Health Care in India: Disrupt The Status Quo

Posted on August 24, 2015 by Tapan Ray

Over decades, we have been trying to ferret out the unfeigned reasons of failure for India to provide access to reasonably affordable, quality health care to all its citizens, but in vain. The quest to know its rationale becomes more intense, as we get to know, even some developing countries in Asia, Africa and Middle East are taking rapid strides to catch up with the health care standards of the developed countries of the world.

In the last few years many such countries, such as, Thailand, Turkey, Rwanda and Ghana, besides China, have successfully ensured access to quality and affordable healthcare to their citizens through well-structured national initiatives. Governments of economically poorer countries, such as, Sri Lanka and Bangladesh too are making rapid progress in this direction. All these commendable health care initiatives are protecting the most vulnerable populations in their respective countries from getting swept away by extreme poverty.

No more than just assurances:

In India, economic and social costs of public health care infrastructural inadequacy, consequent low access and inefficient delivery mechanism keep going north, unabated, barring a small number of States. Over decades, Union Governments of all political dispensations have been making no more than incoherent promises and that too in bits and pieces on reform in public health care services. As on date, no Union Government has articulated a comprehensive pathway to achieve this goal, in tandem with the States, specifying required time-frames and making commensurate budgetary allocations.

Despite the legacy factor, the incumbent Government as well, has not taken any tangible measure in this direction, just yet, besides giving similar in-coherent assurances. Nor has it clearly articulated that providing access to quality health care for all, at a reasonable cost, is one of its top areas of priority in the widely publicized ‘National Development Agenda’.

Agonizing wait continues:

That the Government is now in the process of drafting a National Health Policy to meet the rising demand for sustainable healthcare across the country, was announced by the Secretary – Health & Family Welfare on September 1, 2014. The first draft of The National Health Policy 2015 was placed in the public domain seeking inputs from the stakeholders in January 2015.

That said, agonizing wait of the patients with unfathomable patience still continues for better days of high quality and affordable health care services in India. Palpable feeling of long standing apathy of the decision makers in this area keep lingering simultaneously.

Two critical admissions:

Besides others, following are the two critical and unambiguous admissions in the draft National Health Policy 2015:

“The failure to attain minimum levels of public health expenditure remains the single most important constraint.”

“Over 63 million persons are faced with poverty every year due to health care costs alone, it is because there is no financial protection for the vast majority of health care needs.”

In my article of January 12, 2015 published in this Blog, titled “National Health Policy 2015 Needs Wings To Fly ”, I deliberated on the draft National Health Policy 2015.

No commensurate budgetary provisions:

Despite being aware of the above facts, the Union Budget for 2015-16 allocated just below Rs. 30,000 Crore for health care in India, without unveiling any longer term picture in this regard, not even a ‘broad brush’ one.

To give a perspective regarding how meagre is this budgetary allocation on so critical an area, I quickly add that on August 19, 2015, Prime Minister Modi announced an allocation of Rs.1.25 lakh crore for the development of only Bihar, just prior to the state going for the assembly election.

Untenable reason:

The Finance Ministers reasoned in his budget speech that post devolution of resources to the states following the recommendations of the 14th Finance Commission, the states will address the issue of healthcare in their respective geographical jurisditions.

However, it does not make much sense to me, if at all. This is mainly because, though health is a state subject, it is still a very critical national issue with an overall dismal performance of the country against most of the ‘Millennium Development Goals’.

Only a ‘National Health Plan’ funded jointly and adequately by both the center and the States with clear budgetary provisions and executed immaculately against clearly measurable performance parameters with specifically assigned accountabilities, could salvage the disastrous consequences of further neglect in the health care space of the country.

Not just deployment of financial resources:

The core issue, I reckon, is not just inadequate deployment of financial resources, but continuation of lack of effective governance in the Union Ministry of Health, as well. And, this is indeed a deadly combination. It has been pushing a large number of patients in India embracing abject poverty every year, as admitted in the draft National Health Policy 2015 of the incumbent Government, but with no visible rectifying measures, as on date.

Dangling carrots, as it were, to the patients by different Union Governments in shedloads, such as, ‘free medicines for all’, ‘free health insurance for all’, ‘free diagnostics for all” and what not ‘for all’, has been continuing forever, with patients having no other choices but to have patience in plenty and probably in perpetuity.

When Primary Health Care itself is a critical issue… :

In such deteriorating heath care environment, when primary health care still remains a key issue mostly in rural India, yet another interesting and tentative assurance reportedly comes from no less than the Union Minister of Health himself on August 18, 2015, when he said:

“The government is working both in secondary and tertiary medical sector and I believe that we need to work out a module in PPP mode to lessen the healthcare burden of common man.”

Having said that, when it comes to providing healthcare services to the poor and the needy, the Honorable Minister, expressed his vision in a notably interesting way, which is reportedly as follows:

“How will we be able to give the healthcare facility to helpless is one question that is unanswered…. All stakeholders should answer this question. Enhance the teaching, the training should be at much higher, speed, scale and skill and above all there should be better communication.”

Going beyond just allopathic treatment:

To answer the Health Minister’s above question – “How will we be able to give the healthcare facility to helpless”, one of the many important ways for the Government, I reckon, is to make a decisive and robust move much beyond Allopathic treatment, just as what China has done with its ‘traditional medicines’.

The strengths of traditional Indian medicines need to be properly leveraged with requisite intervention of science and technology and supported by effective awareness building campaigns.

Expand the role of ‘Traditional Medicines’:

Treatment with traditional medicines in India for many well-tried common diseases, has the potential to play an important role in providing access to health care for all, at least in the public health care space of the country, where AYUSH (Ayurveda, Yoga, Unani, Siddha and Homoeopathy) needs to be promoted and encouraged, actively.

It is expected that the new National Health Policy 2015 would have a much greater focus on the traditional systems of medicine – AYUSH, for the treatment of many common diseases.

It appears from various reports, AYUSH system that calls for not very sophisticated technological inputs for diagnosis of common diseases and preparation of medicinal substances, could be made an integral part of the entire healthcare spectrum, starting from the primary health centers.

As a basic preparatory measure to achieve this goal, the rejuvenated ‘Department of AYUSH’ should work, in consultation with the respective domain experts, to chart out an effective and implementable pathway for the development of education and research in Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy systems.

Need to increase focus on AYUSH:

It has been widely reported that the use of herbs to treat various common ailments is almost universal among many societies, as these are quite often more affordable than buying expensive modern allopathic medicines.

According to the World Health Organization, around 80 per cent of the population of some Asian and African countries currently use traditional medicines to address their health care needs.

I thought the same holds good for India, as well.

However, from a very recent and credible survey report, I find that the above impression is not quite true for India. Penetration of traditional AYUSH systems of treatment, even within the rural population of India, is currently abysmally low.

According to NSSO’s (National Sample Survey Office) Household Expenditures on Health Survey, conducted between January and June 2014, usage of Allopathy for “spells of ailment” is unusually high both in urban and rural India, as follows:

Category	Allopathy Treatment %
Rural Males	90.6
Rural Females	88.7
Urban Males	90.4
Urban Female	91.0

(Source: NSSO 2014-15)

In the absence of adequate access to safe and cost-effective treatments through public health care infrastructure and delivery systems, be it Allopathic or AYUSH, more number of patients are compelled to seek expensive private healthcare services for their “spells of ailment”, as follows:

Category	Private Doctors	Private Hospitals
Male	51.3	24.3
Female	49.7	23.9

(Source: NSSO 2014-15)

AYUSH could play an important role to address such issues, appreciably.

An intriguing recent media report:

On August 19, 2015, I read an intriguing media report that highlights the following two points on apparently a ‘recently overhauled draft’ of the National Health Policy 2015, as follows:

“The National Democratic Alliance (NDA) government plans to increase public investment in health from 1.04 per cent of GDP (gross domestic product) to 2.5 per cent by 2020, with 70 per cent of this being dedicated to primary health care. This target has been set in the overhauled draft National Health Policy that now emphasizes on substantially ratcheting up government investment in public health care facilities across the country.”

“Of the total funds required, the Union government would provide 40 per cent, which could be shored up through a health cess on the lines of an education cess. The cess fund to be used specifically for public health investments could be partly shored up by imposing additional duties on tobacco, alcohol, fatty, salty and sugary products that are considered unhealthy by experts.”

Why is this media report so baffling?

This news really baffled me…a lot, as another more than six month old media report of January 1, 2015 stated just the same on the same two points, exactly quoting the very first draft (not the ‘overhauled’ one) of the National Health Policy 2015 , as follows:

“The draft National Health Policy, 2015 has proposed a target of raising public health expenditure to 2.5 % from the present 1.2% of GDP. It also notes that 40% of this would need to come from central expenditure.”

“The government is also keen to explore the creation of a health cess on the lines of education cess for raising money needed to fund the expenditure it would entail. Other than general taxation, this cess could mobilize contributions from specific commodity taxes such as the taxes on tobacco, and alcohol, from specific industries and innovative forms of resource mobilization.”

Be that as it may, I would urge you to please read both the old and new original media reports on the same draft National Health Policy 2015 and draw your own conclusions, as you deem appropriate.

No change on the ground:

The media reports, such as above, elaborately detailing a significant increase in the health care expenditure as a percentage of GDP in the so called “overhauled” draft of the National Health Policy 2015, gave me an impression that the status quo, at least, in the public health care expenditure scenario has now been disrupted, which in reality has not, at all.

Such reports make patients continue ‘counting colors in the rainbow’, as it were. They keep expecting that getting access to quality and affordable health care for all would soon become a reality, with the Government thinking afresh to raise the public health care expenditure significantly. In reality, the status quo on the ground continues and it can’t be just wished away.

Deserves ‘Infrastructure Status’:

To achieve the basic health care goals of the nation, the Government would require to set the national priorities right. Health care has to be placed at the top rungs of its ‘National Development Agenda’ just as ‘infrastructure’- disrupting the prevailing status quo.

Considering its critical social and economic impact on the progress of the nation, it is about time that ‘Health Care Sector’ be given the ‘infrastructure status’ in India, not just to give a further boost to the industry, but also to make health care products and services affordable to all.

Conclusion:

Making health a ‘Fundamental Right’ for Indian Citizens, as narrated in the draft National Health Policy (NHP) 2015 of Narendra Modi Government, is indeed profound in its both content and intent. However, inordinate delay in its finalization and commencement of implementation process is rather disturbing.

Overhaul and expansion of public health care infrastructure, services and the effective delivery mechanism, undoubtedly, are very necessary requirements for the length and breadth of the country, excepting a very small number of states, which are doing so well in this area.

That said, the real issue is much more deep seated. As the well-known economist Subir Gokarn wrote in one of his articles that in health care “the consequence of inaction is a vicious circle between morbidity and poverty.”

This ‘vicious circle’ has to be broken, sooner. Many developing countries, including much poorer nations, have successfully demonstrated that access to basic quality healthcare can be provided to all, at an affordable cost.

