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Is The Department of Pharmaceuticals On The Same Page As The Prime Minister?

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“The open secret is that pharmaceutical companies throw all manners of inducements on doctors to prescribe their medicines. The victim of their misdemeanors is the unsuspecting patient. Mr. Modi clearly wants to break this self-serving chain” – highlighted a media report on April 20, 2017.

“Prime Minister Modi wants to end the unholy doctor-drug industry nexus” – echoed another media headline on the same day.

In a step towards this direction for the benefits of patients, the PM hinted at making prescriptions in generic names of drugs mandatory through a legal framework. There could be many challenges ahead to achieve this objective, but the fact remains just the same. A study published in a well-acclaimed medical journal, even after the PM’s much talked about pledge, re-establishes the adverse impact of this alleged nexus through a bioequivalarge research study.

In this article, I shall not go into the details of what the PM had said in this regard and the impact of the same on patients, pharma companies, different types of service providers to the branded-generic business, and the Indian Pharma Market (IPM), as I have already done that. Neither shall I focus here on the action expected from the Union Ministry of Health, as they have, at least, amended the statute making the bioequivalence studies mandatory, though several other action steps need to follow. Today, I shall deliberate only on one question: Is the department of pharma on the same page with the PM on effectively addressing the alleged ‘doctor-drug industry nexus’?

A recent study:

The following very recent study elegantly highlighted the criticality of snapping this unholy link, as many believe, for the patients’ sake.

The May 2, 2017 JAMA editorial titled, “Reconsidering Physician – Pharmaceutical Industry Relationships” articulated, physicians need to balance the risk and benefits of treatments, especially when inputs come from companies whose interests may conflict directly with those of patients. Drug costs, though revenue to their respective manufacturers, are high out of pocket expenditure to patients, many of whom seriously struggle to afford their medical treatment.

The above editorial comment was based on an ‘Original Investigation’ study titled, “Association Between Academic Medical Center Pharmaceutical Detailing Policies and Physician Prescribing”, published on the same day in the same esteemed journal.

This large study was aimed at measuring the outcome of an effort by some Academic Medical Centers (AMCs) in the United States to regulate physicians’ conflict of interest in this area. These AMCs enacted policies restricting pharmaceutical representatives’ visits to physicians for product detailing, between 2006 and 2012. Accordingly, the paper analyzed the association between detailing policies enacted at these AMCs and the physicians’ prescribing of actively detailed and not detailed drugs. This study included 16,121, 483 prescriptions, written between January 2006 and June 2012, by 2126 attending physicians, at the 19 intervention group AMCs, and by 24, 593 matched control group physicians.

The authors concluded with a fresh reaffirmation that the implementation of policies at AMCs, which restricted product detailing by the respective company medial representatives, between 2006 and 2012, was associated with a modest but statistically significant reduction in prescribing of detailed drugs across 6 of 8 major drug classes.

Significant cost reduction, with important economic implications:

It’s worth noting, the patients did not suffer at all, in any way, with such restrictions, on the contrary were probably benefitted with this policy, though individual pharma player’s sales revenue might have been adversely impacted.

Quoting the researchers, a Public Release of May 2, 2017 titled, “Restricting sales visits from pharmaceutical reps associated with changes in physician prescribing” also reiterates: The reduction in the prescribing of detailed drugs and the increase in the prescribing of non-detailed drugs potentially represent a large reduction in costs, with important economic implications.

Why aren’t the erring players brought to justice in India?

Instances of serious marketing malpractices of several pharma companies in India are also being widely reported from time to time, both by the international and national media, including expressions of serious concern in the Parliament, and a reported Public Interest Litigation (PIL) pending in the Supreme Court.

Any instances of levying massive fines, or other punitive measures taken by any competent Indian authority for such delinquency by many pharma companies operating in the country, have not been reported, just yet, in my view. This is because, India doesn’t have in place any specific regulatory mechanism with built-in legal teeth that would deter, detect, investigate and take exemplary punitive actions against the erring players, wherever justifiable.

Is the department of pharma on the same page as the PM?

Much before this recent development, the Department Related Parliamentary Standing Committee on Health and Family Welfare in its 58th Report, placed before the Parliament on May 08, 2012, strongly indicted the Department of Pharmaceuticals (DoP) for not taking any tangible action in this regard. The committee observed that the DoP should take immediate action in making the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ mandatory to contain ‘huge promotional costs and the resultant add-on impact on medicine prices’.

It has just been reported, soon after the Prime Minister’s hint for a legal framework mandating doctors to prescribe in generic names, 73 percent doctors surveyed across the country opposed the PM’s initiative, raising concerns about the quality of all non-branded generic drugs. The report further stokes the apprehension of a concerted effort by this alleged nexus to further strengthen the make-believe perception, sans requisite credible favorable evidence, that branded-generics as a category is superior in quality to non-branded generics, which is not the fact.

Unfortunately, nothing substantive has yet happened on the ground regarding this issue, except the announcement of voluntary implementation of the DoP’s ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, effective January 1, 2015 for six months for its assessment. Thereafter, the date extension process on the voluntary implementation of the UCPMP has become a routine exercise for the DoP on various pretexts, such as continuing discussion with the pharma trade associations and other stakeholders or to give legal teeth into it with penal provisions.

This situation prompts an important question: Is the DoP on the same page with the PM to contain, if not eliminate, the alleged unholy doctor-drug industry nexus?

Scope of mandatory UCPMP goes beyond prescriptions with generic names:

The scope of several intricate types of marketing malpractices, goes well-beyond influencing prescriptions for brand name drugs, due to various reasons. Hence, what Prime Minister Modi recently hinted at is not an alternative or a replacement for UCPMP, which will fall within a legal framework and be applicable to all the concerned players. Although, there could possibly be some degree of overlap with the prescriptions in generic names, mainly from the perspective of protecting patients’ health interest, the scope of both these initiatives is mutually exclusive, in many respects.

This would also encourage, especially the millennial generation, for innovative strategic thinking to work out cutting edge pharma marketing game plans with active patient engagement, while charting the uncharted frontiers, despite prescriptions in generic names, as and when it comes, if at all. As a result, new warhorses with proven cerebral power and agility would get newer opportunities to hold the leash and occupy the center stage in the pharma marketing warfare.

But…the indefinite wait continues:

Although the DoP apparently maintains a radio-silence on this important issue, a media report of February 26, 2017 indicates that the department will ‘soon’ issue an order making UCPMP mandatory for the drug manufacturing industry, bringing all doctors, chemists, hospitals and states in its ambit, and a blanket ban on expensive freebies such as cruise or vacation tickets. Intriguingly, no one seems to know how ‘soon’ would this ‘soon’ be – hence, the agony of an indefinite wait for justice continues.

Conclusion:

For the last three and a half decades, ‘Code of Pharmaceutical Marketing Practices’, prepared by various global pharma trade associations and many large global pharma companies individually, has come into existence for ‘strictest’ voluntary adherence. These are being relentlessly propagated by them as a panacea for all marketing malpractices in the drug industry.

Squeaky clean ‘pharma marketing codes for voluntary practices’ can be seen well placed in the websites of almost all large global pharma players and their trade associations. Although, its concept and intent are both commendable, a regular flow of media reports on such malpractices raises a relevant question: Do the votaries, sponsors and creators of these codes “walk the talk”?

If yes, why then mind boggling sums in billions of dollars are being paid as settlement fees by a large number of global pharma companies for alleged colossal marketing malpractices in different countries of the world.

This scenario prompts many stakeholders believe, though over-hyped by the global pharma industry, ‘Voluntary Practices’ alone of Pharma Marketing Code’, has never worked anywhere in the world. Thus, India needs a legally binding UCPMP for all concerned.

Prime Minister Modi has hinted at an effective pathway to mitigate this malevolent nexus for the benefit of patients. Understandably, that way can’t be construed as an exhaustive one, nor a cure-all. A slew of other effective steps should follow from different Government authorities, in tandem. The Union Ministry of Health has, at least, taken a related measure falling in their space. Nevertheless, an intriguing apathy of the DoP, as it were, in this area would encourage many to ponder: Is this important Government department on the same page as the PM in containing the alleged ‘doctor – pharma industry nexus?’

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.

 

Prescriptions in Generic Names Be Made A Must in India?

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Would prescriptions in generic names be made a must in India?

Yes, that’s what Prime Minister Modi distinctly hinted at on April 17, 2017, during the inauguration function of a charitable hospital in Surat. To facilitate this process, his government may bring in a legal framework under which doctors will have to prescribe generic medicines, the PM assured without any ambiguity whatsoever.

“In our country doctors are less, hospitals are less and medicines are expensive. If one person falls ill in a middle-class family, then the financial health of the family gets wrecked. He cannot buy a house, cannot conduct the marriage of a daughter,” he reiterated.

