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Nutraceuticals: Still An Oasis Amidst Well-Regulated Pharmaceuticals

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On November 24, 2016, the food-safety watchdog of India announced that health supplements or Nutraceuticals cannot be sold as ‘medicines’ anymore. This new regulatory standard has been set for the manufacturers of Nutraceuticals and food supplements, and is aimed at controlling mislabeling of such brands. The fine prints of the notification are yet to be assessed.

On the face of it, this new announcement seems to be a good step, and would largely address a long-standing issue on the such products. Prevailing undesirable practices of labeling some pharma brands as food supplements or Nutraceuticals, with some tweaking in the formulations, mainly to avoid the risk of price control, is also expected to be taken care of by the food-safety authority of India, while granting marketing approval.

Nevertheless, it is often construed that off-label therapeutic claims, while promoting these products to the doctors, help achieving brand positioning objective as medicines, though indirectly. Appropriate authorities in India should probably resolve this issue, expeditiously.

In this article, I shall focus on the rationale behind different concerns over the general quality standards, claimed efficacy and safety profile of Nutraceuticals and food supplements, in general, and how the regulatory authorities are responding to all these, slowly, albeit in piecemeal, but surely.

The ‘gray space’ is the issue:

The close association between nutrition and health has assumed a historical relevance. Growing pieces of evidence, even today, suggests that nutritional intervention with natural substances could play an important role, especially in preventive health care. The World Health Organization (WHO) has also highlighted that mortality rate due to nutrition related factors in the developing countries, like India, is nearly 40 percent.

However, as one of the global consulting firm of repute has aptly pointed out, “At one end of this natural nutrition spectrum, are functional foods and beverages as well as dietary supplements, aimed primarily at maintaining health. On the other, more medical end of the spectrum, are products aimed at people with special nutritional needs. In the middle, is an emerging gray area of products that have a physiological effect to reduce known risk factors, such as high cholesterol, or appear to slow or prevent the progression of common diseases such as diabetes, dementia or age related muscle loss.”

This gray space between Pharmaceutical and Nutraceuticals, therefore, holds a significant business relevance, from various perspectives.

An Oasis amidst highly-regulated pharmaceuticals:

Mostly because of this gray space, several pharma companies and analysts seem to perceive the Nutraceutical segment virtually an oasis, lacking any transparent regulatory guidelines, amidst well-regulated pharma business. This perception is likely to continue, at least, for some more time.

Such pattern can be witnessed both within the local and global pharma companies, with some differences in approach, that I shall deliberate later in this article.

However, regulators in many countries, including India, have started expressing concerns on such unfettered manufacturing, marketing and other claims of Nutraceuticals. Many of them even ask, do all these Nutraceuticals deliver high product quality, claimed effectiveness and safety profile to their consumers, especially when, these are promoted by several pharma companies, though mostly off-label, to generate physicians’ prescriptions for various disease treatments?

Not just domestic pharma companies:

This concern is not restricted to the domestic companies in India.

Global pharma players, who generally believe in scientific evidence based medicines, have been reflecting an iffiness towards Nutraceuticals. For example, whereas both Pfizer and Novartis reportedly hived off their nutrition businesses, later Pfizer invested to acquire Danish vitamins company Ferrosan and the U.S. dietary supplements maker Alacer. Similarly, both Sanofi and GlaxoSmithKline also reportedly invested in mineral supplements businesses that could probably pave the way of the company’s entry into medical foods.

However, it is worth underscoring that generally the consumer arms of global pharma companies focus on OTC, and Nutraceuticals do not become an integral part of the pharma business, as is common in India.

Interestingly, not very long ago, Indian pharma industry witnessed a global pharma major virtually replicating the local marketing model involving Nutraceuticals. It also became an international news. On August 24, 2011, ‘Wall Street Journal (WSJ)’ reported that ‘Aventis Pharma Ltd. (now Sanofi India) agreed to buy the branded nutrition pharmaceuticals business of privately held Universal Medicare Pvt. Ltd for an undisclosed amount, as its French parent Sanofi looks to expand in the fast-growing Indian market.’

Universal Medicare, which posted about US$ 24.1 million revenue in the year ended March 31, 2011, will manufacture these branded Nutraceutical products and Aventis will source them from Universal Medicare on mutually agreed terms. Around 750 of the Universal Medicare’s employees also moved to the French Company along with its around 40 Nutraceutical brands, the report said.

If all these acquired brands, do not fall under the new FSSAI guidelines related to the required composition of food supplements and Nutraceuticals in India, it would be worth watching what follows and how.

Nutraceuticals are also promoted to doctors:

Let me reemphasize, India seems to be slightly different in the way most of the pharma companies promote Nutraceuticals in the country. Here, one can find very few standalone ‘Over the Counter (OTC)’ pharma or Nutraceutical product company. For this reason, Nutraceutical brands owned by the pharma companies, usually become an integral part of their prescription product-portfolio. Mostly, through off-label promotion Nutraceuticals are often marketed for the treatment or prevention of many serious diseases, and promoted to the doctors just as any other generic pharma brand.

Need to generate more scientific data based evidences:

A 2014 study of the well-known global consulting firms A.T. Kearney titled, “Nutraceuticals: The Front Line of the Battle for Consumer Health”, also recommended that ‘a solid regulatory framework is crucial for medical credibility, as it ensures high-quality products that can be relied on to do what they say they do.’

This is mainly because, Nutraceuticals are not generally regarded by the scientific community as evidence based medicinal products, going through the rigors of stringent clinical trials, including pharmacokinetics and pharmacodynamics studies, and is largely based on anecdotal evidence. Besides inadequacy in well-documented efficacy studies, even in the areas of overall safety in different age groups, other side-effects, drug interactions and contraindications, there aren’t adequate scientific evidence based data available to Nutraceutical manufacturers, marketers, prescribers and consumers.

There does not seem to be any structured Pharmacovigilance study is in place, either, to record adverse events. In this scenario, even the ardent consumers may neither realize, nor accept that Nutraceuticals can cause any serious adverse effects, whatsoever.

From this angle, the research study titled, “Emergency Department Visits for Adverse Events Related to Dietary Supplements”, published in the  New England Journal of Medicine (NEJM) on October 15, 2015, becomes very relevant. The paper concluded as follows:

“More than 23,000 emergency department visits annually in the United States from 2004 through 2013 were for adverse events associated with dietary supplements. Such visits commonly involved cardiovascular adverse effects from weight-loss or energy herbal products among young adults, unsupervised ingestion of micronutrients by children, and swallowing problems associated with micronutrients among older adults. These findings can help target interventions to reduce the risk of adverse events associated with the use of dietary supplements.”

Fast growing Nutraceutical industry continues to remain largely unregulated. It persists, even after several previous studies had revealed dangerous levels of harmful ingredients, including amphetamine, in some Nutraceuticals.

Indian regulatory scenario:

In India, the ‘Food Safety and Standards Authority of India (FSSAI)’, established under the Food Safety and Standard Act of 2006, is the designated Government body responsible for the regulation and approval of Nutraceuticals in the country.

In July 2015, FSSAI proposed draft regulations for Nutraceuticals, Functional Foods, Novel Foods and Health Supplements for comments from all stakeholders within the stipulated time limit. This draft regulation defines Nutraceuticals as follows:

“Nutraceuticals means a naturally occurring chemical compound having a physiological benefit or provide protection against chronic disease, isolated and purified from food or non-food source and may be prepared and marketed in the food-format of granules, powder, tablet, capsule, liquid or gel and may be packed in sachet, ampoule, bottle, etc. and to be taken as measured unit quantities.”

In this draft FSSAI also proposed that therapeutic claims of Nutraceuticals and all such foods are required to be based on sound medical and nutritional evidence, backed by scientific as well as clinical evidence.

In 2011, FSSAI constituted a product approval committee, whose members were supposed to use similar parameters as drugs, to assess Nutraceuticals for this purpose. However, FSSAI had to jettison this idea, in compliance with the order dated August 19, 2015 of the Supreme Court questioning the procedure followed for approvals by the food regulator.

In April 2016, FSSAI restricted enforcement activity against Nutraceuticals and health supplement companies to only testing of products till new standards are notified.

The latest regulatory developments:

There are, at least, the following two recent developments reflect that the regulatory authorities, though trying, but are still grappling with the overall product quality, efficacy and safety concerns for Nutraceuticals:

  • 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.
  • Again, on November 24, 2016, FSSAI reportedly announced that health supplements or Nutraceuticals cannot be sold as ‘medicines’ anymore. This new regulatory standard set for the manufacturers of Nutraceuticals and food supplements is aimed at controlling mislabeling of such brands. On its enforcement, every package of health supplement should carry the words ‘health supplement’ as well as an advisory warning ‘not for medicinal use’ prominently printed on it.

It further added: “The quantity of nutrients added to the articles of food shall not exceed the recommended daily allowance as specified by the Indian Council of Medical Research and in case such standards are not specified, the standards laid down by the international food standards body namely the Codex Alimentarius Commission shall apply.”

However, these regulations will be enforced from January 2018.

Curiously, in September 2016, National Institutes of Health in United States announced plans to put some more scientific eyes on the industry, the NIH reportedly announced plans to spend US$ 35 million to study natural products, ranging from hops to red wine’s resveratrol to grape seed extract. The new grants, reportedly, are expected to fathom the basic science behind many claims that Nutraceuticals can improve health.

The market:

The August 2015 report titled, ‘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 the consulting firm RNCOS, estimates that 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 Compound Annual Growth Rate (CAGR) of about 8 percent.

Driven by the rising level of awareness of health, fitness and changing lifestyle pattern, increasing co-prescription with regular drugs, and focus on preventive health care, 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 CAGR of about 17 percent, the report states.

The 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 Nutraceutical market, followed by Germany, France, UK and Italy in Europe.

Conclusion:

Today, both manufacturing and marketing of Nutraceuticals keep charting in a very relaxed regulatory space, in India. There are no robust and transparent guidelines, still in place, for product standardization and scientifically evaluate the safety and efficacy of all these products on an ongoing basis. Neither is there any stringent requirement for conformance to the well-crafted cGMP standards.

