Author Archives: Tapan Ray

For Affordable Healthcare: Synergize Resources Through PPP Models

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According to a 2012 study of IMS Consulting, the key factor of significantly high ‘Out of Pocket (OOP)’ expenditure on healthcare in India is that people are pushed into seeking costlier private care services due to imbalanced infrastructure of healthcare workers, medicines and facilities.

Currently, 74 percent of patients in ‘Out-Patient (OP)’ care and 65 percent in ‘in-Patient (IP)’ care seek healthcare in the private channels. In private inpatient care, the average cost of treatment exceeds the average monthly household income at 121 percent for the affording population and 217 percent for the poor population, forcing many families to borrow money or sell assets.

Thus, the affordability challenges for healthcare of the country, as manifested by high OOP spend, is mostly a consequence of a large patient population using the private healthcare channel due to still inadequate availability of public healthcare services.

The situation is looking up:

According to IMS study 2012, currently, on an average about 54 percent of the patients are receiving free medicines from the Government hospitals. In progressive states like, Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka this number goes up to 85 percent. At the same time, in rural India, which constitutes around 70 percent of the total 1.2 billion populations of India, usage of Government facilities for OP care has increased from 22 percent in 2004 to 29 percent in 2012, mainly due to the impact of National Rural Health Mission (NRHM).

Consequently, this increase will also have significant impact in reducing OOP healthcare expenses of the rural poor.

Medicines constitute highest component of OOP:

Medicines still constitute the highest component of OOP expenses in OP care, though its percentage share has decreased from 71 percent in 2004 to 63 percent in 2012.  Similarly for IP care, the share of medicines in total OOP has also decreased from 46 percent in 2004 to 43 percent in 2012.

However, still 46 percent of the patients seeking healthcare in public channels had to purchase medicines from private channels. Recently announced drug procurement system through Central Medical Services Society (CMSS) after hard price negotiation and distribution of those drugs free of cost from Government hospitals and health centers, could address this issue effectively.

Further scope to reduce OOP:

The study highlights that OOP spend could be lowered by 22 percent with:

  • Improved availability of healthcare facilities at public hospitals and health centers, which can be achieved through effective implementation of “National Health Mission” with higher budgetary allocation.
  • Improved availability of medicine at the public channels, which is feasible through effective implementation of already announced “Free Medicine” scheme of the Government across the country.

A total reduction of ~40% in overall OOP spend appears to be possible, the study reiterates, when more people would get confidence that public healthcare can meet all their needs.

The roadmap to achieve the goal:

Fundamentally there are five ways to deal with the affordability issue:

1. Reduction in demand: Creating a better health environment,

2. Reduction in costs: Through price control, increased competition, group purchasing power

3. Increase in financial support from government

4. Increased penetration of health insurance programs

5. Increase per-capita income of households

All these five areas, I reckon, would not be difficult to address through well-structured and strategic Public Private Partnership (PPP) initiatives.

It is increasingly recognized that there are many other healthcare challenges, which do not fall exclusively under either the public or the private sectors. These challenges need to be addressed with combined efforts… with well structured Public Private Partnership (PPP) models.

Private sector should play its role:

The private sector is already a major provider of health services in India. Hence, it has the wherewithal to support implementation of Government’s flagship healthcare programs, especially in the area of service delivery, to enhance their overall effectiveness.

As the Universal Health Care (UHC) proposal made by the High Level Experts Group (HLEG) to the Planning Commission of India highlighted, the government would provide the budget, while the private sector would take the responsibility for delivery of healthcare services.

Accountability for PPP should not fall through the systemic cracks:

The above study indicates, the private parties could include individual physicians, commercial contractors, large private and corporate super-specialty hospitals, not-for-profit agencies (NGOs), pharmaceuticals and device manufacturers. Expertise of all these stakeholders should be appropriately leveraged.

It is absolutely essential to make sure that the accountability of the PPP initiatives does not fall through the cracks now existing in the system.

To control costs and ensure required standards are met, all contractual agreements for PPPs, as recommended, must have adequate built-in monitoring and supervision mechanisms of the highest order, assigning clear roles and responsibilities for each party.

Similarly, NGOs need to be given a larger role of monitoring the activities or services rendered at such facilities to make sure the designated institutions are fulfilling their obligations to the public.

Conclusion:

To make healthcare affordable in India, well-strategized PPP initiatives would have critical roles to play.

Thus, instead of resorting to blame games with Government accusing the private sector to be exploitative and the private sector continuously moaning for ‘unfriendly’ business policies of the government, there is a fundamental need for both the constituents working closely together.

As a result, patients will have greater access to quality healthcare at an affordable price, the industry will grow faster in a sustainable way and the government will have its public healthcare obligations fulfilled to a reasonable extent.

Some of the major sectors in India where PPP has been quite successful are infrastructure, telecom, irrigation, power and airports. So, why should it not work for the healthcare sector of the country, as well?

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.

Astronomical Prices of Patented Cancer Drugs: A Solution in Sight?

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Astronomical prices of patented anti-cancer dugs have become a subject of great concern not just in India. It is becoming an issue across the world.

After issuing the first ever Compulsory License (CL) for Nexavar of Bayer in India, the grapevine is reportedly still abuzz on the progress of issuing CL for some commonly used high priced patent protected anti-cancer drugs, such as, dasatinib (Sprycel) of Bristol-Meyer Squibb. It is believed that a CL on dasatinib will reduce the product price to around Rs 8,000 for a month’s therapy as compared to Rs. L 1.65 for “Sprycel, benefitting the patients suffering from Chronic Myelogenous Leukemia (CML).

