Author Archives: Tapan Ray

Global New Product Launches: Recent Success Trend Unflattering?

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New products are the lifeblood for any company, including the pharmaceutical players. Business performance and sustainable growth of the pharmaceutical industry, as a whole depend on quality of R&D output in terms of ‘New Molecules’, followed by successful development and launch of those new products by the global pharmaceutical innovators.

Post-patent expiry, robust development and ‘just in time’ launch of cheaper generic versions of those innovative products, in a mega scale, usually drive the growth of the generic pharmaceutical industry, globally.

It is worth noting that for the last several years, ‘Patent Cliff’ coupled with progressively drying up R&D pipelines and mostly unflattering new product launches, are taking heavy tolls on the business performance of the global pharmaceutical majors.

The changing dynamics need to be considered:

Echoing this development, a March 2014 report of McKinsey & Company states: “About two-thirds of drug launches don’t meet sales expectations. Improving that record requires pharmaceutical companies to recognize the world has changed and adjust their marketing accordingly.”

To analyze the situation now in perspective, let us start tracking the launches from 2006 and 2007.

10 Big Pharma Sales in 2012 from NMEs approved since 2007 – A comparison

According to a June 2013 report of the ‘FirstWord Pharma’, in 2012 the combined sales of 10 top Big Pharma constituents, as named in the tables below, from the New Molecular Entities (NMEs) approved by the US-FDA since 2007, were US$ 14.8 billion i.e. 4.9 percent of the total revenue of these 10 companies in that year from the patented drugs.

Individual performance of these 10 companies are as follows:

No. Company Sales US$ Million Sales from NMEs US$ Million As % of 2012 Sales
1. Novartis 32153 3445 10.7
2. J&J 25351 2593 10.3
3. BMS 17621 1495 8.5
4. GSK 28518 1282 4.5
5. Merck 35945 1515 4.2
6. Sanofi 30879 1265 4.1
7. Roche 37578 1238 3.3
8. Eli Lilly 20566 457 2.2
9. Pfizer 47496 1040 2.2
10 AstraZeneca 27925 449 1.6

(Source: FirstWord, June 2013)

The success rate: With 2007 as the base year for NMEs

This table shows that Novartis and Johnson & Johnson were the two most successful companies with the launch of such NMEs in 2012, as they generated 10.7 percent and 10.3 percent, respectively, of their total patented drugs sales from these NMEs, as against an average of 4.9 percent, as mentioned above, during that year.

If we now try to analyze the new product launch success rates of the 10 Big Pharma constituents, based on the contribution of these new products (launched since 2007) to their respective total sales in 2012, the following picture emerges:

  • Good:  More than 10 percent - 2 Companies (20 percent)
  • Average: Between 5 and 10 percent - 1 Company (10 percent)
  • Poor: Less than 5 percent - 7 Companies (70 percent)

The success rate: With 2006 as the base year for NMEs

It is interesting to note from this report that by extending the ‘review period’ to NMEs approved by the US-FDA between 2006 and 2012 (i.e. one additional year), revenues generated by these new drugs in 2012 double to US$ 29 billion – or approximately 10 percent (instead of earlier 4.9 percent) of the total combined branded drug sales of the same 10 Big Pharma constituents in the same year, as follows:

No. Company Sales US$ Million Sales from NMEs US$ Million As % of 2012 Sales
1. Merck 35945 7518 20.9
2. Novartis 32153 5843 18.2
3. J&J 25351 3939 15.5
4. BMS 17621 2514 14.3
5. Roche 37578 2818 7.5
6. Pfizer 47496 2946 6.2
7. GSK 28518 1282 4.5
8. Sanofi 30879 1265 4.1
9. Eli Lilly 20566 457 2.2
10 AstraZeneca 27925 449 1.6

(Source: FirstWord, June 2013)

No significant overall qualitative change:

Here also, though some numbers related to the new product launch success rates of the same 10 Big Pharma constituents, based on the contribution of the NMEs launched since 2006 to their respective total sales in 2012 do change, poor to average performance with the new products still remains quite high, as follows:

  • Good: More than 10 percent - 4 Companies (40 percent)
  • Average: Between 5 and 10 percent - 2 Company (20 percent)
  • Poor: Less than 5 percent - 4 Companies (40 percent)

However, at a company level, the broad success trend with new products does not change very significantly. Just two new products approved by the US-FDA in 2006 were off to flying starts. These were:

  • Januvia of Merck: Generated sales of US$ 5.7 billion in 2012
  • Lucentis of Novartis and Roche: Generated combined sales of US$ 4 billion in 2012

Is it practically ‘The End’ of blockbuster drugs era?

While considering the larger picture on the subject, does it mean that Januvia and Lucentis would mark the end of the golden era of global blockbuster drugs…at least for now?

This picture may get clearer with the following table, prompting possibly an affirmative answer:

Best selling NMEs launched since 2006:

No. Product Company Approval Year 2012 Sales in US$ Million
1. Januvia Merck 2006 5745
2. Lucentis Novartis 2006 2398
3. Lucentis Roche 2006 1580
4. Isentress Merck 2007 1515
5. Invega J&J 2006 1346
6. Sutent Pfizer 2006 1236
7. Gilenya Novartis 2010 1195
8. Stelara J&J 2009 1025
9. Sprycel BMS 2006 1019
10 Tasigna Novartis 2007  998

(Source: FirstWord, June 2013)

Successfully launched most recent product is also on a shaky ground:

The new game-changing hepatitis C drug of Gilead Sciences – Sovaldi, has generated a turnover of around US$ 140 million in less than a month’s time from its market launch. Analysts expect an annual turnover of around US$7 billion from this brand.

However, sustaining the current sales momentum for Sovaldi in the years ahead could indeed be challenging for Gilead, as Bristol-Myers Squibb is preparing to obtain FDA approval for its own hepatitis C treatment daclatasvir, which has already been cleared in Europe. In addition, AbbVie is also progressing fast with its novel three-drug fixed dose combination in the same therapy area.

Moreover, Sovaldi’s unusually high price has reportedly created a furore in the western market. It costs US$ 1,000 a pill, raising huge concern among insurers and state funded healthcare providers in the United States. The report states that three Democratic members of the House Energy and Commerce Committee have already demanded that Gilead Sciences must justify the price of Sovaldi.

