How to React to Parallel Trade

The worldwide clinical diagnostics market, historically a market characterized by dynamic changes in competitive structure and technology, is continuing to undergo transitions on multiple fronts that are resulting in coalescence of in-vitro diagnostics with imaging, as well as expansion of segments such as molecular diagnostics and point-of-care testing. The industry is mature, although growth is continuing to outpace overall economic growth in the major countries worldwide.

Automation is becoming increasingly important in clinical laboratories worldwide, as shortages of laboratory technologists as well as cost constraints force labs to substitute automated systems for manual labor.

Informatics is also growing in importance as laboratory results, which account for about 70% of all data used in clinical decision-making, are integrated with data from other modalities such as imaging and patient monitoring to provide a comprehensive and continuously updated view of patient status. New analytical technologies such as microarrays and microfluidic devices are playing an expanding role in the market, enabling new types of tests such as multi-marker molecular tests to be developed for applications in areas such as oncology, cardiovascular disease, pharmacogenetics, and genetic disease testing.

Key segments of the IVD market

This report analyses key segments of the clinical diagnostics market, with 2006 sales and forecast growth rates through 2011, including:

Clinical chemistry Immunodiagnostics Microbiology Molecular diagnostics Haematology/flow cytometry Coagulation Other IVD products including toxicology, serology, histology/cytology testing products, and general laboratory equipment and supplies.

While many segments of the market are mature, and are projected to grow at about the same rate as the clinical diagnostics market as a whole, some segments are expected to provide significant growth opportunities for suppliers. High growth segments include: molecular diagnostics, with the most rapid growth occurring in the oncology testing and genetic disease/pharmacogenetic sub-segments; point-of-care testing for blood glucose, certain types of home and self-testing products; cardiac markers; infectious disease immunoassay testing products; and certain types of cellular analysis products. These are all analysed in detail in this report.

Expansion of the molecular diagnostics segment to include a variety of cancer-related tests, as well as pharmacogenetic tests used to guide drug therapy, is already well underway. Future advances in molecular diagnostics technology promise to enable development of tests that provide earlier detection of cancer, personalised drug treatments, non-invasive prenatal detection of genetic disorders, and advances in targeted therapy.

Overview of suppliers in the clinical diagnostics market

Key suppliers in the IVD products market include Roche Diagnostics, GE Healthcare (via its pending acquisition of Abbott's diagnostics business), Siemens Medical Solutions Diagnostics, Johnson & Johnson's Ortho Clinical Diagnostics and LifeScan divisions, Beckman Coulter, Dade Behring, BD, bioMrieux and Bio-Rad Laboratories. Niche suppliers include Gen-Probe in molecular diagnostics, Sysmex in haematology and cellular analysis, Cytyc in cytology and Ventana Medical in automated pathology. In addition, although Abbott Diagnostics is divesting the majority of its IVD business to GE Healthcare, it retains a significant IVD business focused in molecular diagnostics and whole blood glucose self-testing products. Likewise, while Bayer divested most of its IVD business to Siemens, it retains its whole blood glucose self-testing business, which was already established prior to the Siemens acquisition as an independent business unit. Mainly by virtue of their positions in the glucose self-testing market, both Abbott and Bayer continue to have significant positions in in-vitro diagnostics.

Recent acquisitions and mergers have begun to alter the competitive landscape in the clinical diagnostics market, exemplified by the entry of major competitors in the medical device and diagnostics industry including GE Healthcare and Siemens Medical in in-vitro diagnostics. The resulting competitive structure encompasses in-vitro diagnostics, diagnostic imaging, and clinical informatics, and raises the prospect that competition may become based on new factors such as strengths in automation technology, information technology, and biotechnology. In the central laboratory products segment, the size and scope of competitors is expected to become more important in the era of group purchasing in the US as well as to a growing extent in Europe.

Changes in the regulatory environment impact competition

Initiatives on the part of government agencies in the US, Europe and Japan are directed at creating a harmonized environment for regulatory clearance of IVD products, facilitating commercialization of new IVD products and lowering barriers to worldwide competition, particularly for smaller suppliers. While the pace of development of harmonized regulations has been slower than projected, progress is continuing to eliminate the need for multiple clinical trials in order to gain regulatory clearance in the major regions of the global market. This report provides an update on the current status and projected timelines for implementation of changes in the regulatory environment in the major regions of the market, including the status of global harmonisation efforts.

