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TECHNEWS :: Malta IP & IT Update :: 2006

strange looking pills

Major Pharmaceutical Companies Migrate to Malta



During the last forty years, Malta has undergone vast political and economic changes. As a result, new horizons were opened which resulted in a progressive inflow of foreign direct investment resulting in a stronger platform for external trade. This has contributed significantly to job creation and economic growth in the country, hence rendering the Maltese set-up as an attractive base for international operators. This was definitely a result of various advantages offered by the country, including a robust IT infrastructure, highly educated and specialised work force, a multi-lingual environment, its position between Europe and North Africa, a broad and comprehensive package of incentives, sizeable tax & set-up benefits and state-of the-art office and conference facilities.

Malta Patents & Pharmaceutical Companies

A particularly attractive package has been presented to pharmaceutical industries particularly those that focus on generic pharmaceuticals. The robust and favourable legal environment for generic pharmaceutical and active ingredients producers has attracted a number of leading international names to move to Malta.

Malta’s Patents legislation dates back to the 1960’s and protects the interests of proprietors of a patent against third parties. The insignificant size of the domestic market has resulted in the registration of comparably few patents. Generic Pharmaceutical and Active Ingredients operators take advantage of this and the prohibition of retroactive patent registration to develop and produce in Malta medicines for launch on EU and other markets upon expiry of the patent.

Malta’s Patents and Designs legislation also incorporates the “Bolar” provisions which clearly define the circumstances in which the proprietors of a patent still have no right to prevent third parties from performing those acts which are otherwise protected under the Patent legislation. By having a plant outside the convention area, these companies would be able to carry out all the necessary process development and manufacturing for a new generic product and be ready to launch the day patent protection expires in the EU.

The Malta Medicines Act of 2003 stipulates only a six-year data protection period from the date that the originator drug is first marketed.

The Malta Business Promotion Act (BPA)

The BPA classifies this sector as one of priority for the country, thus enabling companies to qualify for the full package of incentives available. These include:

  • Reduced rates of income tax (as low as 5%) on company’s profits.

  • Tax credits up to 50% on all qualifying expenditure on investments of a capital nature.

  • Provision of industrial buildings finished to pharma requirements at competitive rates of rent.

  • Low interest (less than 2%) loan financing.

  • Loan guarantees.

  • Financial assistance for training of employees up to 80% of costs involved.

This has resulted in the island being developed into a very attractive place generic manufactures to operate. There are already 15 generic pharmaceuticals manufacturers already in place, including Actavis, Amino Chemicals Ltd (a subsidiary of DiPharma SpA), Arrow Pharm Malta, Phoenicia Organics, Starpharma, and a company owned by the 130 year old Swiss pharmaceutical company Siegfried Holdings. Another 8 companies are on the way in, and there is a clear self-sustaining cluster in the making. The 15 companies currently in operation represent an investment of around €100 million; this investment is expected to double by 2007. Eventually, exports from the sector should grow from 33 million in 2003 to 150 million in 2007.

General Advantages

European Union entry has served to further consolidate Malta’s position by enabling generic pharmaceutical manufacturers operating on the island to easily promote their medicines on North African markets where there are established trading routes for onward delivery particularly to the Sub-Sahara region. Market authorisation granted by a regulatory authority in a EU member state should suffice to ensure market penetration to this continent, and to the fast growing markets in South America.

As an EU Member state, Malta is determined to make the most of its new status to enhance business confidence in the country. By formulating and implementing legislative and regulatory systems to encourage investment and growth in key target sectors, and by leveraging on its position in the centre of the Mediterranean, Malta has become an ideal location for such operations. 

Chetcuti Cauchi Advocates is active in both patent protection as well as the setting up of companies in Malta that produce generic pharmaceuticals.


>> Contact us @ ip@cc-advocates.com

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