Whenever, a discussion on such pricing issues comes up in India, the counter arguments from the pharma MNCs are put as under:

  • Does India have adequate diagnostic facilities for the disease?
  • How many diagnosed patients would be able even the low cost product?

The intent of these questions appears to be diversionary in nature and has hardly any relationship with the real issue.

Yes, diagnosing cancer at an early stage is still a challenge in India for various socio-economic reasons, which need to be addressed expeditiously. But, what happens to majority of those diagnosed patients, who cannot afford to pay over Rs. 1.65 for a month’s therapy for a product like dasatinib? Won’t the reduced price of say Rs. 8,000 expand access of the drug to many more additional patients, though may not be to all.

US researchers also point out high cancer drugs cost:

It is interesting to note, that in a in a review article published recently in ‘The Lancet Oncology’, the US researchers Prof. Thomas Smith and Dr. Ronan Kelly identified drug pricing as one area of high costs of cancer care. They are confident that this high cost can be reduced, just as it is possible for end-of-life care and medical imaging – the other two areas of high costs in cancer treatment.

Besides many other areas, the authors suggested that reducing the prices of new cancer drugs would immensely help containing cancer costs. Prof. Smith reportedly said, “There are drugs that cost tens of thousands of dollars with an unbalanced relationship between cost and benefit. We need to determine appropriate prices for drugs and inform patients about their costs of care.”

Pricing pressure in Europe too:

Another recent report highlights that Germany is contemplating legislation shortly that would force drug manufacturers to report the reduced prices they negotiate with insurers, potentially pressuring prices lower elsewhere in Europe.

The report highlights that drug manufacturers have had to negotiate rebates on new innovative medicines with German insurers for the past three years. Now, instead of referring to rebates negotiated between drug manufacturers and insurers, the law will refer to reimbursement. The shift may seem small, but it means the talks are really about price, not discounts, which is often good for a limited time or volume and is renegotiable.

It is worth noting from the report that countries including Spain, France and Italy have reduced the number of drugs for which they will reimburse patients, mandated the increased use of generic medicines and lowered the amount they will pay for some products since the economic crisis.

A solution in sight?

Coming back to the Indian scenario, unlike many other developed and developing countries of the world, there is no system yet in place in India to negotiate prices of patented drugs, including those used for cancer.

CL for all patented anti-cancer drugs may not be a sustainable measure for all time to come, either. One robust alternative is price negotiation for patented drugs in general, including anti-cancer drugs, as provided in the Drug Policy 2012. The issue has been under consideration of the Department of Pharmaceuticals (DoP) since 2007. The bizarre report produced by a committee formed for the purpose earlier had no takers.

Unfortunately administrative lethargy and lack of requisite sense of urgency have not allowed the Department of Pharmaceuticals (DoP) to progress much on this important subject, beyond customary lip service, as on date. Intense lobbying on the subject by vested interests from across the world has further pushed the envelope in a dark corner.

Recent report indicates, the envelope has since been retrieved for a fresh look with fresh eyes, most probably, as a new leader now on the saddle of the department.

An inter-ministerial committee has now reportedly been formed by the Department of Pharmaceuticals (DoP) under the chairmanship of one of its Joint Secretaries, to suggest a mechanism to fix prices of patented drugs in India.
Other members of the committee are Joint Secretary, Department of Industrial Policy and Promotion (DIPP); Joint Secretary, Ministry of Health and Family Welfare; and Member Secretary, National Pharmaceutical Pricing Authority (NPPA).

It appears, inputs will be taken from various industry associations, yet again.

Conclusion:

Pharmaco-economics input, I reckon, would be of immense value for this exercise. Since the ‘Public Health Foundation of India (PHFI)’ has one such unit doing lots of good analysis, this inter-ministerial group may also consider inclusion of this unit in the committee, as advisor.

The pricing of newer patented medicines, especially those used for the treatment of cancer, are of critical importance for the country and the committee should ground the issue satisfactorily within a specified period without further delay.

Hopefully, a well thought out report of the inter-ministerial committee would help resolving this issue soon once and for all, including a large number of cancer patients in India.

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.

 

 

Big Pharma: Now A ‘Chink in Its Armor’?

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Emerging trends bring to the fore a possible ‘Chink in the Armor’ of the ‘Big Pharma’, despite a number of recent belligerent moves.

One such move I had deliberated in my earlier blog post. There I mentioned that 2014 report on ‘International Intellectual Property (IP) Index’ of the US Chamber of Commerce’s Global Intellectual Property Centre (GIPC) highlights India’s featuring at the bottom of 25 countries on Intellectual Property (IP) protection. Accordingly, the US Chamber having put forth a set of recommendations reportedly urged the US Trade Representive (USTR) to classify India as a ‘Priority Foreign Country’. This nomenclature is usually attributed to the worst offenders of ‘Intellectual Property Rights (IPR)’, which could culminate into trade sanctions.

The move attempts to dissociate IPR from ‘access to medicines’:

Though the methodology and alleged biases of this report were the topics of raging debates, according to USTR, this move of the US Chamber of Commerce is reportedly just against the IP regime in India and ‘not about access to medicines.’

This clarification is indeed bizarre, as most of the issues related to creation of intense political pressure from overseas for stringent IP regime in a country, such as India, revolve around access to patented medicines. The twin issue of IP and ‘access to patented medicines’ can hardly be separated.

Same old contentious example of ‘Glivec Access Program’:

The example of ‘Glivec Access Program’ does not appear to have many takers within the experts either for well-argued reasons.

