Healthy Skepticism Library item: 15114

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Publication type: news

Jack A.
Novartis generics arm quits drugs trade body
The Financial Times.com 2009 Feb 16
http://www.ft.com/cms/s/0/2ed7871a-fbc8-11dd-bcad-000077b07658.html?nclick_check=1

Full text:

Novartis, the Swiss pharmaceutical group, has removed its generics arm from membership of the drug industry’s international trade body – a move rivals fear creates a two-tier system that could lower ethical standards.

At a closed meeting of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) in Washington DC late last year, Novartis said it would hold membership via its patented drug subsidiary, Novartis Pharma AG, rather than its holding company.

The result – the first such instance – is to exclude Sandoz, its off-patent generic drugs arm, which is the world’s second largest, from IFPMA, including exemption from its revamped code of conduct.

The move comes as IFPMA concludes a probe triggered by criticism of Sandoz for allegedly breaching its ethical code concerning the labelling of its products.

It highlights growing tensions and potential conflicts when innovative pharmaceutical companies are diversifying into generics and other activities as they respond to pressures on sales.

Off-patent manufacturers are also clashing with drug developers over intellectual property, including over the extent to which generic versions of biological medicines are safe and how they should be regulated.

The decision by Novartis was taken in spite of the fact that Daniel Vasella, its chief executive, was the previous head of IFPMA who oversaw the adoption of a tougher new code of practice that could lead to stronger sanctions against its members for any breaches. There is no equivalent code of conduct for the international bodies operated by the generics sector.

Petra Laux, the head of global public affairs at Novartis, confirmed the change of membership status and said: “Sandoz is no longer a member of IFPMA and does not have to comply with its obligations.”

She stressed that Sandoz had its own internal code of conduct and values, The complaint triggering the investigation by IFPMA against Novartis’s generics arm had been judged “without merit”.

She added that Sandoz had never lobbied for its interests at IFPMA, including for the easier introduction of biological generics it was seeking, and it was logical for each subsidiary of Novartis to join the trade body aligned with its own interests, including one for generic companies and another for over-the-counter medicines, a third division of the Swiss group.

Since Novartis acquired Hexal of Germany to become the largest generics company after Teva of Israel, other pharmaceutical groups have expanded into the sector, including Sanofi-Aventis and GlaxoSmithKline. So far, neither has sought to tweak its IFPMA membership in the same way.