Pharmaceuticals - a market in transition

The traditional business model is under pressure

At the same time as many pharmaceutical patents are approaching their expiry dates, generic manufacturers are gaining market share and squeezing prices. To further complicate matters, the competition authorities also seem to be intensifying their scrutiny of the pharmaceutical industry.

Compared to many other markets, the pharmaceutical market is highly complex and influenced by a range of political factors. The future of the pharmaceutical industry therefore depends, among other things, on political initiatives in Denmark and within the European Union. In early May 2009, Kromann Reumert brought these issues under the spotlight at the seminar "Pharmaceuticals – a market in transition".

Karin Verland, former Managing Director of Pfizer, and Morten Kofmann and Michael Pitzner-Bruun, lawyers at Kromann Reumert, were among the speakers to give their assessment of the pharmaceutical industry’s future direction.

Business model under pressure

According to Karin Verland, the pharmaceutical industry’s traditional business model is in serious need of a shot in the arm. The industry is currently facing challenges of such magnitude that, according to Karin Verland, it is crucial that participants improve their prioritisation of resources. And the key to future success will be to increase cooperation across sectors – between government, authorities, public research, pharmaceutical and biotechnology companies.

Increased focus on contracts

At the seminar Morten Kofmann and Michael Pitzner-Bruun provided some context for the European Commission's sector investigation into the pharmaceutical industry and the preliminary conclusions reached by the Commission. They emphasized that one anticipated consequence of the investigation will be an increased focus on contracts, particularly those between originator and generic manufacturers – and specifically the so-called "reverse payments" and the originator manufacturers' use of the regulatory systems. According to Morten Kofmann and Michael Pitzner-Bruun, however, we should not expect any major changes in the patent system despite the Commission's heavy criticism of "patent clusters".

Speakers at the seminar were:

Henrik Vestergaard, Assistant General Manager of the Danish Association of the Pharmaceutical Industry (Lægemiddelindustriforeningen).

Karin Verland, former managing director of Pfizer and now member of the Danish Council of Ethics (Det Etiske Råd).

Morten Kofmann, Partner, and Michael Pitzner-Bruun, lawyer, with Kromann Reumert.