Even then, to substantiate the point that the IP issues in India are not related to ‘access to patented medicines’, the US Chamber of Commerce states, yet again:

“In the case of Glivec, Novartis provided the leukemia drug to 95 per cent of patient population for free. The annual cost for Glivec generic treatment is approximately three to for times the average annual income in India”.

It is worth noting that the Swiss drug-maker Novartis reportedly gave the same example while defending the patent protections of Glivec before the Supreme Court without success. The apex judiciary ultimately dismissed the case last year.

Post Glivec judgment, the same ‘patient access program’ was debates in television programs too. However, its relevance for enhancing access could not be established in either of these two high profile public deliberations, as there were hardly any takers.

That said, I do not have any inkling, whether the protagonists of this much-touted “Glivec Access Program” would at anytime, in future, be able to establish their claim beyond any reasonable doubt that, ‘95 percent of the total patients population suffering from chronic myeloid leukemia receive Glivec free of cost from Novartis’.

Visible ‘Chink in its Armor’:

Not so long ago, Global CEO of Bayer reportedly proclaimed in public that:

“Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western Patients that can afford it.”

In tandem various other tough uttering, well crafted by the global communication agencies of ‘Big Pharma’, followed on the same IPR related issues, projecting its tough monolithic dimension.

However, after keenly watching a good number of much contentious moves being taken on IP and various other related areas by its lobby groups, both in India and overseas, it appears that all constituents of the ‘Big Pharma’ are not on the same page for all these issues, clearly exposing the ‘Chink in its Armor’, as it were.

Let me now give some examples, spanning across various issues, to vindicate this point:

I. Differences on ‘public disclosure of all Clinical Trial data’:

As discussed in my blog post earlier, The Guardian reported an incident on the above issue in July 2013. The article stated that the global pharmaceutical industry has “mobilized” an army of patient groups to lobby against the plan of European Medicines Agency (EMA) to force pharma companies publishing all Clinical Trial (CT) results in a public database for patients’ interest.

Important global pharma industry associations strongly resisted to this plan. The report indicated that a leaked letter from two large pharma trade associations, the Pharmaceutical Research and Manufacturers of America (PhRMA) of the United States and the European Federation of Pharmaceutical Industries and Associations (EFPIA), had drawn out the above strategy to combat this move of EMA.

The Chink:

However despite this grand strategy, some constituents of Big Pharma, such as, Abbott, GlaxoSmithKline (GSK), Johnson & Johnson decided to disclose the results of all applicable/covered clinical trials, regardless of outcome, in a publicly accessible clinical trials results database.

II. Differences on ‘leaked pharma lobbying plan against South African draft IP Policy’:

February 3, 2014 issue of ‘The Lancet’ states, among other issues, the draft IP policy of South Africa seeks to address patent ever-greening, a contentious strategy in which drug firms tweak formulations to extend the 20-year life of a patent.

The leaked 9 page document of the PR firm, Public Affairs Engagement (PAE), titled, ‘Campaign to Prevent Damage to Innovation from the Proposed Draft National IP Policy in South Africa’, was reportedly prepared for ‘Pharmaceutical Researchers and Manufacturers of America (PhRMA)’ based at Washington DC and the lobby group representing research-based pharmaceutical companies in South Africa – ‘Innovative Pharmaceuticals Association of South Africa (IPASA)’.

The Chink:

As deliberated in my earlier blog post, when the above lobbying plan was leaked out, Swiss drug maker Roche and Denmark’s Novo-Nordisk reportedly resigned from the IPASA. Both the companies said that neither do they support this campaign nor have they given any approval to it and hence they are resigning from IPASA. However, the above report quoting IPASA states, “IPASA maintains that the departure of Roche and Novo-Nordisk did not weaken the association’s position.”

III. Other recent major differences within ‘Big Pharma’ constituents:

The Chink:

A. Merck Sereno:

Indian pharma regime may appear to be not encouraging or protecting innovation to the US Chamber of commerce, but one of the oldest constituents of the ‘Big Pharma’ – Merck Sereno has reportedly articulated quite a different take on this score.

In an interview to ‘The Economic Times’, Stefan Oschmann, member of the executive board and CEO, Merck, Germany made some very important observations on:

Patentability:

“Some of the strategies used in the past were developing 20 products and slightly differentiating them. That doesn’t work anymore. This industry has to do its home work.” He added that it makes little sense to adopt a confrontationist attitude towards sensitive issues.

Access:

Oschmann said, “Companies are rightly or wrongly criticized in spending all their money on 20 percent of the richest people of the world and neglecting the rest of the population. This is changing.”

Pricing:

He would not criticize governments such as India for trying to protect consumers from spiraling health-care costs. “Pricing and tier-pricing are worth looking into”.

Governments across emerging markets have been trying to find a way to the same challenges of increasing access to affordable healthcare. Oschmann feels, “This is legitimate to any government. What matters is rules are transparent, fair and non-discriminatory. Rules shouldn’t be used as a tool for industrial policy to only foster local industry.”

Another Chink:

B. GlaxoSmithKline:

Another icon in the global pharmaceutical industry Sir Andrew Witty, the CEO of GlaxoSmithKline, reportedly commented a few months ago on the following, with a pragmatic approach to the situation:

Pricing:

“I think it is wholly reasonable for a country that is having a tremendous growth with challenges has to think about pricing. I don’t think that it is a ridiculous proposition. Of course it hurts the period you go through that price adjustments, there are alternative ways to achieve and having a good dialogue may create positive ways to do it.”