The reported discussions within the Union Ministry of Ayush for setting up a structured regulatory framework, within the CDSCO, for all Ayush drugs and to allow marketing of any new Ayurvedic medicine only after successful completion of clinical trials to ensure its safety and efficacy, are indeed encouraging. This may be followed for all those Nutraceuticals, which want to be promoted as medicines, claiming direct therapeutic benefits.

Be that as it may, November 24, 2016 announcement of FSSAI, that health supplements or Nutraceuticals cannot be sold as ‘medicines’ anymore to control mislabeling of such brands, is a step in the right direction.

Another major issue of many pharma brands being put under Nutraceuticals with some tweaking in formulations and labelled as food supplements, would also probably be largely addressed, as FSSAI would continue to be the sole authority for marketing approval of Nutraceuticals.

However, it is still not very clear to me, as I am writing this article, what happens to those Nutraceutical brands, which are already in the market, with compositions not conforming to the new FSSAI norms. Fairness demands reformulation and relabeling of all those existing Nutraceuticals, strictly in conformance to the new guidelines, and obtain fresh approval from FSSAI. This will help create a level playing field for all Nutraceutical players in India.

While there is a pressing need to enforce a holistic regulatory discipline for the Nutraceuticals to protect consumers’ health interest, the commercial interest of such product manufacturers shouldn’t be ignored, either. This is primarily because, there exists enough evidence that proper nutritional intervention with the right kind of natural substances in the right dosage form, could play an important role, especially in the preventive health care.

As the comprehensive regulatory guidelines are put in place, Nutraceuticals not being essential medicines, should always be kept outside price control, in any guise or form. In that process, the general pharma perception of Nutraceutical business, as an ‘Oasis’ amidst well-regulated and price-controlled pharmaceuticals, would possibly remain that way, giving a much-needed and well-deserved boost to this business.

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.

Counterfeit Drugs In India: A Malady Much Deeper

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Many debates and discussions continue being lined up in India almost regularly, generally by the pharma trade associations, besides a few others, on the issue of counterfeit drugs. A good number of these events are sponsored by the global and local anti-counterfeit product manufacturers and the related service providers, presumably to get a captive pharma audience. By and large, these gatherings are well publicized, and very rightly so, to focus for a while on this growing menace in the country.

One of the key objectives of such proceedings, I reckon, besides recommending the immediate action steps for the government in saddle, is to encourage the manufacturers of high quality drugs to protect their brands from the onslaught of counterfeiters through anti-counterfeit measures. Several of these involve a state of the art non-cloning technology. The core message that gets filtered-through, in most of these occasions is, if the suggested steps are followed by the drug companies with the related products and services, these won’t just help protect the patients’ health interest, but also provide a boost to the top and bottom lines in the pharma business, significantly.

There are no qualms about this initiative, not at all. Nonetheless, can this be considered a holistic approach to tackle the menace of counterfeit drugs, especially by the pharma players in India, and considering various other different ways the menace keep striking the patients, so surreptitiously?

Thus, in this article, my point of focus will be on a critical question, which is not asked with the same vigor always in many of the above events: Hasn’t the malady of counterfeit drugs in India spread much wider, and taken its root considerably deeper?

Counterfeit drugs and what it includes?

According to the World Health Organization (W.H.O), there is currently no universally agreed definition among its member states in what is widely known as ‘Counterfeit medicines’. Nevertheless, W.H.O does indicate that the term ‘counterfeit’ is widely used to include falsified, unlicensed, falsely packaged, stolen and substandard medical products. Jurisdictions across the world define counterfeit medicines in many different ways.

It’s worth noting here, according to W.H.O, substandard medical products also belong to this category. In 2009, W.H.O defined ‘substandard’ drugs as “genuine medicines produced by the manufacturers authorized by the NMRA (national medicines regulatory authority) which do not meet quality specifications set for them by national standards”.

Hence, notwithstanding whatever will be accepted as the general consensus of the W.H.O members on the definition of counterfeit drugs, from the patients’ perspective, any drug failing to meet with the claimed efficacy, safety and quality standards, should come under the same ‘category definition’, including substandard drugs.

Controversy over the term ‘Counterfeit’:

Many W.H.O member countries believe that the term counterfeit is closely associated and legally defined within the Intellectual Property (IP) legislation, and concentrates on trademark protection. Consequently, usage of this terminology has been perceived to have reduced the focus from what is first and foremost a public health issue. Thus, it has become quite important for W.H.O to separate the different categories of what is widely used as ‘counterfeit drug’, for the purpose of analysis and identifying strategies, to effectively address the issue of the public health menace that such activities give rise to.

Types of counterfeit drugs:

A Review Article titled “Anti-counterfeit Packaging in Pharma Industry” dated February 17, 2011, published in the “International Journal of Pharmacy and Pharmaceutical Sciences”, divided the types of counterfeit mechanisms into five categories, in which drugs are manufactured or distributed without proper regulatory clearance, and do not meet the determined standards of safety, quality, and efficacy:

  • No active ingredient (43 percent)
  • Low levels of active ingredient (21 percent)
  • Poor quality drugs (24 percent)
  • Wrong ingredients (2 percent)
  • Wrong packaging or source (7 percent)

This particular article will dwell mainly on a very important segment in this category – the substandard or poor quality drugs.

The magnitude of the problem:

On May 17, 2016, a Research Article titled, “Public Awareness and Identification of Counterfeit Drugs in Tanzania: A View on Antimalarial Drugs”, published in ‘Advances in Public Health’ – a peer-reviewed, open access journal that publishes original research articles, highlighted something that should cause a great concern not just for the Indian drug regulators, but also the Indian pharma manufacturers, in general.

The research paper, besides other points, underscored the following:

“Currently, it is estimated that 10–15 percent of the global drugs supplied are counterfeit. The prevalence is higher in developing countries in Africa and in parts of Asia and Latin America where up to 30–60 percent of drugs on the market are counterfeit. India is a major supplier of poor quality drugs whereby 35–75 percent of fake/counterfeit drugs globally originate from India.”

Another report of ‘Pharmexcil’ dated October 04, 2010 also states: “According to the Organization for Economic Cooperation and Development (OECD), 75 percent of fake drugs supplied world over have origins in India, followed by 7 percent from Egypt and 6 percent from China. India is also a leading source of high quality generic and patent drugs in the legitimate commerce worldwide. Since drugs made in India are sold around the world, the country’s substandard drug trade represents a grave public health threat that extends far beyond the subcontinent.”

Substandard drugs: a potential crisis in public health:

An article with the above title, published in the British Journal of Clinical Pharmacology on November 29, 2013 cautioned on the potential crisis in public health with substandard drugs, as follows:

“Poor-quality medicines present a serious public health problem, particularly in emerging economies and developing countries, and may have a significant impact on the national clinical and economic burden. Attention has largely focused on the increasing availability of deliberately falsified drugs, but substandard medicines are also reaching patients because of poor manufacturing and quality-control practices in the production of genuine drugs (either branded or generic). Substandard medicines are widespread and represent a threat to health because they can inadvertently lead to health care failures, such as antibiotic resistance and the spread of disease within a community, as well as death or additional illness in individuals.”

Hence, the potential of health crisis with various substandard drugs is quite similar to other types of counterfeit drugs.

Substandard drugs and small pharma players:

As I said before, the malady of counterfeit, fake and substandard drugs are spreading much wider and deeper in India. What’s happening around today in this area prompts us to believe, it may no longer be proper to keep all the large pharma manufacturers away from the ambit of discussion on substandard or counterfeit drugs. This apprehension is raising its head, as it is generally believed that only small, unknown, or fly-by-night type of drug manufacturers, are responsible for substandard, fake or counterfeit drugs. Whereas, the reality seems to be different. There are now ample reasons to believe that even some large drug manufacturers, both local and global, who have been caught by the regulator for the same wrongdoing, are also equally responsible for causing similar adverse health impact on patients.

Substandard drugs and large pharma players:

That the issue of substandard drugs is quite widespread in India, involving both global and local pharma players – small and large, is also quite evident from the following report, published in the May 14, 2016 edition of the well-reputed national daily – Hindustan Times:

“A day after French major Sanofi announced a recall of some batches of its popular painkiller Combiflam, India’s drug regulator said over 102 medicines have been highlighted for quality concerns and withdrawal in the last five months. The list includes several popular painkillers.”

The report also indicated that these are generic medicines, both with and without brand names, such as, CIP-ZOX of Cipla, Orcerin of MacLeod Pharma, Zerodol-SP of Ipca Laboratories, Pantoprazole of Indian Drugs and Pharmaceuticals Ltd and Norfloxacin of Karnataka Antibiotics & Pharmaceutical Ltd. According to the public notices of the Central Drugs Standard Control Organization (CDSCO), these batches were manufactured in June 2015 and July 2015, and carried expiry dates of May 2018 and June 2018.

The CDSCO also reportedly said that in notices posted on its website in February and April, 2015, it found some batches of Combiflam to be “not of standard quality” as they failed disintegration tests. The point to note is, according to the US-FDA, disintegration test is used to assess the time it takes for tablets and capsules to break down inside the body and are used as a quality-assurance measure.

“All drugs listed under the drug alert list should be recalled with immediate effect. We have found some serious problems with the making of the drug because of which we have highlighted quality concerns. Hence, recall is necessary for all companies,” GN Singh, the Drug Controller General of India (DCGI), reportedly told the above newspaper.

Should the ‘intent behind’ be considered as the key differentiating factor?

This takes me to another question: What’s the ‘intent behind’ manufacturing substandard drugs? It is not difficult to make out that the only ‘intent behind’ manufacturing substandard drugs by illegal, some small or fly-by-night type of drug operators would be to make quick money, by cutting corners, and criminally falsifying the entire process.

Until recently, I used to strongly believe that those large manufacturers who are getting caught for releasing substandard drugs to the market, have made sheer mistakes, and these are no more than minor aberrations. However, recent findings by the US-FDA, after rigorous manufacturing quality audit of several production facilities of large and small generic drug producers of India, make me wonder whether this thin differentiating line of ‘intent behind’ manufacturing substandard drugs, though still exists, has started getting blurred. The foreign regulators have imposed import ban on drugs produced in those facilities on the ground of willingly compromising drug quality, and grossly falsifying data.

I am not going into those much discussed details here, once again, as the drugs involved in the above cases are meant for exports and the import bans, by the foreign regulators were aimed at protecting the health and safety of citizens of those countries. In this article my focus is on India, and health interest of the local Indian population.

