Nathan Jessop is a columnist for Pharmaceutical Technology Europe.

Nathan Jessop

Switzerland is an important power in Europe's pharmaceutical industry. As well as being one of the EU's major trade partners, Switzerland represents an important source of new pharmaceutical innovation and is home to two of the world's largest pharma companies.

When it comes to Europe, most attention focuses on the EU pharmaceutical market and the R&D activity of companies in the 27 member states. Switzerland is not an EU member state, but remains one of Europe's most important pharmaceutical markets, as well as a major centre for medical research and new products. In 2010, the Swiss pharmaceutical market was valued at SF4.9 billion (€4 billion), which represented a 3.4% increase compared with the previous year (1). The country's healthcare spending represents 10.7% of gross domestic spending, which is one of the highest levels in the world. Per capita, pharmaceutical expenditure is around the average for Organisation for Economic Co-operation and Development (OECD) countries (2), but the country holds a particular interest for the pharma industry because there tends to be a high share of out-of-pocket payment (around 30%) both for total healthcare expenditure and pharmaceutical spending (2).  

Switzerland is ranked by the European Federation of Pharmaceutical Industry Associations as the fourth highest for R&D expenditure in Europe, behind the UK, France and Germany (3). The country's pharmaceutical industry has been active since the 19th century and is a great source of national pride. Traditionally, the country's lack of natural resources forced it to turn to innovative industries and build up an export network. Furthermore, it has been keen to attract foreign workers, whose presence is often viewed as having helped drive its R&D-based sectors (4, 5). Since 2007, work and residency conditions for EU citizens have been substantially relaxed (5). 

Although there has been a steady drift of R&D investment from Europe to the US since 2000, Switzerland's pharma industry has remained an important contributor to the country's economy. In 2011, its annual pharmaceutical exports were estimated to exceed $40 billion (€27.3 billion) (6), while the balance of pharmaceutical trade is positive and has continued to increase since 2000. The Swiss pharmaceutical industry is also a major source of employment, comprising approximately 35000 workers and supporting nearly 120000 other employees in related and downstream sectors (3, 7). For every new job created in the Swiss pharmaceutical industry, it has been estimated that a further two are generated elsewhere in the Swiss economy (8). 

For most Swiss companies, exports are a vital source of revenue, particularly as the growth of the domestic pharmaceutical market has been affected by government pressure to control prices. Another trend that is limiting the market for branded products is the steady growth of the country's genericdrug sector. In the past, there was little interest in generic products—possibly because of Switzerland's leading role in developing new medicines, which created brand loyalty among domestic consumers. In 2008, generics represented only about 9% of the Swiss national market, but estimates for 2011 suggest that generics now account for 12% of the market (2, 3). 

Switzerland is the home country of pharma giants Novartis and Roche, as well as a host of small and medium-size enterprises (SMEs). All the major multinational pharmaceutical companies are represented in the national market, but the leading forces, by far, are Novartis and Roche. Although active in 140 countries worldwide, Novartis maintains a strong link to its home country and employs approximately 12500 staff in Switzerland. Since 2008, Novartis has also been named in an annual survey of Swiss science university students as the most desired company to work for (7). Out of Novartis' estimated €5.1 billion annual R&D budget, approximately 56% is spent in Switzerland (7, 9). Meanwhile, Roche employs around 10000 people in Switzerland, which represents 12% of its global workforce (7). On a global basis, the company spends around €1.9 billion on R&D annually (9). In 2009, Roche strengthened its worldwide position through a US$47 billion takeover of Genentech. The merged group became the seventh largest drug company in the US market. 

From time to time, there has been speculation regarding a merger between Novartis and Roche. In 2003, Novartis announced that it had accumulated enough stock in Roche to control 32.7% of the company's voting rights; however, members of Roche's founding family spoke strongly against any merger, while Novartis' CEO stated that the company was not looking to launch a hostile takeover (10). Since then, rumours have periodically resurfaced, but Novartis has not made any overt move for Roche. In March 2011, one of the members of Roche's founding family left the Roche family voting group, reducing its stake in the company from 50.01% to 45.01%. Some analysts have predicted that, in the long term, a merger with Novartis would be attractive based on the companies' shared interest in oncology. However, Roche has issued a number of media statements to dismiss this possibility and claimed that the suitability of such a merger is even less logical than it was in 2003 (11). Roche's spokesman argued that while Roche has focused on personalised medicine and diagnostics, Novartis has diverged into generic drugs and eye care. 

Switzerland's regulatory agency is called Swissmedic and is based in Bern. Although Swissmedic is linked to Switzerland's Federal Department of Home Affairs, it is independent and has its own budget and, as with many other regulatory agencies, it is funded from the fees it charges for regulatory applications and payments from the government for public services.  

The agency cooperates closely with foreign agencies, including the EMA. Indeed, the EMA has had a mutual recognition agreement in place with Switzerland since 2002 (12). In principle, the agreement is to avoid duplication of procedures when Swiss and EMA requirements are deemed equivalent, but the nature of acceptable processes is frequently updated. In 2010, the EMA and Swissmedic updated their agreement regarding GMP inspection and batch certification to account for advanced therapy medicinal products, such as those in the field of transplants. This update was made because new regulations on advanced therapy medicinal products had separately come into force in the EU and Switzerland since 2007, but had not been considered in the context of the original mutual recognition agreement (12). The 2010 discussions between the agencies were designed to close any loopholes and avoid potential, regulatory misunderstandings regarding these types of products. The original agreements state the equivalence of the two GMP systems, so that a manufacturer in the EU or in Switzerland can release a batch of medicinal product for sale or supply into the market of either party. Although the agreement does relax some of the requirements for operating in the other market, manufacturers must still have an effective batch-recall system to ensure that products can be recalled at any time when so required (12).  

Another example of the two agencies cooperating on an area of mutual interest was during the 2009 H1N1 influenza pandemic. This collaboration was renewed in February 2011, with the two agencies agreeing to share confidential information about the authorisation and safety of medicines used in the context of H1N1 pandemic influenza. 

