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Ease of Doing Pharma Business in India: A Kaleidoscopic View 

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Ensuring ease of doing any ethical business activity in India, is a new focus area of the Government and is very rightly so. Creating ease of doing ethical pharma business too, falls under this overall national objective.

In this article, restricting myself to the drug sector, I shall deliberate on various aspects, which are now being considered by the pharma industry, related to the ‘ease of doing pharma business in India’. My discussion would cover all subsets of pharma players, irrespective of whether they fall under Multinational (MNC) or purely homegrown Indian companies, with different scales of operations – large, medium, small, or micro. 

To help the Government facilitating the ‘‘ease of doing pharma business in India’, it is just not enough to make the business models for all subsets of the Indian pharma sector looking ethical, conforming to all relevant laws, policies, rules and norms. Each pharma player need also to maintain an ongoing strict internal vigil, religiously, to ensure that the requirements of high quality clinical development, manufacturing and selling practices for effective, safe and rational medicines, are properly understood and strictly followed by all the employees within the organization.

A Kaleidoscopic View:

The above situation is something that ought to happen, as the Government keeps striving to improve the ‘ease of doing pharma business’ in India. However, while looking through a Kaleidoscope, as it were, the colors of industry expectations in this area keep changing rapidly, as the new contentious issues keep emerging. Consequently, the ground reality of assessing the same, by a large section of the pharma players in India, seems to veer only around different types of just self-serving demands, expecting those to act as a powerful tailwind pushing their business interests rapidly forward.

Such expectations keep surfacing, rather frequently, from all the subsets of the pharma industry, be they MNCs and their trade associations or the Companies of purely Indian origin and their trade bodies. The accusation to the Government pertaining to all these issues, is a common one: ‘Where is the ease of doing pharma business in India?’

Citing even some recent incidents, they are voicing with equal gusto, that the root causes of all these problems lie miles outside the pharma industry. The causative factor, they indicate, is rooted at the very doorsteps of the Government, as its ministries initiate tough action to root out corruption in the pharma industry as concurrent measures, disturbing their business comfort zones, and upsetting the apple carts. 

The Government has its task cut out:

I hasten to add that I have no intention to paint it as a confrontation between the Government and the pharma industry, in any way. The Government is also facing the brunt from the various stakeholders, relentlessly, for its utter negligence of public health care, and public expenditure over it.

The impact of this Government indifference, though also comes on the patients, the industry does not seem to have much to crib over it as a direct impediment to the ‘ease of doing pharma business’ in India.

Probably as a diversionary tactic, the industry keeps using this critical Government inaction in the hope of diverting the public, or media attention from its own alleged business malpractices, even at a time when these are being covered both by the national and international media, regularly. Nevertheless, the industry credibility on these issues, seems to have started waning fast, as the genie is out of the bottle.

A common punching bag of all industry dissatisfaction on the Government:

It is worth noting that despite some key differences between the MNC and Indian pharma companies, which I shall discuss later, the common punching bag of the industry dissatisfaction on various Government decisions, always has been the lack of ‘ease of doing pharma business’ in the country.

This discontentment may be well justified. I have no qualms about it. However, when this dissatisfaction gets tagged with some recent Government action, taken to protect public health interests and does not have much to do with the ‘ease of doing ethical pharma business’, many eyebrows are obviously raised.

Against some of these critical patient-centric actions, the industry continues to express its annoyance in unison, while for some other Government decisions, it speaks in different voices – some are happy ones, and the others are not so. However, the common thread of expression of all such dissatisfactions is always linked with the lack of ‘ease of doing business’ in India.

A. Where the pharma Industry in India speaks in unison: 

I shall now give two major examples of the key Government decisions, that have irked the entire pharma industry immensely, and makes it voicing that those Government actions grossly violate the fundamental requirements of its smooth running of business. Is that fair? Let me analyze that below with these two examples:

1. Drug price control:

The industry, by and large, opines that individual drug company should be allowed to decide the way it would price any drug, as the market forces, especially for generic drugs, would determine its price.

Indian Parliament, the Supreme Court of India, the Government in power at different times, most of the independent experts and the NGOs, on the contrary, consider drug price control is necessary in India, especially for essential drugs. It makes high quality essential medicines affordable and accessible to the general population.

National Pharmaceutical Pricing Authority (NPPA) has also announced and explained that the competition does not work on controlling prices for pharma products, where the consumers are not the decision makers. The key prescribing decision makers for the patients are the doctors, who are mostly and unethically influenced by the drug companies having vested interest in making such decisions. This unholy nexus has been widely alleged globally, and also established through umpteen number of studies of high credibility.

Nevertheless, the doctors, from across the globe, including in India, have long disputed that any payments, if and when they receive from pharmaceutical companies, have no relationship to how they prescribe drugs.

A March 17, 2016 study of ProPublica has conclusively established that: “The more money doctors receive from drug and medical device companies, the more brand-name drugs they tend to prescribe. Even a meal can make a difference.” This study may be in the context of the Unites States, but India in this in this regard is no exception, as captured even in the parliamentary Committee reports.

Thus, conceding to high voltage pharma advocacy, made on the pretext of ‘encouraging innovation’ and ‘ease of doing business in India’, if any Government contemplates the abolition of drug price control in India is, it would make not just essential drugs inaccessible to a large section of society, but encourage blatant corrupt practices. This caution has come, besides many others, also from a Parliamentary Committee report, unambiguously. Incidentally, the present Government too strongly speaks against corruption, in any form.

Thus, I reckon, if the industry believes that the price control of essential drugs, which are for public health interest, goes against ease of doing pharma business in India, so be it.

2. Manufacturing and selling of irrational FDCs:

A Fixed Dose Combination (FDC) drug may appear irrational to drug regulators and well-qualified experts, after necessary scientific scrutiny, for various reasons. This may happen, primarily because of the following reasons:

  • When the medical rationale of the FDC along with the ingredient details, submitted to the regulatory authority for marketing approval, are considered scientifically inappropriate.
  • When the evolving medical science establishes the irrationality of the FDC after a period of time.
  • When the analysis of ‘Adverse Drug Event’ reports from the ongoing Pharmacovigilance studies signals a red alert.
  • Widespread uncontrolled misuse or abuse of FDCs, where the consumers’ health risks far outweigh the drug benefits, as provided in the drugs Act, for public health interest.
  • Some regulatory loopholes were misused by the drug manufacturers in the past to get the irrational FDCs approved by the State Drug Authorities, violating the new FDC regulatory approval Policy.

Any irrational FDC so identified by the drug regulators and experts, by putting a system of scrutiny in place, must be banned forthwith, in public health interest. There should not be any scope of negotiation with drug manufacturer to make the bans effective.

Incidentally, realizing the gravity of public health risks posed by irrational FDCs, even the NPPA has reportedly decided to review afresh all new applications for price fixations of FDC and examine their safety and efficacy profile.

Moving towards this direction, the NPPA Chairman, has reportedly sent back more than 200 applications for price fixation of FDCs, instructing the concerned manufacturing and marketing companies to apply again with a declaration that their formulations are not “irrational.” It was also reported that the price regulator has also brought under the lens third-party drug makers and pharma companies that outsource to them, to check illegal sales of irrational FDCs and spurious drugs.

Two key questions being raised now:

Despite all these, the industry keeps repeating, especially, the following two questions, which are worth looking at, one by one: 

1.  Why is the ban now?

I discussed the issue of FDC ban in my previous article in this Blog on March 21, 2016 titled, “The Recent Ban On Irrational FDCs: History Repeats Itself”.

In the above article, I also argued that large section of the industry and its associations are protesting against the Government ban of 344 irrational FDCs, and questioning vigorously, even outside the Delhi High Court – ‘why is the ban now?’

The point ‘why now’ is absolutely irrelevant, as not taking any action ever, against a wrong doing ignored over a long period time for whatever reasons, does not confer any regulatory legitimacy to an irrational FDC formulation to be considered as a rational one for all time to come, and thereby, exposing patients to serious health risks, knowingly.

2.  Why is this ban so sudden, and in some cases after decades?

Sudden banning of drugs, which are in the market for a long time, is not a recent Indian phenomenon in India. In 2011, according to a report, in the world’s largest pharma market – the United States, the FDA banned 500 prescription drugs that had been on the market and working for decades. USFDA ban also happened suddenly, and that includes cough syrups too.  Thus, it is intriguing, why is this fuss created by the Industry in India now? 

In the midst of it, one odd, knee-jerk, apparently ‘spoon-fed’ and ill-informed editorial in some Indian business daily, raises more questions about its real intent, rather than help finding answers to the poorly sketched problems.

I would hope, the Government would stay firm and be able to convince the Delhi High Court today, i.e. on March 28, 2016, with its robust data-based arguments, accordingly.

Be that as it may, in my perspective, if the industry still believes that bans of irrational FDCs to protect public health interest, as decided by the independent experts after long and structured deliberations, would go against ‘ease of doing pharma business’ in India, so be it. 

B. Where the pharma industry in India speaks in different voices:

As stated above, there are several other key areas, where the MNC and Indian Pharma players have sharp differences in their perspectives. Despite these differences, the aggrieved section does not even blink a bit to attribute those Government actions to the lack of ‘ease of doing pharma business’ in the country.

 In this area, I shall give just the following three examples: 

1. The Patents Act:

MNCs say that section 3 (d) of the Indian Patents Act 2005, which is aimed at curbing patent ever-greening or frivolous inventions, is against the ease of doing business in India. However, the Indian Pharma players, do not think so, at all. Similar disagreement also exists in other critical areas too, such as, ‘Data Exclusivity (DE)’ and ‘Compulsory Licensing (CL)’.