“It is the government’s responsibility that everybody should get health services at a minimal price,” the Prime Minister further reinforced, as he referred to the National Health Policy 2017. His clear assurance on this much-debated issue is indeed music to many ears.

Some eyebrows have already been raised on this decision of the Prime Minister, which primarily include the pharma industry, and its traditional torch bearers. Understandably, a distinct echo of the same one can also be sensed in some English business dailies. Keeping aside these expected naysayers, in this article, after giving a brief backdrop on the subject, I shall argue for the relevance of this critical issue, in today’s perspective.

Anything wrong with generic drugs sans brand names?

At the very outset, let me submit, there aren’t enough credible data to claim so. On the contrary, there are enough reports vindicating that generic drugs without brand names are generally as good as their branded equivalents. For example, a 2017 study on this subject and also in the Indian context reported, ‘93 percent of generic and 87 percent branded drug users believed that their drugs were effective in controlling their ailments.’

Thus, in my view, all generic medicines without any brand names, approved by the drug regulatory authorities can’t be inferred as inferior to equivalent branded generics – formulated with the same molecules, in the same strength and in the same dosage form; and vice versa. Both these varieties have undergone similar efficacy, safety and quality checks, if either of these are not spurious. There isn’t enough evidence either that more of generic drugs sans brand names are spurious.

However, turning the point that generic drugs without brand name cost much less to patients than their branded generic equivalents on its head, an ongoing concerted effort of vested interests is systematically trying to malign the minds of many, projecting that those cheaper drugs are inferior in quality. Many medical practitioners are also not excluded from nurturing this possible spoon-fed and make-believe perception, including a section of the media. This reminds me of the famous quote of Joseph Goebbels – the German politician and Minister of Propaganda of Nazi Germany till 1945: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”

The lower prices of generic drugs without brand names are primarily because their manufacturers don’t need to incur huge expenditure towards marketing and sales promotion, including contentious activities, such as, so called ‘Continuing Medical Education (CME)’ for the doctors in exotic locales, and several others of its ilk.

Thus, Prime Minister Modi’s concern, I reckon, is genuine to the core. If any doctor prescribes an expensive branded generic medicine, the concerned patient should have the legal option available to ask the retailer for its substitution with a less expensive generic or even any other branded generic equivalent, which is supposed to work just as well as the prescribed branded generic. For this drug prescriptions in INN is critical.

Provide Unique Identification Code to all drug manufacturers:

When in India, we can have a digitally coded unique identification number, issued by the Government for every individual resident, in the form of ‘Aadhaar’, why can’t each drug manufacturer be also provided with a similar digitally coded number for their easy traceability and also to decipher the trail of manufacturing and sales transactions. If it’s not possible, any other effective digital ‘track and trace’ mechanism for all drugs would help bringing the wrongdoers, including those manufacturing and selling spurious and substandard drugs to justice, sooner. In case a GST system can help ferret out these details, then nothing else in this regard may probably be necessary.

Past initiatives:

In India, ‘Out of Pocket (OoP) expenditure’ as a percentage of total health care expenses being around 70 percent, is one of the highest in the world. A study by the World Bank conducted in May 2001 titled, “India – Raising the Sights: Better Health Systems for India’s Poor” indicates that out-of-pocket medical costs alone may push 2.2 percent of the population below the poverty line in one year. This situation hasn’t improved much even today, as the Prime Minister said.

Although, ‘prescribe drugs by generic names’ initiative was reported in July 2015, in the current context, I shall focus only on the recent past. Just in the last year, several initiatives were taken by the current Government to help patients reduce the OoP expenses on medicines, which constitute over 60 percent of around 70 percent of the total treatment cost. Regrettably, none of these steps have been working effectively. I shall cite hereunder, just three examples:

  • On February 29, 2016, during the Union Budget presentation for the financial year 2016-17 before the Parliament, the Finance Minister announced the launch of ‘Pradhan Mantri Jan-Aushadhi Yojana (PMJAY)’ to open 3,000 Stores under PMJAY during 2016-17.
  • On August 04, 2016, it was widely reported that a new digital initiative of the National Pharmaceutical Pricing Authority (NPPA), named, “Search Medicine Price”, would be launched on August 29, 2016. According to NPPA, “Consumers can use the app before paying for a medicine to ensure that they get the right price.”
  • In October 2016, a circular of the Medical Council of India (MCI), clearly directed the medical practitioners that: “Every physician should prescribe drugs with generic names legibly and preferably in capital letters and he/she shall ensure that there is a rational prescription and use of drugs”

A critical hurdle to overcome:

Besides, stark inefficiency of the MCI to implement its own directive for generic prescriptions, there is a key legal hurdle too, as I see it.

For example, in the current situation, the only way the JAS can sell more of essential generic drugs for greater patient access, is by allowing the store pharmacists substituting high price branded generics with their exact generic equivalents available in the JAS. However, such substitution would be grossly illegal in India, because the section 65 (11) (c) in the Drugs and Cosmetics Rules, 1945 states as follows:

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

A move that faltered:

To address this legal issue, the Ministry of Health reportedly had submitted a proposal to the Drug Technical Advisory Board (DTAB) to the Drug Controller General of India (DCGI), for consideration. In the proposal, the Health Ministry reportedly suggested an amendment of Rule 65 of the Drugs and Cosmetics Rules, 1945 to enable the retail chemists substituting a branded drug formulation with its cheaper equivalent, containing the same generic ingredient, in the same strength and the dosage form, with or without a brand name.

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

The focus should now move beyond affordability:

In my view, the Government focus now should move beyond just drug affordability, because affordability is a highly relative yardstick. What is affordable to an average middle class population may not be affordable to the rest of the population above the poverty line. Similarly, below the poverty line population may not be able to afford perhaps any cost towards medicines or health care, in general.

Moreover, affordability will have no meaning, if one does not have even easy access to medicines. Thus, in my view, there are five key factors, which could ensure smooth access to medicines to the common man, across the country; affordable price being one of these factors:

1. A robust healthcare infrastructure
2. Affordable health care costs, including, doctors’ fees, drugs and diagnostics
3. Rational selection and usage of drugs by all concerned
4. Availability of health care financing system like, health insurance
5. Efficient logistics and supply chain support throughout the country

In this scenario, just putting in place a legal framework for drug prescription in generic names, as the Prime Minister has articulated, may bring some temporary relief, but won’t be a long-term solution for public health care needs. There arises a crying need to put in place an appropriate Universal Health Care (UHC) model in India, soon, as detailed in the National Health Policy 2017.

Brand names aren’t going to disappear:

Prime Minister Modi’s assertion to bring in a legal framework under which doctors will have to prescribe generic medicines, probably will also legally empower the retailers for substitution of high priced branded generics with low priced generic or branded generic equivalents.

This promise of the Prime Minister, when fulfilled, will facilitate making a larger quantum of lower price and high quality generic drugs available to patients, improving overall access to essential medicines. Hopefully, similar substitution will be authorized not just for the JAS outlets, but by all retail drug stores, as well.

Brand names for generic drugs will continue to exist, but with much lesser relevance. the Drugs & Cosmetic Rules of India has already made it mandatory to mention the ‘generic names or INN’ of Drugs on all packing labels in a more conspicuous manner than the trade (brand) name, if any. Hence, if a doctor prescribes in generic names, it will be easier for all retail pharmacists and even the patients, to choose cheaper alternatives from different available price-bands.

Possible changes in the sales and marketing strategies:

If it really happens, the strategic marketing focus should shift – from primarily product-brand marketing and stakeholders’ engagement for the same, to intensive corporate-brand marketing with more intense stakeholder engagement strategies, for better top of mind recall as a patient friendly and caring corporation.

Similarly, the sales promotion strategy for branded generics would possibly shift from – primarily the doctors to also the top retailers. It won’t be unlikely to know that the major retailers are participating in pharma company sponsored ‘Continuing Pharmacy Education (CPE)’ in similar or even more exotic places than the doctor!

There are many more.

International examples:

There are enough international examples on what Prime Minister Modi has since proposed in his speech on this issue. All these are working quite well. To illustrate the point with a few examples, I shall underscore that prescribing in generic name or in other words “International Nonproprietary Name (INN)’ is permitted in two-thirds of OECD countries like the United States, and is mandatory in several other nations, such as, France, Spain, Portugal and Estonia. Similarly, pharmacists can legally substitute brand-name drugs with generic equivalents in most OECD countries, while such substitution has been mandatory in countries, such as, Denmark, Finland, Spain, Sweden, Italy. Further, in several different countries, pharmacists have also the obligation to inform patients about the availability of a cheaper alternative.

However, the naysayers would continue saying: ‘But India is different.’

