Author Archives: Tapan Ray

Drug Price Control in India: When A Local Media Goes Against, A Global CEO Doesn’t

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‘Variety is the spice of life’, as the good old saying goes. The week, just gone by, was indeed packed with a wide variety of surprises, well encompassing various important areas, some of which are as follows:

  • Effective November 08, 2016 midnight, Indian currency notes of ₹500 and ₹1000 denominations ceased to remain legal tenders. This demonetization followed extensive media coverage, both national and international, on unprecedented administrative and public chaos around this otherwise bold and good intent.
  • The same day witnessed much unexpected triumph of Trump as the 45th President-Elect and the Commander-in-Chief of the United States of America. It is entirely a different matter though, that post-election, millions of Americans reportedly took to streets across the United states to vent their fury over the billionaire’s election victory.
  • On November 07, 2016, a well-known Indian business daily, ‘The Economic Times’, in its editorial, apparently expressed its solidarity with the pharma industry, in general, to do away with drug price control in India. The key reason for this advocacy, as I could sense, is to encourage the drug players to grow by making more profits. I respect this view of the editor will all humility. However, the point that I am unable to ferret out though, what happens to especially the poor patients in such an eventuality. With hands-on experience in the pharma industry over several decades, it appears to me that the editorial suggestions, as well, grossly lack in requisite depth of understanding of the core issue.
  • On November 09, 2016, quite opposite to what the above editorial of ‘The Economic Times’, the current global CEO of GlaxoSmithKline – Sir Andrew Witty, in an interview, strongly argued in favor of the necessity of drug price control in India, that improves access to medicines for a vast majority of the country’s population. To substantiate this point Sir Andrew said in another interview on the same day, “We’ve seen demand of products jump 45 percent after the price is cut by 20 percent. The problem arises when we don’t have supply to cater to the demand, leaving patients frustrated. A bit more predictability (on the part of government) will help.”
  • As if this diametrically opposite views are not enough, on November 10, 2016, the well-known civil society organization – ‘All India Drug Action Network (AIDAN)’, reportedly sent legal notices to the CEO of Niti Aayog CEO and secretaries to the Health Ministry, Department of Pharmaceuticals and Department of Industrial Policy and Promotion over their talks to cut the powers of the National Pharmaceutical Pricing Authority (NPPA). AIDAN has termed this Government move “anti-national” and “anti-people”, further adding that it affects an ongoing case at the Supreme Court over various aspects of the drug price control.

In this article, I shall restrict myself to the pharma related issue of the past week, especially on the interesting advocacy through editorial, against the drug price control in India. Simultaneously, I shall also underscore its relevance in the country, primarily to improve access to medicines for millions of Indians, as articulated by one of the leading voices from the global pharma industry.

Is the yardstick of judging pharma industry different?

This particular question floats in my mind because of several reasons. One such is, almost regularly sponsoring fully paid trips for doctors, especially in an exotic foreign land, by many pharma companies. Such practices of the drug companies are generally inferred, more often than not spearheaded by a large section of the media, as dubious means of the organization to entice, or influence prescribing decisions of physicians in favor of their respective high priced brands, ignoring the health and economic interest of patients.

In similar context, just after having a quick glance over a not so important article, written on various operations at the headquarter of a global drug company situated in a beautiful locale of the world, when one focuses the fine print at the end as a disclaimer, which reads: “This reporter was in (name of the country) on an invitation by (name of the global company)…, do the readers arrive at the same conclusion on ‘gratification’, as above, and its consequent possible outcome on pharma related writings of these reporters?

Can the concerned members of the ‘Fourth Estate’ possibly claim desired intellectual independence in their analysis of a situation involving such companies or their trade associations, even after the above disclaimer? Or for that matter, related publications too, which allow acceptance of such avoidable ‘gratis’ by its reporters? Shouldn’t such incidences, whenever these happen, irrespective of who availed these, be perceived in the same light?

In the current scenario, this issue is something for us to seriously ponder. This is mainly because, for following similar practices, why should there be two different yardsticks to gauge the quality of professional independence of two different otherwise highly respectable professions?

This reminds me of a great pharma reporter, writing for an internationally acclaimed business daily, mainly on the drug industry and healthcare. I met him in India a few years back on his invitation. Although, I shall not take either his or his paper’s name. This is to show respect to our free and frank interaction. He flew down to India with his employer paying all the pharma reporting work related expenses. He met with all those in the Indian drug industry that he wanted to, primarily to capture the nuances of the thought pattern of large and small Indian pharma players. I was so impressed with his intellect, and independent professional outlook, like all those who met him during his that specific visit to India. Even now, I can feel his independent perspective, as I read his articles. It would be great to experience similar feelings, while reading pharma related articles and editorials, in various publications of my own country. At the same time, I shall be delighted to be proved wrong regarding any such possibilities in this area.

That said, I shall now move on to the relevance of drug price control in India.

Any relevance of drug price control in a ‘Free Market Economy’?

No doubt, this is a very pertinent question. Equally pertinent answers are also available in a 2014 paper titled, “Competition Issues in the Indian Pharmaceuticals Sector” of Delhi School Economics (DSE). The paper deals with issues related to failure of ‘Free Market Economy’, despite intense competition, especially for branded generic drugs in India.

Quoting a practicing surgeon, the DSE article states: “Sometimes it could be just plain ignorance about the availability of a cheaper alternative that makes doctors continue to prescribe costlier brands. But one cannot ignore the role of what is euphemistically called marketing “incentive”, which basically mean the inappropriate influence pharmaceutical companies exert on doctors. This runs deep. Hospitals choose to stock only certain drugs in their in-house pharmacies and insist that hospitalized patients buy drugs only from the hospital pharmacy. Drug companies sell drugs to hospitals at a price much lower than what the patient is charged, further incentivizing the hospital to stock their products. The cheaper brands often get left out in this game.”

Further, in an ideal free-market economic model, for all approved branded generics with exactly the same formulation, having the same claimable efficacy, safety and quality standards, though marketed by different pharma companies, competitive forces should prompt some parity in their pricing.

Any generic brand with exactly the same formulation as others and offering the same therapeutic value, but costing significantly more, should ideally attract a lesser number of customers, if and where purchase decisions are taken by the consumers directly. However, for prescription medicines it’s not so. The well proven process of consumers exercising their own choice to select a brand, mostly influenced by advertising or word of mouth, does not happen at all.

The Government attributes ‘Market Failure’ for pharmaceuticals:

In its price notification dated July 10, 2014, the NPPA has categorically stated the following:

  • There exist huge inter-brand price differences in branded-generics, which is indicative of a severe market failure, as different brands of the same drug formulation, which are identical to each other in terms of active ingredient(s), strength, dosage, route of administration, quality, product characteristics, and intended use, vary disproportionately in terms of price.
  • It is observed that, the different brands of the drug formulation may sometimes differ in terms of binders, fillers, dyes, preservatives, coating agents, and dissolution agents, but these differences are not significant in terms of therapeutic value.
  • In India the market failure for pharmaceuticals can be attributed to several factors, but the main reason is that the demand for medicines is largely prescription driven and the patient has very little choice in this regard.
  • Market failure alone may not constitute sufficient grounds for government intervention, but when such failure is considered in the context of the essential role of pharmaceuticals play in the area of public health, which is a social right, such intervention becomes necessary, especially when exploitative pricing makes medicines generally unaffordable and beyond the reach of most and also puts the huge financial burden in terms of out-of-pocket expenditure on health care.

Civil Society echoed the same sentiment:

In this context, it is important to note that seven large Civil Society Organizations in a letter of August 20, 2014 addressed to Mr. Ananth Kumar, the present Minister of Chemicals and Fertilizers with a copy to Prime Minister Modi, articulated similar views, as follows:

“Limiting all price regulation only to a list of 348 medicines and specified dosages and strengths in the DPCO 2013 goes against the policy objective of making medicines affordable to the public. The National List of Essential Medicines, a list of 348 rational and cost-effective medicines, is not the basis for production, promotion and prescription in India. In reality the most frequently prescribed and consumed medicines are not listed in the NLEM.”

Last week, AIDAN has also indicated that the reported Government move to curtail the power vested on the NPPA for drug price, affects an ongoing case at the Supreme Court over various aspects of the drug price control.

Are medicines cheapest in India…really?

It is often highlighted that medicines cost much cheaper, if not the cheapest, in India. This is too simplistic a view on this subject. It compares the prevailing Indian drug prices in Rupee, against the prices of similar drugs in other countries, just by simple conversion of the foreign currencies, such as, US$ and Euro into Rupee. To make the comparison realistic and credible, Indian drug prices should be compared against the same in other countries, only after applying the following two critical parameters:

  • Purchasing Power Parity and Per Capita Income
  • Quantum of per capita ‘Out of Pocket Expenditure’ on drugs

The Department of Pharmaceuticals (DoP) with the help of academia and other experts had earlier deliberated on this issue in one of its reports on patented drug pricing. The report established that post application of the above two parameters, medicines in India are virtually as expensive as in the developed world, causing great inconvenience to the majority of patients in the country.

Hence, common patients expectedly look for some kind of critical intervention by the Government, at least, on the prices of essential drugs in India.

‘Cannot do away with Drug Price Control’ – said the New Government:

On August 24, 2015 in an interview with a national business daily, V K Subburaj, the Secretary of the Department of Pharmaceuticals commented, “Price control on drugs a shot in the arm for health care” and “the Government cannot do away with it.”

He argued, “A large section of the population is poor. Suddenly, your system is disturbed if you have to spend more on drugs. Drugs are an important component of health care expenditure.”

Accepting the fact that in India, big and small companies investing in research would need more money, Mr. Subburaj said, “In India, we can’t afford to remove controls as the burden of disease is high.”

All stakeholders expect that there is some predictability in what the Government says. Can the stand taken by the policymakers change in just a year’s time, probably wilting under industry pressure?

Conclusion:

The drug price control in India is in vogue since 1970, uninterruptedly. The retail audit data continue to indicate that the growth of the Indian pharma industry, over the last four and half decade long price control regime, has been nothing less than spectacular. This would consequently mean, increasing consumption of drugs, leading to improved access to medicines in India, including its hinterland, though may still not be good enough. Sir Andrew Witty of GSK also articulated the same view, just the last week. It’s a different story altogether that some of the industry sponsored expensive market surveys attempt to wish it away.

Coincidentally, at the commencement of drug price control regime in India in 1970, almost all the players in the ‘Top 10’ pharma league table of the country, were multi-national drug companies. Today the situation has just reversed. Out of ‘Top 10’, about seven are home grown drug companies. Many of these companies were born post 1970. Without frequent M&As by the pharma MNCs, this number could have been probably higher today.

