Specialist pharma company Norgine has announced its resignation from the ABPI, saying the trade body is only concerned with protecting the interests of larger pharma companies.

The company says the ABPI's approach to re-negotiating the new PPRS pricing agreement is the single issue which has made it take the drastic step.

Norgine's move is a very serious blow to the ABPI's claim to speak for all of the UK pharmaceutical industry, and exposes fault lines between 'big pharma' and small to medium sized companies.

Norgine's Chief Operating Officer, Peter Martin says it has quit in protest after learning that the ABPI proposed a 'generic substitution' system, whereby cheaper generics would be substituted for some branded medicines.

This proposal was never taken up, but the Department of Health and the ABPI have instead agreed a 'loss of exclusivity' deal which will peg the price of branded medicines to generic alternatives when they become available.

Norgine specialises in 'branded generics' which are specially re-formulated versions of generically available drugs, but these have been targeted in the new agreement as one area that the NHS can save money.

Martin says this arrangement clearly goes against Norgine's commercial interests, and instead protects the interests of big pharma companies.

Commenting on its shock resignation, Peter Martin, remarked:"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 specialised niches such as gastroenterology.

"Norgine believes that the contribution of smaller innovative companies towards improving patient care needs to be appropriately recognised."

The company says this policy will have a disproportionate impact on its business, and Peter Martin says the company feels betrayed by the ABPI's willingness to sacrifice its interests.

Norgine specialises in areas such as gastroenterology, hepatology and pain management, and a handful of products form the core of its business. Three of its biggest selling products are so-called 'branded generics,' being based on the generic drug polyethylene glycol.

These are Movicol for the treatment of chronic constipation and faecal impaction, Moviprep a new generation bowel cleansing preparation and Klean-Prep is for bowel preparation prior to colonoscopy.

The ABPI's response

Responding to Norgine's decision to leave the Association of the British Pharmaceutical Industry (ABPI), Dr Richard Barker, Director-General of the ABPI, said:

"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 £5 million turnover in 2007 will be completely exempt from the 3.9% cut and, for those with less than £25m turnover, their first £5 million 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."

Dr Frances Macdonald, director of Actelion Pharmaceuticals, who represented smaller companies on the PPRS negotiating team, said: "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."

The PPRS die is cast

The negotiations between the ABPI and the government over the details of the PPRS are now being concluded, and there seems limited scope for them to be amended to satisfy Norgine's complaint.

Asked if the organisation would be willing to reconsider elements of the deal, an ABPI spokesman sounded a conciliatory note, saying: "We are sad to lose any member" but added: "We are a long way into this process to start recasting it."

pharmafocus@wiley.com