Does India Produce ‘World Class’ Medicines, For All?

Posted on October 12, 2015 by Tapan Ray

India has already achieved a staggering number In terms of quantity or volume of generic medicines that it produces not just for India, but for many developed, developing and poorer countries, across the world. For this reason, India is popularly known as ‘The Pharmacy of The World’. No one questions this number at all, rather looks at India with a sense of admiration in this regard.

Nevertheless, for driving this volume growth trend further north, in a consistent and sustainable way, Indian pharma sector must ensure that its huge volume growth engine remains firmly placed on a solid bedrock of ‘world class’ drug quality, always. Any compromise in this crucial area, could strike a critical blow to this ‘tower of national pride’.

Ongoing several embarrassing incidents related to the drug manufacturing quality standards in India, are increasingly fueling the apprehension, whether or not India produces ‘World Class’ medicines for all patients across the world, independent of any other criteria, financial or otherwise. The debate has now taken an interesting turn, especially after near confirmation of this apprehension by the top drug regulator of India.

In this article, I shall discuss this important issue that hugely impacts all of us, giving my own perspective to it. Let me begin with one of the most recent incidents on the subject, involving the numero-uno of Indian pharmaceutical industry.

An overseas new product launch got prematurely aborted?

On September 25, 2015, by a Press Release, Sun Pharma Advanced Research Company Ltd. (SPARC) announced a major set back for the company. The set back may not be so much in terms of the company’s estimated revenue loss, but more on public perception across the world, about the manufacturing quality standards followed even by the top most pharma company of India.

SPARC made a public announcement through media that on March 2015 it had received a final approval from the Food and Drug Administration of the United States (USFDA) for the anti-epileptic drug – Elepsia XR (Levetiracetam extended-release tablets 1000 mg and 1500 mg). However, in the Complete Response letter (CRL) to the company’s New Drug Application (NDA) for the product, the USFDA has revoked its earlier approval, citing that the compliance status of the manufacturing facility was not acceptable on the date of approval. Elepsia XR is to be manufactured at Sun Pharmaceutical Industries Ltd (SPIL)’s Halol facility in Gujarat, the announcement said.

Sun Pharma had reportedly indicated in June 2015 that the Company had been working “very aggressively” to find partners for the product. It had “some advanced discussions” and aimed to launch the drug by the second half of fiscal 2016.

The international media lapped it up and reported this development with eye-catching headlines, one such was:

“India’s Sun Pharma research arm sees FDA nod for Elepsia XR yanked by FDA on manufacturing.”

Not a one-off isolated incident:

This matter can no way be treated as a one-off and an isolated incident, as it fits in well with a series of similar events, spanning over the last few years.

Looking at these disturbing adverse reports from the foreign drug regulators on the drug manufacturing quality standards in India, together with recent comments of the Indian drug regulator on the subject, serious health safety concerns on overall drug quality in the country, are being expressed now. The concern includes the local patients in India, as well.

Can the core issue be wished away?

Up until today, USFDA has altogether warned 39 manufacturing sites of 27 Indian pharma companies for breach of data integrity and not following specified manufacturing quality standards. The agency has also expressed that it treats these as potentially dangerous medicines for the consumption of patients in the US.

In 2015 alone, USFDA has reportedly detected such serious ‘short comings’ with 6 Indian drug makers, till September. A report from Financial Times (FT) states that the above numbers do not include the testing facilities facing sanctions from the European Medicines Agency (EMA) in the GVK Biosciences related cases or from the World Health Organizations (WHO).

What is most worrying, none can possibly still fathom, if these alleged ‘reprehensible’ manufacturing practices are restricted to just a few players or are all pervasive across the Indian drug industry.

When the foreign regulators, such as USFDA and Medicines and Healthcare Products Regulatory Agency (MHRA) of the United Kingdom (UK) continue raising the red flags on the manufacturing standards of the top pharma players of India, including the numero uno, a chilling sensation flows through the spine, as it were. The moot question that comes up: Are all the drugs manufactured in India safe for the local patients, offering desirable efficacy?

Keeping these in perspective, would it be prudent to wish away the drug quality related critical issues, raising a conspiracy theory against the US or EU or suspend discussions on any Foreign Trade Agreement (FTA)? I don’t reckon so, and would touch upon this point in course of my discussion below.

The murmur among the US doctors:

According to an article from Reuters of March 18, 2014, titled “Unease grows among US doctors over Indian drug quality”, some US doctors are also expressing concerns about the quality of generic drugs supplied by Indian manufacturers, following a flurry of recalls and ‘import bans’ by the USFDA.

This concern has been prompted by the fact that India supplies about 40 percent of generic and over-the-counter drugs used in the United States, making it the second-biggest supplier after Canada.

Not much complaint from the Indian doctors:

This is intriguing. Despite so much of furore of the regulatory agencies in the US and EU on the Indian drug quality standards, not much concern on the same has been expressed by the medical practitioners in India, just yet.

It appears, by and large, Indian doctors believe that branded generics are generally of good quality, and the quality of generics without a brand name is not as reliable, always.

This logic is beyond my comprehension. How come just fixing a brand name on a generic formulation makes it more acceptable in terms of quality, when both branded generics and generics without a brand name, have obtained the same regulatory approval from the same drug regulators in India and following the same regulatory process?

As you will see below, the situation has changed further now, especially after the admission of the DCGI about non-compliance of global manufacturing quality standards by majority of the formulation manufacturers in India, as reported by the media. The only silver lining to it is that whatever is being currently manufactured in India, presumably meets the regulators approval in conformance to the Drugs and Cosmetics Act of the country, without any credible data to the contrary.

Does India produce drugs of ‘World Class’ quality for all?

The key question that is being raised today: Does India produce ‘world class’ drugs and for all? This is mainly because, manufacturers of ‘world class’ drug quality always aim at competing for quality on the best global standards to remain competitive in the international markets, in all parameters. This should hold good even for the domestic Indian market, for all drugs, consumed by all the local patients, irrespective of their financial status.

A lurking fear keeps lingering, primarily apprehending that Indian drug manufacturing quality related issues are not confined only to the importers in the developed world, such as, the United States, European Union or Canada. There is no reason to vouch for either, that such gross violations are not taking place with the medicines consumed by the patients in India or in the poorer nations of Africa and other similar markets.

A recent international study on Indian drug quality:

The following study further aggravates the angst.

The September 2014 ‘Working Paper 20469’ of ‘The National Bureau of Economic Research (NBER)’ Cambridge, USA, titled “Poor Quality Drugs and Global Trade: A Pilot Study’, epitomizes the following:

Experts claim that some Indian drug manufacturers cut corners and make substandard drugs for markets with non-existent, under-developed or emerging regulatory oversight, notably Africa.

The study assessed the quality of 1470 antibiotic and tuberculosis drug samples that claim to be made in India and were sold in Africa, India, and five mid-income non-African countries and found:

– 10.9 percent of these products fail a basic assessment of active pharmaceutical ingredients (API)

- The majority of the failures are substandard (7 percent) as they contain some correct API but the amount of API is under-dosed.

– The distribution of these substandard products is not random, they are more likely to be found as unregistered products in Africa than in India or non-African countries.

Claiming that the findings are robust, the NBER study points towards one likely explanation that Indian pharmaceutical firms and/or their export intermediaries do indeed differentiate drug quality according to the destination of consumption.

Incomprehensible?

The above facts are alarming, especially when these flow from a survey report of a credible international institution. This is incomprehensible too, as all these are medicines, and are meant to be for relief or cure of ailments that the patients are suffering from, irrespective of whether they are from the developed, developing or poorer countries.

If it is still happening today, why are those manufacturers allowed by the Indian drug regulators to discriminate between the patients of the developed countries and the developing world, including India, to meet the same health care needs? This is absolutely cruel by any standard, undoubtedly.

‘As you sow, so shall you reap’:

Just as the above well-known proverb says that the actions or deeds repay in kind, reasonably frequent ‘import bans’ by the foreign drug regulators on drug quality norms, has probably prompted booming generic drug exports of Indian pharma now slowing down to US$15.3 billion in 2014-15, from US $14.84 billion in 2013-14.

Along side, these avoidable incidents have significantly dented India’s image as the ‘pharmacy of the world’, manufacturing affordable and high quality generic formulations for the patients across the world.

Indian drug regulator too now thinking afresh?

Yet another relevant question comes up. What happens, if during treatment of serious ailments such drugs fail to act for inferior quality? How would one possibly know in India, whether a death has occurred due to unresponsive poor quality of drugs or on account of severity of the ailments? How helpless are the patients in such a situation?

This sad feeling gets even stronger, when well after a prolonged defense of the high quality of drugs manufactured in India, no less than the Drug Controller General of India (DCGI), airs his second thought on the same issue. This is vindicated by recent media reports on this subject.

On September 30, 2015, a media report stated that being virtually flustered by the USFDA and the drug regulators in the European Union, the Drug Controller General of India (DCGI) would place a proposal before the Ministry of Health, within the next six months, for an amendment to the existing pharmaceutical manufacturing laws under Drugs and Cosmetics Act, 1940, and Drugs and Cosmetics Rules, 1945, in order to ‘bring them on par with international standards’.

The DCGI now believes that this remedial measure would raise drug manufacturing standards in India in line with the global cGMP standards, recommended by the World Health Organization (WHO).

Currently, out of around 8,000 drug manufacturers in India, only 10 to15 percent are following the WHO guidelines, the report stated quoting the DCGI.

The new revelation further strengthens the apprehension about quality of drugs that Indian patients are consuming in the country with a strong hope for relief from the diseases that they suffer from.

The DCGI apparently admitted it, when he was quoted saying in the above report, “India has become a pharmacy of the world. So, we cannot live in isolation and will have to meet their expectations. Our system is in the process of improving.”

DCGI statement follows an important Government decision:

It is worth noting that the above comment of the DCGI comes close on the heels of an important Government decision in this regard.

On August 12, 2015, The Press Trust of India (PTI) reported that to facilitate domestic manufacture of quality medical products, the Cabinet Committee on Economic Affairs (CCEA) on that day approved a proposal of strengthening and upgrading the drug regulatory system both at the Central and state level. The committee approved a budget of of INR17.5 billion (US$270 million) on this account.

The up gradation and strengthening of the system will also include setting up of new laboratories and training academy for regulatory and drug testing officials, the report added.

Yet Another significant development:

On October 5, 2015, in yet another significant development in this direction, the Medicines and Healthcare products Regulatory Agency (MHRA) of the United Kingdom (UK), by a ‘Press Release’, announced signing of a Memorandum of Understanding (MOU) with the Central Drugs Standard Control Organization (CDSCO) of India.

