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
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
Provision of industrial buildings finished to pharma requirements at competitive
rates of rent.
Low interest (less than 2%) loan financing.
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.
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.