Patented medicines:

“I am not one of those CEOs who is gonna stand here and say that you have to have a same approach as you have in other country. India is a very unusual country. It starts from different place than a Britain or a France or a USA, therefore we have to think about what is the right way for India to balance its needs.”

IP:

Sir Andrew emphasized, “And the key to that isn’t to get rid of patents; the key to that is to fix the R&D and manufacturing processes. And that’s what we’ve got to realize in the world we are going to be living in the next 30 or 40 years; companies cannot just turn up and have any price they want. Companies will have to come with a competitive and efficient business model, which will bring real innovation to the people.”

Conclusion: 

Culling all these important developments together, while traveling back in recent times, it does appear, whether the issues are on IP, access or even pricing of medicines, seemingly overpowering might (or may just be simple bullying tactics) of US Chamber of commerce is drowning some very important ‘Big Pharma’ constituents’ voices and numbing many others, despite a visible ‘Chink in its Armor’.

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.

A Snap Shot of Indian Pharmaceutical Market in January 2014

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According to the retail audit dated February 2014 of well reputed AIOCD Pharmasofttech AWACS Pvt. Ltd, in January 2014 the Indian Pharmaceutical Market (IPM) registered a turnover of Rs. 6,227 Crore (around US$1 billion) with a growth of 8.5 percent. The growth break-up is as follows:

-       3.5 percent from existing products or volume (Volume growth was 1.6 percent in January 2013)

-       3.4 percent from new launches

-       1.6 percent from price increases

Number of new products (brands) launched in the month:

- 83

Top performers in growth within ‘Top 10 Companies’: 

-       Emcure at 20.9 percent

-       Sun Pharma at 20.1 percent

-       Lupin at 15.4 percent

 Monthly growth of Indian Companies against MNCs:

-       Indian companies at 11.4 percent

-       MNCs at 1.0 percent

Top growing MNCs for the month:

-       Allergan at 35.7 percent

-       MSD at 17.0 percent

-       Merck Serono at 15.0 percent

Top 5 growing therapy areas for the month:

-       Opthalmologicals/Otologicals at 18.0 percent

-       Anti-diabetic at 17.5 percent

-       Dermatologicals at 16.0 percent

-       Gastrointestinal at 10.0 percent

-       Respiratory at 9.8 percent

Top growing brands (branded generics): 

-       Skinlite at 40 percent

-       Telma at 32 percent

-       Glycomet-GP at 31 percent

-       Phensedyl at 25 percent

-       Dexorange at 14 percent

Conclusion:

It appears that the revival of IPM post Drug Price Control Order 2013 has commenced.

“Make Global Pharma Responsible in Homeland for Objectionable Conduct in Clinical Trials Elsewhere”

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In the context of his recent meeting with Commissioner Margaret A. Hamburg of US-FDA, the Drug Controller General of India (DCGI) reportedly expressed his concern to ‘The Economic Times’ on the ‘objectionable conduct’ of global pharma in new drug trials in India, as follows:

“US and other global drug makers who conduct clinical trials at different locations across the globe need to be made responsible in their home country for their objectionable conduct in clinical trials elsewhere.”

He further added:

“While conducting trials, drug makers cannot discriminate on the basis of nationality, because patient safety is top priority for every regulator – US or India”

The above report also mentioned that there is already a law in place in the United States that makes companies accountable in their homeland, if they are found to be indulging in corruption overseas.

‘Uncontrolled clinical trials are causing havoc to human life’:

That is exactly what the Supreme Court of India observed last year in response to a Public Interest Litigation (PIL) filed by the Human Rights group ‘Swasthya Adhikar Manch (SAM)’.

At the same time, revoking the power of the ‘Central Drugs Standard Control Organization (CDSCO)’ under the Drug Controller General of India (DCGI), the apex court directed the Health Secretary of India to be personally responsible for all ‘Clinical Trials (CT)’ of new drugs conducted in the country in order to control the ‘menace’ of poorly regulated trials on a war-footing.

Earlier in May 2012, the Parliamentary Committee on Health and Family Welfare in its report on the CDSCO, also stated as follows:

“There is sufficient evidence on record to conclude that there is collusive nexus between drug manufacturers, some functionaries of CDSCO and some medical experts.”

Inaction on CT related deaths:

According to the Ministry of Health, between 2005 and 2012, around 475 new drugs were approved for CT, out of which only 17 obtained the regulatory approval for market launch. Though 57,303 patients were enrolled for CT, only 39,022 could complete the trials. During CT, 11,972 patients suffered Serious Adverse Events (SAE) and 2,644 died. 506 SAEs out of the total and 80 deaths had clearly established link to CTs. However, only 40 out of 80 trial related deaths had their respective families meagerly compensated.

An independent investigation:

Interestingly, an investigation  in 2011 by ‘The Independent’, a newspaper of global repute, also highlighted the recruitment of hundreds of tribal girls for a drug study without any parental consent.

Stringent regulatory action followed:

Following high voltage indictments, alleging wide spread malpractices, from all corners – the Civil Society, the Supreme Court and the Parliament, the Ministry of Health constituted an experts committee last year chaired by Professor Ranjit Roy Chaudhury. The committee, after due consultation with all stakeholders, submitted its report recommending a robust process for CTs in India. Besides many other, the experts committee also recommended that:

  • CTs can only be conducted at accredited centers.
  • The principal investigator of the trial, as well as the Ethics Committee of the institute, must also be accredited.
  • If a trial volunteer developed medical complications during a CT ‘the sponsor investigator’ will be responsible for providing medical treatment and care.

