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Reaping Rich Harvest With Orphan Drugs

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A set of perplexing questions on the drug industry has been haunting many, since long. One such area is intimately associated with the core purpose of this business, as enunciated by each company, often publicly. Just to give a feel of it, let me quote what one of the largest global pharma players – Pfizer articulated in this regard, on April 5, 2019: “Health for All is at the core of our company’s purpose. We advance breakthroughs that change patients’ lives by ensuring they have access to quality health care services and Pfizer’s medicines and vaccines.”

Publicly expressed core purpose of any pharma business being generally similar, it may be construed as the same of the industry, at large. Hence, some baffling questions – not ethical, but purely commercial in nature, float at the top of mind, such as:

  • How the core purpose of business – “Health for All”, gets served when companies bring to the market mostly exorbitantly high-priced drugs, having access only to a minuscule patient population?
  • How are these companies growing at a faster pace and doing better commercially, by focusing more on orphan drugs approved for the treatment of rare diseases, affecting a very small patient population.

At this point, it will be worthwhile to have a quick recap on ‘orphan drug’ and ‘rare disease’. According to MedicineNet, orphan drugs are those which are developed to specifically treat rare medical condition. This rare medical condition is also referred to as an orphan disease. With that preamble, I shall now focus on this knotty area in search of evidence-based answers to – Is it possible to reap a rich harvest in business with orphan drugs for rare disease? And, if so, how?

Is the focus on high priced orphan a strategic business move?

Regardless of an affirmative or negative answer to the above questions, many people are head scratching with anguish while observing this trend in the drug industry. Mainly because, it is possibly the most important industry for most patients, not only while suffering from an ailment, but also before and after it happens, for various reasons.

The anguish increases manifold, when top manufacturers of popular mass-market drugs, such as, the cholesterol blockbuster Crestor, Abilify for psychiatric conditions, cancer drug Herceptin, and rheumatoid arthritis drug Humira, the best-selling medicine in the world, at a later stage seek and receive orphan drug status for these products reaping a rich harvest. The underlying intent being leveraging ‘additional advantages’ for exorbitant pricing and lesser competition. Hence, it is a strategic business move. I shall discuss this point in greater details, as was raised in a Kaiser Health News (KHN) investigation, in this article.

The same feeling gets resonated in several articles and papers, such as the one titled ‘Big Pharma’s Go-To Defense of Soaring Drug Prices Doesn’t Add Up,’ published in The Atlantic on March 23, 2019. It questioned, ‘How is it that pharmaceutical companies can charge patients $100,000, $200,000, or even $500,000 a year for drugs – many of which are not even curative?’ Nonetheless, the strategy is working well, as we shall find below.

More drugs for rare diseases entering the market at a higher price:

Another article, titled ‘Drug Prices for Rare Diseases Skyrocket While Big Pharma Makes Record Profits,’ published by America’s Health Insurance Plans (AHIP) on September 10, 2019 wrote, drugs for rare diseases are now entering the market at higher prices than ever before, ranging from tens-of-thousands to hundreds-of-thousands of dollars per patient. It further wrote, according to a new report by AHIP, ‘out-of-control drug prices mean too many patients are forced to choose between paying for their prescriptions or paying their mortgage. The prices for drugs to treat rare medical conditions are 25 times more expensive than traditional drugs. That is 26-fold increase in two decades.

The rationale behind so high pricing:

To explore the rationale behind the exorbitant pricing of such drugs, let’s examine what the expert organizations, such as the Tufts Center for the Study of Drug Development (CSSD) said in this regard. Quoting a senior research fellow of CSDD, the article - ‘The High Cost of Rare Disease Drugs,’ published by the Genetic Engineering & Biotechnology News (GEN) on March 04, 2014 reported, although biopharma players generally set higher prices for orphan drugs, there is no causal link between cost of development and pricing. Instead, rare-disease drug prices reflect typical supply and demand situation: ‘Few treatment alternatives allow companies to charge what they can, knowing that payers will often ultimately foot the bill.’

It further explained: “The rarity of the disease means that few people are affected. Generally, the fewer disease sufferers there are, the higher the price of the drug. Companies that invest the same amount of money or more in orphan drugs as they would non-orphan drugs, want to recoup their investment.”

The situation in India for such drugs:

The January 05, 2019 issue of The Pharma Letter captures it all in its headline – ‘India lifts price caps on innovative and orphan drugs; major fillip for Big Pharma.’ It said, with the new legislation announced on January 4, 2019, the Indian government has decided to remove price restrictions on new and innovative drugs developed by foreign pharmaceutical companies for the first five years. In a rider, the government notification also states, the provisions of the Drug Price Control Order (DPCO) 2013 will not apply to drugs for treating orphan diseases (rare diseases).

How will it impact Indian patients?

Consequent to the above government decision, as the report indicated: ‘Orphan drugs to treat rare disease, like Myozyme (alglucosidase alfa) and Fabrazyme (agalsidase beta), both from Genzyme, which are used in the treatment of rare genetic diseases, are among a host of medicines that are to be kept out of price control.’

Quoting officials, the paper pointed out, the most challenging part in the fight against rare diseases is access to affordable treatment. As on date, the prices of these drugs tend to vary, e.g., the cost of treatment with enzyme replacement therapies may reach more than $150,000 per treatment per year. Whereas, in some other areas it may even be as much as $400,000 annually. Moreover, most of these drugs are rarely available in India. As a result, Indian patients suffering from rare diseases have to import these drugs directly. This makes affordability of medicines with an orphan drug regulatory status, a major issue for different stakeholders.