Swissmedic's work covers registration and approvals, but it is the Swiss federal government that decides on the maximal allowable public price for drugs in the country. This price is calculated from the ex-factory manufacturer price, distribution costs and a valueadded tax rate of 2.5% (2). The Federal Office of Public Health (FOPH) is the final decision-making body for pricing and reimbursement of approved drugs. The FOPH bases its decisions on product cost-effectiveness and also benchmarks prices with those in Germany, the UK, Denmark, the Netherlands, France and Austria. If the FOPH gives a positive reimbursement decision, then a drug is listed in a positive drug list called the Spezialitätenliste within 30 days. The pricing and reimbursement status of drugs is reviewed every three years and after patent expiry, but drugs that are considered particularly innovative can receive a discretionary additional 20% price reward (2). From 2012, generics can also be included in the Spezialitätenliste, if their ex-factory price is 10–60% lower than the Swiss reference product after patent expiry. 

Being one of the EU's major trade partners, Switzerland is a huge force in the European pharmaceutical market. In 2010, 41.5% of EU pharmaceutical imports came from Switzerland (3), which means that the performance of the Swiss pharmaceutical industry has a strong bearing on what happens to the pharmaceutical sector in the rest of Europe.

1. Swissinfo, "Cheaper Prices Slow Down Pharma Market Growth" (Switzerland), 

2. International Society for Pharmacoeconomics and Outcomes Research (ISPOR), "Switzerland–Pharmaceutical" (NJ, USA), 

3. EFPIA, "The Pharmaceutical Industry in Figures" (Belgium), 

4. SGCI Chemie Pharma Schweiz, "Die schweizerische chemisch-pharmazeutische Industrie" (Switzerland), 

, "Switzerland Relaxes Immigration Laws for Most European Nations" (Location of publishing source, 2007), 

6. Espicom, "The Pharmaceutical Market: Switzerland" (Chichester, UK, March 2011). 

7. Novartis, "Novartis en Suisse"  (Switzerland), 

9. G. Roth, "2010 Top 20 Pharmaceutical Companies Report," Contract Pharma,  online, 

www.contractpharma.com/contents/view/33747

10. A. Langley, "Novartis's Stake in Roche Fuels Merger Speculation," 

11. "Roche Changes Raise Novartis Takeover Question," Inpharm  online, 

12. EMA, "Switzerland. European Medicines Agency" (UK), accessed 8 June 2011). 

Articles

Switzerland is an important power in Europe's pharmaceutical industry.

Swiss Pharma Strength

When Pfizer decided to close its R&D site in Sandwich it renewed concerns over the UK's attractiveness to the pharma industry. The site employs 2400 people and although Pfizer has stated that some positions will be transferred to other sites or to other companies working with Pfizer, it is expected that most staff will be made redundant over the next two years (1).

Historically, the UK has been one of the leading forces in the world of pharmaceuticals. The pharma industry is also a major contributor to the country's economy. The job losses at Pfizer have come at an unfortunate time with the UK economy still emerging from recession and unemployment remaining high. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), the innovative pharmaceutical industry is an "important engine of economic recovery", which means that the UK can ill afford to lose investment from a company of Pfizer's size and stature (2). It's not just Pfizer either; a number of other companies have announced cuts in the UK, including AstraZeneca, GSK and Novartis. 

The pharma industry's economic importance to the UK is illustrated by figures from the Association of the British Pharmaceutical Industry (ABPI), which show that the industry has been a net earner for the country for the past 30 years (3). In 2009, the pharmaceutical industry invested £4.4 billion (€5 billion) in UK R&D and employed 72?000 staff. For a number of years, however, EFPIA has been concerned about a drift in investment away from Europe to the US and to the fast-growing economies of Brazil, China and India (2). According to EFPIA, excessive interventions by European national governments to control healthcare expenditure have dented multinational pharma companies' confidence to invest in the region. The organisation will, no doubt, be alarmed by Pfizer's decision to downgrade its investment in the UK, and the fact that it may prompt other large companies to reconsider their presence in the country. 

The irony for the UK is that there are a number of longstanding initiatives in place to help strengthen its position in both traditional pharma and biotech R&D. Despite opposing views over pharmaceutical pricing, government and industry representatives often have joint discussions on issues of common concern. 

Indeed, in November 1999, the UK government, together with representatives of the domestic pharma industry, set up the Pharmaceutical Industry Competitiveness Task Force (PICTF) to identify steps that could be taken to make the UK more attractive for R&D investment (4). The PICTF team met in April 2000 and published its final recommendations in March 2001. Industry representatives were of the opinion that despite the UK's historically strong performance, traditional factors that had contributed to success in the past, such as established academic excellence in life sciences, could not be relied upon to maintain competitiveness in the future. Factors such as market access and intellectual property protection would gauge how the UK was viewed relative to the rest of the world — particularly the US. 

PICTF focused on six areas of UK competitiveness (market developments, intellectual property rights, regulation of medicines licensing, science base and biopharmaceuticals, clinical research and wider economic climate) considered vital for future performance, and established working groups to examine them. Reliable competitiveness indicators were identified, with the intention of reviewing them annually. A quick look at the DoH site notes that reviews were not published for 2006–2008, though 2009 is available, so perhaps they are back on track (5). 

The pharmaceutical industry representatives also used the PICTF initiative as an opportunity to gain commitment from the government to explore some of the industry's concerns. One particular worry at this time was the role that NICE would play in the future UK market (something which continues to trouble the industry today). They sought clarification on the timing of the body's decisions in relation to the availability of data, the limitations of modelling with reference to particular case studies, and how topics were selected for NICE appraisal. Separately, the industry representatives also had helpful discussions with the treasury on a range of fiscal and taxation issues. 

PICTF was considered a success in that it established a framework for dialogue on issues over which the government and the pharma industry might differ. However, it also represented high-level recognition from the government that it valued the industry's contribution to the UK economy. The value of PICTF was also recognised by other countries, as well as by the European Commission (EC), and has shaped their own approaches to boosting national and regional R&D. In 2004, for example, the French government launched a similar exercise called PharmaFrance and even sent representatives to the UK to seek company viewpoints on the R&D environment.  