Well-crafted robust national health care plan and policy, which are integrated with similar initiatives of the States should soon be put in place. Effective implementation of a comprehensive, well-integrated and time-bound health care strategic plan, with requisite budgetary allocations and periodic review, assigning specific accountabilities to individuals, are the needs of the hour. Otherwise, the social and economic consequences of the status quo in the health care space of India, would impede the sustainable growth of the nation, seriously.

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.

Digital Marketing: Is Pharma Still A Laggard?

Posted on August 17, 2015 by Tapan Ray

‘Brand Marketing’ in the pharmaceutical industry, across the world, has mostly remained tradition bound, despite its rapid embracement of modern state of the art tools and technology in most other areas of the business.

Many other industries have been demonstrating over a period of time, how innovative usage of ‘Digital Marketing’ can provide cutting edge advantages to attain business excellence.

Expanded reach:

Today, ‘Digital Marketing’ has expanded its reach much beyond just business. This is currently being adopted even by the political parties and quite successfully. Besides promoting political candidates to win elections, imaginative deployment of high-tech tools is helping these parties to create game-changing favorable ground-swell, across the world.

Now, Indians have started witnessing it, even in the hinterland. It all started with associated glamor and grandeur, to a large extent, from the last general election of the country. Extensive utilization and usage of digital platforms, ranging from social media to high tech 3-D speeches of the political power seekers, have helped heralding the dawn of a new genre of political marketing in India. It helps creating favorable public opinion, capturing a much larger pie of the voters’ mindshare much quicker than the traditional form of marketing campaigns, without even an iota of doubt.

The ‘T-Factor’ changing the operating environment:

Though pharma marketing fundamentals would mostly remain the same, the overall environment in which the industry operates is continuously evolving, at a fairly rapid pace. The ‘T- factor’ or the ‘Technology Factor’ is hastening this process of continuous change.

We are experiencing how pivotal role the mobile or smart phones and tablets are playing at this juncture, when people spend more time with these devices than PCs. Simultaneously, general engagements and interactions are growingly becoming more digital than physical.

All these are setting new trends related to doctors’ and patients’ engagement initiatives, including, seeking, managing and communicating information to achieve desired goals.

Pharma industry is slow in adopting ‘Digital Marketing’:

As I see it, some global pharma companies have started experimenting with ‘Digital Marketing’. However, that is no more than just a very small component of their overall brand or corporate marketing strategy, driven mainly by:

High operational cost and lower commensurate returns of traditional pharma marketing.
And, The ‘Zing Factor’ – sheer energy, enthusiasm and liveliness of it, as an in-thing.

This is vindicated by the fact, while the global digital spending by pharma industry is expected to be around US$2.2 Billion in this year, the total sales and marketing expenditure of just one global pharma major – Novartis was US$ 14.6 Billion in 2013, according to a BBC News report of November 6, 2014.

Digital space cannot be ignored:

While giving example of powerful impact of digital media on brand marketing process,

I would cite the instance of recent ban in the country of ‘Maggi Noodles’ manufactured by Nestle, as ordered by the Indian Government authorities.

The first complaint on the product quality of ‘Maggi Noodles’ was reported from Uttar Pradesh (UP).

There, a product testing laboratory allegedly detected ‘lead and MSG’ much above the permissible level in ‘Maggi’, which is mostly consumed by children. It created an immediate mass furor in the social media. The impact of public outrage in the digital space, based on this just one incident, was so intense in just 24 hours that it influenced many with the same intensity of negative emotion, almost in no time.

Absence could be very costly:

All-time active presence of a company in the digital space is important. Absence of it, at times, could invite disastrous consequences.

In the above case, Nestle management, as I understand, was rather quiet on the social media during the critical period of public fury. Consequently, the inevitable happened, as usually transpires under the fierce pressure of social media.

‘Maggi Noodle’ was immediately banned in the country, without probably following the due process of law, as the Bombay High Court ruling says. The brand image suffered a huge immediate blow. Revenue of billions of dollars vanished in the thin year, almost overnight.

What would have happened with Nestle management being alert with proactive skillful communication in the digital space during this critical time of social media outrage? Probably, the damage inflicted on ‘Maggi Noodles’ brand could have been minimized. Who knows?

That’s the power of the digital space as we experience today. Thus, it needs to be optimally leveraged by the pharma industry, without further delay, with creative ‘Digital Marketing’ engagements.

‘Digital Marketing’ in pharma – a quick look:

For the benefits of all readers let us recapitulate what does this process really entail? ‘Digital Marketing’ in pharma is construed as a targeted, measurable and interactive marketing process of brands or disease related services using digital technology. It ensures immense flexibility and offers a broad spectrum of variety, for patients’ engagements of various types, and reaching out to doctors for increasing prescription generation.

Engagements and interactions with doctors, patients and other relevant stakeholders through digital channels, such as, social media, smart phones/tablets, health applications, e-mails and e-detailing are of immense importance today, as a sizable number of them are looking for more and more instant information, which could be product, disease or any other service related and important to them for a better quality of life.

Its relevance:

‘Digital Marketing’ would soon assume high priority for all round pharma business in India, just as it has already happened in many other industries. The speed of its becoming a critical center piece in the pharma marketing strategy formulation exercise is directly linked with the increasing speed of Internet and smart phone usage by people of all ages with enquiring minds.

On the other hand, rapid change in market dynamics and extremely busy schedules of the important doctors, triggering fast decline in the productivity of traditional product detailing, would hasten this process of change.

The key advantages:

The key objectives of both ‘Traditional or Physical’ and ‘Digital Marketing’ in the pharma industry are basically the same, such as, building brand perception and brand preferences, giving rise to excellence in business performance.

According to a paper of April 16, 2014, published by Salford Business School, Manchester, UK,

The key advantages of ‘Digital Marketing’ over ‘Traditional Physical Marketing’ are as follows, where the ‘Digital Marketing’:

Helps businesses to develop a wider customer base as it does not rely on physical presence or interaction.

Encourages customers to interact directly with businesses.

Is not limited by conventional opening times – customers can interact at a time and place convenient for them

Calibrated increase in usage of ‘digital media’:

Both traditional and digital forms of marketing are currently important in the pharma industry, though in varying degree. Each pharma player has to carefully evaluate one’s current and future product-mix and customer base as they would decide either to initiate or scale up marketing operations in the digital space.

Well calibrated increase in the usage of contemporary ‘Digital Marketing’, keeping in mind rapidly changing aspirational mindset of young Indians, including doctors and patients, with smart phones being a key enabler, would help the Indian pharma industry, significantly, as we move on.

Starting with selective approach:

Initially a company may be selective in its ‘Digital Marketing’ approach, which could be based on digital penetration in the geographical regions or areas and its demographic configuration.

For example, if a particular region shows high smart phone usage for community or group chat within the general population, a pharma company may explore the possibility of creatively designing a smart phone based ‘digital patient chat group’ as a part of its patient engagement initiative,

In this ‘digital patient chat group’, the members suffering from chronic or even serious ailments can discuss with each other the issues for which one is seeking a solution, where even the pharma companies can intervene, wherever they can add value and is legally permissible.

A few examples:

To add a perspective to this discussion, I would give below just a few examples, at random, of various ‘Digital Marketing’ initiatives of global pharma players:

Merck (MSD) uses cervical cancer vaccine Gardasil ’s Facebook fan pages to drive awareness and traffic to their cervical cancer site.

Pharma brand Cephalon promotes pain relief by creating an interactive website.

Boehringer Ingelheim worked with Doctors.net.uk to run a 12-month campaign to raise awareness and sales for its Asasantin Retard, an antithrombotic agent which helps prevent the formation of blood clots.

AstraZeneca’s online campaign for Nexium aimed to educate the patients and build their brand preference. The tactics included coupon downloads, driving qualified potential customers to the site and encouraging them to talk with their doctor about Nexium.

Novartis set up a patient focused website targeting all four major organ transplants drugs.

UCB Pharma partnered with social media platform patientslikeme.com to bring an Epilepsy community to its site.

GSK developed a promotional website aimed at HIV specialists. The site, at www.sciencexchange.co.uk, offers HIV specialists a one-stop-shop for exchanging information on HIV and its management.

Sanofi uses YouTube with a number of product messages

Conclusion:

Today in India, we witness even various political parties, which used to be very traditional in their approaches, have started using a wide variety of digital marketing tools successfully by deploying astute domain experts, to achieve whatever they want to.

On the other hand, despite spectacular evolution and progress of digital technology in many verticals of the pharma industry, its marketing models, by and large, still don’t seem to find these highly productive tools much useful, as compared to a large number of different industries.

Currently, digital information and communication channels are catching growing number of eyeballs of even the doctors and patients. Despite this shifting paradigm, with large to very large field sales forces trying to reach the increasingly busy doctors, pharma industry is still relying heavily on traditional and physical marketing models, including promotion through medical journals and even the direct mailers.

Intriguingly, barring a limited number of global players, pharma industry in general, and Indian pharma companies in particular, seem to be far lagging behind in creative digital marketing initiatives.

As the pressure would keep mounting for more returns from every rupee spent on sales and marketing, pharma marketers would require to reassess the differential value addition potential of digital marketing media. While doing so, they would first feel the need to augment their traditional marketing models with selective and synergistic digital interventions and thereafter to spearhead the core communication of brand values together with customer engagement and interaction initiatives with the help of digital media.

The effectiveness in working out a game changing crafty blend of both brand and patient-centric communication package with digital tools would separate men from the boys. It would demand top quality cerebral inputs from the pharma marketers – a requirement that is not so easily available in the current space of pharmaceutical marketing, dominated by a wide variety of freebies.

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.

Voluntary Practice Alone of Pharma Marketing Code, Has Never Worked…Anywhere

Posted on August 10, 2015 by Tapan Ray

Since the last three and a half decades, ‘Code of Pharmaceutical Marketing Practices’, prepared by various global pharma trade associations and most of the large global pharma companies individually, have come into existence for strictest voluntary adherence. These are being relentlessly propagated as panacea for all marketing malpractices in the drug industry.

Squeaky clean ‘pharma marketing codes for voluntary practices’ can be seen well placed in the websites of almost all large global pharma players and their trade associations.

Though its concept and intent are both commendable, following the regular flow of media reports on this topic, a relevant question surfaces: Do the votaries, sponsors and creators of these codes “walk the talk”?

If yes, why then mind boggling sums in billions of dollars are being paid as settlement fees by large number of global pharma companies for alleged colossal marketing malpractices in different countries of the world.

This scenario prompts a large number of stakeholders believe, though over-hyped by the global pharma industry, ‘Voluntary Practices’ alone of Pharma Marketing Code’, has never worked anywhere in the world.

In this article, I shall discuss this very point in the Indian context, following the recent decisions and developments related to ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’.