Further, in October 2013, the Supreme Court reportedly ordered the government to video record clinical trials of new drugs, making it even tougher for pharma MNCs and the CROs to avoid responsibility on informed consent of the participating volunteers, as required by the regulator.

Consequent industry uproar and recent Government response:

Following all these, as the ball game for CTs in India changed significantly, there were uproars from Big Pharma, the CROs and their lobbyists crying foul.

As the caustic comments and the directive of the Supreme Court of India triggered the regulatory changes in CT, the Union Ministry of Health did not have much elbowroom to loosen the rope. Consequently, the pharma industry and the CROs reportedly made some angry comments such as:

“The situation is becoming more and more difficult in India. Several programs have been stalled and we have also moved the trials offshore, to ensure the work on the development does not stop.”

In response to shrill voices against the stringent drug trial regime in India, Mr Keshav Desiraju, Secretary, Union Ministry of Health and Family Welfare, reportedly said recently:

“While it is not our intention to impose unrealistic barriers on industry, it is equally our intention not to take risks, which may compromise the safety of the subjects of clinical trials.”

During the same occasion, the Union Health Minister Ghulam Nabi Azad also remarked:

“The industry has complained that the regulations are too stringent, but there have also been complaints by parliamentarians, NGOs and others that they are too lax, which the Supreme Court had taken note of.”

He further said without any elaboration, “The Indian regulatory regime governing clinical trials needs to balance the interests of all stakeholders.”

Conclusion:

According to the Indian Society for Clinical Research (ISCR), pharma companies conduct around 60 percent of CTs and the rest 40 percent are outsourced to Contract Research Organizations (CROs) in India.

With the Supreme Court laying stringent guidelines and the regulatory crackdown on CTs, the number of new drug trials in India has reportedly come down by 50 percent. According to Frost & Sullivan, the Indian CT industry was worth US$ 450 million in 2010 -11. Currently, it is growing at 12 percent a year and is estimated to exceed the US$1 billion mark in 2016, with perhaps some hiccups in between due to recent tightening of the loose knots in this area.

Some experts reportedly argue that laxity of regulations and cost arbitrage were the key drivers for global players to come to India for CTs. Thus, there should not be any surprise that with the costs of drug trials going north, in tandem with stringent regulations in the country, some business may shift out of the country. As Mr. Desiraju epitomized in his interview succinctly, as quoted above, this shift would result in much increased costs for the respective companies, which his ministry would ‘regret greatly.’

That said, would the recent anguish of the DCGI, when he expressed “Make global pharma also responsible in their respective homelands for objectionable conduct in CTs elsewhere”, be also construed as a clear signal for shaping up, sooner?

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.

A Potential Game Changer For Pharma R&D

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The ghost of ‘Patent Cliff’ has been haunting the ‘Big Pharma’ since quite some time. This situation has been further aggravated by cost containment pressures of various Governments both in the developed and the emerging markets together with contentious issues on Intellectual Property Rights (IPR).

The ‘dream run’ that the innovator companies enjoyed in launching patented products so frequently and making many those blockbuster drugs of billions of dollars, is no longer a reality.

According to the findings of ‘Pharmaceutical R&D returns performance’ by Deloitte and Thomson Reuters of December 2012, the R&D Internal Rate of Return (IRR) of leading pharmaceutical companies had fallen to 7.2 percent in 2012 from 7.7 percent in 2011.

Many would, therefore, tend to believe that the paradigm is changing significantly. The new paradigm in the brand new millennium throws some obnoxious challenges, including some related to IPR, triggering a process of churning in the global pharma industry. Some astute CEOs of ‘Big Pharma’, having a deep introspection, are bracing for restructuring, not just in the business processes, but also in the process of organizational behavior, mindset, ethics and values. Unfortunately, there are many who seem to believe that this giant wheel of change can be put on the reverse gear again with might.

A new PPP initiative in pharma research:

This trying situation calls for collaborative initiatives to achieve both knowledge and cost synergies for a quantum leap in harnessing R&D output.

One such big laudable initiative has come to the fore recently in this arena. Having experienced something like the ‘law of diminishing return’ in pursuit of high resource intensive R&D projects aimed at critical disease areas such as Alzheimer’s, 10 big global pharma majors reportedly decided in February 2014 to team up with the National Institutes of Health (NIH) of the United States in a ‘game changing’ initiative to identify disease-related molecules and biological processes that could lead to future medicines.

This Public Private Partnership (PPP) for a five-year period has been named as “Accelerating Medicines Partnership (AMP)”. According to the report, this US federal government-backed initiative would hasten the discovery of new drugs in cost effective manner focusing first on Alzheimer’s disease, Type 2 diabetes, and two autoimmune disorders: rheumatoid arthritis and lupus. The group considered these four disease areas among the largest public-health threats, although the span of the project would gradually expand to other diseases depending on the initial outcome of this project.

Not the first of its kind:

AMP is not the first PPP initiative of its kind. The Biomarkers Consortium was also another initiative, not quite the same though, of a major public-private biomedical research partnership managed by the Foundation for the NIH with broad participation from a variety of stakeholders, including government, industry, academia, patient advocacy groups and other not-for-profit private sector organizations.

Open innovation strategy of GlaxoSmithKline (GSK) to discover innovative drugs for malaria is yet another example, where GSK collaborated with the European Bioinformatics Institute and U.S. National Library of Medicine to make details of the molecule available to the researchers free of cost with an initial investment of US$ 8 million to set up the research facility in Spain, involving around 60 scientists from across the world to work in this facility. 