Categorization of new drugs:

Analyzing the current situation the above McKinsey report categorizes the types of new products that are now being launched, as follows:

  • Roughly one in four launches involves drugs that are strongly differentiated from competing products.
  • More than half of upcoming launches are of moderately differentiated products in well-established disease areas, and the priority is to find a way to stand out from the crowd. This requires innovative approaches to unveil insights into stakeholder needs and behaviors that competitors do not have.
  • For roughly 15 percent of launches, the priority will be to establish unmet needs effectively to ensure access to a well-differentiated treatment for a targeted population. McKinsey call these launches “category creators.” Gardasil, launched in the un-established human papilloma virus market, is an example.
  • 8 percent of launches face the substantial challenge of launching an undifferentiated product in an un-established disease area.

Broad strategic steps prescribed:

To address this challenge effectively the above report underscores the need for a systematic approach for the pharma players as follows:

  • Establish unmet needs in a disease area,
  • Develop deep customer insight as a basis for a truly differentiated positioning
  • Land the products safely in the market
  • Maximize launch uptake
  • Use early experiences in the market to fine-tune ongoing launch activities

Conclusion:

Considering the prevailing scenario of ‘Patent Cliff’, coupled with progressively drying up R&D pipelines and mostly unflattering success with the new product launches, how would a company work out its new product launch strategy, is becoming increasingly a critical question to answer on priority.

To appropriately tune a new product in its long-term sales and profit growth trajectory, it is imperative to ensure that the product exhibits its winning trends as soon as it is fired from its launch pad.

This is absolutely essential, as it appears from the above study, around one in three launches has been good in meeting the planned expectations. This makes about two-thirds of new product launches falling well short of target.  It is noteworthy that 78 percent of those new products that fell short in their first year target, lagged in their second-year forecasts too. Further, 70 percent of those laggards did not measure up to the organizational expectations even during their third year in the market.

Thus, any inadvertent mistakes in this area could make the grand finale of intense product development and strategizing efforts over a number of years together with expenses of millions of dollars, unflattering, if not catastrophic, both in terms of top and bottom line score-card of the organization, as is happening more frequently during the last several years.

This trend needs to be reversed with the application of innovative minds and charting the uncharted frontiers, sooner the better, for a healthier global pharmaceutical industry, as we move on.

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.

Why Try To Reinvent The Wheel With So Much Of Hullabaloo?

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A recent IMS study, apparently ‘authorized’ (whatever it means) by the Planning Commission of India has reportedly suggested various ‘ways to make drugs affordable in India’.

Though there does not appear to be anything new in the reported suggestions, the well publicized report could manage to snatch an eye-catching media headline: “Patented Drugs Cheaper, but Less Affordable Here”, for whatever may be the reason.

I wish I had an access to the full report for further enlightenment in this area.

Was this ‘authorized’ study necessary at all in the first place?

If the study were related to improving access to medicines in India, several questions would naturally come up, as follows:

  • What does “The study authorized by the Planning Commission” mean? Has the Planning Commission paid from the taxpayers’ money to get this avoidable study done? Or, has the study been done free of cost, as a favor extended to the Planning Commission of India on the issue, in lieu of authorization of the commission for quoting its name in the report?

Following the due process, it would not difficult to unravel whether the Government has made any payment for the study or not.

  • However, assuming that this study was done free of cost, it will be interesting to know what prompted the Planning Commission to even consider to reinvent the wheel with this new IMS study.
  • The reason being, the comprehensive report on the ‘Universal Health Care (UHC)’ dated November 2011 prepared by the ‘High Level Expert Group (HLEG), chaired by the Chief of the ‘Public Health Foundation of India (PHFI), Dr. Professor K. Srinath Reddy, is already pending before the Commission for giving shape to it working with all the concerned ministries. It is worth mentioning that the Planning Commission of India also had commissioned the HLEG study.
  • Instead of taking the UHC initiative forward, along with, hopefully, an expedited action of the Department of Pharmaceuticals to put in place a robust mechanism for patented drugs pricing, wasting time by moving in circles on the part of the Planning Commission in search of probably yet another ‘Eureka’ type report, would cost a great deal to the healthcare system of India. On the contrary, from the news report it appears that the findings or suggestions made in the IMS report are rather mundane, far from being anywhere near ‘Eureka’ type by any imaginable yardstick.

HLEG already charted the pathway for UHC in India:

The HLEG report has defined the UHC as follows:

“Ensuring equitable access for all Indian citizens, resident in any part of the country, regardless of income level, social status, gender, caste or religion, to affordable, accountable, appropriate health services of assured quality (promotive, preventive, curative and rehabilitative) as well as public health services addressing the wider determinants of health delivered to individuals and populations, with the government being the guarantor and enabler, although not necessarily the only provider, of health and related services”.

Ten principles for UHC in India:

Following are the ‘Ten Principles’, which guided the HLEG to formulate its recommendations for the UHC in India:

  • Universality
  • Equity
  • Non-exclusion and non-discrimination
  • Comprehensive care that is rational and of good quality
  • Financial protection
  • Protection of patients’ rights that guarantee appropriateness of care, patient choice, portability and continuity of care
  • Consolidated and strengthened public health provisioning
  • Accountability and transparency
  • Community participation
  • Putting health in people’s hands

HLEG study guarantees access to essential free health services for all:

Because of the uniqueness of India, HLEG proposed a hybrid system that draws on the lessons learned from within India as well as other developed and developing countries of the world.

UHC will ensure guaranteed access to essential health services for every citizen of India, including cashless in-patient and out-patient treatment for primary, secondary and tertiary care. All these services will be available to the patients absolutely free of any cost.

Under UHC all citizens of India will be free to choose between Public sector facilities and ‘contracted-in’ private providers for healthcare services.

It is envisaged that people would be free to supplement the free of cost healthcare services offered under UHC by opting to pay ‘out of pocket’ or going for private health insurance schemes 

Another Planning Commission commissioned report on procurement and distribution of medicines:

Another working group of the Planning Commission on health, constituted for the 12th Five Year Plan (2012-2017) headed by the then Secretary of Health and Family Welfare Mr. K. Chandramouli, had also submitted its report to the Commission.

The Part II of the report titled, “Provisions of ’free medicines for all in public health facilities …” recommends that health being a state subject, all the state governments of the country should adopt the successful and well proven Tamil Nadu model of healthcare procurement.

Tamil Nadu government through Tamil Nadu Medical Supplies Corporation (TNMSC) reportedly makes bulk purchases of drugs and pharmaceuticals directly from the manufacturers through a transparent bidding process, which reduces the cost of medicines to 1/10th and even to 1/15th of the Maximum Retail Price (MRP) of the respective product packs.