No more proof required:

Although no further proof is required to vindicate the point, just to put this particular deliberation into perspective, I would cite below no more than a couple of recent examples of comments and arguments on this subject, out of so many, as are being frequently reported by the international media:

A February 24, 2014 article highlights that in the last few years alone pharmaceutical companies have agreed to pay over US$13 billion to resolve only U.S. Department of Justice allegations of fraudulent marketing practices.

On November 6, 2014, BBC News deliberated and commented, “Imagine an industry that generates higher profit margins than any other and is no stranger to multi-billion dollar fines for malpractice.”

It is worth noting, all those pharma players paying hefty fines due to alleged humongous marketing misadventures, also prominently display their well-crafted codes of pharma marketing practices for strict voluntary adherence in their respective websites.

Why are such wrongdoers not brought to book in India?

Instances of serious marketing malpractices by several pharma companies in India are also being widely reported from time to time by both the international and national media, including television channels. Even a Standing Committee of Indian Parliament had expressed its grave concern on the subject and urged the Government to place stringent deterrent measures in this area, soon.

Concernedly, instances of levying massive fines or for that matter any other punitive measures taken by any competent authority for similar delinquency in the local drug industry have not been reported from India, just yet. This is only because, India doesn’t have in place any specific regulatory and legal framework as deterrent that would detect, investigate and decide on punitive measures against the erring pharma companies for such misconducts, wherever justifiable.

Government decided to implement a globally failed model:

Personally I have high regards on a large number of astute bureaucrats in India, whom I had occasions to interact with both one-on-one and in groups. Most of their minds are razor sharp and the analytical ability is of the highest order. I am reasonably confident that they know quite well what would work and what would not, to get the expected results in India. The chronicle of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ in that sense is intriguing.

Be that as it may, the bottom-line is, totally ignoring the reality in this regard, the Department of Pharmaceutical (DoP) wanted to make a beginning with the failed model of ‘Voluntary Practices’ of the UCPMP in India.

Accordingly, on December 12, 2014, by a circular to Pharma Industry Associations, namely, IPA, OPPI, IDMA, CIPI, FOPE and SPIC, the DoP announced ‘The Uniform Code of Pharmaceuticals Marketing Practices (UCPMP)’. The communique said that the code would be voluntarily adopted and complied with by the Pharma Industry in India for a period of six months effective January 1, 2015.

The DoP also stated that the compliance to this code would be reviewed thereafter on the basis of the inputs received.

I discussed the key issues related to this DoP circular on voluntary implementation of UCPMP in my blog post of December 29, 2014 titled, “India’s Pharma Marketing Code (UCPMP): Is It Crafted Well Enough To Deliver The Deliverables?”

The time for review:

Thereafter, the clock started ticking to catch the 6-month deadline. As June 2015 took its place in the pages of history, it was about time to ascertain the quality, depth, breadth and seriousness level of implementation of the UCPMP during the past six-month period.

Meanwhile a media report of August 4, 2015 speculated that the Government is planning to make the UCPMP mandatory on the drug and medical devices industry, making it tighter and providing teeth to it.

Has voluntary implementation of UCPMP made any difference?

Stakeholders are now curious to know, what difference has the voluntary UCPMP made during January – June 2015, period?

The mechanism as enunciated by the DoP in its above circular prescribes a virtually unimplementable review process, making the whole exercise subjective and creating a ‘your perception versus my perception’ sort of situation.

This gets vindicated when a leading news daily of India quoting an industry person reported, “There are (only) 15-20% black sheep who are bringing bad name to the entire industry”. Come on…this is a totally subjective, baseless and no more than just an off the cuff comment.

Voluntary implementation requirements of UCPMP grossly impractical:

The ‘Mode of Operation’ of voluntary UCPMP was listed by the DoP under point 8 of its above circular, as follows:

All the Indian Pharmaceutical Manufacturer associations will have UCMP uploaded on their website.

All the associations will upload on their website the detail procedure (as stated in Para 10) of lodging complaints.

All the associations will also have a provision on their website for uploading the details of complaints received i.e. the nature of complaint, the company against whom the complaint has been made, the action taken by the committees under the association including the present status in the complaint and such details of a complaint should remain uploaded in the website for three years. The details of proceedings in a complaint and decisions thereafter will be sent by the concerned Association on Quarterly basis, to National Pharmaceutical Pricing Authority, on following address: Member Secretary, NPPA, 3^rd Floor, YMCA Cultural Centre Building, 1 Jai Singh Road, New Delhi.

The above UCPMP circular finally says:

“The Managing Director/CEO of the company is ultimately responsible for ensuring the adherence to the code and a self declaration, in the format given in annexure shall be submitted by the executive head of the company within two months of date of issue of UCPMP and thereafter within two months of end of every financial year to the Association for uploading the same on the website of the Association. The same must be uploaded on the website of the company also.”

Unrealistic review process:

I have two fundamental questions in this regard, as follows:

1. Do all pharma Trade Associations have websites?

It appeared from my Internet search that just one pharma trade association in India has a website. However, I could not gather the required details even from that particular association’s website.

The readers may also try to locate the very existence of other Indian pharma trade associations’ websites, if I have made any mistakes during my trip to the cyberspace, and attempt to get the relevant details on UCPMP as stated in the DoP circular.

2. Are all ‘voluntary compliance letters’ from the Managing Directors in place?

Are voluntary compliance letters on UCPMP from all Managing Directors of all the pharma companies are with the Department of Pharmaceuticals by now? If not, based on which information the above news item reported that only 15-20 percent of the pharma companies did not comply with the voluntary UCPMP?

Relying only on ‘Voluntary Practice of Code’ is a globally failed model:

A healthy ecosystem for ethical marketing practices should be created and propagated within the pharma organizations of all size and scale of operation. In that sense, voluntary code of pharmaceutical marketing practices prepared by individual pharma organizations or their trade associations such as IFPMA play a commendable role. However, only those are not just enough anywhere in the world, as enumerated above.

Encouragement for voluntary practice of pharma marketing codes by the stakeholders is desirable in India too, predominantly to catalyze a change in the decades old and overall fragile ‘Jugaad’ mindset in this important area of pharma business.

In that sense, just as a starter, DoP’s initial push with voluntary practice of UCPMP is conceptually understandable, though the Department appeared to have messed up totally in its critical operationalization area for the purpose of a diligent review after 6-months.

Many countries initially relied on ‘voluntary practice’ of Pharma Marketing Codes crafted by the pharma players and their global trade associations, mostly in line with the Gold Standard of IFPMA Code of Pharmaceutical Marketing Practices. However, later on, all these countries had to put in place other regulatory and legal checks and balances for the interest of patients.

Why ‘voluntary practice’ concept alone, is not enough?

Strong internal and external performance pressures, while navigating through turbulent business environment facing strong head winds, could temporarily unnerve even the seasoned persons with nerves made of steel, as it were. It has been happening all the time, now more frequently, for different reasons.

Thus, all-weather ‘voluntary practice of marketing code model’ in isolation, has globally failed in the pharma industry, almost everywhere.

Appropriate regulations and robust laws promising justice to all, would always demonstrate a commendable role as a tough deterrent in those trying situations, unless any person or a legal entity is a hardcore manipulator focusing just on profiteering.

Related laws and regulation in other countries:

Most developed nations, such as Europe, United States, Canada, Australia, Japan, to name a few, have robust laws and regulations in this area, which act as serious deterrents to pharma marketing malpractices.

These deterrents fall primarily into the following three areas:

Specific anti-corruption regulatory and legal agencies:

Many Governments, such as, the United States and the member countries of the European Union (EU), are strictly enforcing appropriate legal and regulatory measures through dedicated enforcement agencies constituted specially for this purpose. These agencies can investigate any wrongdoings in the pharma marketing area and initiate judicial proceedings.

Specific anti-bribery Acts covering even overseas activities:

Current anti-bribery and anti-corruption laws in many countries, such as, the United States Foreign Corrupt Practices Act or the Bribery Act of the United Kingdom have impacted several global pharma players pretty hard, as these laws affect them even beyond the shores of their respective countries for indulging in marketing malpractices.

Public disclosures:

One such example is ‘The Physician Payment Sunshine Act’ of the United States. This was a part of its healthcare reform bill that was adopted in March 2010 and was finally released in March 2013.

Under the Sunshine Act, data on payments and gifts made to physicians and teaching hospitals by medical device and pharmaceutical companies must be publicly available on a searchable federal database, starting in September 2014.

What may happen, if UCPMP is made mandatory:

If UCPMP is made mandatory, I would suggest at least the following three actions:

Appropriate transparent rules, regulations and laws with adequate teeth to address this specific purpose either to be framed afresh or the existing anti-corruption and anti-bribery laws to be amended as required, besides others.

A competent fully empowered authority within the Department of Pharmaceuticals (DoP) should be accountable for administration and implementation of the UCPMP effectively. The DoP may wish to revive its own idea of appointing an Ombudsman with quasi-judicial power for this purpose.

State FDAs should play an important role as detecting, investigating and prosecuting agency also for pharma marketing malpractices.

DoP website should provide comprehensive details of all punitive action taken against each erring company for this purpose.

A compliance certificate from the Managing Directors of the respective companies to the Central Board of Direct Taxes (CBDT) stating that the all sales and marketing expenditures computed for Corporate tax payments are in total conformity with the the UCPMP. Any false declaration should attract serious and exemplary penal consequences.

What would the pharma companies gain?

I would expect at least the following to happen:

From the sales and marketing perspective, this new ball game would help establish a level playing field for all the pharma players, to a great extent.

Expenditure on sales and marketing would obviously come down sharply, improving product margins significantly, even if a part of this saving is passed on to patients in form of price reductions.

Without the allurement of freebies, competitive and innovative brand marketing acumen of the pharma companies would get honed, which would ultimately emerge as the key differentiating factor for the balance of performance to tilt either towards success or failure.

Consequently, quality, depth and dimension of marketing inputs for a decisive competitive edge would me more cerebral and distinct in nature, unlike the marketing cacophony in today’s era of freebies.

With greater available resources, it would help the pharma players focusing more on talent, skill and technology development to attain sustainable business excellence.

The key focus would necessarily shift from ‘buying prescriptions’ to ‘creating prescriptions’ with value based innovative communication of bundled products and services.

Conclusion:

Relying solely on voluntary compliance of ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, in my view, would not work in India, just as it has not worked even in the developed countries of the world.

This is primarily because, India does not currently have any serious deterrents in this area, including specific legal and regulatory systems, to limit pharma marketing malpractices, unlike many other developed nations of the world.

If the media speculation of DoP’s making the UCPMP mandatory is right, I would reckon, despite its intriguing circular of December 12, 2014, it is a courageous step in the right direction.

Although coming in form of a bitter pill, it would help the Indian pharma players embracing a long awaited and mandatory course correction for not just doing things right, but more importantly doing right things.