By the way, what’s the span of drug price control in India really – just about 18 percent of the total domestic pharma market now? Around 80 percent of the local drug market continues to remain in the ‘free-pricing’ and ‘high-profit’ zone.

When it comes to profitability, it is worth mentioning, the promoter of the so called ‘low margin’ generic pharma company – Sun Pharma, is the second-richest person in India. He created his initial wealth from India, despite ostensible ‘growth stunting’ price control.

Keeping this in perspective, is it not baffling to fathom the reason behind a local business publication’s apparently endorsing the advocacy initiatives of pharma industry against drug price control through an editorial, when a well-regarded global pharma CEO expresses a strong favorable view in this regard?

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Millennial Generation Doctors And Patients: Changing Mindset, Aspirations, And Expectations

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The term ‘Millennial Generation’ normally refers to the generation, born from 1980 onward, brought up using digital technology and mass media. According to ‘Millennial Mindset’ – a website dedicated to helping businesses understand millennial employees and new ways of working, the key attributes of this generation are broadly considered as follows:

  1. Technology Driven:
  2. Socially Conscious
  3. Collaborative

The millennial mindset:

The publication also indicates that the overall mindset of the millennial generation is also vastly different from the previous generations, which can fall into four categories:

  1. Personal freedom, Non-hierarchical, Interdependent, Connected, Networked, Sharing
  2. Instant gratification, Wide Knowledge, Test and learn, Fast paced, Always on, Innovative
  3. Fairness, Narcissistic, Purpose driven
  4. Balance, Eco-friendly and Experience focused

Seeks different professional ecosystem:

In the professional arena too, this new generation’s expectations from the professional ecosystem are often seen to be distinctly different, as they are generally seen to be:

  • Willing to make a meaningful professional contribution, mostly through self-learning
  • Seek maintaining a reasonable balance between work and personal life
  • Prefer flexible work environment, unwilling to be rigidly bound by convention, tradition, or set rules
  • Impatient for fast both personal and organizational growth, often on the global canvas

The ‘Millennial Generation’ in India:

The millennium generation with a different mindset, aspirations and value system, already constitutes a major chunk of the Indian demography. According to the 2011 Census, out of estimated 1.2 billion population, around 701 million Indians (60 percent) are under 30 years of age, which also very often referred to as ‘demographic dividend’ of India.

Currently, a large number of Indians belonging to the millennial generation are entering into the work stream of both national and International companies operating in the country.

The challenge in healthcare arena:

In the healthcare sphere too, we now come across a fast increasing number of technology savvy and digitally inclined patients and doctors of this generation. Accurately gauging, and then meeting with their changing expectations has indeed been a challenging task for the pharma companies, and the related service providers.

Their expectations from the brands and other services, as provided by the pharma companies, don’t seem to be quite the same as before, either, so are the individually preferred communication formats, the way of processing, and quickly cross-verifying the product and other healthcare information. Before arriving at any decision, they were found to keenly observe the way brands are marketed, their intrinsic value, type and the quality of interface for engagement with them by the companies, whenever required.

Thus, from the pharma business perspective, qualitatively different strategic approaches, to both the millennial doctors and patients, would be of increasing importance and an ongoing exercise. The goal posts would also keep moving continuously. Achieving proficiency in this area with military precision, I reckon, would differentiate the men from the boys, in pursuit of business performance excellence.

In this article, I shall primarily discuss on the changing mindset and needs of the patients and doctors of the ‘millennial generation’.

A. Treating millennial patients differently:

Around 81 percent of millennial doctors, against 57 percent of older generation doctors think that millennial patients require a different relationship with their doctors than non-millennial patients. About 66 percent of millennial doctors actually act upon this and change their approach, as the survey reported.

The difference:

The key differences on millennial doctors’ treating millennial patients, are mainly in the following areas:

  • Expects more, doesn’t get swayed away: Millennial doctors are more likely to advise the millennial patients to do additional research on their own for discussion. 71 percent of millennial doctors believe it’s helpful for patients to do online research before their appointment. However, they don’t get swayed by requests from more-informed patients, as only 23 percent of millennial doctors say they are influenced by patient requests when it comes to prescribing a treatment, whereas 41 percent of non-millennial doctors report finding those requests influential.
  • Gets into the details: The millennial doctors are more likely to simplify and streamline explanations for older patients, whereas non- millennial doctors were more likely to simplify explanations for millennial patients too, treating them exactly the same way.
  • Relies on digital resources: Millennial doctors rely mostly on using digital resources for treating millennial patients, but only around 56.5 percent of them do so for non-millennial patients.

B. Treating millennial doctors differently:

For effective business engagement and ensure commensurate financial outcomes, pharma companies will first require to know and deeply understand the changing mindset, expectations, and aspirations of the millennial doctors, then work out tailor-made strategic approaches, accordingly, to achieve the set objectives.

Top 3 expectations from the pharma industry:

According to a June 2016 special survey report on Healthcare Marketing to Millennials, released by inVentive Health agencies, the top 3 expectations of millennial and non-millennial doctors from the pharma industry, are as follows:

Rank Millennial Doctors % Rank Non- Millennial Doctors %
1. Unbranded Disease Information 67 1. Unbranded Disease Information 58
2. Discussion Guides 48 2. Latest Specific News 46
3. Adherence Support 40 3. Healthy Life Style Information 42

Pharma players, therefore, can provide customized offerings and services, in various innovative platforms, based on these top 3 different expectations of millennial and non-millennial doctors, to achieve much needed critical competitive edge for a sustainable business performance.

Brand communication process needs a relook:

The above report also noted a number of the interesting trends related to the millennial doctors. I am quoting below just a few of those:

  • Only 16 percent of millennial doctors found pharma promotional materials to be influential when considering a new treatment compared to 48 percent of non-millennial doctors who do.
  • 79 percent of them refer to information from pharmaceutical companies only after they’ve found that information elsewhere.
  • 65 percent of these doctors indicated, they did not trust information from pharmaceutical companies to be fair and balanced, while only 48 percent of their older peers shared that sentiment.
  • 50 percent found educational experiences that are driven by their peers to be the most relevant for learning and considering about new treatments, against 18 percent of non-millennial physicians.
  • 52 percent of them, when learning about new treatment options, favor peers as their conversation partners.
  • They are much more likely to rely on a third-party website for requisite product or treatment information
  • 60 percent of millennial doctors are more likely to see a pharma rep, if they offer important programs for their patients, compared to only 47 percent of non-millennial doctors. This also reflects greater patient centric values of the millennial doctors.
  • However, an overwhelming 81percent of millennial doctors believe that any type of ‘Direct To Consumer (DTC)’ promotion makes their job harder, because patients ask for medications they don’t need.
  • 41 percent of millennial doctors prefer a two-way and an in-person interaction, against just 11 percent of them with online reps. Here, it should be noted that this has to be an ‘interaction’, not just predominantly a monologue, even while using an iPad or any other android tablets.

Redesigning processes to meet changing expectations and needs:

Thus, to create requisite value, and ensure effective engagement with millennial doctors, the pharma companies may consider exploring the possibility of specifically designing their entire chain of interface with Millennials, right from promotional outreach to adherence tools, and from medical communications to detailing, as the survey report highlights. I shall mention below just a few of those as examples:

Communication platforms:

For personal, more dynamic and effective engagement, non-personal digital platforms – driving towards personal interactions with company reps, together with facilitating collaboration between their professional peer groups, came out as of immense importance to them.

Adherence and outcomes:

There is a need for the pharma companies to move the strategic engagement needle more towards patient outcomes. This is mainly because, medication adherence is a large part of the patient outcome equation. It involves a wide range of partnerships, such as, between patients and physicians, and also the physicians and pharma players. This particular need can be best met by offering exactly the type of collaborative approach that millennial doctors favor.

Medical communication:

Redesigning the core narrative of medical communication around a disease state and product, engaging the wisdom and enthusiasm of scientific, clinical, and educational leaders primarily to serve a well-articulated noble cause, are likely to fetch desired results, allaying the general distrust of millennial doctors on the pharma companies, in general.

Medical representative:

Earning the trust of the millennial doctors by respecting, accepting, and appealing to their value systems, is of utmost importance for the medical reps. To achieve this, drug companies would require to equip their reps with tools and programs that offer value in terms of patient support and adherence, while demonstrating compelling outcomes with a positive patient experience, and greater efficiency in treatment decisions.

Building reputation:

The “Purpose Generation” – that’s how millennials are often referred to. In that sense, to build a long lasting business reputation among them, pharma companies need to be in sync with this new generation.

Weaving a trusting relationship with them involves meeting all those needs that these doctors value, such as, adherence solutions, innovative patient support programs, and creating shared value for communities. This would mean, for many drug companies, charting an almost uncharted frontier, where there aren’t many footsteps to follow.

Need to induct younger generation to top leadership positions faster:

To capture these changes with precision, and designing effective engagement strategies for millennial patients and doctors accordingly, an open, innovative and virtually contemporary mindset with a pair of fresh eyes, are essential. As against this, even today, many ‘Baby Boomers’ (born approximately between 1946 and 1956), who have already earned the status of senior citizens, meticulously nursing a not so flexible mind with traditional views, still keep clutching on to the key top leadership positions in the pharma industry, both global and local.

This prevailing trend encompasses even those who are occupying just ornamental corporate leadership positions, mostly for PR purpose, besides being the public face of the organization, sans any significant and direct operational or financial responsibilities. Nevertheless, by pulling all available corporate levers and tricks, they hang-on to the job. In that way, these senior citizens delay the process of change in the key leadership positions with younger generation of professionals, who understand not just the growing Millennials much better, but also the ever changing market dynamics, and intricate customer behavior, to lead the organization to a greater height of all round success.

I hasten to add, a few of the younger global head honcho have now started articulating a different vision altogether, which is so relevant by being a community benefit oriented and patient centric, in true sense. These icons include the outgoing GSK chief Sir Andrew Witty, who explains how ‘Big Pharma’ can help the poor and still make money, and the Allergan CEO Brent Saunders promising to keep drug prices affordable. Being rather small in number, these sane voices get easily drowned in the din of other global head honchos, curling their lips at any other view point of less self-serving in nature. Quite understandably, their local or surrounding poodles, toe exactly the same line, often displaying more gusto, as many believe.

Conclusion:

The triumph of outdated colonial mindset within the drug industry appears to be all pervasive, even today. It keeps striving hard to implement the self-serving corporate agenda, behind the façade of ‘Patient Centricity’. When the demography is changing at a faster pace in many important countries, such as India, a sizeable number of the critical decision makers don’t seem to understand, and can’t possibly fathom with finesse and precision, the changing mindset, aspirations and expectations of the millennial generation doctors and patients.