This agreement will increase collaboration between India and UK in the area of medicines and medical devices with the aim of further improving public safety in both the countries. It is worth noting, around 25 percent of generic drugs consumed in the UK are made in India. Hence, the concern of MHRA over the safety of those medicines is understandable.

I wrote in this Blog on USFDA ‘Import Bans’ in my article of November 11, 2013, titled ‘USFDA ‘Import Bans’: The Malady Calls For Strong Bitter Pills.’

Conclusion:

A valid question that is being asked by many in India today, why the issues like, alleged cGMP non-compliance, data fudging and falsification of other documents, especially with USFDA, have multiplied suddenly over the last few years. Why not as many of such issues were raised by the USFDA before around 3 to 4 years?

This is primarily because, of late the inspectors from the USFDA have significantly increased their efforts to ensure the drug manufacturing facilities from where both generic Active Pharmaceutical Ingredients (API) and formulations are exported to the US, strictly follow the drug manufacturing standards, as stipulated by the USFDA. The fact that India supplies about 40 percent of generic and over-the-counter drugs currently used in the United States, has prompted this requirement to safeguard health safety of the American patients.

Such stringent USFDA audits commenced in 2012, when US Congress passed the FDA Safety and Innovation Act. This legislation, among others, requires the USFDA auditing all foreign facilities that make drugs for export to the US, as frequently as it does for the domestic drug manufacturing plants. Thereafter, we have seen a spurt in the USFDA inspections of the pharma manufacturing facilities in India, where from drugs are exported to the US. Hence, there does not seem to be any other credible ‘conspiracy theory’ on this issue.

As reported in ‘The New York Times’ of February 14, 2014, the same DCGI almost brushing aside the gravity of the situation arising out of repeated ‘import bans’, commented at that time, “If I have to follow US standards in inspecting facilities supplying to the Indian market, we will have to shut almost all of those.”

The top drug regulator seems to have changed his mind since then, and presumably is thinking differently now, as the Indian media very recently quoted the DCGI saying “India has become a pharmacy of the world. So, we cannot live in isolation and will have to meet their expectations. Our system is in the process of improving.”

This is a good omen, especially for the patients in India. If and when it gets translated into reality, with Kudos to the DCGI, we all would feel very proud saying, “The Pharmacy of the World now produces the World-Class drugs, for all” …God willing!

By: Tapan J. Ray

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

Just 16% Of Indian Population Has Access To Free Or Partially-Free Health Care?

Posted on October 5, 2015 by Tapan Ray

Is health care currently a low priority area for the Government of India? Probably yes, and thus it is worth trying to fathom it out.

Besides planned frugal spending on overall public health in 2015-16, even as compared to the past trend, two other health related budgetary decisions of the Government are indeed baffling, at the very least.

As many of you, I too know that the incumbent Government in its first full-year budget of 2015-16 has sharply reduced the budgetary allocation on many important health related other projects, such as:

- Union budget allocation for the National Rural Drinking Water Program (NRDWP) that aims at providing safe drinking water to 20,000 villages and hamlets across India, has been drastically reduced this year. Curiously, this decision has been taken at a time, when India loses 200 million person days and Rs 36,600 crore every year due to water-related diseases.

- The Integrated Child Development Services (ICDS) scheme, which provides food, preschool education, and primary health care to children under 6 years of age and their mothers, has also been hit by a 54.19 percent budget cut this year. This decision too of cutting public expenditure on food, nutrition and health care for children to more than half, defies any logic, especially when 40 percent of growth stunted children in the world are reportedly from India, exceeding the number of even sub-Saharan Africa.

I hasten to add that the Union budget 2015-16 has indicated, as the states’ share in the net proceeds of the union tax revenues has increased, as per recommendations of the 14th Finance Commission, these central Government programs will now be run with a changed funding pattern between the Union and states. However, according to financial experts in these areas, regardless of devolution, the total money available to run these critical projects is sharply decreasing.

That said, on the other pages of the same Union Budget, public funding in the current fiscal year for bridges and roads has more than doubled. The budgetary allocation for these two areas now stands more than even education.

I deliberated on similar subject of access to health care in my blog of March 16, 2015, titled, “With Frugal Public Resource Allocation Quo Vadis Healthcare in India?”

Health care sector is important for job creation too:

According to the World Health Organization (WHO), health care sector is one of the largest job creators, not just in India, but globally. Thus, Indian health care industry being one of the fastest growing industrial turf in the country with a reasonable base, deserves a sharper focus of the Government.

Additionally, the socio-economic benefits that this sector provides in creating a sustainable, healthy and highly productive work force, has been well documented and can’t just be wished away, in any case.

The neglect is intriguing:

Currently, total healthcare spend of India is no more than 4.2 percent of the GDP with public spending being just 1.2 percent of it. Other BRICS nations are way ahead of India, in this area too. To set a direction on country’s public healthcare spend, breaking the jinx of a long period of time, the draft National Health Policy 2015 of the Government aimed at initial increase in health expenditure to 2 percent of the GDP.

As a result of the legacy of neglect over a long period of time, which continues albeit more blatantly even today, only 16 percent of the Indian population declares today that they have access to free or partially-free health care. I shall dwell on this area subsequently in this article.

Keeping these in perspective, it was intriguing, when the union budgetary allocation for health care in 2015-16 was kept at Rs. 297 billion or U$4.81 billion for its main health department, almost the same outlay as in the previous budget.

When compared against public fund allocations, such as, US$ 93 billion for highway projects or US$ 7.53 billion for 100 smart cities in the country, one will get a realistic perspective of this meager health budget allocation, in terms of effectively addressing the health care needs of around 1.25 billion people of India. Over 70 percent of this population live in the hinterland.

Agreed that the Government focus on these ‘infrastructure projects’ are not unimportant by any means. Nevertheless, the above comparison only highlights how much priority the Government assigns to the health care sector of India and for the health of its citizens. This issue assumes even greater significance in combating several challenging health situations, such as, ongoing fight against increasing incidence of life-long chronic ailments and deadly life-threatening diseases like, cancer, fueling already high rate of morbidity and mortality in the high country.

A quick glimpse on a few outcomes of neglect:

The Working Paper No. 1184 dated January 8, 2015, titled “Improving Health Outcomes And Health Care In India” of the Organization for Economic Co-operation and Development (OECD), highlights some interesting points, as follows:

Chronic diseases are the biggest causes of death and disability accounting for 50 percent of deaths, with cardiovascular diseases and diabetes, respiratory conditions and cancers figuring most prominently.

Preventive interventions such as improving access to a clean water supply, reducing the spread of HIV/AIDS through better sexual education, and vaccination campaigns for other diseases will each deliver more significant returns in life years.

Vaccination rates for diphtheria, tetanus and pertussis, for measles and for hepatitis B are all much lower than in OECD and peer countries.

Minimal access to free or partially-free health care.

It is an irony that ‘life expectancy’ in India still remains well below the countries at a similar level of development.

Abysmal overall hygienic conditions:

The OECD survey brings to the fore abysmal hygienic conditions still prevailing in India. It can only be improved through active intervention of the Government with necessary budgetary allocations, sans photo ops for some celebrities and most politicians. Sincere support and participation of the civil society and intelligentsia, in general, are also equally important.

The paper underscores, among others, the following extremely unhygienic conditions still prevailing both in urban and rural India:

Most households in rural India do not defecate in a toilet or latrine, which leads to infant and child diseases (such as diarrhea) and can account for much of the variation in average child height. Even today the sight of poor children defecating openly in the streets, that too in a city like Mumbai, is also not very uncommon.

The burning of solid fuels in particular (undertaken by more than 80 percent of the population in cooking) is a major risk factor behind ischemic heart disease, lower-respiratory tract infections and chronic obstructive pulmonary diseases and could also increase cataracts and stroke.

Exposure to air pollution is a significant problem.

Many of the poor continue to smoke heavily.

11 of the lowest income quintile did not undertake sufficient physical activity, compared with 16 percent in the highest income quintile.

India provides minimal access to free or partially-free health care:

As I mentioned above, India provides minimal access to free or partially-free healthcare to its citizens, as compared to all the BRICS nations, many other countries in South East Asia and even in Africa.

The above OECD paper states that with poor health intertwined with poverty, the greatest gains lie with policies that address the social conditions which enable combating communicable and non-communicable diseases.

Among BRICS countries, India provides least access to ‘Free or Partially-Free Health Care’ Services to its general population. This is despite being the largest democracy in the world, which is now striving hard to emerge as an economic and military superpowers.

The following study shows that only 16 percent of the Indian population declares having access to free or partially-free health care from the government:

BRICS Countries	% surveyed said ‘Yes’ to the question: “Does your household have access to free or partially free health care from the State”
India	16
Brazil	24
China	73
Russia	96
South Africa	62

Source: Credit Suisse Research Institute, Emerging Consumer Survey Databook 2014.

As the OECD paper states, in this study approximately 1500 respondents were surveyed in each country, with India and China both having larger sample size of 2500. The male-to-female split between respondents was roughly 50:50 in all cases with rural-to-urban split varying by country.

Poor satisfaction level with existing health care services:

This is very important; as public facilities are the predominant source of qualified health professionals in rural areas where much of the Indian poor reside. In addition, significant population growth is occurring in urban slums, where urban public health care facilities are struggling to provide basic services. In a situation like this, slum dwellers face challenging economic barriers to accessing expensive private health care services (MoHFW, 2012).

The OECD survey indicates that 41 percent of those in rural areas and 45 percent in urban areas were not satisfied with treatment by their doctors or facility.

The reason attributed to this dissatisfaction are as follows:

Distance was cited by 21 percent of people in rural areas and 14 percent in urban areas.

Public health care centers remain closed more than half the time and lack basic medical supplies, such as stethoscopes and blood pressure scales.

Non-availability of required services was cited by 30 percent of people in rural areas and 26 percent in urban areas.

This is quite credible, as according to the Government’s own estimates:

- 10 percent of primary health care centers are without a doctor

- 37 percent are without a laboratory technician

- 25 percent without a pharmacist (MoHFW, 2012)

The above picture is quite consistent with large scale surveys in poor communities of India, by OECD.

Health care business for up market is booming:

Growing inequitable distribution of healthcare products and services is now wide open and blatant, more than ever before. There is no signal yet that the Government would soon consider health care sector as its one of the key focus areas, along with education, just as infrastructure, such as, building roads, highways, e-highways, flyovers, bridges and smart cities.