Thus fathoming a different ‘intent behind’ manufacturing substandard drugs, especially by the large and well-known manufacturers, is the real challenge. What sort of anti-counterfeit events will be able to possibly address this perturbing issue, that is now getting revealed much faster than even before?

Who in India ensures that all drugs are safe?

Possibly none, not even the drug regulators and the enforcers of the drug laws, as a number of national and international media reports reveal. General public doesn’t get any assurance from any authorities that the medicines sold by the drug retail outlets, pan India, are all standard quality and genuine.

At the same time, it is equally challenging for anyone to ascertain, with absolute certainty, that it’s a counterfeit, substandard or a fake drug, in whatever name we call it, is responsible for avoidable suffering or even death of an individual. In such a sad eventuality, one has no other choice but to accept that the causative factor was either a wrong diagnosis of the disease, or delayed onset of treatment.

Is CDSCO still in a denial mode?

It’s an irony that the government sources often highlight that the incidence of substandard, spurious or fake drugs in India has declined from around 9 percent in the 1990s, to around 5 percent in 2014-15, quoting the CDSCO sample survey findings.

Nevertheless, while looking at the same CDSCO survey results of the last four years – from 2011-12 to 2014-15, the incidence of spurious and substandard drugs in India appears to be static, if not marginally increased, as follows:

Year Tested Samples Substandard Samples Spurious or Adulterated samples % Failed
2011-12 48,082,00 2,186.00 133.00 4.82
2012-13 58,537.00 2,362.00 70.00 4.15
2013-14 72,712.00 3,028.00 118.00 4.32
2014-15 74,199.00 3,702.00 83.00 5.10

Source: Central Drugs Control Organization (CDSCO)

In my view, these CDSCO results should be taken perhaps with dollops of salt, not merely the sample size for these surveys is too small, but also the complexity involved in the collection of the right kind of samples that will always pass the acid test of independent experts’ scrutiny.  Right representational sample size – state-wise, is so important, primarily considering that India is the world’s third-largest pharmaceutical market by volume, consumes 383 billion medicines per annum, according to a 2015 Government report, and is quite a heterogeneous pharma market.

A September 06, 2016 media report well captured the palpable hubris of the Government on this worrying subject. It quoted the Drug Controller General of India (DCGI) – Dr. G N Singh as saying: “This is an encouraging trend when it comes to comparing Indian made generics with that produced in regulated markets. This will help us dispel the myth that India is a source of substandard drugs as compared to any other regulated market.”

Interestingly, other studies and reports do indicate that this menace could well be, at least, thrice as large.

Be that as it may, according to an October 22, 2016 media report, CDSCO is expected to release the findings of the latest survey on ‘spurious drugs’ in India by end October 2016.

Two recent good intents of CDSCO:

Apparently, as a response to the widespread public criticism on this issue, despite being in a denial mode earlier, CDSCO has recently expressed two good intents to address this issue, as follows:

  • As reported on October 18, 2016, it has sent a recommendation to the Union Ministry of Health to amend the Drugs & Cosmetics Act to facilitate implementation of bar coding and Unique Identification Number (UIN) on every pack of domestic pharma products.
  • To ensure consistency and uniformity in the inspection process, on May 26, 2016, by a Public Notice, it issued a new draft checklist of ‘Risk Based Inspection of the Pharma Manufacturing Facilities’ for verification of GMP compliance as per the provisions stated under Schedule M of Drugs and Cosmetics Rules, 1945, and sought suggestions from the stakeholders. This checklist would be used by drug regulatory enforcement agencies as a science based tool. It also envisaged that the pharma industry would find this checklist useful for self-assessment.

Let’s now wait and watch, to get to know the timeline of translating these good intents into reality on the ground, and the impact that these decisions will make to reverse the current worrying trend of counterfeit and substandard drugs in India.

Conclusion:

The malady of counterfeit or substandard drugs is not just India centric. Various credible sources have estimated that around a million people fall victim to such so called ‘medicines’, each year. However, unlike many other countries, India still doesn’t have any structured and effective regulatory or other mechanisms, not even any spine-chilling deterrent, in place to address this public health menace of humongous implications.

That said, besides serious health hazards, the adverse financial impact of substandard drugs on patients is also significant. Such drugs, even when non-fatal, are much less effective, if not ineffective or trigger other adverse reactions. Thus, a longer course of treatment, or switching over to a different medication altogether, may often be necessary, multiplying the cost of treatment.

In that sense, substandard, spurious, fake or counterfeit drugs, in whatever name one describes these, increase the disease burden manifold, besides being life-threatening. This issue assumes greater significance in India, where 58.2 percent of the total health expenditure is incurred out-of-pocket by a vast majority of the population. Medicines alone, which are mostly purchased from private retail outlets, across India, account for between 70 and 77 per cent of the individual out of pocket health spending, according to a W.H.O report.

High decibel campaigns on various anti-counterfeit technology solutions for fast selling, or expensive brands of large pharma companies, whether sponsored by placing the commercial interest at the top of mind, or even otherwise, are welcome, so are the two recent good intents of the Union Government, in this area.

However, the desirable proactive focus on curbing the menace of substandard medicines in India, which cause similar health risks as any other type of counterfeit drugs, does not seem to be as sharp, not just yet, barring the pharma export sector. Nor does this issue attract similar zest for a meaningful discourse related to patients’ health and safety within the country, as associated with various other anti-counterfeiting technology solution oriented events. The anomaly remains intriguing, especially when the malady spreads, with its root reaching deeper.

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. 

Declining MR Access to Doctors Prompts Increased Digital Engagement

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The trigger point for a disruptive change in the pharma marketing playbook now seems to be not just on the horizon, but could soon move to a countdown stage, in India.

On Friday, September 16, 2016, at a seminar on the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) organized at Bengaluru, Sudhanshu Pant, Joint Secretary (Policy), Department of Pharmaceuticals (DoP), India, reportedly said that the mandatory UCPMP is now in its last leg of clearance with the Union Government, after incorporating the inputs received from the pharma industry and other stakeholders.

He clearly articulated in his address, once a level playing field is created with mandatory UCPMP, both the pharma industry and the medical professionals will be restricted to offer and receive freebies, respectively, which is the in-thing today to generate prescriptions from the doctors.

“Our intent is that the new code should be followed in letter and spirit. It is not a draconian law, but penalties are stringent. We are enforcing fines. The violation of this code could also lead to suspension of product marketing,” the joint secretary further clarified.

Signals a forthcoming change:

Effective implementation of the mandatory UCPMP across India, could catalyze significant changes in the allegedly dubious pharmaceutical marketing process in India, revolving round ‘give and take’ of enticing ‘freebies’ to the prescribers. According to several reports, some of these practices are followed in the guise of ‘brand-reminders’, and several others fall under ‘events associated with Continuing Medical Education (CME), mostly arranged in various exotic places around the world, with associated hospitalities and equivalents. Besides, there exists a host of different kinds of ‘carrots for prescriptions’ of numerous types, forms and costs, as highlighted frequently by the national and international media.

Nevertheless, it is widely believed by many that Medical Representatives (MR) in India are having virtually no access barrier to meet the doctors, as a large number of both the receivers and the givers of the freebies have allegedly financial interest ingrained on meeting each other.

This scenario, I reckon, will change in India with the strict enforcement of mandatory UCPMP by the Government, curbing any possible misadventure by any stakeholder in the space of ethical pharma marketing practices that would impact the health interest of patients, directly.

Drawing a similar example:

One relevant example for India could be drawn from what happened in the United States (US) in this area, relatively recently. To contain wide-spread unethical pharma marketing practices in the US, President Obama administration enacted the Physician Payment Sunshine Act, effective August 1, 2013. This new law, that requires detailed disclosures from both the physicians and the pharma players on giving and accepting the freebies, limited the financial interest of the prescribers to meet with the MRs several times in a year, for face to face product detailing. Consequently, MR access to prescribers for the same started becoming increasingly more challenging.

A number of studies indicate, a large number of doctors have now started considering the delivery of a frequent barrage sales message an avoidable noise, when alternative highly user-friendly platforms are available to keep them up-to-date on various brands.

In the same way, as the new mandatory UCPMP will come into effect in India, it is quite likely that pharma companies operating in the country would start facing similar challenges with MRs visits, especially, to the important busy doctors and for similar reasons.

Digital channels are gaining strength:

With MRs access to physicians gradually declining, many pharmaceutical companies are trying to make the best use of a gamut of customized, innovative marketing approaches pivoted on various digital platforms. These initiatives are primarily to supplement effective engagement with the doctors to generate increasing prescription demand, and in a more user-friendly manner.

The latest study on trend:

There are many studies in this area, but I shall quote the latest one. According to a 2016 study of the global sales and marketing firm ZS Associates: “The number of digital and non-personal contacts that the pharmaceutical industry now has with physicians exceeded its number of sales rep visits to doctor offices.”

Analyzing the data from 681,000 health care providers who actually engage with pharmaceutical and biotech manufacturers across promotional channels, and more than 40,000 pharmaceutical sales representatives (MRs), the study reported, among others, the following:

  • 44 percent of physicians are “accessible” (that is, they met with more than 70 percent of sales reps who try to meet with them). This is a decline from 46 percent in 2015 and nearly 80 percent in 2008.
  • 38 percent of physicians restricted access (that is, they met with 31 to 70 percent of reps who try to meet with them).
  • 18 percent of physicians “severely” restricted access (that is, they meet with 30 percent or fewer reps who try to meet with them).
  • More than half (53 percent) of marketing outreach to physicians now takes place through “non-personal” promotion, such as email and mobile alerts, as well as direct mail and speaker programs.
  • The remainder of marketing to physicians (47 percent) still takes place through in-person interactions with sales reps (MRs).
  • Today’s physician estimates that he or she already spends 84 hours per year – about two full work weeks – interacting with pharma companies via digital and other non-personal marketing channels.
  • Around 74 percent of the physicians use their smartphones for professional purposes.

Another interesting point also emerges from the report. Despite the fact that non-personal communications, including digital, comprise 53 percent of marketing outreach most drug companies still allocate around 88 percent of their total sales and marketing budget to the sales force.