As per this report, the total running cost of procurement and distribution for the ‘Free Medicines for All’ project during the 12th plan period would be Rs. 28,675 Crore and an additional allocation of Rs. 1,293 Crore will be required as one time capital costs. The contribution of the Central Government at 85 percent of the total cost would be around Rs 25,667 Crore for the entire Plan period.

Conclusion:

In July 2012, while talking on the above K Srinath Reddy Committee report on UHC, which suggests universal health insurance coverage, the Deputy Chairman of the Planning Commission, Mr. Montek Singh Ahluwalia had reportedly said that the health sector of India would anyway receive a major shot in the arm in the 12th five-year plan with a budgetary allocation of 2 percent of GDP during the plan period. He also articulated that the country’s focus would be on cost-effective treatment and healthcare. For this, there would be a huge demand for human resources in the medical sector.

In the above backdrop, when two such excellent recent reports, commissioned earlier by the Planning Commission itself on improving access to affordable healthcare in India, are still pending before it for initiation of meaningful action with public knowledge, it is difficult to fathom what prompted the necessity for yet another Planning Commission ‘authorized’ study on similar area, with no seemingly earthshaking findings, as detailed in the media report.

This brings me back to where I started from, why is this particular attempt by the Planning commission to ‘Reinvent The Wheel’, yet again, and that too with so much of a hullabaloo, instead of diligently acting on the well crafted pending ones?

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.

Loss of Ranbaxy, Gain of Big Pharma…And Two Intriguing Coincidences

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In March 2014, the largest pharma player of India by market capitalization, Sun Pharma, became the latest of the large Indian pharma exporters facing the US-FDA ‘Import Ban’ for drugs manufactured at its Gujarat-based plant. This news came as a shocking surprise to many, including the stock market, as the home grown company has now attained an international stature being governed by a professional management team and steered by a Board that is chaired by a well-regarded non-Indian with decades of experience in the global pharmaceutical industry.

Just before that in January 2014, being slapped with the US-FDA drug ‘Import Ban’ of Active Pharmaceutical Ingredients (API) manufactured in its Toansa Plant of Punjab, the pharmaceutical business of Ranbaxy in the United States, with the products manufactured in its approved manufacturing facilities in India, came to a screeching halt.

It is worth noting that similar ‘Import Bans’ are already in place for the same company’s Dewas, Paonta Sahib, and Mohali production facilities. The combined impact of these bans now makes Ohm Laboratories plant of Ranbaxy, located in New Jersey, its sole generic drug manufacturing facility for the US market.

Considering that the US sales of Ranbaxy reportedly used to be around 57 percent of its total global turnover even in 2012, these import bans are undoubtedly a huge blow to the company, both financially as well as in terms of its business reputation.

Thus, the top priority of Ranbaxy under this situation is effectively addressing all the issues as raised by the US-FDA, especially in the area of documentation, as in the buyers’ market sellers cannot be the choosers.

A ‘Double Whammy’:

Meanwhile, prompted by theses ‘Import Bans’ on product quality ground and adding further woes to the company, the Supreme Court of India on March 15, 2014 reportedly issued notices to both the Central Government and Ranbaxy on a Public Interest Litigation (PIL) seeking not just cancellation of the manufacturing licenses of the company, but also a probe by the Central Bureau of Investigation (CBI) on the allegation of supplying adulterated drugs in the country.

Thus, it is a double whammy for Ranbaxy. The company would now require convincing the top court of the country that it manufactures and sells quality medicines for consumption of the patients in India.

However, Ranbaxy reportedly insisted that the drugs sold by it in the Indian market are safe and effective and that the company complies with all regulations of the country.

Could the situation now get even murkier?

During the process of judicial scrutiny, if the Supreme Court gets convinced with the above reply of Ranbaxy on this issue, the question that could possibly emerge is, how come the same company produces high quality drugs for the patients in India and allegedly substandard quality drugs for the patients of the United States? This could make the subject more complicated, if not murkier, internationally.

Two intriguing coincidences:

In the midst of all these, while connecting various similar looking and important dots, emerged during the last few years, a couple of clear coincidences comes to the fore, as follows:

1. Is the drug quality issue in India for exports limited only to US-FDA?

This brings us to the first interesting coincidence of drug ‘Import Bans’, involving large Indian drug exporters, coming mostly, if not only, from the US-FDA, although there are so   many other drug importing countries, including rest of the developed world.

Moreover, none of the Indian domestic companies had ever faced similar number of USFDA ‘Import Bans’ in the past, though they have been exporting to the United States from their FDA approved and inspected plants since quite a while. Therefore, it is worth figuring out why has it started happening now, that too repeatedly, and involving some of the largest global generic drug manufacturers from India.

Ranbaxy too is a large global player for generic pharmaceutical products. Besides India and the United States, the company markets its products both in East and West Europe, Latin America, Africa, Middle East, South Asia, South-East Asia and Asia-Pacific regions. Interestingly, though its saga related to US-FDA cGMP conformance in the four plants, culminating into drug ‘Import Bans’ in the United States, commenced as early as 2008, the company does not seem to have any issue with any other drug regulator anywhere in the world, not just yet.

According to the media report, UK and Australian drug regulators had commented that they are assessing the impact of the US action on Ranbaxy products sold in their countries. However, as on date Ranbaxy’s drug export to all those countries continue to remain as normal as before.

If over a period of time, it is proved that other foreign drug regulators do not have any similar quality related issues with Ranbaxy manufactured products, a serious joint evaluation of the entire chain of events related to Ranbaxy and others by the global regulatory experts would perhaps be warranted to provide a lasting solution on the subject.

2. Missed opportunities for ‘first to launch’ generic versions of blockbuster drugs:

The second coincidence is related to a series of missed opportunities, especially for Ranbaxy, related to ‘first to launch’ generic versions of several patent expired blockbuster drugs in the United States.

When the emerging dots associated with such lost opportunities for drugs like, Lipitor (Pfizer), Diovan (Novartis) and Nexium (AstraZeneca) are connected, a clear pattern emerges favoring Big Pharma and obviously adversely affecting companies like Ranbaxy.

