drug manufacturers have studied different means to defend profits from copycat drugs.

"Authorised generics have emerged as a new means to combat generic competition... authorised generics do not only provide a means for branded manufacturers to retain some lost revenue but also threaten the very landscape of the generics market, casting a shadow over the long-term growth and development of the sector.

"An authorised generic is no different to any other generic drug in that it is the equivalent to a branded pharmaceutical. However, it differs from its traditional counterpart in that it is manufactured by, or under licence from, the patent-holder of the branded equivalent."

The above should make obvious the pitch of the battle, between the brand-name firms and the generic copycats.

Taking in turn the argument that "the EU itself is introducing the Bolar provisions into its legislation", let me first of all clarify that Bolar-type provisions have nothing at all to do with the refutation of the vulture-mode of generic business. A Bolar-type provision allows early pre-patent expiry development work, including bio-equivalence studies, by generic pharmaceutical companies. The United States were the first to incorporate the Bolar provision into their patent law. Subsequently, the WTO Disputes Panel also accepted the legality of Bolar-type exemptions (case number DS114/R ) in 2000.

In relation to the EU, however, Mr Galea and Ms McKenna's article left out the fact that all EU states (including the new entrants) are signatories to the PCT (Patent Co-operation Treaty), with Malta being the sole exception. They also left out that a European patent is enforceable in all EU countries save, once again, Malta!