For up-market patients, the private sector is creating world class facilities in India. We can see today a good number of ‘five-star’ hospitals, with more number of newer ones coming up offering jaw-dropping facilities, quite akin to, may be even surpassing what are being offered for patients’ luxurious comfort in the developed world. Although these facilities cost a fortune, one would usually need to be in a queue to get admitted there for any medical or surgical treatment.

Most of these hospitals are now in high demand for ‘medical tourism’. According to available reports India currently caters to health care needs of over 200,000 foreign patients. ‘Medical tourism’ business reportedly fetched around US$ 2 billion to India in 2012.

On the flip side of it, as we all read in the recent media reports, some of these hospitals in Delhi refused admission even to seriously ill dengue patients, as they can’t afford such facilities. A few of these patients ultimately succumbed to the disease and the parents of one such poor child, who died without any hospital treatment in that process, committed suicide unable to withstand the irreparable and tragic loss.

Giving ‘Infrastructure Status’ to health care sector:

When creating basic infrastructure is the priority area of the present Government for financial resource allocation, why not give ‘infrastructure status’ to the health care sector now? This is not just for the heck of it, but purely based on merit and earlier detail evaluation by a Government Committee of experts.

To address the critical health care needs for the vast Indian population with appropriate infrastructure, quality products, services and manpower, providing ‘infrastructure status’ to the health care sector could facilitate the whole process. Additionally, it can transform the Indian healthcare sector as one of the biggest job-generating industry too.

This has been a key demand of the industry until recently, though not so much being talked about it today. A few years back, the previous Government was reportedly mulling to assign full fledged infrastructure status to the healthcare sector, as it merits inclusion in the category of ‘infrastructure’, satisfying all the nine criteria set by the erstwhile Rangarajan Committee.

I find in my archive, the Confederation of Indian Industry (CII) also demanded ‘infrastructure status’ for the health care sector in its pre-union budget memorandum for 2010-11. In that proposal CII had estimated that health care industry in India requires an investment of around US$80 billion, whereas in the current fiscal year the public expenditure on health still languishes at U$4.81 billion.

This specific issue seems to have taken a back seat today, for reasons not known to me. However, it is interesting to note that not just the Government apathy, no such demand is being made today by the large multi-industry trade associations of India, as vociferously as we witness, for example, in the case of ‘The Goods and Service Tax (GST) Bill’.

Health care debate is not to the fore today:

Critical health care issues of the country don’t seem to be in the fore front today for comprehensive debates even for the Indian main stream media, to influence the government.

We have been experiencing for quite while that Indian media, including social media, in general, usually goes ballistic 24×7 mostly with selective sensational topics. These may include, among others…glitzy events on Government’s high profile advocacy initiatives to attract more Foreign Direct Investment (FDI) from large overseas companies…Or back home some unfortunate and tragic Dengue fever related deaths due to negligence just in Delhi, though the same and equally grave incidences taking place in the other states of India, are hardly getting any coverage…Or on some high profile alleged murder pot-boilers announcing media verdict conclusively, even before completion of police investigation and charge-sheet being filed in a court of law.

These are probably neither bad, nor unimportant, nor avoidable, nor can come within the ambit of any media criticism. I am also not trying to do that, either.

As the saying goes, variety is the spice of life. We, therefore, generally want to get a feel of it everyday early in the morning, mostly glancing through the newspaper headlines, or in the late evening watching impatient anchor with strong personal opinion trying hard to dominate over all other participants in high-decibel ‘TV debates’, as these are called by the respective channels.

In an era of sensationalized and eye-ball grabbing ‘Breaking News’ of all kinds, flashing everywhere almost every now and then, critical health care issues seem to have become a mundane subject to the newsmakers for any meaningful debate to influence the Government. Serious debates on critical health care issues presumably would not generate all important Television Rating Points (TRPs) to the TV channel owners. Though I have no idea, the TRP of such debates probably has been estimated to be even lesser as compared to the cacophony aired by the TV channels on the cost to exchequer for the MPs subsidized meals in the Indian Parliament…with intermittent high pitch ‘war cry’ of the dominating anchor… ‘the nation wants to know this’.

Conclusion:

Be that as it may, health care environment impacts all of us, quite appreciably. There is not even an iota of doubt on it. However, we can feel it mostly when the reality hits us or our families hard…very hard, as serious and cruel ailments strike suddenly, or as we face avoidable disease related deaths of our near and dear ones, or when illness makes a loving one virtually incapacitated, even after facing financial bankruptcy.

Health care is a serious matter for all of us, just as it is a serious and critical business for every nation and every Government. This criticality factor is independent of whatever level of economic development the country is aspiring for. Thus, the indifference of the Indian Government, if I may say so, despite promising so much on health care earlier this year, is intriguing, and more so, when just 16 percent of the total population has access to free or partially-free health care in our India of the 21^st century.

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.

Evolving Scenario of Non-Personal Promotion in Pharma Marketing

Posted on September 28, 2015 by Tapan Ray

In the Indian pharmaceutical industry, ‘Non-Personal Promotion (NPP)’ is gradually expected to assume much greater strategic importance than what it is today, if at all, in the overall strategic marketing ball game.

This process would get hastened as and when the Department of Pharmaceuticals (DoP) decides to ‘walk the talk’ with mandatory implementation requirement of its ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, with necessary teeth built into it for proper enforcement. Thereafter, pharma sales and marketing process would possibly not remain quite the same.

In that scenario, dolling out ‘Freebies’ of various kinds and values to the customers, that has been happening over a long period of time, would attract penal consequences as would be defined by the Government.

This, in turn, is expected to create virtually a level playing field for all the pharma players in the brand marketing warfare, irrespective of how deep their pockets are. Consequently, without any lucrative incentives to offer to the important doctors, Medical Representatives (MRs) in general, in my view, would find access to busy important doctors becoming increasingly tougher, and much less productive.

Not just an imagination:

This is not totally an imaginary situation, as it has already started happening elsewhere.

Stringent legal and regulatory measures are now being put in place, both for the pharmaceutical companies and also for the doctors, in various developed markets of the world to minimize alleged marketing malpractices.

In tandem, following noteworthy developments are taking place more frequently than ever before:

A large number of high value penalties are being regularly levied by the judiciary and/or regulatory authorities of various countries to many big name global pharma players for alleged marketing malpractices.

Some measurable changes are taking place in the area of ‘access to busy medical practitioners’ by the MRs, more in those countries.

A recent study:

According to a recent study of 2015 by ZS Associates, published in ‘AccessMonitor™ 2015’, MRs’ access to important prescribers are declining steadily over the last 6 to 7 years. This study was based on analysis of ‘Call Reports’ of 70 percent of all US pharma companies’ MRs. The report reviewed in great detail how often over 400,000 physicians and other prescribers meet with MRs who visit their offices.

The decrease in MR access to prescribers from 2008 to 2015 was captured as follows:

Year	MR Access to Prescribers (%)
2015	47
2014	51
2013	55
2008	80

Source: ‘AccessMonitor™ 2015

This trend is indeed striking. It won’t be much difficult either to ascribe a plausible reason to it, when viewed in perspectives of increasingly tough pharma sales and marketing environment in the US.

Over a period of time, stringent laws and regulations, both for the prescribers and also for the pharma players, are being strictly enforced. The ‘cause and effect’ of the overall development can possibly be drawn, when one finds in the above report that throughout the US, more than half of all doctors are voluntarily “access restricted” in varying degree, as on date.

Most impacted specialty area:

Coming to restricted access to doctors in medical specialty areas, oncology was highlighted in the ZS Associates report among the most restrictive specialties. This is evident from its analysis that today around 73 percent of the cancer specialists restrict MR access, where around 75 percent of them were “MR-friendly” as recently as 2010.

With this increasing south bound trend of “access restricted” doctors over the past decade, at least in the US, and with a strong likelihood of its continuity in the future too, the pressure on getting cost-effective per MR productivity keeps mounting commensurately. Hence, the search for newer and effective NPP platforms of modern times is also becoming more relevant to generate desirable prescription output from the important busy medical practitioners.

Any viable alternative?

Although virtually unthinkable today, it would be interesting to watch, whether viable alternatives to pharma MRs emerge in the near future to overcome this critical barrier. As necessity is the mother of all inventions, pharma companies are expected to find out soon, how best to respond in this challenging situation for business excellence.

More interestingly, India being a low-cost thriving ground for technological solutions of critical problems of many types, I would be curious to watch how do the pharma players synergize with ‘Information Technology (IT)’ sector to pre-empt similar fall-out in India, as and when it happens.

Non-Personal Promotion:

In these circumstances, the question arises, when productive personal access to busy doctors through MRs becomes a real issue, what are other effective strategic measures pharma marketers can choose from, for fruitful engagement with those doctors?

Relevant Non-Personal Promotion (NPP), yet personalized, has the potential to create a favorable brand experience and image in the overall brand-building process, leading to increased prescription generation. Application of various high to low tech-based NPP tools is more feasible today than ever before, especially when the use of smart phones, tablet PCs and iPads are becoming so common within the busy medical practitioners.

Major benefits:

There are, at least, the following four key benefits that NPP in pharma marketing could offer:

Companies can proactively get engaged with even those doctors who would not prefer visits by MRs or those visits are failing to yield the desired results, as before.

Personalized, flexible, persuasive, interactive and cost efficient brand or disease related communication can be made available to even extremely busy doctors, at any time of their choice. This is quite unlike personal ‘one on one’ meetings with MRs, that are now taking place usually during or around the busy working hours.

Helps create a positive impression in the doctors’ minds that their busy schedules with patients are valued and not disturbed, respecting their wish and desire for the same.

Built-in provisions to encourage the doctors requesting for more specific information online, would enhance the possibility of ongoing customer interactions for productive long term engagement.

Based on all these, it appears to me, creative use of modern technology based NPP tools show a great potential to create a ‘leap-frog’ effect in augmenting the pharma brand-equity in all situation, especially during restricted access to all those heavy prescribers, who matter the most.

From message ‘Push’ to information ‘Pull’:

One of the fundamental differences between Personal-Promotion (PP) of pharma brands through MRs and Non-Personal Promotion (NNP) of the same, is a major shift from ‘Push’ messaging to the modern day trend of information ‘Pull’.

In the era of Internet and different types of ‘Web Search’, people want to ‘Pull’ only the information that they want, and at a time of their personal choice, if not in a jiffy. In this context, broader utilization of especially digital medium based NPP with navigational tools, would be of great relevance.

