Norgine Bails on British Pharmaceutical Industry

October 15, 2008
Pharmaceutical Executive
Volume 0, Issue 0

Specialty drug firm Norgine splits from the British pharma association due to a growing rift about pricing. A "war of the roses" is escalating between Big Pharma and smaller drug manufacturers; Norgine could be the first casualty.

The Association of the British Pharmaceutical Industry (ABPI) has come under attack from one of its long-standing members, Norgine, which announced its resignation from the UK trade association last week. The move has highlighted a lack of harmony between big pharma and smaller to medium sized companies and puts pay to ABPI's claim to speak for the entire UK pharmaceutical industry.

The row revolves around the Pharmaceutical Price Regulation Scheme (PPRS) negotiations as Norgine believes that the ABPI is not representing the interests of smaller, specialized pharmaceutical developers.

The ABPI is remaining tight-lipped about the row and would only issue a statement. Norgine, however, has been extraordinarily vocal. Its COO, Peter Martin declared, “It has become clear in recent years that the ABPI's agenda is driven by the interests of its largest multinational members and that it is no longer representing the interests of small and medium sized companies with existing products on the market. The domination of the association by a handful of large companies, whose business model depends on patent-protected ‘me-too’ blockbuster medicines, has resulted in perverse consequences for those of us who are trying to help patients and their carers in more specialized niches such as gastroenterology. Norgine believes that the contribution of smaller innovative companies towards improving patient care needs to be appropriately recognized.”

Frances Macdonald, director of Actelion Pharmaceuticals, who represented smaller companies on the PPRS negotiating team, told PharmExec Europe, “The views and concerns of smaller companies were actively sought out and were key considerations for the negotiating team. They have been woven into the fabric of the new PPRS, as witnessed by the concessions relating to size of turnover. In addition, in actively supporting the uptake of innovative new medicines, the revised PPRS will bring value to many small, innovative companies and help them compete in the market.”

Norgine is also adamant that it has repeatedly expressed concerns about the uncertainty surrounding the legal borderline between a medicinal product and a medical device, and the potential risk to patients resulting from the commercialization of medicinal products misclassified as devices. “Unfortunately, this is another area where the ABPI was unable to take an active role due to an apparent conflict of interest with one of its largest members, whose affiliates elsewhere in Europe are exploiting this legal uncertainty.”

In its statement ABPI's Director-General, Richard Barker stated, “We regret the decision of Norgine to resign from the ABPI. Throughout the PPRS negotiations, there has been a very full and open consultative process, which has won wide appreciation from large and small companies alike.

“The ABPI has worked closely with smaller companies and their individual trade associations and as a result of this focus, we have won significant concessions for smaller companies. For instance, they will be insulated from the price cuts imposed as part of the PPRS. Companies with less than £5m turnover in 2007 will be completely exempt from the 3.9 percent cut and, for those with less than $43.85m turnover, their first $8.77m will be exempt.

“For the first time, the PPRS is not simply an economic agreement. It is an agreement, which will encourage innovation and from which all products that do not have effective generic competition should benefit. It is agreement for all, not a few.”

The company says it has no plans to pull out of any European trade associations and remains an active and satisfied member of the relevant trade associations affiliated with EFPIA in most of the European countries where Norgine operates. It will also continue with its membership of the Ethical Medicines Industry Group, which represents small and medium sized companies operating in the UK pharmaceutical sector.