Increasing ‘online professional networks’ for doctors:

Keeping pace with this change several online professional networks for doctors are coming up. One such example is Doctors.net.uk. This is claimed to be the largest and most active online professional network for all UK doctors. Each day over 50,000 doctors make use of Doctors.net.uk to network with colleagues and view information.

This particular online facility provides the doctors with a range of free secure services including an email service, clinical forums, accredited education and medical news, which help them to keep up to date, and to easily maintain their Continuing Professional Development (CPD).

Some digital initiatives of pharma companies:

Here, I would quote just a couple of interesting examples out of several others:

For continuous online engagement with doctors:

In January 2013, the top global pharma major Pfizer launched an online digital platform for the doctors named ‘Pfizerline’. It provides access to the latest information on Pfizer products ‘when, where and how’ the doctors want it. As claimed by the company, ‘Pfizerline’ is regularly updated and forms part of the company’s ongoing commitment to keep the doctors informed about their products and services.

Some say that with ‘Pfizerline’, ‘Pfizer has begun using digital drug representatives to market medicines, leaving the decision as to whether they want to see them in doctors’ hands.’

For new product launch:

According to the Press Release published by PMLive, the first in the pharmaceutical industry ‘digital marketing only’ campaign was launched by Abbott for its Low Dose HRT brand, in November 2013.

The campaign reportedly reached to 9,000 doctors, 45 percent of the NHS population of obstetricians and gynecologists, and nearly 23 percent of GPs who engaged with Abbott’s Low Dose HRT brand via professional network Doctors.net.uk.

According to Abbott, as quoted in this report, the digital campaign, which included interactive case studies, clinical paper summaries and an ask the expert section, helped increase the brand’s market share, with a continuous month-on-month growth in sales in 2013.

I am quoting these two examples, just to illustrate the point that serious experimentations with digital marketing for serious business initiatives, such as, doctor engagement and product launch, have already commenced.

Conclusion:

For better physician engagement, while preparing for a likely future scenario in India, any effective brand marketing strategy on digital platforms would call for in-depth understanding of the target audience preferences on the specific information needs and marketing channels. This customized approach needs to be harnessed to deliver the right message, to the right customer, through right platforms, and at a time of preferred by each prescriber.

The ball game of pharma marketing is gradually but surely changing. Clear signals are now coming from various Governments to the pharma companies to jettison the widely perceived unethical practices of alluring the drug prescribers with ‘freebies’ of different kinds and values, against patients’ health interest.

Unless various third parties come-up just to camouflage continuation of the same unethical marketing practices of many companies, at a cost, getting unfettered MR access to busy prescribers is likely to be increasingly more challenging. Otherwise, effective enforcement of mandatory UCPMP is likely to usher-in this change in India, sooner, just as what the ‘Physician Payment Sunshine Act’ did in the US. The countdown for the new paradigm in the country is expected to commence soon, as reportedly articulated by the Joint Secretary (Policy) of the Department of Pharmaceuticals, recently.

However, there are a couple of points to ponder. It is also widely believed, even today, and also in the US that, while various digital platforms offer never before opportunity to effectively engage with ‘difficult to meet’ prescribers, their use should be prudent and well thought of. Any mass-scale and imprudent general switch to digital communications, is unlikely to fetch the best outcome, to meet with this evolving challenge of change, at least, in the foreseeable future.

At the same time, if pharma companies continue increasing investment in less expensive digital communications sans diligent homework for scaling up, the prescribers may feel so overwhelmed that they will start ignoring them, just as what’s happening with frequent MRs’ visits. Hence, for sustainable business excellence while confronting with forthcoming disruptive changes, the notes of the pharma marketing playbook need to be recomposed, afresh.

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 Happens To Pharma’s Incredible Ride On The ‘Gravy Train’?

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India continues to be one of the fastest growing pharmaceutical market of the world with its over 40 percent of the total pharmaceutical produce is exported around the world. Over half of the total exports constitute of formulations, and the balance comprises of bulk drugs. India has been consistently maintaining its supremacy in the formulation exports since my salad days.

According to Export Statistics (2014-15) published by the Pharmaceutical Export Promotion Council of India (Pharmexcil), United States (US) is the largest market for the India’s pharmaceutical exports with a share of 27 percent of the total, followed by the United Kingdom (UK), South Africa, Russia, Nigeria, Brazil and Germany.

A red flag raised: 

Up until recently, it has almost been like walking over a bed of roses in this front for Indian pharma exporters. However, it does not seem to be so now, and at least in the foreseeable future, for a number of reasons.

The Press Release of ‘CRISIL Research’ dated May 17, 2016 has also raised a red flag in this area. The report foresees growth in pharma formulations (in US dollar terms) declining sharply to 10-12 percent annually over the next 5 years, as compared with a growth of ~19% seen in the last decade.

This adverse impact will be felt mostly in the US – the largest export destination of India, followed by the UK.

I reckon, there are three basic reasons for this changing scenario, namely, pricing, quality and lesser number of branded small-molecule blockbuster drugs going off patent.

The ride on the ‘gravy train’:

Pharma companies across the world consider that doing business in the US market would provide them a lot of money without facing any head wind, fundamentally driven by the drug pricing freedom in the country, as compared to any other market of the world.

This unfettered freedom of charging a hefty price premium in the largest pharma market of the world, on an ongoing basis, has been a critical factor of attraction for many pharma players to do business in the US, coming from various corners of the globe, including India, just as honey attracts the bees, as it were.

Thus far, it has been an incredible ride on the ‘gravy train’, as it were, for most of them.

However, ongoing activities of a large number of drug companies, dominated by blatant self-serving interests, have now given rise to a strong general demand for the Government to initiate robust remedial measures, soon. The telltale signs of which indicate that this no holds barred pricing freedom may not be available to pharma, even in the US, any longer.

In this article, I shall focus mainly on this point, drawing both global and local examples, as this development has a strong potential to add more to the existing miseries of many Indian drug exporters, of course in tandem with many other large MNCs.

Some recent developments: 

The April 21, 2016 issue of ‘The Financial Times’ quoted Joe Jimenez, the Global Chief Executive (CEO) of Novartis, where he said that pharma companies can no longer count on the “hockey-stick” trajectories for new products in the US. This is primarily due to the aggressive control of the drug expenses by the insurers and other healthcare payers, besides lawmakers and the public at large, of this most lucrative pharma market of the world.

As Jimenez said in the report, yesterday’s business model that pharma companies have followed since long, has now changed, slowing the pace of growth of innovative patented products in the US.

This trend is now heading north, primarily driven by the consolidation among the US insurers and healthcare providers. Consequently, the payers are making effective use of their greater bargaining power over the drug companies, especially to avail new incentives for cost savings, as provided in President Barack Obama’s Affordable Care Act, the article highlights.

To give a feel of it, I am quoting the example of a Novartis drug from the same ‘Financial Times’ article. It states, “Entresto, a treatment for heart failure, launched last year on the back of stellar clinical trial results, has so far sold more quickly in Europe than the US, marking a reversal of usual patterns in the pharma industry.”

A key differentiator in global ranking:

In this emerging scenario, all global companies will be adversely impacted for increasing pricing pressure in the US market.

This factor remaining the same for all the pharma players in the world, one of the key differentiating factors that would now play even more important role, is the richness of the advanced stage R&D pipeline of each innovator company.

For example, according to ‘Evaluate Pharma World Preview 2016, Outlook to 2022’ report, the overall R&D pipeline value of Roche is US$ 43.2 billion, far ahead of the same of Novartis’ US$ 24.1 billion and AstraZeneca’s at US$ 23.2 billion, followed by Eli Lilly, AbbVie, Pfizer, Sanofi, Celgene, Biogen and J&J and in that order. As a result, Roche is expected to overtake Novartis and Pfizer in the ranking by 2022, just when the global pharma industry would possibly cross as US$ 1Trillion mark.

Currently Novartis, though quite a small player in the Indian Pharmaceutical Market (IPM) holding the rank of 23 (AIOCD Pharmasofttech AWACS retail audit report, MAT August 2016), is number three in the global ranking, just ahead of Roche.

Indian generic players to feel the heat:

According to the Reuters report of September 11, 2016, US Department of Justice has sent summons this month to the US arm of Sun Pharma – Taro Pharmaceutical Industries Inc. and its two senior executives seeking information on generic drug prices. In 2010, Sun Pharma acquired a controlling stake in Taro Pharmaceutical Industries.

On September 14, 2016, quoting a September 8, 2016 research done by the brokerage firm IIFL, ‘The Economic Times’ reported that some large Indian generic drug manufacturers, such as, Sun Pharma, Dr. Reddy’s, Lupin, Aurobindo and Glenmark have also hiked the prices of some of their drugs between 150 percent and 800 percent in the US. This invites even more apprehensions in the prevailing scenario.

As I wrote in this Blog on September 12, 2016, the subject of price increases even for generic drugs has also reverberated in the ongoing Presidential campaign in the US.

The Democratic Party’s presidential nominee – Hillary Clinton has already promised, if elected in November 2016, she would constitute an ‘Oversight Panel’ to protect the consumers of her country from hefty price increases for long-available life-saving drugs.

Import bans:

In the midst of all this, import bans of a large number of formulations and bulk drugs by the US-FDA from several manufacturing facilities of Indian drug manufacturers of various scales and sizes, have further compounded the future risk potential of Indian pharma business growth in the US.

As investors are raising concerns, the following comment of the Co-Chairman and Chief Executive of Dr. Reddy’s Laboratories, reported by ‘Financial Express’ on August 24, 2015, well captures the pharma business risks in this area:

“The U.S. market is so big that there is no equivalent alternative. We just have to get stronger in the U.S., resolve our issues, build a pipeline and be more innovative to drive growth.”

However, this still remains a good intent. It is worth noting, for most Indian pharma exporters, the US is the single largest export market, with a stake, as high as nearly half of most of these companies’ annual revenue, and probably much more in profit, both of which are now showing a declining trend.

Price control coming in the UK:

On September 15, 2016, the Department of Health of the United Kingdom (UK) reportedly introduced a new Bill in Parliament to use its statutory power to limit the price of generic medicines where competition in the market fails, and pharma companies charge the NHS unreasonably high prices.

The Bill would also allow the government to apply penalties for non-compliance and to recover any payments owed through the courts following a right of appeal to a tribunal. The penalties can be a single penalty not exceeding £100,000 or a daily penalty not exceeding £10,000.