Saga started with uncertainty over Lipitor generic Launch:

Like many other large Indian players, ‘first to launch’ strategy with new generic drugs has been the key focus of Ranbaxy since long, much before its serious trouble with the US-FDA begun in 2008. ‘Import Bans’ on two of its manufacturing facilities by the US regulator in that year created huge uncertainty in its launch of a generic version of Pfizer’s anti-lipid blockbuster drug Lipitor in 2011. On time launch of a generic version of Lipitor was estimated to have generated a turnover of around US $ 600 million for Ranbaxy in the first six months.

Despite its neck deep trouble with the US-FDA at that time, Ranbaxy ultimately did manage to launch generic Lipitor, after partnering with Teva Pharmaceutical of Israel.

The story continued with indefinite delay of Diovan generic launch:

Lipitor story was just the beginning of Ranbaxy’s trouble of not being able to translate its ‘first to launch’ advantage of patent-expired blockbuster drugs into commercial success, thus allowing the Big Pharma constituents to enjoy the market monopoly with their respective blockbuster drugs even after patent expiry.

Despite Ranbaxy holding the exclusive rights to market the first generic valsartan (Diovan of Novartis and Actos of Takeda) for 180 days, much to its dismay, even after valsartan patent expiry in September 2012, a generic version of the blockbuster antihypertensive is yet to see the light of the day. However, Mylan Inc. has, now launched a generic combination formulation of valsartan with hydrochlorothiazide.

US-FDA drug ‘Import Ban’ from the concerned manufacturing facility of Ranbaxy gave rise to this hurdle favoring the Big Pharma, as discussed above.

As a result, Novartis in July 2013 reportedly raised its guidance announcing that the company now expects full-year sales to grow at a low single-digit rate, where it had earlier predicted net sales to turn up flat. It also guided for core earnings to decline in the low single digits, revising guidance for a mid-single-digit drop.

Would it also delay the launch Nexium generic?

Ranbaxy had earlier created for itself yet another opportunity to become the first to launch a generic version of the blockbuster anti-peptic ulcerant drug of AstraZeneca – Nexium in the United States, as the drug goes off patent on May 27, 2014. However, due to another recent US-FDA import ban from the concerned plant of Ranbaxy, it now seems to be a distant reality.

That said, it has now been reported that Ranbaxy is in talks with at least two companies on sourcing ingredients for the generic version of Nexium to be able to launch its generic formulations in the United States immediately after the patent expiry.

In this context, any delay in the launch of generic Nexium, which incidentally is the second-biggest seller of AstraZeneca, would have a big impact on the company’s profit.

With the global sales of Nexium at US$ 3.87 billion and US sales at US$ 2.12 billion in 2013, retaining its monopoly status in the all-important US market beyond the end of May would not only limit a forecast decline in AstraZeneca’s 2014 earnings, but would also protect bonuses for top management of the British pharma giant, the above report says.

No Machiavellian Hypothesis:

By highlighting these coincidences, I have no intention to even attempting to postulate something like a ‘Machiavellian Hypothesis’. I just want to establish that intriguing coincidences do exist whatever may be the reasons.

Probably an in-depth study by independent experts in this field would be able to ferret out the real reasons behind these coincidences, including, why are the cGMP issues repeatedly arising only with the US-FDA?

Conclusion:

Be that as it may, delayed generic launches of Nexium (AstraZeneca) with US sales of US$ 2.12 billion, together with the same for Actos (Takeda) and Diovan (Novartis) recording a combined sales for US$ 8.55 billion, have indeed created almost a wind-fall gain for the respective ‘Big Pharma’ constituents and consequent huge losses for Ranbaxy. The first-to-file bonus on Actos alone was estimated to be more than US$ 200 million.

Though the US-FDA Commissioner Margaret Hamburg has reportedly clarified that the United States is ‘not targeting’ Indian pharma companies but just following a strict quality control regime for all products being imported into America, the following critical questions still float at the top of mind:

- Are all these missed opportunities of Ranbaxy, which favored Big Pharma immensely, just sheer coincidences of clash in timings between USFDA ‘Import Bans’ from four of its manufacturing facilities and the respective launch dates in the United States for the first generic versions of the three blockbuster drugs?

- When Indian generic drug manufacturers continue to export across the world without any problem thus far, why is a series of unprecedented ‘Import Bans’ on quality grounds now coming from the US-FDA in a quick succession decimating the image of Indian generic drug manufacturers?

At the end of the narrative, some wise men could well say that I am trying to connect the dots that do not exist at all. These are all imaginary or at best, sheer coincidences. It could well be just that, who knows? But…

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.

Indian Pharmaceutical Market in February 2014 – A Snap Shot

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According to the Retail Audit dated March 2014 of well reputed AIOCD Pharmasofttech AWACS Pvt. Ltd, in the month of February 2014, the Indian Pharmaceutical Market (IPM) registered a turnover of 5902 Crore (around US$ 980 million) growing at 4.5 percent against Rs. 6,227 Crore (around US$1 billion) in January 2014 with a growth of 8.5 percent.

The growth break-up for the month is as follows:

  • -0.2 percent from existing products
  • 3.2 percent from new launches
  • 1.5 percent from price increases

However, the volume growth of 2.6 percent during Dec’13 to Feb’14 quarter has been better than the same for the corresponding period of the previous year, which was 0.2 percent.

February 2014: Impact of DPCO 2013:

  • The products covered under DPCO 2013 de-grew by (-13.6) percent, whereas rest of the products grew by 7.4 percent resulting an overall growth of 4.5 percent for the month
  • The DPCO 2013 portfolio for GSK de-grew by (-30.7) percent and the same for Ranbaxy registered a negative growth of (-25.2) percent, whereas Sun Pharma had the least impact with its DPCO 2013 portfolio de-growing at -6.8 percent.

Top performers in growth within ‘Top 10 Companies’: 

  • Sun Pharma at 18.1 percent
  • Lupin at 9.3 percent
  • Alkem at 6.7 percent

 Monthly growth of Indian Companies against MNCs:

  • Indian companies at 6.9 percent
  • MNCs at (- 1.7) percent

Top growing MNCs for the month:

  • MSD at 17.3 percent
  • AstraZeneca at 15.3 percent
  • Merck Serono at 5.1 percent

Top 5 growing therapy areas for the month:

  • Anti-diabetic at 13.3 percent
  • Dermatological at 12.5 percent
  • Respiratory at 6.2 percent
  • Cardiological at 5.9 percent
  • Gastrointestinal at 5.1 percent

It is worth noting that Anti-infective market de-grew by 0.9 percent during the month.

