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Pharma To Leverage The Art of Turning Challenges Into Opportunities, Now

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Since, the dawn of the year 2020, the human population living in different countries, across the world are facing ‘lockdowns in different forms. Although essential, it severely restricts normal daily essential and other important activities of all. A large number of populations in India, is also experiencing the same – for nearly 4 months, almost at a trot, as on date.

The fear of getting infected by COVID-19, fueled by uncertainty about a comprehensive way to surely avert infection and apprehension about what happens if someone gets infected, have been haunting many for several months. Moreover, the possible impact of several related essential measures, such as, social distancing and wearing a mask mostly while being outdoors, on both life and livelihood, is profound. It has already started causing an unprecedented – both physical and mental stress on many individuals, besides the economy of the nation.

Living amid ‘lockdown’ conditions is not just an unpleasant experience for all, it’s almost a ‘prison like’, experience for a vast number of people – particularly, both young and old with comorbidly. “It’s very similar to being trapped in a bunker with no access outside,” as expressed by a person with similar issues, which, may be construed as a universal feeling of common individuals. Interestingly, this was quoted in an article -  ‘What patients need right now’, published in the Reuters Events Pharmaon July 07, 2020. The article also highlighted that many other fellow sufferers, especially non-Covid-19 patients, are enduring pandemic enforced isolation without much hope. “They are staying in limbo until help is available and adapting to the worsening of their health conditions,” the article added.

Further, as captured in the McKinsey article – ‘COVID-19 and commercial pharma: Navigating an uneven recovery,’ published on April 21, 2020 – not just patients, health care professionals including doctors, are also facing unprecedented challenges. Especially, because of the need to address fundamental changes in the treatment of patients with conditions other than COVID-19. This is happening across medical specialties and therapeutic areas, besides of course in advising and treating patients with suspected and confirmed cases of COVID-19.

In some instances, some doctors do also worry about their financial security, as practices and health systems face unprecedented financial issues, the above article emphasized. However, at the same time, many of them are now rapidly adjusting how they deliver care, such as through increased use of telemedicine in different forms and ways, the survey found. Which is why, the support they need from pharma companies is also changing.

Taking cognizance of these critical developments, pharma players would require rewriting their playbook for business operations and for its urgent implementation. This article will focus on this important area of pharma business, by leveraging the art of turning a problem or a challenge into an opportunity.

Leveraging the art of turning a challenge into an opportunity:

Turning a problem or challenge into an opportunity in managing business operations, isn’t a cup of tea of all managers, across domains. More so, when it’s caused by an unprecedented disruptive change, such as the Covid-19 pandemic.

The first and the foremost prerequisite from a manager is a mindset to make it happen – driven by uncluttered thinking, with a clear focus on what needs to be achieved, how and when – step by step. Each element of a change has to be analyzed in-depth – supported by credible data, with possible barriers envisaged on the way. In tandem, weighing the chances of success in these initiatives based on data – and not gut feeling, within a predetermined timeframe will be critical. The net outcome of this process will help pharma players acquire a differentiated competitive edge for excellence, amid today’s all-pervasive quandary.

Under this backdrop, leveraging the art of turning a problem or challenge into an opportunity – in an organized manner, for a successful outcome of the present and future pharma business, appears to be a crying need.

The points to ponder:

Effectively moving in this direction will call for – at its very onset, a careful and unbiased data-based assessment of several critical areas, which will include:

  • Whether customer engagement platforms, medium, processes and also the core content of communication of pre Covid-19 days remain equally relevant today, and will remain so in the foreseeable future, for productive business outcomes.
  • Mapping changes with the extent for each, in all touchpoints of disease treatment processes is important – involving both patients and doctors, and simultaneously capturing their new preferences in those areas.
  • Arriving at what strategic and tactical changes the new normal calls for, to effectively engage with especially, non-Covid patient treating doctors and non-Covid infected patients, for other disease areas.
  • How doctors are delivering care, particularly to these patients today?

Accordingly, the pathway for required changes has to be charted out in detail, specifying the end point of each, on a time-bound and ongoing basis. The good news is, several pharma players have already taken several praiseworthy initiatives to combat this crisis.

What pharma companies have done so far:

So far, many pharma companies – both global and local, have taken some commendable steps to address the immediate fallouts of the crisis. These include,

  • Repurposing old medicines – starting from hydroxychloroquine, remdesivir to dexamethasoneand probably beyond. All these drugs are currently being used for the treatment of Covide-19, although conclusive scientific evidences are still awaited – for most of such repurposed drugs.
  • Covid-19 vaccine development started almost immediately, including the homegrown ones.

As the above McKinsey article – ‘COVID-19 and commercial pharma: Navigating an uneven recovery,’ also reconfirms, now most pharma companies are largely focusing on ‘the immediate crisis, including by facilitating access to medicine; supporting HCP, institution, and patient needs in new ways; safeguarding employees; and enabling employees to operate in a new environment.’

The areas where pharma needs to focus more amid immediate crisis:

Another, responsibility of pharma to help tide over the immediate crisis, is to ensure that critical drugs, such as remdesivir, do not go in short supply. And also, avoiding unnecessary hype on a COVID-19 vaccine, which a global CEO termed as a grave disservice‘ to the public.

Nearer home, it also happened – not by any pharma company, but by the country’s premier, state-run medical research organization – the Indian Council of Medical Research (ICMR). The head of the ICMR has announced that India is planning to launch the Covid-19 vaccine by August 15, 2020. This was later retracted under heavy adverse criticism.

Future focus areas need to be in sync with the changing customer behavior:  

While converting several challenges into opportunities in sync with the future requirements of their business operations, drug companies should try to derive the first mover advantages. For this purpose, creative use of almost real-time data will be vital. In this endeavor, I reiterate, one of the top priorities will be to ensure that all touchpoints of the consumer engagement process take into account the changing customer behavior, as captured by data.

To have a productive value delivery system in the new normal, cerebral use of modern technology-based tools and platforms could provide a sharp cutting edge. A similar process may be adopted – even a stage earlier – during the differential value creation process of the business. Nevertheless, the name of the game for the future, would still remain delighting the customers at all the touch points, especially while navigating through strong headwinds.

Another major impact area of pharma business:

The onslaught of Covid-19 pandemic has also resulted in some significant behavioral changes among many health care consumers. These spans across several areas, as I wrote earlier. For example, a number of surveys have revealed that fewer number of non-Covid-19 patients are now visiting doctors’ clinics.

The study quoted by the above McKinsey article highlights some important points in this regard, such as:

  • Among surveyed HCPs, 82 percent report declines in patient volumes, with more than half describing the declines as “significant”.
  • 40 percent of the surveyed patients reported having a doctor cancel an appointment, while an additional 30 percent or so canceled the appointments themselves.
  • Half of surveyed physicians worry that their patients will not be able to receive timely care for new or existing conditions, particularly those that are not COVID-19 related.
  • The overall reduction in volume is widespread, but variation exists. For example, the number of oncology-related visits have declined far less than those related to cardiology or dermatology, perhaps reflecting patient or physician perceptions of urgency.
  • Such data represent a snapshot of a time still early in the trajectory of this crisis, but the HCPs surveyed expect the trends to continue—and to accelerate, potentially.

Another challenge is surfacing, the talent gap to squarely deal with the crisis.

The problem of talent gap, an opportunity? 

While preparing a company to succeed amid new challenges of the new normal, pharma leadership will notice some critical talent gaps in important areas of business. This is indeed a problem or a challenge. But can this also be converted into a new opportunity? … I guess, this is an opportunity of reskilling the company to meet with the future challenges, to move ahead at a faster pace.

In pursuit of this goal, top pharma decision makers may wish to evaluate a well-balanced mix of two approaches:

  • Reskilling competent existing employees for the new world.
  • Hiring new and ready – suitable talents, for immediate results.

Conclusion:

Reuters reported last Friday, with over 1 million Covid-19 cases, ‘India joins U.S., Brazil in the grim Coronavirus club.’ As on July 19, 2020 morning, the recorded Coronavirus cases in the country reached 10,77,874 with 26,828 deaths. According to the Indian Medical Association (IMA), the spike in the number of Covid-19 cases in India has resulted in the community spread of the Coronavirus disease. It further added: “This is now an exponential growth. Every day the number of cases is increasing by more than around 30,000. This is really a bad situation for the country.” The pace of climb continues going north.

Meanwhile, the Prime Minister of India has also urged all concerned to convert Covid-19 related challenges into opportunities. He said, it’s time to initiate reforms in several areas of governance by all the Indian State Governments.

Call it, the Prime Minister’s advice, or a basic management tool – most appropriate to leverage at this hour, the concept is worth considering by pharma players, as well, instead of getting overwhelmed by the crisis. Thus, in my view, it’s about time for pharma companies to identify critical Covid-19 related challenges, both immediate and also of the future – and convert those into opportunities – powered by technology-based cerebral inputs, in the new world order.
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

 

A Link To Ponder: Pharma Digitalization – Cyber Threats – Cyber Immunity

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Digitalization in the pharmaceutical industry – slowly but steadily, across its various domains, from drug discovery, clinical development, supply chain, sales and marketing to engage with various stakeholders, is a reality today. Consequently, the concept of data as a business asset, is fast taking the center stage, being the nerve center of the business. It encompasses, conceiving data requirement, generation of a massive pool of credible data accordingly, their analysis and finally – putting a robust data security system in place, against any kind of theft or misuse.