Expectedly, this approach is increasingly proving to be self-defeating, if not demeaning to many. It’s affecting the long term corporate performance, continually inviting the ire of the stakeholders, including Governments in various countries.

From this perspective, as the above survey results unravel, the millennial doctors and patients, with their changing mindset, aspirations, expectations and demands, look forward to an environment that matches up with the unique characteristics and values of their own generation.

To excel in this evolving scenario, especially in India – with one of the youngest demographic profiles, proper understanding of the nuances that’s driving this change, by the top echelon of the pharma management, is of utmost importance. Only then, can any strategic alignment of corporate business interests with the expectations of fast growing Millennials take shape, bridging the ongoing trust deficit of the stakeholders, as the pharma industry moves ahead with an accelerated pace.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Relevance of Artificial Intelligence In Creative Pharma Marketing

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Keeping pace with the challenge of change globally, the macro environment in the pharma business is also undergoing a metamorphosis. This includes areas, such as, strong product pricing pressure, dwindling new product pipelines, increasing operating expenses, stringent regulatory requirements, rising stakeholder expectations, and several others. All these developments collectively, are making the drug companies, both global and local, feel the tailwind of various intensities, in their efforts to achieve the corporate financial goals, more than ever before.

Despite this continuous change, most pharma players’ overall strategic business models to meet with the increasing economic expectations of the shareholders, other investors and the stock markets, have hardly undergone any path breaking, radical, or disruptive advancement, just yet. This includes even the most critical interface between an organization and the consumers – pharma sales and marketing.

That said, it is not uncommon, either, to witness some sporadic initiatives of major business process reengineering with sophisticated digital applications. Interestingly, all these measures are mostly replacements or for realignment of the same age old, and traditional strategic pharma sales and marketing models. Most of these are aimed at adding more speed and accuracy to the same business core process, along with ensuring greater management information and control to support the decision making process.

Despite this palpable environmental shift, general inertia within the pharma industry to respond to all these, with commensurate strategic game plans of surgical accuracy, is glaring. Currently, the general response to this transformation is mostly reactive and traditionally defensive in nature, rather than proactive, as the overall business environment around the industry keep becoming increasingly demanding. Most pharma players may not, but the time keeps galloping ahead, offering a mind boggling rapid advances in disruptive technological innovations – the potential game changers for its several business domains.

In the midst of such all-embracing changes, yet another disruptive technology – ‘Artificial Intelligence (AI)’, is prompting many business leaders to step on to a brand new paradigm, making use of AI to the extent required, especially, while preparing a detail strategic roadmap for the business with high precision.

A clear intent to seize this moment is now visible in many industries, though in varying degrees and scale, but surely it is happening. This is vindicated by the gradual increase in demand for AI, across a wide variety of its application areas.

Marketing to turn upside down?

On October 26, 2016 an article published in ‘The Huffington Post’ on how AI could ‘Turn the Marketing World Upside Down’ indicated its disruptive impact on the way innovative marketing strategies are conceived, created and implemented on the ground.

The article gave an interesting example of how paradigm shift follows a predictable pattern of development that starts with substitution, followed by augmentation, modification, and finally redefinition.

For example, the evolution of today’s smartphones also followed the same pattern, as follows:

  • First replaced simpler landline phones
  • Then adapted with the addition of a camera
  • And finally redefined “phone” altogether, not just by replacing cameras, pagers, and many functions of personal computers, but by being able to perform with great precision an incredible number of various other serious requirements, well supported by related digital apps.

With the application of AI in marketing, the conventional ball game right from conception, to charting out and execution of marketing strategies, will be catapulted to a new and fascinating orbit altogether. I have no intent to romanticizing it. This is going to happen sooner than later, as we move on.

Artificial Intelligence (AI):

In a simple and commonly understandable way ‘Artificial Intelligence (AI)’ can be explained as the theory and development of computer systems, which are able to perform tasks normally requiring human intelligence, such as, machine learning, visual perception, image processing, speech recognition, decision-making, and language processing, besides many others.

In the Hollywood film industry, several sci-fi movies have already been made, based on AI as the core theme. Some of these international blockbuster films are ‘The Terminator’, ‘Transcendence’, ‘The Matrix’, ‘Ex Machina’, ‘Ex Machina’ or even ‘2001: A Space Odyssey’, among many others.

Some concern, but…:

Alongside, a serious concern has also been expressed by some global icons, that the evolution of AI could reach a dangerous threshold, where mankind will no longer remain in control of the creation of its own progeny, besides other living beings. This could, as they believe, jeopardize the continuity of an entire civilization, at least, in its present form.

In 2014, globally acclaimed Professor Stephen Hawking commented in an  interview with the BBC: “Humans, limited by slow biological evolution, couldn’t compete and would be superseded by A.I.”

In fact, in July 2015, Professor Hawking reportedly joined Elon Musk, Steve Wozniak, and many others, warning that AI can potentially be more dangerous than nuclear weapons.

In the same year, even Bill Gates, co-founder of Microsoft, reportedly expressed his concerns, saying, “I am in the camp that is concerned about super intelligence…”

On the other hand, despite such apprehensions, AI based technology keeps evolving at a rapid pace, with the funding in AI research taking giant leaps forward. The technology has already found its cutting edge extensive applications in several warfare. We now hear almost every day about unmanned drones not just doing defense surveillance, but destroying strategic targets with jaw-dropping precision. Or for that matter, use of robots has become rather common to diffusive explosive devices of various kinds, intensity, and planted in important places to kill people. As reported by the media, ‘autonomous and self-aware robots to diminish the need for human soldiers to risk their lives.’

Google’s driverless cars also use similar AI technology offering advanced analytics-based algorithms, machine learning and deep learning processes, which could well be another game changing example in this area.

The benefits far outweigh the risks?

Be that as it may, the benefits of AI seem to far outweigh the risks, in various areas. This includes its strategic applications in the pharma industry.

This gets vindicated by the February 2016 research report of ‘Markets and Markets’ (claimed as the world’s second largest firm in publishing premium market research reports, per year), which estimated that AI market would record a turnover of around US$ 5.05 Billion by 2020, growing at a CAGR of 53.65 percent between 2015 and 2020. This market is currently dominated by the ‘Machine Learning’ technology, as it provides the computers with the ability to learn without being explicitly programmed, and are capable of updating themselves when exposed to new data.

Some of the key players operating in the artificial intelligence market are IBM Corp. (U.S.), Microsoft Corp. (U.S.), Google Inc. (U.S.), IPsoft (U.S.), FinGenius Corp. (U.K.), Rocket Fuel Inc. (U.S.), Mobileye N.V. (Israel), Kensho Technologies, Inc. (U.S.), Sentient Technologies (U.S.), and Zephyr Health (U.S.), the report revealed.

AI in pharma:

Over the last decade, AI is being increasingly used by various industries, as a key support to the strategic decision making process, in various areas of business. Understandably, in pharma its use has been rather limited, as on date. Nevertheless, there are several key domains within the pharma industry, where effective use of AI has the potential to be a critical performance enhancer. These areas include, not just in discovery research, or in clinical trials, or in sales and marketing, but also in setting the right strategic direction for the company.

However, in this article, I shall focus mainly on the application of AI in pharma marketing.

AI in pharma marketing:

Although AI is now being sparsely used, it is expected to be more widely used in pharma research and development. It also shows tremendous potential in developing creative sales and marketing strategies, with great accuracy.

So far, pharma marketing strategies are based more on the qualitative data, some traditional quantitative data, and a huge dose of marketers ‘gut feel’. It continues to happen, when the world, including India, is moving towards innovative data driven decision models. If one chooses to, now a pharma marketer also can make effective use of an abundantly available wide variety of quality data to feel the pulse of the markets, consumers and any identified issues, with great precision. Thereafter, based on these real life hard facts, the team needs to put in place for implementation, with an open and innovative mind, a creative sales and marketing game plan, to achieve the set goals.

Would that mean, a pharma marketer should necessarily be an expert in a huge volume of data analysis? I don’t guess so. ‘Machine Learning’, ‘Deep Learning’ and other analytics-based processes of AI can help them enormously to do so.

AI based analytics has now been proved to be far more reliable than any human analysis of the humongous volume of different kinds of quality data. Doing so is even beyond the capacity of any conventional computers that a marketing professional generally uses for this purpose.

The prime requirement for this purpose, therefore, is not just huge volume of data per se, but good quality of a decent volume of data, that a state of the art analytics would be able to meaningfully deliver, that is tailor made to meet the specific requirements of pharma marketers to create a cutting edge marketing strategy.

Areas of AI use in pharma – some examples:

AI will be extremely useful to arrive at the most effective strategic options available, with pros and cons, to achieve the core sales and marketing objectives of the organization, both long and short term.

It can also add immense value right at the decision making stages to determine the key ingredients of an effective strategic plan in a number of critical areas, such as:

  • Arriving at the optimal product-portfolio-mix with the right expense tag attached to each brand
  • Deep learning about market dynamics, customer behavior and their interplay
  • Matching unmet customer needs with enhanced and differentiated value offerings – both tangible and intangible
  • Effective bundling of brand offerings and associated services for each patient segment
  • Selecting the right mix of communication channels, including social media, to ensure maximum productivity in reaching each category of the target audience
  • Detailed strategic blueprint for each type of stakeholder engagement, along with related value offerings
  • Arriving at the best possible resource-mix with the available budget
  • Real-time monitoring of each strategic action steps, consistently, making quick changes on the run, if and when required

Pharma AI platforms are already available:

There are a number of AI platforms now available for the pharmaceutical companies, across the world. For example, in September 2015, by a Press Release, Eularis – a leading provider of next-generation advanced marketing analytics to the Pharma industry, announced the release of the E-VAI, the latest development in sophisticated machine learning technology delivering next-generation analytics and decision making for Pharma marketers globally.

Another recent example of AI in this area, as well, is ‘Salesforce Einstein’. It delivers advanced AI capabilities in sales, service, and marketing, and enables anyone to build AI-powered apps that get smarter with every interaction. According to Salesforce, it will enable everyone in every role and industry to use AI to be their best.

Conclusion:

The use of AI in pharma is still in its nascent stage today. However, for a sustainable business excellence in its various domains, AI is increasingly proving to be of great relevance, now and also in the future. Sales and marketing is one such domains.

With the passage of time, both the macro and micro pharma business operating environments are changing fast, primarily driven by changing expectations of stakeholders, the public at large, and disruptive algorithmic technical innovations, based on advanced science, statistics and mathematics.

The scope to effectively utilize the full potential of advanced algorithmic technical tools, is huge. It is easier now to capture a massive volume of pharma related high quality raw data of different kinds, for tailor-made innovative analysis, with the help of AI based analytics, while creating cutting-edge strategic game plans.