Technology continues to be a major driver of the market

The IVD market has historically been technology-driven, with examples being the introduction of multi-channel analysers that made high-volume chemistry testing practical, as well as the introduction of nucleic acid testing technologies that have created a new and rapidly growing segment of the market by enabling new types of tests to be offered. The development of sensor technologies and rapid testing technology spawned another new segment of the market for point-of-care testing. In the future, information and automation technology are expected to emerge as increasingly important market drivers, along with continued advances in molecular diagnostics technology. Biotechnology is also expected to become an important driver of the market, enabling the discovery and commercialization of new disease markers in multiple application segments including cardiovascular disease, oncology, infectious disease management, neurological disorders and guidance of targeted therapy. Informatics technology, including telecommunications technologies enabling a wider dissemination of diagnostic testing, is expected to play an important role in improving the utility of diagnostic data, allowing easier access to diagnostic services for patients, and improving the efficiency of patient management.

• Chapter 1 Introduction
  • 1.1 Basics
  • 1.2 How IT Works
  • 1.3 How IT Began
  • 1.4 How IT Developed
  • 1.5 The Scale of The Issue
  • 1.6 Arguments for and against
• Chapter 2 Bringing Parallel Imports to Market
  • 2.1 National Regulatory Approval
  • 2.1.1 Criteria Employed
  • 2.1.2 Application Procedure
  • 2.1.3 Assessment
  • 2.1.4 Conditions
  • 2.2 Parallel Distribution of Centrally-Approved Medicines
  • 2.3 Specific Mechanism
  • 2.4 Repackaging/Re-Labelling
  • 2.4.1 Trademarks
  • 2.4.1.1 The Bms Case
  • 2.4.1.2 The Boehringer Case
  • 2.4.2 Copyright
  • 2.4.3 Quality Concerns
• Chapter 3 Major Controversies
  • 3.1 Impact on Investment in R&d
  • 3.2 Impact on Launch Decisions
  • 3.3 Shortages Created by Parallel Exporting
  • 3.4 Savings from Parallel Trade
  • 3.5 Counterfeits and Parallel Trade
  • 3.5.1 Industry View
  • 3.5.2 Other Contributors
  • 3.5.3 Traders' Response
  • 3.5.3.1 UK
  • 3.5.3.2 Germany
  • 3.5.3.3 Denmark
  • 3.5.4 Evidence
  • 3.6 Diversion of Compassionate Relief Supplies
• Chapter 4 Market Profiles
  • 4.1 Major Countries of Destination
  • 4.1.1 Denmark
  • 4.1.2 Finland
  • 4.1.3 Germany
  • 4.1.4 Netherlands
  • 4.1.5 Norway
  • 4.1.6 Sweden
  • 4.1.7 United Kingdom
  • 4.1.7.1 Pl(Pi) Scheme
  • 4.1.7.2 Savings
  • 4.1.7.3 Pprs
  • 4.2 Major Source Countries
  • 4.2.1 Greece
  • 4.2.2 Spain
  • 4.2.3 Other Countries
  • 4.2.3.1 Austria
  • 4.2.3.2 Belgium
  • 4.2.3.3 France
  • 4.2.3.4 Portugal
  • 4.2.3.5 Poland
• Chapter 5 Strategic Responses and Their Potential Consequences
  • 5.1 Main Manufacturer Counter-Strategies to Pt
  • 5.2 Risks
  • 5.2.1 Commercial Risks
  • 5.2.2 Legal Risks
  • 5.2.2.1 Treaty of Rome
  • 5.2.2.2 Directive 2004/27/Ec
  • 5.2.3 Summary of Legal Processes
• Chapter 6 Price Management
  • 6.1 Price Corridors
  • 6.2 Euro-Based Pricing
  • 6.3 Price Reductions
  • 6.4 Brand Equalisation Deals
  • 6.5 Dual Pricing
  • 6.5.1 Gw's Scheme
  • 6.5.2 Pfizer's Scheme
  • 6.5.2.1 Article
  • 6.5.2.2 Pfizer Makes Changes
  • 6.5.2.3 Royal Decree
  • 6.6 Free Pricing with Rebates
  • 6.6.1 Pan-European Opportunity
  • 6.6.2 National Opportunities
• Chapter 7 Supply Management
  • 7.1 Export Prohibition
  • 7.2 Stock Allocation
  • 7.2.1 Article 81: The Adalat Case
  • 7.2.2 Article
  • 7.2.2.1 Relevant Product Market
  • 7.2.2.2 The Syfait Case
  • 7.2.2.3 France's Competition Council
  • 7.2.3 Where Are We Now?
  • 7.3 Direct Distribution
  • 7.3.1 Involvement of Wholesalers in Pt
  • 7.3.2 Examples of Direct Distribution
• Chapter 8 Recommendations