Another pharmaceutical R&D initiative that featured UK pharma industry participation was conducted at an overall EU level by the EC's G10 Medicines Group (6). In 2002, the group brought together top European industry and public health decision makers to consider ways of improving competitiveness in line with social and public health objectives. In a similar fashion to PICTF, the G10 group set up a system of EU indicators to allow comparisons to be made between the EU and its major competitors as a basis for establishing best practice within the EU and uptake in each member state. The group also published a report on its findings for the EC, outlining proposals for concrete action to be taken (7).Out of the 14 or so G10 recommendations, perhaps the most one important was to set benchmarks by which Europe could measure its industry productivity against the US. More information was also to be made available regarding disease statistics, as there was an incomplete picture across Europe. 

Recognising the growing importance of biotech R&D to the future of new drug development, in 2003, the UK Government launched the Bioscience Innovation and Growth Team (BIGT), which was led by the BioIndustry Association (BIA) in conjunction with the Departments of Trade & Industry and Health. Like PICTF, the BIGT issued a report, following consultation with more than 70 industry experts. Its recommendations included programmes to increase the scientific and managerial talent base available to the biotech sector, with the hope of emulating the leading position of the US in the field of biotech drug development. Many of the recommendations recognised the need for a long-term vision for the industry and reached as far as 2015. Unfortunately, such goals make monitoring its ongoing success difficult. 

A much more recent initiative is "Lifescience UK". Launched in January 2011, four key members, the Association of British Healthcare Industries (ABHI), the Association of the British Pharmaceutical Industry (ABPI), the BioIndustry Association (BIA) and the British In Vitro Diagnostics Association (BIVDA), will all represent their own sector interests and work with the government to help strengthen and grow the UK's life sciences environment. Watch this space. 

The UK's Ministerial Industry Strategy Group (MISG) continues to meet twice a year as part of the follow-up to the implementation of the PICTF recommendations. The latest review available from PICTF is for 2009, and it paints an optimistic view for the UK (8). Key highlights include the fact that the UK's corporate taxation rates are more favourable than those of the US and Japan, and that there is an upward trend in annual numbers of new graduates in subjects considered relevant to the UK pharma industry. The report also focused on the fact that 16 of the world's top-selling 75 medicines were discovered and developed in the UK — more than any other country except for the US. In light of the closure of Pfizer's Sandwich facility, which was often considered the jewel in the crown of UK R&D because of its role in development of a certain Pfizer blockbuster, it will be interesting to see what the next PICTF report contains. 

The reaction of the government to Pfizer's decision will beimportant for a number of reasons. A primary concern is the economic impact that the closure will have on the local economy in Kent. Not only is the company a major employer in the area, but many other local businesses supplying goods and services depend on its presence for their own viability. Initial estimates suggest that outside Pfizer, 3000 extra jobs could be lost when contractors and other small businesses lose a major source of their revenue (9). The government has said that it will seek to preserve R&D activity in the area through discussions with other firms in the pharmaceutical sector, but it is difficult to see why such companies would commit themselves to high level investment in Sandwich, given that Pfizer has exited despite its long association with the area (10). 

Other multinational pharmaceutical companies will be watching closely as they weigh up decisions to streamline their own operations. Although GSK's CEO, Andrew Witty, recently stated that Pfizer's decision had nothing to do with the UK business environment, there must be considerable unease over what lies ahead for the domestic industry (11). The UK Government's efforts to implement costcontainment measures have tended to be more direct in recent years, such as price cuts, which have angered companies. In 2008,the ABPI warned that the pharma industry had cut UK jobs by 10% over the previous three years because of the pricing environment, and claimed that there was a "direct link between job cuts and changes to the pricing mechanism" (12). 

It certainly seems as though pharma companies are not happy with the UK at the moment and, as with most things, the likes of Pfizer will vote with their feet. 

1. BBC, Pfizer to close UK research site (2011). 

2. EFPIA, The Pharmaceutical Industry in Figures (2010). 

3. ABPI, The pharmaceutical industry in the UK (2011). 

4. UK Department of Health, "Pharmaceutical Industry Competitiveness Task Force" (2001). 

5. Department of Health, "Pharmaceutical industry competitiveness and performance indicators" (2010). 

6. EurActiv, "G10 Medicines Group makes recommendations to enhance pharmaceutical competitiveness" (2002). 

7. European Commission, "High Level Group on innovation and provision of medicines" (2002). 

8. Bioscience Innovation and Growth Team, "Bioscience 2015" (2004). 

9. Business For Kent, "Shockwaves of Pfizer closure will be felt across Kent" (2011). 

10. InPharm, "Pfizer's CRO plans for Sandwich will have limited impact" (2011). 

11. Sky News, "Glaxo Backs UK After Rival's Plant Closure" (2011). 

, "UK Drug firms to slash workforce by 10pc" (2008). 

Despite initiatives to encourage multinational pharma companies to conduct R&D in the UK, the country may be losing its edge; is Pfizer's decision to exit a key site earlier this year the beginning of a mass exodus?

Could The UK Be Losing Its Pharma Luster?

The public believes that governments and regulators will ensure the safety of the medicines they use. This means that efforts to improve available drug safety systems are always high on agendas — particularly as zerorisk medicines do not exist — but this often requires considerable investment in new electronic technologies. To achieve drug safety objectives, greater demands have also been placed on the pharmaceutical industry. Since 1995, for instance, EU regulations have required new drug applications to include details of a risk management system. Following the EU's large expansion in 2004, there was increased emphasis on drug safety in new legislation and a number of Directives touch upon key topics in this area. 

In September 2010, the European Parliament approved a new set of pharmacovigilance, which were then adopted by member states' Ministers for Health in November.

  Not everyone, however, is satisfied by the new measures. In December, Health Action International Europe (HAI), Medicines in Europe Forum (MiEF) and the International Society of Drug Bulletins (ISDB) issued a joint press release criticising the new proposals as lacking ambition and having a number of faults.

  One major concern was that member states would no longer be required to support pharmacovigilance systems using public funding. There was also unease at the increased role the pharma industry would play in providing the data for pharmacovigilance systems. 

The full extent of medicinal risk is rarely known at the outset of the application; clinical trials are limited in size and feature restrictions in the scope of patients studied, so full information relating to age, gender, ethnicity, restricted co-morbidities and interactions with other medications is impossible at this stage. As such, risk should be managed over a product's lifecycle and reflect the product's use in the wider population. The processes involved in such programmes include risk detection, risk assessment, risk minimisation and risk communication. Because multiple risks may be associated with a product, however, their combined impact in relation to the benefit conferred by the drug must be assessed. The EMA has published guidelines on risk management systems to help companies meet requirements in this area.