Thus, in my opinion, if some ‘public health interest’ related provisions of the robust Indian Intellectual Property (IP) Act, such as, section 3 (d), DE and CL, are considered as going against the ‘ease of doing pharma business in India’ by the MNCs, so be it.

2. Mandatory Uniform Code of Pharma Marketing Practices (UCPMP):

Need to have a mandatory UCPMP, though, is reportedly supported by the MNCs, Indian pharma players do not seem to be quite in sync with this idea. I am not sure, whether the delay in the announcement of mandatory UCPMP, almost in every 3 months, has any coincidence with it or not. However, the reality is, no one still knows clearly, when would it definitely come, if at all.

Media reports on pharma MNC support to mandatory UCPMP, and repeated reiteration that its members in India rigidly follow the IFPMA Code of Marketing Practices, though commendable, seem to grossly lack in credibility.

Interestingly, despite the existence of this code and high-decibel vouch for its rigid conformance, maximum number of MNCs have been fined billions of dollars, by the Government in various countries, for alleged gross marketing and other business malpractices. It has been happening over a long period of time, and is being reported by the international media, frequently.

What is really happening, especially, on the so called total support of ethical marketing practices by the MNCs? Are they trying to create just good optics by craftily framing and supporting such showpiece codes, and blatantly defying these to achieve self-serving goals? The voice gets shriller, even when they are being levied hefty fines, after getting caught red handed, as reported by the global media? I guess, the future would ultimately unfold the reality. But would it, at all?

The Indian Scenario: 

Even in India, such alleged marketing malpractices involving even a top pharma MNC have often been reported by the media. Just to illustrate, “Prescribe a drug maker’s medicine and get a free vacation”, reported a news article. There are several other similar reports too. Hence, the credibility of pharma MNC statements regarding strict conformance to ethical marketing codes, ably formulated by the well-known pharma trade associations, such as, IFPMA, appears to be very low, if exists at all.

The well-reputed medical Journal BMJ in one of its articles titled, “Corruption ruins the doctor-patient relationship in India”, published on May 8, 2014, expressed serious concern on this issue.

It concluded that corruption, kickbacks and the nexus between doctors and pharmaceutical firms are rampant India. This eventually prompted the BMJ, in June 2014, to launch a campaign reportedly called ‘Corruption in Medicine’.

On this issue, way back in May 08, 2012, even the Indian Parliamentary Standing Committee on Health and Family Welfare in its 58th Report, placed before the Parliament on May 08, 2012, expressed its serious concern.

Indian lawmakers, recommended in the report that the Department of Pharmaceuticals (DoP) should take decisive action, without further delay, in making the UCPMP mandatory, so that effective checks could be ensured on ‘huge promotional costs’ and the resultant add-on impact on medicine prices. Unfortunately, despite a change in the Government in 2014, UCPMP has still not been mandatory.

It is anybody’s guess, despite all these reports, what type of external pressure, if at all, the DoP is still facing to put in place a robust mandatory UCPMP with strong deterrent measures.

Under this backdrop, in my view, if mandatory UCPMP having enough teeth, to curb ongoing blatant marketing malpractices to protect patients’ health interest in India, is considered by any as going against the ‘ease of doing pharma business in India’, so be it. 

3. Drug manufacturing quality:

Enough discussions have already been made on import ban of USFDA from over 45 drug manufacturing facilities of Indian Companies, of all sizes and scale of operations, on the ground of drug quality standards. USFDA considered drugs manufactured in those banned facilities are unsafe for the consumption of American patients. Some other foreign drug regulators, from the developed countries, have also taken similar action.

Taking advantage of this development, it was reported that attempts are indirectly being made to establish that MNC marketed generic drugs are superior to similar ones, manufactured even by the large Indian drug producers.

The fact, apparently, is quite different. MNCs operating in India has not come under the USFDA scanner in this regard as much, probably not because of their far superior drug manufacturing quality standards in India, as compared to even the best of their Indian counterparts. I reckon, it is mainly because, very few MNC drug manufacturing facilities in India export India manufactured drugs for consumption in the United States. 

It may not, therefore, make any real sense to conclude that MNC marketed generic drugs in India, either manufactured my themselves or under loan & license or under a third party, are generally better in quality than the similar ones manufactured even by the large Indian manufacturers. 

In any case, I feel that there is a huge scope for Indian drug regulators to ensure uniformly high drug quality standards. This is necessary for Indian patients’ health and safety. There also should be stringent regular quality audits in all drug manufacturing facilities in India, where non-conformance with prescribed standards would attract serious punitive measures. The Union Ministry of Health, together with the State Governments would require increasing the number of auditors accordingly.

However, the reality is, many Indian drug manufacturers have expressed that maintaining stricter drug manufacturing standards (cGMP) would involve huge expenditure, which they will not be able to afford. Consequently, this would go against the ‘ease of doing pharma business’ in India.

Again, in my view, if the stringent regulatory requirements for maintaining high drug manufacturing standards in India to protect public health interest, is considered as going against the ‘ease of doing pharma business’ in India, so be it.

Conclusion:

Improving ‘ease of doing pharma business’ in India is an absolute necessity, just as all other businesses. Pharma sector deserves it very badly too, as it has been experiencing excruciating delay in multiple regulatory clearances. Single window clearances of all applications, with a much greater sense of urgency, without bureaucratic red tapes and avoiding other unnecessary delays, is certainly the way forward for India. It would require urgent policy reforms, maintaining a right balance between, public, consumers and business interests.

Pharma sector is not all villain, either, by any yardstick. It is instrumental in saving and improving the quality of lives of so many people across the globe, since a very long time, with its both innovative and generic medicines. All must acknowledge it, and the Government does it too, openly, several times. 

That said, the space of focus of the pharma industry appears to be getting increasingly narrowed down to more of its self-serving acts, and in their hard selling, through hugely expensive advocacy campaigns, even at the huge cost of attracting frequent self-defeating scathing criticisms, across the world.

At the same time, the Governments in different times hugely disappointed its citizens, in charting a clear road map for quality and affordable health care for all in India, along with appropriate budgetary allocations and policy reforms, and thereafter, in its implantation with military precision.

However, that doesn’t mean, in any way, while facilitating ‘ease of doing pharma business’ in India, the Government would turn a blind eye on the rapidly breeding corruption in the pharma business practices, and give in to unjustified industry muscle-flexing, sacrificing the health interest of its citizens in the country.

While looking through this Kaleidoscope, it appears to me, if the pharma sector considers the appropriate Government actions to protect public health interest, against the unacceptable industry practices, would also go against the ‘ease of doing pharma business’ in India… Well, so be it.

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.

 

The Curious Conundrum of New Drugs Approval Process

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Fathoming the details of just a short span of time, not going beyond the last 10 years, I find from the published data that many new drugs, such as, Alatrofloxacin, Aprotinin, Drotrecogin alfa, Lumiracoxib, Propoxyphene, Rofecoxib, Rosiglitazone, Sibutramine, Tegaserod, Tetrazepam, were withdrawn from a number of important global markets. Quite a few of those were withdrawn also from the world market.

The key reason for almost all these withdrawals was serious safety concerns for the patients while using these medicines. Interestingly, some of these new molecules were withdrawn even after attaining the blockbuster status, such as Rofecoxib.

Tens of thousands of patients have died only because of this reason, according to reports.

It is widely believed by the experts in this area, if full public disclosure of the entire data of drug clinical trials was made, most of these new drugs would not have seen the light of the day and without putting many patients’ health safety in jeopardy.

All this is a part of a curious conundrum in the new drug approval process, across the world, for various reasons. In this article, I would try to dwell on this issue.

Voices against this ‘unethical practice’ getting louder:                                             

On December 22, 2015, ‘CBC News’ published an interesting article, titled “Researcher issues ‘call to action’ to force release of hidden drug safety data: Bringing drug industry data into the light of public scrutiny.”

The article echoed the same belief of other global experts and, in fact, went a step forward. It categorically reiterated, if full disclosure of the entire data of drug clinical trials is made public, medical practice might have been quite different.

To drive home this point, the article cited the example of the arthritis drug rofecoxib (Vioxx), which has been linked to tens of thousands of deaths related to heart attacks.

It highlighted, although this risk was very much known to the regulatory authority of the United States, the relevant data was not released to the public for an impartial scrutiny.

Quoting different sources, the paper observed, almost half of the drug trials remain secret and the studies that are published, overwhelmingly report results that make the drug in question look good.

Independent experts’ views differed from the innovator companies:

In some cases, when researchers were able to see what is hiding in the filing cabinets of the drug innovator companies, a different picture altogether emerged on the overall profile of those drugs.

One group looked at 12 antidepressants, comparing the published studies with the internal US FDA assessments. They found that 94 per cent of the published studies were positive, as compared to 51 per cent, when they included all of the studies assessed by the drug regulator.

Based on a detailed study, the authors concluded, without considering all the data, drug effectiveness can often be exaggerated, leading doctors and patients to assume that the medications work better than what they actually do. The ongoing practice of the drug players may help them to significantly diminish the risks, related to the benefits offered by these medicines.

A few months ago, another group analyzed the data from an unpublished drug company study about the effect of Paxil on teen depression and found that the drug did not work and was not safe for the patients. This result completely contradicted the original, unpublished study on this drug.