Why patient groups are not generally too vocal about this issue?

An interesting paper of 2008-09 brought to the fore the importance of patient organizations to further patient interest in various areas of health care. With the example of rare diseases and orphan drugs, it aptly expressed: ‘by changing the scale of their organizational efforts, patients’ organizations have managed to integrate themselves into the relays of power through which matters of health are thought about and acted upon. Through their formation into coalitions, patients’ organizations have been able to assume a number of important functions in relation to the government of health.’ The paper further added that the orphan drug problem can be thought of as having changed the scale and organizational form of rare disease patients’ groups.

Regrettably, a recent report of October 09, 2019, raised a big question in this area with a startling headline - ‘Big Pharma’s shelling out big-time to patient organizations. Is there any quid pro quo?’ It said, the Senate Finance Committee of the United States, while looking into the drug pricing decisions, ‘is digging into pharma funding for patient advocacy groups, which have been known to speak in tune that are music to the industry’s ears.’ It added, some Big Pharma constituents together contributed more than $ 680 million to hundreds of patient groups and other nonprofits last year.

It’s worth noting, earlier this year, several patient advocacy groups rallied in objection to a Trump-administration plan that would introduce step therapy requiring patients to try cheaper drugs before moving to more costly ones. ‘A Kaiser Health News analysis found that about half of the groups that objected had received funding from the pharmaceutical industry.’ Be that it may, rallying behind high drug prices by patient groups would help the industry only at the cost of patients’ interest. This is beyond an iota of doubt.

The motivation behind marketing more drugs for rare diseases:

There are several motivating factors to market drugs, which also treat rare disease, attaching startling price tags. The top drivers are generally considered, as follows:

  • The company gets seven years of market exclusive rights with the drug marketing approval for a rare or orphan disease. Interestingly, many drugs that now have an orphan status aren’t entirely new, either. Even if, the product patent runs out, USFDA won’t approve another version to treat that rare disease for seven years. This exclusivity is compensation for developing a drug, designed for a small number of patients whose total sales weren’t expected to be that profitable, otherwise.
  • Market exclusivity rights granted by the ‘Orphan Drug Act’ in the United States, can be a vital part of the protective shield that companies create.
  • Leveraging associated free pricing incentive, the concerned company can attach any price tag of its choice to the orphan drug, sans any competition.
  • Interestingly, more than 80 orphan drugs won USFDA approval for more than one rare disease, and in some cases, multiple rare diseases. For each additional approval, the drug manufacturer is qualified for a fresh batch of incentives. 

The system ‘is being manipulated by many drug makers’:

That this system is being manipulated by many drug makers was also established by the Kaiser Health News (KHN) investigation dated January 17, 2017 titled, ‘Drugmakers Manipulate Orphan Drug Rules To Create Prized Monopolies.’ The analysis brought out that ‘the system intended to help desperate patients, is being manipulated by most drug makers. It reiterated, the key driver is to maximize profits, besides protecting niche markets for even those medicines, which are already being taken by millions. Thus, many orphan drugs, originally developed to treat diseases affecting fewer than 200,000 people, come with astronomical price tags.’

Even some familiar brands were later approved as orphan drugs:

The KHN’s investigation also uncovered that many drugs that now have an orphan status aren’t entirely new. Over 70 were drugs first approved by the USFDA for mass market use. These medicines, some with familiar brand names, were later approved as orphans. ‘In each case, their manufacturers received millions of dollars in government incentives plus seven years of exclusive rights to treat that rare disease, or a monopoly’, the investigation revealed.

The same KHN study also cited the example of AbbVie’s Humira – the best-selling drug in the world. ‘Humira was approved by the USFDA in late 2002 to treat millions of people who suffer from rheumatoid arthritis. Three years later, AbbVie asked the FDA to designate it as an orphan to treat juvenile rheumatoid arthritis, which they told the FDA affects between 30,000 and 50,000 Americans. That pediatric use was approved in 2008, and Humira subsequently was approved for four more rare diseases, including Crohn’s and uveitis, an inflammatory disease affecting the eyes. The ophthalmologic approval would extend the market exclusivity for Humira for that disease until 2023, the report highlighted.

The report also indicated, much touted Gleevec of Novartis, a drug that revolutionized the treatment of chronic myeloid leukemia, has nine orphan approvals. Similarly, Botox, started out as a drug to treat painful muscle spasms of the eye and has three orphan drug approvals. It’s also approved as a drug for mass-market for a variety of ailments, including chronic migraines and wrinkles. Despite humongous pricing, recent reports show that drugs with orphan status are eclipsing many new drugs with outstanding commercial success.

Companies focus on orphan drugs for better financial results:

Many top global companies’ sharp strategic focus on orphan drugs, presumably for the above reasons, is paying a rich dividend. This is evident from a number of recent reports, such as, ‘Orphan Drug Report 2019’ of Evaluate Pharma, released in April. The report says, orphan drugs will make up one-fifth of worldwide prescription sales, amounting to $242bn in spending by 2024 – much of it is going to either big pharma or big biotech players. It also found that the drugs prescribed for the treatment of rare diseases now account for seven of the 10 top-selling drugs of any kind, ranked by annual sales.