EudraVigilance, a joint effort between the EMA and the competent authorities in member states, is a system that forms an integral part of the European approach to risk management. First developed in 2001, EudraVigilance consists of a data processing network and management system for reporting and evaluating suspected adverse drug reactions across the European Economic Area (EEA). By implementing an electronic approach to pharmacovigilance, the authorities hoped to facilitate early detection of possible safety signals associated with medicines. Data generated cover both the development and postauthorisation periods for products, but some critics of the system worry about an over-reliance on companies to report data that is used in the system. 

The EudraVigilance Clinical Trial Module (EVCTM) focuses on the reporting of suspected unexpected serious adverse reactions (SUSARs) during clinical trials. SUSARs from clinical trials must be reported by the trial sponsor to the regulatory body in the country where the event occurred, and it is then that agency's responsibility to electronically report the event to the EudraVigilance system. Study sponsors in the EU must have a EUDRACT number, which functions as a unique identifier of the trial within the EU's clinical trial database. In this way, SUSARs from the same clinical programme being run at different European sites can be collectively assessed and processed. There is also a EudraVigilance Post-Authorisation Module (EVPM) designed for post-authorisation individual case study reports. Similarly with EVCTM, SUSARs must be reported to the national regulatory body, which then electronically reports the event to the EudraVigilance system.  

Because drug safety issues have an international dimension, efforts have been made to enable the global exchange of relevant safety information. ICH, for example, brings together regulatory agencies from Europe, the US and Japan, along with their industry counterparts. ICH's technical working groups have produced several guidelines and documents on the secure electronic exchange of safety data for pharmacovigilance and the EudraVigilance system makes use of such safety information if it arises from outside Europe. SUSARs occurring in a trial outside the EEA must be reported electronically to the EudraVigilance system by the sponsor rather than the regulatory agency. A similar responsibility is assigned to companies regarding safety issues occurring outside the EEA for authorised products. 

Despite the sophistication of the European pharmacovigilance systems introduced since 2005, many believe that improvements can still be made. In 2007, the European Commission (EC) conducted a public consultation exercise to identify weaknesses in existing systems.

  The feedback obtained highlighted the lack of clarity over roles and responsibilities for pharmacovigilance, as well as a perception of excessive bureaucracy within the regulatory agencies in different member states. 

There were also suggestions that the complex reporting rules were implemented differently by regulatory bodies in the various member states, which was seen as holding back efforts to improve pharmacovigilance in the region, particularly with respect to rapid decision-making. Improvements to existing systems were also seen as representing only an evolutionary approach to pharmacovigilance and there was a sense that new thinking is required; indeed, the continued expansion of the EU and the sophistication of the products emerging from innovative R&D programmes seems to demand it.

As an initial proposal, those behind the consultation exercise suggested a two-pronged approach, centred on implementing the existing framework and changing the legal framework. To improve systems, collaborations would be encouraged with the EC's Directorate General for Research, so that studies could be funded to examine the safety of medicines, as well as to develop new methodologies to conduct pharmacovigilance. Communication would also be initiated with individual regulatory agencies to resolve the administrative issues raised by those responding to the public consultation. On the legal front, there was a promise to strengthen transparency rules relating to pharmacovigilance data, and to introduce a clear drug safety standard. To achieve this, the EC decided to involve the EMA because of its experience in coordinating region-wide measures, with the hope that it would lead to the development of a responsive system that enabled rapid safety decisions to be applied equally across all member states. 

Since the EMA's involvement began, the agency has been promoting the establishment of a European Network of Centres for Pharmacoepidemiology and Pharmacovigilance (ENCePP). The idea behind the network is to better coordinate the monitoring of authorised medicines in Europe and to capture the information revealed by ongoing post-authorisation studies on safety and risk-benefit. To achieve these goals, the EMA will collaborate with European experts in pertinent fields. Those behind ENCePP have emphasized that the network aims to complement and not replace existing pharmacovigilance measures in Europe, such as EudraVigilance.

An initial output of ENCePP was to establish a public, fully searchable electronic index of available EU research resources in the fields of pharmacoepidemiology and pharmacovigilance. At the end of 2010, ENCePP published its Work Plan 2011–2012, which outlined its intended strategy and listed deliverables and target dates.9 A steering group will meet quarterly to oversee delivery and coordination with the EMA. 

While there is considerable activity on reforming the approach to pharmacovigilance across the EU, it is not clear how well this has been communicated to the public and physicians. A number of safety scandals over the years have attracted considerable media attention, and made people suspicious about the transparency of regulatory bodies and their interaction with the pharma industry. For example, the TeGenero TGN1412 incident in 2006 in the UK led to considerable public criticism of the MHRA, with some observers believing that existing information in the public domain concerning immunological mechanisms related to the drug's action should have led to a more cautious attitude.

  Presently, there is also controversy in France regarding Servier's Mediator and the failure of the country's regulatory agency to act on prior concerns raised over the cardiovascular safety of the product. On a wider scale, the pain reliever propoxyphene has been subjected to strong criticism regarding its safety; one European physician, who played a role in having the drug withdrawn from the EU market, described it as the "worst drug in history" and claimed that it was responsible for more deaths than any other drug.

It is precisely because of such safety scandals that the joint December 2010 press release by the HAI, MiEF and ISDB called for a more ambitious approach by the European authorities to pharmacovigilance. If European authorities are to gain the public's confidence, as well as that of physicians, future pharmacovigilance measures should also indicate what the legal sanctions will be for those that fail to meet the necessary safety standards. 

1. International Society of Drug bulletins, "Final proposals on pharmacovigilance: Some progress, but a missed opportunity to genuinely strengthen patient safety" (2010). 

2. EMA, "Guideline on Risk Management Systems for Medicinal Products for Human Use" (2005). 

3. ENCePP, "Strengthening medicines safety monitoring" (2007). 

5. Medscape, "Physicians Say Good Riddance to 'Worst Drug in History'" (2011). 

Europe's approach to pharmacovigilance has room for improvement that European agencies are working on.