Any specific request coming from the target doctors in response to personalized e-mails or other direct communications may be delivered through the MRs. This would help creating an important and additional opportunity to strengthen the relationship between the prescribers and the pharma companies.

A good NPP strategy, therefore, needs to be crafted by creating a platform for ongoing engagement with the prescribers, primarily through information ‘Pull’, rather than making it just another part of any specific promotional campaign through message ‘Push’.

The segments to initially concentrate upon:

Till mandatory UCPMP comes into force with stringent compliance requirements, and in tandem MCI guidelines for the doctors acquire necessary teeth, Indian pharma industry, at least, can start warming up with NPP.

A sharper focus on NPP, as I see it, is required in the following pharma marketing situation, at least as a key supporting strategy:

Extremely busy doctors, who do not want to meet the MRs

Important doctors, who are not too attentive during brand communication

Potential heavy prescribers, who do not prefer interaction with MRs during meetings, with poor engagement level

For promotion of important ‘mature brands’ or ‘cash cows’ to free MRs’ time to focus on newer products

NPP and “Cash Cows”

NPP could be very relevant for ‘Mature Brands’ or the ‘Cash Cows’, especially for those pharma players having a large number of such brands and at the same time are also introducing new products. This situation is not very uncommon in the Indian pharma industry, either.

With such ‘mature brands’, the MRs have already done a superb job, who are now required to concentrate on making ‘Stars’ with other new products.

It would, therefore, be more meaningful to opt for a lower cost engagement with NPP for these brands, at least for the busy doctors, across multiple channels. Consequently, this strategy would further boost the margins of mature brands, sans deployment of a large number of more expensive MRs.

Platforms to explore:

The emerging situation offers a never before opportunity to use many interesting channels and interactive platforms for flexible and effective tech-based customer engagements. These can be used both for the doctors and also for the patients’ engagement initiatives. Exploration of platforms, such as, custom made health apps, social media, WhatsApp, e-mails and messengers using smartphones and mobile handsets, has already been initiated by some pharma players, though in bits and pieces.

Trapped in an ‘Archaic Strategy Cocoon’?

I wrote an article on the above subject in this blog dated June 17, 2013 titled, “Pharma Marketing in India: 10 Chain Events to Catalyze a Paradigm Shift”

In that article, I mentioned that over a long period of time, Indian pharmaceutical industry seems to have trapped itself in a difficult to explain ‘Archaic Strategy Cocoon’. No holds bar sales promotion activities, with very little of cerebral strategic marketing, continue to dominate the ball game of hitting the month-end numbers, even today.

It is about time to come out of this cocoon and prepare for the future, proactively, boldly, creatively and squarely. This will require a strategic long term vision to be implemented in an orderly, time-bound and phased manner to effectively convert all these challenges into high growth business opportunities.

Conclusion:

Like many others, I too believe that ‘face to face’ meetings still remain the most effective method for MRs’ brand detailing to doctors. It may remain so, at least, for some more time.

Nonetheless, in the gradually changing sales and marketing environment, pharma players, I reckon, should no longer rely on the personal visits alone. Instead, they should start exploring multi-channel, mostly tech-based, interactive and personalized NPP as effective augmentation, if not alternatives, for customer engagement to achieve the business goals.

In an environment thus created, it appears, the same or even a lesser number of MRs would be able to effectively orchestrate a large number of communication channels, facilitated by simple yet high technology online platforms.

All NPP channels and platforms would need to be designed and used as preferred by the busy medical practitioners and at any time of their choice, which could even be outside the usual working hours for a MR. In a transparent and mostly online sales and marketing monitoring process, physical supervision and guidance of, at least, the front line managers may also become irrelevant, as we move on.

In India, most pharmaceutical players are attuned to similar genre of promotional strategy-mix, predominantly through MRs, for all types of doctors and specialties, though the message may vary from one specialty to the other. A large number of companies also don’t seem to have organized research-based credible data. These are mainly on, what types of engagement platforms – personal or non-personal – and at what time, each busy prescriber would prefer for product information access and sharing.

Pharma sales marketing environment is slowly but steadily undergoing a metamorphosis, all over the world. This change is very unlikely to spare India, ultimately. The evolving paradigm of mostly high-tech driven and extremely user-friendly NPP in pharma marketing, has the potential to reap rich harvest. The early adopters, making adequate provisions for scaling up, are likely to gain a cutting edge competitive advantage to excel in business performance.

Scalable and creative use of NPP has a ‘Zing Factor’ too. Nonetheless, pharma marketing strategies have been too much tradition bound, by choice. By and large, most of what are being followed today reflect high attachment to past practices, with some tweaking here or there…tech-based or otherwise.

Well before it becomes a compelling strategic option, as the looming pharma marketing environment unfolds with the UCPMP becoming mandatory for all, would the Indian pharma companies come out of the ‘Archaic Cocoon’ to proactively embrace NPP with required zest and zeal?

By: Tapan J. Ray

Indian Patents Act To Prevail Undiluted…Finally

Posted on July 27, 2015 by Tapan Ray

Curiously enough, what a little birdie told me just a couple of weeks ago, very similar to that I read in various media reports even less than a week later.

It was related to a somewhat trepidatious national policy in the making on Intellectual Property Rights (IPR) in India.

One major apprehension, besides a few others on this IPR Policy, was flying all over and nettling many. It was regarding the possibility of tweaking or dilution of the Indian Patents Act by the Government, coming under strong external pressure and also to get support on India’s food security in the World Trade Organization (WTO).

Probably to douse this simmering fire of trepidation, well calibrated, unambiguous and reassuring narratives on the subject were unfolded recently by the Government, that too in a quick succession, which were somewhat as under.

On July 20, 2015, at an event organized by the Federation of Indian Chambers of Commerce and Industry (FICCI), the Commerce and Industry Minister Nirmala Sitharaman reiterated that:

India’s IPR laws are quite in compliant with the TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement.

There is no need for apprehension in any corner of the world as to what India’s patent regime is like.

The Minister also indicated at the same event that following a transparent process of drafting…and redrafting; the final blue print of the IPR policy has now been circulated to all concerned ministries for inter-ministerial consultations. After completion of that process soon, her Ministry would submit the final version to the Cabinet for approval.

It is now anticipated that by the end of this year the first ‘IPR Policy’ of India would be operational.

The creeping angst for a possible twitching in the country’s otherwise robust Patents Act, was mostly originated from a pointed recent utterance of Prime Minister Modi on this issue that we shall quickly explore in this article.

Another stronger assertion:

Immediately thereafter, while commenting on a related article published in an Indian business daily dated July 24, 2015, Minister Nirmala Sitharaman reasserted the following points even more emphatically and virtually in so many words:

India’s IPR laws are fully compliant with international obligations under the TRIPS agreement. This includes the Patents Act, 2005, whose provisions have time and again stood the test of judicial scrutiny.

There is no question of permitting ‘evergreening’ of patents, or of realigning our IPR laws to comply with US laws.

There is no question of sacrificing our IPR laws to get support from a particular country even on food security.

A brief background:

In October 2014, almost immediately after Prime Minister Modi’s return to India from the United States, the the Department of Industrial Policy and Promotion (DIPP) formed a six-member ‘Think Tank’, chaired by Justice (Retd.) Prabha Sridevan, to draft the ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas.

The notification mandated the ‘Think Tank’ to examine the current issues raised in such reports and give suggestions to the ministry of Commerce & Industry as appropriate.

However, the domestic pharma industry, many international and national experts together with the local stakeholders, continue to strongly argue against any fundamental changes in the prevailing robust patent regime of India.

Taking quick strides, on December 19, 2014, the Think Tank’ released its first draft of 29 pages seeking stakeholders’ comments. According to Minister Nirmala Sitharaman, “Different people, countries, including the United States and other organizations have already given their inputs on the draft policy.”

The new policy would focus on stronger enforcement of IPR by increasing the manpower in IP offices and reducing pendency of IPR filings. It aims at bringing clarity to the existing laws and making changes wherever required to safeguard the interests of Indian industry and patent holders worldwide.

I reviewed this subject in my blog post of January 19, 2015 titled, New “National IPR Policy” of India – A Pharma Perspective.

Most recent apprehension:

The most recent spark for the speculation of a possible dilution in the Indian Patents Act 2005, came from the April 24, 20015 media report that quoted Prime Minister Modi expressing his intent on the issue, seemingly going overboard, as follows:

“India’s patent laws should be brought on par with global standards to make Asia’s third largest economy a hub for outsourced creative services.”

The basic purpose of making such an apparently ambiguous statement may be construed as an attempt to attract more Foreign Direct Investments (FDI) for the country.

Whatever it may be, this announcement of the Prime Minister sent a strong signal to many as an impending major shift in his Government’s thinking to move away from an otherwise robust and a decade old IPR regime in India, undoubtedly under intense external pressure.

The above pronouncement from an otherwise tough minded Prime Minister came as a bolt from the blue, as it were, to many stakeholders. This is mainly because; India has so far been maintaining in all forum that its IPR regime is fully TRIPS compliant and garnered enough international support from the experts in this area, including Nobel Laureates.

The Prime Minister made his intent even stronger, when he further elaborated his argument as under:

“If we don’t work towards bringing our intellectual property rights at par with global parameters, then the world will not keep relations with us. If we give confidence to the world on IPR, then we can become a destination globally for their creative work.”

Some American Government agencies reportedly lapped up Prime Minister Modi’s statement as they openly commented as follows:

“The United States also welcomes April 2015 statements made by Prime Minister Modi recommending that India align its patent laws with international standards and encourages India expeditiously undertake this initiative”

Intriguing comment:

Prime Minister Modi’s comment in this regard that “India needs to bring its patent laws on par with global standards,” comes of rather intriguing to many domain experts, as TRIPS agreement is the only universally accepted ‘Global Standard’ for IPR. Even the new Government has reiterated that Indian patent regime is fully TRIPS compliant.

India welcomes and encourages innovation:

With the enactment of Patents Act 2005, India has demonstrated that Intellectual Property Rights (IPR) and pharma patents in particular, help fostering innovation and is critical in meeting unmet needs of the patients.

However, the moot question still remains, what type pharmaceutical invention, should deserve market exclusivity or monopoly with overall freedom in pricing, keeping larger public health interest in mind.

There are still some loose knots in the process of speedy resolution of all IP related disputes and creation of a desirable ecosystem for innovation in the country, that the new IPR Policy is expected to effectively address, soon.