Impact on the pharma industry:

The March 2017 report of ‘India Brand Equity Foundation (IBEF)’ states that Indian pharmaceutical sector accounts for about 2.4 per cent of the global pharmaceutical industry in value terms, 10 per cent in volume terms and is expected to expand at a Compound Annual Growth Rate (CAGR) of 15.92 per cent to US$ 55 billion by 2020 from US$ 20 billion in 2015. With 70 per cent market share (in terms of value), generic drugs constitute its largest segment. Over the Counter (OTC) medicines and patented drugs constitute the balance 21 percent and 9 percent, respectively. Branded generics constitute around 90 percent of the generic market. In my view, if the above decision of the Prime Minister is implemented the way I deliberated here in this article, we are likely to witness perceptible changes in the market dynamics and individual company’s performance outlook. A few of my top of mind examples are as follows:

  • No long-term overall adverse market impact is envisaged, as ‘the prices of 700 essential medicines have already been capped by the National Pharmaceutical Pricing Authority (NPPA). However, some short-term market adjustments are possible, because of several other factors.
  • There could be a significant impact on the (brand) market shares of various companies. Some will have greater exposure and some lesser, depending on their current sales and marketing models and business outlook.
  • Valuation of those companies, which had acquired mega branded generics, such as Piramal brands by Abbott Healthcare, or Ranbaxy brands by Sun pharma, may undergo considerable changes, unless timely, innovative and proactive measures are taken forthwith, as I had deliberated before in this blog.
  • Together with much awaited implementation of the mandatory Uniform Code of Pharmaceutical Marketing Practices (UCPMP) sooner than later, the sales and marketing expenditure of the branded generic players could come down significantly, improving the bottom-line.
  • Pharma marketing ballgame in this segment would undergo a metamorphosis, with brighter creative minds scoring higher, aided by the cutting-edge strategies, and digital marketing playing a much greater role than what it does today.
  • A significant reduction in the number of field forces is also possible, as the sales promotion focus gets sharper on the retailers and digitally enabled patient engagement initiatives.

The above examples are just illustrative. I hasten to add that at this stage it should not be considered as any more than an educates guess. We all need to wait, and watch how these promises get translated into reality, of course, without underestimating the quiet lobbying power of the powerful pharma industry. That said, the long-term macro picture of the Indian pharma industry continues to remain as bright, if appropriate and timely strategic interventions are put well in place, as I see it.

In conclusion:

It is an irony that despite being the 4th largest producer of pharmaceuticals, and catering to the needs of 20 percent of the global requirements for generic medicines, India is still unable to ensure access to many modern medicines to a large section of its population.

Despite this situation in India, Prime Minister Modi’s encouraging words on this issue have reportedly attracted the wrath of some section of the pharma industry, which, incidentally, he is aware of it, as evident from his speech.

Some have expressed serious concern that it would shift the decision of choosing a specific generic formulation of the same molecule for the patients from doctors to chemists. My counter question is, so what? The drug regulator of the country ensures, and has also repeatedly affirmed that there is no difference in efficacy, safety and quality profile between any approved branded generic and its generic equivalents. Moreover, by implementing an effective track and trace system for all drugs, such misgiving on spurious generic medicines, both with or without brand names, can be more effectively addressed, if not eliminated. Incidentally, reported incidences of USFDA import bans on drug quality parameters and breach of data integrity, include many large Indian branded generic manufacturers. Thus, can anyone really vouch for high drug quality even from the branded generics in India?

Further, the expensive branding exercise of essential medicines, just for commercial gain, and adversely impacting patients’ access to these drugs, has now been questioned without any ambiguity, none else than the Prime Minster of India. The generic drug manufacturers will need to quickly adapt to ‘low margin – high volume’ business models, leveraging economies of scale, and accepting the stark reality, as was expressed in an article published in Forbes – ‘the age of commodity medicines approaches’. Even otherwise, what’s wrong in the term commodity, either, especially when generic medicines have been officially and legally classified as essential commodities in India?

Overall, the clear signal from Prime Minister Modi that ‘prescriptions in generic names be made a must in India ‘, well supported by appropriate legal and regulatory mechanisms – is indeed a good beginning, while paving the way for a new era of Universal Health Care in India. 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.

Digital Divide And Indian Pharma Industry

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Over the last one and half decades of this new millennium, despite making significant headway in digital literacy, fueled by consistent progress in the penetration of broadband Internet and availability of more affordable smartphones, a large section of Indian population is still not digitally literate, not even in its importance and awareness, creating a sharp digital divide in the country.

This populace with inadequate or no digital literacy spans across a large section of our society, such as those who are generally poor, many living in rural areas, or lacking in adequate digital awareness, or exhibiting strong preferences in adhering to traditional approaches of doing things, or differently abled individuals, and many elderly persons.

In the health care arena, this citizenry constitutes one of the most vulnerable segments of the society often posing serious health risks, and mostly unable to make use of various digital tools while availing several social sector benefits of the government, as and when required.

However, more concerning is the fact that this gap is not just quite significant, there does not seem to be any near-term possibility of bridging it, either, as all accompanying responsibilities now lying on the government alone. Effective measures to bridging this gap do not depend on just technology, as the issue is multidimensional in nature, necessitating participation of all the stakeholders, pharma included – for a quantum leap in the business growth too.

This should not go unnoticed and unappreciated. Addressing this scenario effectively would call for a different strategic approach – not the usual run of the mill type ad hoc measures, both by the government, and in healthcare, also by the pharma marketers. In this article, I shall dwell in this area.

What it means?

In the modern era, the term ‘digital divide’ broadly refers to the gap between demographics and regions that have access to modern Information and Communications Technology (ICT), and those who don’t or have restricted access to it. Post late 1990s, this terminology is primarily used to describe the split between those with and without Internet access, particularly broadband.

In the global perspective, according to ‘Tech Target’ – the global network of technology-specific websites, the ‘digital divide’ typically exists between those in cities and those in rural areas; between the educated and the uneducated; between socioeconomic groups; and between the more and less industrially developed nations. Even among populations with some access to technology, the digital divide can be evident in the form of lower-performance computers, lower speed wireless connections, lower-priced connections, such as dial-up, and limited access to subscription-based content. The report also points out, while adoption of smartphones is growing, even among relatively lower-income groups, the cost of various data plans and the difficulty of performing tasks and transactions on smartphones continue to inhibit the closing of the gap.

To a large extent, this is applicable to India, as well.

It’s not just a technological issue:

Bridging the ‘digital divide’ in health care is not just a technological issue. It’s rather a complex one with many dimensions. It also depends on the health literacy of individuals, or a society, or the location where they live in. The World Health Organization (WHO) defines health literacy as: ‘The cognitive and social skills which determine the motivation and ability of individuals to gain access to, understand, and use information in ways which promote and maintain good health.’

This is not just the ability of a person to understand the health messages, it also involves the individual’s ability to look for the required information, and taking further action accordingly. As a December 2016 study of Michigan State University Extension concludes, those who are more likely to experience low health literacy are, older adults, racial and ethnic minorities, people with less than a high school diploma, people with low income levels, facing language issue for communication and those with compromised health status, such as chronic health conditions. Culture and access to resources also affect people’s health literacy. Another October 2016 study published in the Journal of Medical Internet Research, establishes the connection between low health literacy and the skepticism on health technologies.

Effectively bridging ‘digital divide’ alone, may not resolve the issue of health literacy. Neither, just addressing the health literacy can bridge the gap of ‘digital divide’, effectively. Thus, there isn’t any ‘one size fits all’ type of solution, to address both these issues, for a synergistic outcome in improving affordable access to quality health care for all.

Bridging the ‘Digital Divide’:

That said, bridging the digital divide, especially in the healthcare segment, has immense relevance in the modern days. As PwC’s Global Digital IQ Survey report of May 2016 observes, health care is arguably one of the world’s most information-intensive sectors, and the opportunities to improve quality, encourage affordability and enhance the consumer experience are vast. Wider application of digital technology can help this sector tackle many of these pressing challenges, effectively. However, the sector is currently behind the curve, the report highlights.

According to another 2016 report by PwC on Indian healthcare, the digital connectivity of the country is expected to grow from 15 percent access in 2014 to 80 percent access in 2034, with rural Internet users increasing by 58 percent annually, which presents a great potential for telemedicine and remote diagnosis in the country. This is indeed encouraging.

Can pharma industry hasten the process?

As I said before, bridging the ‘digital divide’ and improving health literacy, may be construed by many as a primary responsibility of the Indian government, through various robust initiatives backed by allocated budgetary provisions. Nonetheless, in the realm of healthcare, I reckon, pharmaceutical and other related industries can significantly help hastening the process, not just as a social responsibility, but for significant growth in businesses, simultaneously creating a win-win situation for all.