Reforming The Approach To Pharmacovigilance In Europe

In France, public confidence in health authorities and pharmaceutical industry has been shaken by a safety scandal over the drug Mediator (benfluorex hydrochloride), which was marketed by Servier and acts as a hypolipidemic and hypoglycemic drug. Medicines containing this agent were first approved in Europe in the mid to late 1970s. Besides appearing on the French market as Mediator, the product was also available in Portugal, Spain and Italy, and benfluorex-containing products were also authorised, but not marketed, in Cyprus and Luxembourg.  

Although Mediator was licensed in France for the treatment of diabetes, it became widely used offlabel in the country as a weight loss treatment. In November 2009, several reports appeared that linked the drug to valvular heart disease and pulmonary arterial hypertension.

  Upon review of this information, the French medicines regulator AFSSAPS (Agence française de sécurité sanitaire des produits de santé) suspended the product's marketauthorisation.  

Following Mediator's market withdrawal, an initial study suggested that it was linked to 500 deaths in France between 1976 and November 2009;

  however, further research has suggested that the figure could be much higher, leading to an outcry from the French public and media. Much of the criticism has been directed at AFSSAPS, which is accused of failing to act earlier on available information and to draw conclusions from issues with structurally similar drugs.  

Although there is continuing controversy regarding Mediator itself, the situation has wider implications for the field of anti-obesity drug development as a whole, which has already experienced setbacks such as the withdrawal of rimonabant. Companies developing products in this area will probably face higher regulatory hurdles and a skeptical public.  

Obesity has long been recognised as a major cause of morbidity and mortality. This led to the idea that pharmacotherapy tackling obesity could be beneficial as an adjunctive support to diet, exercise and lifestyle modification. However, early agents in the field ran into safety problems, some of which were chemically related to benfluorex. 

In 1997, a study was published that linked the appetite suppressants fenfluramine and dexfenfluramine to cardiac valve disease. At first, the risk was attributed to the two drugs when used in combination, but cases of valve disease were later reported in patients who had been treated exclusively with either fenfluramine or dexafenfluramine.

In September 1997, the FDA asked manufacturers to voluntarily withdraw both treatments from the US market based on the results of echocardiograms of patients who had been on the medications.

  Findings supplied by physicians showed that approximately 30% of the evaluated patients had abnormal echocardiograms, despite having no symptoms. This rate was much higher than expected, forcing the FDA to take immediate action as well as to defend itself for not acting earlier. According to the FDA, before these physician reports there had been no information to suggest an association of heart valve disease with fenfluramine and dexfenfluramine. The FDA also pointed out that heart disease had also not been observed in a oneyear European study that had been used in the regulatory application for dexfenfluramine. Seeing the situation that the FDA was faced with, the EMA decided to take stronger measures by withdrawing the licences for fenfluramine and dexfenfluramine, as well as a number of other anti-obesity agents where clinical benefit was in doubt.

In France, the safety issues regarding dexfenfluramine have led to a flurry of lawsuits against Servier, who had marketed the drug as Isomeride. In 2000, Anna Paulos, a patient suffering from pulmonary arterial hypertension, claimed that Isomeride was responsible for her condition and won 349000 in damages from Servier.

  The family of another patient, who died in 1995, also fought a long-running court battle with Servier, which concluded in January 2011 when a court of appeal ordered the company to pay 145500 as compensation.

  The success of these lawsuits and the media coverage they generated has led to other cases against Servier, backed by the high profile patient group L'Association des Victimes du Mediator et de l'Isoméride, which campaigns for those who took the drug. 

When the recent safety issues regarding Mediator are considered in light of previous safety concerns over fenfluramine and dexfenfluramine, it is no surprise that there has been anger in France, since benfluorex is a fenfluramine derivative. In fact, recognising the link between the two drugs, the patient organisation campaigning for victims of Isomeride is now inviting those who took Mediator to come forward.  

In 2003, the first case of valvular heart disease due to benfluorex was reported in a Spanish medical journal, with the authors describing how a 50year old woman who had been taking benfluorex for a year developed cardiovascular symptoms.

  They noted that the patient had been examined two years prior to treatment, at which time her cardiovascular profile had been normal. Post-treatment, microscopic examination of the valves revealed that the damage seen was identical to that described in patients who had taken fenfluramine and dexfenfluramine. The authors suggested that fenfluramine, dexfenfluramine and benfluorex shared a common mechanism in damaging heart valves. 

Despite this case report, and a number of other papers strongly suggesting that patients treated with benfluorex incurred a risk of valvular heart disease, it was not until November 2009 that the French authorities took the drug off the market. Recent reports in the French press show that as long ago as 1998, three eminent French physicians wrote to the AFSSAPS advising them to reevaluate the use of Mediator in diabetes and obesity. The French newspaper, 

, has been at the forefront of covering the scandal and has obtained a copy of this letter and other enquiries sent to the agency concerning the safety of benfluorex-containing medicines.

In 1998, at the request of the Italian health authority, a Europeanlevel investigation was initiated over the safety implications of the structural similarity between benfluorex and fenfluramine. According to 

, both Italy and France were rapporteurs for the enquiry, but while the results of the investigation prompted Italy and Spain to take Mediator off their markets, no action was taken in France. Not surprisingly, these media reports have led to accusations that the AFSSAPS and the French government are too close to the pharmaceutical industry.

Ever since a World Health Organization report in 2000 ranked the French healthcare system as the best in the world, there has been considerable national pride over the service. The country also has one of the highest levels of pharmaceutical consumption, so the scandal surrounding Mediator and the failings of the country's regulatory system have caused great public anger that will shake confidence in the pharmaceutical industry and its products.  

Servier's reputation, in particular, has been damaged. Servier has often publicised the fact that it is one of the most successful French pharmaceutical companies, but there has long been speculation in the French press regarding the extensive political connections of its founder, Jacques Servier. In 2009, he was awarded the prestigious Grandcroix de la Légion d'honneur by French president Nicolas Sarkozy, to whose party some claim he has made contributions to.

  So far, Servier has rejected the links between its drug and valvular heart disease, and is fighting legal claims from patients who used the product. There will be considerable public interest in the outcome of these cases, in addition to how the company is treated as a result of the ongoing government action over the scandal. 

Recognising the level of public feeling, French Health Minister Xavier Bertrand announced in January 2011 that there would be a thorough reform of the country's pharmacovigilance system, which is due to be completed by the end of the year.