I would expect its longer term effect to be ‘win-win’ for all – pharmaceutical industry in India, the Government and above all the patients…well…of course, barring the regular recipients of freebies of all types, forms, kinds, nature and value.

By: Tapan J. Ray

Data Manipulation: Leapfrogging Dangerously Into Clinical Trial Domain

Posted on August 3, 2015 by Tapan Ray

Over the last several years, repeated allegations of gross data manipulative practices, detected by global drug regulatory agencies, such as USFDA and MHRA, have shaken the Indian pharma exporting companies hard.

This has been hurting the overall business performance of most of these players, considerably, besides other consequential fallouts

Significant numbers of pharma manufacturing facilities of different scale and size have been receiving ‘Import Alerts/Warning Letters’, at regular intervals, from the overseas drug regulators. All such steps have resulted in refusal of entry of medicines manufactured in those plants into the importing countries. As on date, most of these bans are for the United States (US), some for the United Kingdom (UK) and now a fresh one that covers all the 28 countries of the European Union (EU).

Consequently, the drug export performance of the country has started moving south, as I indicated in my blog post of September 29, 2014, titled “Make in India…Sell Any where in The World”: An Indian Pharma Perspective.

While looking at the future, the situation seems to be even more concerning than what is generally envisaged today, as it involves many homegrown local pharma behemoths, including the topper of the Indian pharma league table – Sun Pharma.

Time to take the bull by the horns:

These are regular and serious episodes of allegedly deliberate wrong doings involving life saving medicines. It is about time that without further delay the Indian Government and the country’s drug regulators accept unequivocally that there is something fundamentally wrong in this area that needs to be set right urgently.

To come out of this peril soon, competent authorities need to first ascertain without squandering much time on the utopian “conspiracy theory”, whether this seemingly uncontrollable issue falls under:

Technical incompetence
Inadequate resource deployment
Or just an outcome of generally all pervasive and a very Indian “Jugaad” mindset

It could well be a mix of all the three above factors in different proportions.

‘Data manipulation’ dangerously leapfrogging into clinical trial domain:

So far, incidences of alleged data falsification were restricted mostly to drug manufacturing activities. Alarmingly, it has now leapfrogged into the immensely important domain of ‘Clinical Trials’, based on which the drug regulators decide on the ‘Marketing Approval’ of medicines for patients’ consumption, wherever required.

If the Government does not nip it in the bud, ruthlessly and now, it has the potential to heavily impact the innocent patients even costing their precious lives.

What it means commercially?

According to Pharmaceutical Export Promotion Council (Pharmexcil), the Indian pharmaceutical industry could lose around US$1 – US$1.2 billion worth of exports due to the latest decision of the European Union to ban 700 generic drugs that earlier received European Union (EU) clearance for sale in their member countries.

According to Pharmexcil, Europe accounts for US$3 billion out of total Indian pharma exports of US$15.4 billion, which includes both APIs and formulations. This is the first time, when there has been a negative growth in pharma exports to the EU.

Unrolling the GVK Bio saga:

On July 22, 2015 Federal Institute for Medicines and Medical Products of Germany reportedly posted the notice (in German language) of ban of 700 generic drugs effective August 21, 2015. This ban would be applicable to all 28 EU member nations.

Accordingly, from the above date, all these drugs of both the Indian and multinational companies for which clinical trials were done by India’s Hyderabad based GVK Biosciences, cannot be distributed or sold by pharma companies, wholesalers, drug stores and other outlets in the EU, as indicate in the above notice. This would be the largest ban of generic drugs imposed by the European Union, as it comes into effect.

This ban is reportedly the ultimate outcome of an inspection in 2014 by the French authorities of the GVK site that handled the clinical trials for those 700 drugs. The French inspectors found that a number of electrocardiograms were falsified by GVK Bio employees as part of 9 approval studies between 2008 and 2014.

Following this finding, earlier on January 23, 2015, by a Press Release, the European Medicines Agency (EMA) had announced that a number of medicines for which authorization in the European Union (EU) was primarily based on clinical studies conducted at GVK Biosciences in Hyderabad, India, should be suspended.

Though GVK Bio has disputed the claims, it has reportedly set aside up to US$6.5 million for new studies on these drugs.

Indian Government blames ‘vested interests supporting Big Pharma’!

Interestingly, on July 23, 2015, The Financial Express reported, “the Modi government has asked the heads of India’s diplomatic missions in EU member countries and at the European Commission (EC)-level to take up the issue with the concerned authorities and ensure that it is not ‘blown out of proportion’ by ‘vested interests’ supporting the Big Pharma (innovator drug companies).”

However, it is even more interesting that earlier on April 16, 2015, quoting the CEO of GVK Biosciences Private Limited Reuters reported, “India may go to the World Trade Organization (WTO) if the European Union does not reconsider a decision to suspend the sale of about 700 generic drugs that were approved based on clinical trials by GVK Biosciences.”

It is noteworthy, despite the above public announcement, between April and July 2015, India has not lodged any complaint to the WTO on this mega ban in EU, involving clinical trials conducted by GVK Biosciences.

In my view, any tangible immediate outcome of the Indian diplomatic move, particularly on this ban in the EU, as reported above, appears rather unlikely, if at all.

The rigmarole continues:

The narrative of alleged gross falsification of sensitive clinical trial data does not end here. Almost replicating what happened earlier with frequent incidences of drug manufacturing data manipulation, the same rigmarole now leapfrogs into another important domain with similar intensity.

On June 30, 2015, close on the heels of the above GVK Biosciences saga, the World Health Organization issued a ‘Notice of Concern’ after inspection of Chennai-based Contract Research Company, Quest Life Sciences facility.

It also brought to light, critical deviations from GCP (Good Clinical Practices), over data integrity, subject safety and quality assurance and in gross violation of procedures during clinical trials for HIV drugs, such as, Lamivudine, Zidovudine and Nevarapine dispersible tablets from Micro Labs.

WHO inspectors reportedly found that “two-thirds of electrocardiograms performed on patients were duplicates with dates and names changed by the company”.

The WHO letter also underscored, “These issues appear to be systemic in nature and occurring many times over a significant period of time, and not only as a one-time incident for the study submitted to WHO.”

Again, almost depicting the past, there does not seem to be any perceptible and strong regulatory interventions in India in this regard, event after the above ‘Notice of Concern’ from the WHO.

Could assume a snowballing effect:

This situation may eventually assume a snowballing effect, when data related malpractices in clinical trials would catch up with drug manufacturing related data manipulation detected by the foreign drug regulators in India. I have just given an example of its continuation in the clinical trial domain.

The following are a few examples of just the last six months of 2015 of the continuation of the same in the drug manufacturing area:

Cadila Pharmaceuticals Limited:

In a letter dated February 25, 2015 to Cadila Pharmaceuticals Limited, the USFDA wrote that in the pharma manufacturing facility of the company, located at 294 GIDC Industrial Estate, Ankleshwar, Gujarat, their (USFDA) investigator identified significant deviations from current good manufacturing practice (CGMP) for the manufacture of Active Pharmaceutical Ingredients (APIs). Those deviations cause the APIs manufactured there to be adulterated, in that the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with CGMP.

Emcure Pharmaceuticals Ltd.:

On July 13, 2015, by an ‘import alert’ posted on its website, the USFDA announced that the regulatory agency had barred imports from Hinjewadi manufacturing plant in Maharashtra of Emcure Pharmaceuticals Ltd., after their inspection revealed the company was not meeting manufacturing quality standards.

Aurobindo Pharma Ltd.:

Again, according to a July 22, 2015 media report, “Hyderabad-based Aurobindo Pharma is the latest addition to an expanding list of Indian drug firms that have come under the scanner of the US health regulator.” In this case also the USFDA reportedly raised issues related to the quality management systems of the company.

Business sustainability could be in jeopardy:

There are ample evidences that manipulations of specified drug quality standards, are making even the large home grown pharma companies to pay through the nose. In fact, it has already cost some of these companies an arm and a leg, at times jeopardizing even their very existence. One such company is Ranbaxy. The issues related to data fudging of Ranbaxy have been so complex and widespread that its recent acquirer Sun Pharma has already started struggling to keep its neck above water with this brand new acquisition.

According to July 27, 2015 media reports, GVK Biosciences are also in parleys to sell the business, following EU drug regulators’ serious allegations of clinical trial data manipulation at its Hyderabad facility.

Again, media reports of July 30, 2015 indicated that hit by the USFDA imposing import ban on three of its manufacturing facilities, Ipca Laboratories reported 86 per cent decline in net profit for first quarter ended June 30, 2015.

Though, some domestic pharma companies are still out of it, with grace, if this overall menace remains unchecked and not intervened by the Government, it could cost the nation dear, at least when it comes to near term exports business growth and global disrepute for the delinquency.

Are medicines for domestic consumption safe and effective?

When such rampant data manipulation can take place for ‘export quality’ of drugs, what about the quality standards of medicines, which are manufactured for consumption of local patients?

Despite intense furore on this subject, Indian drug regulators at the Central Drugs Standard Control Organization (CDSCO), very strangely, do not seem to be much concerned on this critical issue, at least, as perceived by majority of the stakeholders. It appears from the precedents, our drug regulators seem to act promptly, mostly when the Supreme Court of the country directs them for any specific action for public interest.

Considering blatant violations of GMP and GCP standards that are increasingly coming to the fore related to ‘export quality’ drugs in India, and that too only after the inspections by the foreign drug regulators, the following questions float at the top of my mind:

Why no such warnings are forthcoming at all from the Indian drug regulators?

Does it mean that the level of conformance to GMP and GCP is hundred percent for all medicines manufactured and clinically evaluated in India for the consumption of local patients?

If yes, why such incidences are not uploaded to the CDSCO website, just like USFDA?

If not, why?

Conclusion:

Increasing incidences of repeated GMP and GCP violations by the Indian drug exporters, as enunciated mostly by the USFDA, MHRA and now EMA are, in turn, fueling the apprehensions of many Indian stakeholders on the quality manufacturing and clinical evaluation of those drugs in the country.

In the critical public health safety area, there does not seem to be any room for diplomatic maneuvering by the Government, whatever is its financial impact on the drug exports performance of India.

This can be corrected, only if the Indian pharma industry and the Government, in tandem, wish to move in the right direction. Searching for justifications within imaginary ‘vested interests’ and self-created ‘conspiracy theory’ would be futile and counterproductive.

Making the wrongdoers swallow strong bitter pills would help salvaging the seemingly uncontrollable regulatory situation. Additionally, it would stop inviting disrepute to the country that the world was referring to, even until recently, as the ‘pharmacy of world’.

Any attempt to trivialize the situation, could meet with grave consequences and prove to be foolhardy. The emerging scenario ultimately may even compel the local doctors and hospitals to avoid prescribing drugs of those companies involved in such wrong doings against patients’ interests. This actually happened earlier with Ranbaxy, though briefly. It is also possible that many erudite patients on their own may request the doctors to prescribe equivalent drugs of pharma MNCs, enjoying better brand equity in this regard.