Two fundamental changes that the US is looking for:

Leaving aside the peripheral ones, the following two are the center pieces where the United States would want India to dilute its Patents Act 2005 considerably:

Patentability for all types of innovation, including ‘me-too’ ones and evergreening of patents, which would delay entry of affordable generic drugs.

“Compulsory Licensing (CL)” provisions, other than during natural calamities.

The status today:

Though the Prime Minister has not further spoken on this subject publicly, from the recent statements of the Union Minster of Commerce and Industry it seems rather clear that for greater public health interest, India has decided to keep its Patents Act undiluted, at least, for now.

The Union Government has distinctly explained its stand in the following two areas:

I. No…No, to ‘Evergreening’ of patents in India:

In line with this thinking, for quite sometime a raging global debate has brought to the fore that there are quite a large number of patents on drug variants that offer not very significant value to the patients over the mother molecules, yet are as expensive, if not more than the original ones.

In common parlance these types of inventions are considered as ‘trivial incremental innovations’ and described as attempts to ‘evergreening’ the patents.

A paper titled, “Pharmaceutical Innovation, Incremental Patenting and Compulsory Licensing” by Carlos M. Correa argued as follows:

“Despite decline in the discovery of New Chemical Entities (NCEs) for pharmaceutical use, there has been significant proliferation of patents on products and processes that cover minor, incremental innovations.”

The study conducted in five developing countries – Argentina, Brazil, Colombia, India and South Africa has:

Evidenced a significant proliferation of ‘evergreening’ pharmaceutical patents that can block generic competition and thereby limit patients’ access to medicines.

Found that both the nature of pharmaceutical learning and innovation and the interest of public health are best served in a framework where rigorous standards of inventive steps are used to grant patents.

Suggested that with the application of well-defined patentability standards, governments could avoid spending the political capital necessary to grant and sustain compulsory licenses/government use.

Commented, if patent applications were correctly scrutinized, there would be no need to have recourse to CL measures.

Indian Patents Act under its section 3(d), discourages the above practices for public health interest. This particular provision, though absolutely TRIPS compliant is not followed in the developed markets, predominantly for commercial reasons. Hence the mounting pressure is on India for its major dilution.

II. Compulsory License (CL) provisions would stay to prevent misuse and abuse:

This is another major safeguard provision for the patients against abuse and misuse of patents, including obscene price tags of patented drugs, non-working of patents as a commercial strategy, limited availability, besides extreme urgency and some other situations. Though TRIPS very clearly allows all such provisions, India has so far granted just one CL.

With these India has amply demonstrated that CL provisions are important safeguards for the country and not for abuse or misuse by any one, including the Government. Moreover, it has to pass the acid test of rigorous judicial scrutiny that includes the Supreme Court of India.

Despite all these, more scares are being created around CL provisions in India than what is the reality in the country.

Various safeguards and deterrents against misuse and abuse of patents are absolutely essential for public health interest. Hence there is naturally no question of going back from such provisions in the statute.

It is worth noting, if Indian Patent regime is not TRIPS compliant, why hasn’t any country complained against India to the World Trade Organization (WTO) for having all these provisions in the Indian Patents Act, as yet?

India shows the new IPR way:

According to available reports, the following countries are coming closer to the Indian pharma patent regime:

Argentina has issued guidelines to reject ‘frivolous’ patents
Peru, Columbia and some other South American countries have placed curbs
Philippines has similar provisions
South Africa is contemplating to incorporate such steps
Australia is deliberating on making the law tougher

Positive reverberations in the domestic pharma sector:

Home grown pharma players seem to be visibly happy too, as the overall stand of the Government in this regards is getting clearer.

This in many ways gets vindicated, when a promoter, chairperson and managing director of a mid-size Indian Pharma and Biotech company, with high media visibility, reportedly comments on the finalization of Indian IPR Policy as follows:

“There is a need to protect interest and disallow monopolies like big pharma or big companies/corporates that want to invest and take advantage of the Indian market.”

Concerns of some ‘Who’s Who’:

The following is just an example of such concern:

On February 10, 2015, the Nobel Laureate in Economics – Joseph E. Stiglitz, made the following comment in an article published in ‘The World Opinion Page’ of ‘Project Syndicate’:

“If the Obama administration succeeds in forcing India to strengthen its patent laws, the change would harm not only India and other developing countries; it would also enshrine a grossly corrupt and inefficient patent system in the US, in which companies increase their profits by driving out the competition – both at home and abroad. After all, generic drugs from India often provide the lowest-cost option in the US market once patent terms have expired.”

As things stand today, it would not be unreasonable to conclude that the Nobel Laureate Joseph E. Stiglitz’s worst apprehension on the Indian Patent regime, in all probability would not come true.

Conclusion:

For quite some time, Indian Government has been under intense nagging from the United States, other developed countries, many drug MNCs and the pharma lobby groups lavishly funded by them; to effect major changes in the Patents Act of the country that currently denies unreasonable commercial exploitations, in many ways. Section 3(d) of the statute is just one of the key examples.

The browbeaters of such ilk keep pontificating the importance of ‘innovation’ and that too with a condescending undertone, as if the Indian Government is blissfully ignorant about it.

They allegedly want the Government to dilute the robust safeguard provisions of Indian Patents Act, trying to unfairly tilt the balance of justice in their favor. Consequently, it would go against the patients’ health interest by considerably delaying entry of cheaper generic equivalents, of ‘me-too’ type of inventions, in the country.

Despite initial apprehensions based on the possible misconstrued observation of the Prime Minister Modi on this issue, clear and unambiguous recent assertions of the Government on the patent regime of India, especially in the ‘count-down’ days of the new IPR Policy announcements, is reassuring. It goes without saying, this cannot happen without the benediction of India’s all-powerful Prime minister.

As stated in the draft document, let us hope that the new IPR Policy would help establishing a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and accelerate economic growth, employment and entrepreneurship.

Under this backdrop, it now emerges almost indubitably that Indian Patents Act 2005 would continue to prevail undiluted much to the dismay of its fiercest critics…Finally?

By: Tapan J. Ray

China Relaxes Drug Price Control: Is Pharma Euphoria In India Misplaced?

Posted on June 1, 2015 by Tapan Ray

On May 5, 2015, the National Development and Reform Commission (NDRC) of China announced that price controls on most drugs sold there would be lifted from June 1, 2015. This move was believed to tackle issues of drug quality and to encourage innovation among domestic companies. Only narcotics and some listed psychotropic drugs would continue to be controlled by the government.

Quite like in India, Chinese price controls for most drugs were blamed by the industry for low quality and even adulterated medicines that seem to threaten public health.

Apprehension expressed:

Almost immediately after the announcement for ending price control on most drugs, many started expressing serious apprehensions that this decision of the Chinese Government would lead to higher drug prices for the consumers at the retail level.

Without taking any chances, the Chinese Government immediately switched to a high decibel communication process to allay such fear.

Chinese Government quickly acted on allaying the fear:

Xinhua reported, China’s top economic planner, almost simultaneously, asked the country’s price watchdogs to organize a six-month check on the movement of medicine prices, following the above decision.

The NDRC said the move is intended to detect any illegal practices disrupting market order, such as price fixing and artificial inflation of prices.

The agency also urged local authorities to create an online platform for better price monitoring. The NDRC also said the key intent is to curb illegal practices, such as price fixing and manipulative changes to increase drug costs.

Gigantic role of Chinese ‘Universal Health Care’ system highlighted:

The following explanations also came from the Chinese Government to highlight that this decision is not likely to have adverse impact on its citizens:

China has a function Universal Health Care (UHC) system in place

According to NDRC, 80 percent of drugs are sold through hospitals in China and not through retail channels. Thus, public hospitals are the places where most transactions take place and drugs are procured through a process that involves tough price negotiations with the pharma companies.

In addition to control of prices at the local procurement level, most of the freed drugs would still be controlled somewhat by various medical insurance plans even before they reach the Chinese hospitals, where 80 percent of drugs are dispensed.

With this announcement, the Chinese Government would lift controls on the price of about 2,700 medicines from June 1, 2015 that accounts for just about 23 percent of medications available in the country.

Experts also said they expected medicine prices to remain unchanged.

Has the pricing pressure in China increased, on the Contrary?

On May 26, 2015 in an article titled, “Foreign Drug makers Face Pressure to Lower Prices in China”, Bloomberg reported:

“Starting June 1, 2015 most drugs in China will be liberated from government-set price caps. For foreign drug makers, though pressure to cut prices is rising. Since late last year, many provincial governments have introduced new bidding systems to bring down the cost of medicines they procure, and they’re pushing multinationals to compete more directly with cheap local generics on price.”

Chinese healthcare scenario is different from India:

From the above scenario, it is abundantly clear that Chinese drug procurement, distribution and consumption scenario is quite different from India.

China’s UHC is well in place and over 80 percent of its population gets medicines from public hospitals. Whereas, UHC seems to have been virtually jettisoned in India by the incumbent Government, at least for now, and around 75 percent of the populations purchase medicines from the retail market, out of pocket.

Whereas, the National Health and Family Planning Commission (NHFPC) of China announced in May 2015 that it would increase healthcare subsidies this year by 19 percent, i.e. just over US$ 60 per person, India decided not to make any increase even on its abysmal low expenditure on health, in its Union Budget 2015.

According to the National Health Policy 2015 (Draft) of India, total per capita health expenditure of the country was at US$ 62 in 2011, against China’s US$ 274 for the same year. This gap is likely to increase significantly with China adding to it another US$ 60 per capita through increase in healthcare subsidies in 2015.

Chinese Government believes that this step would help improve economic growth and boost domestic consumption, whereas Indian Government obviously thinks differently.

‘Why not in India’ type of reaction is misplaced:

There are many other critical differentiating factors in the comparative healthcare scenario between India and China.

Be that as it may, keeping only the above differences in mind, when one comes across some weird reasoning in a section of the Indian media stating, no wonder that raises many other eyebrows simultaneously. More so, as pharma related Indian media is not just vibrant, a large section of it is mostly on the ball, with up to date domain knowledge, and presenting incisive analysis.

A bizarre report: “Comparing apples to oranges”?

That said, I recently noted, while flipping through some pharma related business reports, a bizarre and seemingly uninformed comment on this subject. The article recently published in a leading business daily questioned, why the drug pricing policies of India and China are different? Obviously the author does not seem to be aware of the differences in the overall healthcare scenario between India and China, as deliberated above.

If the above question is taken as benign and laced with a dash of ignorance, it certainly raises the good old and much often repeated question, “Are we comparing apples to oranges”?