Nonetheless, pharma players apparently continue to chart the same strategic frontier where there are many footsteps to follow. Many of them have restricted themselves to no more than digitally re-engineering the same overall business processes that they have been already following, since long. Just a few of them are making use of the leading edge analytics involving AI, such as ‘Machine Learning’, ‘Deep Learning’, ‘Visual Perception’, ‘Image Processing, besides many others, which can be more ‘patient-centric’ and at the same help deliver a strong business performance.

Thus, quicker adaptation, and thereafter continuous scaling up applications of high quality AI based analytics in creative pharma marketing, are not just of immense relevance today, they also bring with them the commensurate potential for sustainable excellence in financial performance of the organization, fueled by critical early mover advantage.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Counterfeit Drugs In India: A Malady Much Deeper

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Many debates and discussions continue being lined up in India almost regularly, generally by the pharma trade associations, besides a few others, on the issue of counterfeit drugs. A good number of these events are sponsored by the global and local anti-counterfeit product manufacturers and the related service providers, presumably to get a captive pharma audience. By and large, these gatherings are well publicized, and very rightly so, to focus for a while on this growing menace in the country.

One of the key objectives of such proceedings, I reckon, besides recommending the immediate action steps for the government in saddle, is to encourage the manufacturers of high quality drugs to protect their brands from the onslaught of counterfeiters through anti-counterfeit measures. Several of these involve a state of the art non-cloning technology. The core message that gets filtered-through, in most of these occasions is, if the suggested steps are followed by the drug companies with the related products and services, these won’t just help protect the patients’ health interest, but also provide a boost to the top and bottom lines in the pharma business, significantly.

There are no qualms about this initiative, not at all. Nonetheless, can this be considered a holistic approach to tackle the menace of counterfeit drugs, especially by the pharma players in India, and considering various other different ways the menace keep striking the patients, so surreptitiously?

Thus, in this article, my point of focus will be on a critical question, which is not asked with the same vigor always in many of the above events: Hasn’t the malady of counterfeit drugs in India spread much wider, and taken its root considerably deeper?

Counterfeit drugs and what it includes?

According to the World Health Organization (W.H.O), there is currently no universally agreed definition among its member states in what is widely known as ‘Counterfeit medicines’. Nevertheless, W.H.O does indicate that the term ‘counterfeit’ is widely used to include falsified, unlicensed, falsely packaged, stolen and substandard medical products. Jurisdictions across the world define counterfeit medicines in many different ways.

It’s worth noting here, according to W.H.O, substandard medical products also belong to this category. In 2009, W.H.O defined ‘substandard’ drugs as “genuine medicines produced by the manufacturers authorized by the NMRA (national medicines regulatory authority) which do not meet quality specifications set for them by national standards”.

Hence, notwithstanding whatever will be accepted as the general consensus of the W.H.O members on the definition of counterfeit drugs, from the patients’ perspective, any drug failing to meet with the claimed efficacy, safety and quality standards, should come under the same ‘category definition’, including substandard drugs.

Controversy over the term ‘Counterfeit’:

Many W.H.O member countries believe that the term counterfeit is closely associated and legally defined within the Intellectual Property (IP) legislation, and concentrates on trademark protection. Consequently, usage of this terminology has been perceived to have reduced the focus from what is first and foremost a public health issue. Thus, it has become quite important for W.H.O to separate the different categories of what is widely used as ‘counterfeit drug’, for the purpose of analysis and identifying strategies, to effectively address the issue of the public health menace that such activities give rise to.

Types of counterfeit drugs:

A Review Article titled “Anti-counterfeit Packaging in Pharma Industry” dated February 17, 2011, published in the “International Journal of Pharmacy and Pharmaceutical Sciences”, divided the types of counterfeit mechanisms into five categories, in which drugs are manufactured or distributed without proper regulatory clearance, and do not meet the determined standards of safety, quality, and efficacy:

  • No active ingredient (43 percent)
  • Low levels of active ingredient (21 percent)
  • Poor quality drugs (24 percent)
  • Wrong ingredients (2 percent)
  • Wrong packaging or source (7 percent)

This particular article will dwell mainly on a very important segment in this category – the substandard or poor quality drugs.

The magnitude of the problem:

On May 17, 2016, a Research Article titled, “Public Awareness and Identification of Counterfeit Drugs in Tanzania: A View on Antimalarial Drugs”, published in ‘Advances in Public Health’ – a peer-reviewed, open access journal that publishes original research articles, highlighted something that should cause a great concern not just for the Indian drug regulators, but also the Indian pharma manufacturers, in general.

The research paper, besides other points, underscored the following:

“Currently, it is estimated that 10–15 percent of the global drugs supplied are counterfeit. The prevalence is higher in developing countries in Africa and in parts of Asia and Latin America where up to 30–60 percent of drugs on the market are counterfeit. India is a major supplier of poor quality drugs whereby 35–75 percent of fake/counterfeit drugs globally originate from India.”

Another report of ‘Pharmexcil’ dated October 04, 2010 also states: “According to the Organization for Economic Cooperation and Development (OECD), 75 percent of fake drugs supplied world over have origins in India, followed by 7 percent from Egypt and 6 percent from China. India is also a leading source of high quality generic and patent drugs in the legitimate commerce worldwide. Since drugs made in India are sold around the world, the country’s substandard drug trade represents a grave public health threat that extends far beyond the subcontinent.”

Substandard drugs: a potential crisis in public health:

An article with the above title, published in the British Journal of Clinical Pharmacology on November 29, 2013 cautioned on the potential crisis in public health with substandard drugs, as follows:

“Poor-quality medicines present a serious public health problem, particularly in emerging economies and developing countries, and may have a significant impact on the national clinical and economic burden. Attention has largely focused on the increasing availability of deliberately falsified drugs, but substandard medicines are also reaching patients because of poor manufacturing and quality-control practices in the production of genuine drugs (either branded or generic). Substandard medicines are widespread and represent a threat to health because they can inadvertently lead to health care failures, such as antibiotic resistance and the spread of disease within a community, as well as death or additional illness in individuals.”

Hence, the potential of health crisis with various substandard drugs is quite similar to other types of counterfeit drugs.

Substandard drugs and small pharma players:

As I said before, the malady of counterfeit, fake and substandard drugs are spreading much wider and deeper in India. What’s happening around today in this area prompts us to believe, it may no longer be proper to keep all the large pharma manufacturers away from the ambit of discussion on substandard or counterfeit drugs. This apprehension is raising its head, as it is generally believed that only small, unknown, or fly-by-night type of drug manufacturers, are responsible for substandard, fake or counterfeit drugs. Whereas, the reality seems to be different. There are now ample reasons to believe that even some large drug manufacturers, both local and global, who have been caught by the regulator for the same wrongdoing, are also equally responsible for causing similar adverse health impact on patients.

Substandard drugs and large pharma players:

That the issue of substandard drugs is quite widespread in India, involving both global and local pharma players – small and large, is also quite evident from the following report, published in the May 14, 2016 edition of the well-reputed national daily – Hindustan Times:

“A day after French major Sanofi announced a recall of some batches of its popular painkiller Combiflam, India’s drug regulator said over 102 medicines have been highlighted for quality concerns and withdrawal in the last five months. The list includes several popular painkillers.”

The report also indicated that these are generic medicines, both with and without brand names, such as, CIP-ZOX of Cipla, Orcerin of MacLeod Pharma, Zerodol-SP of Ipca Laboratories, Pantoprazole of Indian Drugs and Pharmaceuticals Ltd and Norfloxacin of Karnataka Antibiotics & Pharmaceutical Ltd. According to the public notices of the Central Drugs Standard Control Organization (CDSCO), these batches were manufactured in June 2015 and July 2015, and carried expiry dates of May 2018 and June 2018.

The CDSCO also reportedly said that in notices posted on its website in February and April, 2015, it found some batches of Combiflam to be “not of standard quality” as they failed disintegration tests. The point to note is, according to the US-FDA, disintegration test is used to assess the time it takes for tablets and capsules to break down inside the body and are used as a quality-assurance measure.

“All drugs listed under the drug alert list should be recalled with immediate effect. We have found some serious problems with the making of the drug because of which we have highlighted quality concerns. Hence, recall is necessary for all companies,” GN Singh, the Drug Controller General of India (DCGI), reportedly told the above newspaper.

Should the ‘intent behind’ be considered as the key differentiating factor?

This takes me to another question: What’s the ‘intent behind’ manufacturing substandard drugs? It is not difficult to make out that the only ‘intent behind’ manufacturing substandard drugs by illegal, some small or fly-by-night type of drug operators would be to make quick money, by cutting corners, and criminally falsifying the entire process.

Until recently, I used to strongly believe that those large manufacturers who are getting caught for releasing substandard drugs to the market, have made sheer mistakes, and these are no more than minor aberrations. However, recent findings by the US-FDA, after rigorous manufacturing quality audit of several production facilities of large and small generic drug producers of India, make me wonder whether this thin differentiating line of ‘intent behind’ manufacturing substandard drugs, though still exists, has started getting blurred. The foreign regulators have imposed import ban on drugs produced in those facilities on the ground of willingly compromising drug quality, and grossly falsifying data.

I am not going into those much discussed details here, once again, as the drugs involved in the above cases are meant for exports and the import bans, by the foreign regulators were aimed at protecting the health and safety of citizens of those countries. In this article my focus is on India, and health interest of the local Indian population.

Thus fathoming a different ‘intent behind’ manufacturing substandard drugs, especially by the large and well-known manufacturers, is the real challenge. What sort of anti-counterfeit events will be able to possibly address this perturbing issue, that is now getting revealed much faster than even before?

Who in India ensures that all drugs are safe?

Possibly none, not even the drug regulators and the enforcers of the drug laws, as a number of national and international media reports reveal. General public doesn’t get any assurance from any authorities that the medicines sold by the drug retail outlets, pan India, are all standard quality and genuine.

At the same time, it is equally challenging for anyone to ascertain, with absolute certainty, that it’s a counterfeit, substandard or a fake drug, in whatever name we call it, is responsible for avoidable suffering or even death of an individual. In such a sad eventuality, one has no other choice but to accept that the causative factor was either a wrong diagnosis of the disease, or delayed onset of treatment.

Is CDSCO still in a denial mode?

It’s an irony that the government sources often highlight that the incidence of substandard, spurious or fake drugs in India has declined from around 9 percent in the 1990s, to around 5 percent in 2014-15, quoting the CDSCO sample survey findings.