  • 8.1 Don't Rush to 'do Something'
  • 8.2 Don't Forget to Use Your Full Rights
  • 8.3 Don't Let Lawyers Drive The Agenda (but Do Take Early Legal Advice)
  • 8.4 Supply Management Schemes Can Work (and Stay within The Law)
  • 8.5 Responding to Incoming Pt with Price Cuts Is Generally Not
  • Advisable
  • 8.6 Dual Pricing Opportunities Exist (but Mainly in Spain)
  • 8.7 Emphasise to Payers That Savings from Pt Are Very Limited
  • 8.8 Emphasise That Savings to Patients Are Almost Non Existent
• Chapter 9 Other Countries
  • 9.1 United States
  • 9.1.1 Personal Importation
  • 9.1.2 Legislative Attempts
  • 9.1.2.1 Bipartisan Bill
  • 9.1.2.2 Impact Limited?
  • 9.2 Switzerland
  • 9.3 Israel
  • 9.4 Philippines
• Chapter 10 Future Prospects
  • 10.1 No Single European Price
  • 10.2 Waning Eu Support
  • 10.2.1 European Commission
  • 10.2.2 Ecj
  • 10.2.3 European Parliament
  • 10.2.4 Emea
  • 10.3 National Drivers and Restraints Remain Important
  • 10.4 Eu Enlargement Less of A Threat
  • 10.5 No Product Now Immune
  • 10.6 No Country Now Immune
  • 10.7 Manufacturers Regaining Control of Distribution
  • 10.8 Changes among Parallel Traders
  • 10.8.1 Diversification
  • 10.8.2 Exits
  • 10.9 Prospects for US
  • References
  • Appendix 1 Ecj Judgments on Pharmaceutical Parallel Trade
  • Appendix 2 European Association of Euro-Pharmaceutical Companies (Eaepc)
  • Appendix 3 Eaepc Good Parallel Distribution Practice Guidelines for Medicinal Products
  • Appendix 4 Pl(Pi) Licence Holders in UK
• List of tables
  • Table 1.1 Eu Member States
  • Table 1.2 Commercial Versus Personal Importation
  • Table 1.3 Principal Outcome of Pharmaceutical Parallel Trade Cases at Ecj
  • Table 1.4 Evolution of Parallel Trade (% of Pharmacy Market Sales)
  • Table 1.5 Value of Pt in Medicines (€ Million) at Pharmacy Purchase Prices, 2002
  • Table 2.1 Parallel Distribution Notifications to Emea, 2004-2006
  • Table 2.2 Introductory Dates for Patents and Spcs in Cee Countries
  • Table 3.1 Direct Savings from Parallel Trade (€ Million)
  • Table 4.1 Evolution of Pt Penetration in Germany
  • Table 4.2 Numbers of Applications and Regulatory Approvals for Pis in The Netherlands
  • Table 4.3 Evolution of Pt Penetration in The Netherlands
  • Table 4.4 Evolution of Pt Penetration in Norway
  • Table 4.5 Evolution of National Pt Regulatory Approvals in Sweden
  • Table 4.6 Evolution of Pt Penetration in Sweden
  • Table 4.7 Evolution of Pt Penetration in The Uk
  • Table 4.8 Number of Pl(Pi)S Issued in UK
  • Table 4.9 Top-10 UK Importers by Numbers of Pl(Pi)S Issued January 2005-June 200750
  • Table 4.10 Country of Origin of Pl(Pi)S Approved to November 2002
  • Table 4.11 Impact of Price Modulation with 2005 Pprs on Pi Penetration of Selected Brands
  • Table 4.12 Evolution of Parallel Exports from Greece
  • Table 4.13 Decline in The Spanish Wholesaler Margin
  • Table 5.1 Main Pt Counter-Strategies
  • Table 5.2 National Competition Authorities in The Eu
  • Table 6.1 Hitting Pt, or The Bottom Line?65
  • Table 6.2 Glaxo Countdown to An Eu Stalemate
  • Table 6.3 Specimen Annex 1/Annex 2 Price Differences Offered by Pfizer Spain, June 2005
  • Table 6.4 'dual Pricing' Schemes in Spain
  • Table 7.1 Syfait - Countdown to A Non-Decision
  • Table 7.2 Turnover of French 'export-Only' Wholesalers (€ Million), 2002
  • Table 7.3 Export Sales of Leading French Wholesalers, € Million
  • Table 8.1 Time Delays before Parallel Trade Judgments Have Been Decided by The Ecj
  • Table 9.1 Top 10 Drug Classes Sold to Canada-US Cross Border Pharmacies, 200499

Parallel Trade in Pharmaceuticals Past and future scenarios Parallel trade or parallel importation is the cross-border trade in a particular product, through a route that the manufacturer may not have originally intended. As many manufacturers operate a system...

View all products in this category