UK drug regulatory authorities had also announced import bans of APIs and formulations from some manufacturing facilities of a couple of leading Indian drug manufacturers, but on a lesser scale as compared to the USFDA.

Action in EU:

As reported by Bloomberg on July 22, 2016, The European Medicines Agency (EMA) has called for a halt to sales of hundreds of medicines that were tested in India, after an inspection of a research site found “substitution and manipulation” of the study samples. The affected companies include both large Indian and multi-national players.

According to a PTI report of July 27, 2015, after this incident Pharmexcil estimated that exports worth US$ 1-1.2 billion are likely to be affected, if cancellation of 700 generic drugs by the EU stands.

Conclusion:

All these developments, particularly on pricing and mostly in the US, could have a retarding effect on the business growth trend of a large number of global and local pharma companies.

Focusing nearer home, the evolving scenario in the world’s top pharma market, viewed together with what’s happening in Europe, both on pricing and the data integrity fronts, send a strong cautionary signal to the Indian drug exporters, in general.

Inadequate remedial measures could unleash this pressure to reach a dangerous threshold, impacting sustainable performance of the concerned companies. On the other hand, adequate remedial action, both strategic and operational in nature, could lead to significant cost escalation, with no space available for its neutralization through price increases, gradually squeezing the margin.

As I see it, ease of doing pharma business in these top export markets will no longer be quite the same as in the past. Many believe, pharma industry has invited these measures sans perceptible self-control, over a long period of time.

Is it mostly a self-inflicted injury of the industry players? The drug companies, in general, don’t believe so. Will this change be irreversible?  Only the future could unravel this. However, regarding the possibility of future US Government legislation on drug pricing, it’s now a wait and watch game for the stakeholders. On a shorter time-frame, the ghost in this area, would keep haunting globally, primarily for business in the US market, at least, till the end of this year.

However, for the Indian pharma exporters, pricing appears to be just one among several other critical issues, especially, in the two most lucrative markets of the world. The overall situation in this area, by and large, remains unchanged till today, besides expression of a plethora of good intents.

Thus, pharma analysts’ quest to ferret out an answer to the Gordian knot on the continuity of Indian pharma exporters’ incredible long ride on the ‘gravy train’, has also not been plain sailing, so far. Further mired by the local manufacturers’ prolonging errors of judgement, the status quo ante is expected to still remain elusive, at least, for now.

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. 

On Serious Healthcare, Some Bizarre Decisions

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On August 04, 2016, it was widely reported by the media that the Union Minister of Chemicals and Fertilizers – Mr. Anant Kumar, would launch a new digital initiative of the National Pharmaceutical Pricing Authority (NPPA), named, “Search Medicine Price”, on August 29, 2016.

This is an app developed by the National Informatics Centre, for android smartphones ‘that will enable patients to check the prices of essential medicines on-the-go’. It will be an extension of NPPA’s “Pharma Jan Samadhan” web-portal facility. The Indian price regulator believes that wide use of this app would successfully reduce the instances of overcharging the consumers by the pharma companies and retail chemists, especially for lifesaving, and other expensive medicines. 

India’s drug pricing watchdog is planning to introduce this app to enable the patients check the prices of essential medicines on-the-go, and expects that this measure will hold drug companies and medicine retail outlets more accountable to patients.

In the test version of the app, which has since been released for stakeholder feedback, patients can search for the ceiling price of all medicines under the National List of Essential Medicines (NLEM), on the basis of its generic name and the state they’re buying it from.

The Chairman of NPPA, reportedly, further said, “Consumers can use the app before paying for a medicine to ensure that they get the right price. At present, whatever action we take against the companies, including recoveries, the consumer does not get back the overcharged amount he or she has paid.”

Good intent with a basic flaw:

The intent of the Government in this regard is indeed laudable. However, the initiative seems to underscore the blissful ignorance of the prevailing ground realities in India.

The media report highlights that with this app, the patients can search for the ceiling price of all medicines featuring in the NLEM on the basis of their generic names.

Whereas, the ground reality to make any meaningful use of this app is quite different. This is primarily because, in the Indian Pharmaceutical Market (IPM), over 90 percent of drugs are branded generics. An overwhelming majority of the doctors, as well, follow this trend while writing prescriptions for their patients, in general. For any single ingredients or Fixed Dose Combination (FDC) formulation, there are as many as even 30 to 40 brands, if not more. 

In that case, when the prescriptions given to patients are mostly for branded generic drugs, how would that person possibly get to know their generic names, to be able to check their ceiling prices with the help of the new “Search Medicine Price” app?

Not just a solitary example: 

This is just not a solitary instance of ignorance of the Government decision makers on the realities prevailing in the country.

With an admirable intent of making drugs more affordable for increased access, especially, to all those patients incurring out-of-pocket health expenditure, the Government has been taking several such measures, and is also trying to create a hype around these. Unfortunately, most of these efforts, miss the core objective of increasing access to drugs at the right price, by miles. 

Another recent example: 

This particular example, in my view, is even more bizarre.

It happened on February 29, 2016, the day when the Union Budget proposal for the financial year 2016-17 was presented before the Parliament of India.

In this budget proposal, the Union Finance Minister announced the launch of ‘Pradhan Mantri Jan-Aushadhi Yojana (PMJAY)’. 3,000 Stores under PMJAY will be opened during 2016-17.

Many consider this scheme as a repackaged old health care initiative, only adding the new words ‘Pradhan Mantri’ to it.

Just to recapitulate, Jan-Aushadhi is an ongoing campaign launched by the Department of Pharmaceuticals in 2008, in association with Central Pharma Public Sector Undertakings (PSU), to provide quality medicines at affordable prices to the masses.

Under this scheme, Jan Aushadhi Stores (JAS) are being set up to provide generic drugs, which are available at lesser prices, but are equivalent in quality and efficacy as expensive branded drugs.

The Department of Pharmaceuticals had initially proposed to open at least one JAS in each of the 630 districts of the country, so that the benefit of “quality medicines at affordable prices” is available to at least one place in each district of India.

If the initiative becomes successful, based on its inherent merit and the cooperation of all stakeholders, the scheme was to be extended to sub divisional levels as well as major towns and village centers by 2012. However, after 5 years, i.e. up to February, 2013, only 147 JAS were opened, and out of those only 84 JASs are functional. 

More recently, according to a June 02, 2015 report, “under the new business plan approved in August 2013, a target of opening 3,000 Jan Aushadhi stores during the 12th plan period i.e. from 2013-14 to 2016-17 was fixed. As per the Standing Committee on Chemicals and Fertilizers report in March 2015, till date only 170 JAS have been opened, of which only 99 are functional.”

Tardy progress:

The tardy progress of the scheme was largely attributed to:

  • A lackluster approach of State governments
  • Poor adherence to prescription of generic drugs by doctors,
  • Managerial/ implementation failures of CPSU/ BPPI.
  • Only 85 medicines spread across 11 therapeutic categories were supplied to the stores and the mean availability of these drugs was found to be 33.45 percent, with wide variations across therapeutic categories. 

There is no doubt, however, the intent of ‘Pradhan Mantri Jan-Aushadhi Scheme’ of 2016 is as laudable as the earlier “Jan-Aushadhi Scheme”, launched by the Department of Pharmaceuticals in 2008, was at that time. But, the moot question that comes at the top of mind:  Is it robust enough to work effectively in the present situation? 

Why it may not fetch the desired outcome?

Besides strong support from the State Governments, and other factors as enlisted above, making the doctors prescribe drugs in generic names would be a critical issue to make the “Pradhan Mantri Jan-Aushadhi scheme’ a success, primarily to extend desirable benefits to a sizeable section of both the urban and rural poor. Another relevant question that comes up now, how would the Government ensure that the doctors prescribe drugs in the generic names?

A critical challenge:  

Since, the generic drugs available from ‘Jan Aushadhi’ retail outlets are predominantly prescription medicines, patients would necessarily require a doctor’s physical prescription to buy those products.

Despite some State Government’s circulars to the Government doctors for generic prescription, and the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, that states: “Every physician should, as far as possible, prescribe drugs with generic names and he/she shall ensure that there is a rational prescription and use of drugs”, the doctors, in India, prescribe mostly branded generics. It includes even many of those prescriptions, generated from a large number of the Government hospitals.

The legal hurdle for generic substitution:

In a situation such as this, the only way the JAS can sell more for greater patient access to essential drugs, if the store pharmacists are allowed to substitute a high price branded generic with exactly the same generic molecule that is available in the JAS, without carrying any brand name, but in the same dosage form and strength, just as the branded ones. 

However, this type of substitution would be grossly illegal in India. This is because, the section 65(11)(c) in the Drugs and Cosmetics Rules, 1945 states as follows:

“At the time of dispensing there must be noted on the prescription above the signature of the prescriber the name and address of the seller and the date on which the prescription is dispensed. 20[(11A) No person dispensing a prescription containing substances specified in 21[Schedule H or X] may supply any other preparation, whether containing the same substances or not in lieu thereof.]” 

Thus, I reckon, the most important way to make ‘Jan Aushadhi’ drugs available to patients for greater access, is to legally allow the retailers substituting the higher priced branded generic molecules with their lower priced equivalents, sans any brand name.

A move that did not work:

Moving towards this direction, the Ministry of Health had reportedly submitted a proposal to the Drug Technical Advisory Board (DTAB) to the Drug Controller General of India (DCGI), for consideration.

In this proposal, the Health Ministry reportedly suggested an amendment of Rule 65 of the Drugs and Cosmetics Rules, 1945 to enable the retail chemists substituting a branded drug formulation with its cheaper equivalent, containing the same generic ingredient, in the same strength and the dosage form, with or without a brand name.

However, in the 71st meeting of the DTAB held on May 13, 2016, its members reportedly turned down that proposal of the ministry. DTAB apparently felt that given the structure of the Indian retail pharmaceutical market, the practical impact of this recommendation may be limited.

Conclusion:

Considering all this, just as ‘Pradhan Mantri Jan Aushadhi Yojana’, the likes of ‘Search Medicine Price app’, apparently, are not potentially productive health care related initiatives, if not just one-offs, ‘feel good’ type of schemes for the general population. 