Nevertheless, while looking at the same CDSCO survey results of the last four years – from 2011-12 to 2014-15, the incidence of spurious and substandard drugs in India appears to be static, if not marginally increased, as follows:

Year Tested Samples Substandard Samples Spurious or Adulterated samples % Failed
2011-12 48,082,00 2,186.00 133.00 4.82
2012-13 58,537.00 2,362.00 70.00 4.15
2013-14 72,712.00 3,028.00 118.00 4.32
2014-15 74,199.00 3,702.00 83.00 5.10

Source: Central Drugs Control Organization (CDSCO)

In my view, these CDSCO results should be taken perhaps with dollops of salt, not merely the sample size for these surveys is too small, but also the complexity involved in the collection of the right kind of samples that will always pass the acid test of independent experts’ scrutiny.  Right representational sample size – state-wise, is so important, primarily considering that India is the world’s third-largest pharmaceutical market by volume, consumes 383 billion medicines per annum, according to a 2015 Government report, and is quite a heterogeneous pharma market.

A September 06, 2016 media report well captured the palpable hubris of the Government on this worrying subject. It quoted the Drug Controller General of India (DCGI) – Dr. G N Singh as saying: “This is an encouraging trend when it comes to comparing Indian made generics with that produced in regulated markets. This will help us dispel the myth that India is a source of substandard drugs as compared to any other regulated market.”

Interestingly, other studies and reports do indicate that this menace could well be, at least, thrice as large.

Be that as it may, according to an October 22, 2016 media report, CDSCO is expected to release the findings of the latest survey on ‘spurious drugs’ in India by end October 2016.

Two recent good intents of CDSCO:

Apparently, as a response to the widespread public criticism on this issue, despite being in a denial mode earlier, CDSCO has recently expressed two good intents to address this issue, as follows:

  • As reported on October 18, 2016, it has sent a recommendation to the Union Ministry of Health to amend the Drugs & Cosmetics Act to facilitate implementation of bar coding and Unique Identification Number (UIN) on every pack of domestic pharma products.
  • To ensure consistency and uniformity in the inspection process, on May 26, 2016, by a Public Notice, it issued a new draft checklist of ‘Risk Based Inspection of the Pharma Manufacturing Facilities’ for verification of GMP compliance as per the provisions stated under Schedule M of Drugs and Cosmetics Rules, 1945, and sought suggestions from the stakeholders. This checklist would be used by drug regulatory enforcement agencies as a science based tool. It also envisaged that the pharma industry would find this checklist useful for self-assessment.

Let’s now wait and watch, to get to know the timeline of translating these good intents into reality on the ground, and the impact that these decisions will make to reverse the current worrying trend of counterfeit and substandard drugs in India.

Conclusion:

The malady of counterfeit or substandard drugs is not just India centric. Various credible sources have estimated that around a million people fall victim to such so called ‘medicines’, each year. However, unlike many other countries, India still doesn’t have any structured and effective regulatory or other mechanisms, not even any spine-chilling deterrent, in place to address this public health menace of humongous implications.

That said, besides serious health hazards, the adverse financial impact of substandard drugs on patients is also significant. Such drugs, even when non-fatal, are much less effective, if not ineffective or trigger other adverse reactions. Thus, a longer course of treatment, or switching over to a different medication altogether, may often be necessary, multiplying the cost of treatment.

In that sense, substandard, spurious, fake or counterfeit drugs, in whatever name one describes these, increase the disease burden manifold, besides being life-threatening. This issue assumes greater significance in India, where 58.2 percent of the total health expenditure is incurred out-of-pocket by a vast majority of the population. Medicines alone, which are mostly purchased from private retail outlets, across India, account for between 70 and 77 per cent of the individual out of pocket health spending, according to a W.H.O report.

High decibel campaigns on various anti-counterfeit technology solutions for fast selling, or expensive brands of large pharma companies, whether sponsored by placing the commercial interest at the top of mind, or even otherwise, are welcome, so are the two recent good intents of the Union Government, in this area.

However, the desirable proactive focus on curbing the menace of substandard medicines in India, which cause similar health risks as any other type of counterfeit drugs, does not seem to be as sharp, not just yet, barring the pharma export sector. Nor does this issue attract similar zest for a meaningful discourse related to patients’ health and safety within the country, as associated with various other anti-counterfeiting technology solution oriented events. The anomaly remains intriguing, especially when the malady spreads, with its root reaching deeper.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion. 

Reticence Around Unveiling Clinical Trials

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While scanning through various publications, we now get to know, almost at regular intervals, about new clinical trials capturing the newer ways of treating different ailments. Such information instils an invigorating hope in the minds of doctors and the patients alike, to more successfully and predictably fight the battle against diseases in the ongoing pursuit for a better quality of life.

However, for independent and impartial assessment of any new drug before it comes to the market, an ethical and transparent process of unveiling clinical trials, sans any reticence whatsoever, are absolutely essential. Only this process would be able to satisfactorily establish, beyond an iota of doubt, the safety and efficacy levels of, especially, the new drugs. To move in that direction, the fundamental requirements will be diligently recording and publishing all types of data – positive, not so positive, and also negative, arising out of all clinical trials, conducted anywhere in the world, for the same drug.

Thus, there should be a system of open access to all clinical trial data, as each trial is completed. Otherwise, pharma companies’ publication bias, overwhelmingly on positive results, would continue, as alleged by many across the world. It is worth noting that over 60 percent of all clinical trials for new drugs are sponsored by the pharma and biotech companies.

There isn’t any dearth of examples of new drugs’ getting not just the required regulatory approval, riding on the back of robust ‘positive’ clinical trial data on safety and efficacy, but also becoming highly dependable money-spinners for the companies, and in no time, as it were. These cash churning new brands would also get well protected for monopolistic pricing all through their respective patent life, and sometimes even after that, in various different ways.

Nevertheless, at a later date, mostly post patent expiry, not all pre-launch new drug trials could be universally accepted as robust and conclusive, especially on their efficacy and safety claims. On the contrary, a number of detailed and deep-stick independent studies indicate that some new drugs are, in fact, much less effective, if not ineffective, and cause more serious side effects than what were published earlier.

Hence, some critical questions are now being asked by many stakeholders, with greater assertiveness than ever before and backed by solid evidence, in this arena. Although it has now started creating a snowballing effect, still, nothing much seems to have changed on the ground, just yet.

Why aren’t all clinical trial results, and for all new drugs not still published, or otherwise made available for public scrutiny, unveiled, and of course after protecting any reasonable commercial interest? Does business consideration, then continue to prevail over the need for transparency in clinical trial data disclosure for patients’ health and safety? The sneaking fear behind the reasons of this reticence of pharma players, in general, continues to torment many. I shall discuss this point in this article backed by recently published data.

Not a recent trend:

This isn’t a recent trend either, and continuing for decades, without any effective remedial measures by the appropriate authorities. I would give just a couple of examples, one from 1998 and the other from 2014, to drive home this point.

A  British Journal of Clinical Pharmacology (BJCP) article, published way back in August 1998 would vindicate this point. This study revealed the following on clinical trial data:

“Substantial evidence of selective reporting was detected, since trials with positive outcome resulted more often in submission of final report to regulatory authorities than those with inconclusive or negative outcomes.”

Another study published on September 10, 2014 in the Journal of American Medical Association (JAMA) states as follows:

“Thirty-five percent of published reanalysis led to changes in the findings that implied conclusions different from those of the original article about the types and number of patients who should be treated.”

That said, I shall now focus on a very recent controversy in this area, related to a blockbuster drug that has now gone off-patent.

A contemporary example:

Statin class of drugs, especially, Atorvastatin is one of many such examples.

Pfizer launched Atorvastatin with the brand name Lipitor in early 1997. At that time, it was the fifth in the statin class of drugs for the treatment of hyperlipidemia.

It was launched on the back of a 1996 clinical study that concluded, Lipitor reduces bad cholesterol significantly more than the other statins, from the very onset of treatment to as long as the treatment continues. After that it’s a history in the pharma industry, Pfizer marketing turned it into the best-selling drug ever, in the history of pharmaceuticals, so far.

Over 14.5 years, Lipitor reportedly made over US$ 125 billion in sales, and provided up to a quarter of Pfizer Inc.’s annual revenue for years.

Product claim – then:

Claiming that in ‘one year alone, statins reduced numerous cases of cardiovascular-related complications and saved thousands of lives’, a Pfizer Paper on “The Value of Statin”, reiterated the drug’s role both in the treatment and prevention of Coronary Artery Diseases (CAD). I am quoting below from this paper to cite just one example each – treatment and prevention:

  • In a study of patients with Coronary Artery Disease (CAD) statin therapy reduced the relative risk of mortality by 50 percent in those > 80-years-old, 44 percent in those 65- to 79-years-old, and 30% in those < 65 years old, compared to CAD patients in the same age group not taking statin therapy (Ref. Chloe, Allen A., et al. ‘Statin Therapy Is Associated With Reduced Mortality Across All Age Groups of Individuals With Significant Coronary Disease, Including Very Elderly Patients’. JACC. 40: 10; 1777-1785)
  • An analysis of 18 trials, including 56,934 patients, primarily without CVD, demonstrated statins conferred a relative risk reduction (RRR) in all-cause mortality by 14 percent and stroke by 22 percent (Ref. Statins for the primary prevention of cardiovascular disease. Cochrane Database System Review. 2013 Jan 31; 1:CD004816).

Research findings for the same drug – now:

Among several other publications on statins, a July 26, 2015 article, published in the ‘World Journal of Cardiology’ concludes as follows:

“History has proven otherwise, and the global prevalence of Coronary Heart Disease (CHD), despite worldwide statin usage and cholesterol lowering campaigns, has reached pandemic proportions. Coronary heart disease is an extremely complex malady and the expectation that it could be prevented or eliminated by simply reducing cholesterol appears unfounded. After twenty years we should concede the anomalies of the cholesterol hypothesis and refocus our efforts on the proven benefits of a healthy lifestyle incorporating a Mediterranean diet to prevent CHD.”

To give one more example, let me quote from a contemporary study, published on June 12, 2016 in the ‘BMJ Open’, which also comes to a similar conclusion, as follows:

“High LDL-C (Low-Density Lipoproteins – Cholesterol) is inversely associated with mortality in most people over 60 years. This finding is inconsistent with the cholesterol hypothesis (i.e., that cholesterol, particularly LDL-C, is inherently atherogenic). Since elderly people with high LDL-C live as long or longer than those with low LDL-C, our analysis provides reason to question the validity of the cholesterol hypothesis. Moreover, our study provides the rationale for a re-evaluation of guidelines recommending pharmacological reduction of LDL-C in the elderly as a component of cardiovascular disease prevention strategies.”

Examples of other drugs:

Lipitor should not stand out as a solitary example, in this field. To establish this point, let me now put forth, just as illustrations, a few more examples of similar bias on positive results in clinical trial publications, besides many others.