While digitalization of pharma business, helps transform the company to an all-time ready and an agile customer-centric business entity, with one ear always listening to customers to delight them with its deliverables. Conversely, the other ear is on its employees with a similar objective. This is a difficult task and mostly involves disruption of status-quo within the organization, but often produces game changing outcomes for the business, as is known to many.

Which is why, one sees a good number of people around, offering expert digital services for the pharma industry – along with a hope of a never before improvement in the future organizational performance. So far so good, but this transformation process also invites a huge technology-related threat to business – ‘Cyberthreat.’ In this article, I shall focus on the critical need of taking guard against this threat, as is often advised by all well-qualified domain experts. This risk is expected to increase further, as the technology keeps advancing.

Although, I had deliberated on Cybersecurity in my article, ‘Exigency of Cybersecurity in Digitalized Pharma,’ in a different context, before delving into the core point of today’s discussion, let us together try to recapitulate what does ‘Cyberthreat’ mean to us, in the real world.

Cyber-threat in the digitalized business:    

Let me paraphrase, especially in context of the pharma industry, what the Cybersecurity and Infrastructure Security Agency (CISA) of the Government of the United States, has stated. It articulates, ‘Cybersecurity’ or ‘Cyber threats’ to a control system, refer to the attempts of unauthorized access to a control system device and/or network using a data communications pathway.

This access can be directed from within an organization by trusted users or from remote locations by unknown persons using the Internet. Threats to control systems can come from numerous sources, including disgruntled employees, and malicious intruders. To protect against these threats, it is necessary to create a secure cyber-barrier around the Industrial Control System (ICS).

Many sources indicate that the threat to cyber security in business, is often triggered to gain access to a company’s digital system to damage or steal data, or even to rattle its digital infrastructure for accomplishing a specific purpose.

Rapid digitalization in pharma may attract more cyber criminals:

According to a senior official of Kaspersky - a global cyber security company: “As rapid digitalization penetrates the healthcare sector, cyber criminals are seeing more opportunities to attack this lucrative and critical industry, which is honestly not equipped enough to face this virtual danger.”

The company further emphasized, with systems are now interconnected and mobile devices extensively used, both for remote access and for data sharing, digitalization in pharma increasingly exposes the organizations to both generic and targeted attacks. Thus, ‘creating Cyber immunity’ to ensure a powerful safeguard against such threats, becomes a top priority area in the digital transformation process of the drug industry.

Interestingly, way back in 2012, another report had also cautioned: ‘Cybercrime costs economy billions annually, with pharmaceutical and biotech companies among the hardest hit.’

Evidences of Cyber-attacks on pharma across the world:

There are numerous evidences of Cyber-attacks on the pharma players, globally. Such as, in June 2017, The Washington Post reported, US-based global pharma major, was among dozens of businesses affected by a sprawling cyberattack, with victims across the globe facing demands to hand over a ransom or have their computer networks remain locked and inaccessible.

Another report of December 13, 2017 wrote, by the third quarter of the year, ‘Merck had a better idea of the financial tab from the attack. While it generally had a very solid quarter, the results were dampened by the impact of the attack. There were $300 million in lost sales and costs.’

The Deloitte paper, titled ‘Cyber & Insider Risk at a Glance: The Pharmaceutical Industry’, also reiterated, the evidence abounds that pharmaceutical companies are the target of sophisticated Internet criminals. Serious cyberattacks are taking place even in the most advanced countries, including the US, Europe and Japan.

In the US, besides Merck, hacking has taken place against other major pharma and medical device makers, such as, ‘Boston Scientific, Abbott Laboratories, and Wyeth, the drug maker acquired by Pfizer Inc. The same group successfully hacked the Food & Drug Administration’s computer center in Maryland, exposing sensitive data (including formulas and trial data) for virtually all drugs sold in the US,’ the paper revealed.

The real impact of the attack often doesn’t come out:

Outside world often doesn’t get to know about the comprehensive impact of numerous cyber-attacks for various reasons. Some of which may include, it’s possible aftermath on both the corporate image and also the brands, besides share prices. At the same time, the situation may prompt many to question the company’s capability to protect its business in the digitalized world.

The key reasons:

As the 2018 Data Security Incidence Report highlights, healthcare-led all industries accounted for around about 25 percent of more than 750 reported incidents, in volume. As identified by Kaspersky from various cyber-attack techniques and behavior of cyber-criminals, on the digital infrastructure of pharma players, let me paraphrase below the three key motivators, besides a few others:

  • Getting Intellectual Property (IP) related strategic details, including R&D, unpublished clinical trial results and formulation development processes.
  • Detailed business plans for pre-identified products.
  • Or, may even be for ransom.

Where does India stand?

According to reports, India ranks 6th for highest cyber-attacks on pharmaceutical companies. Nearly 45 per cent machines in the Indian pharmaceutical organizations more than four in 10 devices were detected with malicious attempts. Ahead of India features - Pakistan (54 per cent), Egypt (53 per cent), Mexico (47 per cent), Indonesia (46 per cent) and Spain (45 per cent).

Such attacks are taking place even in India, as cyber-criminals “are slowly realizing that pharmaceutical companies house a treasure trove of highly valuable data such as the latest drugs and vaccines, the newest researches, as well as medical secrets,” the report says.

Likewise, another article, published in Health Issues India, on September 17, 2019, made some interesting points. The article is titled, ‘Cyberattacks: A crisis in Indian pharma?’ It flagged in the following three areas, in this regard:

  • Numerous cracks exist in the cyber-security armor of Indian pharmaceutical companies.
  • Just five to ten percent possess security systems strong enough to protect information from hackers.
  • And many do learn about a breach for several months.

Quoting a top expert, the paper reemphasized that generally in the Indian pharma companies “current systems don’t have security control and visibility in place to immediately detect the attack and respond on a real-time basis.” Thus, ‘it is unsurprising that Indian pharma has been so hard hit by cybercrime,’ the article further commented.

Conclusion:

Echoing many others, Booz Allen also advised in its article – ‘Understand the risks, and stay ahead of the game.’ This is a critical requirement in the digital age. Although, most pharma companies agree on the possibility of huge business losses from a cyber-attack, the industry continues to lag behind other industries when it comes to cyber-security implementation, the paper reiterated.

On the other hand, just strengthening a company’s IT systems, alongside an installation of powerful anti-virus software may still not be enough. Nor will it be adequate to working closely with the vendors who help protect cyber-security of the digital infrastructure of various companies. Even a robust system of forensic audit and analysis and reevaluating cyber-security protocols on an ongoing basis, may not be able to prevent cyber-attacks.

This is primarily because, a company is run, managed, looked after and cared by its employees. Although, it always remains the endeavor of any company to hire good, trustworthy and high performing employees, it does not always happen that way. It is also equally possible that some of them, at some time, for some reasons, may misuse the digital network for others or personal gain.

Thus, besides putting in place all other safeguards, as stated above, to attain desirable ‘Cyber-Immunity’, it is crucial for the organization to ensure buy-in of each employees a vital concept. This is – protecting cyber-security is everybody’s responsibility in a digital business framework, both individually and collectively. The process should start from the CEO and percolate down to the lowest rung in the ladder of hierarchy.

Hence, the reality is – ongoing digital transformation process of the pharma business would open the door of cyber-threats – often leading to crippling cyber-attacks. Thus, developing a comprehensive and strong cyber-immunity framework becomes essential for the organization. From this perspective, right from the start of this process – and not later on, drug companies need to ponder over the critical link between digitalization and cyber threats to provide adequate cyber immunity to its digital systems, for game changing outcomes.

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.

 

Would ‘Complex Generics’ Attract More ‘Authorized Generics’?

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Despite increasing numbers of alleged scams involving generic drugs, both in the United States and also in India, even involving many large generic drug manufacturers, the traditional generic drug market, keeps growing globally. Although, the current growth is in mid-single digit, the market can’t be ignored, either.

That apart, enormous pricing pressure, squeezing bottom line and cutthroat competition, are prompting many companies, including Big Pharma, to craft different strategies to excel in this market. One such involves a shift in business focus from relatively low priced traditional generic drugs to comparatively higher priced complex or specialty generic medicines with a few competitors.

In this emerging situation, a lurking apprehension does surface for many. If the margin is good and the prices of these complex or specialty generics, are much higher than traditional ones, won’t it prompt more ‘Authorized Generics’ coming into the market? Won’t that jeopardize the interest of other generic drug makers? In this article, I shall explore this area, along with its possible consequences. Before doing that, it will be worthwhile to give an overview of the generic market, before recapitulating what are ‘Authorized’ and ‘Complex’ generics.

How lucrative is the generic drugs market now?

According to the latest report by IMARC Group, the global generic drug market size reached US$ 340 Billion in 2018 and is expected to be at US$ 475 Billion by 2024, growing at a CAGR of 5.3 percent during 2019-2024 period.

The key market growth drivers remain, increasing number of product patent expiration, higher prevalence of chronic diseases and different government initiatives to encourage faster generic launch, including the United States. The pace of increase is faster in the emerging markets, like India. However, unlike India, non-branded generic drugs, rather than branded generics, are dominating most the markets.