Another study of October 2019 by Prime Therapeutics LLC (Prime) shows, with more of ultra-expensive drug treatments coming to market, there is a sharp jump in the number of drug super spenders. While small in number, this group of drug super spenders grew 63 percent, which resulted in $800 million in additional drug costs. In the same period, the number of drug super spenders with drug costs over $750,000 increased 38 percent. This explains, why many companies are focusing on orphan drugs for better financial results.

Conclusion:

As the above quoted report of AHIP articulated, the regulators’ primary intent behind creating lucrative incentives for orphan drugs, was to encourage drug makers to develop treatments for rare diseases by earning a modest profit. ‘Unfortunately, drug makers have responded by building lucrative business models that empower them to achieve a gross profit margin of more than 80 percent – compared to an average gross profit margin of 16 percent for the rest of the pharmaceutical industry,’ the report said.

The AHIP study also finds, from 1998 to 2017, orphan drugs were 25 times more expensive than non-orphan drugs, resulting 26-fold increase in average per-patient annual cost, while the cost of specialty and traditional drugs merely doubled. Today, 88 percent of orphan drugs cost more than $10,000 per year per patient, which will be no different even when Indian patients import the same. The paper also revealed, in 2017, seven out of ten best-selling drugs had orphan indications. And among newly launched drugs, the share of orphan drugs increased more than 4-fold, from 10 percent to 44 percent, over a 20-year period.

Coming back to the core purpose of the pharma and biotech business, as defined by the pharma organizations themselves, one would have expected the situation to be much different. Their stated business purpose – ‘Health for All’, does not seem to recognize: “Every patient deserves to get the medications they need at a cost they can afford,’ as AHIP reiterates. Whereas, “drug makers are gaming well-intentioned legislation to generate outsized profits from drugs intended to treat a small population of patients with rare diseases.” In this scenario, reaping a rich harvest with the orphan drug status seems to have become a new normal.

By: Tapan J. Ray

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

Pharma’s Perception Management

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An intriguing input-output relationship in the pharma industry has remained baffling, since the last several years, where increasing financial inputs are resulting in diminishing productivity output. More disturbing is, this input-output relationship has now reached a new low, with their individual swings moving in the diametrically opposite directions – as numerous reports of 2019 point out. The deteriorating situation of this magnitude would make many to feel sad, especially those who were or are intimately associated with this industry, for quite a while.

Strikingly, the trend encompasses even the largest – and one of the most influential pharma markets of the world – the United States. Which is why, the subject assumes greater importance. As one can witness today, regardless of the outcome, most American drug companies and their increasingly resourceful trade associations, reportedly, keep unleashing political, non-political and financial capital to influence pharma related policies in different countries. In tandem, they also try to create a favorable public perception in areas of vested interest, in many important markets, including India. These efforts cost money, and tons of it.

This process is not new, though, and was there in the past, as well. It also yielded results at that time, unlike what is happening today. This was mostly because of less public awareness on health-related issues, and a better general perception of the industry. Curiously, despite a sharp diminishing return, the same process is being followed, even today, with a lot more inputs and internal hype. Ironically, the snowballing effect of pharma’s ‘perception challenge’ is now all pervasive. It is visible even in the most market driven and business-friendly countries, like America. They have a requisite talent pool, financial resources and other wherewithal to manage perception – the best possible way. Then why it’s not happening?

To make it happen, I reckon, the core purpose of pharma business should be to delight the patients – more of them – the better. With a similar vision, the drug industry could achieve what it wanted to in the past, also making a good profit, unlike what has been openly expressed in the recent years. This article would, therefore, explore the reasons behind it’s not happening now, through the prism of perception management. However, before examining that, let me give examples of the quantum of financial inputs that the pharma industry constituents are using today to achieve its lobbying goals, vis-a-vis, its declining public perception, as we see in 2019. 

Pharma lobbying expenses are shooting north:

According to the Bloomberg report of January 23, 2019, the main trade group of the pharma industry in America – Pharmaceutical Research and Manufacturers of America (PhRMA), spent a record high amount of USD 27.5 on lobbying in a single year – 2018. This was quoted from the public disclosure reports. Although this was the highest for PhRMA to date, ‘the pharmaceutical industry has upped its spending over the last few years, as it faces immense pressure over high drug prices from the public, Congress and the Trump administration,’ – the news highlighted.

Another article, published in The Guardian also indicated: ‘Pharmaceutical companies spend far more than any other industry to influence politicians.’ It further added, hundreds of millions of dollars flow to shape laws and policies that keep drug company profits growing. One more article highlights, the wide reach of pharma industry money can be traced among people and groups who are in a position to influence drug policy – think tank that has received funding from a major pharmaceutical lobby, and doctors who accepted payments from drug companies.

Moreover, Kaiser Health News (KHN) analysis also found that such money reaches even patient groups for supporting the industry whenever required. The analysis detected ‘about half of the groups representing patients have received funding from the pharmaceutical industry.’

Globally, the general interest of the public on the affordability of quality drug treatment package that pharma companies offer, is fast increasing. Recognizing this fact, the entire approach of pharma lobbying appears blatantly self-serving.