Drug quality related avoidable malpractices and attempted hoodwinking to regulators, are taking place at a time when Prime Minister Modi is going global to give a boost to his much publicized ‘Make in India’ campaign.

In the current aspirational business climate of the country, it is an irony that alleged ‘Data Manipulation’, which was so far confined to pharma manufacturing activities in India, instead of getting mitigated, is now leapfrogging into the related clinical trial domain too, with utter disregard to patients’ health safety interest and the reputation of the country.

By: Tapan J. Ray

Indian Patents Act To Prevail Undiluted…Finally

Posted on July 27, 2015 by Tapan Ray

Curiously enough, what a little birdie told me just a couple of weeks ago, very similar to that I read in various media reports even less than a week later.

It was related to a somewhat trepidatious national policy in the making on Intellectual Property Rights (IPR) in India.

One major apprehension, besides a few others on this IPR Policy, was flying all over and nettling many. It was regarding the possibility of tweaking or dilution of the Indian Patents Act by the Government, coming under strong external pressure and also to get support on India’s food security in the World Trade Organization (WTO).

Probably to douse this simmering fire of trepidation, well calibrated, unambiguous and reassuring narratives on the subject were unfolded recently by the Government, that too in a quick succession, which were somewhat as under.

On July 20, 2015, at an event organized by the Federation of Indian Chambers of Commerce and Industry (FICCI), the Commerce and Industry Minister Nirmala Sitharaman reiterated that:

India’s IPR laws are quite in compliant with the TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement.

There is no need for apprehension in any corner of the world as to what India’s patent regime is like.

The Minister also indicated at the same event that following a transparent process of drafting…and redrafting; the final blue print of the IPR policy has now been circulated to all concerned ministries for inter-ministerial consultations. After completion of that process soon, her Ministry would submit the final version to the Cabinet for approval.

It is now anticipated that by the end of this year the first ‘IPR Policy’ of India would be operational.

The creeping angst for a possible twitching in the country’s otherwise robust Patents Act, was mostly originated from a pointed recent utterance of Prime Minister Modi on this issue that we shall quickly explore in this article.

Another stronger assertion:

Immediately thereafter, while commenting on a related article published in an Indian business daily dated July 24, 2015, Minister Nirmala Sitharaman reasserted the following points even more emphatically and virtually in so many words:

India’s IPR laws are fully compliant with international obligations under the TRIPS agreement. This includes the Patents Act, 2005, whose provisions have time and again stood the test of judicial scrutiny.

There is no question of permitting ‘evergreening’ of patents, or of realigning our IPR laws to comply with US laws.

There is no question of sacrificing our IPR laws to get support from a particular country even on food security.

A brief background:

In October 2014, almost immediately after Prime Minister Modi’s return to India from the United States, the the Department of Industrial Policy and Promotion (DIPP) formed a six-member ‘Think Tank’, chaired by Justice (Retd.) Prabha Sridevan, to draft the ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas.

The notification mandated the ‘Think Tank’ to examine the current issues raised in such reports and give suggestions to the ministry of Commerce & Industry as appropriate.

However, the domestic pharma industry, many international and national experts together with the local stakeholders, continue to strongly argue against any fundamental changes in the prevailing robust patent regime of India.

Taking quick strides, on December 19, 2014, the Think Tank’ released its first draft of 29 pages seeking stakeholders’ comments. According to Minister Nirmala Sitharaman, “Different people, countries, including the United States and other organizations have already given their inputs on the draft policy.”

The new policy would focus on stronger enforcement of IPR by increasing the manpower in IP offices and reducing pendency of IPR filings. It aims at bringing clarity to the existing laws and making changes wherever required to safeguard the interests of Indian industry and patent holders worldwide.

I reviewed this subject in my blog post of January 19, 2015 titled, New “National IPR Policy” of India – A Pharma Perspective.

Most recent apprehension:

The most recent spark for the speculation of a possible dilution in the Indian Patents Act 2005, came from the April 24, 20015 media report that quoted Prime Minister Modi expressing his intent on the issue, seemingly going overboard, as follows:

“India’s patent laws should be brought on par with global standards to make Asia’s third largest economy a hub for outsourced creative services.”

The basic purpose of making such an apparently ambiguous statement may be construed as an attempt to attract more Foreign Direct Investments (FDI) for the country.

Whatever it may be, this announcement of the Prime Minister sent a strong signal to many as an impending major shift in his Government’s thinking to move away from an otherwise robust and a decade old IPR regime in India, undoubtedly under intense external pressure.

The above pronouncement from an otherwise tough minded Prime Minister came as a bolt from the blue, as it were, to many stakeholders. This is mainly because; India has so far been maintaining in all forum that its IPR regime is fully TRIPS compliant and garnered enough international support from the experts in this area, including Nobel Laureates.

The Prime Minister made his intent even stronger, when he further elaborated his argument as under:

“If we don’t work towards bringing our intellectual property rights at par with global parameters, then the world will not keep relations with us. If we give confidence to the world on IPR, then we can become a destination globally for their creative work.”

Some American Government agencies reportedly lapped up Prime Minister Modi’s statement as they openly commented as follows:

“The United States also welcomes April 2015 statements made by Prime Minister Modi recommending that India align its patent laws with international standards and encourages India expeditiously undertake this initiative”

Intriguing comment:

Prime Minister Modi’s comment in this regard that “India needs to bring its patent laws on par with global standards,” comes of rather intriguing to many domain experts, as TRIPS agreement is the only universally accepted ‘Global Standard’ for IPR. Even the new Government has reiterated that Indian patent regime is fully TRIPS compliant.

India welcomes and encourages innovation:

With the enactment of Patents Act 2005, India has demonstrated that Intellectual Property Rights (IPR) and pharma patents in particular, help fostering innovation and is critical in meeting unmet needs of the patients.

However, the moot question still remains, what type pharmaceutical invention, should deserve market exclusivity or monopoly with overall freedom in pricing, keeping larger public health interest in mind.

There are still some loose knots in the process of speedy resolution of all IP related disputes and creation of a desirable ecosystem for innovation in the country, that the new IPR Policy is expected to effectively address, soon.

Two fundamental changes that the US is looking for:

Leaving aside the peripheral ones, the following two are the center pieces where the United States would want India to dilute its Patents Act 2005 considerably:

Patentability for all types of innovation, including ‘me-too’ ones and evergreening of patents, which would delay entry of affordable generic drugs.

“Compulsory Licensing (CL)” provisions, other than during natural calamities.

The status today:

Though the Prime Minister has not further spoken on this subject publicly, from the recent statements of the Union Minster of Commerce and Industry it seems rather clear that for greater public health interest, India has decided to keep its Patents Act undiluted, at least, for now.

The Union Government has distinctly explained its stand in the following two areas:

I. No…No, to ‘Evergreening’ of patents in India:

In line with this thinking, for quite sometime a raging global debate has brought to the fore that there are quite a large number of patents on drug variants that offer not very significant value to the patients over the mother molecules, yet are as expensive, if not more than the original ones.

In common parlance these types of inventions are considered as ‘trivial incremental innovations’ and described as attempts to ‘evergreening’ the patents.

A paper titled, “Pharmaceutical Innovation, Incremental Patenting and Compulsory Licensing” by Carlos M. Correa argued as follows:

“Despite decline in the discovery of New Chemical Entities (NCEs) for pharmaceutical use, there has been significant proliferation of patents on products and processes that cover minor, incremental innovations.”

The study conducted in five developing countries – Argentina, Brazil, Colombia, India and South Africa has:

Evidenced a significant proliferation of ‘evergreening’ pharmaceutical patents that can block generic competition and thereby limit patients’ access to medicines.

Found that both the nature of pharmaceutical learning and innovation and the interest of public health are best served in a framework where rigorous standards of inventive steps are used to grant patents.

Suggested that with the application of well-defined patentability standards, governments could avoid spending the political capital necessary to grant and sustain compulsory licenses/government use.

Commented, if patent applications were correctly scrutinized, there would be no need to have recourse to CL measures.

Indian Patents Act under its section 3(d), discourages the above practices for public health interest. This particular provision, though absolutely TRIPS compliant is not followed in the developed markets, predominantly for commercial reasons. Hence the mounting pressure is on India for its major dilution.

II. Compulsory License (CL) provisions would stay to prevent misuse and abuse:

This is another major safeguard provision for the patients against abuse and misuse of patents, including obscene price tags of patented drugs, non-working of patents as a commercial strategy, limited availability, besides extreme urgency and some other situations. Though TRIPS very clearly allows all such provisions, India has so far granted just one CL.

With these India has amply demonstrated that CL provisions are important safeguards for the country and not for abuse or misuse by any one, including the Government. Moreover, it has to pass the acid test of rigorous judicial scrutiny that includes the Supreme Court of India.

Despite all these, more scares are being created around CL provisions in India than what is the reality in the country.

Various safeguards and deterrents against misuse and abuse of patents are absolutely essential for public health interest. Hence there is naturally no question of going back from such provisions in the statute.

It is worth noting, if Indian Patent regime is not TRIPS compliant, why hasn’t any country complained against India to the World Trade Organization (WTO) for having all these provisions in the Indian Patents Act, as yet?

India shows the new IPR way:

According to available reports, the following countries are coming closer to the Indian pharma patent regime:

Argentina has issued guidelines to reject ‘frivolous’ patents
Peru, Columbia and some other South American countries have placed curbs
Philippines has similar provisions
South Africa is contemplating to incorporate such steps
Australia is deliberating on making the law tougher

Positive reverberations in the domestic pharma sector:

Home grown pharma players seem to be visibly happy too, as the overall stand of the Government in this regards is getting clearer.

This in many ways gets vindicated, when a promoter, chairperson and managing director of a mid-size Indian Pharma and Biotech company, with high media visibility, reportedly comments on the finalization of Indian IPR Policy as follows:

“There is a need to protect interest and disallow monopolies like big pharma or big companies/corporates that want to invest and take advantage of the Indian market.”

Concerns of some ‘Who’s Who’:

The following is just an example of such concern:

On February 10, 2015, the Nobel Laureate in Economics – Joseph E. Stiglitz, made the following comment in an article published in ‘The World Opinion Page’ of ‘Project Syndicate’:

“If the Obama administration succeeds in forcing India to strengthen its patent laws, the change would harm not only India and other developing countries; it would also enshrine a grossly corrupt and inefficient patent system in the US, in which companies increase their profits by driving out the competition – both at home and abroad. After all, generic drugs from India often provide the lowest-cost option in the US market once patent terms have expired.”

As things stand today, it would not be unreasonable to conclude that the Nobel Laureate Joseph E. Stiglitz’s worst apprehension on the Indian Patent regime, in all probability would not come true.