Just to cite an example out of many, various pharma companies can set up ‘digital health information kiosks’ especially in those areas where awareness and participation of the local population related to healthcare issues are poor or suboptimal. These ‘digital health information kiosks’, providing various diseases or treatment related information that a pharma company may be interested in, can be set up at convenient locations, of course, with the approval of local authorities. Such information, should encourage people to seek more and more health information digitally, explaining the whole process, and at the same time persuading them to take available disease prevention measures. and advising them to visit doctors, to initiate early treatment, wherever necessary.

I repeat, this is just an illustration, there could several other ways of achieving the same result.

Increasing relevance:

For healthcare, the above trend would mean empowering most of the population to have unfettered access to knowledge in various health related fields, especially in prevention, management and available treatment options, for various diseases, encompassing both acute and chronic conditions. Thus, this process has the potential to create a significant snowballing effect, not just on

deeper penetration of telemedicine, but also on remote diagnosis in India. In tandem, leveraging this trend early enough and in innovative ways, is likely to enable the pharma players to provide a much-needed boost to their respective business ventures.

Advantage pharma:

Rapid transformation in the complex market dynamics, coupled with increasing challenges in making productive face to face interaction with important doctors for prescription generation and consequent fast decline in the economic outcome of traditional product detailing, is likely to hasten this metamorphosis. On the other hand, this change also brings a blessing in disguise for the pharma players, by opening many new doors of opportunity based on digital platforms, and thereby paving the way for reaping a rich harvest, for all those who will choose to be early adopters.

In the above context, intimate business involvement with the digital world in many areas, such as ‘digital sales and marketing’ assumes a high priority for Indian pharma players, just as it’s being imbibed by some global players, including many in other industries. The speed of its becoming the centerpiece in pharma sales and marketing strategy formulation process ought to be directly linked to the increasing speed of broadband Internet penetration, smart phone and other digital platform usages by people of all ages with enquiring mindsets. Thus, the destiny’s call is clearly ‘Advantage Pharma’.

Key benefits:

According to a paper of April 16, 2014, published by Salford Business School, Manchester, UK, the major benefits of ‘Digital Marketing’ are as follows:

  • It helps businesses to develop a wider customer base as it does not rely on physical presence or interaction.
  • It encourages customers to interact directly with businesses.
  • It is not limited by conventional opening times – customers can interact at a time and place convenient for them

Calibrated increase in usage of digital platforms:

It is worth noting, traditional methods of sales and marketing, barring a few exceptions, are currently prevailing in the Indian pharma industry. In this scenario, each pharma player, must carefully evaluate its current and future product-mix, along with customer types and base, as they would decide, first to initiate, and then to scale up their sales and marketing operations in the digital space in a well-calibrated manner.

In this new ball game, the fresh entrants would need to consider only the credible research-based data, on the rapidly changing aspirational mindset of young Indians, including doctors and patients, with smart phones being a key enabler, on the one hand. While on the other, these should provide optimal digital penetration in different geographical regions or areas, together with the usage of platforms and related demographic configurations.

For example, if a region shows high smartphone usage for community or group chat within the general population, a pharma company may explore the possibility of creatively designing a smart phone based ‘digital patient chat group’ as a part of its patient engagement initiative. In this ‘digital patient chat group’, the members suffering from chronic or even acute ailments can discuss with each other the issues for which one is seeking a solution, where even the pharma companies can intervene, wherever they can add value and is legally permissible.

The effectiveness in working out a game changing crafty blend of both brand and patient-centric communication package with digital tools would separate the men from the boys. It would demand top quality cerebral inputs from the pharma marketers – a requirement that is not so easily available in the current space of pharmaceutical marketing, dominated by a wide variety of freebies.

In conclusion:

Humongous digital divide in India is a fall out, predominantly of disparate availability and access to ICT, not just between those living in rural and urban areas, but spans across several other areas such as, between educated and uneducated people, demographic and economic classes, to name a few. Nonetheless, especially, since the last one and a half decades, the country has made significant headway in gradually reducing this gap, though a lot more ground is yet to be covered in this direction.

Today in India, we witness even various political parties, which used to be very traditional in their approaches have started using a wide variety of digital marketing tools successfully by deploying astute domain experts, to achieve their goals.

For the healthcare sector, including the pharma industry, this progress throws open many doors of opportunities, both for the public, as well as for the industry. Notwithstanding this digital divide and general prevalence of an overarching traditional behavior and response patterns, displaying visible apathy or inability to embrace the promises of the emerging cyber era, several doctors and patients have already started reaping the benefits offered by various digital platforms, tools and media. The regulators governing this sector, are also not lagging far behind, with their presence visible in the digital space too, including social media.

This challenge of change should be effectively leveraged by all stakeholders in healthcare, reaping a rich harvest. Like many other constituents in this intricate, yet interesting ball game, pharma industry too needs to assume an active, pragmatic and proactive role in several innovative ways.

Flooring the gas pedal to move into the digital space of healthcare, would provide significant competitive and commercial advantages to the early movers, more than ever before. When political narratives can be made more productive by embracing the digital platforms, why not the business narratives of the pharma industry in India?

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.

Multi-channel Engagement: A New Normal In Pharma Marketing

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The 2015 Report of AffinityMonitor reconfirms that access to important doctors for pharma Medical Representatives (MRs) continues to decline. Now, fewer than half of all doctors are truly accessible to the MRs, down from nearly 80 percent in 2008. In other words, though MRs continue to be the best way to engage the average physician, this “best way” is steadily getting worse.

However, for physician engagement, all digital channels put together to rank the second highest. These include both digital “push”, such as, email or alerts sent to a physician’s smart phone – followed by telemarketing, direct mail; and digital “pull”, such as content that doctors can access on their own from the Internet, and peer interactions, like webinars.

With the new digital channels emerging, pharma companies will have a wider range of promotional and engagement channels to reach out to not just the doctors, but also other important stakeholders. Additionally, various non-personal marketing channels could also help pharma companies overcome the declining trend of restricted access to physicians for MR.

No single channel works for all physicians:

Although, no single channel works for all physicians, as each doctor has a unique preference for how he or she wants to receive information across various channels, most doctors will engage with pharma players in some way. The findings of this report are based on data compiled from more than 100 pharma brands, including engagements with 632,000 physicians across a wide range of specialty areas, and more than 123 million individual physician interactions.

The report suggests that by understanding those channels on a physician level, and targeting their marketing and promotion accordingly, pharma companies can hone the effectiveness of each physician engagement, and thereby improve sales and marketing productivity considerably, for excellence in business.

Similar trend in India with varying degree of difficulty:

Similar trend, though with varying degree of difficulty, can be noticed in India, as well. Over the past several years, many top pharma companies have been already experiencing the steadily declining quality of access of pharma MRs to many important doctors.

This is primarily due to the number of patients coming to these busy practitioners is fast increasing, and as the doctors are trying to see all these patients within the same limited time that was available to them, as in the earlier days. In tandem, their other obligations of various kinds, personal or otherwise, are also overcrowding the same highly squeezed time space.

Thus, an increasing number of MRs, which has more than doubled in the past decade, is now fiercely competing to get a share of lesser and lesser available time of the busy medical practitioners. Added to this, a gross mismatch between the inflow of doctors with similar prescription potential and ever increasing inflow of patients, is making the situation worse.

Reevaluating traditional marketing and sales communication models:

In this complex scenario, the key challenge before the pharma players is how to make sales communication with the busy medical practitioners more productive?

Consequently, many pharma companies, across the globe, have started reevaluating their traditional sales communication models, which are becoming increasingly expensive with diminishing returns from the MR calls.

As I discussed in some other article, a few drug companies have commenced using various interesting multi-channel digital platforms, though mostly fall under the traditional pharma sales communication process.

I shall now briefly glance over the trend of responses of the Indian pharma companies over a couple decades, to meet these challenges of change.

MR based Experimentations:

With a strong intent to squarely overcome this challenge, many Indian pharma players initially tried to experiment with several different MR based approaches, in various permutations and combinations. It was initially directed to make the prescription generation process more productive, by equipping the MR with a wide range of soft skills.

Some pharma players also tried to push up the overall sales productivity through additional rural market coverage to Tier IV cities and below. Quite a few of them succeeded in their endeavor to create profitable business models around the needs of hinterland and rural geographies.

These pharma players, though quickly realized that extra-urban geographies require different tactical approaches, broadly remained stuck to the traditional marketing and sales communication models. These approaches include, differentiated product portfolio, distribution-mix, pricing/packaging and promotional tools, considering most the doctors are not as busy as their counterparts in the metro cities and large towns.