A crusader emerged in Canada:

Interestingly, the same article, as above, states that Mathew Herder , the health law associate professor at Dalhousie University in Halifax, Canada is now taking up the fight. He is now “calling on other doctors, researchers and journalists to bombard Ottawa with their own demands for drug industry data, using the new legislative lever called the ‘Protecting Canadians from Unsafe Drugs Act,’, which was passed late last year in Canada. 

He has also created a template to help doctors, researchers and journalists access drug safety data at Health Canada. Herder reportedly could even include biomedical researchers, doctors who prescribe medicine, investigative journalists pursuing questions about drug safety, and other activists and patient groups.

This example is worth imbibing elsewhere.

The ‘Rule Books’ are in place, though with loopholes:

To curb such alleged patient unfriendly practices of the innovative drug manufacturers, while obtaining the marketing approval of new drugs, various rules and procedure were put in place, by various authorities.

I shall deliberate below a few of these rules, and enough loopholes therein, enabling the interested parties to hoodwink the external experts, at the cost of patients.

International Clinical Trials Registry Platform:

Much before Herder, following a ministerial summit on Health Research in 2004, a World Health Assembly Resolution passed in 2005 called for unambiguous identification of all interventional clinical trials. This resolution led to the establishment of the ‘World Health Organization (WHO) International Clinical Trials Registry Platform’. It collates information on trials that have been notified in a network of clinical trial registries.

According to W.H.O, “The registration of all interventional trials is a scientific, ethical and moral responsibility”.

In the latest version of the Declaration of Helsinki, it reiterates, “Every research study involving human subjects must be registered in a publicly accessible database before recruitment of the first subject.”

It unambiguously states, “Researchers have a duty to make publicly available the results of their research …. Negative and inconclusive as well as positive results must be published or otherwise made publicly available”.

Understandably, W.H.O statement underscores, “There is an ethical imperative to report the results of all clinical trials, including those of unreported trials conducted in the past.”

It is worth mentioning here that on January 1, 2015, by a new policy on publication of clinical data, ‘European Medicines Agency (EMA)’ also decided to proactively publish all clinical reports submitted as part of marketing-authorization applications for human medicines, by the by pharmaceutical companies.

Big Pharma's serious apprehensions on greater Public transparency:  

Before finalization of the above policy, EMA sought comments on its draft from various state holders. On September 5, 2013, in its remarks on the draft, ‘The European Federation of Pharmaceutical Industries and Associations, EFPIA’ expressed its apprehension about the public health safety oriented proactive move by the EMA as follows:

“We are worried by a move towards greater transparency of clinical trials data that appears to be putting transparency – at whatever cost – ahead of public health interests. Our detailed response to the EMA draft policy speaks to this concern. While EFPIA values other voices and opinion in the conversation surrounding clinical trials data, we believe there are better alternatives than what the EMA is presenting.” 

This is of course understandable. That said, it also gives satisfaction to note that EMA did not wilt under any pressure on this score, whatever the anecdotal might of the external force be. 

Gross non-compliance, endangering patients’ health safety:

Although, the standards and requirements of “Public Disclosure of Clinical Trial Results” have been well specified now, and even in most of the Big Pharma websites one can find disclosure norms of clinical trial data, their overall compliance on the ground, is still grossly inadequate, endangering patients’ health safety.

An article published in the BMJ Open on November 12, 2015 titled, “Clinical trial registration, reporting, publication and FDAAA compliance: a cross-sectional analysis and ranking of new drugs approved by the FDA in 2012”, well captured the magnitude of this issue. 

Nevertheless, the study analyzed just a subset of drugs approved in a single year, 2012. The researchers only examined whether clinical trials were registered and reported, not what that data suggested about how the drugs worked.

The paper reported the results as follows:

“In 2012, the US FDA approved 39 novel new medicines, known as NMEs, and 35 novel drugs. Combining these lists, the FDA approved a total of 48 new drug entities, 15 of which were sponsored by 10 large pharmaceutical or biotechnology companies with market capitalizations valued over US$19 billion. A total of 342 trials were conducted to gain regulatory approval of the 15 drugs, 24 of which were excluded from our analysis, leaving 318 trials involving 99 599 participants relevant to our study, a median of 17 trials per drug.”

Based on the findings, the authors concluded asunder:

“Trial disclosures for new drugs remain below legal and ethical standards, with wide variation in practices among drugs and their sponsors. Best practices are emerging. 2 of our 10 reviewed companies disclosed all trials and complied with legal disclosure requirements for their 2012 approved drugs. Ranking new drugs on transparency criteria may improve compliance with legal and ethical standards and the quality of medical knowledge.”

Simultaneously, The Washington Post in an article of November 12, 2015, titled, “How pharma keeps a trove of drug trials out of public view”, summarized this report by highlighting to the general public that one third of the clinical trial results that US FDA reviewed to approve drugs made by large pharmaceutical companies in 2012, were never publicly reported. 

Unethical practices skewing medical science:

On July 25, 2015, ‘The Economist’ published an article titled, “Spilling the beans’. It highlighted again that the failure to publish the results of all clinical trials is skewing medical science. 

This article also brought to the public attention that half of the clinical trial results are never published over several decades. It broadened the discourse with the observation that this specific unwanted practice, distorts perceptions of the efficacy of not just drugs, but devices and even surgical procedures too, in a well planned and a systematic manner. What is most important to note is, it has seriously compromised with patients’ health interest, across the world. 

It keeps on happening, as there are no firm obligations on the part of drug companies for making public disclosure of all such data, both for and against, though all these data are required to be filed with the regulatory authorities. Hence, the overall assessment of the drugs, weighing all pros and cons, is just not possible for any outside expert agency.

For granting necessary marketing approval, the designated authorities, at least theoretically, ensure that the drugs are reasonably safe, and have, at least, ‘some beneficial effects’. However, the prescribing doctors would continue to remain ignorant of the untold facts, the article states. 

According to ‘The Economist’, although in the United States the relevant laws were modified, way back in 2007, to address this issue, it still remains as a theory, the actual practices in this regard are mostly not so.

Despite vindication no tangible outcome yet:

As I said earlier, this fact got vindicated through extensive research by the ‘BMJ Online’ article and many other contemporary medical publications. 

For example, the evidence released earlier on  April 10,  2014 by the Cochrane Collaboration of London, UK, also shows that a large part of negative data generated from the clinical trials of various drugs were not disclosed to the public. 

Again, like Vioxx, though the US FDA was aware of all such data, for a well known drug Tamiflu, unfortunately the prescribing doctors were not. As a result, the U.S. Centers for Disease Control and Prevention (CDC), which doesn’t have the same access to unpublished data as the regulators, recommended this medicine not being able to evaluate it holistically. 

However, as the findings from the unpublished clinical trials eventually surfaced, CDC expressed serious apprehension on the overall efficacy of Tamiflu, quite contrary to the assessment of the concerned big pharma player.

Hence, despite quite a large number of vindications by the experts, no tangible outcome has been noticed on this pressing issue, just yet.                                                                

Conclusion:

Based on all this discussion, the moot question that springs up: Why do the doctors still prescribe such drugs, even after being aware of the full facts?

In this regard, an article titled, “Big Pharma Plays Hide-The-Ball with Data”, published in the Newsweek on November 13, 2014 raised a very valid question. 

It commented, even if Tamiflu does nothing, and there is just a slight chance of life-threatening side effects, why was it approved by the US FDA, in the first place?

Even more intriguing is: Why do the doctors continue prescribing these, especially after the Cochrane Collaboration took the Tamiflu’s maker, Roche, to task about many of its claims, in April 2014.

Incidentally, the Cochrane Collaboration is widely regarded as one of the most rigorous reviewers of health science data. It takes results of multiple trials, looks for faults and draws conclusions. It doesn’t accept funding from businesses with a stake in its findings.

The answer to this question may perhaps be too obvious to merit any elaborate discussion here. 

Be that as it may, this curious conundrum of ‘New Drug Approval’ with ‘Partial Public Disclosure of Clinical Trial Data’ needs to effectively addressed, without further delay. If not, patients’ health interest would continue to get seriously compromised with the continuation of prevailing laxity in its implementation process by the drug regulators.

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.

Nutraceuticals: A Major Regulatory Step That Was Long Overdue

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Currently in India the nutraceutical products segment, with surrogate or off-label therapeutic claims, is growing at a reasonable pace.

Many such products are now being directly promoted to the medical profession, just like any other modern medicines, with therapeutic claims not being supported by robust clinical data that can pass through scientific or regulatory scrutiny.

For such use of nutraceutical products, I raised the following two questions in my article on this Blog titled, “Nutraceuticals with Therapeutic Claims: A Vulnerable Growing Bubble Protected by Faith and Hope of Patients” on August 27, 2012: 

  • What happens when the nutraceutical products fail to live up to the tall claims made by the respective manufacturers on their efficacy and safety profile?
  • Are these substances safe in those conditions, even when not enough scientific data has been generated on their long term toxicity profile?

Importance of robust clinical data for any product with therapeutic claims:

For similar claim of therapeutic efficacy in the treatment of a disease condition, any drug would require establishing its pharmacokinetics and pharmacodynamics with pre-clinical and clinical studies, as stipulated by the drug regulators. Some experts believe that these studies are very important for nutraceutical products as well, especially when therapeutic claims are made on them, directly or indirectly. This also because, these substances are involved in a series of reactions within the body. 

Similarly, to establish any long term toxicity problem with such products, generation of credible clinical data, including those with animal reaction to the products, both short and long term, using test doses several times higher than the recommended ones, is critical. These are not usually followed for nutraceutical products in India, even when therapeutic claims are being made.