Whereas pharma’s lobbying output is diving south:

The governments in many countries can now make it out, even when this is done covertly – keeping the so called ‘patient groups’ and ‘doctors’, as mentioned above, in the forefront. As many can clearly decipher the core purpose behind such stealth approaches of pharma players, the productivity or output of pharma lobbying is going south in a bottomless pit, as it were. Still, to reduce stakeholder pressure on drug pricing, its apparently getting more intensive, across the world and particularly in America.

The Bloomberg report of January 23, 2019, captures how this situation, on the contrary, is bringing public, government and opposition leaders together on the reduction of drug prices. The news underscores: ‘One of the few issues that unites President Donald Trump and the Democrats newly in charge of the U.S. House of Representatives is reducing the price of prescription medicine. Both sides will be looking for accomplishments to tout at a time when the pharmaceutical industry has become a target of public ire.’

Regardless of these developments, the age-old pharma lobbying approach remains unchanged. There doesn’t seem to be much visible interest, either, for a radical and innovative ‘perception management’ approach to salvage the situation.

Pharma’s ultimate goal has to change to delighting customers – the best possible way, where the quantum of profit earned will be a measure of customer satisfaction. This is what the management guru Peter Drucker said, long ago. Since, this is not happening, both patients’ and public perception on the industry, is getting from bad to worse, which has been captured in the 2019 Gallup poll.

2019 Gallup Poll: Big pharma sinks to the bottom of U.S. industry rankings:

The September 03, 2019 issue of Gallup carried the headline - Big pharma sinks to the bottom of U.S. industry rankings while announcing ‘American’s Views of U.S. Business, Industry Sectors, 2019.’ Being more specific, it said, ‘The pharmaceutical industry is now the most poorly regarded industry in Americans’ eyes, ranking last on a list of 25 industries that Gallup tests annually.’

Elaborating it further, the author stressed, Americans’ net ratings for the pharmaceutical industry have never been lower since Gallup first polled on industries in 2001. Over the past 19 years, few industries have been rated lower than the pharmaceutical industry’s current – 31 net rating. These include the federal government and the oil and gas, real estate, and automobile industries.

The age-old process of pharma lobbying is not working anymore:

‘Lobbying’ is the term that is more frequently used in the United States and the Western countries. In India, similar campaigns are called ‘Advocacy’, by pharma trade associations. These activities are carried out by concerned individuals or companies, industry associations, paid employees – hired for this purpose, or by any other interested groups. But, everybody’s common goal is primarily aimed at influencing government policies, or mold top influencers’ opinion in favor of business – overtly or covertly.

That traditional mindset of pharma lobbying is no longer working, came to the fore some time back. The October 28, 2016 articles, published in the CNBC, cautioned with a headline – ‘A warning for Big Pharma: Lobbying won’t work anymore.’

The article candidly suggested to big pharma players: ‘If you try to use the same old lobbying and crony networks to get your way, it won’t work. Not anymore. And here’s a special warning call just for Big Pharma: You need to change your public relations and marketing strategies now, or die. The good news is, unlike so many other industries, the drug companies have a very effective way out of this mess.’ Making no bones about it the author said, ‘no industry seems more clueless right now than Big Pharma.’

Acknowledging that: ‘Several reports say the Big Pharma lobbying group known as PhRMA is looking to spend as much as $300 million and pull out lots of other stops in order to defend higher prescription drug costs.’ The paper emphasized: ‘this is a battle the drug giants can’t win.’ This is because: ‘Public and political sentiment against expensive medicines and companies that charge those prices is at a fever pitch.’ This, I reckon, is changing the old paradigm of pharma lobbying.

Managing public perception – the new ballgame to influence policies:

Thus, the bottom line to note, today’s public policies are increasingly driven by public sentiments, their needs, aspirations and demand. Thus, the old, and the virtually counterproductive system of lobbying with lawmakers and some key opinion leaders, often including a few media friends, has to change. Even the covert ways of achieving it, under the guise of some trendy events or seminars, hyped by the best communication and PR professionals, are also not yielding commensurate results.

The first task will, therefore, be to come out of this decade old self-created imbroglio, as the pharma’s topmost head honchos will hopefully realize that the name of today’s  game is ‘managing public perception’ of the pharma industry. This would simultaneously necessitate replacing the self-serving goals with the ones that would delight the customers – genuinely – sans façade of any kind.

Pharma’s reputation to be on par with the tobacco industry?

According to ZS: ‘Recent polls and surveys demonstrate that the pharmaceutical industry’s reputation continues to be plagued by negative perceptions.’ It further adds: ‘Many consumers still consider pharma’s reputation to be on par with the tobacco industry, positioning one product category that treats cancer just above a product category that causes it.’ It appeared in the Aug 01, 2017 issue of ZS, titled ‘Reputation Is Paramount, So What’s Holding Pharma Companies Back?’

Is reputation mostly driven by perception?

The reputation or image of a person, an organization or any industry is generally a matter of perception of individuals, formed based on multiple reasons. As Edward de Bono - Physician, author, and originator of the term lateral thinking had put it – ‘Perception is real even when it is not reality.’ Accepting this dictum, even more profound is what he said further - ‘You can analyze the past, but you need to design the future.’

It’s critical to understand the process of ‘perception,’ as out of so much available information, only some are selectively received, organized and interpreted to develop individual perception. More important is the fact that perceptions often become strong inputs to take individual decisions, actions or to express views.