These are not robust enough either, to survive the grueling of reality, impractical for effective implementation, and thus, seriously handicapped to fetch any meaningful benefits for the patients, on the ground.

It is, therefore, still unclear to me, how would the needy patients, and the Indian population at large, could derive any benefit from such bizarre decisions, on so serious a subject as health care.

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.

NCDs: Any Wolf Around, In Sheep’s Clothing? 

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Noncommunicable Diseases (NCDs), such as, cancer, cardiovascular disease, diabetes and chronic respiratory disease, are now the leading cause of death in the world, accounting for 63 percent of annual deaths. Over 80 percent of NCDs occur in lower or middle income countries.

Moreover, wide prevalence of NCDs and inadequate patients’ access to related drugs have a profound negative impact on the economic progress of any country. According to various reports, the increase of around just one year of a country’s average life expectancy, could increase its GDP growth by around four percent.

Since long, the global drug industry has been contributing immensely to discover and bring to the market various amazing medicines to effectively treat a spectrum of NCDs. It is still happening, but with a stark different impact on the majority of the patients, across the world. 

There are many important aspects to NCDs, such as, public and private initiatives in their prevention, continuous screening, proper diagnosis, providing most effective treatment, and population’s lifestyle management for more effective disease control. However, in this article, I shall focus only on modern drug pricing, as one of the key barriers for patients’ access to modern drugs for the treatment of these ailments.

Saying something, and doing something else:

In this context, some large pharma lobby groups pontificate that the drug industry recognizes the economic and social impact of NCDs. Many of them also try to widely publicize, that they are working with various stakeholders, such as, the Governments, other payers and patients’ groups, as an active solution partner in lessening this burden. 

Yes, some of them do actively support some programs, mostly to prevent, screen and diagnose these chronic ailments. There are also instances when they try to showcase some of their occasional and complicated, so called ‘patient access’ programs.

Interestingly, a global major even wanted to reap a rich harvest by highlighting one such initiatives to win a patent litigation in the Supreme Court of India. As many would know, the Apex Court of the country did not take cognizance of its real value to patients, as projected by the concerned company, while dictating its final judgement on the Glivec case.

To many independent experts, these could most probably be part of a grand façade to justify the high drug prices, which most of the patients can’t afford, and also is an attempt to manage their fast eroding overall public image. On the other hand, they ‘religiously’ continue to keep increasing the drug prices arbitrarily, including those of NCDs. I shall dwell on it below.

Impeding patient access to modern drugs:

Despite all these developments, the issue of general affordability of most effective available drugs, even by the payers, such as, many Governments and the health insurance companies, are seriously impeding the patient access to these medicines.

Such exorbitant treatment costs with modern and more effective drugs is creating almost an impregnable barrier for access to these medicines, mostly for those patients incurring Out-of-Pocket (OoP) expenditure on health care. In a situation like this, where the volume sales do not increase significantly, to maintain the business growth the manufacturers of these drugs further hike up their product prices to a jaw dropping level, as perceived by both the patients and the payers.

This overall pricing environment is now posing a major challenge to many even in many developed countries of the world, including the United States.

Even the sky is not the limit:

Today, for a drug price increase not even the sky is the limit. Recently, the Census Bureau, Commerce Department of the United States (US) announced May 2016 sales of merchant wholesalers of various industries in the country. According to this report, the total pharma sales by manufacturers to pharmacies, hospitals, and others in the distribution chain reflected a buoyant increase of a hefty 11.3 percent from a year ago, especially when most other sectors showed sluggishness in growth.

The obvious question, therefore, that comes up, are the Americans now consuming more pharmaceutical products than in the past? The answer, however, is negative, though not very surprising to many.

In that case, is this increase in growth coming primarily from price increases of drugs, which are mostly used for the treatment of chronic ailments? The answer now will be an affirmative one. 

How much price increase is enough?

This question becomes quite relevant, when a large section of even Americans starts raising their voices against high drug price, as it is adversely impacting their access to those drugs. 

If this question is put slightly differently, such as, when Apple Inc. can take an annual price increase of around 10 percent for its iPhones in the Unites States (US), how much drug price increases the pharma companies are possibly taking every year in the same country? This interesting point was deliberated in an article published in The Wall Street Journal (WSJ) on July 14, 2016. 

Price increases driving growth:

According to this article, pharmaceutical prices in the US rose by 9.8 percent from May 2015 through May 2016. This is the second-highest increase among the 20 largest products and services tracked by the Bureau of Labor Statistics’ Producer Price Index, with investment services ranking first.

Majority of pharma companies keeps increasing prices also for a large section drugs used in the treatment of NCDs, which require almost lifelong therapy for the patients to lead a normal and meaningful life.

I am trying to give below a flavor of such drug price increases, both for NCDs and communicable diseases, quoting a few examples from the above WSJ article:

  • Biogen Inc. reported a 15 percent increase to US$ 744.3 million in US sales of its Multiple Sclerosis (MS) drug Tecfidera in the first quarter, primarily due to price increases. The local revenue for Biogen’s other biggest-selling products, Avonex, used in the relapsing form of multiple sclerosis, and Tysabri used in multiple sclerosis and Crohn’s disease, also benefited from higher prices.
  • The sales of Giliead Science’s Truvada, used as a preventive treatment for HIV rose 16 percent in the quarter, on the back of higher prices, and also increased use as a preventive treatment for HIV.
  • Global sales of Amgen Inc.’s anti-inflammatory drug Enbrel rose 24 percent in the first three months of the year, driven primarily by a higher net selling price.
  • US sales for AbbVie Inc.’s anti-inflammatory drug Humira rose 32 percent in the first quarter, due to price increases and higher prescription volume. 
  • Pfizer Inc.’s US price increases and, in some cases greater prescription volume, helped drive higher revenue for nine drugs representing US$2 billion in US revenue.

Payers have started reacting:

Responding to this development, Express Scripts’ National Preferred Formulary (NPF) of the US, which is one of the most widely used drug list in the United States, providing prescription drug coverage guidelines for 25 million Americans, has excluded many drugs from its 2017 list. This exclusion covers some brands, such as, Novo Nordisk’s blockbuster GLP-1 diabetes drug Victoza and two of its top-selling insulins.

Similarly, another large American retail and health care company CVS Health’s 2017 formulary does not feature, among many other drugs, Sanofi’s blockbuster insulin Lantus along with its follow-up Toujeo, making it the largest commercial product ever excluded from a formulary. 

‘The playbook used for a number of years is over’:

In an article of August 04, 2016 titled, “Drug lobby plans a counterattack on prices”, a senior director of the public affairs firm APCO Worldwide, which represents several drug companies, and a former HHS official under President George W. Bush was quoted saying, in the context of pharma companies and their lobby groups that, the reality, the message and the playbook used for a number of years is over. The industry can no longer defend high drug prices by pointing to the pricey research and development that goes into innovative medicines. They have to move on, he added.

Indian scenario:

The Indian scenario is much worse, with OoP expenditure on drugs being around 70 percent of the total treatment cost. It could be even more, if only NCDs are considered. This situation raises a red flag, especially considering the WHO report released on January 20, 2015 that highlights NCDs are estimated to have accounted for 60 per cent of the deaths in India in 2014.

Some of the examples are as follows:

  • An ICMR-INDAIB study, published in September 2011, on diabetes prevalence in India indicate that the epidemic is progressing rapidly across the nation, and has already affected a total of 62.4 million persons in 2011. With proper diagnosis and screening this figure may increase to a dangerous level in India.
  • According to WHO, almost 2.6 million Indians are predicted to die due to coronary heart disease (CHD), which constitutes 54.1 percent of all CVD deaths in India by 2020. 
  • A March 2012 ‘The Lancet’ study found that nearly six lakh Indians die of cancer every year, with 70 percent of these deaths between the ages of 30-69 years.
  • A report titled “Dementia in Asia Pacific Region” released in November 2014, at the 17th Asia Pacific Regional Conference of Alzheimer’s Disease International (ADI) states that by 2050, the number of people in India suffering from dementia will rise to over 12 million.

Carefully assessing the enormous pharma business opportunity, mainly due to increasing health awareness and fast growing per capita income in the country, pharma players operating in India have become very active in the NCD area, in different ways. However, one strategy remains unchanged, which is continuous increase in modern drug prices, even at the cost of volume increase, frequently taking them beyond affordability of a large section of patients in India. 

Indian Government also reacted:

Recognizing, and basically to address this critical problem, just as what has is now happening in other parts of the globe too, the Union Ministry of Health was compelled to take strong measures, especially in the absence of Universal Health Care (UHC) in India. The Government recently revised the National List of Essential Medicines (NLEM) by adding many more modern drugs for NCDs in the list, to facilitate bringing them under the drug price control mechanism of the country.

Many company’s evading drug price control:

The Union Chemicals and Fertilizers minister Mr. Ananth Kumar informed the Rajya Sabha of the Indian Parliament on July 28, 2016 that various drug price regulatory measures taken by the government have helped consumers save Rs 4,988 crore over the last two years.

This saving may well be just on the paper. On the ground, have the consumers been really benefited out of these measures, and if so, to that much extent? 

The answer wouldn’t be too ferret out, when one takes into account the reply of the Minister of State for Chemicals and Fertilizers, Mr. Hansraj Gangaram Ahir to the Lok Sabha of the Parliament on March 08, 2016. The Minister informed the lawmakers that the National Pharmaceutical Pricing Authority (NPPA) is trying to recover a whopping Rs 4,551 crore, including interest, from various pharma companies for overcharging as of February 2016. Out of this total amount, Rs 3,698.32 crore, representing about 82 per cent of the total outstanding amount, is under litigation in various High Courts and Supreme Court spreading across 1,389 cases, the Minister further said.

The question, therefore, arises, how much benefit of the drug price control of essential medicines is actually benefitting the patients, and how much is being evaded by the pharma players?

Price increases driving Indian pharma industry growth:

In India too, a large number of pharma companies are increasing prices, including a large proportion of those drugs, which are used in the treatment of NCDs, requiring almost lifelong therapy for the sufferers to lead a normal and meaningful life.

The exorbitant treatment cost for many NCDs, with the modern and more effective drugs, is seriously impeding the patient access. As a cascading effect, the manufacturers of these drugs are further jacking up their prices to a much higher level for achieving their business growth objectives. This is very similar to what is happening also in the developed countries, including the US. 