Strategic marketing based experimentations:

Several changes were also made in the strategic marketing areas of pharma business, though most of these, if not all, were imbibed from the global marketing practices of that time. These were well captured in an IMS report of 2012. Some of these strategic marketing shifts were as follows:

  • Strategic Business Unit Structure (SBU): To bring more accountability, manage evolving business needs and use the equity of organization for reaching to the middle of the accessible pyramid.
  • Therapy Focus Promotion: Generally seen where a portfolio is specialized, therapy focused, and scripts are driven through chosen few doctors; generally, in chronic segment.
  • Channel Management: Mostly adopted in OTC /OTX business; mature products with wider portfolio width.
  • Hospital Task Force: Exclusively to manage the hospital business.
  • Specialty Driven Sales Model: Applicable in scenarios where portfolio is built around 2 or 3 specialties.
  • Special Task Force: Generally adopted for niche products in urban areas, such as fertility clinics or for new launches where the focus is on select top rung physicians only.
  • Outsourced Sales Force: Generally used for expansion in extra-urban geographies or with companies for whom medico marketing is secondary (such as OTC or Consumer Healthcare companies).

Pharma MNCs did more:

In addition, to increase sales revenue further, many pharma MNCs engaged themselves in co-promotion of their patented products with large local or global pharma companies operating in India, besides out-licensing. A few of them pushed further ahead by adopting newer innovative promotional models like, Patient Activation Teams, Therapy Specialists, or creating patient awareness through mass media.

Realizing quickly that patients are increasingly becoming important stakeholders in the business, some of the pharma MNCs started engaging them by extending disease management services, along with a clever mix of well-differentiated tangible and intangible product related value offerings, such as, Counseling, Starter kits, Diagnostic tests, Medical insurance, Emergency help, Physiotherapy sessions, and Call centers for chronic disease management, to name a few. Concerned doctors used to be reported about the status of the patients, who were not required to pay anything extra for availing these services from the MNC pharma companies.

Nevertheless, despite all these, declining productivity of the traditional pharma sales communication models continued, predominantly from the extremely busy and very high value medical practitioners/experts/specialists, as mentioned above.

The critical point that remained unaddressed:

At that time, pharma sales communication kept focusing on customer/market types and characteristics. Most companies missed the emerging order of unique customer preferences towards the medium of sales communication, and differentiated message requirements for each doctor. Not many pharma players could probably realize that MR’s quality of access to doctors for productive sales communication would emerge as one of the most critical issues, and become increasingly complex.

Leveraging technology for an effective response:

Amid all these experimentations with pharma sales and marketing models, a few companies did ponder over leveraging technology to chart a novel pathway for effectively addressing this emerging challenge. They tried to ascertain:

  • Whether the traditional sales approach would continue to be as relevant as opposed to digitally customized sales applications?
  • Whether MRs would continue to remain as relevant in all areas of pharma prescription generation process, in the years ahead?

First major venture in e-marketing:

Towards this direction, in 2013, Pfizer reportedly started using digital drug representatives to market medicines, leaving the decision in doctors’ hands as to whether they would want to see them.

Prior to that, in 2011, a paper published in the WSJ titled, “Drug Makers Replace Reps With Digital Tools” stated that pharmaceutical companies in the United States are downsizing their sales force with increasing usage of iPad applications and other digital tools for interacting with doctors.

Lot many other fascinating experimentations with pharma e-marketing have now commenced in several places of the world, many with considerable initial success. However, most of these efforts seem to be swinging from one end of ‘face-to-face’ sales communication with doctors, to the other end of ‘cyber space driven’ need-based product value sharing with customers through digital tool kits.

Blending the right communication-mix is critical:

Coming back to the AffinityMonitor 2015 Research Report, today pharmaceutical and biotech companies have at their disposal more than a dozen of promotional channels to include in their strategy, spanning across, from traditional methods to digital ones.

Some physicians still want to interact with MRs, others restrict MR detailing, as they prefer to get the required information from various credible websites, directly, and from their peers. One doctor may prefer to regularly use a mobile application for product information, while another similar physician may rarely wish to surf the Web for information to achieve the same purpose. Some others may simply not engage with any sales communication no matter what the channels are. Although overall accessibility to MRs is getting more restricted, some doctors are still more accessible than others, the report finds.

Segmenting doctors by their accessibility to personal promotion, such as, MRs and by non-personal promotion like other channels, including digital, allows pharma companies to identify potential gaps in their marketing approach.

For example, of the 54 percent of doctors who are less accessible to MRs, 15 percent show good accessibility to other channels. In other words, those doctors haven’t closed the door for good, just yet. Pharma companies can still reach them, provided they use the right approach, the report suggests. Drug companies would, therefore, require gathering specific information doctor-wise, and customizing both the medium and the message for effective brand value delivery, accordingly.

Sales and marketing avalanche too isn’t working:

This study revealed that a pharma company’s top 100 doctors receive as high as 423 contacts a year, and the top 10 doctors receive more than 600 each year. Given such volume, it’s easy to imagine how doctors can start to get buried under an avalanche of sales and marketing. It’s also easy to see how even the right message, in the right channel, to the right doctor, could get lost in all the noise, and may even create a bad customer experience for many physicians, the report concludes.

Conclusion:

The decline in pharma MR’s quality of access to physicians for brand communication is now well documented. Moreover, ‘one size fits all’ type of message, delivered even by the best of MRs, is unlikely to be productive in the changing macro environment.

Therefore, the right knowledge of whether a doctor would prefer to engage through traditional marketing and sales communication methods by meeting with an MR, or would just prefer to get his/her required information through any digital medium, is critical for success in the new ball game. This in turn will help generate the desired level of prescription support for any pharma brand.

Still, a majority the doctors’ choices in India would, possibly, involve MRs, while a good number of other important doctors’ choices may probably be independent of them. Nevertheless, from this emerging trend, it’s clear now that multi-channel engagement would be a new normal in pharma sales and marketing, sooner than later.

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.

Relevance of Artificial Intelligence In Creative Pharma Marketing

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Keeping pace with the challenge of change globally, the macro environment in the pharma business is also undergoing a metamorphosis. This includes areas, such as, strong product pricing pressure, dwindling new product pipelines, increasing operating expenses, stringent regulatory requirements, rising stakeholder expectations, and several others. All these developments collectively, are making the drug companies, both global and local, feel the tailwind of various intensities, in their efforts to achieve the corporate financial goals, more than ever before.

Despite this continuous change, most pharma players’ overall strategic business models to meet with the increasing economic expectations of the shareholders, other investors and the stock markets, have hardly undergone any path breaking, radical, or disruptive advancement, just yet. This includes even the most critical interface between an organization and the consumers – pharma sales and marketing.

That said, it is not uncommon, either, to witness some sporadic initiatives of major business process reengineering with sophisticated digital applications. Interestingly, all these measures are mostly replacements or for realignment of the same age old, and traditional strategic pharma sales and marketing models. Most of these are aimed at adding more speed and accuracy to the same business core process, along with ensuring greater management information and control to support the decision making process.

Despite this palpable environmental shift, general inertia within the pharma industry to respond to all these, with commensurate strategic game plans of surgical accuracy, is glaring. Currently, the general response to this transformation is mostly reactive and traditionally defensive in nature, rather than proactive, as the overall business environment around the industry keep becoming increasingly demanding. Most pharma players may not, but the time keeps galloping ahead, offering a mind boggling rapid advances in disruptive technological innovations – the potential game changers for its several business domains.

In the midst of such all-embracing changes, yet another disruptive technology – ‘Artificial Intelligence (AI)’, is prompting many business leaders to step on to a brand new paradigm, making use of AI to the extent required, especially, while preparing a detail strategic roadmap for the business with high precision.

A clear intent to seize this moment is now visible in many industries, though in varying degrees and scale, but surely it is happening. This is vindicated by the gradual increase in demand for AI, across a wide variety of its application areas.

Marketing to turn upside down?

On October 26, 2016 an article published in ‘The Huffington Post’ on how AI could ‘Turn the Marketing World Upside Down’ indicated its disruptive impact on the way innovative marketing strategies are conceived, created and implemented on the ground.

The article gave an interesting example of how paradigm shift follows a predictable pattern of development that starts with substitution, followed by augmentation, modification, and finally redefinition.

For example, the evolution of today’s smartphones also followed the same pattern, as follows:

  • First replaced simpler landline phones
  • Then adapted with the addition of a camera
  • And finally redefined “phone” altogether, not just by replacing cameras, pagers, and many functions of personal computers, but by being able to perform with great precision an incredible number of various other serious requirements, well supported by related digital apps.

With the application of AI in marketing, the conventional ball game right from conception, to charting out and execution of marketing strategies, will be catapulted to a new and fascinating orbit altogether. I have no intent to romanticizing it. This is going to happen sooner than later, as we move on.

Artificial Intelligence (AI):

In a simple and commonly understandable way ‘Artificial Intelligence (AI)’ can be explained as the theory and development of computer systems, which are able to perform tasks normally requiring human intelligence, such as, machine learning, visual perception, image processing, speech recognition, decision-making, and language processing, besides many others.