‘Designing the future’ from the pharma industry perspective:

To design an inclusive model of the pharma industry future, the first requirement will be establishing a ‘true connect’ between the industry and the public, based on the latter’s expectations, aspirations, needs and demands, from the industry. This new process being far from self-serving in nature, needs to be steered by ‘perception management’ experts, based on credible data pool – and not by the gut feelings of the hard-core lobbyists or self-styled advocacy experts.

The reformed industry objective – ‘delight the customers while making money’, will form the core of this new ‘perception management’ model. This would entail fleshing out – step by step, the blueprint of its action plan, while pharma should be seen by all to walk the talk.

Creating a positive perception for pharma:

As described in the book ‘Getting Ahead,’ creating a positive perception would prompt taking four basic steps, each of which will help enhance the current view that others have and improve any negative opinion that exists.

Taking a cue from what the author suggests, the first step is to discern how pharma industry is generally perceived by others. Each and every industry practice affecting its stakeholders, particularly patients, is being observed, analyzed and directly affects how others perceive the industry. The author further adds, ‘inaccurate perceptions show you how easy it is for others to incorrectly perceive you.’

The second step is also equally important, as it involves knowing, without any bias, how the industry is ‘actually’ perceived and why – mainly based on consumer feedback, collected and analyzed on a scientific platform.

The third step may involve an intensive internal brainstorming of scale, to zero-in to how the pharma industry would ‘want’ it to be perceived and capture the same in an easy to understand format for all, after pilot testing it.

And the fourth step is most challenging that will help determine how to replace the current perception with the most desirable one.

Conclusion:

As rising drug prices increasingly becoming a major political and public talking point, pharmaceutical groups in America are, reportedly, splurging heavily to influence public opinion and policy. With a spending of roughly USD 280 million, it featured at the top spot among lobbying spenders in 2018 – - with no other industry coming close. However, when one looks at the outcome of such spending either in the American political sphere or within the government, one can find what even President Trump is saying - ‘One of my greatest priorities is to reduce the price of prescription drugs.’ Similarly, when it comes to the public – the Gallup Poll 2019 points out:‘The pharmaceutical industry is now the most poorly regarded industry in Americans’ eyes, ranking last on a list of 25 industries that Gallup tests annually.’

The old industry practices - “from generating the highest drug costs in the world to spending massive amounts on lobbying politicians to the industry’s role in the U.S. Opioid crisis,” are no longer yielding results, due to a radical change in public perception of the drug industry. Even the most powerful current political personality and one of the most business-friendly politician – President Trump, can’t risk ignoring it.

If at all, the drug industry and its trade associations are trying to mold a favorable public opinion with such heavy spending, those efforts are also not working at all. Pharma’s public image crash comes, as the general population strongly dislike, disapprove or remain indifferent on various drug-related issues or methods and processes that the industry follows to earn huge money – even at the cost of patients’ health interests. As a result, a strong negative perception of pharma is created that often indirectly impacts many policy decisions.

So far, pharma hasn’t succeeded in achieving one of its key lobbying goals by managing public perception, effectively. To make it happen, its predominating self-serving interest, that is progressively alienating the public, must be jettisoned, forthwith. The time is ripe to create a new, strong and sustainable public perception for the industry, even in India, by managing customer perception, while making them feel genuinely delighted with company’s products and service offerings. With these contemporary inputs, conducive government policies facilitating a strong business performance, will surely be the most cherished output.

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.

 

Patient Services Aren’t Optional Any More For Pharma Business Excellence

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In the modern world of abundance of information through various sources and platforms, patients are increasingly looking for greater engagement in their healthcare decision-making process with the doctors, slowly but steadily, and in that process seeking better services from different service providers in this area, including the pharmaceutical companies.

This trend has now been well-captured, globally. Various research studies have conclusively established that greater patient’s engagement in health care contributes to improved health outcomes. The obvious question that surfaces in this context is what is this patient engagement?

Patient engagement:

It broadly means a process that realizes the importance of providing adequate knowledge, skills and related services to people effectively, making them understand various disease management and alternative treatment measures, and thereby facilitating them to be an integral part of their health care related interventions, for better health outcomes.

When patients, physicians, other related constituents, including the pharma companies share both the process and goal of disease management or treatment processes, a win-win situation evolves to everybody’s full satisfaction. This has immense commercial relevance too.

Deserves to be a part of the grand design:

In that sense, pharmaceutical companies, especially those operating in India, would need to roll up sleeves and pull up socks to play a greater role in delivering a better experience for patients through effective engagement and offering relevant high quality services. This exercise now deserves to be an integral part of a grand design and planning of any sales and marketing strategy. A recent survey by Accenture Consulting also concluded that patient services from pharma companies are most important to patients.

Key patient service providers:

Besides several others, especially the following two important constituents can play defining roles as patient service providers by directly engaging with patients, to achieve this objective:

  • Patient advocacy groups or organizations (PAO): These entities provide a special attention to patient care and protection of their rights, and engage them accordingly. Patient advocates of these groups are a liaison between patients and various healthcare providers to improve or maintain a high quality of health care for the former. Some global drug players also recognize that these groups possess a highly influential voice in the healthcare system.
  • Pharmaceutical, biotech or device companies: Some of these companies, mostly in the developed world have established strategic patient advocacy functions within their corporate structure to foster relationships with patients, their caregivers, and the disease-specific nonprofit advocacy groups usually support them. These interactions should ideally ensure that the voice of patients is understood across every function within the company, from R&D to commercialization, as articulated in a recent Whitepaper of BioNJ on this subject.