Although, Central Nervous System (CNS), cardiovascular, dermatology, oncology and respiratory are among the dominant segments in the market, CNS and Cardiovascular segments are the two largest ones in this market. North America holds the largest market share, with more than 88 percent of total prescriptions being written for generic drugs in the U.S., as the report highlights. Despite this scenario, to mitigate huge pricing pressure, cutthroat competition and low margin, many drug players are preparing to move into specialty or complex generics.

The size and growth of complex or specialty generics market: 

The April 2019 report by Research and Markets- “Specialty Generics Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024″ states, the global specialty generics market reached a value of US$ 44.8 Billion in 2018. By 2014, its value is expected to reach US$ 88.9 Billion with a much higher CAGR of 11.9 percent, in 2019-2024 period.

Which drugs would belong to this market?

According to the ‘White Paper’ titled, ‘Complex Generics: Maximizing FDA Approval Prospects’ of Parexel, the following are some examples of complex generics; the list continues to grow as more products are being added in this category every day:

  • Complex Active Pharmaceutical Ingredients (APIs), examples being Enoxaparin, Low Molecular Weight Heparin, Glatiramoids, Iron Carbohydrate Complexes etc.
  • Complex Formulations, examples being Liposomes, abuse-deterrent generics, parenteral microspheres.
  • Complex Route of Delivery, such as topical ointments and locally acting GI drugs.
  • Complex Drug-Device Combinations, such as DPI, MDI, nasal sprays, and transdermal systems.

These types of complex and high-cost generics, besides some off-patent biologic products and even Biosimilar drugs, are often used to treat complex and life-threatening diseases, such as, cancer, Hepatitis C, and many others. Complex generics are expected to eventually own a significant percentage of the total generic drugs market, as a number of big-ticket specialty drug molecules will go off patent in the ensuing years.

The major advantages of complex generics:

Some of the major advantages of the complex generics market over traditional generics are as follows:

  • Complex manufacturing requirements with higher capital costs – thus, higher price, better margin, fewer players, lesser competition.
  • Increasing prevalence of life-threatening diseases, besides, cost containment measures from the government and healthcare providers, are pushing the demand of these drugs.

Indian companies are also entering the fray: 

As the share of specialty medicines in global spending in 2017 increased to 32 percent from 19 percent in 2007, Indian drug players also could sniff the opportunity in this space. Just as Sun Pharma, reportedly shifted its focus from once lucrative traditional generics medicines to specialty drugs, amid continued price erosion in its biggest market – the US, many others are also joining the fray.  The Indian players who are, reportedly, investing in complex generics include, Aurobindo Pharma, Dr. Reddy’s Labs, Cipla, Lupin, Glenmark and Cadila.

More specifically, with the contribution of specialty medicines to overall pharmaceutical spend in the US, Germany, France, Italy, UK, and Spain – almost doubling over the last 10 years, this trend is likely to gather momentum, as the above report indicated. Accordingly, commensurate strategic actions aimed at this segment by many companies, both global and local, are clearly now visible.

Some strategic initiatives:

In preparation of a major shift in the strategic focus on complex generics, key examples of some of the important initiatives of different companies will include the following:

  • Big generic players wanted to be bigger in the global market through M&A, such as Teva acquired Allergan’s generic business, Mylan bought Abbott Laboratories’ generics businessAbbott Laboratories’ non-U.S. developed markets specialty and branded generics business. Similarly, Endo International acquired Par Pharmaceuticals. In India the mega deal of Sun Pharma acquiring Ranbaxy in 2015. In the same year, Lupin acquired New Jersey-based generic drugs firm GAVIS to boost its presence in the US.
  • Novartis sold its 300 ‘troubled’ U.S. generics to India’s Aurobindo for US$ 1B, as the entire generics industry faced unrelenting pricing pressure in the U.S.’ Whereas, Novartis’ wants to focus higher-margin assets like Biosimilars and complex generics.
  • Pfizer is set to combine its off-patent drug unit Upjohn with Mylan, to create a new business with its own off-patent branded and generic drug lines. The merger will bring together Pfizer medications such as Lipitor and Viagra with Mylan’s EpiPen, used to halt life-threatening allergic reactions.
  • Owing to margin pressure and other reasons, some of the Indian drug players also decided to enter into higher margin complex generics space, pursuing both organic and inorganic routes. There are several such examples, such as: In January 2017, Zydus Cadila announced acquisition of Sentynl Therapeutics Inc., a US based specialty pharma company specialized in marketing of products in the pain management segment. And in October 2017, Lupin acquired US-based Symbiomix Therapeutics LLC to expand Lupin’s US women’s health specialty business in the highly complementary gynecological infection sector.

Any flip side of complex generics business for the Indian players? 

Although, driven by mainly higher profit margins and tough entry barriers, many generic players with the requisite wherewithal, find complex generics business more attractive to focus on, there’s a flip side to it, as well. This is, post patent expiry, innovator companies may be encouraged to introduce more ‘Authorized Generics’, creating a tough competitive environment for other generic players to compete with them. This brings us to the question of what are ‘Authorized Generics?’

Authorized Generics:

According to the USFDA, the term ‘Authorized generic’ is used to describe an approved brand name drug that is marketed without any brand name on its label. It is exactly the same product as the branded one, and may also be marketed by another company with the innovator company’s permission. Generally, an ‘Authorized Generic’ is launched at a lower price than the brand name drug.

Moreover, ‘Authorized Generics’, despite being the generic version of patented molecule, are mostly marketed by the patent holders themselves, both pre and post patent expiry. While a separate NDA is not required for marketing an ‘Authorized Generic’, USFDA requires that the NDA holder notify the FDA, if it markets an ‘Authorized Generic. The NDA holder may market both the ‘Authorized Generic’ and the brand-name product at the same time. Interestingly, the USFDA has approved around 1215 ‘Authorized Generics’ as of September 30, 2019.

Advantages of ‘Authorized Generics’ over ‘Traditional Generics’:

The key advantage of ‘Authorized Generics’ over traditional generic drugs is, while traditional generic drugs can be marketed only after patent expiry of the innovator drug, ‘Authorized Generics’ can be marketed even before patent expiry. In other words, innovator companies or their authorized collaborators can make lower priced ‘Authorized Generic’ versions available on their behalf, under their own new drug application (NDA). ‘Authorized Generics’ may be made available to patients even before patent expiry to out-maneuver the conventional generic drug makers, in advance, on price, quality and doctors’ confidence in the original drug.

According to several reports, over the past years, ‘many innovator drugs companies have been launching Authorized Generics, simultaneously with the first Abbreviated New Drug Applications (ANDA) filer’s launch of its generic drug product.’ However, the question remains how do the stakeholders perceive the ‘Authorized Generics’?

Perception of ‘Authorized Generics’:

Studies are available analyzing the impact of ‘Authorized Generics’ on the pharma market and also on the stakeholders. In this article, I shall refer to a comprehensive research study, titled ‘Authorized Generics: Effect on Pharmaceutical Market,’ published in the International Journal of Novel Trends in Pharmaceutical Sciences (IJNPTS), on February 29, 2012, which came out with the some notable findings.

Generally, there isn’t any doubt, either on the fact that ‘Authorized Generics’ provide the identical experience that the patient receives from the brand drug but at a lower price. Nor is there any question over greater confidence of doctors while prescribing these drugs. However, the researchers wrapped up the discussion by stating: It is difficult to conclude that the ‘Authorized Generics’ practice should be continued or banned. Though Indian pharmaceutical companies are dealing with generic drugs – 42 percent of the respondents were in favor of ‘Authorized Generics’ practice, whereas 58 percent opposed it. Thus, the overall perception of ‘Authorized Generics’, appears to be a mixed bag.

Conclusion:

There are free flowing arguments both in favor and against the ‘Authorized Generics.’ The article titled, ‘Drugmakers Master Rolling Out Their Own Generics to Stifle Competition,’ published in the Kaiser Health News (KHN) on August 05, 2019, captures it well.

It quoted the spokeswoman for the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful pharma lobby group saying, an Authorized Generic drug “reduces prices and results in significant cost savings.” Whereas the critics say, “Authorized Generics hurt long-term competition and often perversely increase costs, even in the short term.”

The detractors further expressed, ‘Authorized Generics’ don’t just steal sales from existing generic rivals, they erode incentives to make generic drugs. A professor at the University of California, Hastings College of the Law, who studies pharma was also quoted in this article saying, this practice can “stave off generic competition and make sure that generics can’t get much of a foothold when they do get to market.” Adding further he said: “That’s the game. And drug companies have become masters at this.”

As the Kaiser Health News highlighted, Eli Lilly announced launch of the ‘Authorized Generic’ version of Humalog insulin in March 2019 for US$137 a vial, at half the price of its brand name version costing US$237. This was reasoned by the company as a considerate move to address the need of those patients who can’t afford the price of the brand – Humalog. Curiously, even some analysts believe that ‘Authorized Generics’ may help explain why relatively few true generics are reaching the market despite a surge in approvals, especially in the United States.

Against the above backdrop, the drug policy makers need to ponder, would ‘complex generics’ of different companies face greater challenges from ‘Authorized Generics,’ playing a spoilsport for the rest in this ball game?

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.

 

 

Deadly Climate Change Impact On Human Health: How Prepared Is India?