In the Hollywood film industry, several sci-fi movies have already been made, based on AI as the core theme. Some of these international blockbuster films are ‘The Terminator’, ‘Transcendence’, ‘The Matrix’, ‘Ex Machina’, ‘Ex Machina’ or even ‘2001: A Space Odyssey’, among many others.

Some concern, but…:

Alongside, a serious concern has also been expressed by some global icons, that the evolution of AI could reach a dangerous threshold, where mankind will no longer remain in control of the creation of its own progeny, besides other living beings. This could, as they believe, jeopardize the continuity of an entire civilization, at least, in its present form.

In 2014, globally acclaimed Professor Stephen Hawking commented in an  interview with the BBC: “Humans, limited by slow biological evolution, couldn’t compete and would be superseded by A.I.”

In fact, in July 2015, Professor Hawking reportedly joined Elon Musk, Steve Wozniak, and many others, warning that AI can potentially be more dangerous than nuclear weapons.

In the same year, even Bill Gates, co-founder of Microsoft, reportedly expressed his concerns, saying, “I am in the camp that is concerned about super intelligence…”

On the other hand, despite such apprehensions, AI based technology keeps evolving at a rapid pace, with the funding in AI research taking giant leaps forward. The technology has already found its cutting edge extensive applications in several warfare. We now hear almost every day about unmanned drones not just doing defense surveillance, but destroying strategic targets with jaw-dropping precision. Or for that matter, use of robots has become rather common to diffusive explosive devices of various kinds, intensity, and planted in important places to kill people. As reported by the media, ‘autonomous and self-aware robots to diminish the need for human soldiers to risk their lives.’

Google’s driverless cars also use similar AI technology offering advanced analytics-based algorithms, machine learning and deep learning processes, which could well be another game changing example in this area.

The benefits far outweigh the risks?

Be that as it may, the benefits of AI seem to far outweigh the risks, in various areas. This includes its strategic applications in the pharma industry.

This gets vindicated by the February 2016 research report of ‘Markets and Markets’ (claimed as the world’s second largest firm in publishing premium market research reports, per year), which estimated that AI market would record a turnover of around US$ 5.05 Billion by 2020, growing at a CAGR of 53.65 percent between 2015 and 2020. This market is currently dominated by the ‘Machine Learning’ technology, as it provides the computers with the ability to learn without being explicitly programmed, and are capable of updating themselves when exposed to new data.

Some of the key players operating in the artificial intelligence market are IBM Corp. (U.S.), Microsoft Corp. (U.S.), Google Inc. (U.S.), IPsoft (U.S.), FinGenius Corp. (U.K.), Rocket Fuel Inc. (U.S.), Mobileye N.V. (Israel), Kensho Technologies, Inc. (U.S.), Sentient Technologies (U.S.), and Zephyr Health (U.S.), the report revealed.

AI in pharma:

Over the last decade, AI is being increasingly used by various industries, as a key support to the strategic decision making process, in various areas of business. Understandably, in pharma its use has been rather limited, as on date. Nevertheless, there are several key domains within the pharma industry, where effective use of AI has the potential to be a critical performance enhancer. These areas include, not just in discovery research, or in clinical trials, or in sales and marketing, but also in setting the right strategic direction for the company.

However, in this article, I shall focus mainly on the application of AI in pharma marketing.

AI in pharma marketing:

Although AI is now being sparsely used, it is expected to be more widely used in pharma research and development. It also shows tremendous potential in developing creative sales and marketing strategies, with great accuracy.

So far, pharma marketing strategies are based more on the qualitative data, some traditional quantitative data, and a huge dose of marketers ‘gut feel’. It continues to happen, when the world, including India, is moving towards innovative data driven decision models. If one chooses to, now a pharma marketer also can make effective use of an abundantly available wide variety of quality data to feel the pulse of the markets, consumers and any identified issues, with great precision. Thereafter, based on these real life hard facts, the team needs to put in place for implementation, with an open and innovative mind, a creative sales and marketing game plan, to achieve the set goals.

Would that mean, a pharma marketer should necessarily be an expert in a huge volume of data analysis? I don’t guess so. ‘Machine Learning’, ‘Deep Learning’ and other analytics-based processes of AI can help them enormously to do so.

AI based analytics has now been proved to be far more reliable than any human analysis of the humongous volume of different kinds of quality data. Doing so is even beyond the capacity of any conventional computers that a marketing professional generally uses for this purpose.

The prime requirement for this purpose, therefore, is not just huge volume of data per se, but good quality of a decent volume of data, that a state of the art analytics would be able to meaningfully deliver, that is tailor made to meet the specific requirements of pharma marketers to create a cutting edge marketing strategy.

Areas of AI use in pharma – some examples:

AI will be extremely useful to arrive at the most effective strategic options available, with pros and cons, to achieve the core sales and marketing objectives of the organization, both long and short term.

It can also add immense value right at the decision making stages to determine the key ingredients of an effective strategic plan in a number of critical areas, such as:

  • Arriving at the optimal product-portfolio-mix with the right expense tag attached to each brand
  • Deep learning about market dynamics, customer behavior and their interplay
  • Matching unmet customer needs with enhanced and differentiated value offerings – both tangible and intangible
  • Effective bundling of brand offerings and associated services for each patient segment
  • Selecting the right mix of communication channels, including social media, to ensure maximum productivity in reaching each category of the target audience
  • Detailed strategic blueprint for each type of stakeholder engagement, along with related value offerings
  • Arriving at the best possible resource-mix with the available budget
  • Real-time monitoring of each strategic action steps, consistently, making quick changes on the run, if and when required

Pharma AI platforms are already available:

There are a number of AI platforms now available for the pharmaceutical companies, across the world. For example, in September 2015, by a Press Release, Eularis – a leading provider of next-generation advanced marketing analytics to the Pharma industry, announced the release of the E-VAI, the latest development in sophisticated machine learning technology delivering next-generation analytics and decision making for Pharma marketers globally.

Another recent example of AI in this area, as well, is ‘Salesforce Einstein’. It delivers advanced AI capabilities in sales, service, and marketing, and enables anyone to build AI-powered apps that get smarter with every interaction. According to Salesforce, it will enable everyone in every role and industry to use AI to be their best.

Conclusion:

The use of AI in pharma is still in its nascent stage today. However, for a sustainable business excellence in its various domains, AI is increasingly proving to be of great relevance, now and also in the future. Sales and marketing is one such domains.

With the passage of time, both the macro and micro pharma business operating environments are changing fast, primarily driven by changing expectations of stakeholders, the public at large, and disruptive algorithmic technical innovations, based on advanced science, statistics and mathematics.

The scope to effectively utilize the full potential of advanced algorithmic technical tools, is huge. It is easier now to capture a massive volume of pharma related high quality raw data of different kinds, for tailor-made innovative analysis, with the help of AI based analytics, while creating cutting-edge strategic game plans.

Nonetheless, pharma players apparently continue to chart the same strategic frontier where there are many footsteps to follow. Many of them have restricted themselves to no more than digitally re-engineering the same overall business processes that they have been already following, since long. Just a few of them are making use of the leading edge analytics involving AI, such as ‘Machine Learning’, ‘Deep Learning’, ‘Visual Perception’, ‘Image Processing, besides many others, which can be more ‘patient-centric’ and at the same help deliver a strong business performance.

Thus, quicker adaptation, and thereafter continuous scaling up applications of high quality AI based analytics in creative pharma marketing, are not just of immense relevance today, they also bring with them the commensurate potential for sustainable excellence in financial performance of the organization, fueled by critical early mover advantage.

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: No Longer An Optional Competitive Driver

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The emerging global trend of patients’ demand for greater engagement in their treatment decision making process, could well be a game changer in the prescription demand generation process for pharma brands, even in India, and in not too distant future. This would assume a critical importance not just from the patients’ perspective, but also for the pharma companies and other health care players, for commercial success.

The fast penetration of Internet services is increasingly becoming a great enabler for the patients to get to know, learn and obtain more and more information about their fitness, overall health, various illnesses, disease symptoms, available diagnostic tests, including progress in various clinical trials, besides the drugs and their prices – and all these just with several clicks.

Thus, equipped with relevant information from various dependable and user-friendly sources from the cyberspace, patients have started asking probing questions about the risks and benefits of various types of treatment decisions and diagnostics tests, when recommended by the doctors. At times, especially in the Western world, such interactions even lead to changes, additions or deletions in the choice of therapy, including drugs, devices and diagnostics tests.

Even in a developing country, such as India, many of such types of patients would no longer want to play just a passive role in their disease treatment or health and fitness improvement processes. Although, they would continue to want the doctors to take a final decision on their treatment, but only after having meaningful interactions with them.