There is a need to strengthen this approach within the Indian pharma industry, as well, for the benefit of local patients, of course, by scrupulously avoiding any possible serious controversy, which I shall discuss below.

A recent study:

A 2016 report by Accenture concludes that patient services are no longer optional for pharma companies, as they are gradually becoming a cutting edge competitive driver. In a situation like this, the question isn’t whether they should really gear up to offer such services, the immediate need, instead, is to put their ears on the ground to carefully decide which ones would be most appropriate for the individual players, and how best to offer them.

For this study, Accenture surveyed more than 200 patient services executives, covering seven therapeutic areas: heart, lungs, brain, immune systems, bones, hormone/metabolism and cancer. The respondents agreed that much work and greater resources need to be invested in this area to gain a competitive edge in business.

This is further evident from the trend that around 84 percent of pharma companies in the United States plans to invest more in patient-centric services, such as adherence, remote monitoring and medication delivery – over the next 18 months, as the report highlights.

For marketing patient services alone to facilitate direct communications to patients, the digital platforms are most preferred with social media and web page usages being 51 percent and 49 percent, respectively.

A serious concern:

Providing various health related services useful to patients, by the PAOs or by pharma, biotech or device companies separately, without any form of financial relationship or influence of any kind to one another, would probably earn a great appreciation from all stakeholders.

Nevertheless, serious concerns are often expressed on the core intent of various pharma company’s generous funding to various patient advocacy organizations, including the eminent ones involved with patients suffering from cancer, HIV, Alzheimer’s, and other diseases. Several of them don’t even report such contributions, besides providing justifiable explanations on the objectives and actual use of such financial contributions.

If one wants to draw a simile, this is what exactly allegedly happening today, because of such type relationship, between pharma, biotech or device companies on the one hand, and doctors, many other health care providers, including retail chemists, on the other. In the Indian context, as well, it holds good. A paper from ‘CUTS International’, aptly drives home this point. Another September 17, 2016 article published in ‘The New York Times’, reiterates the same.

What’s wrong in funding PAOs?

Some may argue, what’s wrong with pharma industry’s funding the PAOs. On the face of it, there may not appear to be anything wrong either. However, scholarly articles still express serious concern on such practices, mainly for conflicts of interest. For example, a September 2013 article titled, “Patient Advocacy Organizations: Institutional Conflicts of Interest, Trust, and Trustworthiness”, published in The Journal of Law Medicine & Ethics unambiguously states as follows:

“Numerous studies have found that even established and respected researchers and physicians are influenced by drug company money and gifts, which can bias study conclusions and encourage increased prescribing of potentially harmful medications. There is no reason to believe that PAOs are any less susceptible to such influence. In fact, there is little oversight of relations between PAOs and their for-profit donors, which in itself increases the potential for undue influence. Similar concerns regarding the lack of oversight have been raised regarding the physician professional groups that develop clinical care guidelines.”

Why is it a potential conflict of interest?

Many construe such financial relationships as potential conflicts of interest, because pharma players appear to be more interested in earning maximum possible profit through high drug pricing, while PAOs advocate for highly efficacious, safer and more affordable medicines for all, besides some other interests and rights of patients. Moreover, some large constituents of patient advocacy groups aren’t even seen lending their voices to the concerted protests of other stakeholders, including the political leaders – irrespective of their affiliations, against the sharp increase in prices of many life-saving drugs, covering both patented and generic medicines.

Several studies on this concern: 

A March 02, 2017 report titled, “Conflicts of Interest for Patient-Advocacy Organizations”,

published in ‘The New England Journal of Medicine (NEJM)’, probably vindicates this point. This is mainly because, if pharma funding gets reciprocated through their remaining quiet, passive or even indirectly supporting any possible bias in the physicians prescribing decisions for high cost drugs – having other cheaper alternatives, that may not be in the best health and economic interest of many patients.

After examining and analyzing 104 large patient-advocacy organizations with an annual revenue of minimum USD 7.5 million, the researchers of the above study found that 83 percent of PAOs receive significant financial support from drug, device and biotechnology companies; and more interestingly, industry executives often serve on these groups’ governing boards.

Another article on this report commented though, that this study may have some limitations as the most organizations examined in this study did not provide exact figures for their reported donations, besides only 10 percent of patient-advocacy organizations revealed how they used the industry donations.

This NEJM study is not just one of its kind, another January 2017 report published in JAMA Internal Medicine, also concluded that there is a need to improve this conflict of interest issue of the patient advocacy groups or PAOs on their conflict of interest policies to help maintain public trust.

In conclusion:

Keeping aside altogether the contentious issue of funding PACs by the pharma, biotech or device companies, I would submit that it’s about time that the pharma industry in India realizes that patients have started perceiving themselves as consumers of health care. This perception is increasing by a manifold with improving access to not just the Internet, but consequent word of mouth sharing of such information with even those who do not have digital or health literacy.