An October 4, 2016 article titled, “Big Pharma’s Role in Clinical Trials”, published in the ‘Drug Watch’, quotes several other companies sailing in the same boat, as follows:

  • The Cochrane Collaboration, a nonprofit organization based in London that reviews health care information, concluded that unlike its promotional claims, Roche’s Tamiflu only shortened symptoms of influenza by one day, and it did not prevent hospitalizations or complications from influenza.
  • AstraZeneca reportedly paid US$ 647 million in lawsuit settlements for failing to inform the public of Seroquel’s side effects.
  • Takeda Pharmaceuticals reportedly settled lawsuits claiming the company’s anti-diabetic drug Actos caused bladder cancer, for US$ 2.37 billion.
  • In July 2012, GlaxoSmithKline reportedly pleaded guilty and agreed to pay US$ 3 billion to settle charges brought by the U.S. Department of Justice for failing to report clinical data on its anti-diabetic drug Avandia.
  • Johnson & Johnson was reportedly accused of hiding some dangerous side effects like, diabetes, substantial weight gain, stroke and gynecomastia – or breast development in boys for its product Risperdal – used to treat schizophrenia and bipolar disorder in adults and adolescents and autism spectrum disorders in children and adolescents.  The company reportedly settled claims in Kentucky, Texas and Montana for a total of more than US$ 340 million and settled multiple cases in Pennsylvania for undisclosed amounts.
  • As reported by ‘Financial Times’ on February 03, 2015, Novartis was accused of manipulating trial data in favor of its anti-hypertensive drug – Diovan, and concealing side-effects associated with its Tasigna – for leukemia treatment. As a result, the company reportedly faced a temporary suspension of its business in Japan, as punishment for alleged manipulation of clinical trial data.

Possible reasons:

The above ‘Drug Watch’ article attributed several reasons to positive data bias in publications, as follows:

  • Researchers publish positive findings more often than negative findings as a result of human bias. Scholars want their work to contribute to medical advancement and not deter it.
  • Researchers do not want to put their time and energy into writing studies about negative results.
  • Journals seek positive results, and publish them more quickly to increase publicity.
  • Trial sponsors want to publish positive results to increase profit.

The article emphasized, “Big Pharma funds 60 percent of all clinical trials, and takes advantage of its power to persuade researchers and influence institutions.  The result is an under-informed, and misinformed medical community giving advice to patients with false or incomplete data. The byproducts of industry cover-ups are scores of deaths and millions of dollars in industry profits.”

Indian scenario:

India is also not immune from such alleged wrongdoings. Indian clinical trial organizations have also been accused of trial related scams, and that too on a mega scale, reaching beyond the shores of the country. I am quoting below two such recent examples:

  • In August 2015, the European Union reportedly banned the marketing of around 700 generic medicines for alleged manipulation of clinical trials conducted by the domestic research company GVK Biosciences. This was reported as the largest EU-wide suspension of sales and distribution of generic drugs ordered by the European Commission that was applicable to all its 28 member nations.
  • In July 2016, the European Medicines Agency (EMA) reportedly recommended suspending the sale of dozens of generic medicines over concerns about “flawed” studies that were conducted by the Semler Research Center, located in Bengaluru. Many of these drugs are sold by Novartis and Teva Pharmaceuticals.
  • In September-October 2015, US-FDA also found “significant instances of misconduct and violations of federal regulations by the same research center, which includes substitution and manipulation of study subject samples.”
  • This year, the World Health Organization (WHO) also had issued a notice to Semler for the same reasons. After, examining the company’s computer servers, early and late last year, WHO reportedly found a spreadsheet file containing detailed instructions for manipulating drug samples that were used in clinical trials for its clients. 

It is even more unfortunate that such malpractices are continuing, even after the Supreme Court of India’s widely reported observation in early 2013 that ‘Uncontrolled clinical trials are causing havoc to human life.’ The apex court of the country made this remark in response to a petition filed by the human rights group Swasthya Adhikar Manch (SAM).  

The upshot:

Recent scrutiny of all original clinical trial findings of many new drugs by the independent experts, including statins, even if taken just as raising controversies, the question would still remain, why did such controversies not surface much earlier, or during the product patent life? No company would possibly be willing to unveil the fact behind this raging debate.

The good news is, pharma companies operating in Europe and the United States have decided to share trial data with qualified researchers, effective 2014, presumably in response to mounting pressure from clinical trial transparency campaigners, for quite some time.

The European Federation of Pharmaceutical Industries and Associations (EFPIA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) have jointly released a set of principles detailing plans to allow greater access to information from clinical trials. However, it fell short of public availability of all clinical trial data. Let’s wait, watch and hope that this seemingly good intent would be translated into reality by all their member companies.

Some pharma companies and their trade associations continue to raise issues of the various legalities against related to public disclosures of all trial data. Nevertheless, it is worth noting that in April 2014, a legislation was approved in Europe by the European Parliament to increase transparency in clinical trials by making the trial results publicly available. EMA was commissioned by the European Parliament to create a database where all interested parties could view comprehensive data from clinical trials. The transparency rules for the European Clinical Trial Regulation entered into force on January 1, 2015 and apply to clinical trial reports contained in all marketing authorization applications submitted on or after this date. On March 3, 2016, EMA announced the detailed guidance on the requirements for pharmaceutical companies to comply with the agency’s policy on publication of clinical trials data for all medicines. Chapter Three of this publication gives guidance to companies on how to anonymize clinical reports for the purpose of publication.

The EMA initiative of transparency of clinical trial data  aims at ensuring that drug companies are aware of what is expected of them, and that they are ready for the publication of these critical data.

Besides Europe, in the United States too, though there is a clear mandate of the federal government that all clinical trial results related to serious or life-threatening diseases require to be published and uploaded on ClinicalTrials.gov – the database of the Government covering all clinical trials in America. However, this government mandate also seems to be hardly followed, both in its letter and spirit, according to reports. Similar scenario, reportedly, still prevails in most other developed countries, as well. India does not seem to be any different in this matter, either.

Intriguingly, the whole issue continues to remain polemical, with more number of initial clinical trial conclusions reportedly turning out to be not as transparent as these ought to be, carrying a significant bias towards positive treatment outcomes.

As a result, prevailing reticence around unveiling all clinical trials, including those of blockbuster drugs, is eventually pushing many patients to the brink of much avoidable and unforeseen serious health risk.

By: Tapan J. Ray  

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion. 

Is Criticizing Pharma Now Just A Fad?

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Is criticizing pharma now just a fad of its stakeholders? Fathoming the right answer to this seemingly simple question may not be too easy, either, for some. The task could even be more onerous, especially when the global ‘researched based’ pharma and biotech companies, well chorused by their trade associations, are exerting serious efforts to garner the much required trust of all stakeholders on their ‘patient centric’ focus in the process of transacting business.

This often repeated pledge, as it were, on ‘patient centric’ approach is indeed praiseworthy. There’s no two opinions about it, either. The new found interest of several ‘research-based’ pharma and biologic players to develop less expensive biosimilar drugs, to possibly improve patient access to otherwise expensive biologic medicines, post patent expiry, could well be a reiteration of the same and well publicized vow, of course if not proven otherwise.

A recent example:

In the context of ‘patient-centric’ approach with biosimilar product development by the world’s largest innovative biologic drug makers, let me quote the following recent example.

On September 23, 2016, by a Press Release, the Food and Drug Administration of the United States (US-FDA) announced regulatory approval of Amjevita (adalimumab-atto) as a biosimilar to Humira (adalimumab) for multiple inflammatory diseases. This is the fourth FDA-approved biosimilar, after the new biosimilar pathway became effective in the US. Amjevita has been developed by Amgen Inc. – one of the global pioneers in the development of innovative biologic drugs.

According to US-FDA, a biosimilar is a biological product that is approved based on a showing that it is highly similar to an already-approved biological product and has no clinically meaningful differences in terms of safety, purity and potency (i.e., safety and effectiveness) from the reference product, in addition to meeting other criteria specified by law.

Although, Amjevita is biosimilar to Humira,  it has not been approved as an interchangeable product with Humira. This issue is considered as a major regulatory roadblock in the US for substitution of original biologic brands with their biosimilar equivalents, which can, therefore, be prescribed mostly to the new patients. It’s worth noting here that Humira – the blockbuster arthritis drug of AbbVie Inc. clocked a sale of US$ 14 billion in 2015, and probably will continue to do so in the foreseeable future, even long after patent expiry. I shall touch upon that point below, briefly.

It is estimated that the savings of putting just new patients on much less expensive biosimilar drugs, sans substitution of the expensive original brand, will be billions of dollars. Nonetheless, this will help reduce the cost of treatment with biologic medications, improving their access to many others.

A key barrier:

Interestingly, the barriers to following the biosimilar path are being mostly created none other than the innovative drug companies themselves, even post patent expiry, presumably to extend market exclusivity and monopoly pricing.

Arising out of one such key barrier, in the form of patent litigation, Amgen’s Amjevita, in all probability, may not be available to deserving patients for years. This could involve a protracted process of skillfully navigating through the labyrinth of legalities.

On August 05, 2016, The Wall Street Journal (WSJ) reported that AbbVie Inc. has filed a patent-infringement lawsuit against rival Amgen Inc., seeking to block sales of a lower-priced biosimilar of AbbVie’s top-selling, now generally considered as an off-patent drug – Humira.

When the narrative gets paradoxical:

While all the ‘research-based’ drug companies claim to be ‘patient-centric’ in their business approaches, be it with the development of biosimilars or in other areas, somewhere this narrative gets paradoxical.

On September 02, 2016, Reuters reported that global ‘research-based’ companies are now ‘waging courtroom patent battles against each other over biosimilars, as the line blurs between companies known for their innovative medicines, and those that produce cheaper biotech knockoffs.’

Some of the recent high-profile examples were reported as follows:

  • Sanofi sued Merck in the US federal court over its biosimilar version of Lantus insulin with around US$7 billion in annual sales.
  • Eli Lilly reached a royalties deal with Sanofi to end a similar Lantus-related lawsuit, but their pact means the biosimilar launch was likely delayed.
  • Pfizer and Korea’s Celltrion in August beat back a court challenge from Johnson & Johnson over US$10 billion autoimmune drug Remicade, though J&J’s Janssen unit promised to appeal.
  • In a closely watched case, Novartis wants the US Supreme Court to dump a six-month marketing delay for biosimilars, in what would be the first time the high court took up a biosimilar case.
  • Samsung Bioepis, along with partner and minority shareholder Biogen Inc, filed a lawsuit against AbbVie in Britain in March to stop the US company from blocking the launch of yet another Humira biosimilar.