Conclusion:

For quite some time, Indian Government has been under intense nagging from the United States, other developed countries, many drug MNCs and the pharma lobby groups lavishly funded by them; to effect major changes in the Patents Act of the country that currently denies unreasonable commercial exploitations, in many ways. Section 3(d) of the statute is just one of the key examples.

The browbeaters of such ilk keep pontificating the importance of ‘innovation’ and that too with a condescending undertone, as if the Indian Government is blissfully ignorant about it.

They allegedly want the Government to dilute the robust safeguard provisions of Indian Patents Act, trying to unfairly tilt the balance of justice in their favor. Consequently, it would go against the patients’ health interest by considerably delaying entry of cheaper generic equivalents, of ‘me-too’ type of inventions, in the country.

Despite initial apprehensions based on the possible misconstrued observation of the Prime Minister Modi on this issue, clear and unambiguous recent assertions of the Government on the patent regime of India, especially in the ‘count-down’ days of the new IPR Policy announcements, is reassuring. It goes without saying, this cannot happen without the benediction of India’s all-powerful Prime minister.

As stated in the draft document, let us hope that the new IPR Policy would help establishing a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and accelerate economic growth, employment and entrepreneurship.

Under this backdrop, it now emerges almost indubitably that Indian Patents Act 2005 would continue to prevail undiluted much to the dismay of its fiercest critics…Finally?

By: Tapan J. Ray

India’s Drug Pricing Policy: “Absurd, Unreasonable And Irrational” – Supreme Court

Posted on July 20, 2015 by Tapan Ray

On July 15, 2015, while hearing a petition related to the current ‘Market Based Drug-Pricing Policy’ of the country, the Supreme Court of India expressed its bewilderment on the very rationality of the ‘National Pharmaceutical Pricing Policy 2012’ and directed the Government for its review.

The petition was filed by an NGO called, ‘All India Drug Action Network’. It pleaded before the honorable court that ‘Market Based Drug-Pricing’ that is currently followed in India, was never used for any price regulatory purposes. Under this new policy, simple average ‘Ceiling Prices’, in many cases, are higher than the market leader price.

The petitioner reportedly also alleged that under the new drug policy, the profit margin for pharma companies and dealers has become in the range of 10-1300 per cent. Thus, the NGO sought a direction to the Government to continue with earlier ‘Cost-Based Pricing’ to arrive at ‘Ceiling Prices’ for all essential drugs.

‘All India Drug Action Network’ contended that the ‘National List of Essential Medicines (NLEM)’ consisted of only 348 drugs and had left out many other essential medicines from price control. Thus, it sought inclusion of more life-saving medicines in the NLEM whose prices would be regulated by the government. It also pleaded that the price control must extend to various “dosages, strength and combinations” of those drugs falling under NLEM.

Expressing its serious concern, the three-judge bench of the Apex Court reportedly told the Government, “You are fixing the maximum price of a medicine above the retail price of the leading company of the same drug. It is absurd.”

The honorable Supreme Court reportedly also observed that the “pharmaceutical companies were already charging 5,000 times of the production cost and then you are taking the average of them and fixing under the drug price control order. This is legitimizing the profiteering”.

Many construe this observation of the Supreme Court as virtual endorsement of ‘All India Drug Action Network’s accusation that the earlier ‘cost-based drug-pricing’ model was better for the patients, whereas the new ‘market-based drug pricing’ model just legitimizes profiteering and pushes drugs out of reach of the poor, who are already suffering under very high ‘out of pocket’ health expenditure burden.

The Honorable Court reportedly asked the Department of Pharmaceuticals of Union Ministry of Chemicals and Fertilizers to reconsider aspects like the formula to fix prices. And thereafter pass a “reasoned” order on the representation of the NGO on the issue within six months after hearing all parties concerned. It also asked the Centre to file a copy of its decision on the representation of NGO, which would file it in six weeks.

However, at the very beginning the bench had expressed, “this is not an easy area for the courts to intervene and it is very difficult for a court to sit in judgment in such kind of policy matters.”

The Additional Solicitor General appearing for the Government reportedly submitted that the Government is open to consider the representation. “We will have a look to add some more drugs under the price control order”, she reportedly said.

Key objectives for drug price control in India:

As has now been well established, backed by robust data, that in a country like India ‘Out of Pocket Expenditure’ for medicines is very high.

According to the World Bank Out-of-pocket health expenditure (% of private expenditure on health) in India was last measured at 85.88 in 2013.

In a situation like this, to ensure adequate access to affordable essential medicines for the common man, the Government has hardly any option but to regulate the prices of, at least, the essential medicines.

To achieve this objective meaningfully, the Government through the ‘National Pharmaceutical Pricing Authority (NPPA)’ tries to make sure that all such medicines are:

Adequately Available
Reasonably Affordable

Therefore, maintaining a right balance between ‘affordability’ and ‘availability’ of medicines is of critical importance, while framing any drug pricing policy, .

A January, 2013 article titled, “Pharma Policy 2012 and Essential Drug’s Pricing” gives the following examples to illustrate how current ‘market based pricing’ mechanism is going to make many drugs costlier:

Drug	Disease	Market-based pricing (simple average)	Cost based pricing
Metformin	Diabetes	Rs.35	Rs.14
Atorvastatin	Cholesterol	Rs.127	Rs.16
Atenolol	Hypertension	Rs.38.5	Rs.08

Source: Jan Swasthya Abhiyan (JSA)

Why ‘drug price control’ at all in a ‘Free Market Economy’?

It is indeed a very pertinent question to ponder over.

However, equally pertinent answers are also available. One such was deliberated in a 2014 paper titled, “Competition Issues in the Indian Pharmaceuticals Sector” of Delhi School Economics (DSE). The paper deals with the subject related to failure of ‘Free Market Economy’ especially for branded generic drugs in India, despite seemingly intense price competition.

In an ideally free-market economy model, for each of these brands of identical drugs, having similar regulatory approvals from the Indian drug regulator on efficacy, safety and quality standards, competitive forces should have prompted uniform or at least near uniform prices for all such products.

Any brand of the same drug/drugs charging more, should generally have attracted lesser customers, if consumers would have exercised their purchase decisions directly; efficacy, safety and quality standards being the same, as certified by the drug regulator.

Interestingly, for prescription medicines, the much proven process of consumers exercising their free choice to select a brand, influenced by advertising or other available information, does not happen at all.

A snapshot of key changes in the new drug policy over the previous one:

The ‘Drug Price Control Order 2013 (DPCO 2013)’ clearly articulates two basic changes in the criteria for drug price control in India, as follows:

1. Span of price control:

This was re-defined in DPCO 2013 based on the ‘essentiality criteria’ of the drugs, which in turn is based on the ‘National List of Essential Medicines 2011 (NLEM 2011)’, instead of bulk drug based price control of DPCO 1995.

2. Methodology of price control:

This was also re-defined in DPCO 2013, making a clear departure from ‘Cost-Based Price Control’ of DPCO 1995 to ‘Market-Based Price Control’. The ‘Ceiling Prices’ are now arrived at by calculating the simple average price of each essential drug with market share of 1 percent and above. Instead, in DPCO 1995, ‘Ceiling Prices’ of price-controlled drugs used to be arrived at by applying specified ‘Maximum Allowable Post Manufacturing Expenditure (MAPE)’ on the manufacturing costs of each of such formulations.

Key lacunae in DPCO 2013:

Besides contentious methodology of price control in DPCO 2013, NLEM 2011 does not also cover a wide range of essential drugs, which are so important for patients. I had highlighted this issue in one of my earlier blog posts titled “Is The New ’Market Based Pricing Model’ Fundamentally Flawed?”

NLEM 2011 does not cover many combinations of TB drugs, a large number of important drugs for diabetes and hypertension. Many other critical life saving medicines, such as, anti-cancer drugs, expensive antibiotics and products needed for organ transplantation have been left out of price control. In fact, the prices of a number of these drugs have reportedly gone up after the notification of DPCO 2013, though NPPA has now started acting on this avoidable trend.

The government has reportedly admitted in an affidavit filed before the Supreme Court that the market value and share of medicines covered by new DPCO 2013, as ‘Essential Drugs’, is a meager 18 per cent of the Indian Pharmaceutical Market (IPM), instead of 20 percent under DPCO 1995.

As a result, DPCO 2013 based on NLEM 2011 undermines the entire objective of making essential drugs affordable to all.

All these lacunae in the current DPCO 2013 calls for a major revision of NLEM 2011, besides methodology of ‘Ceiling Price’ calculations. The Union Health Ministry has reportedly initiated steps to revise the list considering the existing market conditions and usage of drugs by the patients. This has reportedly happened again as recently as on July 16, 2015.

Observations of Indian lawmakers:

On April 20, 2015, a panel of 31 lawmakers of the Standing Committee on Chemicals and Fertilizers tabled its report in the Indian Parliament. The committee emphasized that patients in India should have access to all medicines, including life saving drugs, at affordable prices. Accordingly, it recommended expansion of the scope of price control to all medicines available in the country.

The Committee wondered why all medicines are still not listed in the ‘National List of Essential Medicines (NLEM)’ and is of the view that drugs of all kinds are essential and are required by the patients for treatment of various disease conditions at different times.

Government defines “Market Failure for pharmaceuticals”:

In its price notification dated July 10, 2014, the NPPA has categorically stated about “Market Failure for pharmaceuticals” as follows:

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 the 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 unaffordable and beyond the reach of most patients. This also puts huge financial burden in terms of out-of-pocket expenditure on healthcare.

Has DPCO 2013 delivered?

Many stakeholders, barring some NGOs, felt initially that DPCO 2013 would be a win-win drug pricing policy for both the industry and patients, as it would apparently be less intrusive for the pharma players.

Along side, through ‘Public Relations’ overdrive, a hype was successfully created in the media by vested interests to generate a feeling that the drug prices are coming down by 30-40 percent as a result of the new market-based price control regime under DPCO 2013.

That could well be true for a handful of drugs. However, the fact is that the industry was adversely impacted by just around 2.3 percent, with the provision for annual price increases for even the price-controlled drugs. On the other hand, the span of price control came down from 20 percent of the just pervious DPCO 1995 to 18 percent in DPCO 2013, not impacting the industry as significantly as it was hyped before. This is quite evident even from the reported overall performance of the industry.

For the general patients, by and large, DPCO 2013 has not delivered what it was expected to on the ground.

Conclusion:

Realization of these facts has been just enough for the public disillusionment to set in, with a possible snowballing effect. Now the Supreme Court has intervened responding to a Public Interest Litigation (PIL). It has also made tough observations on the rationale of ‘market based drug price control’ and directed the government to review it.

On the other side, the Government appointed experts are reportedly revisiting the NLEM 2011 to include more essential drugs in this list.