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It’s not uncommon to find many people, including heads of countries, expressing their serious apprehensions in public, about the scary impact of climate change. Just the last year, on November 26, 2018, BBC News captured one of such incidences with the astonishing headline: “Trump on climate change report: I don’t believe it.” The findings of this report have underscored, ‘unchecked global warming would wreak havoc on the US economy.’

Similarly, a few years ago, on September 05, 2014,CNN News 18 quoted Prime Minister Narendra Modi as saying: “Climate has not changed. We have changed. Our habits have changed,’ while answering to a question on climate change. Regardless of the outcome of any split-hair analysis of the rationale behind such statements from the world leaders, such public discourse could trivialize the possible catastrophic impact of climate change on the planet earth.

Be that as it may, that climate change is taking place, carrying all its ill-effects, is real now, without any ambiguity. There is also widespread consensus among the members of the United Nations that ‘the Earth is warming at a rate unprecedented during post hunter-gatherer human existence.’

It is worth noting that way back in 2001, the ‘Third Assessment Report of the Intergovernmental Panel on Climate Change’, further recorded: “There is new and stronger evidence that most of the warming observed over the last 50 years is likely to be attributable to human activities”, most importantly the release of greenhouse gases from fossil fuels.

Several ‘International Agreements’, including the Paris Agreement on Climate Change - all supported by hard scientific data, have called for immediate, quantifiable measures in each country to address the ‘wide-ranging environmental threats, such as ozone depletion and long-range transboundary air pollution.’ Against this backdrop, in this article, I shall focus on the dreadful effect of climate change in the proliferation of a wide-variety of ailments, especially infectious diseases, within a few decades. While doing so, let me first have a quick recap on what is ‘Climate Change’, in a simple language.

Climate Change – a quick recap:

According to the United Nations, ‘Climate Change is the defining issue of our time and we are at a defining moment. From shifting weather patterns that threaten food production, to rising sea levels that increase the risk of catastrophic flooding, the impacts of climate change are global in scope and unprecedented in scale. Without drastic action today, adapting to these impacts in the future will be more difficult and costly.’

It’s important to note, although, the planet Earth’s climate is constantly changing over geological time, the current period of warming is occurring more rapidly than many past events. Scientists are concerned that the natural fluctuation or variance, is being overtaken by a rapid human-induced warming, as they emit more greenhouse gases. As these gases get trapped in the atmosphere, more heat is retained that has serious implications for the stability of the planet’s climate, even impacting human health with grave consequences. The World Health Organization (W.H.O) has also warned that the health of millions could be threatened by increases in malaria, waterborne disease and malnutrition.

Its impact human health:

The direct and indirect impact of climate change on human health is profound. Before I go into the specifics, let me indicate some of the direct ones, as captured by the Center for Health and the Global Environment (CHanGE), University of Washington. This is sans any charts and maps, unlike the usual practice:

  • Increasing temperatures are causing poor air quality that can affect the heart and worsen cardiovascular disease.
  • Increasing exposure to pollen, molds, and air pollution, all of which can worsen allergies and other lung diseases, such as asthma.
  • Changes in the geographic range of disease-carrying insects, such as mosquitoes, ticks, fleas and other similar ones, which can fast spread many tropical ailments, such as dengue fever and malaria to humans.
  • Increasing frequency and severity of extreme weather and climate events can cause, besides many physical illnesses, several kinds of mental illnesses – increasing both morbidity and mortality.
  • Frequent flooding events and sea level rise can contaminate water with harmful pathogens and chemicals, potentially causing food-borne and waterborne illnesses.
  • Changing weather patterns affect the quality and quantity of nutritious foods with increasing incidence of under-nutrition and micronutrient deficiencies.
  • Additional stress placed on hospital and public health systems, could limit people’s ability to obtain adequate health care during extreme weather events and disease outbreaks.

Most specific and the deadly one:

The World Health Organization (W.H.O) publication - ‘Climate change and human health – Risks and Responses,’ clearly flagged that ‘Changes in infectious disease transmission patterns are a likely major consequence of climate change.’

Citing a pertinent analogy to explain the reason, it said: “Humans have known that climatic conditions affect epidemic diseases from long before the role of infectious agents was discovered, late in the nineteenth century. Roman aristocrats retreated to hill resorts each summer to avoid malaria. South Asians learnt early that, in high summer, strongly curried foods were less likely to cause diarrhea.”

Would pharma players convert these problems into opportunities?

Curiously, some pharmaceutical investors are researching to fathom potential business opportunities lying underneath the above problem, especially for vaccines and newer antimicrobials. It’s probably a blessing in disguise not just for the drug companies, but also for the general public, considering the following two issues, prevailing in the current scenario:

  • According to W.H.O, Antimicrobial Resistance (AMR) is an increasingly serious threat to global public health. It threatens the effective prevention and treatment of an ever-increasing range of infections caused by bacteria, parasites, viruses and fungi, causing the success of even major surgery and cancer chemotherapy seriously compromised.
  • ‘Pharmaceutical companies are backing away from a growing threat that could kill 10 million people a year by 2050’, reported a July 19, 2018 article. This is because, ‘Antibiotics Aren’t Profitable Enough for Big Pharma to Make More,’ wrote another article, published in Bloomberg Businessweek, on May 3, 2019.

Interestingly, a recent report analyzed and evaluated how this can be done, and which companies will be benefitted most in that process. 

“Climate change to fetch a big business opportunity for pharma”:

As reported on July 25, 2019, Morgan Stanley told investors that climate change will cause an increased prevalence and rapid spread of infectious diseases that may be a boon for some drug companies with big vaccine portfolios. It also highlighted, between 383 million and 725 million more people may be exposed to Zika, dengue and other diseases by 2050, depending on the pace and severity of global warming.

The analysts estimated, especially 7 pharma companies will be critical to fighting infectious diseases brought on by climate change. According to the research note of thebank, ‘the USD 500 billion infectious disease market could see demand for an added USD 125 billion in new vaccines, or as much as USD 200 billion assuming premium pricing for more complex new treatments.’

The top possible gainers:

Identifying the top possible gainers, Morgan Stanley apprised, vaccine development being more difficult and expensive, companies that are already in that business will have an upper hand.

Hence, Sanofi and GlaxoSmithKline are expected at the top, given their existing pipelines and manufacturing capacity. Takeda and Merck both have vaccines in the works for dengue fever, one of the diseases that climate change is likely to exacerbate. Janssen and Pfizer are both active in the vaccines market, but would need to establish new research programs to take on tropical diseases. ‘Moderna’ is also in a good position because it has demonstrated a potential pipeline for drugs combating the Zika virus., as Morgan Stanley further elaborated.

Nevertheless, Morgan Stanley isn’t the only bank looking at investment opportunities from climate change, on July 24, 2019, Goldman Sachs also, reportedly, said it was hiring a sustainable-finance group that is looking into issues related to sustainability. Thus, on the positive side, climate change could fetch a big business opportunity for many pharma players, across the world.

600 million people at risk for climate change in India:

On June 24, 2019, a reputed national business news daily of India reported, “600 million people at risk: Climate change may soon turn critical in India.” Against this threat, the current public health care infrastructure in the country, continues to remain fragile, as stated in India’s National Health Profile, 13th Issue.

It also states, the cost of treatment has been on the rise in India and it has led to inequity in access to health care services. Intriguingly, the country spends around 1.02 percent of its GDP towards public health, which has remained static to declining over a long period of time. Although, health insurance is a growing segment, it hasn’t taken off fully. Several measures are needed to improve and expand insurance coverage.

Further, according to the report by the Center for Disease Dynamics, Economics & Policy (CDDEP) in the US, India is facing shortage of 600,000 doctors and 2 million nurses. This report was widely quoted by the Indian media, on April 14, 2019.

These facts give a perspective on what is India’s level of preparedness to address the critical health issues related to climate change, especially the havoc that the dreaded infectious diseases can cause to so many.

Conclusion:

Astute health policy makers, including a large section of the top political echelon of the country are, apparently, aware of various ill effects of climate change. They also seem to be cognizant that these are likely to accelerate the worsening health problems of the population, including infectious diseases, asthma and other respiratory diseases.

Assuming, new and modern drugs will keep coming to help treat these ailments, do we have a functioning and efficient public health infrastructure to grapple with such issues. What about high out of pocket expenditure towards healthcare for a large section of the population, regardless of Ayushman Bharat?

As the (W.H.O) publication - ‘Climate change and human health – Risks and Responses’ recommended, ‘early planning for health is essential to reduce, hopefully avoid, near future and long-term health impacts of global climate change. The optimal solution, however, is in the hands of governments, society and every individual—a commitment to a change in values, to enable a full transition to sustainable development.’

That said, as India is also a signatory to the latest Paris Agreement on Climate Change, can we assume, India will walk the talk to significantly contain its deadly impact on human health? How is India preparing itself to meet this great challenge of Probably it is anybody’s guess, at least, as on date?

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.

Would ‘Connected Healthcare’ Catch Pharma Players Off-Guard?

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Rapid advancement of medical science is making several life-threatening diseases easily preventable, curable and manageable. For some conditions, such as, peptic ulcer even surgical interventions are no longer necessary. This results in the expansion of preventive and primary-care segments, with equal speed. Simultaneously, increasing complexity of many diseases, late stage disease detection, and better identification of rare diseases, are broadening the specialty hospital segment, as well.

