Increasing the dose
Malta joined the European Patent Organisation (EPO) earlier this month, which means that it will be designated in European patent applications filed on or after March 1, 2007. Will this impact the country's thriving pharmaceutical industry?Actavis...
Malta joined the European Patent Organisation (EPO) earlier this month, which means that it will be designated in European patent applications filed on or after March 1, 2007. Will this impact the country's thriving pharmaceutical industry?
Actavis Malta managing director Sergio Vella said that Malta may now be covered in a medicine patent application. The move, however, does not designate Malta retroactively and therefore does not affect patents issued before March 1.
For years, Malta has benefited from an exemption, known as the Bolar Provision, which enables manufacturers of generic pharmaceuticals to conduct tests and trials on patented pharmaceuticals, prior to patent expiry, in support of filing applications for marketing authorisation for medicinal products.
Mr Vella believes that such an exemption has proved invaluable to pharmaceutical companies in Malta.
"Malta has had this provision in its law for many years and there is no doubt that this gave companies like ours a strategic advantage by having Malta as a base.
"Having said that, I do not believe that the Bolar Provision alone supports the long-term viability of Actavis Malta or the products that we manufacture. Our global presence is ultimately supported by our competitiveness in the timely production of high quality medicinal products.
"In order to maintain a healthy future, pharmaceutical companies in Malta such as ours must not rely on incentives and the Bolar Provision alone, but must strive to provide a high quality product, at a competitive price and with a good service... We tend to forget the basics sometimes. We are quite confident that we have a good formula here," he said.
There could be no more reassuring indicator of Actavis' belief in the industry than the fact that it has started discussions with Malta Industrial Parks on the possibility of expanding to an adjacent site in Bulebel.
Although it is not needed imminently - the present site will be sufficient for the short term - the long-term plans also reflect the company's rapid growth in the generics industry.
"We have a state-of-the-art facility that we have radically upgraded and restructured over the last few years. We designed into it quite an amount of spare capacity and are in the process of bringing in even more equipment. We have more than doubled the number of blister lines over the past two years. We were lucky to have the space for the extra machinery this entailed.
"Having said that, over a 3-5 year window, we see the possibility of requiring more and we are looking at space adjacent to this facility. We are currently in discussion with Malta Industrial Parks on this," he said.
The growing turnover is also being reflected in staffing levels. The 360 staff last year will increase to around 400 this year and if performance continues to grow at the same pace, the company might also be recruiting more people. In the meantime, the company has adopted a continuous shift pattern - including weekends, where necessary. It has also started offering flexitime and teleworking.
"We have established some criteria for this, which would include some time being spent here, as the networking remains very important. I think flexibility is a very strong motivator for people who have conflicting demands from their private and working lives," he said.
One reason for the growth is the fact that more and more products are being manufactured in Malta.
In 2002, Actavis sold only five products in Malta. At present, Actavis sells 32 products on the local market and manufactures a similar number for export (which accounts for 90 per cent of its production). This year, it is planning to launch 10 more products locally and eight for the international market.
"We know that there is demand for a number of products and will be launching more, including some for which the branded product is not available on the market with a view to increasing further lower cost generics availability.
"In Europe, generics accounts for over a quarter of all medicines, although this varies greatly from country to country. The generic market in Malta has to be split between the state and private medicine. Private medicine only accounts for about 35 per cent of local business. The bulk is definitely state related, with generics having good opportunities in this sector due to their cost competitiveness factor.
"Ten per cent of our production is sold locally which is considerable given the size of the population. In spite of the fact that the generics industry in Malta is more or less in its infancy, we have enjoyed quite a positive response from the medical profession and from pharmacists.
"Of course, there is considerable room to grow. We are working closely with the medical profession. We have organised visits to the plant so that we could explain our standards, our manufacturing processes, our quality criteria... The feedback was very positive.
"The trend is definitely increasing in favour of generics. We hope to see more and more in Malta as this is one of the most effective ways of lowering medicine prices. The results of Actavis' entry to the local market have been marked - not only because our products are cheaper but because they also drive down the cost of branded drugs. I have heard of reductions in cost of anything between 20 to 60 per cent," he said.
As time goes by, more and more of the R&D is being entrusted to the local organisation, which currently employs around 45 people in its development activities.
"The unit helps with the development of products up to dossier stage. The parent company then decides whether to sell the dossier to another manufacturer or develop the product itself.
"A quarter of our employee base is graduates, most of them pharmacists or chemists. Overall, the availability of these types of skills has improved. But there is room for improvement in specific areas, especially for chemists and particularly for chemists with postgraduate degrees. The gap is closing, in some areas more than others. There are people in the pipeline but we require people on a real-time basis and this, sometimes, necessitates recruitment of staff from overseas as well. Naturally, we are aware that when supply does not meet demand, it can tend to drive costs upwards.