It is equally noteworthy, while Amgen is keen to launch its own biosimilars, the company’s aggressive legal strategy delayed Novartis’s efforts to introduce the first US biosimilar, Zarxio, before the copy of Amgen’s US $1 billion drug Neupogen finally went on sale last year.

Further, Amgen has also filed a legal suit against a biosimilar version of its Enbrel (etanercept) developed by Novartis (Sandoz), which has already received regulatory approval from the US-FDA on August 30, 2016 for multiple inflammatory diseases.

Taking these into consideration, isn’t, therefore, about time to ponder afresh, whether the innovative drug makers’ general mindset of maintaining drug exclusivity with a very high price, on techno-legal grounds, even after enjoying price monopoly over a long period of the specified time, be termed as ‘patient-centric’?

Indian scenario:

Indian players have already started developing biosimilar drugs in the country. This market offers a lucrative future opportunity considering that original biologic brands with a global turnover of around US$ 70 billion will expire by 2020.

The first biosimilar was approved and marketed in India for a hepatitis B vaccine in 2000 (GaBI Online). By now, around 30 such products have reportedly received the Drug Controller General of India (DCGI)’s approval for marketing in India. Even after the new biosimilar guidelines were framed and implemented locally, since 2012, there has not been any worthwhile legal suits filed by the global innovative biologic manufacturers, against the Indian companies or such products developed and approved in India, till 2014.

Since then, this scenario has changed with Roche suing Biocon and its partner Mylan on their biosimilar versions of Roche’s Herceptin (Trastuzumab) for breast cancer, and also making the DCGI a party to this suit. This litigation is broadly on the following grounds:

  • Non-adherence to the Indian biosimilar guidelines
  • Misrepresentation of drugs as biosimilar and passing off 

Be that as it may, its key impact is on affordable biosimilar drugs that can save more lives of breast cancer patients in India. If it is so, do such litigations demonstrate a patient-centric perspective for so important a drug, which is not even protected by a product patent in India, any longer?

Are biosimilars the only examples?

Lest I am not seen as highlighting only the instances of blocking market entry of biosimilar drugs, as sole examples of ‘patient-centric focus’, or lack of it, of many global innovative drug manufacturers, I would now expand it, just a bit. This is only to fathom the bottom-line – whether it is a ‘patients-centric’ focus, or solely a ‘profit-centric’ outlook.

‘Patients-centric’ or ‘Profit-centric’?

To get a sense on this vexing issue, it would be worthwhile for us to find out by ourselves the most appropriate reason behind each of the following. Of course it’s just an illustration. This reason could be either a ‘patient centric’ focus, or simply a ‘profit centric’ outlook. …And then let’s try to make out which way the overall balance tilts, on the ground:

  • Discovering new drugs, delivery systems, and finding new indications
  • Lack of transparency and widely reported bias towards mainly positive results in clinical trial data, both for publication and regulatory approval of various new drugs, and associated global furor.
  • Exorbitant high prices of many new patented medicines and some generic drugs too
  • Widely reported marketing/other malpractices, and associated fines paid by the respective players
  • Causing entry delay for cheaper small molecule generics and large molecule biosimilar drugs post patent expiry restricting gtreaterr patient access

What’s your relative score now?

Conclusion:

Let me sign off here by raising the following relevant questions in this area, for all of us to think and address, as we deem appropriate:

Is the narrative of ‘patient centric’ approach of the ‘research-based’ global drug companies’ now getting clearer with the widely reported credible examples, as above?

Is there still a paradox between their two different strategic business approaches – one entry into off-patent drug development, such as biosimilars, and the other in blocking or delaying entry of such drugs, whenever possible, even after enjoying a specified period of product pricing monopoly?

Does it then mean, what a large section of pharma industry constituents is now publicly demonstrating, at least in the above areas, more than negates their protracted sound bites on ‘patient centric’ focus?

Despite these facts, would pharma related criticism in this space be termed as just a fad of the stakeholders?

If not, what should be the way forward from here to ensure that remedial measures are taken in so important an area of ‘patient-centric’ outlook, soon enough?

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion. 

Declining MR Access to Doctors Prompts Increased Digital Engagement

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The trigger point for a disruptive change in the pharma marketing playbook now seems to be not just on the horizon, but could soon move to a countdown stage, in India.

On Friday, September 16, 2016, at a seminar on the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) organized at Bengaluru, Sudhanshu Pant, Joint Secretary (Policy), Department of Pharmaceuticals (DoP), India, reportedly said that the mandatory UCPMP is now in its last leg of clearance with the Union Government, after incorporating the inputs received from the pharma industry and other stakeholders.

He clearly articulated in his address, once a level playing field is created with mandatory UCPMP, both the pharma industry and the medical professionals will be restricted to offer and receive freebies, respectively, which is the in-thing today to generate prescriptions from the doctors.

“Our intent is that the new code should be followed in letter and spirit. It is not a draconian law, but penalties are stringent. We are enforcing fines. The violation of this code could also lead to suspension of product marketing,” the joint secretary further clarified.

Signals a forthcoming change:

Effective implementation of the mandatory UCPMP across India, could catalyze significant changes in the allegedly dubious pharmaceutical marketing process in India, revolving round ‘give and take’ of enticing ‘freebies’ to the prescribers. According to several reports, some of these practices are followed in the guise of ‘brand-reminders’, and several others fall under ‘events associated with Continuing Medical Education (CME), mostly arranged in various exotic places around the world, with associated hospitalities and equivalents. Besides, there exists a host of different kinds of ‘carrots for prescriptions’ of numerous types, forms and costs, as highlighted frequently by the national and international media.

Nevertheless, it is widely believed by many that Medical Representatives (MR) in India are having virtually no access barrier to meet the doctors, as a large number of both the receivers and the givers of the freebies have allegedly financial interest ingrained on meeting each other.

This scenario, I reckon, will change in India with the strict enforcement of mandatory UCPMP by the Government, curbing any possible misadventure by any stakeholder in the space of ethical pharma marketing practices that would impact the health interest of patients, directly.

Drawing a similar example:

One relevant example for India could be drawn from what happened in the United States (US) in this area, relatively recently. To contain wide-spread unethical pharma marketing practices in the US, President Obama administration enacted the Physician Payment Sunshine Act, effective August 1, 2013. This new law, that requires detailed disclosures from both the physicians and the pharma players on giving and accepting the freebies, limited the financial interest of the prescribers to meet with the MRs several times in a year, for face to face product detailing. Consequently, MR access to prescribers for the same started becoming increasingly more challenging.

A number of studies indicate, a large number of doctors have now started considering the delivery of a frequent barrage sales message an avoidable noise, when alternative highly user-friendly platforms are available to keep them up-to-date on various brands.

In the same way, as the new mandatory UCPMP will come into effect in India, it is quite likely that pharma companies operating in the country would start facing similar challenges with MRs visits, especially, to the important busy doctors and for similar reasons.

Digital channels are gaining strength:

With MRs access to physicians gradually declining, many pharmaceutical companies are trying to make the best use of a gamut of customized, innovative marketing approaches pivoted on various digital platforms. These initiatives are primarily to supplement effective engagement with the doctors to generate increasing prescription demand, and in a more user-friendly manner.

The latest study on trend:

There are many studies in this area, but I shall quote the latest one. According to a 2016 study of the global sales and marketing firm ZS Associates: “The number of digital and non-personal contacts that the pharmaceutical industry now has with physicians exceeded its number of sales rep visits to doctor offices.”

Analyzing the data from 681,000 health care providers who actually engage with pharmaceutical and biotech manufacturers across promotional channels, and more than 40,000 pharmaceutical sales representatives (MRs), the study reported, among others, the following:

  • 44 percent of physicians are “accessible” (that is, they met with more than 70 percent of sales reps who try to meet with them). This is a decline from 46 percent in 2015 and nearly 80 percent in 2008.
  • 38 percent of physicians restricted access (that is, they met with 31 to 70 percent of reps who try to meet with them).
  • 18 percent of physicians “severely” restricted access (that is, they meet with 30 percent or fewer reps who try to meet with them).
  • More than half (53 percent) of marketing outreach to physicians now takes place through “non-personal” promotion, such as email and mobile alerts, as well as direct mail and speaker programs.
  • The remainder of marketing to physicians (47 percent) still takes place through in-person interactions with sales reps (MRs).
  • Today’s physician estimates that he or she already spends 84 hours per year – about two full work weeks – interacting with pharma companies via digital and other non-personal marketing channels.
  • Around 74 percent of the physicians use their smartphones for professional purposes.

Another interesting point also emerges from the report. Despite the fact that non-personal communications, including digital, comprise 53 percent of marketing outreach most drug companies still allocate around 88 percent of their total sales and marketing budget to the sales force.

Increasing ‘online professional networks’ for doctors:

Keeping pace with this change several online professional networks for doctors are coming up. One such example is Doctors.net.uk. This is claimed to be the largest and most active online professional network for all UK doctors. Each day over 50,000 doctors make use of Doctors.net.uk to network with colleagues and view information.

This particular online facility provides the doctors with a range of free secure services including an email service, clinical forums, accredited education and medical news, which help them to keep up to date, and to easily maintain their Continuing Professional Development (CPD).

Some digital initiatives of pharma companies:

Here, I would quote just a couple of interesting examples out of several others:

For continuous online engagement with doctors:

In January 2013, the top global pharma major Pfizer launched an online digital platform for the doctors named ‘Pfizerline’. It provides access to the latest information on Pfizer products ‘when, where and how’ the doctors want it. As claimed by the company, ‘Pfizerline’ is regularly updated and forms part of the company’s ongoing commitment to keep the doctors informed about their products and services.

Some say that with ‘Pfizerline’, ‘Pfizer has begun using digital drug representatives to market medicines, leaving the decision as to whether they want to see them in doctors’ hands.’

For new product launch:

According to the Press Release published by PMLive, the first in the pharmaceutical industry ‘digital marketing only’ campaign was launched by Abbott for its Low Dose HRT brand, in November 2013.

The campaign reportedly reached to 9,000 doctors, 45 percent of the NHS population of obstetricians and gynecologists, and nearly 23 percent of GPs who engaged with Abbott’s Low Dose HRT brand via professional network Doctors.net.uk.

According to Abbott, as quoted in this report, the digital campaign, which included interactive case studies, clinical paper summaries and an ask the expert section, helped increase the brand’s market share, with a continuous month-on-month growth in sales in 2013.

I am quoting these two examples, just to illustrate the point that serious experimentations with digital marketing for serious business initiatives, such as, doctor engagement and product launch, have already commenced.

Conclusion:

For better physician engagement, while preparing for a likely future scenario in India, any effective brand marketing strategy on digital platforms would call for in-depth understanding of the target audience preferences on the specific information needs and marketing channels. This customized approach needs to be harnessed to deliver the right message, to the right customer, through right platforms, and at a time of preferred by each prescriber.