On the other hand, the general mindset of people is also changing as fast. They dare to chart in the cyberspace, seek for more health-information, prefer participative care, expect a speedy treatment process – delivering better outcomes.

The cumulative impact of these are creating some brilliant sparks, confirming evolution of some disruptive health care business models. These are quite different from what we generally experience today.One such model is termed ‘connected healthcare.’ This is a unique business model, having potential to break the decades old status-quo – for the benefit of patients – closely involving doctors, pharma – medical device/diagnostic companies and of course the hospitals. In this article, I shall deliberate on ‘connected healthcare’ looking at its various aspects and examining whether pharma industry is ready for this change. Let me start this discussion with the role of Internet of Things (IoT), as an enabler for this process.

Internet of Things (IoT) – A great enabler for ‘connected health’:

‘Internet of Things (IoT)’ has opened new vistas of opportunities for providing healthcare with significantly better outcomes. According to Ecoconsultancy, by leveraging the IoT network, medical devices of everyday use can be made to collect, store and share invaluable medical data, providing a ‘connected healthcare’ system. Consequently, doctors, along with patients, can get speedy and deeper insights into symptoms and trends of diseases for prompt interventions, even from remote locations. The question that follows: what really is ‘connected health?’

‘Connected Health (cHealth)’ and a teething problem:

‘Connected health or (cHealth)’ refers to the process of empowering healthcare delivery through a system of connected and interrelated computing devices, mechanical and digital machines on an IoT network platform. It provides the ability for seamless data transfer and access between patients and providers, without requiring human-to-human interactions to improve both quality and outcomes of healthcare.

Two more articles, one titled ‘Connected health: How digital technology is transforming health and social care,’ and the other ‘Accelerating the adoption of connected health’, both published by Deloitte Center for Health Solutions also described ‘Connected health (cHealth)’quite eloquently.

One of the papers highlighted, being a technology driven network system, cHealth has its own teething problems. Some of its key reasons include: Many physicians ‘are often reluctant to engage with technology, partly due to the scale and pace of changes, and partly through lack of education and training, and concerns over liability and funding.’

Precise value offerings of a ‘Connected Health’ system:

The Accenture study titled, ‘Making the Case for Connected Health,’ established that ‘connected health’ approach creates value at three different levels, as follows:

  • Clinical efficacy and safety - Eliminating duplicate lab and radiology tests; improving patient safety through 24/7 access to comprehensive, legible medical records; and speeding up access to patient medical histories and vital information – the cost of treatment can be reduced, significantly.
  • Shared knowledge - Improves care quality, benefits with prompt safety alerts, such as drug interaction, enhances clinical decision-making through sophisticated tools along with evidence-based care protocols, and helps acquiring new capabilities in health care.
  • Care transformation - Advanced analytics help sharing clinical decision-making process, population health management, and facilitate building new care delivery models.

‘Connected health’ in managing chronic diseases:

‘Connected health’ is being practiced at different levels in many countries. These are particularly useful in treating or managing chronic ailments, such as cardiovascular (hypertension), metabolic (diabetes) disorders and COPD (Asthma).  Some examples are as follows:

Many hypertensive patients monitor their blood pressure and other related parameters, through self-operating digital instruments and devices. If the auto-flagged readings get transferred to the treating physicians through IoT system, physicians can promptly adjust the drug doses and offer other required advices over the same system online, and as and when required or periodically. This could avoid periodic personal visits to doctors for the similar purpose, saving time and money. At the same time, it ensures better quality of life through the desired level of disease management, always.

Similar results have been reported in the management of diabetes and Asthma with ‘connected health’ system.

 ‘Connected health’ in treating life-threatening diseases, like cancer:

The paper titled, ‘Smart technology helps improve outcomes for patients with head and neck cancer,’ published by the News Medical on May 17, 2018, which was also read at the June 2018 Annual Meeting of the American Society of Clinical Oncology (ASCO), highlights some interesting developments in this area. This federally funded, randomized clinical trial on 357 people receiving radiation for head and neck cancer, using mobile and sensor technology to remotely monitor patient symptoms, resulted in less severe symptoms related to both the cancer and its treatment.

It also noted: ‘Patients who used the technology – which included a Bluetooth-enabled weighing scale, Bluetooth-enabled blood pressure cuff, and mobile tablet with a symptom-tracking app that sent information directly to their physician each weekday – had lower symptom severity than participants who had standard weekly visits with their doctors. In addition, daily remote tracking of patient wellbeing, according to the researchers, enabled physicians to detect concerning symptoms early and respond more rapidly, compared to usual care.’

While treating serious ailments, medical images, such as computed axial tomography (CT), magnetic resonance imaging (MRI), digital mammography and positron emission tomography (PET), can be connected, stored and shared with cloud-based connectivity and online sharing platforms, as confirmed by several studies. This would enable physicians to build better and deeper referral networks, for better diagnosis and speedier treatment inventions to patients.

‘Connected healthcare’ is fast growing:

As the above Accenture study indicates, many countries have started implementing  ‘connected healthcare’ systems to deliver cost-effective, high-quality and speedy healthcare services to the population with better outcomes. Some of these nations are, Australia, Canada, England, France, Germany, Singapore, Spain and the United States.

According to the New Market Research report titled, “Connected Healthcare Market – Global Industry Analysis, Size, Share, Trends, Growth and Forecast 2018 – 2022,” published by Wise Guy Research: ‘Globally, Asia-Pacific region is one of the fastest growing markets for ‘connected healthcare’. It was valued at USD 2.65 billion in 2015, and is expected to reach USD 23.8 billion by 2022, at the rate of 30.6% during the forecast period.’ During this span, ‘The global connected healthcare market is expected to reach $105,337.5 Million by 2022 at a CAGR of 30.27%,’ with North America commanding largest market share of 36.7%, the report highlights.

‘Connected health’ shows a high potential in India:

The above report also indicates, ‘mobile-health services’ accounts for the largest market segment in the UK, Italy, Japan, China and India. E-prescribing is the fastest growing segment in Asia Pacific and is expected to grow at the rate of 31.27% CAGR during the forecast-period.

E-Health initiative of the Government of India, which is aimed at using of Information and Communication Technology (ICT) in health signals a good potential for ‘connected health’ in India. Fast penetration of mobile technologies even at the hinterland of India will facilitate this process.

Another article titled, ‘Why Connected health is the key to reducing waste and increasing efficiency,’ published in Healthcare India on July 25, 2017, brings to the fore some key benefits of ‘connected healthcare’ in the country. It says, ‘connected healthcare’, can bring path-breaking changes in the country. Following are a few examples:

  • Today when almost 70 percent of the medical expenses are borne by the patient, a ‘connected health’ ecosystem, would reduce admissions by early intervention and potentially deter surgeries.
  • Having access to a patient’s entire medical record, physicians’ will be able to minimize ‘over diagnosis’, amounting to multiple tests, over-medication and avoidable prescriptions, thereby reducing out of pocket health expenditure of patients.
  • When patients are referred from one doctor to the other, or from the rural medical centers to district hospitals, they often need to repeat all the tests, as there is no connected health ecosystem. In doing so, they lose time and sometimes don’t show up for follow up treatments and consultations with their treatment remains incomplete.

Leading private players in ‘connected health’ area:

Some of the leading market players in the global ‘connected healthcare’ market, reportedly, include Agamatrix Inc. (USA), Airstrips Technology (San Antonio), AliveCore Inc. (Australia), Apple Inc. (USA), Athenahealth Inc. (USA), Boston Scientific Co. (USA), GE Healthcare (UK), Honeywell Life care Solutions (UK), Medtronics (Ireland) and Philips Innovation Campus (Bengaluru, India).

Would ‘Connected healthcare’ disrupt pharma’s legacy commercial model:

McKinsey Digital’s March 2012 paper titled, “Biopharma in the coming era of connected health” explains, how ‘connected healthcare’ has started disrupting the legacy commercial models of pharma and Biopharma industry. One of the related examples cited in the article is, pharma’s less emphasis on large sales forces “selling” to physicians.

As this new system gathers wind on its sail, information transparency will allow customers, regulators, and competitors to understand and independently assess the performance of various drugs, often better than what the manufacturers present. These powerful new data sources would reveal true efficacy of medicines, in the real-world settings. No doubt, it will be a significant patient empowerment.

Would pharma be caught off-guard?

Despite such clear signs of changes, the way the pharma industry continues to operate, which as perceived by a majority of the population, is generally self-serving in nature. It has remained virtually unchanged over several decades. Another strong public perception is, patients often get trapped by a two-way financial interest, existing between doctors, hospitals, pharma, biotech – medical devices/diagnostic companies, in various forms. Notwithstanding, industry lobbyists pooh-poohing it, it remains a robust general perception, nonetheless.

That said, this situation can no longer be allowed to remain frozen in time. Today, time is making many things obsolete, including human behavior and business practices, much faster than ever before. This gets fueled primarily by two catalytic factors – one, rapid progress of technology, and the other, which is even more fundamental – the changing demographic profile and social fabric. Together, these are creating a new, informed, more assertive and expressive mindset of people – signaling their needs, preferred choices and processes, even for a health care solution. It’s for the industry now to shape up, soon.