Top growing brands:

  • Lantus (Sanofi) at 25 percent
  • Monocef (Aristo) at 23 percent (despite de-growth of the therapy area)
  • Glycomet-GP (USV) at 23 percent
  • Skinlite (Zydus Cadila) at 19 percent
  • Aciloc (Cadila Pharmaceuticals) at 15 percent

New Launches:

Total 107 Brands (generic formulations) were launched in February 2014, which justifies why new launches contributed 3.2 percent of the total growth of 4.5 percent for the month.

By: Tapan J. Ray

Kind Courtesy: AIOCD Pharmasofttech AWACS Pvt. Ltd.

 

Is Credibility Erosion of Pharma Accelerating?

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‘Big Pharma’ now seems to be desperately trying to gain the long lost high moral ground by pushing  hard its gigantic image makeover juggernaut, maintaining a strong pitch on the relevance of stringent Intellectual Property Rights (IPR) in the lives of the patients. However, even more alert media, by reporting a number of unethical and fraudulent activities of some of its constituents on the ground, is taking much of the steam out of it. As a result, the pace of erosion of all important pharma credibility is fast accelerating.

Innovation – A critical need for any science-based business:

Innovation, which eventually leads to the issue of IPR, is generally regarded as extremely important to meet the unmet needs of patients in the battle against diseases of all types, especially the dreaded ones. Thus, it has always been considered as the bedrock of the global pharmaceutical industry. As we all know, even the cheaper generic drugs originate from off-patent innovative medicines.

At the same time, it is equally important to realize that just as the pharmaceutical or life-science businesses, innovation is critical for any other science based businesses too, such as IT, Automobile, Aviation, besides many others. Since many centuries, even when there were no ‘Patents Act’ anywhere in the world, leave aside robust ones, pharmaceutical industry has been predominantly growing through innovation and will keep becoming larger and larger through the same process, acrimonious debate over stringent IPR regime not withstanding.

India has also amply demonstrated its belief that innovation needs to be encouraged and protected with a well-balanced Intellectual Property regime in the country, when it became a member of the World Trade Organization and a part of the TRIPS Agreement, as I had discussed in my earlier blog post.

Simultaneously, a recent research report is worth noting, as well. The study reveals, though the pharmaceutical companies in the United States, since mid 2000, have spent around US$ 50 billion every year to discover new drugs, they have very rarely been able to invent something, which can be called significant improvement over already existing ones. This is indeed a matter of great concern, just as a very ‘stringent IP regime’ prompts ‘evergreening’ of patents, adversely impacting the patients’ health interest.

Though innovation is much needed, obscene pricing of many patented drugs is limiting their access to majority of the world population. On top of that, business malpractices net of fines, wherever caught, are adding to the cost of medicines significantly.

Key reasons for acceleration of credibility erosion:

I reckon, following are the three main factors accelerating credibility erosion of pharma in general and Big Pharma in particular:

  1. Large scale reported business malpractices affecting patients’ health interest
  2. Very high prices of patented medicines in general, adversely impacting patients’ access and cost of treatment
  3. Attempts to influence IP laws of many countries for vested interests

1. Accelerating credibility erosion due to business malpractices:

In the pharmaceutical sector across the world, including India, the Marketing and Clinical Trial (CT) practices have still remained very contentious issues, despite many attempts of so called ‘self-regulation’ by the industry associations. Incessant complaints as reported by the media, judicial fines and settlements for fraudulent practices of some important pharma players leave no breather to anyone.

To illustrate the point, let me quote below a few recent examples:

Global:

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder. According to the Italian regulator Avastin costs up to 81 euros, against around 900 euros for Lucentis. Out of the total amount, Novartis would require to pay 92 million euros and Roche 90.5 million euros. Roche’s Genentech unit and Novartis had developed Lucentis. Roche markets the drug in the United States, while Novartis sells it in the rest of the world. Quoting the Italian regulator, the report says that the said practices cost Italy’s health system more than 45 million euros in 2012 alone, with possible future costs of more than 600 million euros a year.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges. An investigation of those former employees of Sanofi unearthed that they had made illicit payments to get more orders from pharma dealer.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines.
  • In July 2012, GlaxoSmithKline was reportedly fined US$ 3 bn in the United States after admitting to bribing doctors and encouraging the prescription of unsuitable antidepressants to children. According to the report, the company encouraged sales reps in the US to ‘mis-sell’ three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.
  • Not so long ago, after regulatory authorities in China cracked down on GlaxoSmithKline for allegedly bribing of US$490 million to Chinese doctors through travel agencies, whistleblower accusations reverberated spanning across several pharma MNCs, including Sanofi. The company reportedly paid ¥1.7 million (US$277,000) in bribes to 503 doctors around the country, forking over ¥80 to doctors each time a patient bought its products.

All these are not new phenomena. For example, In the area of Clinical Trial, an investigation by the German magazine Der Spiegel reportedly uncovered in May, 2013 that erstwhile international conglomerates such as Bayer, Hoechst (now belongs to Sanofi), Roche, Schering (now belongs to Bayer) and Sandoz (now belongs to Novartis) carried out more than 600 tests on over 50,000 patients, mostly without their knowledge, at hospitals and clinics in the former Communist state. The companies were said to have paid the regime the equivalent of €400,000 per test.

India:

Compared to the actions now being taken by the law enforcers overseas, India has shown a rather lackadaisical attitude in these areas, as on date. It is astonishing that unlike even China, no pharmaceutical company has been investigated thoroughly and hauled up by the government for alleged bribery and other serious allegations of corrupt practices.

However, frequent reporting by Indian media has now triggered a debate in the country on the subject. It has been reported that a related Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing in the near future. It is worth noting that in 2010, ‘The Parliamentary Standing Committee on Health’ also had expressed its deep concern by stating that the “evil practice” of inducement of doctors by the pharma companies is continuing unabated as the revised guidelines of the Medical Council of India (MCI) have no jurisdiction over the pharma industry. The Government, so far, has shown no active interest in this area, either.

In an article titled, “Healthcare industry is a rip-off”, published in a leading business daily of India, states as follows:

“Unethical drug promotion is an emerging threat for society. The Government provides few checks and balances on drug promotion.”