A 2016 Report: 

An April 2016 report of Accenture titled, “The Patient is IN: Pharma’s Growing Opportunity in Patient Services,” finds that the patients in the top global pharma markets want and expect consistent services coming from the pharma companies.

These patients are increasingly seeking more services from the pharma players before they are treated for a disease, regardless of the types of illnesses they have. However, it’s more important to note that patients’ responses during this survey have clearly indicated that while they highly value the services they use, a vast majority of them do not know about the services, which, as the pharma companies claim, are already available for them.

The Accenture study covered 203 executives at pharmaceutical companies, 100 in the United States and 103 in Europe (8 countries) from October to November 2015, covering seven therapeutic areas: heart, lung, brain, cancer, immune system, bones, and hormones/metabolism. Annual revenues of the surveyed companies ranged from nearly US$ 1 billion to more than US$ 25 billion.

Some important findings:

Following are some key findings of this report:

1. Patient services are delivering value with a significant increase in focus, and investment expected over the next two years, with 85 percent of companies are raising their investment in patient-centric capabilities over the next 18 months. However, the companies have only become slightly more patient-centric over the past two years. 9 of the following top 10 services are attracting above average business impact, which is an increase over hopping 73 percent that currently offer such patient services:

  • Disease education
  • Patient segmentation and insight
  • Patient experience management
  • Medication delivery/support
  • Patient risk assessment
  • Wellness information and health management
  • Nurse/ physician/patient access portal
  • Medication/ treatment reconciliation
  • Patient outreach, reminders, and scheduling
  • Adherence program management

2. Digital platforms play a dominant role in making patients aware of the services offered. Thus, companies are going big with investments in digital engagement technologies and supporting analytics, with 95 percent of companies planning to invest in patient engagement technologies over the next 18 months.

3. Much of this investment (but not all) is aligned to what patients value. 50 percent of the following top 10 fastest growing services are perceived by the patients delivering significant value:

  • Benefit coverage and access support
  • Health coach/counselor
  • Adherence program management
  • Co-payment assistance programs
  • Remote monitoring
  • Affordability and reimbursement support
  • Nursing support services
  • Reward/ incentive programs
  • Medication delivery/support
  • Patient outreach, reminders, and scheduling

Out of these, ‘medication delivery and support’, ‘remote patient monitoring’ and ‘adherence program management’ were highly valued by 85, 79 and 77 percentages of patients, respectively.

To give an example, pharma companies in the United States use digital as the primary channel for direct communications for patients. They use social media (51 percent) and web pages (49 percent) to market patient services. The use of TV is around 53 percent.

The challenge:

Let me re-emphasize here, as on date, just 19 percent of the surveyed patients are familiar with already available services meant for them. This had happened, despite respective pharma companies’ basic reliance and dependence on health care professionals for dissemination of their respective well-targeted services.

Thus, lack of awareness among patients about the services provided, throws a major challenge to pharma players to accurately ascertain, finding out effective ways, and then continuously measure and evaluate the impact of those services on outcomes, to further hone the process. Such a mechanism needs to be put in place before channeling further major investments in this important space.

Key takeaways:

Following are the key takeaways from this study:

  • Patient services will become a competitive driver and are no longer optional for pharmaceutical companies.
  • Investment should be led by what patients value, but measuring business value is critical to sustainability.
  • Clear organizational and operating strategy must be in place to ensure companies are structured for success.
  • Effective communication to patients the economic value of services, is central to healthcare professional interactions.

Patient-services strategy:

Accenture’s North American Managing Director of patient-services epitomized the findings of the report during its release on April 2016 by saying, “In this changing competitive environment, the question will no longer be if life sciences companies should offer these services, but rather which ones, and how they should be implemented.”

Thus, development of a robust patient-services strategy by the pharma players, that syncs well with the patients’ needs on the ground, will be absolutely necessary for the pharma players, as we step into the future. More importantly, there should be an effective alignment of the strategy with different health care professionals, through effective communication of various types and kinds, to ensure that the brand value offerings, well supported by carefully tailored patients’ services, generate a synergistic outcome for the target group.

Conclusion:

Patient services are increasingly assuming importance of a cutting-edge competitive driver of success in the pharma business. Accordingly, various types of such services have already started attracting greater investments, especially in the Western part of the globe, and are soon expected to become a key competitive driver of success in the healthcare market of India too.

However, while crafting an effective patient-services strategy, one-size-fit-all type of approach won’t work. This is primarily because, not just the service requirements would vary within patients or patient groups, the method of the preferred service delivery mechanism would also vary. For example, some patients may prefer to engage with their doctors for this purpose, some others’ preference could well be Internet based interactive digital platforms, or through a smart app available in a smartphone.

Thus, to succeed in this area for business excellence, pharma marketers must find out the most effective ways to offer these services to each types or groups of patients.

Moreover, the patient services strategy should be an ongoing exercise, as the target groups’ needs of the types of services, and preferred delivery platforms for the same would also keep changing over time.

In India too, quite slowly though, but steadily, the process of arriving at treatment decisions for the patients is undergoing a metamorphosis. Taking a fast mover advantage in the country, in a big way and now, would help reaping a rich harvest, in the near future.

Are Indian pharma players too taking note of this shifting paradigm for sustainable 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. 

 

Déjà Vu In Pharma Industry

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It’s happening in the West, and is equally widespread in the Eastern part of the globe too, though in different ways and forms, as both the national and international media have been reporting, consistently. The phenomenon is all pervasive, and directed towards stalling almost all possible future laws and policies that a large section of the pharma industry sees as a potential apocalypse for their business models.

It has a wide reach and covers, for example, the policy-decision makers or possible policy-decision makers in the near future, other policy influencers, many hospitals, and the final interface with the patients – the prescription decision makers.

Although, it affects health care as a whole, in this article I shall focus just on the pharma industry.

Looking West:

While looking at the West, I would cite a recent example from the United States. It’s yet another déjà vu for the western pharma industry.

On August 26, 2016, ‘The Los Angeles Times’ in an article titled, “Drug companies spend millions to keep charging high prices” stated, “Of roughly US$ 250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount – about US$ 70 million – has been contributed by deep-pocketed drug companies to defeat the state’s Drug Price Relief Act.”

The Drug Price Relief Act of California, is aimed at making prescription drugs more affordable for people in Medi-Cal and other state programs by requiring that California pays no more than what’s paid for the same drugs by the Department of Veterans Affairs of the United States. It would, in other words, protect state taxpayers from being ripped off.

The report also quoted Michael Weinstein, President of the AIDS Healthcare Foundation saying that industry donations to crush the Drug Price Relief Act “will top US$ 100 million by the election, I’m quite certain of it.” He further added, “They see this as the apocalypse for their business model.”

Looking East:

While citing a related example from the eastern part of the globe, I shall draw one from nearer home – India, as China has already been much discussed on this matter. This particular media report on a wide-spread pharma industry practice, though took place in a different form, as compared to the United States, belongs to the same genre, and captures yet another déjà vu involving the pharma players operating in the eastern world, similar to what’s happening in the west.

India:

On August 30, 2016 a report published in ‘The Economic Times’ titled, “Pharma cos offer freebies to doctors, violate code: MP” quoted a serious allegation of a Rajya Sabha Member of the Parliament on this issue. The MP claims, he has evidence of four drug companies’ recently bribing doctors across India to push their products. These four companies include both large Indian and multinational pharma players, and two out of these four features, among the top five companies of the Indian Pharma Market (IPM).

The lawmaker further said, “I am waiting for the minister’s response on this issue. Nothing has come so far. We also have the names of the doctors who have taken bribes, which we will release eventually,”

Another September 06, 2016 report, published by the same business daily in India, categorically mentioned that TOI has documents to establish that one of these companies took hundreds of doctors from across India to places like Vancouver, Amsterdam, Oslo, Venice, New York, Boston, Brussels and Moscow. The documents reportedly include email exchanges between the company executives, city-wise lists of doctors with ‘legacy codes’, names of spouses, passport copies and visa copies, and show how the company has spent several millions of rupees in taking doctors and sometimes even their spouses, ostensibly to attend medical conferences.

Other NGOs have also reportedly submitted proof of the same to the Government for remedial measures in India, against such gross ongoing unethical practices in pharma marketing.

It is worth mentioning here that all these expenses are part of the marketing budget of a company and the sum total of which is built into the ‘retail price to the patients’ of the respective drugs, even in India.

Two broad processes for the same goal:

Thus it emerges, very broadly, there are two key processes followed by many in the pharma industry to achieve the same goal of increasing profit. These are as follows:

  • Marketing malpractices in various forms to influence prescription decision
  • Arbitrary increase of drug prices, for both branded and generic medicines

The justification:

Many global pharma majors still keep justifying, though the number of its believers is fast dwindling, that the high new drug prices have a linear relationship with the cost of new drug innovation. Even for argument’s sake one nods in favor, the critical question that needs to be answered is, if this is the basic or primary axle on which the wheel of innovation moves, won’t affordability and access to drugs for a significant number of the population be seriously compromised?