Nearer home, ‘Open Source Drug Discovery (OSDD)’ project of the Council of Scientific and Industrial Research (CSIR) is a now a global platform to address the neglected tropical diseases like, tuberculosis, malaria, leishmaniasis by the best research brains of the world working together for a common cause.

Challenges in going solo:

In this context, it is worth mentioning that the CEO of Sanofi, Chris Viehbacher reportedly said in an interview on April 15, 2013 that his company “Won’t push hard to find an Alzheimer’s treatment because the science isn’t advanced enough to justify the costs to develop a drug. Therefore, Sanofi definitely won’t commit major resources seeking to discover an Alzheimer’s therapy.” He further stated, “I think we have to do a lot more basic science work to understand what’s going on. We really, at best, partially understand the cause of the disease. It’s hard to come up with meaningful targets.”

The above report also mentioned that the first Alzheimer’s drugs, should they prove successful, would lead to a market worth US$ 20 billion as estimated in 2012.

Long desired OSDD model:

The new AMP R&D model in the United States seems to have derived its impetus from the “open-source” wave that has swept the software industry. Keeping that spirit unchanged, in this particular ‘open source’ model too, the participants would share all scientific findings with the public and anyone would be able to use these results freely for their own research initiatives.

The collaborators of this PPP project are expected to gain a better understanding of how each disease type works, and thereafter could make use of that collaborative knowledge to discover appropriate new molecules for the target disease areas.

AMP is also expected to arrive at methods to measure a disease progression and its response to treatment much more precisely. This will enable the pharma participants getting more targets right and early, thereby reducing the high cost of failures. Just to cite an example, there have been reportedly 101 failures since 1998 in late-stage clinical trials by Pfizer, J&J and Elan Corp.

Commendable initiative in the uncharted frontier:

The ‘open source’ AMP initiative of ‘Big Pharma’ in the uncharted frontier is indeed very unusual, as the innovative drug companies are believed to be not just quite secretive about the science that they are engaged in, but also near obsessive in pursuing and clinging-on to the Intellectual Property Rights (IPR) through patents for each innovative steps related to potential new drugs.

It is worth noting that like any OSDD model, this PPP agreement also denies the participating players from using any discovery for their own drug research up until the project makes all data public on that discovery.

However, as soon as the project results will be made public, fierce competition is expected all around to develop money-spinning winning drugs.

Participating companies:

Ten pharma companies participating in AMP are reportedly, AbbVie, Biogen Idec, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Eli Lilly, Merck & Co., Pfizer, Sanofi and Takeda. It is good to find within the participants some staunch business rivals. According to a report, a number of foundations, including the American Diabetes Association and the Alzheimer’s Association have also agreed to get involved in the project.

Some key non-participants:

For various different reasons some key pharma majors, such as, Amgen, Roche and AstraZeneca have decided not to participate in AMP.

AMP project and cost:

AMP reportedly has reportedly articulated its intent to: “Map molecular paths that each disease follows and to identify key points that could be targets for treatment. In Type 2 diabetes, for instance, researchers hope to catalog the genetic changes that raise or lower a person’s risk for developing the disease. It also will seek novel methods to measure each disease’s course while assessing if a potential drug is working. Being able to measure a disease’s progress in that way, could speed drug development by raising a company’s confidence that an experimental drug is working, or let it more quickly end a project if a drug isn’t working.”

The participating companies and the NIH have jointly agreed that the AMP would put together a research system on cost sharing basis by pooling the brightest minds who are experts on each disease, along with the best drug discovery laboratories, relevant data and samples from clinical trials to decipher the diseases in ways, which none of these pharma players has been able to achieve just yet on its own.

To achieve all these, the total cost has been estimated at roughly just US$ 230 million, as compared to US$135 billion that the global drug industry claims to spend in a year on R&D.

This should also be seen in context of a study of December 2012 carried out by the Office of Health Economics (OHE), UK with a grant from AstraZeneca, which estimated that the cost of developing new medicine has risen by ten times from US$100 million in the 1970s to as high as US$ 1.9 billion in 2011.

As a head honcho of a global pharma biggie had put it earlier, a large part of these R&D expenses are the costs of failure, as stated above.

Criticism:

As usual, criticism followed even for this path-breaking project. Critics have already started questioning the rationale of the choice of the above four disease areas, with an exception perhaps for Alzheimer’s and wondered whether the participating players are making use of the federal fund to push hard the envelope of their respective commercial intents.

Another new collaborative approach: 

In another recently announced collaborative initiative, though not of the same kind, where Merck & Co has reportedly entered three separate collaboration agreements to evaluate an immunotherapy cancer treatment that is part of a promising new class of experimental drugs that unleash the body’s immune system to target cancer cells.

Conclusion:

There could still be some hiccups in the process of effective implementation of the AMP project. Hope, all these, if any, will be amicably sorted out by the participants of stature for the benefits of all.

Be that as it may, ‘open source’ model of drug discovery, as believed by many, would be most appropriate in the current scenario to improve not only profit, but also to promote more innovative approaches in the drug discovery process.

On May 12, 2011, in an International Seminar held in New Delhi, the former President of India Dr. A.P.J. Abdul Kalam highlighted the need for the scientists, researchers and academics to get effectively engaged in ‘open source’ philosophy by pooling talent, patents, knowledge and resources for specific R&D initiatives from across the world for newer and innovative drugs.

According to available reports, one of the key advantages of the ‘open source’ model would be substantial reduction in the high cost of failures of R&D projects, which coupled with significant saving in time would immensely reduce ‘mind-to-market’ span of innovative drugs in various disease areas, making these medicines affordable to many more patients.