That price increases are primarily driving the growth of the Indian Pharmaceutical Market (IPM) is vindicated by the following table, which has been compiled from the monthly retail audit reports of the well-reputed organization AIOCD Pharmasofttech AWACS Private Limited:

IPM growth through price increases versus volume (July 2015 to June 2016):

Growth % Jun 16 May April Mar Feb Jan 16 Dec 15 Nov Oct Sept Aug July 15
Price 3.8 5.0 4.5 5.1 5.4 5.1 5.2 1.0 13.2 9.9 13.2 12.9
Volume -0.6 -4.4 3.2 -5.3 3.7 1.3 2.8 5.0 5.5 1.4 1.6 3.3

Source: Monthly Retail Audit of AIOCD Pharmasofttech AWACS Pvt. Ltd

Conclusion:

Around the world, arbitrary drug price increases almost on a continuous basis, including in the low inflation countries that may now include India, has sparked-off a raging global debate. Even the Presidential nominees for the forthcoming general election in the United States are taking keen interest on the subject.

As highlighted in a recent issue of the magazine Politico, powerful pharma lobby groups are also gearing up to spend hundreds of millions of dollars to counter this ‘threat’, as perceived by them.

A number of hectic activities in this area, apparently, have started in India too, mainly to divert the focus of the stakeholders from arbitrary drug price increases to other important areas such as, NCDs. This usually happens by making the vested interests eulogizing how much good work these pharma companies are doing in this particular area, only to serve the patients’ health interest. 

Many global pharma players seem to still believe that the same old message from the same old playbook would work even today, at least in India, to defend high drug prices on the contentious ground of pricey R&D that goes into innovative medicines. I reckon, almost gone are those days, even in India.

NCDs need to be fought, unitedly, with effective public, private initiatives and without any self-serving agenda of any participants. The issue needs to deliberated not in the five-star hotels, neither in front of a captive audience, nor with an intent of getting favorable media coverage, but on the real ground, along the general population, both in the urban and the hinterlands of India.

These initiatives would appear praiseworthy to many, when the ultimate aim of any stakeholder, including the doctors and the pharma players, won’t be to make the consumers consume more of high priced medicines, in many cases even by selling their frugal assets. The key aim, I believe, should be to facilitate prevention, screening, diagnosis and treatment with affordable modern medicines, and finally to help manage the ailments well, through the rest of the life of any sufferers.

In the battle against NCDs, it is also important to know well and segregate, if there is any wolf around, in sheep’s clothing.

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.

Drugs & Devices: Chasing Never-Enough Profit And Price Control

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On July 20, 2016, the Union Ministry of Health of India announced the addition of Coronary Stents to the National List of Essential Medicines (NLEM) 2015 with immediate effect, bringing them under the Drug Price Control Order.

Reacting sharply to this development, the medical device industry commented, with an undertone of threat, that this price cap could stop manufacturers from introducing technologically advanced stents in India.

However, without contributing to any further knee-jerk reaction, let me try to analyze in this article, whether the never-enough profit motive of the imported stent manufacturer prompted the Government to resort to price control for these life saving devices.

The use of stent:

In the treatment of coronary artery diseases, cardiac stents are now widely preferred in India, just as many other countries of the world. These are small expandable tubes, usually made of metal mesh, and are used to treat narrowed or weakened arteries in the body. 

One of its most extensive usages is in patients with Coronary Heart Disease (CHD), caused by the buildup of plaque, where stents are used to open narrowed arteries and help reduce the symptoms, such as, chest pain or angina, or to help treat a heart attack. This procedure of a percutaneous coronary intervention (PCI) is called angioplasty. 

According to the report of an experts’ sub-committee formed by the Government in October 2015, around 25 percent of deaths in India is attributed to Cardio Vascular Disease (CVD). Coronary Artery disease (CAD) is the commonest CVD accounting for 90-95 percent of all CVD cases and related deaths.

However, for a large majority of the Indian population, the cost of angioplasty is prohibitively high. A patient may have to shell out anywhere between around Rs. 60,000 and Rs. 150,000 for a stent coated with drugs, called Drug Eluting Stent (DES), to curb restenosis, according to published reports.

Even for most Government staff, the cost of angioplasty could well be several times more than their maximum reimbursable limit fixed for angioplasty. Thus, only around 3 out of 1000 needy coronary heart disease patients are treated with angioplasty in India, as compared to 32 in the United States.

An opportunity to shape up:

Despite DES being notified as drugs under the Drugs and Cosmetics Act, 1940, the coronary stents did not feature in the National List of Essential Medicines (NLEM) prior to the above notification, and therefore, were not covered by the Drug Price Control Order (DPCO), so far.

For a long time, this situation offered an important opportunity to the imported stent manufacturers to shape up with responsible pricing…but did they?

Why is angioplasty cost so high?

While trying to find out a credible answer to the above question, the following details on DES of Abbott Healthcare are worth looking at. This information was sourced from a Maharashtra FDA report, and referenced by Rema Nagarajan in her article published in the Times of India on September 25, 2014 to highlight why is DES so expensive for patients in India.

Although, pricing details are of 2014, nevertheless, it gives a flavor of the prevailing situation:

Cost Break-Up/Unit Cost per Unit (Rs.)
DES imported into India at 40,710
Sold to Distributor Sinocare at 73,440
Distributor Sold to Hinduja Hospital 1,10,000
Patient charged 1,20,000 (threefold increase of import price)

(Source: Maharashtra FDA report)

The saga of ‘Market driven pricing’:

Both the drug and the device companies apparently make valiant efforts to package such ‘arbitrary’ pricing as so called ‘Market Driven’ ones, though such price tags keep crippling many cardiac patients financially too. Ironically, the saga still continues.

Taking advantage of the free-pricing environment in India for Coronary Stents, to attain market dominance many global majors, possibly believe that they can print any Maximum Retail Price (MRP) on their import cost. It was happening even when the Government does not levy any customs duty on stents. Do these companies ignore its optics too? Who knows? 

Like most drugs, market forces do not play any significant role in the medical device pricing too, globally.

In June 2013, a research study published in the ‘American Heart Journal (AHJ)’, compared the use of Bare-Metal Stents (BMS), Drug-Eluting Stents (DES), and Balloon Catheters according to company presence in the hospital. It concluded that Medical Representative (MR) presence was associated with increased use of the concerned company’s stents during percutaneous coronary interventions. The effect was more pronounced with the use of DES, and resulted in the higher procedural cost of US$ 250 per patient.

In this particular study, it was found that DESs were used in about 56 percent of the cases, when the MRs concerned were at the hospital, against 51 percent when they weren’t there.

The situation is not terribly different in India too, where also the medical choices are often influenced by the drugs and device makers through, much discussed, dubious means.

The market:

According to a market research report of ‘Future Market Insights (FMI)’ dated May 09, 2016, the coronary stent market of India was of US$ 481 million in 2015, and by the end of 2016 is expected to reach at US$ 531 growing at a CAGR of 14.0 percent over the forecast period of 2016 – 2026.

This study segmented the market on the basis of the following product types:

  • Drug Eluting Stent (DES)
  • Bare Metal Stent (BMS)
  • Bioresorbable stent (BVS) 

DES segment is expected to exhibit the highest growth and the BMS segment a stable growth, during the forecast period. This is mainly attributed to the emergence of new and more effective stents in the market, the report highlights. 

The market is dominated by the imported stents. Abbott, Medtronics, Meril Lifesciences and Boston Scientific, hold together around 60 percent share of the Indian market.

In India, nine of the 11 domestic stent manufacturers are located in Surat and Vapi of Gujarat. These stents are picking up the market share currently hovering around 30 percent, costing even less than half, as compared to the imported ones.

The Government stepped in:

When the industry did not seem to shape up, despite the regulatory opportunity available to keep the stents out of the NLEM, the media started writing about it, strongly and quite frequently. These were intended to bring some sanity into the imported and advanced Coronary Stent pricing system. Still nothing changed, and the Government had to step in.

Ultimately, in October 2015, the Union Ministry of Health constituted a sub-committee of expert cardiologists under the chairmanship of Prof. Y.K. Gupta, Head of the department of pharmacology, All India Institute of Medical Sciences (AIIMS). The mandate of this sub-committee was to examine the issues relating to the essentiality of coronary stents, and recommend whether the coronary stents should be included in the NLEM.

Accordingly, after a series of in-depth discussion with various stakeholders, which included stent manufacturers and the patient groups, the sub-committee recommended the inclusion of two categories of coronary stents, namely the DES and BMS in the NLEM. This suggestion was in response to “the enormous need of percutaneous coronary intervention, or angioplasty with stent.”

By a notification on July 20, 2016, the Ministry of Health announced that the sub-committee has submitted its report to the Government, and after thorough examination of the report, its recommendations have been accepted for implementation with immediate effect.

This decision of the Government is expected to set the stage for the National Pharmaceutical Pricing Authority (NPPA) to work out ceiling prices, which are expected to be 40 percent to 70 percent less than the current prices for these stents.

Conclusion:

For the last several years, many stakeholders, including the media and the Government, have been expressing grave concern over the exorbitant prices of the Coronary Stents.

Earlier in 2015, following a petition, even the Delhi High Court directed the Government to monitor the prices of stents in the market.

Indian drug price regulator, the NPPA, and some state FDAs too flagged the point that although locally manufactured stents are much cheaper, doctors and hospitals continue to use the imported ones, for various commercial and other reasons. As a result, the situation remained the same, adversely affecting the health of a large number of cardiovascular patients in India.

The last week’s decision of the Indian Government for inclusion of coronary stents in the NLEM, needs to be viewed under the backdrop of steep increase in the incidence of CHD in India. It clearly poses a significant public health hazard, where the cost of stents becomes a key treatment barrier for the majority of the patients incurring out-of-pocket health expenditure.

Price control of drugs and devices may not be the best way to improve their access to the most of the Indian population. Nevertheless, considering the high out-of-pocket expenditure for health care in the country, instead of behaving responsibly, doesn’t the drug and the device makers’ mindless chase after ‘never-enough profit’ objectives, often prompt the imposition of regulatory price control?

The fact that many global drug and device manufacturers, even after posting over 30 percent standalone net profit growth in India, continue cribbing incessantly about the stifling Regulatory and Intellectual Property Right (IPR) environment in the country, vindicates the above point well, possibly beyond any reasonable doubt.