In the drug manufacturing quality area, USFDA and MHRA (UK) has recently announced a number of ‘Import Bans’ for drugs manufactured in some facilities of Ranbaxy and Wockhardt, as those medicines could compromise with the drug safety concerns of the patients in the US and UK. Even as recent as in late March 2014, the USFDA has reportedly issued a warning letter to another domestic drug maker USV Ltd on data integrity-related violations in good manufacturing practices occurred at the company’s Mumbai facility. This is indeed a cause of added concern.

Similarly, in the Clinical Trial area of India, responding to a PIL, the Supreme Court of the country and separately the Parliamentary Standing Committee also had indicted the drug regulator. The Committee in its report had even mentioned about a nexus existing between the drug regulator and the industry in this area.

2. Accelerating credibility erosion due to high patented drugs pricing:

On this subject, another March 2014 report brings to the fore the problems associated with access to affordable newer medicines, which goes far beyond India, covering even the wealthiest economies of the world.

The report re-emphasizes that the monthly costs of many cancer drugs now exceed US$ 10,000 to even US$ 30,000. Recently Gilead Sciences fixed the price of a breakthrough drug for hepatitis C at US$ 84,000 for a 12- week treatment, inviting the wrath of many, across the world.

Why is the drug price so important?

The issue of pricing of patented drugs is now a cause of concern even in the developed countries of the world, though the subject is more critical in India. According to a 2012 study of IMS Consulting Group, drugs are the biggest component of expenditure in the total Out Of Pocket (OOP) spend on healthcare, as follows:

Items Outpatient/Outside Hospital (%) Inpatient/Hospitalization (%)
Medicines 63 43
Consultation/Surgery - 23
Diagnostics 17 16
Minor surgeries 01 -
Private Consultation 14 -
Room Charge - 14
Others 05 04

Probably for the same reason, recently German legislators have reportedly voted to continue until the end of 2017 the price freeze on reimbursed drugs, which was introduced in August 2010 and originally set to expire at end of 2013.

However in India, only some sporadic measures, like the Drug Price Control Order (DPCO 2013) for essential drugs featuring in the National List of Essential Medicines (NLEM 2011), that covers just around 18 percent of the total domestic pharmaceutical market, have been taken. On top of this, unlike many other countries, there is no negotiation on price fixation for high cost patented drugs.

If caught, insignificant fine as compared to total profit accrued, has no impact:

Many stakeholders, therefore, question the business practices of especially those players who get exposed, as they are caught and fined by the judiciary and the regulatory authorities.

Do such companies prioritize high profits ahead of patients’ lives, creating a situation for only those with deep pockets or a good health insurance cover to have access to the patented medicines, and the rest of the world goes without?

It is also no surprise that highly secretive and well hyped so called “Patient Access Programs” of many of these companies, are considered by many no more than a sham and a façade to justify the high prices.

3. Accelerating credibility erosion due to unreasonable IP related demands:

Despite some well-justified measures taken by countries like, India in the IP area, the US and to a great extent extent Europe and Japan, continuously pressured by the powerful pharma lobby groups, are still pushing hard to broaden the IP protections around the globe through various Free Trade Agreements (FTAs). At the same time, Big Pharma lobbyists are reportedly trying to compel various governments to enact IP laws, which would suit their business interest at the cost of patients.

Fortunately, many stakeholders, including media, have started raising their voices against such strong-arm tactics, further fueling the credibility erosion of Big Pharma.

Conclusion:

In the midst of all these, patients are indeed caught in a precarious situation, sandwiched between unethical practices of many large pharma players and very high prices of the available life saving patented medicines, beyond the reach of majority of the global population.

That said, accelerating credibility erosion of pharma in general and the Big Pharma in particular could possibly lead to a stage, where it will indeed be challenging for them to win hearts and minds of the stakeholders without vulgar display or surreptitious use of the money power.

To avoid all these, saner voices that are now being heard within the Big Pharma constituents should hopefully prevail, creating a win-win situation for all, not by using fear of sanctions as the key in various interactions, not even raising the so called ‘trump card of innovation’ at the drop of a hat and definitely by jettisoning long nurtured repulsive arrogance together with much reported skulduggery, for patients’ sake.

By: Tapan J. Ray

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

Is The Indian Patent Regime Weak?

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“India misuses its own IP system to boost its domestic industries,” US Senator Orrin Hatch commented while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30.

The reasons for this low score, especially true in the case of the pharma sector, are the US view that India’s patentability requirements are in violations of Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the non-availability of regulatory data protection, non-availability of patent term restoration and the use of compulsory licensing (CL) for commercial, non-emergency situations.

Given this, one could, erroneously though, assume that the Indian Patent Act is weak and not TRIPS-compliant….

To read more of this article, along with another interesting expert view, please click on The Financial Express March 4, 2014.

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.

Just Born A Pharma Goliath: Would India Be Impacted?

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Just born a potential pharma Goliath, as Actavis – the Dublin-based one of the largest global generic drug makers, in its biggest ever purchase, acquires New York based R&D based pharma major – Forest Laboratories, for a whopping US$ 25 billion.

It is worth noting that as on date Actavis has grown mainly through Mergers and Acquisition (M&A) route. In 2012, the company took over American generic drug major Watson Pharma for €4.5 bn and then Ireland’s Warner Chilcott, marketing patented drugs for gastrointestinal and urological conditions, for US $8.5 bn. Post buy out of Forest Laboratories, Actavis would have annual sales turnover of US$15 bn.

So far, mostly R&D based Pharma players acquired generic drug makers:

This acquisition is interesting. The reason being, since the last few years, mostly research based global pharmaceutical companies are taking over generic pharma players in the emerging markets with a reasonable speed. To cite a few examples:

In June, 2010, British drug major GlaxoSmithKline (GSK) announced acquisition of ‘Phoenix’, a leading Argentine pharmaceutical company focused on the development, manufacturing and marketing of branded generic products, for a cash consideration of around US $253 million. With this acquisition, GSK planned to accelerate its business growth in Argentina and the Latin American region.

Similarly, Paris based Sanofi with the acquisition of Zentiva, became an important player in the European generic drug market. Zentiva, is also a leading generic player in the Czech, Turkish, Romanian, Polish, Slovak and Russian markets, besides the Central and Eastern European region. In addition to Zentiva, in the same year 2009, Sanofi also acquired other two important generic players, Medley in Brazil and Kendrick in Mexico.

In February 2014, the German Drug major Bayer reportedly announced that it would buy Dihon Pharmaceutical Group Co of China, expanding the German company’s footprint in a key growth country. Dihon’s products are also sold in Nigeria, Vietnam, Myanmar and Cambodia. Privately held Dihon specializes in ‘Over-The-Counter (OTC)’ and herbal ‘Traditional Chinese Medicine (TCM)’ products.