If not, why is this furor, across the world, is fast assuming a snowballing effect? Why are even the generic drug prices going up steeply even in the United States, where some of the largest Indian drug manufacturers are being questioned for the same by the competent authorities of the country?

I deliberated on a similar subject in my article titled, “The Next Frontier: Frugal Innovation For High-Tech Drugs”, published in this Blog on May 20, 2016.

Marketing malpractices:

Laws are fast catching up to book the offenders resorting to pharma marketing malpractices in most of the countries of the world, including China. This is vindicated by the fact that global pharma players are now paying billions of dollars a fine, in various countries, especially in the West.

Just as no criminal law can totally eliminate any crime, anywhere in the world, despite a heavy dent in pharma’s reputation related to this area, many companies still continue to indulge in such malpractices, blatantly, and even with some brazenness.

India:

Unfortunately, in India, the inertia to catch the bull by the horn and lack of governance in this regard continues, making patients pay a heavy price. As the above media report indicates, both MNCs and the local players indulge into this deplorable activity almost without any inhibition. As many industry watchers believe, some companies have started hiring these services through professional third parties just to create a facade for taking the high moral ground, as and when required, both with the government and also other stakeholders.

Initiating a step in this direction, on December 12, 2014, the DoP announced details of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, which became effective across the country from January 1, 2015. The communique also said that the code would be voluntarily adopted and complied with by the pharma industry in India for a period of six months from the effective date, and its compliance would be reviewed thereafter on the basis of the inputs received.

UCPMP, though not a panacea, was aimed at containing pharma marketing malpractices in India. However, as happened with any other voluntary pharma marketing code, be it of a global drug major or their trade associations, similar non-compliances were detected even by the DoP with voluntary UCPMP.  This gross disregard to the code, apparently prompted the DoP contemplating to make the UCPMP mandatory, with legal implications for non-compliance, which could possibly lead to revocation of marketing licenses.

In this context, it is worth recapitulating that the Union Minister of Chemicals and Fertilizer – Mr. Ananth Kumar, in his reply in the Indian Parliament, to a ‘Lok Sabha Starred Question No: 238’ on the UCPMP based on the inputs received, also had admitted:

“The Government had announced Uniform Code for Pharmaceutical Practices (UCPMP) which was to be adopted voluntarily w.e.f. 1st January, 2015 for a period of six months and has last been extended up to 30.06.2016. After reviewing the same it was found that the voluntary code was not working as expected. The Government consulted the stakeholders, including NGO’s / Civil Society members and after examining their suggestions it is now looking into the viability of making the Code Statutory.”

This seems to be yet another assurance, and expression of a good intent by the Union Minister. The fact today is, after extending the UCPMP in its original form up to June 30, 2016 with four extensions and despite the Government’s public admission that it is not working, by a circular dated August 30, 2016, the Government has informed all concerned, yet again, that voluntary UCPMP has now been extended ‘till further orders’.

This not only creates public apprehension on the DoP’s true intent on the subject, but also gives enough room for speculation regarding behind the scene power play by the vested interests to keep a mandatory UCPMP, having sufficient legal teeth, away, as long as possible. Are these forces then also visualizing its enforcement as an apocalypse for their business models in India too?

Thus, the possibility of containing pharma marketing malpractices in India is still charting in the realm of the decision makers’ assurances and no further.

Arbitrary drug price increases:

Arbitrary price increases of important drugs are drawing increasing public ire in the West, the latest being a 400 percent price increase of generic EpiPen of Mylan. This is now being considered yet another business malpractice in the pharma industry, as whole.

No robust regulatory or legal measure is now being followed in the West to contain the drug over pricing public health menace. Thus, it is increasingly assuming a critical political significance today to win over the voters, especially in the forthcoming Presidential election of the United States.

Thus, as reported by Reuters, on September 02, 2016, Hillary Clinton announced that, if elected, she would create an oversight panel to protect the consumers of the United States from large price hikes on longer-available, life-saving drugs and to import alternative treatments if necessary, adding to her pledges to rein in overall drug prices.

She would give the ‘Oversight Panel’ an aggressive new set of enforcement tools, including the ability to levy fines and impose penalties on manufacturers when there has been an unjustified, outlier price increase on a long-available or generic drug.

On September 08, 2016, reacting to these proposed measures articulated by Hilary Clinton, the global CEO of the world’s largest pharma player reportedly commented, as expected, that it “will be very negative for innovation.”

Nonetheless, the bottom-line is, even in the United Sates, a transparent mechanism to deal with arbitrary price increases of the existing important medicines, still charts in the realm of several assurances of the probable decision makers, just as it is India to effectively deal with pharma marketing malpractices.

A global CEO’s lone voice stands out:

In this context, I would start with yet another example of astronomical price increase of a widely used anti-diabetic product, besides EpiPen of Mylan. According to Dr. Mayer Davidson, Professor of Medicine at the Charles R. Drew University of Medicine and Science in Los Angeles, who has carefully tracked the rapid and repeated increases, from 2011 to 2013 the wholesale price of insulin went up by as much as 62 percent in the United States. Whereas, from 2013 to 2015 the price jumped again, from a low of 33 percent to as much as 107 percent.

In the midst of this scary situation, a solitary and apparently a saner voice from the global pharma industry stands out. According to an article published in the Forbes Magazine on September 06, 2016, Brent Saunders, CEO of Allergan, ‘explicitly renounced egregious price increases.’ Saunders also said that the industry needs to ‘end its addiction to price hikes far in excess of inflation, often taken several times in a single year.’ While outlining his company’s “social contract with patients,” Saunders vowed that Allergan would:

  • Limit price increases to single-digit percentages, “slightly above the current annual rate of inflation,” net of rebates and discounts.
  • Limit price increases to once per year.
  • Forego price increases in the run-up to patent expiration, except in the case of corresponding cost increases.

Though this seems to be a lone voice in the pharma industry, it makes the CEO stand much taller than his peers.

India:

On this score, India has already put in place the ‘National Pharmaceutical Pricing Authority’ to regulate the drug prices of primarily those falling under the ‘National List of Essential Medicines (NLEM)’. However, it is a different matter that as per its own public admission, NPPA is still unable to strictly enforce these price controls, with significant incidences of non-compliance. Therefore, the net benefits to the patients in India for having this mechanism, is indeed arguable.

The core issue:

All that we witness in this area are mostly assurances, promises and good intent on the part of various Governments of different political dispensation, over the last several decades. The same indifference to public health care, in general, continues. Nothing seems to be working effectively in the public health care space of the country, even today. A large section of patients, bearing the tough burden of the highest out of pocket health expenditure in India, are under significant consequential stress of all kinds.

An important part of this scenario is well-captured in the statement of the erstwhile Secretary of the Department of Pharmaceuticals (DoP) – V K Subburaj at an event in New-Delhi on April 19, 2016, when he said, “In the entire world, I think our drug control system probably is the weakest today. It needs to be strengthened.”

Is it a legacy? Possibly yes. But, who will fix it, and what steps are we taking now for its satisfactory resolution?

The core issue in the pharmaceutical arena is, therefore, about striking an optimal balance between drug profitability and patient affordability, to avoid any adverse impact on access to drugs for a large majority of population in the world.

Conclusion:

Thus, it appears to me, if those who now decide for the people’s health interest, also refuse to wake up from deep slumber and remain as indifferent as before, soon we may hear or read or experience yet another or more of similar deplorable developments, having serious adverse repercussions on the patients.

Interestingly, despite such incidents, pharma stocks remain generally unaffected and buoyant. Its overall trend continues heading north, factoring-in that no implementable Government action is forthcoming, for obvious reasons. Consequently, pharma business remains as robust as ever, but the patients continue to suffer increasingly more.

Pharma industry in general, has been seriously attempting to wash its hands off for this scary emerging situation, since long. It blames the governments for trying to throttle the money spinning business with ‘unnecessary’ regulations, as discussed above, for something that is only the state responsibility, as they perceive. The governments, in turn, blame the industry and try to regulate it more strictly. Invariably, the patients in need of right and affordable medical care get caught in this cross-fire – some succeed to overcome the health crisis, but mostly exposing themselves to huge financial uncertainty in the future, many others can’t.

When the business continues to flourish with current business ‘practices’, why would the pharma players bother about rapidly tarnishing industry reputation, and public outcry? Does it really matter at all on the ground, for running a money spinning business machine, especially when there exists a fair chance of stalling the new laws and policies, with deep pockets, as alleged by many?

In this scenario, what else a common man would do while falling seriously ill, except praying to the almighty for divine care and blessings for a speedy recovery, along with possibly lamenting, it’s déjà vu in the pharma industry?

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.