The quest of many patients to ride the crest of this wave by gaining relevant information, especially through numerous digital platforms, besides word of mouth, is increasing. A lot more would eventually seek a wide range of relevant information on various disease treatment options and their effective management processes. Facilitated by this knowledge, many patients would opt only for those ones offering the best value within their respective economic means. Some enlightened individuals have already started expressing their preference to take part in the treatment and prescribing decision making process with the doctors. This visibly ascending trend is unstoppable now, as patients increasingly perceive themselves as consumers of health care.

Consequently, the pharma, biotech or device players in India would require to deeply understand the patients’ needs on the ground, not what they think those are, and treat patients as the key partner for business excellence – at least, as much as what they consider for other stakeholders, such as doctors and hospitals, if not even much more than that. Some companies are trying to make it happen through doctors, which don’t seem to be working as much as these should, according to another Accenture study.

Currently, several global pharma, biotech or device players claim that they follow ‘patient-centered’ approaches, and try to drive home this point through advocacy campaigns. However, many stakeholders don’t buy it any more. This is because such an approach must always lead to a win-win outcome. It, therefore, requires passing the acid test of conformance to the very definition of a ‘patient-centered’ approach, which requires establishing a partnership to ensure that all related decisions would respect patients’ wants, needs and preferences and solicit patients’ input on the education and support they need to make decisions.’

Thus, respective players in this arena need to shift gears fast, as the ball game is fast changing with its traditional version unlikely to yield the desired business results any longer. The name of the new version of this game is ‘direct engagement with patients’ to impart high quality of meaningful services in the therapy areas that the respective companies are in, by charting clear, innovative and well integrated strategies, and not just through single minded focus on sales and marketing. It’s important for all of us to realize that providing patient services aren’t optional any more for pharma business excellence.

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.

Awaiting ‘The Moment of Truth’ on ‘Working of Patents’ in India

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By a letter dated October 21, 2014 addressed to the Secretary, Department of Industrial Policy and Promotion (DIPP) of India, the domestic pharma major Cipla has sought for the revocation of five patents of Novartis AG’s respiratory drug Indacaterol (Onbrez) in India, under Sections 66 and 92 of the Indian Patents Act.

Launch of a generic equivalent:

Cipla also announced its decision to launch shortly a generic equivalent of Indacaterol with the brand name Unibrez Rotacaps to satisfy the unfulfilled requirement of the new drug in India.

The Maximum Retail Price for a strip of 10 capsules of Unibrez Rotacaps 150 mcg would cost Rs.130.00 to patients against the equivalent strength of Onbrez of Novartis costing Rs.677.00, which is 420 percent more expensive than the price at which Cipla would sell this drug.

What do the Sections 66 and 92 of the Indian Patents Act say?

- Section 66 of the Indian Patents Act:

“66. Revocation of patent in public interest: Where the Central Government is of the opinion that a patent or the mode in which it is exercised is mischievous to the State of generally prejudicial to the public, if any, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked.”

- Section 92 of the Indian Patents Act:

“92. Special provision for compulsory licenses: (1) If the Central Government is satisfied, in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non- commercial use, that it is necessary that compulsory licenses should be granted at any time after the sealing thereof to work the invention, it may make a declaration to that effect, by notification in the Official Gazette, and thereupon the following provisions shall have effect, that is to say –

(i) The Controller shall on application made at any time after the notification by any person interested, grant to the applicant a license under the patent on such terms and conditions as he thinks fit;

(ii) In settling the terms and conditions of a license granted under this section, the Controller shall endeavor to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.

(2) The provisions of sections 83, 87, 88, 89 and 90 shall apply in relation to the grant of licenses under this section as they apply in relation to the grant of licenses under section 84.

(3) Notwithstanding anything contained in sub- section (2), where the Controller is satisfied on consideration of the application referred to in clause (i) of sub- section (1) that it is necessary in –

(i) A circumstance of national emergency; or

(ii) A circumstance of extreme urgency; or

(iii) A case of public non- commercial use, which may arise or is required, as the case may be, including public health crises, relating to Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis, malaria or other epidemics, he shall not apply any procedure specified in section 87 in relation to that application for grant of license under this section:

Provided that the Controller shall, as soon as may be practicable, inform the patentee of the patent relating to the application for such non-application of section 87.”

Two key reasons:

Anchored on the above two sections of the Indian Patents Act, the two key reasons cited by Cipla for revocation of five patents granted to Indacaterol of Novartis AG are, very briefly, as follows:

Lack of inventive steps and ‘evergreening’ of patents:

The exclusivity given to five patents of Indacaterol is contrary to law due to lack of inventive step, being obvious inventions. Novartis allegedly has indulged in ‘evergreening’ with a number of patents to extend monopoly of the drug much beyond the term of the first patent. Indian law expressly bars ‘evergreening’ as it impedes drug access to a large majority of the patients.

Lack of working of the patents:

Cipla also claimed lack of “working” of those patents in the country, as a mere 0.03 percent of the drug requirement is currently being fulfilled in India. This leaves the percentage of inadequacy in the requirement of the drug per year at a staggering number of around 99.97 percent.

With supporting details, Cipla has stated in its letter that Indacaterol under the brand name Onbrez is imported by Novartis through its licensee Lupin Pharma only. It further pointed out that the Indian law requires all patents to be “worked” within the territory of India.

While adequate quantity of imports may qualify as working, the present case is one in which the patents in question have not been worked through imports of adequate quantity of the drug. Thus reasonable requirements of the public have not been fulfilled, at all.