Back home, MNCs acquired the following generic companies from 2006 to 2011:

Year Indian Companies Multinational Companies

Value ($Mn)

 Type of Deal
2006 Matrix Labs Mylan 736 Acquisition
2008 Ranbaxy Labs Daiichi Sankyo 4,600 Acquisition
Dabur Pharma Fresenius Kabi 219 Acquisition
2009 Shantha Biotech Sanofi-aventis 783 Acquisition
2010 Orchid Chemicals Hospira 400 Acquisition
Piramal Healthcare Abbott 3,720 Acquisition
Paras Pharma Reckitt Benckiser 726 Acquisition
2011 Universal Medicare Sanofi 110 Acquisition
2013 Mylan Agila Specialities 1750 Acquisition

Key drivers for generic acquisition:

From 2012 to 2015 patented drugs with a combined turnover of US$ 183 billion have already faced or would face intense generic competition resulting in, as high as, around 90 percent price erosion for those products. It is not just patent expirations that are exerting pressure on innovator companies. Added to this, a relatively weak R&D pipeline and increasing focus of various governments to reduce healthcare costs, have forced many research based global pharma players to imbibe the inorganic growth strategy in the generic space to quickly grab a sizable share of this large and fast growing market, especially in the emerging economies of the world.

Actavis acquisition is different:

In the above light Actavis’s acquisition of Forest Laboratories is quite different. Here, instead of a predominantly research-based company’s acquiring a generic player, a basically generic drug major has bought a research based global pharmaceutical player.

Interestingly, Forest Laboratories follows a unique R&D model. It is focused on, instead of discovering on its own, identifying strong medically relevant product candidates and guiding them through the complex development lifecycle, from proof-of-concept through post-marketing.

Strong global portfolio of both generic and patented drugs:

Post buy out, Actavis would have a strong combo-portfolio of generic drugs together with a relatively robust line-up of a diverse range of patented products, spanning across therapy areas such as Anti-Infective, Respiratory, Cardiovascular, Central Nervous System, Gastrointestinal, Obstetrics and Pain Management and that too not just in the emerging markets, but globally, unlike many others.

In addition, acquisition of Forest Laboratories would also provide Actavis access to former’s large US sales teams, transforming the merged entity a formidable force to reckon with in the topmost pharmaceutical market of the world, besides many others.

An intriguing recent decision:

That said, it is interesting to note that in January 2014, Actavis, then the second-biggest generic drug maker by market capitalization, announced that it would quit China as “It is not a business friendly environment… China is just too risky”. This is indeed intriguing, because by 2015, China’s generic market is expected to be close to US$ 82 billion.

Be that as it may, post acquisition Actavis would be in a position to offer all its customers in all the markets of the world a rainbow of products from patented to generics, carving out a critical strategic advantage for itself in the global pharmaceutical market.

Impact in India:

The question now boils down to what would be the impact of the just born Goliath on the domestic pharmaceutical industry in India.

Differentiated generic business:

The generic drugs market is usually classified as simple generics, super-generics and biosimilars. To differentiate, by adding value in the generic medicines, many domestic players are gradually entering into the ‘Super Generic’ and ‘biosimilar’ category of drugs. For example, Dr Reddy’s Laboratories has reportedly chosen to go for a difficult to copy drug formulation with its blood-thinner Fondaparinux. Sun Pharma, on the other hand, is focusing on innovative delivery platforms for its ophthalmic drugs and oral contraceptives. Cadila is looking at newer drug delivery modes for its painkiller Diclofenac. So is Lupin in other areas. In the biosimilar arena, Biocon has already developed Trastuzumab formulation of Roche. Moreover, the biosimilar business of Dr Reddy’s Laboratories continues with its impressive growth trend, besides many other Indian players in the same fray.

Simultaneously, India is improving its effectiveness in ‘Contract Research and Manufacturing Services (CRAMS) space. As we have recently witnessed in India the alliances between Merck & Co and Cipla and earlier with Sun Pharma. Even prior to that, collaborative agreements of Pfizer with Aurobindo Pharma; GSK with Dr Reddy’s Laboratories; Abbott India with Cadila and many more, would vindicate this point.

Merck Serono of Germany also announced a partnership to co-develop a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies (MAbs) with Dr. Reddy’s Laboratories. The partnership covers co-development, manufacturing and commercialization of the compounds around the globe, with some specific country exceptions. Mylan has also signed similar agreement with Biocon.

Glenmark Pharma has chosen yet another route, by entering into collaboration with Forest Laboratories (now Actavis) in 2013, for the development of a novel mPGES-1 inhibitor for chronic inflammatory conditions, including pain management.

Advantage India, provided…

Global generic drugs market would get its next booster dose with reportedly around 46 drugs going off patent opening a market of another US$ 66 billion from monopolistic to intense generic competition in 2015.

Details of ANDA status from the US-FDA source, as I indicated in my earlier blog post, probably indicate that several Indian players have already started moving in that direction at a brisk pace, keeping their eyes well fixed on the crystal ball. Over 30 percent of Abbreviated New Drug Applications (ANDAs) and around half of the total Drug Master Filings (DMF) now come from the Indian Companies. In 2013 alone, the US-FDA granted 154 ANDAs and 38 tentative ANDAs to the Indian companies.

Despite all these, a serious apprehension does creep in, which finds its root in much-publicized fraudulent behavior of a few large Indian drug manufacturers, seriously compromising with the cGMP standards of some high profile global drug regulators. This challenge has to be overcome, sooner, to reap rich harvest out of the emerging global opportunities in the space of generic drugs.

Conclusion: 

Geographically, North America is the largest consumer of generic drugs followed by Europe and Japan. However, the highest growth of the generic drugs market is observed in the Asia-Pacific region. Besides Actavis, some of the major generic drugs manufacturers of the world are Mylan, Apotex, Hospira, Par Pharmaceutical., Sandoz International and Teva Pharmaceutical.

From India, Ranbaxy Laboratories (before the recent fiasco), Dr. Reddy’s Laboratories, Lupin and Sun Pharma, besides many others, are competing quite well in the global generic drugs market with success.