This is because we are comparing medicine procurement, distribution, usages and consumption scenarios of those two different countries that cannot be practically compared at all, especially in this regard.

An equally bizarre comment?

To make such ‘off the cuff’ reports spicy, some news-unworthy masala is also usually sprinkled on it. If I remember correctly, I read somewhere in one such typical report, probably a head honcho of the Indian unit of a pharma MNCs making blissfully ignorant, equally bizarre, attention hungry, ‘shooting from the hip’ type of remarks. The person most probably commented something like; the decade long ‘draconian price control in China’ failed to improve access to medicines. Thus, Indian Government, he imagines, should strongly introspect on its drug price control and allow free pricing for all drugs. I am not very sure, whether this is the representative view of the pharma industry in India or probably not.

Domain experts’ eyes on the ball:

Fortunately and most likely in the same piece, the real domain experts made very pertinent and sensible comments on India China comparison on this critical issue.

I hasten to add, this is my personal view, and may be the author concerned meant something different, which I would accept with due respect and humility.

Conclusion:

Just because China has relaxed drug price control in the context of its own environment of a reasonably well-functioning ‘Universal Health Care’ system, India should not toe the line with its abysmally poor public healthcare products and services offerings. As a result of this, the country records one of the highest, if not the highest, out of pocket expenditure towards medicine in the world.

The bizarre reports and comments in this regard, as above, probably need to be taken, not with a pinch but loads of salt, and trashed for abject ignorance in the specific area.

Moreover, the Indian Government too does not seem to be in any mood just yet, to pay attention in the area of ‘Universal Health Care’ to ensure health for all in the country. The situation is not expected to improve in this year either, as the Government has not made requisite budgetary allocations for health, to play the ball as the time demands.

Does all these not mean that, going by the Chinese example, the ill-informed euphoria of a section of the Indian pharma industry is unrealistic, if not absolutely misplaced?

By: Tapan J. Ray

India To Expand NLEM 2011: A Step In The Right Direction

Posted on May 11, 2015 by Tapan Ray

Responding to growing discontentment on the flawed National List of Essential Medicines 2011 (NLEM 2011) and equally vociferous demand for its urgent rectification, on May 5, 2015, in a written reply to the Lower House of Indian Parliament (Lok Sabha) the Union Minister for Chemicals and Fertilizers – Mr. Ananth Kumar made the following submission:

“The Ministry of Health and Family Welfare, has constituted a Core Committee of Experts to review and recommend the revision of National List of Essential Medicines (NLEM) 2011 in the context of contemporary knowledge of use of therapeutic products.”

According to earlier media reports, the Government had formed this Core Committee in May 2014 under Dr. V.M Katoch, Secretary, Department of Health Research (DHR) and Director General, Indian Council of Medical Research (ICMR). However to utter dismay of many, even in a full year’s time, the Committee has not been able to come out with any tangible recommendations in this area.

In his reply from the floor of the Parliament, the Union Minister added with a tinge of reassurance:

“The Core committee has already held wide consultations with stakeholders and is likely to come out with its recommendations on the revised NLEM soon… The revised NLEM would form the basis of number of medicines which would come under price control,”

This reply from the Minister was in response to a query from a lawmaker on what steps have been taken by the Government to expand the list of NLEM 2011 and provide them to the poor at affordable prices.

Mr. Ananth Kumar also reiterated, the National Pharmaceutical Pricing Authority (NPPA) has already fixed the ceiling prices in respect of 521 medicines till date, out of 628 NLEM formulations included in the first schedule of DPCO, 2013.

“The revised NLEM would bring more drugs under price control”, the Minister said.

NPPA’s earlier initiative was thwarted:

It is worth noting that in 2014, to include all drugs of mass consumption, in addition to essential and life saving medicines, NPPA initiated an exercise to expand the NLEM 2011.

At that time, quite rightly I reckon, the pharmaceutical industry vehemently protested against this regulatory overreach of NPPA and sought judicial intervention at least in two High Courts of India.

Moreover, as is well known today, NPPA’s attempt to regulate prices of medicines of mass consumption got thwarted, when the Union Government intervened and directed the price regulator to withdraw its related internal guidelines. Coincidentally this lightning action was taken just before Prime Minister Narendra Modi’s schedule visit to the United States in end 2014.

Be that as it may, the industry observers consider the last week’s announcement of the Union Minister, from the floor of the Parliament, to expand the span of NLEM 2011 as a step in the right direction for improving access to affordable essential medicines for all in India.

A brief backdrop for ‘Essential Medicines’:

The World Health Organization (W.H.O) has defined ‘Essential Medicines’ as those that ‘satisfy the priority healthcare needs of the population’. It has been propagating this concept since 1977, when W.H.O published the first Model List of Essential Drugs with 208 medicines. All these medicines together provided safe, effective treatment for the majority of communicable and non-communicable diseases, at that time.

Every two year this list is updated. The current Model List of Essential Medicines, prepared by the W.H.O Expert Committee in April 2013, is its 18^th Edition.

According to W.H.O, such ‘Essential Medicines’ are selected with due regard to disease prevalence, evidence on efficacy and safety, and comparative cost-effectiveness. The Organization categorically states:

“Essential medicines are intended to be available within the context of functioning health systems at all times in adequate amounts, in the appropriate dosage forms, with assured quality, and at a price the individual and the community can afford.”

Many countries of the world, India included now, have the National List of Essential Medicines (NLEM) and some have provincial or state lists as well, such as, in Tamilnadu Rajasthan and Delhi.

Health being a state subject in India, NLEM usually relates closely to Standard Treatment Guidelines (STGs) for use within the State Government health facilities. Ironically, such measures are currently being taken by just a small number of State Governments in the country.

NLEM – A forward-looking ongoing concept:

According to W.H.O, the concept of ‘Essential Medicines’ is forward-looking and ongoing. This idea prompts the need to regularly update the selection of medicines in the NLEM, reflecting:

New therapeutic options
Changing therapeutic needs
The need to ensure drug quality
The need for continued development of better medicines
Medicines for emerging diseases
Medicines to meet changing resistance patterns

As a part of its ongoing exercise, on May 8, 2015, The World Health Organization (W.H.O) by a ‘News Release’ announced addition of several new treatments for cancer and hepatitis C to its list of ‘Essential Medicines’, which the agency believes should be made available at affordable prices.

All 5 new products for the treatment of Hepatitis C, including sofosbuvir and daclatasvir, were included in the List. These medicines cure more than 90 percent of those infected and cost from US$63,000 to US$94,500 in the United States, depending upon the drug and treatment regimen.

Considering, new breakthroughs made in cancer treatment in the last years, W.H.O also revised the full cancer segment of the Essential Medicines List this year: 52 products were reviewed and 30 treatments confirmed, with 16 new medicines added in the list, including Herceptin of Roche, and Gleevec of Novartis.

“When new effective medicines emerge to safely treat serious and widespread diseases, it is vital to ensure that everyone who needs them can obtain them,” said W.H.O Director-General, Dr Margaret Chan. “Placing them on the WHO Essential Medicines List is a first step in that direction.”

India would also require putting similar effective systems in place for a robust, ongoing and time-bound review process for its NLEM.

Immense health and economic impact of ‘Essential Medicines’:

Globally the health and economic impact of ‘Essential Medicines’ have been proved to be remarkable, especially in the developing countries, as such drugs are one of the most cost-effective elements in healthcare system of any time. That’s why the stakeholders bestow so much of importance on a well thought out and properly crafted list of essential medicines by the astute experts appointed by the Government.

According to W.H.O, while spending on pharmaceuticals represents less than one-fifth of total public and private health spending in most developed countries, it represents 15 to 30 percent of health spending in transitional economies and 25 to 66 percent in developing countries.

In developing countries, such as India, pharmaceuticals are the largest Out of Pocket (OoP) household health expenditure. “And the expense of serious family illness, including drugs, is a major cause of household impoverishment.”

Flawed NLEM could multiply access to medicines problems:

Despite well-documented global evidence regarding high potential of health and economic impact of ‘Essential Drugs’, if the NLEM does not include right kind of drugs and remains flawed, it could have significant adverse impact on the overall access to ‘Essential Medicines’ in India.

In addition, properly structured NLEM could help setting the right course in the procurement and supply of medicines in the public sector – national or state Government schemes that reimburse medicine costs, and also for domestic production of drugs in the country.

A quick overview of NLEM in India:

There was no functional NLEM in India before 2002. According to a paper titled “Decisions on WHO’s essential medicines need more scrutiny”, published in the BMJ on July 31, 2014, in India the first National Essential Medical List (NEML) was prepared in 1996. However, this list was neither implemented for procuring drugs nor were STGs drawn up.

It all started in 2002, when the National Drug Policy of India, announced in that year, was subsequently challenged through a Public Interest Litigation (PIL) in the Karnataka High Court on the ground of being inflationary in nature. The Honorable Court by its order dated November 12, 2002 issued a stay on the implementation of that Policy.

This judgment was challenged by the Government in the Supreme Court, which vacated the stay vide its order dated March 10, 2003 and ordered as follows:

“We suspend the operation of the order to the extent it directs that the Policy dated February 15, 2002 shall not be implemented. However we direct that the petitioner shall consider and formulate appropriate criteria for ensuring essential and lifesaving drugs not to fall out of the price control and further directed to review drugs, which are essential and lifesaving in nature till 2nd May, 2003”.

As a result DPCO 1995 continued to remain operational, pending formulation of a new drug policy, based on NLEM based span of price control, as directed by the Honorable Supreme Court of India. Necessitated by this directive of the Apex Court of the country, the first NLEM of India came into effect in 2002.

In 2011, NLEM 2002 was subsequently reviewed and re-evaluated by a committee of 87 experts from various fields, and was replaced by the NLEM 2011 with 348 drugs.

In the recent years, following a series of protracted judicial and executive activities, the National Pharmaceutical Pricing Policy 2012 (NPPP 2012) came into effect on December 7, 2012. In the new policy the span of price control was changed to all drugs falling under the National List of Essential Medicines 2011 (NLEM 2011) and the price control methodology was modified from the cost-based to market based one. Accordingly the new Drug Price Control Order (DPCO 2013) was notified on May 15, 2013.

However, the matter is still subjudice, as NPPP 2012 would ultimately require passing the acid test of scrutiny by the Supreme Court of India, in the future days.