Conclusion:

Joining all these dots, one gets a clear sign of ‘connected healthcare’ gradually evolving in India. Even if, it still takes some more time for an integrated ICT system to be in place, especially in India, it’s for sure that ‘connected healthcare’ will be a reality, surely.

As and when it happens, it will be a disruptive process. The process of sharing all requisite disease prevention, treatment and management related data, between patients, doctors and other care providers, including pharma companies – over regulatory approved, interconnected IoT enabled devices, machines and applications, will benefit all.

There will, of course, be several barriers to overcome, before this new era ushers in. One such hurdle being, many doctors still don’t express a favorable attitude towards adoption of ICT technology in their everyday practice. Alongside, the government with the help of regulators, should enact the requisite laws, and frame stringent rules to ensure enough privacy and security of confidential medical information of individual patients. In tandem, appropriate authorities must ensure that ‘connected healthcare’ system is effectively implemented by all concerned.

As strong environmental needs will hasten this process, public access to high quality healthcare with better outcomes – and all at an affordable cost, will improve by manifold. Thus, I reckon, days aren’t too far to witness ‘connected health care’ in India. But, the hundred-dollar questions still remain unanswered – Are most pharma players ready for the ‘connected healthcare’ regime, or will it catch them off-guard?

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.

Pharma To Facilitate Self-Managing Chronic Diseases For Better Outcomes?

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“India’s burden of non-communicable disease (NCD) is escalating, but still the country does not have sufficiently detailed data on NCDs for research and policy purposes.” This was captured in a recent study, titled “India’s escalating burden of non-communicable diseases,” published in The Lancet Global Health on October 03, 2018. Thus, many experts are pondering, how to contain this menace and lower the disease burden of NCDs, in this situation. One of the ways to address this issue is exploring some unconventional ways.

As several studies have established, improving ‘self-management’ of chronic diseases by patients, after proper diagnosis and a treatment plan being in place, is one of the pillars to lower the disease burden. One such study is titled, ‘Patients’ knowledge of their chronic disease,’ appeared on June 2013 – Vol 42 (6) issue in the journal of afp – Australian Family Physician. The paper highlights that effective tools, policies and other measures to help self-management, would facilitate the process. These arecritical not just for better outcomes, but also to reduce the overall treatment cost.

In a similar context, another recent article, titled ‘Why Apps for Managing Chronic Disease Haven’t Been Widely Used, and How to Fix It,’ published in The Harvard Business Review (HBR) on April 04, 2018 made an interesting observation. The authors wondered: “In an era where nearly, every consumer good and service — from books and groceries to babysitting and shared rides — can be purchased through an electronic transaction on a mobile device, it seems reasonable to think that more and more of our health care can also be managed using apps on mobile devices.”

This article will dwell in this area, based on several interesting and credible research findings. Nevertheless, to give a proper perspective, I shall start with a brief outline on the incidence of chronic diseases in India.

Increasing incidence of chronic diseases in India:

There are several recent reports confirming the ascending trend of non-infectious chronic diseases in India, two of which are as follows:

The National Health profile 2018, published by the Ministry of Health also records that between 1990 and 2016 the disease burden due to:

  • Communicable, maternal, neonatal, and nutritional diseases, as measured using Disability-adjusted life years (DALYs), dropped from 61 per cent to 33 per cent.
  • Noncommunicable diseases increased from 30 per cent to 55 per cent.
  • The epidemiological transition varies widely among Indian states: 48 percent to 75 percent for non-communicable diseases, 14 percent to 43 percent related to infectious and associated diseases; and 9 percent to 14 percent associated with injuries.

Alongside, the above article of The Lancet Global Health also underscores the following takeaways from its comprehensive analyses of NCDs in the Indian situation:

  • The three leading causes of mortality—cardiovascular diseases, respiratory diseases, and diabetes.
  • In absolute terms, these three diseases together kill around 4 million Indians annually (as in 2016).
  • Most of these deaths are premature, occurring among Indians aged 30–70 years, representing some of the world’s largest health losses, with enormous policy ramifications.
  • India’s Ministry of Health and Family Welfare is making efforts to establish policies and intervention strategies for prevention and control NCDs. For example, the National Program for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke, launched in 2010, and the National Program for Health Care of Elderly, launched in 2010–11, the article noted.

As none of the measures taken so far could create an appreciable impact, India needs to come up with a major intervention to tackle this escalating health issue, the article concluded. In my view, optimal use of modern technology in the self-management of such virtually lifelong diseases, can be a great enabler for patients to bring down the disease treatment and management cost, significantly. Let me hasten to add again, the question of self-management comes only after a proper medical diagnosis and a prescribed treatment plan for the same being in place.

The key benefits of self-management and the unmet need:

The key benefits of effective self-management of chronic diseases are many. However, the following four clearly stands out:

  • Improves Patients’ quality of life significantly.
  • Arrests progression of the ailment – containing associated disease related complications.
  • Substantially reduces the interval and number of follow-up visits with doctors.
  • Thus, reduces the disease burden appreciably.

Curiously, most traditional pharma companies are yet to take any major step to address, at least, the above four critical areas. They don’t seem to go beyond the conventional methods of disease related advices. Whereas, the crucial need to fetch a behavioral change in patients for participative self-management of NCDs, keeps lingering.

A number of research studies have also confirmed that ‘mobile health applications are promising tools for improving outcomes in patients suffering from various chronic conditions.’ One of these studies titled, ‘Smartphone app in self-management of chronic low back pain: a randomized controlled trial’, was published in the November 27, 2018 issue of the European Spine Journal.

Sensing an unmet need in this area, besides a large number of brilliant tech startups, many large and pure technology companies, such as Apple and Google have already entered this fray.

 A recent example:

Let me cite a recent example to drive home the above point. On December 12, 2018, CNBC featured an article carrying the headline ‘Apple now has dozens of doctors on staff, showing it’s serious about health tech.’ Some of the key points of this article are as follows:

  • The number of doctors on staff is an indication that Apple is serious about helping customers manage diseases, and not just wellness or fitness.
  • Doctors can also help Apple guide the medical community on how to use Apple’s new health technologies and to deflect criticism and also to win approval among doctors who fear liability and are already overburdened by technology.
  • Many of these doctors are also still continuing to see patients. That might also give Apple an edge by emphasizing the patient experience.

This example demonstrates how detail are the plans of these tech companies for gaining a firm foothold in the healthcare space.

‘Effectiveness’ and ‘future scope’ of self-management of diseases:

The article titled, ‘Self-Management: A Comprehensive Approach to Management of Chronic Conditions,’ featured in the August 2014 edition of the American Journal of Public Health (AJPH) reiterated some important points. It established the relevance, future scope and effectiveness of self-management of chronic diseases, as follows:

  • As chronic conditions emerge as a major public health concern, self-management will continue to grow as a crucial approach to managing these conditions, preventing illness and promoting wellness.
  • Chronic disease conditions are generally slow in their progression and long in their duration. Thus, self-management can offer those living with these conditions, a means to maintain or even improve their capacity to live well, over the course of their lives.
  • Self-management intervention programs that address specific diseases are showing success across multiple chronic conditions.
  • These programs have particular value that represents an amalgamation of the goals of the patient, family, community, and the clinician with everyone working in partnership to best manage the individual’s illness while facilitating comprehensive care.
  • Self-management reaches beyond traditional illness management by incorporating the larger concept of prevention by emphasizing the notion that those who are chronically ill still have a need for preventive interventions to promote wellness and mitigate the further deterioration of health.
  • If one considers the nature of self-management in all its elements and practical characteristics, it is not only a logical approach to health and health care, but also an optimal way to address chronic conditions as a major issue in public health.

Inducing a behavioral change in chronic disorders with health apps:

For effective self-management of chronic diseases, there is a need to neutralize the negative influence of the individual’s behavioral traits. Research studies have also established that behavior-change-focused interventions play an important role in this effort.

However, not all patients take adequate care for such changes to take place. While the treating doctor may play an important role of a coach in this area, in reality, they usually don’t find enough time to spend on each patient with NCDs. The McKinsey & Company’s publication titled, ‘Changing patient behavior: the next frontier in health care value,’ also reiterates that to address the rising cost of chronic conditions, health systems must find effective ways to get people to adopt healthier behaviors.

As I mentioned before, this space has attracted active interest of many tech players in business expansion. More evidence-based health apps are being introduced to help drive patient-behavior change for effective self-management of chronic diseases. There are reported surveys on weight management aided by health apps, where ‘ninety-six percent of respondents agreed or strongly agreed that using a diet or nutrition app helped drive positive behavior change and healthy eating habits.’

In my article, titled ‘Prescription Digital Therapy Now A Reality,’ published in this blog on May 07, 2018, I mentioned that in September 2017, the first USFDA-cleared mobile app has been made available to patients. The app has both safety and efficacy label to help treat patients with ‘Substance Use Disorder’. Studies have established that it is two-times more effective than conventional in person therapy sessions.

More recently, in September 2018, Apple’s smart-watch version 4 included a US-FDA cleared electrocardiogram (ECG), officially classifying it as a medical device capable of alerting its user to abnormal heart rhythms. In the same context, US-FDA Commissioner Scott Gottlieb, M.D., said that digital advances, creating a new technological paradigm of health tools and health apps., are empowering consumers to take better informed decisions on their medical care and healthy living.