  He also stated that the decisionmaking process would be reassessed so that the burden of proof would lie with companies regarding safety issues. To date, one of the explanations from the AFSSAPS as to why Mediator was allowed to stay on the French market for so long is that the safety issues recorded through pharmacovigilance measures were not enough to prompt market withdrawal. However, there has been no explanation as to why concerns raised elsewhere in Europe did not feed through to the French system. The French Health Minister has proposed that following the withdrawal of a drug, all countries should be systematically informed.  

The scandal regarding Mediator continues to grow, generating almost daily coverage in the French media, and illustrates the importance of establishing a robust and transparent pharmacovigilance system that can respond to safety findings elsewhere in the world. If regulators are implicated in safety scandals, they will be called to account, as was the case with the head of AFSSAPS, Jean Marimbert, who was forced to resign. Similarly, unless the public believe that decisions over the licensing of medicines are taken in a scientific and impartial way, the pharma industry will be subject to increasing suspicion regarding its activities. In a major market such as France, the industry can ill afford to lose public confidence. 

 EMA, "Questions and answers on the withdrawal of medicines containing benfluorex" (2010). 

 Inpharm, "Servier's Mediator provokes French drug safety controversy" (2010). 

 FDA, "Questions and Answers about Withdrawal of Fenfluramine (Pondimin) and Dexfenfluramine (Redux)" (1997). 

 Libération, "Un mal rare pour quelques kilos de trop" (2000). 

 Le Figaro, "Mediator: l'Assurance maladie mettait en garde dès 1998" (2011).

 Le Post, "Mediator: Jacques Servier a-t-il financé Nicolas Sarkozy et l'UMP?" (2010). 

 Le Monde, "Mediator: Xavier Bertrand annonce une réforme de la pharmaco-vigilance" (2011). 

In France, public confidence in health authorities and pharmaceutical industry has been shaken by a safety scandal over the drug Mediator (benfluorex hydrochloride).

Drug Scandal Shocks France

India has become a major business partner for the EU and has been designated as one of its "strategic partners" since 2004.

  In 2009, EU goods exports to India were valued at €27.5 billion, with imports from India to the EU being valued at €25.4 billion.

  As a result of the growing ties, the two partners have been negotiating a Free Trade Agreement (FTA), which they hope will further boost trade. The EU and India already have in place an institutional framework, including an annual summit and various working parties, to look at technical issues that can improve business relations. Therefore, there was considerable interest in the 11th India–EU Summit, which was held at the end of 2010 in Brussels (Belgium), as positive news concerning progress on the FTA was expected to be announced. 

However, although the post-summit press conference did report that a conclusion to the FTA was expected by Spring 2011, this aspect of the meeting became overshadowed by an unrelated but ongoing dispute between India and the EU.

  During 2008 and 2009, a number of Indian generics exports were seized in the EU because it was claimed that they violated local patent laws. The issue is embarrassing for the EU because it concerns the supply of generic drugs from India to developing countries and ties into the emotive issue of access to medicines in these regions. 

The Indian pharmaceutical industry is a major producer of generic drugs and routinely exports them to other countries. According to the Indian Drug Manufacturers' Association (IDMA), exports in 2009 reached $10 billion and are growing annually at 22%.

  India is ranked as the third largest country in terms of production volume and its export status is helped by the fact that 150 factories are approved by the FDA, the UK's MHRA, and agencies in Australia and South Africa. In addition, a number of other Indian facilities possess WHO-GMP certificates. 

Due to price differentials, Indian generic products have become particularly popular in developing countries as a cheaper alternative to branded products; for example, Médecins Sans Frontières (MSF) estimates that more than 80% of the AIDS medicines used to treat more than 5 million people across the developing world come from Indian companies.

Until 2005, India only allowed pharmaceutical patents for the manufacturing process used to produce a drug and not for the end product itself. This enabled Indian pharma companies to develop large numbers of cheap generics and by the start of 2005, there was an estimated 60000 generic brands in 60 therapeutic areas on the Indian market.

  Multinational pharma companies lobbied against the increasing availability of generic drugs, which are marketed at much lower prices than their products, but were particularly alarmed when it became apparent that some Indian companies were prepared to export their products to other markets. 

In 1995, India joined the World Trade Organisation (WTO), which obligates its member countries to switch to a European/US style drug patent system that concerns chemical entities themselves. In line with a 2005 deadline, India changed its patent law accordingly. This did have some impact on the generics industry, as not only were patents allowed for new drugs whose development started in 2005, but they were also permitted for a number of other products considered patentable after 1995. Nongovernmental organisations such as MSF, however, were worried by the decision and claimed that it would restrict the availability of affordable medicines in poorer countries.

Nevertheless, from the viewpoint of multinational pharma companies, the changes to Indian patent laws did not go far enough. While the Indian patent regime fulfils the basics required by WTO rules, it is still not considered as stringent as in the EU. This has resulted in Indian generics companies continuing to compete against multinational companies — with matters often ending up in court.  

Indian companies believe that resentment from multinational companies stemming from a number of legal decisions going against them in India has led to them seeking other ways to decrease the competition by lobbying governments in their home markets.

  During 2009, Indian companies were angered by frequent seizures of their products at EU transit points by European authorities under the pretext of patent protection.  

One such incident in 2009 led to the Dutch authorities detaining a shipment of Indian generics destined for Brazil and Colombia. The reason given by the Dutch authorities was that the products infringed EU patents, even though the companies pointed out that the products were off patent in India and not meant for sale in the EU. The Indian government became involved and commented that developing countries lacked the capability to manufacture these essential medicines and could not afford the patented alternatives. The Dutch Foreign Minister, on a trip to India, was drawn into the dispute and admitted that patent protection should not have been used to interfere with the distribution of generic drugs to poor patients across the world.

Although the Dutch government and other EU officials promised to try and resolve the issues prompting the seizures, this did not stop Brazil and India from filing complaints against the EU at the WTO over the shipment seizure.

  According to EU officials the dispute centred on how member states interpreted EC Regulation 1383, which allows a rightholder to ask customs to detain shipments under suspicion of being counterfeits, pirated goods or goods infringing intellectual property rights.