A recent study emphasizes need for urgent expansion of NLEM:

A March 2015 independent evaluation of DPCO 2013, which controls prices of essential medicines in India as featured in the NLEM 2011, brought to light some interesting facts. The Public Health Foundation of India (PHFI) and the Institute for Studies in Industrial Development released this report titled “Pharmaceutical Policies in India: Balancing Industrial and Public Health Interests” at a conference on pharmaceutical policies in India, held in New Delhi from 3 to 7 March, 2015.

This independent evaluation would most probably be submitted to the Supreme Court where PHFI is one of the petitioners in a case challenging the current NPPP 2012.

The study found that price regulations of NLEM 2011 are limited to just 17 percent of the total pharmaceutical market in India. This leaves 83 percent of the domestic pharma market free from price control, providing only marginal financial relief to patients for all essential medicines, in its true sense, as desired by the Supreme Court of India. Thus, one of the key recommendations of this study is to review the NLEM 2011, urgently.

“Clearly the interests of the pharmaceutical industry have received precedence over the interest of the patient population,” the report highlighted.

Anurag Bhargava, of the Himalayan Institute of Medical Sciences, was quoted in March 2014 BMJ Article titled, “Analysts in India call for urgent expansion of essential medicines list”, saying:

“This is a matter of concern given that the NLEM was not drafted as an instrument for price regulation. It is a representative rather than a comprehensive list of medicines utilized in actual practice. To serve as a reference for rational prescribing, the NLEM includes only a few model dosage forms, strengths, and combinations of drugs.”

NLEM 2011 fails to reflect public health priorities:

The report, with relevant details, brings to the fore that NLEM 2011 has failed to reflect India’s public health priorities. It underscores the following glaring deficiencies in NLEM 2011, which covers just:

1 percent of drugs for anemia
5 percent of respiratory drugs
7 percent of antidepressants
15 percent of drugs for diabetes
18 percent of drugs for tuberculosis
13 percent of anti-malarial drugs
23 percent of cardiac drugs
35 percent of antibiotics

Areas for revision in NLEM 2011:

A critical appraisal of NLEM 2011 was done in the above-mentioned 2014 BMJ paper and also by the NPPA separately.

Taking all these into consideration, some key areas of concerns related to NLEM 2011 floats at the top of mind. A few examples of important issues, which need immediate attention, are as follows (not necessarily in the same order):

Other key strengths and dosage forms of the same drugs covered under NLEM 2011

Analogues of scheduled formulations not covered

Close substitutes in the same therapeutic class not covered

Some essential drugs listed in the W.H.O model list and even in Delhi list are missing in the NLEM 2011

Several essential HIV and Cancer drugs are not included in NLEM 2011

Essential oral anti-diabetic medicines, like glimeperide and glicazide do not find place in NLEM 2011, especially when the list in the DSPRUD for Delhi includes anti-diabetic medicines such as glimepiride, sitagliptin, vildagliptin, saxagliptin

Commonly used anti-asthmatic medicines like almeterol and montelukast are missing in NLEM 2011

When W.H.O model List (EML) includes capreomycin, cycloserine, ethionamide, kanamycin and para-aminosalicylic acid for treatment of multi-drug resistant tuberculosis, these drugs are missing in NLEM 2011 list

Though a large number of Fixed Dose Combinations (FDCs) are prescribed to treat common ailments in India, especially in certain therapeutic groups such as respiratory, cardiovascular, anti-diabetic, dermatology, anti-malarial and anti TB/MDR TB, most of these are missing in NLEM 2011

While the W.H.O list mentions 21 vaccines, the NLEM 2011 mentions only nine vaccines

A separate list of lifesaving drugs based on existing lifesaving drugs list of government agencies like the CGHS needs to be worked out

Pediatric formulations need to be included in NLEM

Inclusion of some medical devices which are already covered under the definition of drugs under the Drugs and Cosmetics Act 1940

Essential and well-selected lifesaving patented drugs should also feature in the NLEM, just as what W.H.O has done this month by adding to its ‘Essential Medicines List’ all the five patented new curative treatments for hepatitis C, besides 16 new cancer drugs.

Thus, in its present form the NLEM 2011 needs a critical relook and revision, mainly in the light of the missing drugs and keeping in view of the requirements under various National Health Programs as well as the National Formulary of India 2010.

The BMJ paper also highlights, the Indian Academy of Pediatrics has come out with a list of ‘Essential Drugs’ for children in India. Such a list might be consulted for the Pediatric List of Essential Medicine within the NLEM. Provision should be made to review the NLEM at two yearly intervals, as is currently practiced by the W.H.O.

Civil Society steps in:

Accordingly, in August 2014, seven Civil Society Organizations in a letter to Minister Ananth Kumar with a copy to Prime Minister Narendra Modi, among others, wrote as follows:

“Limiting all price regulation only to a list of 348 medicines and specified dosages and strengths in the DPCO 2013 goes against the policy objective of making medicines affordable to the public. The National List of Essential Medicines, a list of 348 rational and cost-effective medicines, is not the basis for production, promotion and prescription in India. In reality the most frequently prescribed and consumed medicines are not listed in the NLEM.”

Healthcare: China on a fast track, India crawls through a slow lane:

Interestingly, to help improve economic growth and boost domestic consumption, China has recently decided to floor the gas pedal on the fast lane of healthcare reform, while India chose to continue to crawl through its slow lane.

Interestingly, both the countries want to draw similar sets of trend lines for health and economic progress of their respective nations.

This has been vindicated by Reuters report of May 9, 2015, when it highlighted, China would increase its healthcare subsidies by 19 percent this year as part of efforts to deepen social reforms and strengthen safety nets.

The report also indicated, economists view this measure as crucial for China to improve the quality of its healthcare, if it wishes to remake its economy and boost domestic consumption. They say a stronger safety net will encourage Chinese to spend more and save less.

As opposed to the Chinese scenario, in India, the Union Budget 2015-16 came as a real dampener for the healthcare space in the country. This assumes greater significance, as the budget was planned by the reform oriented Modi Government.

Despite the dismal state of current public healthcare services, the annual budgetary allocation for healthcare has been kept at Rs. 33,152 Crore, just a tad more than Rs. 30,645 Crore of 2014-15, with no visible indication for any healthcare reform measure in the country, any time soon.

Conclusion:

‘Essential Medicines’ based drug price control, as was directed by the Honorable Supreme Court of India, is just not far sighted, but a potential game changer in the healthcare space of the country.

While looking at the bigger picture, this policy also promises a significant contribution in the overall economic progress of the nation.

To make this policy effective in the longer term, NLEM should be fair, impartial, far sighted, up to date, robust and beyond obvious any controversy, which includes its authors… just as the spirit behind the good old saying: “Caesar’s wife must be above suspicion.”

Unfortunately, NLEM 2011 is mired with many shortcomings for all the wrong reasons, as discussed above.

The incumbent Government would require striking a just and right balance between public health interest and expectations of the Pharma industry in this critical area. Taking the right policy decision in a transparent an effective manner, balancing the healthcare and economic interest of the country, would be critical.

That said, Pharma industry in India, I reckon, would also not be devastatingly impacted with the possible expansion of NLEM. This is mainly because, currently only 17 percent of the total pharmaceutical market in India comes under price control, based on the span of NLEM 2011 formulations. In any case, the balance 83 percent of the domestic pharma market still falls under the free-pricing zone.

Even when DPCO 1995 came into force, which continued till DPCO 2013 became effective, 20 percent of the total domestic pharmaceutical market was under price control.

Moreover, there was no provision for automatic annual price increases for price-controlled drugs under DPCO 1995. Whereas DPCO 2013 has a provision for annual price increases for all such essential drugs based on WPI. As a result, MRPs of all price controlled essential drugs have gone up effective April 1 of this year and would continue to happen so every year, as long as NPPP 2012 remains in force.

Under this complex mosaic and fast evolving backdrop, the announcement of the Union Minister for Chemicals and Fertilizers – Mr. Ananth Kumar on the floor of the Parliament last week is a laudable one.

To help improve access to affordable essential medicines for all in the country, the Minister has reiterated, “The expanded NLEM would bring more essential drugs under price control.” This categorical affirmation by the Government in power, though belated, is a step in the right direction…for both better healthcare and also its consequential critical impact on the economic progress of India.

By: Tapan J. Ray

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

Posted on January 19, 2015 by Tapan Ray

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

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

A quick glance at the Draft IPR Policy:

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

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

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

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

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

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

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

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

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

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

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

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

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

Here below are examples of some of those events:

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

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

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

On April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘Priority Watch List Country’. Placement of a trading partner on the ‘Priority Watch List’ or ‘Watch List’ indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.

It further stated that USTR would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern. An OCR is a tool that USTR uses on adverse IPR issues and for heightened engagement with a trading partner to address and remedy in those areas.

“India misuses its own IP system to boost its domestic industries,” commented the US Senator Orrin Hatch while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) of US Chamber of Commerce on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30. The main reasons for the low score in the report were cited as follows:

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

- Non-availability of regulatory data protection

- Non-availability of patent term restoration

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

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

In the midst of all these, international media reported:

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

Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma trade associations globally, has reportedly urged the US government to continue to keep its pressure on India in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too. Interestingly, as reported in the media a senior representative of this lobby group would be India when President Obama visits the country later this month.

In view of all these concerns, during Prime Minister Narendra Modis’s visit to the United States in September 2014, a high-level Indo-US working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries.

Almost immediately after the Prime Minister’s return to India, in October 2014, the Government formed a six-member ‘Think Tank’ to draft ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas. The notification mandated the ‘Think Tank’ to examine the current issues raised by the industry associations, including those that have appeared in the media and give suggestions to the ministry of Commerce and Industry as appropriate.

However, the domestic pharma industry of India, many international and national experts together with the local stakeholders continue to strongly argue against any fundamental changes in the prevailing patent regime of India.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Draft IPR Policy: Does dwell on these issues.

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

Conclusion:

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

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

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

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

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

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

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

By: Tapan J. Ray

Ringside View Of A Key Pharma Job Missing ‘The X Factor’

Posted on September 15, 2014 by Tapan Ray

Just the other day, a well known doctor and a long-time friend of mine invited me for a friendly chat over lunch, after a long while. I had no option really but to accept the invite, as the warmth of his voice was overflowing.

Though the eatery, based on the ambiance and the quality of food we like, was mutually decided in his previous call, I called him again to ask whether on the pre-fixed date, about an hour earlier to the scheduled time, I can meet him first in his clinic and from there we can go together for lunch.

With a slight pause, he said, ‘No problem…but I won’t be able to talk to you there much, as I need to see all those patients with pre-scheduled appointments.”

“That’s no issue. We’ll have enough time to chat while eating. But, would you see any Medical Representatives (MRs) during that time?” I asked.