Though Actavis has its manufacturing operations in India with its registered office located in Mumbai, the company is not yet engaged in serious local marketing operations in the country. In 2006 as Watson Pharma Pvt Ltd., the company acquired Sekhsaria Chemicals in a move to push forward its generic drug agenda globally. In 2005, it acquired a manufacturing facility in Goa from Dr. Reddy’s Laboratories to produce solid dosage generic drugs for the US market.

Taking all these into considerations, if much deliberated cGMP issues with the foreign drug regulators are resolved sooner, Actavis is not expected to make any major difference for Indian pharma players either in the domestic market or for that matter globally, any time soon.

Thus Indian pharma players are unlikely to be adversely impacted with the emergence of this new potential Goliath in the global pharmaceutical landscape.

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.

Threats to Indian Generics: Failing in US Inspections is Just Half The Story

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At a recent event of the American Enterprise Institute, Dr. Harry Lever, a senior cardiologist at the Cleveland Clinic in Ohio, reportedly expressed his concern based on his personal experience regarding inconsistent quality among Indian generics. As a result, he requires switching patients off them, almost routinely, for desired therapeutic effects.

Many reasons may be attributed to such medical concerns on Indian generics in the United States, however limited those may be, the core issue can nevertheless be wished away.

Back home in India, many doctors reportedly have also expressed similar apprehensions on the quality of many generic formulations produced by over 10,000 pharmaceutical manufacturers in the country.

US-FDA on its part has taken action to protect health safety of the patients in the United States through import bans of drugs manufactured in all those facilities, which failed to meet its cGMP standards during inspection.

Not an old story:

Not so long ago, just in 2013, quality related concerns with generic drugs exported by India came to the fore after Ranbaxy reportedly pleaded guilty and paid a hefty fine of US$ 500 million for falsifying clinical data and distributing ‘adulterated medicines’ in the United States.

Thereafter, US-FDA banned drug imports from Ranbaxy and Wockhardt, manufactured in all those facilities that failed to conform to its cGMP quality standards.

Those are the stories for generic formulations. Most recently, following yet another ‘import ban’ and this time for Active Pharmaceutical Ingredients (API) manufactured at its Toansa plant, Ranbaxy has suspended all shipments of APIs pending review. With this step, Ranbaxy would virtually have no access to the top pharmaceutical market of the world.

A not very responsible remark either:

Unfortunately, in the midst of such a scenario, instead of taking transparent and stringent measures, the Drug Controller General of India (DCGI) was quoted as saying, “We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

The DCGI made this comment as the US-FDA Commissioner Margaret Hamburg was wrapping up her over a weeklong maiden trip to India in the wake of a number of ‘Import Bans’ arising out of repeated cGMP violations by some large domestic generic drug manufacturers. Whereas, Hamburg reiterated the need for the domestic drug makers of India to make sure that that the medicines they export are safe for patients, the DCGI’s above comment appears rather arrogant and out of tune, to say the least.

Just recently, on the above comments of the DCGI, the American Enterprise Institute reportedly commented, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”

Failing in US-FDA inspection is just half of the story:

Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are now sold in the United States come from India. All most all of these are cheaper generic versions of patent expired drugs. Total annual drug export of India, currently at around US$ 15 billion, is more than the domestic turnover of the pharma industry. Hence, India’s commercial stake in this area is indeed mind-boggling.

It is now well known, if such ‘Import Bans’ continue or grow due to shoddy compliance of required cGMP standards, there could be a serious challenges for the Indian drug exporters to salvage their reputation on drug quality for a long time to come. Consequently, this will offer a crippling blow not just to their respective organizational business outlook, but also to future drug exports of India. It is worth mentioning that drugs and pharmaceuticals are currently a net foreign exchange earner for the country.

The other half of the story:

Threats related to export of Indian generic drugs on quality parameters, as flagged by the US-FDA in India, is just half the story. The other half of the story begins in the US, instead of in India, and is related to stringent new measures taken by the same regulator in its own land to have a check on the quality of imported generic drugs consumed by the patients in America.

A recent report highlights that around twelve academic centers of the United States are now involved in the firstever widespread safety and quality evaluation of generic drugs. This program is run by the US-FDA and would continue through 2017.

This initiative has been prompted by the fact that generic drugs currently contribute over 80 percent of prescriptions written in the US. In 2014, the said program will reportedly focus on cardiovascular drugs, ADHD treatments, immune-suppressants, anti-seizure medicines, and antidepressants. The grand plan is highlighted to project the priority emphasis of the US-FDA on the quality of generic drugs, especially after it banned medicine import from four India-based facilities over a period of last nine months.

Some Examples:

- A widespread testing program of USFDA followed its 2012 finding that generic copies of antidepressant medication Wellbutrin XL did not work as good as the original. This study eventually led the largest generic drug player of the world -Teva to withdraw its generic version from the market in 2012.

- According to the report, US-FDA is now reviewing a 2013 study done by a Boston-based researcher that found widespread impurities in the generic version of Pfizer’s anti- cholesterol drug Lipitor manufactured outside of the US. The research reportedly found that some generic versions of Lipitor produced overseas were rendered ineffective as a result of manufacturing impurities. However, US-FDA action on the same is not known, as yet.

Thus, the other half of the story unfolds the reality that, even if any exporter escapes USFDA inspection in India, there is a fair chance now that the generic formulations could be tested in the US itself under the above program and if found wanting in quality parameters, concerned generic formulation could face a ban in the United States.

Conclusion:

There is nothing like tightening all loose knots in the required cGMP process for all drugs manufactured in India, without bothering much about their testing in the US. If the drug quality consciousness becomes robust in the shop floor, well before the products leave the shores of India, there is no reason why the country would face similar embarrassing incidents in future, along with a strong global furore.

The US-FDA Commissioner’s recent calling on the DCGI to join hands with the US to enforce more rigorous oversight of drug manufacturing facilities, needs to be followed up with due earnest, the above avoidable comment of the DCGI not withstanding.

The Commissioner reportedly reiterated that the US would increase the number of FDA inspectors in India from 11 to 19 as it intensifies inspections of drug manufacturing plants, simultaneously with arranging cGMP compliance related workshops for the drug exporters. The DCGI also made an announcement that India intends to increase its inspectors from 1,500 to 5,000 over the next five years.

A deepening economic spat over cheaper generic drugs, not withstanding, all these good intents to maintain a robust drug quality standard need to be translated into reality.

Trying to find ghosts nurturing dubious intentions against India, especially in areas pertaining to drug quality standards, may not augur well for the patients at large, not just of the United Stated, but for our own homeland too.

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.