Abysmally low drug access to Indian patients:

According to Cipla, when there has been a necessity for the availability of Indacaterol to a much larger number of patients afflicted by COPD, that has assumed magnitude of an epidemic, just a miniscule of 0.03 percent of the total drug requirement is currently being met in the country. In 2013, the import of Indacaterol, as reportedly declared in Form 27 by Novartis to the Patent office, was just 53,844 units, which could meet this drug requirement at best of only 4,500 out of 15 million patients, annually.

Despite accepted drug benefits, the doctors are unable to adequately prescribe Indacaterol in India, due to low quantity of the drug import for the public.

Thus, while announcing the launch of cheaper generic equivalents of the drug, Cipla emphasized that its Unibrez Rotacaps would fulfill the requirements of the public, meet public health interest and at the same time increase access to this medicine, with an affordable alternative, for a large number of patients.

Increasing incidence of COPD in India:

In its application to the DIPP, Cipla underscored that Indacaterol is one of the preferred medications to treat widely prevalent Chronic Obstructive Pulmonary Disease (COPD) that has reached the magnitude of an epidemic in India with about 15 million Indians afflicted with the ailment.

COPD is now among the top ten causes of disease burden in India. According to Indian Council of Medical Research (ICMR), the overall prevalence rates of COPD in India are 5.0 and 3.2 percent respectively in men and women of and over 35 years of age. The World Health Organization (WHO) also reported that COPD is the cause of death of more people than HIV-AIDS, Malaria and Tuberculosis all put together in the South East Asian Region.

Cipla quoted an Indian Study on “Epidemiology of Asthma, Respiratory Symptoms and Chronic Bronchitis in Adults (INSEARCH)”, which estimated that about 7 percent of deaths annually are a result of Chronic Respiratory Diseases in India.

Importance of Indacaterol in COPD treatment:

Cipla reiterated that Indacaterol is the preferred drug over other beta adrenoceptor agonists, as it has to be consumed only once a day. Moreover, it has a higher potency and prolonged effect as compared to other beta adrenoceptor agonists.

Strong arguments make the case interesting:

Though appropriate legal authorities would take a final call on the subject, prima facie, Cipla seems to have a strong case resting on the pillars of Sections 66 and 92 of the Indian Patents Act.

Since, Cipla has already gone ahead and announced the launch of cheaper generic equivalent of Indacaterol in India, it gives a sense about the company’s confidence in its argument against five valid patents of Novartis on this drug.

On the other hand, one may also justifiably say that Cipla should have waited for the final verdict of the court of law on the validity of five Indacaterol patents in India, before deciding to actually launch a generic version of the patented drug.

It is worth noting that in 2013, Novartis lost a legal battle related to patent grant for its anti-leukemia drug Glivec in the Supreme Court of India. The case lasted over seven years in various courts of law. Interestingly, Cipla had followed similar course of action in the Glivec case too, and had won the case decisively.

‘Form 27’ and the Indian Patent office (IPO):

At this stage it is worth noting, a ‘Public Notice’ dated December 24, 2009 was issued by the Controller General of Patents, Design & Trade Marks, directing all ‘Patentees and Licensees’ to furnish information in ‘Form No.27’ on ‘Working of Patents’ as prescribed under Section 146 of the Patents Act read with Rule 131 of the Patents Rule 2003.

The notice also drew attention to penalty provisions in the Patents Act, in case of non-submission of the aforesaid information.

The information sought by the IPO in ‘Form 27’ can be summarized as follows:

A. The reasons for not working and steps being taken for ‘working of the invention’ to be provided by the patentee.

B. In case of establishing ‘working of a patent’, the following yearly information needs to be provided:

  • The quantity and value of the invention worked; which includes both local manufacturing and importation.
  • The details to be provided, if any licenses and/or sub-licenses have been granted for the products during the year.
  • A statement as to whether the public requirements have been met partly/adequately to the fullest extent at a reasonable price.

The ‘Public Notice’ also indicated that:

• A fine of up to (US$ 25,000 may be levied for not submitting or refusing to submit the required information by the IPO.

• And providing false information is a punishable offence attracting imprisonment of up to 6 months and/or a fine.

The important point to ponder now is, if Cipla’s allegation is correct, what has been the IPO doing with the ‘Form 27’ information to uphold the spirit of Indian Patents Act 2005, thus far?

Conclusion:

For various reasons, it would now be interesting to follow, how does the IPO deal with this case right from here. In any case, information provided through ‘Form 27’ cannot remain a secret. ‘The Right to Information Act (RTI)’ will help ferret more such details out in the open.

As the ‘Moment of Truth’ unfolds in this case, one would be quite curious to fathom how the strong voices against ‘non-working of patents’ and ‘evergreening’ drive home their arguments before the court of justice.

On the other hand, the global innovator companies, their highly paid lobby groups and the USTR are expected to exert tremendous pressure on the Indian Government to protect the global pharma business interests in India, come what may. All these would indeed create a potboiler, as expected by many.

In this complex scenario, striking a right balance between rewarding genuine innovation, on the one hand, and help improving access to affordable modern medicines to a vast majority of the population in the country, on the other, would not be an enviable task for the Indian Government.

As the juggernaut of conflicting interest moves on, many would keenly await for a glimpse of ‘the moment of truth’ based on the judicial interpretation of ‘evergreening’ and ‘working of patents’, for this case in particular.

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.