SUPPLEMENTARY PATENT PROTECTION FOR DRUGS
PRESS RELEASE
PRESS RELEASE
The Competition Authority advocates shortening drug patent protection in the deficit reduction decree.
Possible expenditure savings and greater competition
At its meeting on 30 May 2002 the Competition Authority resolved to submit a report to the Speaker of the Senate, the Speaker of the Chamber of Deputies, the Ministers of the Economy and Finance, Health, Production, the Presidents of the Regional Councils and Regional Governments, and the Presidents of the Autonomous Provinces relating to Article 3 of Decree-Law no.63 of 2002 currently being discussed in the Senate, containing provisions to Rationalise the System of Costs of Pharmaceutical Products.
Paragraph 8 of this Article, as originally worded, substantially reduced the residual life of many pharmaceutical patents with the aim of achieving cost savings and greater competition. In particular, it realigned the complementary patent protection period granted for many drugs under Law No. 349 of 19 October 1991 (a further 18 years) with the period provided by European law (a further 5 years), reducing this extra protection period to one year in 2002 and two years for each subsequent calendar year. In the text approved by the Chamber of Deputies enacting this Decree Law, known as the "Deficit Reduction Decree-Law" the reduction of the "supplementary protection" was considerably shortened, reaching six months only for each calendar year, and only after 2004.
This solution, contrary to what was indicated in the text of the Decree Law, substantially distorts competition, with negative fallout in terms of possible public finance savings, for the following reasons:
1) it hampers the development of the generic drugs market in Italy which, despite the initial results, cannot achieve the size of the market that exists in other major European countries;
2) it keeps prices higher because of a patent protection system that is exclusive to Italy;
3) it restricts the development of the basic chemicals industry by not permitting the production of these molecules, even for the purposes of export to the countries in which patent protection has lapsed.
These distortions directly affect the public spending on pharmaceuticals because the molecules (or active ingredients) for which the excessive extension of the patent protection period benefit still account for very large substantial percentage of aggregate public expenditure (approximately 3,500 million euro: source Assogenerici) which can therefore wipe out the substantial expenditure savings that could reasonably be expected from the amendment as originally proposed (up to an annual 1,800 million euro when fully implemented; source Assogenerici).
The Authority therefore expressed the hope that the original version of Article 3 of Decree Law No. 63 of 15 April 2002 would be restored, in order to prevent the introduction of measures that would hamper the development of competition in the pharmaceuticals sector, and achieve greater public expenditure savings which would have obvious benefits both to the National Health Service and to consumers.
Rome, 4 June 2002