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.

 

 

An Emerging Yo-Yo Syndrome With Biosimilar Drugs

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Competition from Biosimilar drugs poses a threat of a combined revenue loss of estimated US$ 110 billion of those pharma players who are still enjoying market monopoly with patented biologic brands. This is expected to surely happen, in the long run, if the signals picked up from the evolving scenario continue to stay on course.

Simply speaking, generic versions of original biologic drugs are termed as Biosimilars. These are large protein molecules, created from living organisms following complex processes. Thus, it is significantly more expensive to develop and market biosimilar drugs, as compared to any small molecule generic chemical ones. 

Hurdle creation and the core intent: 

Despite these complexities, for quite some time, global original biologic drug players had initiated intense campaign to create tough hurdles in the process of regulatory and marketing approval for biosimilar drugs, predominantly raising safety concerns. A simultaneous campaign was also launched among doctors and the payers in the developed countries, stoking the same fear, to forestall the overall acceptance of biosimilar drugs.

When drug regulators of different countries are solely responsible to ensure patient safety of any drug, why are the global pharma companies, and their trade associations are continually shouting from the roof top expressing concerns in this regards? It is often seen that such campaigns become more intense, when it comes primarily to block or delay the entry of biosimilar, many generic drugs and some IP related issues in a country. Umpteen number of such examples are available from India, Europe, United States and many other countries. Many would agree that in such cases, the core intent is as important as the issue.

I discussed on those hurdle creating campaigns in my article in this Blog, on August 25, 2014, titled, “Scandalizing Biosimilar Drugs With Safety Concerns”. Hence won’t dwell on that again here.

The campaign yielded results:

This campaign of global bio-pharma majors to restrict the entry of lower priced biosimilar drugs into the market, immediately after patent expiry, has been successful to a great extent, so far. Let me now give below a recent example, from credible sources, to vindicate this point.

Although, the world’s number 1 drug in sales – Humira (Adalimumab), with a turnover of US$ 15 Billion in 2015 (IMS Health), is going off patent in December 2016, no biosimilar version of Adalimumab is ready, just yet, to compete with this profit churning blockbuster biologic brand, in the United States. More interestingly, according to another report dated July 14, 2016 of the Wall Street Journal (WSJ), even on the verge of its product patent expiration this year, U.S. sales of Humira rose 32 percent to US$ 2.2 billion in the first quarter this year, with over 16 percent jump in its prescription volume.

It is worth noting, Humira was first approved in 2002, and has long been one of the most profitable drugs, globally, contributing around 60 percent of Abbvie’s total revenue even in the last year.

The industry may well argue, in a situation like this, how can a pharma company possibly decide to remain within the ambit of just patent protection, even if it leads to sacrificing other stakeholders’ interest? That’s a ‘business ethics’ issue, and is beyond the scope of this article.

The beginning of a yo-yo syndrome:

At the very outset, let me mention that the term ‘yo-yo syndrome’ has been coined to refer to something that moves up and down quickly, or something that changes repeatedly between one level and another.

Keeping this into perspective, some of the big bio-pharma companies, such as, Amgen, which have been, reportedly, trying hard to block the on-time entry of biosimilar drugs, through litigations and lobbying, could stand as good examples in this area.

For instance, Amgen, on the one hand, seem to be vigorously shielding its over US$10 billion of annual biologic sales from the biosimilar competition through powerful lobbying. Whereas, on the other, it commenced developing its own biosimilar drugs, to reap a rich harvest from the available opportunities.

According to an Associated Press report on July 12, 2016, a panel of Food and Drug Administration advisers of the United States has voted unanimously in favor of Amgen’s version of AbbVie’s Humira. While not binding, the recommendation could help the USFDA approval of the knockoff drug.

According to reports, the companies now working on Humira biosimilars, include Novartis, Mylan and Baxter.

India did it, but a tough road ahead:

On December 9, 2014, international media flashed across the world a great news item from the Indian pharma industry: “The first biosimilar of the world’s top-selling medicine Humira (adalimumab) of AbbVie has been launched in India by Zydus Cadila.” That said, let me hasten to add that Humira does not have a valid product patent protection in India.

Yet another good news is, according to a Press Release of Biocon dated July 15, 2016, its India made Insulin – Glargine was launched in Japan on the same day by its partner FUJIFILM Pharma Co., Ltd. (FFP).

These are excellent developments, and music to many ears. However, on the flip side, intense legal battle on various regulatory grounds against the Indian biosimilar drug players, by the makers of original biologic to protect their own turf of market monopoly, has also commenced with associated acrimony.

Earlier, the Swiss drug major – Roche had objected to Biocon’s referring to Herceptin at an international scientific conference, related to clinical trial results of its own ‘biosimilar’ version Herclon (trastuzumab).

On April 2016, responding to Roche’s complaint, the Delhi High Court ordered changes to the packaging labels of the brands sold by Biocon, and other bio-pharma companies in India, such as, Reliance Life Sciences and Mylan. The court also raised questions about the DCGI’s approval processes for biosimilars, and restrained the companies from using Roche’s data related to the manufacturing process, safety, efficacy and tests.  

More recently, this issue between Roche and Biocon, over breast cancer drug trastuzumab has reportedly taken another acrimonious turn with both the companies approaching the Delhi High Court on charges of contempt of court.

Roche reportedly also alleged contempt over Biocon using the name ‘Herceptin’ in the approval process of its trastuzumab drug in the United States. According to reports, Biocon is currently conducting Phase III clinical trials for marketing approval of its trastuzumab in the U.S.

Thus, to carve out a niche in the biosimilar space of the world, Indian pharma has made some good progress. Alongside, taking note of many contemporary factors and development in this area, a lurking apprehension too did creep in. It raises an awkward and uncomfortable question – do the Indian companies have pockets deep enough to overcome the expensive legal and regulatory challenges thrown by the global biologic drug makers to protect their market monopoly status for expensive drugs, much longer than what they deserve?

Let me keep my fingers crossed.

Critical global speed-bumps for biosimilar entry:

Besides, many other hurdles, as I highlighted in my article of August 25, 2014, the intricate patent shield beyond original patent expiry, is a major speed bump for biosimilar drugs’ smooth global market entry. 

Maintaining the same example of Humira, a well crafted patent-shield strategy was implemented to extend market monopoly of this brand, at least for another decade. Although, the main patent of Humira expires in December 2016, it is reportedly well shielded, at least, with 70 other patents till 2027, as many reports indicate.

This is possible because, according to a January 19 2016 report by Bloomberg, the U.S. patent office in the same month rejected Amgen’s effort to knock out two patents on AbbVie’s anti-inflammatory bestseller Humira. Amgen hoped to get its Humira competitor to market by 2017. This is a bad news for other biosimilar drug makers too.

Nevertheless, the good news is, in May 2016, the Patent Trial And Appeal Board (PTAB) announced that it would embark on a review of Coherus’ challenge of Humira’s ’135 methods patent. Experts believe, even if it the PTAB upturns Humira’s IP shield, AbbVie could appeal, which could take another year or so.

Recent status:

So far, after the biosimilar guidelines were put in place for the first time in the United States, a Novartis version of Amgen’s Neupogen, got USFDA approval in March 2015, only after so many delays and protracted litigations. Novartis is also trying to to do the same for Amgen’s Enbrel. Pfizer too won the U.S drug regulator’s approval in April 2016 for a version of Johnson & Johnson’s Remicade, but the product is still not available for sale.

Currently, some constituents of Big Pharma, such as, Amgen, Novartis and Pfizer have started warming up for manufacturing copycat versions of blockbuster original biologic drugs of other companies.

High quality biosimilars:

These new biosimilars are of top quality. Even USFDA could not find any meaningful differences in the key parameters, such as, efficacy, safety, potency and purity, between the original biologic drugs and their biosimilar versions.

According to a July 12, 2016 Bloomberg report, in several cases USFDA finds the clinical results of biosimilar drugs are robust enough to support ‘extrapolation’. This could support approval of these biosimilar drugs for all indications that the original biologic brands treat, without requirement of separate clinical trials for each, facilitating the approval process and accelerating their market entry.

With these developments, the high voltage lobbying campaigns of the original biologic makers, and their trade associations, both to the drug regulators and doctors, are expected to lose steam, if not ultimately die down altogether. 

However, the protracted and fierce legal battles of the originators, creating various intricate patent shields, to enjoy a brand monopoly for a much longer period, are expected to continue, if not turn fiercer.

The question of price advantage with biosimilars:

Currently the cost advantage provided by the biosimilar drugs over the original biologics, does not come anywhere near to what we see for small molecule generic drugs, post patent expiry. 

For example, Zarexio of Novartis has been priced 15 percent less than the original Neupogen of Amgen. It is generally believed that in the united states this difference would continue to be around 15 to 30 percent, in the near future. Whereas in Europe, the difference is higher, as the governments regulate their prices.

In India too, the difference in the pricing trend is currently, more or less, similar. 

Nonetheless, the above report of Bloomberg had quoted the global CEO of Novartis Joe Jimenez saying that biosimilar drugs would eventually cost 75 percent less than the original biologics. 

Let’s hope so.

Conclusion:

The powerful constituents of Big Pharma who decided to delay, if not stall the entry of biosimilar drugs for vested interest, have now started adopting a dual strategy. They did not have any other choice either, after President Obama’s fulfillment of his election promise with the ‘Affordable Care Act’, which, among others, facilitated charting the regulatory pathway for entry of biosimilar drugs in the United States, for the first time ever. 

Thus, on the one the one hand, these companies continued crafting robust patent-shields to extend market monopolies, even beyond the original patent expiries, through protracted and complicated litigations. While, on the other, started moving with great speed to develop biosimilar versions of the original blockbuster biologic drugs of other players, as they go off patent. This is mainly to cash-in the golden opportunities, which otherwise would go to different players.

India has made an entry into this space, but would still require a lot to do, including winning the expensive legal battles, in order to be recognized as a global force to reckon with, in the biosimilar segment.

To facilitate rapid growth, and universal acceptance of biosimilar drugs, for patients’ interest across the world, it will be interesting to follow the spread of the ‘yo-yo syndrome’ of the original biologic drug makers, as we move on.

By: Tapan J. Ray  

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