Thus, PPP initiatives in pharmaceutical R&D, such as AMP, are expected to have immense potential to create a win-win situation for all stakeholders, harvesting substantial benefits both for the pharmaceutical innovators and the patients, across the world.

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.

 

 

 

 

‘Herceptin Biosimilars’ Seriously Questioned

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The news struck as an anticlimax, close on the heels of high decibel product launch of ‘Herceptin Biosimilars’ in India, being hyped as the first in the world, bringing much needed relief to many diagnosed breast cancer patients for their economical pricing.

At the same time, this legal challenge has now come as an acid test for the regulator to prove that ‘Caesar’s wife must be above suspicion’ for any new drug approval and especially if it is a complex biosimilar used for the treatment of patients suffering from dreaded diseases, such as, breast cancer.

It’s not patent this time:

Interestingly, this is not a patent infringement case, as Roche has reportedly given-up its patent on Trastuzumab (Herceptin) in India last year.

Alleged violations: 

The above media report highlights, in Delhi High Court Roche has sued Biocon of India and its US based generic partner – Mylan along with the Drug Controller General of India (DCGI) related to launch of ‘Herceptin Biosimilar’ versions in India.

The allegation against Biocon and Mylan is that their recently launched drugs are being misrepresented as ‘biosimilar Trastuzumab’ or ‘biosimilar version of Herceptin’ without following the due process in accordance with the ‘Guidelines on Similar Biologics‘, necessary for getting approvals of such drugs in India.

‘Caesar’s wife’ under suspicion too:

The DCGI has also been sued by Roche for giving permission for launch of this product allegedly not in conformance with the above biosimilar guidelines, which were put in place effective August 15, 2012.

Roche reportedly argued that the above guidelines on similar biologics laid down a detailed and structured process for comparison of biosimilar with the original product and all the applications for manufacturing and marketing authorization of biosimilars are necessarily required to follow that prescribed pathway before obtaining marketing approval from the DCGI. Roche has also stated that there is no public record available, in the clinical trial registry India (CTRI) or elsewhere to show that these two players actually conducted phase-I or II clinical trials for the drug.

According to report Roche claims that DCGI has approved the “protocol and design study for testing” of Biocon related to the proposed drug just before the above regulatory guidelines were made effective, predominantly for patients’ health and safety reasons.

Interim restrain of the Delhi High Court:

In response to Roche’s appeal, the Delhi High Court has reportedly restrained Mylan and Biocon from “relying upon” or “referring to Herceptin” or any data relating to it for selling or promoting their respective brands Canmab (Biocon) and Hertaz (Mylan) till the next hearing.

The relevance of ‘Guidelines on Similar Biologics’:

The ‘Guidelines on Similar Biologics’ clearly articulated:

“Since there are several biosimilar drugs under development in India, it is of critical importance to publish a clear regulatory pathway outlining the requirements to ensure comparable safety, efficacy and quality of a similar biologic to an authorized reference biologic.”

Thus for patients’ health and safety interest the above regulatory pathway must be followed, the way these have been prescribed without any scope of cutting corners. This is even more important when so important pharmacovigilance system is almost non-functional in India.

Attempts to dilute the above guidelines from some quarters:

It was earlier reported that strong representations were made to the drug regulator in writing by powerful domestic players in this area urging to dilute the above ‘Guidelines’, otherwise it will be difficult for them to compete with the pharma MNCs.

This argument is ridiculous by any standard and smacks of putting commercial considerations above patients’ health interest.

The key issue:

As I see it, four quick questions that float at the top of my mind are as follows:

  • If the ‘Guidelines on Similar Biologics’ have not been followed either by the applicants or by the DCGI, how would one establish beyond an iota of doubt that these drugs are biosimilar to Trastuzumab, if not ‘Biosimilar to Herceptin’?
  • If these drugs are not proven biosimilar to Trastuzumab, as specified in the ‘Guidelines on Similar Biologics’, how can one use Trastuzumab data for their marketing approvals and the DCGI granting the same?
  • If these drugs were not biosimilars to Trastuzumab, would these be as effective, reliable and safe as Herceptin in the treatment of breast cancer?
  • Further, how are references related to Herceptin being used to promote these drugs both pre and post market launch?

Conclusion:

I guess, predominantly commercial considerations prompted Roche to sue Biocon, Mylan and also the DCGI on ‘Trastuzumab biosimilars’, launched recently in India.

Be that as it may, for the interest of so many diagnosed breast cancer patients in the country, there is crying need for the facts to come out in the open, once and for all. Are these drugs truly Trastuzumab biosimilars with comparable safety, efficacy, quality and reliability of Herceptin?

If the answer comes as yes, there would be a huge sigh of relief from all corners inviting millions of kudos to Biocon and Mylan.

However, if by any chance, the allegations are proved right, I do not have an iota of doubt that the honorable Delhi High Court would ferret out the truth, unmask the perpetrators and give them exemplary punishments for playing with patients’ lives.

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.

“India is The Biggest Battlefield for Intellectual Property Rights”

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The US Senator Orrin Hatch reportedly made the above comment while introducing the 2014 report on ‘International Intellectual Property (IP) Index’, prepared by an Israel based consultancy firm – Pugatch Consilium for the Global Intellectual Property Centre (GIPC) of the US Chamber of Commerce. In this forum, the Senator further alleged, “India misuses its own IP system to boost its domestic industries”.