Some experts in this field, therefore, quite often say, “A lack of reported toxicity problems with any nutraceutical should not be interpreted as evidence of safety.” 

The current status:

Currently in India, nutraceuticals, herbals and functional foods are covered under the definition of ‘food’ as per Section 22 of Food Safety & Standards Act, 2006. These food products have been categorized as Non-Standardized/special food products. Neither was there any properly framed guidelines related to manufacturing, storage, packaging & labeling, distribution, sales, claims and imports, nor any legal fear of counterfeiting.

A recent reiteration of the need of regulatory guidelines for nutraceuticals:

In a study on ‘Indian Nutraceuticals, Herbals, and Functional Foods Industry: Emerging on Global Map,’ jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and RNCOS and released by ASSOCHAM on August 17, 2015 the above key apprehensions on the lack of any kind of regulatory guidelines for the approval and monitoring of products falling under this segment, were reiterated.

The market:

According to the above study, the global nutraceuticals market is expected to cross US$ 262.9 billion by 2020 from the current level of US$ 182.6 billion growing at a compound annual growth rate (CAGR) of about 8 percent.

United States (US) has the largest market for the nutraceuticals, followed by Asia-Pacific and European Union. Functional food is the fastest growing segment in the US nutraceuticals market. Germany, France, UK and Italy are the major markets in the European Union for nutraceuticals. Japan (14 percent) is the major consumer of nutraceuticals in Asia-Pacific, followed by China (10 percent).

The Indian nutraceuticals market is at a nascent stage now, but fast emerging. India accounts for around 1.5 percent of the global market. However, the above study forecasts that due to rising awareness of health and fitness and changing lifestyle, India’s Nutraceuticals market is likely to cross US$ 6.1 billion by 2020 from the current level of US$ 2.8 billion, growing at a compound annual growth rate (CAGR) of about 17 percent. 

Phytochemicals in nutraceuticals:

Phytochemicals have been broadly defined as chemical compounds occurring naturally in plants. A large number of phytochemicals, either alone and/or in combination, are currently being used as nutraceuticals with significant impact on the health care system, claiming a number of medical health benefits, including prevention, treatment and even cure of many types of diseases.

The most recent regulatory intervention:

Responding to the growing demand for regulatory intervention in this important matter, on November 30, 2015, by a gazette notification, the Government of India included phytopharmaceutical drugs under a separate definition in the Drugs & Cosmetics (Eighth Amendment) Rules, 2015, effective that date.

This regulatory action also followed the rapidly growing use of these drugs in India, which includes purified and standardized fraction with defined minimum four bio-active or phytochemical compounds. 

On the ground, this significant regulatory measure would necessarily require the pharma players to submit the specified data on the phytopharmaceutical drug, along with the application to conduct clinical trial or import or manufacture in the country.

The salient features of the notification:

I am summarizing below, only the salient features of the detail notification for obtaining regulatory approval of these drugs in India:

A. Data to be submitted by the applicant:

A brief description or summary of the phytopharmaceutical drug giving the botanical name of the plant: 

- Formulation and route of administration, dosages

- Therapeutic class for which it is indicated

- The claims to be made for the phytopharmaceutical product.

- Published literature including information on plant or product or phytopharmaceutical drug, as a traditional medicine or as an ethno medicine and provide reference to books and other documents, regarding composition, process prescribed, dose or method of usage, proportion of the active ingredients in such traditional preparations per dose or per day’s consumption and uses.

- Information on any contraindications, side effects mentioned in traditional medicine or ethno medicine literature or reports on current usage of the formulation.

- Published scientific reports in respect of safety and pharmacological studies relevant for the phytopharmaceutical drug intended to be marketed.

- Information on any contraindications, side effects mentioned or reported in any of the studies, information on side effects and adverse reactions reported during current usage of the phytopharmaceutical in the last three years, wherever applicable.

- Present usage of the phytopharmaceutical drug ,  –  to establish history of usages, provide details of the product, manufacturer, quantum sold, extent of exposure on human population and number of years for which the product is being sold. 

B. Human or clinical pharmacology information

C. Identification, authentication and source of plant used for extraction and fractionation

D. Process for extraction and subsequent fractionation and purification

E. Formulation of phytopharmaceutical drug applied for

F. Manufacturing process of formulation

G. Stability data

H. Safety and pharmacological information

I. Human studies

J. Confirmatory clinical trials

K. Regulatory status in other countries

L. Marketing information, including text of package inserts, labels and cartons

M. Post marketing surveillance (PMS)

N. Any other relevant information that will help in scientific evaluation of the application

Conclusion:

Prior to the above gazette notification, companies marketing nutraceutical products in general and phytochemical products, in particular, used to operate under a very relaxed regulatory framework.

Such products are currently promoted with inadequate disclosure of science based information, particularly with the surrogate therapeutic claims, which are based merely on anecdotal evidence and forms a part of intensive off-label sales and marketing efforts on the part of respective marketing players. It continues to happen, despite the fact that off-label therapeutic claims for any product are illegal in India, just like in many other countries.

Appropriate measures now being taken by the Government on phytochemical drugs, are expected to further plug the regulatory loopholes for off-label therapeutic claims without any robust scientific evidence. This particular regulation would also, hopefully, help curbing marketing malpractices to boost sales turnover of such products.

Considering all this, it appears that this is a major regulatory step taken by the Indian Government that was, in fact, very long overdue. Implemented properly, this would ensure predictable health outcomes and improved safety standards for most of the nutraceutical products, solely keeping patients’ health interest in mind.

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 Manipulation: Leapfrogging Dangerously Into Clinical Trial Domain

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

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

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

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

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

Time to take the bull by the horns:

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

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

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

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

‘Data manipulation’ dangerously leapfrogging into clinical trial domain:

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

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

What it means commercially?

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

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

Unrolling the GVK Bio saga:

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

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

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

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

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

Indian Government blames ‘vested interests supporting Big Pharma’!

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

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

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

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

The rigmarole continues:

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

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

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

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

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

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

Could assume a snowballing effect:

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

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

Cadila Pharmaceuticals Limited:

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

Emcure Pharmaceuticals Ltd.:

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

Aurobindo Pharma Ltd.:

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

Business sustainability could be in jeopardy:

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

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

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

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

Are medicines for domestic consumption safe and effective?

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

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

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

  • Why no such warnings are forthcoming at all from the Indian drug regulators?
  • Does it mean that the level of conformance to GMP and GCP is hundred percent for all medicines manufactured and clinically evaluated in India for the consumption of local patients?
  • If yes, why such incidences are not uploaded to the CDSCO website, just like USFDA?
  • If not, why?

Conclusion:

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

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

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

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

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

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

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

By: Tapan J. Ray

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 Protection’: Needs A Clear Direction…But Is It An IPR Issue?

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The terminologies ‘Data Exclusivity’ and ‘Data Protection’ are quite often used interchangeably by many, creating a great deal of confusion on the subject. However, in a true sense these are quite different issues having critical impact on public health interest of a nation.

In several media reports as well, one can notice the interchangeable use of these two terms. It is especially happening when the reports are speculating whether or not the Government of India is considering putting in place ‘Data Exclusivity’/ ‘Data Protection’ along with ‘Patent Linkage’ through administrative measures, without making any amendments in the Patents Act 2005 of the country.

Tracking this development, the last week, I wrote about ‘Patent Linkage’. In this article, I shall dwell on the same area, but from ‘Data Exclusivity’/ ‘Data Protection’ perspective.

A brief overview:

Close to a decade ago, Government of India constituted ‘Satwant Reddy Committee’ to recommend a direction that India should follow on ‘Data Protection’ in the country involving pharmaceutical and agricultural products.

In 2007 the Committee submitted its report recommending ‘Data Protection’ in the country to be introduced for pharma products in a calibrated manner. However, the report did not specify a timeline for its implementation.

Interestingly, even this committee did not differentiate between the terminologies ‘Data Protection’ and ‘Data Exclusivity, as we now see in the first draft of the ‘National IPR Policy.’

According to available reports, after due deliberation, the erstwhile Government decided not to take any action on the committee’s recommendations for ‘Data Protection’ in India.

Difference between ‘Data Protection’ and ‘Data Exclusivity’:

In an article published in ipHandbook, titled “Data Protection and Data Exclusivity in Pharmaceuticals and Agrochemicals”, the author Charles Clift with a great deal of experience in the U.K. Department of International Development (DFID) and a former Secretary, Commission on Intellectual Property Rights, Innovation and Public Health, World Health Organization; differentiated these two terminologies as follows:

Data Protection (DP): Protection of commercially valuable data held by the drug regulator against disclosure and unfair commercial use.

Data Exclusivity (DE): A time bound form of Intellectual Property (IP) protection that seeks to allow companies recouping the cost of investment in producing data required by the regulatory authority.

Arguments in favor of ‘Data Exclusivity’:

International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), Geneva, in its website argues in favor of ‘Data Exclusivity’ as follows:

- Health authorities require, as part of a submission for a marketing authorization, that proprietary information be disclosed in order to ensure public health and patient safety.

- The innovator assumes the entire risk for the generation of the data, what requires expensive and lengthy clinical trials.

- ‘Data Exclusivity’ is necessary to provide a measure of certainty to the innovator that they will be provided with a period of protection for their efforts of testing a drug.

