Clarkston Consulting recently participated in the GPhA Annual Meeting in Orlando, FL. This signature event creates a forum for generic pharmaceutical executives from around the world to display their passion for delivering improved healthcare outcomes to millions of patients worldwide. It represents a time to reflect on accomplishments of the past year, the challenges of tomorrow and the path towards realizing their strategic vision. This year more than 700 attendees participated– a record high for GPhA.

Tony Mauro

The industry’s passion was on full display as GPhA Chairman of the Board of Directors, Tony Mauro (President Mylan North America) highlighted the accomplishments and challenges for the industry and GPhA in particular. Mr. Mauro highlighted the Food and Drug Safety and Innovation Act (FDASIA) getting passed, which includes the landmark Generic Drug User Fee Act (GDUFA). This act provides funding to the FDA to ensure that all drug manufacturing facilities that supply to the U.S. market are regularly inspected and the backlog of drug applications are processed in a more timely and predictable manner. He highlighted some future challenges for the industry:

• Implementing and executing GDUFA
• Educating patients, payers, prescribers and dispensers on the safety and efficacy of generic medicines
• Securing the supply chain to ensure reliable availability and safe delivery of medicines
• Emphasizing the fair outcome to challenges associated with Patent Settlement Agreements

Ralph Neas

Ralph Neas highlighted the implementation of GDUFA and the success of the Affordable Care Act, a great example of “how Washington should work.” Ralph noted specific achievements regarding maintaining access to affordable healthcare outcomes including legislative battles blocking amendments to patent settlement, generic labeling, drug abuse/diversion, reimportation and drug shortages.  He also noted the success of the ARI (Accelerated Recovery Initiative) and value of IMS Health Analytics.

Looking ahead, Mr. Nease emphasized the fight to prevent carve-out initiatives that leave healthcare system savings on the table, establishing a biosimilars approval pathway and negotiating an effective Trans-Pacific Partnership. With the increasing number of people gaining access to insurance, the expanding global market and future value of biosimilars, Mr. Nease believes the industry can deliver incredible value to patients.

The Honorable Jon Kyl and Jonathan Orszag

The honorable Jon Kyl outlined the new political landscape, predicting a marginally more active Obama-Congress relationship and noting the rules have been updated to facilitate an increase in votes on more bills. Jonathan Orszag addressed the looming issue regarding reverse Patent Settlement bans, noting that if they are prevented, consumer benefit will be negatively impacted; over time, branded pharmaceutical manufacturers will have less incentive to innovate and generic pharmaceutical manufacturers will have a disincentive to invest. In his estimation, when reverse patent settlements include a fair transfer of value, they are highly precompetitive.

Doug Long

Mr. Doug Long from IMS Health took the audience on a journey of data and analytics.  China and Brazil made great strides in growth in 2012 (21.1% and 15.9% respectively), while the U.S. and Japan still comprise 64.5% market share.  Other interesting findings included the significance of ‘medicinal use’ on controlling health care costs – something that is sure to motivate companies to consider alternative delivery mechanisms such as direct-to-consumer delivery.

Mr. Long highlighted significant events of 2012 that influenced the market:

• Decline in the U.S. Pharmaceutical Market
• Generic market reaching a record 80%
• Continued merger & acquisition activity
• Escalation in DEA enforcement
• High dose forms of generic Wellbutrin found to be not bioequivalent
• Supreme Court affirming health care reform
• New obesity drugs signaling that innovation is stronger
• Potentially more liberal Rx to OTC policy emerging

And, regarding U.S Generics, we should anticipate:

• More commoditization of the market
• Fewer small molecules
• Fewer exclusivity periods going forward
• Follow-on biologics and biosimilars emerging as big opportunities
• Quality of innovation improving
• PGD backlogs at record levels
• Increased public awareness of generic injectables shortages
• More regulatory and reimbursement challenges ahead
• Continued increase in market consolidation and M&A activity in generics

CEOs Unplugged

Perhaps the most interesting session was the CEOs Unplugged roundtable where Donald DeGolyer (President, Sandoz, Inc.) Tony Mauro (President, Mylan North America), Thomas Moore (President, Hospira, Inc.), Allan Oberman (President & CEO Teva Americas Generics) and Siggi Olafsson (President, Actavis Pharma) provided their perspectives on a number of industry issues, including:

• Collaboration with the FDA and FTC
• Importance of proactive management of quality
• Backlog of applications at the FDA
• Investment in quality and compliance
• Patent settlements
• Biologics
• Biosimilars, its pricing, and authorized generics
• State and federal regulations
• M&A in the industry in the next 12 months
• Tamper resistance packaging
• FDA guidance on the respiratory therapeutic area
• Drug shortage management
• Industry changes in the next 5 years

The candid conversation unveiled the collective shared interests of the generics pharmaceutical industry and the independent, entrepreneurial spirit of its members.

Dr. Margaret Hamburg

The event wrapped up with an insightful presentation from FDA Commissioner Dr. Margaret Hamburg.  For the fourth year in a row, Dr. Hamburg shared her perspective on the agency and the generic pharmaceutical industry. She expressed concerns of forces working to undermine trust in the suitability for interchangeable biosimilars that would ultimately be a great disservice to patients in need of lower-cost treatments.  She also highlighted the need for generic pharmaceutical companies to implement quality as part of their global operations.

The four-day event was an inspiring display of passion and enthusiasm for the industry that has seen immense growth over the past ten years and holds a bright future to meet the global market need for affordable healthcare.