In the midst of all these, the same drug pricing juggernaut continues to keep rolling, with almost similar narrative, though with different packaging and all associated theatrics of the day. Universal Health Care (UHC) for all now seems to be no more than an illusion, as vindicated by the recent union budgetary allocations for health in India

The Supreme Court of the country has observed afresh that India’s drug pricing policy is “Absurd, Unreasonable and Irrational”. This ticks the general population looking up to the honorable Apex Court as the savior to their long outstanding misery in this area, especially when steep ‘Out of Pocket Health Expenditure’ in India continues to stand out as a sore thumb.

Be that as it may, hoping against hope, the common man continues to clutch on mostly to Government assurances, just on its face value, that ‘Achhe din anne wale hain (Good days are coming)’ for most patients in the country…who knows?

By: Tapan J. Ray

India: Tops The GDP Growth, Remains At The Bottom On Health Care

Posted on July 13, 2015 by Tapan Ray

On February 9, 2015, the Wall Street Journal (WSJ) reported, “India’s statistics ministry surprised economists when it unveiled the new numbers for the growth of India’s gross domestic product. It ratcheted up India’s GDP growth figures using a new methodology that pegs expansion in Asia’s third-largest economy at 7.5 percent last quarter and 8.2 percent the quarter before that. Economists and the ministry, using the old methodology, had originally said growth was closer to 5.5 percent during those quarters. This recalculation indicates that India has already dethroned China as the world’s fastest-growing big economy, though China’s economy is still four times the size of India’s.”

For Indians in particular, this has indeed been a significant ‘feel good factor’.

However, keeping this ascending GDP growth rate in perspective, when we study the current health care related data of India as compared to BRICS nations (Brazil, Russia, India, China, South Africa) or even OECD (Organization for Economic Co-operation and Development) countries, India features at the rock bottom.

In this article, I shall quickly compare some critical health care parameters of India, against the same for other BRICS countries.

At the rock-bottom on healthcare:

This becomes absolutely clear when we look at the recent data on ‘Health Status’ of BRICS Nations, as follows:

Health Status of BRICS Nations (2013*)

	Life Expectancy at Birth	Infant Mortality per 1,000 Live Births	Child Mortality under 5 per 1,000 Live Births	Maternal mortality ratio (per 100 000 live births)
Russia Federation	71	9	10	24
Brazil	74	12	14	69
South Africa	59	33	44	140
China	75	11	13	32
India	66	41	53	190

* Life expectancy at birth data is of 2012; maternal mortality ratio is of 2010; all the others are of 2013. Source: Health and Health Care in BRICS Nations by Victor G. Rodwin, Wagner School of Public Service, New York University,

The legacy factor:

This has not happened overnight, public health care has been getting neglected in India over a long period of time. However, the process of slowing down in this area has become more pronounced in the recent years, as we shall discuss below.

The following table based on relatively recent data on ‘Health Expenditure’ in BRICS Nations, well captures the abject lack of focus in this area, which is so vital for sustainable economic progress of India:

Health Expenditure in BRICS Nations (2012*)

	GDP Per capita (PPP)	Public Expenses on Health (% GDP)	Private Expenses on Health (%GDP)	Total Expenses on Health (%GDP)	Out-of pocket Health Expenses (% of Total Healthcare Expenditure) 1
Russia Federation	24,805	3.8	2.4	6.3	33.52
Brazil	16,096	4.3	5.0	9.3	31.08
South Africa	13,046	4.2	4.6	8.8	7.21
China	12,880	3.0	2.4	5.4	34.67
India	5,855	1.3	2.7	4.0	58.05

* GDP per capita in PPP is of 2014; Human Development Index is of 2013; the rest of the data is of 2012. 1. Calculated based on private expenditure on health (% of GDP), total expenditure on health (% of GDP), out-of-pocket health expenditure (% of private health care expenditure). Source: Health and Health Care in BRICS Nations by Victor G. Rodwin, Wagner School of Public Service, New York University.

Lowest Human Development Index:

Human Development Index (HDI) is broadly defined as a composite statistic of life expectancy, education, and per capita income indicators, which is used to rank countries into four tiers of human development. Net outcomes of both education and health care play critical roles in the statistical calculations of HDI.

Among the BRICS nations, India registers the lowest HDI at 0.586, as compared to 0.658 of South Africa, 0.719 of China, 0.744 of Brazil and 0.778 of Russia.

Source: Health and Health Care in BRICS Nations by Victor G. Rodwin, Wagner School of Public Service, New York University.

High economic costs of neglect to health care:

An April 30, 2015 article of Reuters stated that over 60 percent of deaths in India are due to non-communicable diseases (NCDs) such as cancer, diabetes, chronic respiratory and cardiovascular diseases, which are responsible for about 70 percent of spending on healthcare. They also make serious adverse impact on the economic health of the country, with NCDs and mental illness expected to cost India US$ 4.58 trillion between 2012 and 2030.

This, by all means, creates a high priority situation, which needs to be addressed with commensurate well thought-out policy measures backed by adequate budgetary support.

The condition assumes even greater significance, as healthy and well-productive workforces contribute immensely to high and sustainable economic growth aspiration of a nation, always.

Healthcare budget gets further axed:

To meet the expectations of many, when the incumbent government is trying to floor the gas pedal for accelerated economic growth of the country, requisite budgetary allocation for quality and affordable healthcare in India, continues to lag behind.

On the contrary, in December 2014, just prior to the Union Budget Proposal 2015-16, the new Government reportedly ordered more than Rs 6,000 Crore or US$948 million cut (20 percent) from its own healthcare budget allocation of around US $5 billion for the financial year ending March 31, 2015, due to financial constraints.

In 2014-15, the finance ministry also ordered a spending cut of around 30 percent to US$ 205.4 million on India’s HIV/AIDS program.

Then came the Union Budget proposal 2015-16. Interestingly, even after several well publicized announcements by the Government on the ‘National Health Assurance Mission’, with generous promises on rejuvenation of public health care services sooner, the budget ignored all these – lock, stock, and barrel.

For 2015-16, the health care budget allocation was kept at Rs. 33,152 Crore, a tad more than Rs. 30,645 Crore of 2014-15. There has been no indication either for any comprehensive and integrated focus on healthcare, adequately backed by commensurate budgetary allocation, any time soon.

Could crimp efforts to control the spread of diseases:

Just around this time, a report from Reuters, quoting one of the health ministry officials, stated that this budget cut could crimp efforts to control the spread of diseases.

Interestingly, more newborns die in India than in poorer neighbors such as Bangladesh, and preventable illnesses such as diarrhea kill more than a million children every year.

This issue becomes even more glaring, when India contributing to 21 percent of the global disease burden, accounts for just a fraction of global spending on health.

What the Government promised, but did not deliver:

Before the Union Budget proposal of 2015-16, another article of Reuters dated October 30, 2014, quoting an Government announcement, reported that under the National Health Assurance Mission, Narendra Modi government would provide all citizens with free drugs and diagnostic treatment, in addition to insurance cover to treat serious ailments.

The proposed plan was to be rolled out in phases from April 2015 and was to cover the entire population by March 2019. The project would reportedly cost an estimated US$11.4 billion annually, when the entire population of the country comes under it.

National Health Assurance Mission was reportedly to focus, among others, on the following:

Improving preventive healthcare services by ensuring adequate availability of medical practitioners in rural areas.

Creating new infrastructure under existing welfare programs.

Providing tertiary care services through an insurance-based model with the government offering more than 50 drugs free to all the citizens.

Offering in the package, along with the drugs, about 12-15 diagnostic treatments.

Encouraging the State Governments to enter into outsourcing agreements for the provision of treatment.

All admirers of the new dispensation felt greatly obliged for this announcement. It was to some extent fulfillment of a long awaited expectation for a just and efficient healthcare system in India.

Adding strength to the Government’s promise, it was also reported that the World Bank along with UK’s health cost-effectiveness agency NICE are assisting India in this regard, providing technical assistance and advice on treatments the government should offer in its health care package.

However, at the end of the day nothing got translated into reality, at least not just yet.

Patients are compelled to turn to expensive private sector providers:

At around 1.3 percent of GDP, India’s public health expenditure is already among the lowest in the world, even as compared to 1.4 percent of Bangladesh, 1.6 percent of Sri Lanka and 2.9 percent of Thailand.

It is noteworthy that the public sector is the main source of health funding in nearly all OECD countries. However, in India, only 33 percent of health spending was funded by public sources in 2012, a much lower share than the average of 72 percent in OECD countries.

Moreover, health accounted for only 4.8 percent of total government spending in 2012, significantly lower than the 14.4 percent across OECD countries.

A January 2015 paper titled, “Improving Health Outcomes And Health Care In India”, published by the OECD reconfirms that with India’s low life expectancy largely reflecting deaths from preventable diseases, the most significant gains in health would come from population-wide preventive measures.

The paper highlights that except a small number of states, overall access to public health care services in India is rather poor even today, resulting in many people turning to more expensive private-sector providers, who mainly serve those who can pay.

A quick comparison between public and private health care expenditure:

For a quick comparison between public and private health care expenditure, I shall refer to a very recent Government survey report.

This survey titled, “Key Indicators of Social Consumption in India Health” was conducted by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Program Implementation of the Government of India from January to June 2014 period and was published in June 2015.

The following table prepared from the above NSSO survey, is an example that would highlight the extent of difference in the average medical expenditure per hospitalization between a public and a private sector hospital.

Average Medical Expenditure Per Hospitalization/Case in Public And Private Hospitals

Broad ailment category	Public (Rs.)	Private (Rs.)
Infections	3007	8134
Cancers	24526	78050
Cardio-vascular	11549	43262
Respiratory	4811	18705
Gastro-intestinal	5281	23933
Genito-urinary	9295	29608
Obstetric and neonatal	2651	21626
Psychiatric & neurological	7482	34561
Blood diseases (including anemia)	4752	17607
Endocrine, metabolic & nutrition	4625	19206

Need to garner resources to implement ‘National Health Assurance Mission’:

The High Level Expert Group (HLEG), constituted by the erstwhile Planning Commission in January 2011, under the chairmanship of Dr K. Srinath Reddy, produced a comprehensive report on ‘Universal Health Care (UHC) in India’ in November 2011.

On health financing, HLEG made 10 recommendations, where from I would quote just two as follows:

Government (Central government and states combined) should increase public expenditures on health from the current level of 1.3 percent of GDP to at least 2.5 percent in the first 5 years and to at least 3 percent of GDP by the next 5-year period.

Use general taxation as the principal source of health care financing – complemented by additional mandatory deductions for health care from salaried individuals and taxpayers, either as a proportion of taxable income or as a proportion of salary.

I reckon, to meet the budgetary needs for ‘National Health Assurance Mission’ both direct and indirect taxes require to be levied if possible, at least in the next budget, along with adequate incentives to the State Governments to do the same.

Conclusion:

Over a period of time, economic aspirations of India have grown by manifold and very rightly so. To achieve these aspirations, alongside, at least two critical social needs such as ‘Education’ and ‘Health Care’ must be focused on simultaneously. I underscore ‘simultaneously’. There does not seem to be any alternative either, if we want to ensure that Indian aspirations do not remain just a pipe dream, for long.