- Patents and ‘Data Exclusivity’ are different concepts, protect different subject matter, arise from different efforts, and have different legal effects over different time periods

Arguments suspecting the intent of ‘Data Exclusivity’:

The above paper of Charles Clift highlights the following on DE:

- The effect of DE is to prevent entry of generic competitors, independent of the patent status of the product in question.

- DE law, wherever applicable, prevents generic manufacturers from using innovators’ test data, though it would allow the drug regulator to analyze this data prior to market approval.

- Even if the patent period has expired or there is no patent on a product, DE will act independently to delay the generic entry until the period of DE is over.

- In that way DE compensates innovators for delayed market entry and concomitant loss of potential profits.

- DE is a much stronger right than a patent, mainly because, unlike patent law, there is no exceptions or flexibilities that allow the governments to provide the equivalent of Compulsory License (CL).

- DE acts as a barrier to CL of a patent on the same product by preventing marketing approval for a CL.

TRIPS Agreement talks about DP, but not DE:

Article 39 of TRIPS Agreement on “Protection of Undisclosed Information” contains a general clause on the obligations of the members of the WTO, where Article 39.3 specifies three obligations for its member countries as follows:

- To protect data on New Chemical Entities (NCE), the collection of which involves considerable effort, against unfair commercial use.

- To protect these data against disclosure, except where necessary to protect the public

- To protect such data against disclosure, unless steps are taken to ensure that the data are protected against unfair commercial use

According to Charles Clift, Article 39.3 only articulates widely accepted trade secret and unfair competition law, and is not an invitation to create new IP rights per se for test data. Nor does it prevent outside parties from relying on the test data submitted by an originator, except in case of unfair commercial practices.

Some developed countries, such as the United States and the European Union have argued that Article 39.3 of TRIPS requires countries to create a regime of DE, which is a new form of time-limited IP protection. However, it is worth noting that in both these countries DE regime was adopted prior to TRIPS Agreement. Hence, many experts construe such approaches and pressure, thus created for DE, as ‘TRIPS Plus’.

What is ‘TRIPS Plus’?

The ‘TRIPS-Plus’ concept would usually encompass all those activities, which are aimed at increasing the level of IP protection for the right holders, much beyond what is required for conformance of TRIPS Agreement by the World Trade Organization (WTO).

Some section of the civil society nurtures a view that ‘TRIPS Plus’ provisions could significantly jeopardize the ability, especially, of developing countries to protect the public health interest adequately.

Some common examples of ‘TRIPS Plus’ provisions:

Common examples of ‘TRIPS Plus’ provisions could include:

- Extension of the patent term beyond usual twenty-year period

- Introduction of provisions, which could restrict the use of CL

- Delaying the entry of generics

Is ‘Data Protection’ an IPR issue?

In my view, the issue of ‘Data Protection’ is more a drug regulatory than an IPR related subject and should be treated as such. This is because ‘Data Protection’ is more related to the ‘Drugs and Cosmetics Act’ of India rather than the ‘Patents Act 2005′.

Thus, it is quite intriguing to make out why ‘Data Protection’, which will be governed by ‘Drugs and Cosmetics Act’, is featuring in the IPR Policy of the country.

I wrote on the draft National IPR Policy in my blog post of January 19, 2015, titled “New “National IPR Policy” of India – A Pharma Perspective”.

Conclusion:

After jettisoning the ‘Satwant Committee Report’ on ‘Data Protection’, the Government was in no mood, until recently, to discuss anything about DP and DE, despite intense pressure from the pharma MNC lobby in India. However, the issue first resurfaced during EU-FTA negotiation, when India rejected these provisions outright and unambiguously.

However, the ghost started haunting India, yet again, when the US Government started flexing its muscle on this issue, at the behest of the American pharma companies.

Although DP is a drug regulatory issue, curiously, it features in the draft National IPR Policy. Even there, the subject has taken an interesting turn, when in the first draft of ‘National IPR Policy’ of India, the six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan clearly recommended “Protection of undisclosed information not extending to data exclusivity.”

In my opinion this is indeed a very pragmatic recommendation. It deserves support from all concerned so that the profound intent continues to feature in the final IPR Policy of India, to protect public health interest of the nation.

Just like ‘Patent Linkage’, as I discussed in my last week’s article, finding a middle ground to put ‘Data Protection’ in place through administrative measures, without making any amendments either in the Drugs & Cosmetics Act or in the Patents Act of the country, seems to be desirable and very much possible, as well.

However, the very thought of considering ‘Data Exclusivity’ in India, in my view, should prompt a clear ‘No…No’ response from the present Government of India.

This is mainly because, besides all other reasons as mentioned above, even if the patent period for a molecule has expired or there is no patent on a product, DE will act independently to delay the generic entry until the period of ‘Data Exclusivity’ gets over.

By: Tapan J. Ray

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

 

What President Obama And Prime Minister Modi Discussed On IPR And Healthcare In India

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During the recent visit of the US President Barack Obama to India from January 25-27, 2015, both the domestic and international media was abuzz with the speculation, whether or not India would concede some ground to America on the prevailing, generally considered, well balanced patent regime in India.

Many expected that the American delegation would succeed in getting some specific assurances from Prime Minister Narendra Modi to follow the line of the US style Intellectual Property Rights (IPR) in India, which would help the American pharma companies to maximize their financial returns in the country.

The assurances from India were expected mainly in areas involving grant of patents even to those pharma products, that do not quality for the same under section 3(d) of the Indian Patents Act 2005, dilution of provisions for Compulsory License (CL) and creation of a new provision for Data Exclusivity in the country, besides a few others.

As everyone noticed, just before the US President’s visit, interested groups both in India and also from abroad intensified lobbying and released op-eds to create pressure on the Indian negotiators, in general, and the Prime Minister Modi in particular.

Terming the Indian Patents Act weak, the lobby groups turned the Indian IPR regime on its head. Playing the role of India’s benefactor, they re-packaged their shrill collective voice into pontificating words while giving interviews to the Indian media by saying: “A strong IPR regime could allow the country (India) to make a major contribution to tackling health challenges, both domestically and around the world.”

Additional US interest in Indian IP regime from TPP perspective:

Exemplary demonstration of India’s resistance to intense external pressure, time and again, for dilution of the IP regime in the country, seems to have become a model to follow for the emerging economies of the world, in general. This trend now gets reflected even among some of the members of the 12-nation Trans-Pacific Partnership (TPP), which is a proposed regional regulatory and investment treaty.

According to reports, TPP members, such as, Brunei, Malaysia, Singapore and Vietnam are negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement. Besides America, other members of the TPP are Australia, Japan and New Zealand, Canada, Chile, Mexico and Peru.

TPP negotiations are generally expected to follow the overall framework of American laws. However, according to media reports, based on the leaked draft of the TPP, the data exclusivity period for biologic medicines has already been negotiated down to 7 years, from 12 years under the US Affordable Care Act.

However, on January 27, 2015, US Senator Orrin Hatch, Chairman of the Senate Finance Committee reportedly said that he would oppose Senate approval of the TPP, if it does not provide 12 years of patent protection for biologics.

The same day, at a hearing before the House Ways and Means Committee, US Trade Representative Mike Froman reportedly reiterated, “The US is insisting on 12 years of IP protections, even though the Obama administration’s budget calls for 7-year exclusivity on biologic meds.”

It is also worth noting that Nobel laureate Joseph E. Stiglitz in an op-ed titled, “Don’t Trade Away Our Health”, published in The New York Times of January 30, 2015 commented as follows:

“TPP could block cheaper generic drugs from the market. Big Pharma’s profits would rise, at the expense of the health of patients and the budgets of consumers and governments.”

Clicking on this short video clip you will be able watch another similar viewpoint on TPP, its general perspective and what it encompasses.

Thus, the closely guarded ‘turf war’ on TPP is now heating up, making negotiations increasingly tougher to arrive at a consensus on the IP rules that would be applicable to pharmaceutical products in this trade initiative. Consequently, the evolving scenario has prompted the interested groups to keenly follow, with hopes, the outcome of Presidents Obama’s recent visit to India, especially in the pharma IP areas. This is because, many emerging economies of the world are now appreciative of the prevailing well-balanced patent regime in India.

After the 12-nation TPP agreement comes into force, probably following the lines of the US IP laws, it is quite possible that India may sometime in future would prefer to be a part of this agreement for greater trade facilitation, as the country comes closer to America…Who knows?

However, in that case the bottomline is, India would have to amend relevant provisions of its Patents Act in conformance with the requirements of mainly the US pharmaceutical companies and the IP laws prevailing in America, as this will be necessary to become a new member of this treaty.