Conclusion:

It has been well-demonstrated by research studies that evidence-based health-apps for self-managing chronic diseases improve outcomes, remarkably. Consequently, this has triggered some critical activities by purely tech companies in the health care space, even in India. The primary driver being a strong consideration of this segment as an opportunity area to meet an unmet need, where most pharma players don’t seem to be doing enough, as on date.

Before it gets too late, there appears a need to take a serious note of this shifting paradigm. The awareness of which should then play a critical role in developing marketing strategies for brands used in NCDs. Otherwise, non-pharma tech companies will eventually dominate this segment, armed with a different genre of technological prowess that they possess.

The article titled, “Evidence-Based mHealth Chronic Disease Mobile App Intervention Design: Development of a Framework,” published inJan-Mar 2016 edition of the Journal of JPMIR Research Protocols, epitomizes it succinctly:

“Mobile health technology creates a shift in the paradigm of chronic disease management. It offers new possibilities to engage patients in self-management of their chronic diseases in ways that did not exist in the past. To maximize the potential of mHealth requires the integration of research and expertise from multiple disciplines including clinical, behavioral, data analytics, and technology to achieve patient engagement and health outcomes. This paradigm shift also triggers a need for new approaches to designing clinical and behavioral support for chronic disease management that can be implemented through existing health care services and programs.”

These developments send a strong signal for pharma to facilitate self-managing chronic diseases, soon enough, for better patient outcomes and, in tandem, creating a win-win situation for both.

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.

 

 

‘Data-giri’: Critical For A Rewarding New Product Launch

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Success in new product launches is a fundamental requirement to excel in pharma business – regardless of whether the drug is innovative or a generic one. For a novel, innovative molecule, associated risks are much higher, as it carries a huge amount of associated R&D expenditure.

The launch plan for a generic formulation or even a ‘me-too’ patented variety, can broadly replicate the first in the class molecule. Whereas, for any breakthrough innovative medicine – it’s a whole new ball game. There are virtually no footsteps to follow. Nonetheless, there is one thing common in both – a robust launch plan is pivotal to success, across the board.

In this regard, the March 2014 article titled, ‘The secret of successful drug launches’, of McKinsey & Company captures an interesting scenario: “About two-thirds of drug launches don’t meet expectations. Improving that record requires pharmaceutical companies to recognize the world has changed and adjust their marketing accordingly.”

On the same issue, Bain & Company also drew a similar outline with its article titled, ‘How to Make Your Drug Launch a Success,’ published about three and half years later – on September 06, 2017. It reported: “Our research shows that nearly 50 percent of launches over the past eight years have under-performed analyst expectations, and more than 25 percent have failed to reach even 50 percent of external revenue forecasts.”

The bottom-line, therefore, is – even if the success rate of new product launches has marginally improved, for various reasons, there still isn’t much to write home about it. In this article, I shall deliberate what type of approaches, when used with powerful cerebral inputs, could possibly improve this rate – significantly and sooner. Could it be with ‘Data-giri’?

What is ‘Data-giri’?

A good question. ‘Data-giri’ is quite an unheard-of terminology, probably was first used by the Chairman of Reliance Industries – Mr. Mukesh D. Ambani, on September 02, 2016. This happened when he announced the forthcoming launch of his mobile network ‘Jio’. At that time, light-heartedly he said:”We Indians have come to appreciate and applaud ‘Gandhigiri’. Now, we can all do ‘Data- giri’, which is an opportunity for every Indian to do unlimited good things, with unlimited data.”

As is known to many, the word ‘Gandhigiri’ is generally used in India to express the power in the tenets of Gandhism. Similarly, the expression ‘Data-giri’ may symbolize the power that the effective use of the right kind and quality of ‘data’ could provide. Unleashing the potential of relevant and requisite data for value creation, would assume critical importance, even in drug launches, more than ever before.

‘Data-giri’ in drug launches:

Right kind and volume of relevant ‘Data’ is fast becoming an important marketing weaponry. Its variety and quality of usage in business, would ultimately differentiate between success and failure.

Today, data usage in pharma marketing can no longer be restricted to just retail and prescription audits, supported at times by a few custom-made marketing research initiatives. The data that I am talking about here, covers mostly real-life and ongoing data in many areas, such as customer behavior, their practices, thinking pattern, aspirations, together with associated changes in trend for each – captured right from the early stages. The cluster of customers includes doctors, patients, healthcare providers and all other stakeholders.

To unleash the hidden power of data for gaining a productive space for brands in customers’ mind, building an arsenal of data for engagement in pharma marketing warfare, is emerging as a new normal for pharma players.

Accordingly, the bedrock of any strategic plan is shifting from – key decisions based mostly on gut feelings, to all such decisions standing on pillars of a large pool of well-analyzed data. From a new product-launch perspective, the basic data requirements would encompass some critical areas, which need to be focused on. I would illustrate this point with a few examples, as below.

Basic data requirements for a new product launch:

One such example in the above area, comes from United BioSource LLC (UBC) – a leading provider of pharmaceutical support service. It highlights 4 real-time basic data insights as critical to a successful drug launch, which I summarize as follows:

  • What market share I want to achieve?
  • Where are my potential high-volume prescribers?
  • What are the characteristics of patients who will receive my drugs?
  • Which physician specialties would prescribe my drug – immediate, medium and long term?

Successful companies do three things right:

Another example on what successful companies do right comes from the above research report of Bain & Company. It found that companies with successful launches do the following three things right:

  • They differentiate their drug through messaging, post-launch data and services.
  • They create broad customer advocacy via a superior customer experience.
  • They organize their launch as a micro-battle and ensure continuous ‘frontline feedback’.

The paper included a few other factors as, comprehensive market research, key opinion leader advocacy and competitive resourcing. The authors observed that pharma executives grossly underestimate several key success ingredients, including customer advocacy and organizing each launch as a micro-battle, with a real-time dual-feedback mechanism involving all concerned, to facilitate prompt intervention whenever required.

From both the above examples, none can possibly refute that without a meticulously created ‘data arsenal’, these exercises are feasible, in any way, for a rewarding new product launch outcome.

Data is fundamental to create a Unique Customer Experience (UCE):

As I wrote in my previous article, the expertise in creating a Unique Customer Experience (UCE) or aUnique Patient Experience (UPE) for a brand, would eventually separate men from the boys in the game of gaining product ‘market share’. Crafty use of data is fundamental for moving towards this direction.

One of the crucial requirements for UCE or UPE is taking a significant share of mind of consumers. This is possible by designing data-based cutting-edge differential advantages of the brand over others. In pharma marketing battleground, this could be done either – with only tangible brand features, or mostly with intangible benefits and perceptions, or an astute mix of both.

Data – essential to measure deviation against the strategic plan:

During any new product launch-phase, it is essential to capture and accurately measure all actual deviations against plan, taking place on the ground at each pre-defined milestone. The exact reasons for each need to be ferreted – both below or above expectations, for immediate necessary actions. This is important, as various studies indicate that the performance trend of a new product in the first six months from its launch, is a good indicator of its future performance.

All types of customer engagements, including selection of communication channels and platforms, should be ongoing research data-based. I emphasized this point in my previous article, as well. It was reiterated that ‘omnichannel content strategy’ for improving patient engagement and providing UPE, across all touchpoints in the diagnosis and treatment process, should be created over the bedrock of high-quality data.

Time for a switch from SOV to SOC:

Creating greater ‘Share of Voice (SOV)’ for a new brand, especially during its launch phase, would no longer work in pharma. This approach is based on the key premise of ‘Jo dikhta hai wo bikta hai’. This often-used Hindi phrase when translated into simple English, may be expressed as: ‘That which is seen is sold.’

In the pharma context SOV may be explained, as I understand: The percentage of total sales promotion and marketing activities for a brand within the sum total of the same in the represented therapy area. It is usually determined by measuring some key parameters, such as frequency and reach of doctors-call, or customer-contact, or even its rank in ‘top of mind brand recall.’

Greater SOV can make marketeers believe that enough is being done by the company to benefit potential brand consumers, which would help reaping a rich harvest. It may also reflect how busy they are with the execution of all planned-activities. On the other hand, consumer-experience may not be quite in sync with the intent and belief of the marketeers. They may not find enough value in the conventional brand marketing process. This is likely to happen much more in the future, as most consumers will want to experience a unique feeling of being cared enough by the company, while moving through all the touch points of the treatment process.

This trend calls for a major shift in pharma marketeers’ approach – from creating a greater SOV to offering greater SOC (Share of Care). I highlighted the importance of providing ‘care’ through several of my articles in the past, published in this blog. One such is titled “Creating A ‘Virtuous Cycle’ Through Patient Reach and Care”, published on April 09, 2018.

Conclusion:

The critical switch from SOV to SOC involves imaginative application of complex data of high quality.

A well-thought-out plan to fetch out critical answers aiming to provide UCE or UPE, will involve in-depth analysis of voluminous data of high quality, through modern-day analytics. From this perspective, fast learning of the art of ‘Data-giri’ is becoming a critical requirement for new product launch success in pharma, 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.

Key Drivers And Long-Term Impact of Pharma M&A in India

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Corporate M&A is increasingly considered an integral part of the organization’s growth strategy for value creation, by a large number of pharma companies, across the world. In tandem, it throws open many other doors of opportunities, such as reduction of business risks and massive corporate restructuring.