  The rules permit detainment even where goods are in transit through the EU. According to the Indian media, complaints from sanofi aventis SA, Novartis AG and Eli Lilly led to the European seizures.

By associating the Indian generics with patent infringement, critics of multinational pharma argue that the EU is effectively labelling the products as counterfeits, which was considered insulting in India, as the products came from wellestablished domestic companies such as Dr Reddy's and Aurobindo Pharma. Critics believe that special interest groups, supported by the multinationals, are content for there to be confusion over the concept of counterfeiting, as defined by law, and what constitutes legitimate generics.

Meanwhile, Indian companies have little faith in EU promises to address its legislation.

  Initially, the EU offered to send notes to all customs authorities to refrain from making seizures of Indian generics, but it was only when the Indian government insisted on stronger action that it considered amending EC Regulation 1383.

  The Indian media has now reported that domestic companies are rerouting their products through ports in South Africa rather than using Europe for transit. Although this route is more expensive, it is believed to be more secure.

Although EU and Indian negotiators say that a deal regarding the transit of Indian generics was reached at the December 2010 summit, this has not satisfied concerns about the impact on access to medicines in developing countries.

  Furthermore, despite the statements from Indian officials, the complaint to the WTO has not been withdrawn. Another issue that has not been addressed by the EU is how to deal with the separate complaint from Brazil.

  In the past, Brazil has taken a strong line with pharma multinationals over their prices and has favoured its own active generics sector to provide cheap medicines to patients.  

MSF continues to take a highprofile stance in the EU–India dispute, arguing that the transit issue cannot be considered in isolation of other discussions around the future FTA framework. It holds the view that pressure is being exerted behind the scenes by multinational pharma manufacturers to introduce measures that prolong data exclusivity for their products.

  EU officials have insisted that the FTA will not restrict India's right to produce generic drugs and have suggested that MSF and its supporters are spreading irresponsible rumours.

  In response, MSF has asked the EU negotiators to specifically state that data exclusivity and other related intellectual property details are not being considered as part of the FTA discussions. EU officials have refused to do this because they are still negotiating the terms of the FTA. To exert further pressure, MSF has launched a high profile campaign called Hands Off Our Medicine.

  In December 2010, to coincide with the EU–India summit, MSF organised protests in Nairobi (Kenya), Bangkok (Thailand), Jakarta (Indonesia), India and Brussels (Belgium) in opposition to the impact of EU's trade policies on access to medicines. 

The EU needs to tread carefully. Considering its usual role in battling with the pharma industry for better pricing for patients in Europe, it would be highly embarrassing if the EU were to be seen as having a different opinion when it comes to patients in developing regions. It also has much to lose by annoying major trade partners such as India and Brazil. The pharmaceutical industry must also be wary because its image has been heavily tarnished in the past regarding patient access issues. In 2001, for instance, it was at the centre of a battle with the South African government, which was examining ways to source generics to help tackle its HIV crisis.

  Public opinion was firmly against the pharmaceutical multinationals. 

Although a provisional timeframe of Spring 2011 has been set for the EU–India FTA, it is unlikely that the side issues concerning generics will have been resolved. It seems likely though that EU officials and representatives of the pharmaceutical multinationals will be forced to reveal their position on global access to medicines by MSF and others supporting its views.  

1. European Commission, "Bilateral Relations: India" (2010).  

2. Securing Pharma, "EU aims to appease India with softened customs law" (2010). 

3. Business Standard, "India, EU expect FTA by spring of 2011" (2010). 

4. Indian Drug Manufacturers' Association (2010). 

5. Médecins Sans Frontières, "At EU-India Summit, European Negotiators Urged Not to Block Access to Affordable Medicines" (2010). 

6. AIDS News, "India Changes Patent Law to Meet WTO Treaty, Making New Medicines Less Available to Most Citizens, Other Countries" (2004). 

7. Henry J. Kaiser Family Foundation, "India's Trade Minister Says EU Will To Take Steps To Prevent Seizure Of Generic Medicines" (2010). 

8. DNA India, "Netherlands assures India to sort out drug seizure issue" (2009). 

9. EU Business, "Brazil, India take EU to WTO over generic drug seizures" (2010). 

10. The Economic Times, "Indian generics to be safe from seizure while passing through EU" (2010). 

11. HM Revenue & Customs, "European Community (EC) legislation. HMRC Reference: Notice 34" (2010). 

12. Indian Express, "Indian pharma cos shun EU, route goods via SA ports" (2010). 

13. BBC News, "India-EU generic drug row 'resolved' at Brussels summit" (2010). 

15. The Guardian, "ANC urged to deliver Aids drugs" (2010). 

The recent India–EU summit was expected to bring news about the upcoming Free Trade Agreement between the EU and India; however, a dispute regarding the supply of generic drugs from India to developing countries has taken centre stage.

Generics Dispute EU-India Trade Negotiations

Over the past 2 years there has been an overt drive by the European Parliament to improve patient access to information on medicines. However, there is growing concern that some of the proposals put forward will lead to direct-to-consumer (DTC) advertising.

  Historically, in Europe, DTC has been considered an inappropriate means for pharma companies to communicate with patients because it bypasses the healthcare professional.  

In the US, DTC advertising is firmly entrenched, characterised by low government intervention in the market. Historically, advertising was always directed at healthcare professionals, but the increasing involvement of patients in healthcare decisions prompted some companies to change tactics.

  The first print DTC advertisement in the US appeared in 1981 from Boots for its ibuprofen product, Rufen. This was shortly followed by a similar approach from Merck for Pneumovax, its pneumonia vaccine. 

These developments took the FDA by surprise and it was forced to quickly react to the situation. In 1982, the agency asked pharma companies for a voluntary moratorium on DTC advertisements while it researched the issue. Its surveys revealed a desire from patients for more information about medicines, so in 1985 the agency decided that DTC was permissible provided that it met the same legal requirements as advertising directed at healthcare professionals. At this stage, DTC took off and with time the number of promotional routes increased to take in radio and television. 

One of the main problems for the FDA was that official regulations were not designed to cover advertising. The 1906 Food and Drugs Act, which represented the basis of future regulations, only focused on the information provided on the medicine's label — advertising was never specifically mentioned. Another issue was that the advertising itself was under the jurisdiction of the Federal Trade Commission (FTC), which could only act if a company's promotional advertising adversely affected that of another company. Deceptive advertising itself was not covered. 