Discussion in the summit meeting:

According to the Joint Statement on the summit meeting released by the White House, President Obama and Prime Minister Modi discussed the following subjects related to IPR and Healthcare in India, as detailed below:

  • Reaffirmed the importance of providing transparent and predictable policy environments for fostering innovation.  Both countries reiterated their interest in sharing information and best practices on IPR issues, and reaffirmed their commitment to stakeholders’ consultations on policy matters concerning intellectual property protection.
  • Reaffirmed their commitment to the Global Health Security Agenda (GHSA) and announced specific actions at home and abroad to prevent the spread of infectious diseases, including a CDC-Ministry of Health Ebola and GHSA preparedness training, expansion of the India Epidemic Intelligence Service, and development of a roadmap to achieve the objectives of the GHSA within three years.
  • Committed to multi-sectoral actions countering the emergence and spread of antimicrobial resistance (AMR), and cooperation in training of health workers in preparedness for infectious disease threats. The Leaders agreed to focus science and technology partnerships on countering antibiotic resistant bacteria and promoting the availability, efficacy and quality of therapeutics.
  • Welcomed further progress in promoting bilateral cooperation on cancer research, prevention, control, and management and agreed to continue to strengthen the engagement between the CDC and India’s National Centre for Disease Control.
  • Welcomed the upcoming completion of an Environmental Health, Occupational Health and Injury Prevention and Control MoU between the U.S. Centers for Disease Control and Prevention and the Indian Council for Medical Research to further collaborative efforts to improve the health and welfare of both countries’ citizens.
  • Agreed to expand the India-U.S. Health Initiative into a Healthcare Dialogue with relevant stakeholders to further strengthen bilateral collaboration in health sectors including through capacity building initiatives and by exploring new areas, including affordable healthcare, cost saving mechanisms, distribution barriers, patent quality, health services information technology, and complementary and traditional medicine.
  • Pledged to encourage dialogue between the U.S. Department of Health and Human Services and its Indian counterparts on traditional medicine.
  • Pledged to strengthen collaboration, dialogue, and cooperation between the regulatory authorities of the two countries to ensure safety, efficacy, and quality of pharmaceuticals, including generic medicines.
  • Agreed to accelerate joint leadership of the global Call to Action to end preventable deaths among mothers and children through a third meeting of the 24 participating countries in India in June 2015.  As host, India will showcase the power of new partnerships, innovations and systems to more effectively deliver life-saving interventions.
  • Also lauded the highly successful collaboration on a locally produced vaccine against rotavirus, which will save the lives of an estimated 80,000 children each year in India alone, and pledged to strengthen the cooperation in health research and capacity building through a new phase of the India-U.S. Vaccine Action Program.

As stated earlier, during this summit meeting, US lobbyists were reportedly nurturing a hope that Prime Minister Modi would eventually agree, at least in principle, to jettison section 3(d) on the patentability criteria enshrined in the Indian Patents Act 2005 and significantly water down the country’s Compulsory License (CL) provisions. This expectation increased, when the US President made the investment promise of U$4 billion in India.

That said, from the above points of discussion in the joint statement, it appears that no breakthrough on the part of the US was achieved especially in the IPR space, during the summit.

However, in other areas of bilateral healthcare co-operation, such as, science and technology partnerships in countering antibiotic resistant bacteria; cancer research and traditional medicines; the reaffirmations made by the two leaders are encouraging.

US pressure on IP to continue:

Going by India’s reaffirmation during the summit meeting of its commitment to consultations with America on policy matters related to IPR protection and US Trade Representative Mike Froman’s reported affirmation of the following to the US lawmakers during a Congressional hearing held on January 27, 2015, it is construed by the IP activists that the kettle has possibly started boiling:

- “We have been concerned about the deterioration of the innovation environment in India, and we have engaged with the new government since they came into office in May of last year about our concerns,”

- “We held the first Trade Policy Forum in four years in November. I just returned from India yesterday as a matter of fact … and in all of these areas, we have laid out a work program with the government of India to address these and other outstanding issues.”

- “We are in the process of providing comments on that draft policy proposal on IPR, and we are committed to continuing to engage with them to underscore areas of work that needs to be done in copyright, in trade secrets as well as in the area of patents,”

- “We’ve got a good dialogue going now with the new government on this issue, and we’re committed to working to achieve concrete progress in this area,”

Media reports also indicate that US pressure on IPR would continue, as they highlight:

“Threatened by free trade of high-quality and affordable medicines, US-based pharmaceutical companies and politicians friendly with the industry are using prominently placed op-eds, large advertisements on Washington, D.C. buses, and letters to President Obama to spread false information -claiming India’s rules are not legal or discourage innovation. The companies have been threatening to withhold investment if India does not adopt weaker patent laws that would extend pharmaceutical monopolies and stymie the country’s generic industry.”

I discussed some of these issues in my blog post of January 19, 2015, titled “New National IPR Policy of India – A Pharma Perspective”.

Conclusion:

Irrespective of whatever the US-India Joint Statement says on IPR, some experts do apprehend that Indian Government may now wilt under continuous intense pressure from the American Government. This is mainly because, India’s Commerce and Industry’s Minister has reportedly sought America’s inputs in the finalization process of the new National IPR policy of the country.

On this score, let me hasten to add that it may not be prudent to read too much into it, as seeking stakeholders’ comments on such matter is a practice that India has been following since long on various issues and policies.

However, at the same time, other groups of experts nurture a quite different viewpoint. They are confident that the nationalist Modi Government, under no circumstances would concede its long nurtured strategic ground on IPR to the US power play.

Emerging countries across the globe are keenly watching this intense game of  ‘Power Chess’, as they plan to emulate India in many of the pharmaceutical IP areas to uphold the public health interest, providing affordable healthcare to all.

These are still early days. Thus, in my view, on January 25, 2015, what President Barack Obama and Prime Minister Narendra Modi discussed on the IPR regime in India may not be as important as what they would eventually decide to agree, disagree or agree to disagree in this area, moving on from here.

Only time would prove…not just who is right, that is pretty obvious to many, but who wilts at the end of the day…and more importantly, why?

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.

New “National IPR Policy” of India – A Pharma Perspective

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Whether under pressure or not, is hardly of any relevance now. What is relevant today is the fact that the new Indian Government, almost in a record time of just around two months, has been able to release a high quality first draft of an important national policy for public discourse.

In October 2014, the Department of Industrial Policy and Promotion (DIPP) constituted a six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan to draft the ‘National IPR Policy’ of India and taking quick strides, on December 19, 2014, released its first draft of 29 pages seeking stakeholders’ comments and suggestions on or before January 30, 2015. A meeting with the stakeholders has now been scheduled on February 5, 2015 to take it forward.

A quick glance at the Draft IPR Policy:

The proposed ‘Mission Statement’ as stated in the draft “National IPR Policy” is:

“To establish a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and to accelerate economic growth, employment and entrepreneurship.”

Specifying its vision, mission and objectives, the draft policy suggests adopting a catchy national slogan to increase IP awareness: ‘Creative India; Innovative India’ and integrating IP with “Smart cities”, “Digital India” and “Make in India” campaigns of the new Government.

The ‘Think Tank’ dwells on the following seven areas:

  • IP Awareness and Promotion
  • Creation of IP
  • Legal and Legislative Framework
  • IP Administration and Management
  • Commercialization of IP
  • Enforcement and Adjudication
  • Human Capital Development

In the policy document, the ‘Think Tank’ has discussed all the above seven areas in detail. However, putting all these in a nutshell, I shall highlight only three of those important areas.

1. To encourage IP, the ‘Think Tank’ proposes to provide statutory incentives, like tax benefits linked to IP creation, for the entire value chain from IP creation to commercialization.

2. For speedy redressal of patent related disputes, specialized patent benches in the high courts of Bombay, Calcutta, Delhi and Madras have been mooted. The draft also proposes creation of regional benches of the IPAB in all five regions where IPOs are already located and at least one designated IP court at the district level.

3. The draft concludes by highlighting that a high level body would monitor the progress of implementation of the National IP Policy, linked with performance indicators, targeted results and deliverables. Annual evaluation of overall working of the National IP Policy and quantification of the results achieved during the period have also been suggested, along with a major review of the policy after 3 years.

Although the National IPR policy cuts across the entire industrial spectrum and domains, in this article I shall deliberate on it solely from the pharmaceutical industry perspective.

Stakeholders’ keen interest in the National IPR Policy – Key reasons:

Despite full support of the domestic pharmaceutical industry, the angst of the pharma MNCs on the well-balanced product patent regime in India has been simmering since its very inception, way back in 2005.

A chronicle of recent events, besides the seven objectives of the IPR policy as enumerated above, created fresh general inquisitiveness on how would this new policy impact the current pharmaceutical patent regime of India, both in favor and also against.

Here below are examples of some of those events:

  • At a Congressional hearing of the United States in July 2013, a Congressman reportedly expressed his anger and called for taking actions against India by saying:

“Like all of you, my blood boils, when I hear that India is revoking and denying patents and granting compulsory licenses for cancer treatments or adopting local content requirements.”

This short video clipping captures the tone and mood of one such hearing of the US lawmakers.

  • On April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘Priority Watch List Country’. Placement of a trading partner on the ‘Priority Watch List’ or ‘Watch List’ indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.
  • It further stated that USTR would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern. An OCR is a tool that USTR uses on adverse IPR issues and for heightened engagement with a trading partner to address and remedy in those areas.
  • “India misuses its own IP system to boost its domestic industries,” commented the US Senator Orrin Hatch while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) of US Chamber of Commerce on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30. The main reasons for the low score in the report were cited as follows:

-       India’s patentability requirements are (allegedly) in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.

-       Non-availability of regulatory data protection

-       Non-availability of patent term restoration

-       The use of Compulsory Licensing (CL) for commercial, non-emergency situations.

Based on this report, US Chamber of Commerce urged USTR to classify India as a “Priority Foreign Country”, a terminology reserved for the worst IP offenders, which could lead to trade sanctions.

  • In the midst of all these, international media reported:

“Prime Minister Narendra Modi got an earful from both constituents and the US drug industry about India’s approach to drug patents during his first visit to the US last month. Three weeks later, there is evidence the government will take a considered approach to the contested issue.”

  • Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma trade associations globally, has reportedly urged the US government to continue to keep its pressure on India in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too. Interestingly, as reported in the media a senior representative of this lobby group would be India when President Obama visits the country later this month.
  • In view of all these concerns, during Prime Minister Narendra Modis’s visit to the United States in September 2014, a high-level Indo-US working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries.
  • Almost immediately after the Prime Minister’s return to India, in October 2014, the Government formed a six-member ‘Think Tank’ to draft ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas. The notification mandated the ‘Think Tank’ to examine the current issues raised by the industry associations, including those that have appeared in the media and give suggestions to the ministry of Commerce and Industry as appropriate.
  • However, the domestic pharma industry of India, many international and national experts together with the local stakeholders continue to strongly argue against any fundamental changes in the prevailing patent regime of India.

A perspective of National IPR Policy in view of Pharma MNCs’ concerns:

I shall now focus on four key areas of concern/allegations against India on IPR and in those specific areas what has the draft National IPR Policy enumerated.

- Concern 1: “India’s patentability requirements are in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.”

Draft IPR Policy states: “India recognizes that effective protection of IP rights is essential for making optimal use of the innovative and creative capabilities of its people. India has a long history of IP laws, which have evolved taking into consideration national needs and international commitments. The existing laws were either enacted or revised after the TRIPS Agreement and are fully compliant with it. These laws along with various judicial pronouncements provide a stable and effective legal framework for protection and promotion of IP.”

A recent vindication: Just last week (January 15, 2015), Indian Patent Office’s (IPO’s) rejection of a key patent claim on Hepatitis C drug Sovaldi (sofosbuvir) of Gilead Sciences Inc. further reinforces that India’s patent regime is robust and on course.

Gilead’s patent application was opposed by Hyderabad based Natco Pharma. According to the ruling of the IPO, a new “molecule with minor changes, in addition to the novelty, must show significantly enhanced therapeutic efficacy” when compared with a prior compound. This is essential to be in conformity with the Indian Patents Act 2005. Gilead’s patent application failed to comply with this legal requirement.

Although Sovaldi ((sofosbuvir) carries an international price tag of US$84,000 for just one treatment course, Gilead, probably evaluating the robustness of Sovaldi patent against Indian Patents Act, had already planned to sell this drug in India at a rice of US$ 900 for the same 12 weeks of therapy.

It is envisaged that this new development at the IPO would prompt entry of a good number of generic equivalents of Sovaldi. As a result, the price of sofosbuvir (Sovaldi) formulations would further come down, despite prior licensing agreements of Gilead in India, fetching huge relief to a large number of patients suffering from Hepatitis C Virus, in the country.

However, reacting to this development Gilead has said, “The main patent applications covering sofosbuvir are still pending before the Indian Patent Office…This rejection relates to the patent application covering the metabolites of sofosbuvir. We (Gilead) are pleased that the Patent Office found in favor of the novelty and inventiveness of our claims, but believe their Section 3(d) decision to be improper. Gilead strongly defends its intellectual property. The company will be appealing the decision as well as exploring additional procedural options.”

For more on this subject, please read my blog post of September 22, 2014 titled, “Gilead: Caught Between A Rock And A Hard Place In India”

- Concern 2: “Future negotiations in international forums and with other countries.”

Draft IPR Policy states: “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.”

- Concern 3: “Data Exclusivity or Regulatory Data Protection.”

Draft IPR Policy states: “Protection of undisclosed information not extending to data exclusivity.”

- Concern 4: “Non-availability of patent term restoration, patent linkage, use of compulsory licensing (CL) for commercial, non-emergency situations”.

Draft IPR Policy: Does dwell on these issues.

I discussed a similar subject in my blog post of October 20, 2014 titled, “Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?”

Conclusion: 

Overall, the first draft of the outcome-based model of the National IPR Policy appears to me as fair and balanced, especially considering its approach to the evolving IPR regime within the pharmaceutical industry of India.

The draft policy though touches upon the ‘Utility Model’, intriguingly does not deliberate on ‘Open Source Innovation’ or ‘Open Innovation’.

Be that as it may, the suggested pathway for IPR in India seems to be clear, unambiguous, and transparent. The draft policy understandably has not taken any extreme stance on any aspect of the IP. Nor does it succumb to high voltage power play of the United States and its allies in the IPR space, which, if considered, could go against the public health interest.

It is heartening to note, a high level body would monitor the progress of implementation of the National IPR Policy, which will be linked with performance indicators, targeted results and deliverables. Annual evaluation of the overall working of the policy and the results achieved will also be undertaken. A major review of the policy will be done after 3 years.

That said, pharma MNCs in general, don’t seem to quite agree with this draft policy probably based purely on commercial considerations, shorn of public health interest. It is quite evident, when a senior lobbyist of a powerful American pharma lobby group reportedly commented to Indian media on the draft National IPR Policy as follows:

“Real progress will only be achieved when India demonstrates through policy change that it does indeed value the importance of intellectual property, especially for the innovative treatments and cures of today and tomorrow”.

It appears, India continues to hold its stated ground on IPR with clearly enunciated policy statements. On the other hand MNCs don’t stop playing hardball either. Though these are still early days, the question that floats on the top of mind: Who would blink first?…India? Do you reckon so?

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 Outlook 2015: A Glimpse Of Some Drivers and Barriers

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Looking ahead, the brand new year 2015 appears quite interesting to me both from the global and also from the local pharmaceutical industry perspective. In this article I shall try to give a glimpse of some of the important drivers and barriers for success of the industry as the year unfolds, based on recent and ongoing developments.

Let me start with the global outlook of 2015, where in the midst of all gloom and doom of the past years, I notice formation of a distinct and new silver lining, mainly due to the following two reasons:

1. Record number of new drugs approval in 2014 spanning across10 therapy areas:

As indicated in its website, USFDA has approved 41 novel medicines in 2014, which is 14 more than the previous year and is the second highest after 1996 that witnessed 53 approvals. Many of these new drugs are with blockbuster potential.

According to another report, the European Medicines Agency (EMA) has also recommended 82 new medicines in 2014, which though includes generic drugs in its list. However, this number too shows an increase from 79 in 2013 and 57 in 2012.

According to January 02, 2014 report from Forbes, very interestingly, infectious diseases dominated with 12 approvals (27 percent), cancer with 8 approvals (18 percent), followed by rare diseases with 5 (11 percent). Just two of these new approvals are for Hepatitis treatment and the rest are for bacterial, fungal, viral, and parasitic infections.

AstraZeneca received the highest number of 4 approvals followed by Eli Lilly with 3.

2. Patent expired blockbuster drugs in 2015 would have low generic impact:

Though drugs worth sales turnover of US$ 44 billion would go off patent in 2015, patent expiries will have minimal impact on the top line as 2015 sales will grow close to four times that of patent losses. Following are the top 10 drugs among those:

No. Brand Company Disease Sales2013 (US$ Bn) Patent Expiry
1. Lantus Sanofi Diabetes 7.9 Feb 2015
2. Abilify Otsuka/Bristol-Myers Squibb Schizophrenia/ Other neurological conditions 7.8 April 2015
3. Copaxone Teva Multiple sclerosis 4.33 Sept 2015
4. Neulasta Amgen Infection reduction in cancer patients on chemotherapy 4.4 Oct 2015
5. Tracleer Actelion Pulmonary arterial hypertension 1.57 Nov 2015
6. Namenda Actavis Alzheimer’s disease 1.5 April 2015
7. Avodart/Jalyn GSK Benign prostatic hypertrophy 1.34 Nov 2015
8. Zyvox Pfizer Gram-positive bacterial infections 1.35 May 2015
9. AndroGel Abbvie Low testosterone  1.03 Early 2015
10. Synagis AstraZeneca Monoclonal antibody to prevent respiratory syncytial virus infection in infants  1.1 Oct 2015

(Compiled from FiercePharma data)

As a significant number of these drugs are biologics, such as Lantus, Abilify, Neulasta and Synagis, the generic impact on those large brands, post patent expiry, would be minimal, at least, for several more years.

However, Lantus sales could soon be impacted, as its biosimilar versions from Boehringer Ingelheim and Eli Lilly have already received approval in Europe, and may be launched in the United States, as well.

Biosimilar versions of other drugs that will go off patent in 2015, do not seem to be anywhere near launch soon to make immediate dent in the sales of the original biologics. I had deliberated on various possible reasons for delay in biosimilar entry, especially in the US, in my earlier blog post of August 25, 2014, titled “Scandalizing Biosimilar Drugs With Safety Concerns”

Taking all these into consideration, EvaluatePharma has estimated that out of patent expiry related sales turnover of US$44 billion, just around US $16 billion would get impacted in 2015 by their generic equivalents.

Global market outlook 2015:

According to IMS Health, spending on medicines will reach nearly $1,100 billion in 2015 with a growth rate of 3-6 percent over the last five-year period.

According to EvaluatePharma, the overall outlook of the global pharma industry in 2015 and beyond is expected to be as follows:

  • A dozen products launched in 2015 are forecast to achieve blockbuster sales by 2020
  • Drugs treating high cholesterol and heart failure will dominate the field with a combined 2020 sales forecast of US$8 billion
  • Sovaldi and its combination product Harvoni will take the number one worldwide seller spot with forecasted sales of $15.3 billion in 2015
  • Patent expiries will have minimal impact on the top line as 2015 sales will grow close to four times that of patent losses
  • Financing climate appears friendly and deals will continue at a steady pace but M&A activity unlikely to match the frenzy of 2014

Moreover, Oncology therapy area brings a huge promise with novel immuno-oncology drugs. As Reuters have reported, Merck & Co’s Keytruda and Bristol-Myers Squibb’s Opdivo, which work by blocking a protein called Programmed Death receptor (PD-1), are the first in a coming wave of immuno-therapies that analysts believe could generate annual sales of more than US$30 billion a year.