"This phenomenon is not restricted to pharma. It has happened in ICT, for technical staff and with accountants too. I think the challenge is always for local authorities to make sure that the educational system is in sync with - or even in advance of - industrial needs. It is a challenge because it is a playing field that is moving at quite a fast pace.
"In the meantime, we work closely with most of the educational set-ups. We support the post-graduate diploma course in applied chemistry, which started in February last year. We also encourage our own people to further their studies."
Does the lack of qualified personnel - and possibly higher wage demands - threaten the competitiveness of the sector? Mr Vella thinks that this is too simplistic an analysis.
"Competitiveness is made up of different factors. There are obviously countries that have much more competitive labour rates than we do but I still believe that on the whole, we manage to retain a degree of attraction, especially when compared to Western European countries.
"Competitiveness, in my view, is not only made up of pure costs but of your whole offering, including quality of product, quality of service, flexibility, responsiveness, high service levels. Response time is one of the key success factors in generics; you have to be able to respond quickly to a customer demand for generics. The flexibility Malta has in this regard is well recognised.
"Compared to other Actavis sites, Malta rates quite highly. When you look at what has happened over the years, Actavis Malta has moved to more complex products and more complex operations, because of our response rate and because of our flexibility in switching from one product line to another."
The pharmaceutical industry has created some clustering, with suppliers and sub-contractors investing in their own processes to be able to meet the required standards. Mr Vella believes this to be very important for the local economy.
"We are definitely keen to pursue opportunities to leverage the local set-up. For example, printed matter is very important to our business so we are sourcing a good amount of it locally. We are also sourcing other packaging material from other vendors. At the end of the day, however, we will only use local clusters when the cost, quality and service meet our expectations.
"The fact that there are local companies interested is very positive but they do need to ensure that they can be competitive," he warned.
Actavis Malta is one cog in a very large wheel that is growing larger by the day. Actavis, founded in 1956, is continuing with its aggressive expansion plans and already has a market capitalisation of over €3 billion. There have been dozens of acquisitions over the past years and it is looking at more. Actavis also sells products on behalf on other companies, which also helps it to extend its reach.
It is constantly adding to its repertoire of drugs. At present, it has over 650 products on the group's markets, including more than 30 oncology products acquired through the acquisition of the Romanian oncology business, Sindan, in March 2006.
In addition, the group has more than 330 projects in development and registration.
Some products - like generic HIV drugs - remain elusive. Others, like the diabetes drug glimepiride, were major successes.
"This product was researched and developed entirely in Malta. It is doing quite well in Malta and quite well in Europe," Mr Vella said.
"We are very proud of it."
Actavis Malta managing director Sergio Vella said that Malta may now be covered in a medicine patent application. The move, however, does not designate Malta retroactively and therefore does not affect patents issued before March 1.
For years, Malta has benefited from an exemption, known as the Bolar Provision, which enables manufacturers of generic pharmaceuticals to conduct tests and trials on patented pharmaceuticals, prior to patent expiry, in support of filing applications for marketing authorisation for medicinal products.
Mr Vella believes that such an exemption has proved invaluable to pharmaceutical companies in Malta.
"Malta has had this provision in its law for many years and there is no doubt that this gave companies like ours a strategic advantage by having Malta as a base.
"Having said that, I do not believe that the Bolar Provision alone supports the long-term viability of Actavis Malta or the products that we manufacture. Our global presence is ultimately supported by our competitiveness in the timely production of high quality medicinal products.
"In order to maintain a healthy future, pharmaceutical companies in Malta such as ours must not rely on incentives and the Bolar Provision alone, but must strive to provide a high quality product, at a competitive price and with a good service... We tend to forget the basics sometimes. We are quite confident that we have a good formula here," he said.
There could be no more reassuring indicator of Actavis' belief in the industry than the fact that it has started discussions with Malta Industrial Parks on the possibility of expanding to an adjacent site in Bulebel.
Although it is not needed imminently - the present site will be sufficient for the short term - the long-term plans also reflect the company's rapid growth in the generics industry.
"We have a state-of-the-art facility that we have radically upgraded and restructured over the last few years. We designed into it quite an amount of spare capacity and are in the process of bringing in even more equipment. We have more than doubled the number of blister lines over the past two years. We were lucky to have the space for the extra machinery this entailed.
"Having said that, over a 3-5 year window, we see the possibility of requiring more and we are looking at space adjacent to this facility. We are currently in discussion with Malta Industrial Parks on this," he said.
The growing turnover is also being reflected in staffing levels. The 360 staff last year will increase to around 400 this year and if performance continues to grow at the same pace, the company might also be recruiting more people. In the meantime, the company has adopted a continuous shift pattern - including weekends, where necessary. It has also started offering flexitime and teleworking.