It does not give any pride to many when one witnesses India topping the league table of GDP Growth percentage, while continuing to remain at the rock bottom so far as the health care is concerned.

Education and health care are universally considered as the bulwark for sustainable progress and growth of any nation. Even all BRICS countries have realized and implemented that, being well ahead of India in those fronts, unquestionably.

Let’s believe and hope, India would not continue to neglect these two critical growth catalysts of any nation, for long, while trying to build a robust economy. Otherwise, pushing hard only for economic growth as a percentage of GDP, could well be akin to chasing a rainbow, if not creating an unsustainable bubble with disastrous consequences, in the long run.

By: Tapan J. Ray

Evolving Trend Of Patient Engagement In Treatment Decisions

Posted on July 6, 2015 by Tapan Ray

Slowly but steadily the process of taking treatment decisions for the patients is undergoing a metamorphosis, where well informed patients no longer want to play just a passive role. These patients want the doctors to take a final decision on their treatment only after meaningful interactions with them.

Today, Internet is increasingly becoming a great enabler for the patients to get to know, learn and obtain more and more information about their fitness, overall health, illnesses, disease symptoms, various diagnostic test results, including progress in various clinical trials, besides drugs and their prices…and all these just with clicks.

As a result, equipped with relevant information from various dependable and user-friendly sources in the cyberspace, patients have started asking probing questions about the risks and benefits of various types of treatment decisions and diagnostics tests, recommended by the doctors. At times, such interactions even lead to changes, additions or deletions in choice of therapy, including drugs, devices and diagnostics tests.

Hence, this change, which could well be a game changer, assumes even commercial importance for the pharma companies and other healthcare players in this area.

The emerging trend of patients’ demand for engagement in the treatment decision making process by the doctors needs encouragement by all concerned, especially, doctors, marketers of pharma products and healthcare services.

This process would not just be more balanced, fair and humane; it would make the entire healthcare value chain more efficient and cost-effective, as it would also involve managing expectations of informed patients. Alongside, it would encourage outcomes based evaluation of healthcare process with commensurate pricing, making the system accountable and efficient more than ever before.

In an emerging situation like this, are the pharma companies connecting the evolving dots and re-strategizing their marketing game plans accordingly? In this article, that’s what I shall try to dwell on.

Pharma marketing still remains tradition bound:

Despite this gradually transforming scenario, which would possibly lead to a paradigm shift, especially in the way of making treatment decisions for the patients, most pharma players do not seem to be thinking so, as they continue to be tradition bound in their overall marketing approach.

Even today, to generate product prescription demand by influencing treatment decision of the doctors, the pharmaceutical companies provide them with not just product information through their respective sales forces, but also drug samples and a variety of different kinds of gifts, besides many other prescription influencing favors. This approach is working very well, albeit more intensely, in India too.

Be that as it may, this trend is a potential ‘Game Changer’.

Data vindicates continuation of traditional pharma marketing:

Broad types of marketing expenditure of the pharma industry vindicate that drug companies are still not deploying adequate resources for ‘patient engagement’ initiatives in creative ways.

According to a November 11, 2013 report of ‘The Pew Charitable Trusts’ titled, “Persuading the Prescribers: Pharmaceutical Industry Marketing and its Influence on Physicians and Patients”, pharma industry spent more than US$27 billion on drug promotion in 2012. Out of this expenditure, more than US$24 billion was incurred on marketing to physicians and over US$3 billion on advertising (mainly through television commercials) to consumers, wherever permitted by a country’s regulator.

This approach is traditional and is designed to promote drugs by influencing only the doctors’ prescription decisions and not so much towards ‘patient engagement’ for the same, as appears to be the emerging need of the time.

Expenditure by type of pharma marketing in 2012:

A. Direct Marketing:

According to Cegedim Strategic Data, U.S. Pharmaceutical Company Promotion Spending (2013), expenditure by type of pharma marketing in 2012 was mainly as follows:

	Type of pharma marketing	Expenditure in US$
1.	Detailing face-to-face to doctors	15
2.	Free samples to doctors	5.7
3.	Educational and Promotional Meetings	2.1
4.	Promotional mailings	1.2
5.	Journal and Web Advertisements	0.9
6.	Direct-to-Consumer Advertising	3.1

B. Indirect marketing:

As indicate in the earlier mentioned report of ‘The Pew Charitable Trusts’, indirect marketing of US$2.35 billion incurred by the pharma companies were mainly in the following areas:

Continuing Medical Education (CME):

In 2011, the pharmaceutical and medical device industries provided 32 percent of all funding for CME courses in the United States, amounting to US$752 million out of $2.35 billion.

It is worth mentioning that to prevent these courses from functioning as veiled marketing, the Accreditation Council for ‘Continuing Medical Education’ regulates them.

However, a 2007 Senate Finance Committee report found that “drug companies have used educational grants as a way to increase the market for their products in recent years.”

Grants to Health Advocacy Organizations (HAO):

In this initiative, patient advocates can mobilize large numbers of people for an event on a specific disease related issue, which often goes to the benefit of pharma companies that manufacture related drugs.

A study found that organizations that had received grants from pharmaceutical manufacturers often endorsed the companies’ positions, while groups that had received minimal financing focused their advocacy on the drugs’ potential side effects.

Thus, the bottom-line is, in the marketing bandwidth of the pharma players, ‘patient engagement’ initiatives targeted towards patients’ benefits did not occupy a significant space.

Need to move beyond drugs and doctors:

From the above reports, it appears that while strategizing the marketing initiatives; pharma players start with products or brands and use doctors as the main decision makers to generate prescription support for those brands.

As stated earlier, though some global pharma companies are now talking about ‘patient centric’ approaches, but not much about ‘patient engagement’ approaches to harvest rich benefits out of the emerging new paradigm, in a win-win way.

Going beyond the drugs and the doctors, deploying significant resources to actively engage with the consumers to satisfy their needs and expectations, and in that process influencing patients’ behavior favorably towards the products or brands, need to be a critical part of the pharma marketing warfare, as we move forward.

Influencing patients’ behavior is challenging:

Influencing patients’ behavior through patient engagement is indeed more challenging. It calls for a multi-pronged approach involving all concerned stakeholders.

Besides innovative use of the cyberspace, digital Health Apps, among others, could well fit in nicely to achieve this goal.

I discussed this subject in my article dated March 30, 2015 in this Blog titled, “Quantum Value Addition With Health Apps, Going Beyond Drugs”.

In that direction, I reiterate that keeping pace with today’s ‘technology revolution’, rapid advent of various game-changing and user-friendly digital platforms, including Health Apps for consumers, are showing immense potential in this area. To usher in a refreshing catalytic change in the overall landscape for ‘patient engagement’ in healthcare, these platforms could emerge as key differentiating factors from the pharma players’ perspective.

Informed patients would want getting more and more engaged:

Currently, relatively smaller numbers of patients are keen to get engaged in their disease treatment decisions of the doctors or with the pharma companies on this subject, directly or indirectly.

Still a much larger number of patients, for historical reasons, remain passive while seeking treatment from the doctors.

This is changing and would change even faster with growing knowledge and awareness of digital power and its fast penetration in the hinterland along with increasing usage of smartphones.

As the patients would try getting more and more engaged in their respective treatment decision process, it would eventually hold the key to rapid progress of healthcare all over world. It has to happen in the ‘Smart Cities’ of ‘Digital India’ too, which is just a matter of time.

An institutional patient engagement initiative:

Without any direct and significant involvement of pharma industry, there are already some exemplary organized moves towards this direction in several parts of the world. One such institution has recently been established through 2010 ‘Patient Protection and Affordable Care Act’ of the United States, known as ‘The Patient-Centered Outcomes Research Institute (PCORI)’. It helps patients in making informed healthcare decisions to significantly improve healthcare delivery and outcomes.

Active promotion of high integrity, evidence-based information that comes from intensive research, ably guided by patients, caregivers and the broader healthcare community, forms the bedrock of this Institute. PCORI ensures that, patients and the public at large have information that they can use to make decisions that reflect their desired health outcomes and other expectations.

This move can be termed as one of the key steps towards ‘Patients Engagement’ in the United States, setting a good example for many other countries to follow, across the world.

Meeting with the challenge of change:

To effectively respond to the challenges posed by the need of ‘Patients Engagement’ in the disease treatment process, some pharmaceutical companies, especially in the United States, have started developing more direct relationship with the patients. Besides innovative use of digital Health Apps, creation of ‘Patient Empowered’ social networks would help addressing this issue properly.

Global pharmaceutical majors, such as Pfizer, Johnson & Johnson, Novartis, Boehringer Ingelheim, AstraZeneca, Bayer, GlaxoSmithKline, Sanofi, Roche, Novo Nordisk, Becton, Dickinson & Co and Merck are now directly engaging with the customers through social media, such as, Twitter and Facebook. Some of them have also started experimenting with the Health Apps, as well; though in India not much green shoots are seen in this area.

Just to cite an example, I quote from the The Annual Review 2014 of Pfizer that captures the following:

“People today are able to access and exchange more information than ever before, and it’s no surprise that health is an area where information sharing is exploding. As patients become more informed, they become more involved – more active in their own care and the care of others, and in medical research.

This is the era of “patient-centricity,” where patients are far from passive subjects of study or treatment. Laypeople are taking starring roles in designing clinical trials; tracking and managing their personal health data; and, crowdsourcing new insights and solutions with diverse, far-reaching communities.”

This effort of Pfizer, by all means, is highly commendable, which leaves enough room for others in the pharma world to emulate, may be even more creatively.

Conclusion:

To achieve the objective of meaningful ‘patient engagement’ in the treatment decision making process, there is a primary need for the pharma players to put in place a credible, informative and interactive communication platform.

Today’s world prompts that this platform should ideally be digital and must be an outcome of extensive research on the information needs of patients in the identified areas. Patients’ queries and comments require to be appropriately answered by experts with compassion, remaining within the regulatory framework of the country.

Inputs and resources provided by the concerned pharma companies to the patients through these platforms would help strengthen the quality of their ‘patient engagement’ campaigns. This in turn would enable the patients to properly understand the disease, the rationale of treatment decision of the doctors, subsequent follow up steps and further treatment, if any, thereafter.

With such engagements, the image of the concerned pharma companies would grow by manifold in the eyes of the beholder – the patients. It would then expand much beyond just the buyer and seller relationship for drugs, transcending in the space of well-respected pharma institutions that helped patients in arriving at precise and most cost-effective treatment decisions for a better quality of life.

By: Tapan J. Ray

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A Tapan Ray Website

Author Archives: Tapan Ray

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Indian Patents Act To Prevail Undiluted…Finally

India’s Drug Pricing Policy: “Absurd, Unreasonable And Irrational” – Supreme Court

India: Tops The GDP Growth, Remains At The Bottom On Health Care