Indian pharma industry outlook 2015:

Indian pharmaceutical industry, dominated by branded generic drugs, is estimated to register a turnover of around US$ 33.8 billion with an average growth of 10.3 percent in 2014 – 2018 period, according to Deloitte. Increasing number of diagnosis and treatment of chronic ailments, fuelled by ascending trend in the per capita income, would be the key factors to drive this double-digit growth rate.

In 2013-14, pharma exports of the country with a turnover of US$ 14.84 billion grew at a meager 1.2 percent, which is the slowest growth in nearly the last 15 years. Pharmexcil attributed its reason to USFDA related regulatory issues and increasing global competition. India still stands exposed in this area, unless meaningful corrective measures are taken forthwith. It is worth noting, although India exports drugs to over 200 countries in the world, the United States (US) alone accounts for about 25 percent of India’s pharma exports.

Key issues and challenges in ‘The Exports Front’:

Generic drugs currently contribute over 80 percent of prescriptions written in the US. Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are sold there, come from India and account for around 10 per cent of finished dosages in the US.

Almost all of these are cheaper generic versions of patent expired drugs, which are mainly produced in around 200 USFDA approved drug-manufacturing facilities located in India. Hence, India’s commercial stake in this space is indeed mind-boggling.

Indian drug exports were taking place satisfactorily without any major regulatory hitches since quite some time. Unfortunately, over the last few years, mostly the Federal Drug Administration of the US (USFDA) and the United Kingdom (UK)’s Medicines and Healthcare Products Regulatory Agency (MHRA) have started raising serious doubts on the quality of medicines manufactured in India, creating an uncertainty on drug exports in those countries.

To overcome this critical issue and keep marching ahead with distinction in the drug exports front, Indian pharma would require to successfully dealing with the following two areas:

A. Data integrity:

Since quite a while, USFDA has been raising serious concerns on ‘Data Integrity’ in their previously approved production facilities of a large number of Indian pharma players. The details of each of these concerns are available in the USFDA website.

This worrying development is now posing a huge threat to future growth potential of Indian drug exports, as in this area the Indian government had set an objective, in its strategy document, to register a turnover of US$ 25 billion in 2014-15. In all probability, it would fall far short of this target at the end of this fiscal, predominantly for related reasons. However, the good news is, considering the criticality of the situation, the Indian government is now working with the USFDA to resolve this problem.

I discussed a part of this area in my Blog Post of September 29, 2014 titled “Make in India…Sell Any Where in The World”: An Indian Pharma Perspective

B. Credibility of Clinical Trial Data from India:

Credibility of ‘Clinical Trial Data’ generated by the domestic players in India, has also become a cause of great concern, as the regulators in France, Germany, Belgium and Luxembourg suspended marketing approval for 25 drugs over the genuineness of clinical trial data from India’s GVK Biosciences.

Key issues and challenges in ‘The Domestic Front’:

Though 2015 would also witness the following important issues and challenges, meeting with this challenge of change should not be difficult with a proper mindset and right strategies:

A. The Drug Price Control Order 2013 (DPCO 2013):

Change in the mechanism of drug price control from earlier ‘cost based’ to newer ‘market based’ one and the specified provisions to neutralize inflationary impact of the input costs on the bottom line, based on the WPI, have already been considered as welcoming changes for the industry. As a result, despite implementation of the DPCO 2013, the pharma shares continued to do well in 2014 despite doomsayers’ predicaments, not just in the past, but even today.

I believe, the DPCO 2013 would not cause any significant negative impact further in 2015 on the performance of pharma companies, as the price controlled drugs would in all probability continue to be around 20 percent of the total pharma market. Moreover, now annual price increases are linked to the WPI for the controlled products and the companies can increase prices of remaining 80 percent of decontrolled products, upto 10 percent every year, irrespective of inflationary trend.

That said, due to huge inter-brand price differences, in July 2014 the National Pharmaceutical Pricing Authority (NPPA) had brought under price control 50 more cardiovascular and anti-diabetic drugs in addition to 348 drugs that featured under price control in the DPCO 2013.

If the pharma players do not take note of such abnormal inter-brand price variation of the same drugs without meaningful reasons, there could possibly be further move by the NPPA in this direction.

Additionally, any mechanism for patented products’ pricing, if announced in 2015, would have far-reaching impact, especially on the MNCs marketing such drugs.

B. Unethical practices in Clinical trial:

In the Clinical Trial arena of India, responding to a Public Interest Litigation (PIL), the Supreme Court of the country and separately the Parliamentary Standing Committee had indicted the drug regulator and charted out some action areas. The Parliamentary Committee in its report had even mentioned about a nexus existing between the drug regulator and the industry in this area.

Driven by the directives of the Apex Court of the country, the union ministry of health of the government of India has already strengthened some areas of past laxity in drug regulatory control, such as mandatory registration of clinical trials, constitution of committees to oversee the trial approval, its execution and above all ethical treatment of patients, including compensation.

Although, these are all requisite measures to create an appropriate longer-term eco-system for clinical trials in India, it has reportedly ruffled many feathers, such as CROs in the country who work mainly for pharma MNCs and some global pharma players too. This is mainly because of inordinate delays in drug approvals during the regulatory rectification process, besides cost of clinical trials going up. An orderly drug regulatory environment must prevail, instead of allegedly ‘free for all’ clinical trial environment in the country, costing many innocent lives and livelihoods.  Responding to this changing clinical trial environment, some MNCs have already articulated that they are reconsidering their drug trial strategy in India and some Indian players, possibly with vested interests and echoing similar sentiments, are also saying that they would shift their clinical trial projects out of India, which would adversely impact the country’s clinical trial industry.

Be that as it may, it appears now that under the directive of the Supreme Court of the country, the decisions taken by the government in clinical trial area are irreversible, for the long-term interest of the country.

C. Intellectual Property (IP) issues:

Reacting to some well-justified measures taken by India in the IP area to make healthcare affordable to all, the US and its some key allies, continuously pressured by their powerful pharma lobby groups, continue to push India hard to broaden the IP protections. ‘Big Pharma’ lobbyists are reportedly trying to compel India to amend its IP laws that would suit their business interest at the cost of patients.

Fortunately, many stakeholders, including media, have started raising their voices against such strong-arm tactics, further fueling the credibility erosion of ‘Big Pharma’ and creating important pressure groups for the government.

Simultaneously, concerned pharma MNCs are also seeking legal recourse over issues mainly related to the section (3d) and Compulsory Licensing of the Indian Patents Act. However, most of the judicial verdicts vindicate the quality of decisions taken by the Indian Patent Office (IPO) in these areas.

Though very unlikely, any amendment or tweaking of the existing patent laws of India in 2015 would provide an unfair advantage to MNCs with negative impact on public health interest.

D. Uniform Code of Pharmaceutical Marketing Practices:

Compared to the actions that are now being taken by the law enforcers overseas against pharmaceutical marketing malpractices, India has been showing a rather lackadaisical attitude in these areas, until recently. It astonishes many that unlike even China; no pharmaceutical company has been investigated thoroughly and hauled up by the government for alleged bribery and other serious allegations of corrupt practices.

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

The Government, until recently, has shown no active interest in this area either, though the new Union Health Minister, J.P. Nadda decried the unethical nexus between the doctors and pharma companies, amounting violations of medical ethics in the country. He reportedly has stated that in majority of the cases, the pharma companies are luring the doctors by giving gifts and other benefits for prescribing the brand of medicines of their choice to the patients.

As the saying goes, ‘better late than never’, on December 12, 2014, the Department of Pharmaceuticals (DoP) of the Government of India announced details of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, which would be effective across the country from January 1, 2015 for all pharma players to implement, across India.

However, I reckon, the document in its current form is rather weak in its effective implementation potential. Meaningful and transparent deterrent measures to uphold public health interest are also lacking. The entire process also deserves a well-structured monitoring mechanism and digital implementation tools that can be operated with military precision. I discussed this issue in my Blog Post of December 29, 2014, titled “India’s Pharma Marketing Code (UCPMP): Is It Crafted Well Enough To Deliver The Deliverables?”

On UCPMP a survey done by E&Y has highlighted the following points, besides other areas:

  • More than 50 percent of the respondents are of the opinion that the UCPMP may lead to manipulation in recording of actual sampling activity.
  • Over 50 percent of the respondents indicated that the effectiveness of the code would be very low in the absence of legislative support provided to the UCPMP committee.
  • 90 percent of the respondents felt that pharma companies in India should focus on building a robust internal controls system to ensure compliance with the UCPMP.

In my view as well, the self-regulatory measures prescribed in the UCPMP of the DoP are unlikely to make any significant impact in 2015, unless pharma companies start focusing on building robust internal controls system to ensure compliance with the UCPMP.

Conclusion:

I would now put on the balance of probabilities, the new ‘Silver Linings’ of the Global pharmaceutical industry as discussed above, the issues and challenges of 2015 for the Indian pharma and also other important factors that I have not been able to discuss in this article. The overall emerging picture depicts that the pharma industry, both global and local, would fare much better than what it did in the recent past, provided the industry, as a whole, does not continue to ignore the storm signals outright.

Thus, based on the available data, the year 2015, as appears to me, would provide an enormous opportunity with promises of an interesting time ahead that the pharmaceutical industry should try to leverage on…and then cherish it for a long while…most probably as a turning point of the same ball game with different success requirements.

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.