The Irish Independent reports that a European Union
loophole is costing Irish taxpayers millions of euro in additional fees for
The Irish Independent has learnt that five drug companies have been allowed
to extend the patent of branded medicines for an extra six months here, reaping
a top price for the medicines.
Once the patent of a branded drug runs out, the financial returns to the
manufacturer dramatically drop because it has lost exclusive rights to its sale
and other companies can make cheaper versions.
The six-month extension was granted to encourage companies to spend more on
researching paediatric medicines because treatments for children are suffering
from serious under-investment.
However, it means the taxpayer, through the Health Service Executive (HSE),
is paying over the odds for these medicines for another six months and cannot
purchase cheaper generic versions during that time.
The concession has cost at least €54m in 2011, according to the most
The figures are based on the costs of the drugs to the HSE under various
state schemes including the medical card, drug payment and long-term illness
Several of the drug companies contacted by the Irish Independent could
provide no examples of progress they had made in developing more medicines for
children in return for the rise in their profits due to the EU perk.
They also refused to divulge how much income was generated, saying it was
commercially sensitive information.
The companies which were allowed the six-month extension are Bristol Myers
Squibb, AstraZeneca, Pfizer, Merck Sharp & Dohme and Novartis.
The drugs granted the extension included the anti-cholesterol drug Lipitor;
Singulair, which is used to prevent asthma attacks; and Diovan which treats high
Others include Xalatan, which treats the eye disease glaucoma, and Arimidex,
which is given to women with breast cancer after surgery.
The so-called Paediatric Regulation came into force in the EU in
The purpose is to facilitate the "development of medicines to treat
infants and children in order to ensure that new medicines are researched
and authorised for children under 17 years of age".
A spokesman for the Department of Health was unable to quantify the
benefit of the extension but pointed to a report carried out over a year ago
by the European Medicines Agency.
It found there is evidence of increased and better research on
paediatric medicines and importantly "increased availability of paediatric
medicines and age-appropriate information regarding these medicines".
The extension has been particularly lucrative for companies
supplying Ireland because of our traditionally higher drugs prices.
The Irish Independent also reports that
the value of Ireland's fund industry will pass the $2.3 trillion (€1.8tn) mark
for the first time in 2013 despite a challenging regulatory and economic
backdrop, according to BNY Mellon.
The bank's head of offshore, Rachel Turner, has
also predicted that Ireland will retain its position as a global leader in fund
"We are still seeing a huge appetite from
investors to place money in Ireland," said Ms Turner. She added that large
chunks of UCTIS asset flows last year came through Irish vehicles.
"This is down to the fact that Ireland is still
seen as a good place to do business from a funds perspective, despite the
financial crisis," she said.
BNY Mellon is the largest funds administrator in
Ireland, according to Monterey Insight, based on total net assets of $401bn for
fund administration services across domiciled and non-domiciled funds.
State Street is second with $356bn and JP Morgan
third with almost $240bn.
Ms Turner added increasing regulation posed
significant challenges to the sector, but Ireland could use its EU presidency to
help shape legislation and position the Irish funds industry for future growth.
"One of the greatest challenges facing the Irish
funds industry in 2013 is increased regulation at both a global and local
level," she said.
"How quickly the industry in Ireland adapts to
these changes will be critical to maintaining the upward growth trajectory the
industry has enjoyed."
She added that Ireland needed to start targeting
funds from further afield.
"Ireland needs to begin to target emerging
distribution markets such as South America and the Middle East," she said.
The Irish Times reports that
executive life in Switzerland will soon be less lucrative after more than
two-thirds of Swiss voted yesterday in favour of capping pay at listed
Some 68 per cent backed the so-called “rip-off
initiative” in a referendum, giving shareholders a veto over salaries of
managers and board members. New provisions, to be anchored in the Swiss
constitution, will outlaw golden handshakes for arriving and departing managers,
plus bonus payments for executives involved in mergers and acquisitions.
At general meetings, pension funds and other
institutional investors will be obliged to act in the interests of their
investors and publish their votes.
Managers and board members will, in future, be
re-elected at company agms to obviate the need for payouts for prematurely
ending multiannual contracts.
Breaches of the new law will result in fines of
up to six years’ pay or a prison term of up to three years.
The grassroots initiative, launched seven years
ago by a manager-turned-politician Thomas Minder, collected donations via an
online platform. Yesterday, he said it would end an era of large bonus payments
to managers regardless of their – or their company’s – performance.
It handed shareholders greater ability to
intervene in bonus awards, he said, and would discourage short-term thinking
damaging to a company’s long-term interests.