In the post globalization era, mostly the large to medium sized Indian players are imbibing this strategy to gain a competitive edge, in the highly crowded generic drug market, not just in India, but also in various other parts of the world. At the same time, it is equally true that there are many other pharma biggies who have moved into the top 10 of the domestic league table in India, following mainly the organic growth path, and are still staying that way.

For example, the league table ranking (MAT October 2017) of the Indian domestic pharma market, published by AIOCD Pharmasofttech AWACS Pvt. Ltd, reflects a similar scenario. It shows, not many local Indian drug players seem to be too aggressive in Merger and Acquisition (M&A) within the country. In fact, among companies featuring in the TOP 10, only around half seems to have not gone for any major domestic M&A. The remaining half pursued a predominantly organic route, for a quantum growth in the Indian market.

In this article, I shall try to fathom, both the critical drivers and the long-term impact of pharma M&A initiatives – both inbound and outbound, with their either origin or destination being in India.

Are the key drivers different?

India is overwhelmingly a branded generic market. So are its key players. Thus, most pharma M&As in India are related to generic drugs.

Thus, unlike research-based global pharma players, where one of the most critical drivers for M&A, is related to new drug innovation to maintain sustained growth of the organization, the drivers for the same in India is somewhat different. Neither are these exactly the same for exports and the domestic market, with occasional overlaps in a few cases, though.

Export markets:

To expand and grow the pharma business in the export markets is obviously the main overall objectives. To attain this, the acquiring companies generally take into consideration some common critical factors, among others. Each of which is carefully assessed while going through the valuation process and arriving at the final deal price for the company to be acquired. A few examples of which are as follows:

  • The span and quality of market access and the future scope for value addition
  • Opportunities for value creation with available generic products, active ANDAs and DMFs
  • A competitive portfolio, especially covering specialty products, novel drug delivery systems and even off-patent biologic drugs
  • Market competitors’ profile
  • Product sourcing alternatives and other available assets

Domestic market:

Similarly, in the domestic market too, there could be several critical drivers. The following, may be cited just as an illustration. There could well be some overlaps here, as well, with those of export markets:

  • Moving up the pharma value chain, e.g., from bulk drug producer to formulation producer with marketing, intending to climb further up
  • A new range and type of the generic product portfolio
  • Expansion of therapeutic and geographic reach
  • Expansion of consumers and customers base
  • Greater reach, depth, efficiency and productivity of the distribution channel
  • Acquiring critical manufacturing and other related tangible and intangible assets

A glimpse at the 2016-17 M&A trend in India:

An E&Y paper titled, “Transactions 2017” says, India continues to enjoy a prominent position in the global generic pharma space, due to many preferred advantages available within the country, such as a large number of USFDA approved sites coupled with low Capex and operating costs. As a result, the pharmaceuticals sector witnessed 51 pharma deals in the year 2016, with an aggregate disclosed deal value of USD4.6 billion.

However, according to Grant Thornton Advisory Pvt. Ltd, there have been around 27 M&A deals in pharma and healthcare sector by Q3 2017, valued at USD719 million. This appears to be way below 54 deals, valued at USD4.7 billion in calendar year 2016.

Cross-border activity dominated the sector:

Highlighting that cross-border activity dominated the sector, the E&Y paper said, “outbound and domestic transactions drove most of the deal activity, with 21 deals each. In terms of the disclosed deal value, outbound and inbound activity stood at USD2.1 billion each. Domestic deal-making was concentrated in smaller value bands with an aggregate deal value of USD342 million, of which USD272 million (4 deals) worth of deals were restructuring deals.”

Inbound and a domestic M&A occupied the center stage:

It is interesting to note that despite initial hiccups, inbound overseas interest in sterile injectable continued, along with a range of different generic formulations. The notable among which, as captured in the above paper, are as follows:

  • China-based Shanghai Fosun Pharmaceutical (Group) Company Limited announced the acquisition of an 86 percent stake in Gland Pharma Limited for up to USD1.26 billion.
  • US-based Baxter International Inc. entered into an agreement to acquire Claris Injectable Limited, a wholly owned subsidiary of Claris Lifesciences Limited, for USD625 million.
  • In November 2017, India’s Torrent Pharmaceuticals acquired more than 120 brands from Unichem Laboratories in India and Nepal, and its manufacturing plant at Sikkim for USD558 million.

Outbound M&A:

Facing continuous pricing and other pressures in the largest pharma market in the world – United States, Indian pharma players sharpened their focus on Europe and other under-penetrated markets, with a wider range of product portfolio. Following are a few examples of recent outbound M&As for the year, done predominantly to serve the above purpose, besides a couple of others with smaller deal values:

  • Intas Pharma, through its wholly owned subsidiary inked an agreement to acquire Actavis UK Limited and Actavis Ireland Limited from Teva Pharmaceutical for an enterprise value of USD767 million.
  • Dr. Reddy’s Laboratories entered into an agreement with Teva Pharmaceutical and an affiliate of Allergan plc to acquire a portfolio of eight ANDAs in the US for USD350 million.
  • Sun Pharma stepped into the Japanese prescription drug market by acquiring 14 brands from Novartis for USD293 million.
  • Lupin also strengthened its position in Japan by acquiring 21 products from Shionogi & Company Limited for USD150 million. In 2017, Lupin also acquired US-based Symbiomix Therapeutics – a privately held company focused on bringing innovative therapies to market for gynecologic infections. The acquisition value stands at USD 150 million.
  • Two other relatively large outbound acquisitions in 2017 were Piramal Enterprises’ acquisition of anti-spasticity and pain management drug portfolio of Mallinckrodt for USD171 million and Aurobindo Pharma’s Generis Farmaceutica USD142.5 million.

Long term business impact of M&A on the merged entity:

So far so good. Nevertheless, a key point to ponder, what is the long-term impact of M&A on the merged entities in India. It may impact several critical areas, such as financial ratios, reputation on drug quality standards or even its impact on employee morale. Sun Pharma’s acquisition of Ranbaxy in 2015 may be an example in this regard. Not too many credible studies are available for Indian pharma companies in this regard, it could be an interesting area for further research, though.

A research paper titled “Post-Merger Performance of Acquiring Firms: A Case Study on Indian Pharmaceutical Industry”, published by the International Journal of Research in Management & Business Studies (IJRMBS), in its July-September 2015 issue, captured an interesting point. It found, that M&As have a significant impact on the merged company performance as compared to the pre-merger period, but the impact is evident more in the immediate year after the merger.

The paper concluded, although the profitability had improved in the merged company as indicated in the financial ratios, like PBIT, Cash Profit margin and Net profit margin, but the improvement in the performance is observed only up to 1 year of the merger. As far as operating performance is concerned the short term positive impact can be observed, but again it lasts up to 1 year only. The overall study results, therefore, indicate the positive impact of merger on the operating and financial performance only in the short run (+1 year).

Is it a mixed bag?

Nevertheless, there are also other studies in this regard, which concluded the favorable impact of M&As on corporate performance. However, those studies adopted certain other parameters of measuring the financial and operational improvements in the merged companies. Some more research findings in this area – ferreted out from literature review and are available in the same issue of IJRMBS), revealing a mixed bag. Let me quote some these findings, starting from the earlier years, as follows:

Kruze, Park and Suzuki (2003): With a sample of 56 mergers of manufacturing companies from the period 1969 to 1997 concluded that the long term operating performance of control firms was positive but insignificant and high correlation existed between pre and post-merger performance.

Beena (2004): Analyzed the pre and post-merger performance of firms belonging to pharma manufacturing industries with samples of 115 acquiring firms between the period 1995 and 2000. For the purpose of analysis four sets of financial ratios were considered and it was tested using t –test. The study showed no improvement in the performance, as compared to the pre-merger period for the sample companies. 

Vanitha. S and Selvam. M (2007): With a sample of 58, to study the impact of merger on the performance in the Indian manufacturing sector from 2000 to 2002, the study concluded, overall financial performance is insignificant for 13 variables.

Pramod Mantravadi and Vidyadhar Reddy (2008): Investigated a sample of 118 cases of mergers in their study. They found, more impact of merger was noticed on the profitability of banking and finance industry, pharmaceutical, textile and electric equipment sector, whereas the significant decline was seen in chemical and Agri-Products sector.

More Indian studies are expected in this interesting area to understand the possible long-term impact of pharma M&A in India.

Conclusion:

Be that as it may, inbound and outbound consolidation and expansion of the Indian pharma industry through M&A will continue. However, this likely to happen at a varying pace, depending upon both the opportunities and constraints for business growth. This will include both in the export and the domestic markets.

Increasingly complex business environment, intense drug pricing pressure in the US, dwindling much differentiated product pipeline, impending patent expiry of blockbuster drugs, will drive the inbound M&A. Whereas, the domestic players would like to spread their wings in search of greater market access, across the world. This process is likely to include a different type of product-mix, including specialty and biologic products, creating some barrier to market entry for many other generic players.

Going forward, the critical drivers for pharma M&A in India, both inbound and outbound, are unlikely to undergo any radical change. Interestingly, available research studies regarding its long-term impact on the companies involved in this process are not yet conclusive. However, many researchers on the subject still believe, especially the financial impact of M&As on the merged entities in India last no more than short to medium term.

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.