Similar comment on South African IP Policy:

It is interesting to note that this ‘Battle Cry’ on IPR follows almost similar belligerent utterance of a Washington DC-based lobbying firm named ‘Public Affairs Engagement (PAE)’, reportedly headed by a former US ambassador Mr. James Glassman.

PAE, in a recent South African IP policy related context, as deliberated in my earlier blog titled, “Big Pharma’s Satanic Plot is Genocide”: South Africa Roars”, had stated in January 2014, “Without a vigorous campaign, opponents of strong IP will prevail, not just in South Africa, but eventually in much of the rest of the developing world.”

The GIPC report:

That said, in the GIPC report, India featured at the bottom of 25 countries on Intellectual Property (IP) protection with a score of 6.95 out of 30. Thailand, Vietnam, Indonesia and Argentina also scored low in overall ranking on protection for patents, copyright and trademarks. The United States ranked at the top, followed closely by Britain and France.

Interestingly, no country could register a “perfect” score in the survey, which used 30 factors ranging from levels of counterfeiting and piracy to patents and legal protections for all kinds of products and services ranging from pharmaceuticals to software to Hollywood films.

Among other BRIC countries, Russia with a score of 13.28, China with 11.62 and Brazil with 10.83, ranked 13th, 17th and 19th, respectively, within the selected 25 countries.

Key reasons, especially related to pharmaceuticals, as cited for the poor rating of India are as follows:

  • “Patentability requirements in violations of TRIPS”
  • “Regulatory Data Protection (RDP) not available”
  • “Patent term restoration not available”
  • “Use of Compulsory Licensing (CL) for commercial non-emergency situation”

The ground reality in India:

The answers to all these questions are much discussed and now an integral part of Indian Patents Act, as enacted by the Parliament of the country after prolong deliberations by the astute lawmakers keeping patients’ interest at the center.

As I had indicated earlier, there does not seem to be any possibility of these laws getting amended now or in foreseeable future, despite the above ‘Battle Cry’, Special 301 Watch List of the US, and continuous poor rating by the US Chamber of Commerce. This is mainly because of humanitarian sentiments attached to this issue, which are robust and sensitive enough to ignore even politically in India. Let me try to address all these 4 points briefly as follows:

“Patentability requirements in violations of TRIPS”:

Patentability is related mainly to Section 3(d) of the Patents Act. India has time and again reiterated that this provision is TRIPS compliant. If there are still strong disagreements in the developed world, the Dispute Settlement Body of the ‘World Trade Organization (WTO)’can be approached for a resolution, as the WTO has clearly articulated as follows:

“WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgments. A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligations.”

Thus, it is quite challenging to fathom, why those countries, instead of creating so much of hullabaloo, are not following the above approach in the WTO for the so called ‘patentability’ issue in India?

“Regulatory Data Protection (RDP) not available”:

In this context, Commerce and Industry Minister Anand Sharma had reportedly asserted earlier at a meeting of consultative committee of the Parliament as follows:

“India does not provide data exclusivity for pharmaceuticals and agro-chemicals which is in the paramount interest of our generic pharmaceutical industry as grant of data exclusivity would have considerable impact in delaying the entry into the market of cheaper generic drugs.”

Hence, the question of having RDP in India does not possibly arise, at least, in near to mid term, which would require moving an amendment in the relevant Act through the Parliament.

“Patent term restoration not available”:

Again, this provision does not exist in the Indian Patents Act. Hence, in this case too, a change does not seem likely, at least, in near to mid term, by bringing an amendment through the Parliament.

“Use of Compulsory Licensing (CL) for commercial non-emergency situation”:

Besides situations like, national emergency or extreme urgency, the current CL provisions, as per the Indian Patents Act, specifically state that at any time after the expiration of three years from the grant of patent, any interested person may make an application to the Patent Controller for grant of patent on the following grounds:

  • Whether the reasonable requirements of the public with respect to the patented invention have been satisfied?
  • Whether the patented invention is available to the public at a reasonable affordable price?
  • Whether the patented invention is worked in the territory of India?

It is worth mentioning, the Government has no authority to direct any individual for not applying for any CL under the above provision of the statute, hence law will take its own course in this area too, unless an amendment through Parliament is made in the Patents Act, which seems very unlikely again in the near to medium term.

Eyebrows raised on methodology and motive behind the ‘IP Index’ report:

Media report indicates that IP experts in India have questioned the methodology and even the motive behind GIPC’s ‘International Intellectual Property (IP) Index’ where India has been ranked the lowest among 25 countries.

The same article quotes a well-known IP expert saying, “Underlying this report is a major paradox that protecting weak patents makes the IP regime a strong one. Countries such as India that have stood up for genuine innovation and refused to protect trivial inventions have been accused of having ‘weak’ IP regimes, while it should have been the other way round.”

The article also mentions that Pugatch Consilium, which provides advisory services to top global drug makers and their trade associations, drafted the report for the US Chamber of Commerce.

Conclusion:

Keeping aside the strong allegation that the GIPC report has some ulterior motive behind, the high profile PR blitzkrieg of the pharma multinational trade associations, quite in tandem with South African outburst on the same IP issue, as I wrote in my blog post “Big Pharma’s Satanic Plot is Genocide”: South Africa Roars”, is indeed noteworthy.

However, even if one goes purely by the merits of the report with GIPC’s reasoning on ‘Why is India losing ground’, I reckon, despite so much of cost-intensive efforts and pressures by the global pharma lobbying groups, their expectation for a change in the pharma patents regime in India, any time soon, is probably much more than just a wishful thinking.

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.