“I’m just happy the long campaign is over. It’s a
huge signal with over 60 per cent,” said Mr Minder of the vote, backed by all 26
Swiss regions or cantons.
At least five of Europe’s top-20 highest paid
executives work for Swiss firms, including Nestlé, Credit Suisse and drug firm
Critics of the campaign, who proposed a milder
reform, said the vote would make Switzerland less attractive to international
Economiesuisse, the industry federation that
spearheaded a €6.5 million campaign against the initiative, admitted its
campaign had been damaged by public outrage over corporate pay-offs at the
loss-making UBS bank and Novartis.
Last month, Novartis scrapped plans to pay
departing chairman Daniel Vasella up to €60 million in a non-compete bonus.
The Irish Times also reports that
the head of the European Stability Mechanism, Klaus Regling, has warned of the
difficulties in reaching political agreement on using the ESM to directly
recapitalise banks, a key strand of Ireland’s bid for debt relief.
In an interview with German weekly
Wirtschaftswoche ahead of today’s meeting of the euro zone’s finance ministers
in Brussels, Mr Regling said there was significant political resistance from
some states towards using the fund to directly recapitalise banks.
“In order to have direct bank recapitalisation by
the ESM, a unanimous decision by the 17 euro members is required. Additionally
in Germany and in other countries the agreement of parliament is necessary,” he
Pointing out that each country has a veto on the
issue, he said that a “compromise” needs to be found that is “acceptable to all
and that can be explained politically”.
“Each country, even a small country like Estonia,
has a right of veto. And there are several countries where enthusiasm for direct
bank recapitalisation by the ESM is rather limited.”
Mr Regling’s comments come as euro zone finance
ministers gather in Brussels, amid divisions between member states about the
scope and remit of the ESM fund’s capacity to directly recapitalise banks.
Ireland’s bid to lengthen the maturities of some of its bailout loans also
received a setback, with euro zone finance ministers delaying a decision on
Ireland and Portugal’s request for an extension of the maturities of some of its
Mr Regling said there was also an argument for
capping the sum that could be used to directly recapitalise banks. He pointed
out that direct bank recapitalisation would negatively affect the ESM’s rating,
as recapitalising banks is perceived as riskier than granting loans to
While the 17 European states that share the
single currency agreed last year that the ESM fund should be used to directly
recapitalise banks, there is mounting disagreement between states about how this
process should operate. Germany has indicated that it wants an €80 billion cap
on bank recapitalisations.
Ireland is hoping the euro zone’s rescue fund can
be used to directly recapitalise AIB and Bank of Ireland.
The possibility of the ESM setting up
subsidiaries to directly recapitalise banks credit rating is also being
considered, according to sources.
The Irish Examiner reports that
British exploration company Europa Oil & Gas intends to expand its Irish asset
portfolio beyond its two existing prospects off the south-west coast, which have
a mean total resource potential of around 2bn barrels of oil.
The London-headquartered firm, which has exploration
assets in Britain, Ireland, mainland Europe, and northern Africa, is unlikely to
drill at its Irish prospects until 2015, but is likely to apply for a frontier
licence this summer, ahead of its licensing options expiring in November.
It has already held exploratory talks regarding potential farm-out agreements
for its Irish interests, with a number of high-profile international players
understood to have shown interest.
The AIM-listed firm’s two offshore Ireland options — the Kiernan and Mullen
prospects — are both located in the southern Porcupine Basin, off the south-west
Previous testing has shown a 90% probability of 66m barrels of oil and a 10%
probability of 1bn barrels existing at the Mullen prospect, with those numbers
potentially being bigger at the Kiernan prospect.
The two assets combined have a mean resource potential of 2bn barrels.
Europa chief executive Hugh MacKay suggested that, whatever the true final
figure, it is likely to be in the hundreds of millions of barrels bracket.
He added that Europa’s estimates to date have not been notional, but are based
on 2D seismic work done last year, after the company was awarded options in the
Government’s Atlantic Margin licensing round in late 2011.
“The attractiveness to the larger players should be that the Porcupine Basin is
potentially not just a one prospect wonder, but a new play extending into open
acreage,” said Mr MacKay.
He added that the company is definitely interested in expanding its Irish
portfolio and fully intends to be involved in the Government’s next offshore
licensing round, though a decision on the timing or location of this round has
not yet been made.
Europa’s need for a development partner is obvious. The cost of undertaking 3D
seismic work is being estimated at $27m (€20m), with actual drilling work
costing another $50m-$100m.
The company is not concerned with waiting to see what Providence Resources and
Exxon find at the nearby Dunquin field, with Mr MacKay proclaiming: “We’re happy
to farm out now.”
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