It was only in the early 1960s that regulatory authority over prescription drug advertising was transferred from the FTC to the FDA. Within the FDA, drug advertising is now regulated by the Division of Drug Marketing, Advertising and Communications (DDMAC); however, no official regulations specifically mention DTC. This vagueness effectively means that the agency has been playing catch up in trying to regulate novel advertising developments. The appearance of the internet as a promotional channel is one such example. 

Despite its existence, DTC advertising has a number of opponents in the US. For a start, many observers do not like the fact that it is difficult to determine exactly how much is being spent by the pharma industry on such promotional measures.

  When dealing with the media, the pharma industry likes to stress its investment in R&D, but while stating that promotion is vital to its work, the industry appears reluctant to provide financial figures. 

Those who favour DTC believe that it heightens patient interest in their health and brings them information on new products that they might otherwise not know about.

  Others, however, believe that pharma companies do not provide impartial information, which puts the physician under pressure when a patient asks about a product they have seen advertised. Also, many consumer groups believe that drug prices are becoming too high, fuelled by DTC. 

Outside the US, New Zealand, Bangladesh and South Korea allow limited DTC advertising, while in some other markets limited advertising has been permitted for certain vaccines.

  Most attention, however, has been on whether Europe will ever permit DTC — particularly as European regulators have often adapted a number of US regulations for the region. 

Previous efforts to introduce DTC approaches in Europe have been rejected. In 2002, the EC introduced a proposal to allow pharma companies to answer patient requests in three disease areas: diabetes, asthma and HIV/AIDS.

  The intention was to allow a 3year trial period, but these measures were strongly rejected by the European Parliament. Surprisingly, the measures were also rejected by the pharma industry, which made it clear that it had not sought to change the existing regulations regarding the direct provision of information to patients. Nevertheless, the industry did use the opportunity to express irritation in the way it was monitored. For example, it asked why specific laws stood in the way of it communicating with patients over its products, even when others could. Presumably, this meant information communicated by the media about new medicines. In this regard, the restrictions on the pharma industry contrast with the freedom enjoyed by manufacturers of vitamins and herbal remedies, who routinely advertise products to patients. The pharma industry also asked why companies manufacturing foods containing unhealthy ingredients were not prevented from freely communicating with the public. 

While not advocating DTC advertising outright, the European pharma industry has consistently held the position that in a regulated environment there should be some means for companies to communicate directly with patients regarding their medicines. Given the carefully worded statements from the pharma industry suggesting that it is not openly seeking change, it is therefore surprising that DTC proposals continue to be put forward for debate in the European Parliament. 

Part of the reason could be because ideas around DTC have not been raised in isolation and make up the so-called "pharmaceutical package" currently being discussed at EU level.

  The package includes measures for tackling counterfeit medicines and improving pharmacovigilance, which have been widely welcomed. However, it also includes measures for disseminating information to patients, which has alarmed opponents of DTC.   

However, the driving force for these changes is patients, who feel that they still have difficulties in accessing medicines' information. In their minds, the focus for policy change is on the provision of information rather than promotion. It is widely agreed that information on medicines in Europe is fragmented, which puts patients at a disadvantage in receiving healthcare.

At present, Article 88 of Directive 2001/83/EC — a set of rules for pharmaceutical advertising — prohibits DTC advertising of prescription-only medicines, but interpretations of the directive can vary between EU member states.

  Presumably, those who back a revision to the way information is communicated in Europe believe some sort of standardisation is needed and that some aspects of DTC could be acceptable if they benefit the patient. 

The lack of clarity over what is being proposed for Europe has caused a number of delays with the EC's Directive on Information to Patients. In November 2010, some progress was made with potential promotional routes for information being specifically rejected;

  MEPs backed measures to ban information on prescription drugs being made available on radio and television, and also extended the ban to print media. At the first reading of the legislation, MEPs supported the provision of "objective information on a drug's characteristics and the treated disease or condition", but rejected "unsolicited information or disguised advertising".

What the current legislation does acknowledge is that pharma companies know their products best. In line with this, the legislation will allow companies to provide basic information on product characteristics, labelling and package leaflets, as well as an accessible version of a drug's assessment report. However, it will be up to individual member states whether or not to extend this to include other non-promotional information, such as pricing details and packaging changes. 

Providing more information may enhance the role that European patients play in healthcare. For example, there are hopes that, by being better informed, patients will be able to contribute towards pharmacovigilance measures by reporting their adverse effects directly to national authorities.

				  The European Parliament has introduced draft legislation to facilitate the introduction of specialised pharmaceutical portals that would contain an array of medical information on medicinal products and their proven side effects. These would also instruct patients on how to report adverse events using these sites and other means. The national portals will also be linked to EU ones so that information is not lost across the region. At the moment, one of the alleged weaknesses in the EU is that information on an adverse reaction at national level may not be recorded at a regional level, thereby not providing a full picture of a product's potential side effect profile. 

In Europe, patient demand for increased access to information on medicines looks likely to result in pharma companies being permitted to directly communicate with patients. However, it is difficult to see DTC evolving into the advertising style typified by the US market, particularly as the European pharma industry itself has been careful to distance itself from such an approach. The culture and market conditions in Europe remain very different to those in the US and so it unlikely that DTC advertising would ever have a receptive audience.  

1. European Public Health Alliance, "Direct-To-Consumer Advertising — for or against?" (2008). 

3. M.A. Gagnon and J. Lexchin, PloS Medicine (January, 2008).  

5. GSK, "Direct-to-consumer advertising" (2010). 

6. ABPI, "ABPI welcomes European Parliament decision on DTC" (2002). 

7. Inpharm, "DTC: the new philosopher's stone?" (2003). 

8. Scrip 100, Reform on the Agenda (2010). 

9. PharmaTimes, "MEPs vote for pharma to 'inform, not advertise'" (2010). 

10. European Parliament, "Protecting patients: EU to upgrade medicine safety monitoring. European Parliament" (2010). 

Direct-to-consumer (DTC) advertising is firmly entrenched in the US, but has historically been considered as an inappropriate means of communication in Europe for prescription-only medicines.