“Though my hectic schedule and other commitments don’t allow me to meet with them as much as I used to earlier… yes, still I do meet with a few of them only two days in a week,” he took a pause, possibly to refer to his calendar and said, “Tomorrow being one those day…yes… I will… but why are you asking that?”

“I would like to just observe the MRs, while they discuss their products with you”, I literally warmed up while replying to him

“But Tapan, I don’t talk much in these meetings”, he replied somewhat apprehensively.

“Don’t worry, I shall just sit there, incognito, taking a mental note of what’s happening around, nothing more, nothing less,” I closed the call, as he did not ask any further question.

The ‘D-Day’:

On the ‘D-Day’, I entered for the first time into his well equipped and squeaky-clean clinic and saw his secretary sitting outside his office. She buzzed him immediately, as I introduced myself to her. To my utter surprise, my doctor friend came out promptly, despite his jam-packed schedule. Greeting me with his both hands and usual warmth and laughter, he took me inside, as the waiting patients were probably wondering, who is this gate-crasher? Offering a chair to me, the doctor friend smiled and said, “I couldn’t make time to meet any MR today since morning, though have kept a couple of them waiting for you to arrive, as you had desired.”

“That was not really necessary,” I quipped, “but thanks so much, nonetheless.”

The ringside view:

In a little over an hour’s time, I observed with great interest four MRs interacting with their, quite expectedly, one of the very potential customers.

Three of them were about thirtyish or below and one middle aged gentleman. Two of them came with their respective superiors. Three were quite traditional in approach. One was armed with an iPad.

I got an overall impression that the MRs were more in a hurry to conclude the call as compared to my doctor friend. Most of the interactions were more of reminder types than full detailing of any product, though all four of them had some very specialized products. I was under the impression that, at least, in presence of the supervisors, in-clinic proceedings take place with far more detail.

My doctor friend seem to be rather impatient and not quite enthused with the ongoing proceedings, but I was curious, very curious, especially when the young MR took out his iPad. I expected to see something novel on the innovative application of technology in medical communication. Probably for that reason, I was disappointed, when the young man handled the gizmo rather clumsily and used it merely to highlight some recent references on his specialized product stored in the archive.

Young looking accompanying managers of the two MRs did not appear to be live-wires, either. The participation of one of them was restricted to just handing over some medicine samples to the doctor, which the MR was passing on to him from his bag and the other just requested for prescription support for a product, as he was getting up from his chair.

While I was engrossed in the ringside view and my related thoughts, my doctor friend seemingly woke up wearing a smile, as a middle-aged confidant looking MR entered into the room. That gentleman came alone. He started his interaction recalling some events related to a trip abroad, which his boss had briefed him and conveyed to my friend how positive was the audience feedback after his speech. Informing that after the event his company has analyzed the key questions raised on the concerned product, he sought permission of the doctor to discuss top three of those questions very briefly, and he did. The doctor shifted his position in the chair several times rather awkwardly; probably because he was being so frequently referred to by the MR with lavish eulogy and that too in my presence. Though the content of the MR’s talk was not anything earthshaking, the environment that he created putting my friend on the pedestal, albeit with plain flattery, appeared to be working. He used no detailing aids, neither did he give any gift, but applied just impromptu traditional salesmanship.

This was the last MR call for us. My friend looked at me and asked, “Liked?” looking at each other both of us laughed loudly. I then stopped to ask him, “Do you prescribe the products they thanked you for prescribing?”

I am not very sure about others, but the gentleman who came last? … Yes, I do prescribe at least two of his products,” my friend replied with a disarming smile as he was standing up, looking at his watch.

He then put his hand on my shoulder and with a mild squeeze said, “Let’s step out now, rest we shall catch up on the run.”

A quick analysis:

According to my assessment, barring the last MR, none of the other three calls appeared to have interested my friend in any way, as he kept referring to his calendar, diary and other things very often, while those MRs were talking.

No wonder, my friend could not even remember prescribing any of their products. This probably means, at least three out of the four calls, made by MRs of very well reputed companies, did not leave much impact, if at all. Interestingly, two out of the four calls were from the MNCs.

Is the professional standard of MRs declining in India?

As we know, pharma industry in India is highly fragmented, with over 10,000 companies in the organized sectors and around 60,000 brands. In an environment of cutthroat competition like this, pharma players are exploring all possible means to carve out for themselves a decent share of the respective product categories, incurring average sales and marketing expenditure of around 20 to 22 percent of the total sales.

Like many other countries of the world, in India too, MRs are the most important link between the medical profession and the pharma companies. Thus, the cost of MRs takes quite a significant chunk of total sales and marketing budget of the pharma companies. There remains a huge scope for improvement though, in the realm of per MR productivity, which varies widely between the companies. For example, according to a recent report, a Sun Pharma MR on an average generated around Rs 90 lakh of business in the full year ended on March 31 2014, as compared to Rs 55 lakh of Ranbaxy, during the same period.

According to a survey conducted among both specialists and General Practitioners (GP), published in Express Pharma some years ago, out of total 30 doctors interviewed, 23 reported that quality of medical representatives visiting them has deteriorated. Only three doctors reported that the quality has not really changed, while four reported quality has improved. It was claimed by the authors that this survey result is statistically significant both on ‘t test and z test’.

The study concluded that pharma companies are responsible for this decline, as majority of them are focusing just on the end results without bothering much about the means to the end. This indicates, disproportionately more weightage is being given on the total quantum of sales rather than its quality, during performance measurement.

My above personal experience on the subject, though very short, is not much different from the above survey results, either.

The tradition continues over decades:

It appeared to me, besides new application of state-of-art technology to modernize the communication process, to ensure rapid access to all related information and to improve efficiency of tech based command and control sales & marketing management systems; basically nothing noteworthy has changed, just yet.

Interestingly, many readily available third party training programs for the MRs in the peripheral areas are springing up in large numbers with fancy claims, leaving one of the most critical issues virtually unaddressed.

I shall try to deliberate on that area now, as I see it.

‘The X Factor’:

In my view, just as the doctors are well recognized professional experts in medical care for treating patients based on evidence based science, MRs are also, supposedly, experts and a valuable source of knowledge for the medicines that their respective companies deal with, but unfortunately not regarded that way in India, generally. This is predominantly because, the doctors have accreditation for their profession that is absolutely a pre-requisite for their medical care business. Whereas, MRs do not have any such accreditation, which could formally recognize them as professionals in the knowledge-based drug/medicine business and related areas. Thus, there is somewhere a basic disconnect between the professions of the doctors and the MRs.

‘The X Factor’, in my view, is the process that facilitates requisite professional connects between the doctors and MRs, cemented by mutual professional respect, sans any kind of vested interests or needs of allurements, generally speaking.

Only with ‘The X Factor’ induced professional connects, I reckon, MRs could establish themselves as high quality source of knowledge for the drugs and disease areas that they deal with, of course, backed by regular training to hone their knowledge and skills.

This ‘X Factor’ could well be embedded into the organizational sales/marketing systems by putting in place a formal process to recognize medical representation as a respected profession.

The process of accreditation:

A structured process for Accreditation of MRs, most desirably, by involving the Government, can help achieving this goal sooner. If the Government participation is not possible for various reasons, the accreditation to MRs should come from some highly credible source, as would be accepted by the medical profession.

The process of Accreditation of MRs involves, in brief, documentation of the candidate’s basic pharma related knowledge, comprehension ability and domain specific skill sets, together with the ability of successful application of all those, while interacting with the medical profession to achieve the business goals.

The key task in the process of Accreditation is to develop modern technology based self-learning programs for the MRs that would provide basic knowledge of anatomy, physiology, pathophysiology and pharmacology together with a range of common treatments. Overall knowledge of communication and selling skills would also form an integral part of this process.

The Accreditation would ensure that the MR aspirants attain reasonable high standards for the profession that they are aspiring for. Later on, the pharmaceutical companies, who would hire them, could mold and sharpen their knowledge and skills according to company specific requirements.

Accreditation of MRs would, therefore, be a formal way to ensure that requisite high standards of the MR profession are met. Consequently, while meeting accredited MRs, the doctors would also know that they are meeting well trained and groomed, competent and credible disease area specific drug consultants. This, in turn, would help establishing requisite professional connects between the two professions based on a bond of mutual trust and respect, resulting in a win-win outcome for both.

How would the doctors recognize accredited MRs?

On successful completion of the examination for Accreditation, the individual would earn the privilege of being called an ‘Accredited Medical Representative (AMR)’, and acquire the right to put ‘AMR’ symbol next to his or her name in the business card and to wear a nice looking ‘AMR Pin’, while meeting the doctors.

Nothing much visible in this direction:

That said, not much has been effectively done, as yet, either to arrest the declining image of the MRs in the eyes of the medical profession or to make the MR profession a respectable one, except giving some extrinsic fancy job titles to them, devoid of any intrinsic value.

I am aware of some highly credible organizations, which are capable enough to give a formal shape to ‘MR Accreditation Program’ in India.

Thus the following key question arises in search of ‘The X-Factor’:

Should MRs need to have Accreditation from a credible and recognized authority in India, formally recognizing them as ‘Drugs/Medicine professionals’ and adding significant value and greater respect to the profession that they belong to?

In an earlier blog post titled “A National Regulatory Standard is necessary for MRs of the Indian Pharmaceutical Industry”, I had flagged this issue, though on a different perspective

Epilogue:

Now I get back to where I started from, in this article:

In about an hour, we were done with the lunch. However, while my doctor friend and I were eating, in track two of my brain, all those that I mentioned above were flashing by, though not in an orderly manner.

While we were in the portico of the hotel requesting the doorman to page our drivers, I thanked my doctor friend for buying me a sumptuous lunch and casually commented, “You remember the last MR?… He seems to have been really flabbergasted by your awesome speech in their conference abroad. My compliments! You have always been an excellent speaker!”

“Well…”, he quipped somewhat embarrassingly.

“Why have you reduced the frequency of meeting with the MRs?” I was curious, as those calls were a great learning experience for me, after a long while.

“Time…that’s a great constraint for me. Moreover, these meetings are like going through just motions”, he replied, while looking for his car.

Our cars arrived.

Before, I got into my car, I turned back to ask again, “Did you enjoy your foreign sojourn as a speaker for that pharma company?”

By that time the doctor friend was already in his car. Before closing the door, he looked at me again, widely smiled…somewhat naughtily, lunged forward, lowered his voice and haltingly replied, “Well…You know that…Bye for now.”

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

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