The ball game of pharma marketing is gradually but surely changing. Clear signals are now coming from various Governments to the pharma companies to jettison the widely perceived unethical practices of alluring the drug prescribers with ‘freebies’ of different kinds and values, against patients’ health interest.

Unless various third parties come-up just to camouflage continuation of the same unethical marketing practices of many companies, at a cost, getting unfettered MR access to busy prescribers is likely to be increasingly more challenging. Otherwise, effective enforcement of mandatory UCPMP is likely to usher-in this change in India, sooner, just as what the ‘Physician Payment Sunshine Act’ did in the US. The countdown for the new paradigm in the country is expected to commence soon, as reportedly articulated by the Joint Secretary (Policy) of the Department of Pharmaceuticals, recently.

However, there are a couple of points to ponder. It is also widely believed, even today, and also in the US that, while various digital platforms offer never before opportunity to effectively engage with ‘difficult to meet’ prescribers, their use should be prudent and well thought of. Any mass-scale and imprudent general switch to digital communications, is unlikely to fetch the best outcome, to meet with this evolving challenge of change, at least, in the foreseeable future.

At the same time, if pharma companies continue increasing investment in less expensive digital communications sans diligent homework for scaling up, the prescribers may feel so overwhelmed that they will start ignoring them, just as what’s happening with frequent MRs’ visits. Hence, for sustainable business excellence while confronting with forthcoming disruptive changes, the notes of the pharma marketing playbook need to be recomposed, afresh.

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion. 

What Happens To Pharma’s Incredible Ride On The ‘Gravy Train’?

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India continues to be one of the fastest growing pharmaceutical market of the world with its over 40 percent of the total pharmaceutical produce is exported around the world. Over half of the total exports constitute of formulations, and the balance comprises of bulk drugs. India has been consistently maintaining its supremacy in the formulation exports since my salad days.

According to Export Statistics (2014-15) published by the Pharmaceutical Export Promotion Council of India (Pharmexcil), United States (US) is the largest market for the India’s pharmaceutical exports with a share of 27 percent of the total, followed by the United Kingdom (UK), South Africa, Russia, Nigeria, Brazil and Germany.

A red flag raised: 

Up until recently, it has almost been like walking over a bed of roses in this front for Indian pharma exporters. However, it does not seem to be so now, and at least in the foreseeable future, for a number of reasons.

The Press Release of ‘CRISIL Research’ dated May 17, 2016 has also raised a red flag in this area. The report foresees growth in pharma formulations (in US dollar terms) declining sharply to 10-12 percent annually over the next 5 years, as compared with a growth of ~19% seen in the last decade.

This adverse impact will be felt mostly in the US – the largest export destination of India, followed by the UK.

I reckon, there are three basic reasons for this changing scenario, namely, pricing, quality and lesser number of branded small-molecule blockbuster drugs going off patent.

The ride on the ‘gravy train’:

Pharma companies across the world consider that doing business in the US market would provide them a lot of money without facing any head wind, fundamentally driven by the drug pricing freedom in the country, as compared to any other market of the world.

This unfettered freedom of charging a hefty price premium in the largest pharma market of the world, on an ongoing basis, has been a critical factor of attraction for many pharma players to do business in the US, coming from various corners of the globe, including India, just as honey attracts the bees, as it were.

Thus far, it has been an incredible ride on the ‘gravy train’, as it were, for most of them.

However, ongoing activities of a large number of drug companies, dominated by blatant self-serving interests, have now given rise to a strong general demand for the Government to initiate robust remedial measures, soon. The telltale signs of which indicate that this no holds barred pricing freedom may not be available to pharma, even in the US, any longer.

In this article, I shall focus mainly on this point, drawing both global and local examples, as this development has a strong potential to add more to the existing miseries of many Indian drug exporters, of course in tandem with many other large MNCs.

Some recent developments: 

The April 21, 2016 issue of ‘The Financial Times’ quoted Joe Jimenez, the Global Chief Executive (CEO) of Novartis, where he said that pharma companies can no longer count on the “hockey-stick” trajectories for new products in the US. This is primarily due to the aggressive control of the drug expenses by the insurers and other healthcare payers, besides lawmakers and the public at large, of this most lucrative pharma market of the world.

As Jimenez said in the report, yesterday’s business model that pharma companies have followed since long, has now changed, slowing the pace of growth of innovative patented products in the US.

This trend is now heading north, primarily driven by the consolidation among the US insurers and healthcare providers. Consequently, the payers are making effective use of their greater bargaining power over the drug companies, especially to avail new incentives for cost savings, as provided in President Barack Obama’s Affordable Care Act, the article highlights.

To give a feel of it, I am quoting the example of a Novartis drug from the same ‘Financial Times’ article. It states, “Entresto, a treatment for heart failure, launched last year on the back of stellar clinical trial results, has so far sold more quickly in Europe than the US, marking a reversal of usual patterns in the pharma industry.”

A key differentiator in global ranking:

In this emerging scenario, all global companies will be adversely impacted for increasing pricing pressure in the US market.

This factor remaining the same for all the pharma players in the world, one of the key differentiating factors that would now play even more important role, is the richness of the advanced stage R&D pipeline of each innovator company.

For example, according to ‘Evaluate Pharma World Preview 2016, Outlook to 2022’ report, the overall R&D pipeline value of Roche is US$ 43.2 billion, far ahead of the same of Novartis’ US$ 24.1 billion and AstraZeneca’s at US$ 23.2 billion, followed by Eli Lilly, AbbVie, Pfizer, Sanofi, Celgene, Biogen and J&J and in that order. As a result, Roche is expected to overtake Novartis and Pfizer in the ranking by 2022, just when the global pharma industry would possibly cross as US$ 1Trillion mark.

Currently Novartis, though quite a small player in the Indian Pharmaceutical Market (IPM) holding the rank of 23 (AIOCD Pharmasofttech AWACS retail audit report, MAT August 2016), is number three in the global ranking, just ahead of Roche.

Indian generic players to feel the heat:

According to the Reuters report of September 11, 2016, US Department of Justice has sent summons this month to the US arm of Sun Pharma – Taro Pharmaceutical Industries Inc. and its two senior executives seeking information on generic drug prices. In 2010, Sun Pharma acquired a controlling stake in Taro Pharmaceutical Industries.

On September 14, 2016, quoting a September 8, 2016 research done by the brokerage firm IIFL, ‘The Economic Times’ reported that some large Indian generic drug manufacturers, such as, Sun Pharma, Dr. Reddy’s, Lupin, Aurobindo and Glenmark have also hiked the prices of some of their drugs between 150 percent and 800 percent in the US. This invites even more apprehensions in the prevailing scenario.

As I wrote in this Blog on September 12, 2016, the subject of price increases even for generic drugs has also reverberated in the ongoing Presidential campaign in the US.

The Democratic Party’s presidential nominee – Hillary Clinton has already promised, if elected in November 2016, she would constitute an ‘Oversight Panel’ to protect the consumers of her country from hefty price increases for long-available life-saving drugs.

Import bans:

In the midst of all this, import bans of a large number of formulations and bulk drugs by the US-FDA from several manufacturing facilities of Indian drug manufacturers of various scales and sizes, have further compounded the future risk potential of Indian pharma business growth in the US.

As investors are raising concerns, the following comment of the Co-Chairman and Chief Executive of Dr. Reddy’s Laboratories, reported by ‘Financial Express’ on August 24, 2015, well captures the pharma business risks in this area:

“The U.S. market is so big that there is no equivalent alternative. We just have to get stronger in the U.S., resolve our issues, build a pipeline and be more innovative to drive growth.”

However, this still remains a good intent. It is worth noting, for most Indian pharma exporters, the US is the single largest export market, with a stake, as high as nearly half of most of these companies’ annual revenue, and probably much more in profit, both of which are now showing a declining trend.

Price control coming in the UK:

On September 15, 2016, the Department of Health of the United Kingdom (UK) reportedly introduced a new Bill in Parliament to use its statutory power to limit the price of generic medicines where competition in the market fails, and pharma companies charge the NHS unreasonably high prices.

The Bill would also allow the government to apply penalties for non-compliance and to recover any payments owed through the courts following a right of appeal to a tribunal. The penalties can be a single penalty not exceeding £100,000 or a daily penalty not exceeding £10,000.

UK drug regulatory authorities had also announced import bans of APIs and formulations from some manufacturing facilities of a couple of leading Indian drug manufacturers, but on a lesser scale as compared to the USFDA.

Action in EU:

As reported by Bloomberg on July 22, 2016, The European Medicines Agency (EMA) has called for a halt to sales of hundreds of medicines that were tested in India, after an inspection of a research site found “substitution and manipulation” of the study samples. The affected companies include both large Indian and multi-national players.

According to a PTI report of July 27, 2015, after this incident Pharmexcil estimated that exports worth US$ 1-1.2 billion are likely to be affected, if cancellation of 700 generic drugs by the EU stands.

Conclusion:

All these developments, particularly on pricing and mostly in the US, could have a retarding effect on the business growth trend of a large number of global and local pharma companies.

Focusing nearer home, the evolving scenario in the world’s top pharma market, viewed together with what’s happening in Europe, both on pricing and the data integrity fronts, send a strong cautionary signal to the Indian drug exporters, in general.

Inadequate remedial measures could unleash this pressure to reach a dangerous threshold, impacting sustainable performance of the concerned companies. On the other hand, adequate remedial action, both strategic and operational in nature, could lead to significant cost escalation, with no space available for its neutralization through price increases, gradually squeezing the margin.

As I see it, ease of doing pharma business in these top export markets will no longer be quite the same as in the past. Many believe, pharma industry has invited these measures sans perceptible self-control, over a long period of time.

Is it mostly a self-inflicted injury of the industry players? The drug companies, in general, don’t believe so. Will this change be irreversible?  Only the future could unravel this. However, regarding the possibility of future US Government legislation on drug pricing, it’s now a wait and watch game for the stakeholders. On a shorter time-frame, the ghost in this area, would keep haunting globally, primarily for business in the US market, at least, till the end of this year.

However, for the Indian pharma exporters, pricing appears to be just one among several other critical issues, especially, in the two most lucrative markets of the world. The overall situation in this area, by and large, remains unchanged till today, besides expression of a plethora of good intents.

Thus, pharma analysts’ quest to ferret out an answer to the Gordian knot on the continuity of Indian pharma exporters’ incredible long ride on the ‘gravy train’, has also not been plain sailing, so far. Further mired by the local manufacturers’ prolonging errors of judgement, the status quo ante is expected to still remain elusive, at least, for now.

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.