"We have established some criteria for this, which would include some time being spent here, as the networking remains very important. I think flexibility is a very strong motivator for people who have conflicting demands from their private and working lives," he said.
One reason for the growth is the fact that more and more products are being manufactured in Malta.
In 2002, Actavis sold only five products in Malta. At present, Actavis sells 32 products on the local market and manufactures a similar number for export (which accounts for 90 per cent of its production). This year, it is planning to launch 10 more products locally and eight for the international market.
"We know that there is demand for a number of products and will be launching more, including some for which the branded product is not available on the market with a view to increasing further lower cost generics availability.
"In Europe, generics accounts for over a quarter of all medicines, although this varies greatly from country to country. The generic market in Malta has to be split between the state and private medicine. Private medicine only accounts for about 35 per cent of local business. The bulk is definitely state related, with generics having good opportunities in this sector due to their cost competitiveness factor.
"Ten per cent of our production is sold locally which is considerable given the size of the population. In spite of the fact that the generics industry in Malta is more or less in its infancy, we have enjoyed quite a positive response from the medical profession and from pharmacists.
"Of course, there is considerable room to grow. We are working closely with the medical profession. We have organised visits to the plant so that we could explain our standards, our manufacturing processes, our quality criteria... The feedback was very positive.
"The trend is definitely increasing in favour of generics. We hope to see more and more in Malta as this is one of the most effective ways of lowering medicine prices. The results of Actavis' entry to the local market have been marked - not only because our products are cheaper but because they also drive down the cost of branded drugs. I have heard of reductions in cost of anything between 20 to 60 per cent," he said.
As time goes by, more and more of the R&D is being entrusted to the local organisation, which currently employs around 45 people in its development activities.
"The unit helps with the development of products up to dossier stage. The parent company then decides whether to sell the dossier to another manufacturer or develop the product itself.
"A quarter of our employee base is graduates, most of them pharmacists or chemists. Overall, the availability of these types of skills has improved. But there is room for improvement in specific areas, especially for chemists and particularly for chemists with postgraduate degrees. The gap is closing, in some areas more than others. There are people in the pipeline but we require people on a real-time basis and this, sometimes, necessitates recruitment of staff from overseas as well. Naturally, we are aware that when supply does not meet demand, it can tend to drive costs upwards.
"This phenomenon is not restricted to pharma. It has happened in ICT, for technical staff and with accountants too. I think the challenge is always for local authorities to make sure that the educational system is in sync with - or even in advance of - industrial needs. It is a challenge because it is a playing field that is moving at quite a fast pace.
"In the meantime, we work closely with most of the educational set-ups. We support the post-graduate diploma course in applied chemistry, which started in February last year. We also encourage our own people to further their studies."
Does the lack of qualified personnel - and possibly higher wage demands - threaten the competitiveness of the sector? Mr Vella thinks that this is too simplistic an analysis.
"Competitiveness is made up of different factors. There are obviously countries that have much more competitive labour rates than we do but I still believe that on the whole, we manage to retain a degree of attraction, especially when compared to Western European countries.
"Competitiveness, in my view, is not only made up of pure costs but of your whole offering, including quality of product, quality of service, flexibility, responsiveness, high service levels. Response time is one of the key success factors in generics; you have to be able to respond quickly to a customer demand for generics. The flexibility Malta has in this regard is well recognised.
"Compared to other Actavis sites, Malta rates quite highly. When you look at what has happened over the years, Actavis Malta has moved to more complex products and more complex operations, because of our response rate and because of our flexibility in switching from one product line to another."
The pharmaceutical industry has created some clustering, with suppliers and sub-contractors investing in their own processes to be able to meet the required standards. Mr Vella believes this to be very important for the local economy.
"We are definitely keen to pursue opportunities to leverage the local set-up. For example, printed matter is very important to our business so we are sourcing a good amount of it locally. We are also sourcing other packaging material from other vendors. At the end of the day, however, we will only use local clusters when the cost, quality and service meet our expectations.
"The fact that there are local companies interested is very positive but they do need to ensure that they can be competitive," he warned.
Actavis Malta is one cog in a very large wheel that is growing larger by the day. Actavis, founded in 1956, is continuing with its aggressive expansion plans and already has a market capitalisation of over €3 billion. There have been dozens of acquisitions over the past years and it is looking at more. Actavis also sells products on behalf on other companies, which also helps it to extend its reach.
It is constantly adding to its repertoire of drugs. At present, it has over 650 products on the group's markets, including more than 30 oncology products acquired through the acquisition of the Romanian oncology business, Sindan, in March 2006.
In addition, the group has more than 330 projects in development and registration.
Some products - like generic HIV drugs - remain elusive. Others, like the diabetes drug glimepiride, were major successes.
"This product was researched and developed entirely in Malta. It is doing quite well in Malta and quite well in Europe," Mr Vella said.
"We are very proud of it."