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Beyond ‘The Magic Moment’ of New Drug Marketing Approval

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“Uncontrolled clinical trials are causing havoc to human life. There are so many legal and ethical issues involved with clinical trials and the government has not done anything so far.”

This is exactly what the Supreme Court of India observed while responding to a Public Interest Litigation (PIL) on the subject in January 2013.

While Indian regulators with the active intervention of the Supreme Court are trying to grapple with, besides others, the basic ‘human rights’ aspect of the Clinical Trial (CT), many countries in different parts of the world are moving much ahead at a brisker pace. They have started thinking and putting in place more patient centric newer drug approval systems and also, in tandem, hastening the process of bringing new drugs to the market.

Current general scenario in CT:

Currently, after pre-clinical studies and before applying for regulatory approval, a new drug has to be tested on volunteers in randomized studies to prove its efficacy and safety on patients. Relatively short duration of new drug trials can hardly establish long-term safety and efficacy, which are now arrived at through extrapolation of data collected during CT period.

It is worth noting, the overall situation changes dramatically after launch of these products, as their usage expands from a relatively smaller number of CT volunteers to millions of real-world patients.

In a situation like this, unrealistic expectation of patients’ safety in perpetuity based primarily on extrapolation of very limited CT data is being increasingly questioned today.

That is why, on going post-marketing surveillance, which is also known as a Phase IV CT, is considered as a much more effective process to gauge relative superiority of the drug against the existing ones in terms of both efficacy and safety on a longer term.

That said, today one reads and hears umpteen number of accusations for almost lack of any meaningful response on the part of the pharmaceutical companies, in general, towards revelations of post-marketing surveillance data. This could, in turn, expose the patients to various types of risks, including wasteful healthcare expenditure.

The ‘Magic Moment’ in the present regulatory process:

A recent paper highlights a single “Magic Moment” between pre and post-licensing processes in the current drug-approval model in many countries. In this system, the use of a drug is tightly controlled in a narrowly defined pre-licensing population. Thus, CTs are also conducted on such pre-defined and relatively homogeneous volunteers, who are generally free from complicating conditions.

However, after ‘The Magic Moment’ of marketing approval, a large number of heterogeneous patient population, with many of them on multiple therapy, also use these new products in uncontrolled settings. Situations as these had led to post-marketing major drug withdrawals like, Vioxx and Avandia due to patients’ safety.

These grave concerns have led to a strategic shift in the drug regulatory approval scenario throwing open new ideas in the drug approval process.

Adaptive Licensing:

To find the right answer to this vexing issue the drug regulators in many countries are  reportedly seriously contemplating to imbibe a process that will continuously help analyzing information through ongoing post-marketing surveillance data. Continuous medical data analysis like this will enable the regulators to modify their earlier decisions on marketing approval and also medical reimbursements related to pricing reasons.

This new process is called ‘Adaptive Licensing (AL)’, which is expected to benefit the overall healthcare system, by not allowing medical reimbursement of treatments with those drugs, which will provide negligible benefit over existing low cost therapies.

Difference between current mechanism and AL:

According to a ‘Health Canada’ paper titled, “The Path to Adaptive Drug Regulation”, the difference between the two is as follows:

Current system:

As explained above, post-licensing i.e. after ‘The Magic Moment’ of regulatory approval, treatment population grows rapidly and treatment experiences do not contribute to evidence generation.

Adaptive Licensing:

After initial license, treated patients grow more slowly due to regulatory restrictions. Patient experience is captured to contribute to real-world information. The marketing license is also modified accordingly from time to time.

Most desirable for many drugs:

Experts in this field opine that AL will help bringing in alignment of all required processes so important for a new drug seen from patients’ perspective like, R&D, regulatory approval and market access with the active involvement of all stakeholders like, the pharmaceutical companies, the drug regulator, payors/insurance companies and also the researchers.

In the AL system, a transparent drug development process will provide enough data on risk-benefit profile of the concerned drug to satisfy the drug regulator for its quick marketing authorization on pre-determined types of patients.

Such approval will follow real-life monitoring of efficacy and safety for modification of the drug license accordingly, wherever and whenever required.

Thus, AL is expected to strike a right balance balance between timely access to new drugs for the patients and the need to evaluate real time evolving information on safety and efficacy leading to a well-informed patient centric decisions by the drug regulators.

A continuous regulatory evaluation and decision-making process:

AL intends to evaluate a drug through its entire life span.  It has been reported that during this long period, clinical and other data will “Continue to be generated on the product through various modalities, including active surveillance and additional studies after initial and full licensing. The artificial dichotomy of pre vs. post licensing stages (‘The Magic Moment’) will be replaced by graded, more tightly managed, but more timely and potentially more cost-effective market entry and market stability.”

Not necessary for all drugs in the near term:

It is worth noting that AL system may not perhaps be required for all pharmaceutical or biologic products and will not totally replace the current system of drug licensing process, at least in the near term.

AL process may immediately be followed only for those products with a favorable risk-benefit drug profile as demonstrated in the initial data and there is a robust reason for early market entry of this drug to meet unmet needs, simultaneously with ongoing studies.

The ‘Magic Moment’ freezes in India…in perpetuity:

As per the Drugs and Cosmetics Act of India, after obtaining drug marketing approval from the regulators, concerned pharmaceutical companies are required to follow the pharmacovigilance system in the country to own the responsibility and liability of the drugs as enunciated in the Schedule Y of the Act. Unfortunately, this is hardly being followed in India, ignoring patients’ safety blatantly.

With the plea that most products launched in India are already being marketed in many developed markets of the world, the concerned companies prefer to depend on clinical experiences in those markets. This attitude totally bypasses the regulatory requirement to follow a robust pharmacovigilance system in India. Indian drug regulators also do not seem to be much concerned about this important patients’ safety related requirements, very surprisingly not even for biosimilar drugs.

However, the current ground realities are quite different. As we witness today, there does not seem to be much difference in time between international and India launch of innovative products. Thus, the argument of gaining medium to long-term experience on safety and efficacy from international data related to these drugs, does not seem to hold any water at all.

On the contrary, some drugs withdrawn from the international markets on safety grounds are still available in India, despite ire and severe indictment even from the Indian Parliamentary Standing Committee.

In a situation like this, AL process of Marketing approval for selected newer and innovative drugs may be considered by the Indian Drug Regulators, just not to be more patient centric, but also to help evaluating  pricing decisions of innovative drugs failing to demonstrate significantly better treatment outcomes as compared to the existing ones.

A recent example of AL:

One of the latest drugs, which reportedly will undergo such regulatory scrutiny of USFDA is Tacfidera (dimethyl fumarate) used for the treatment of multiple sclerosis, approved in April 2013 and costing US$ 54,900 per patient per year.  Interestingly, Tacfidera, before the drug can find itself on a formulary, will need to demonstrate its effectiveness in the real world.

The report indicates, “the first six months after a drug launch are always about educating payers about its benefits, and while most large payers are likely to make a decision to reimburse the drug in the next twelve months, data collection will continue and changes in policies might be made at a later date.”

Thus, in the years ahead, whether a new drug will become a blockbuster or not will very largely be decided by the ongoing real world data. If the promise of a drug diminishes at any point of time through clinical data, it will certainly going to have consequential financial and other adverse impacts.

Another interesting recent development:

Under new pharmacovigilance legislation in Europe, the European Medicines Agency has reportedly announced the list of over 100 drugs that soon will bear the “black triangle” logo. This initiative is directed to encourage both the doctors and patients to report side effects to enable close monitoring of drug safety.

Criteria to include drugs under additional monitoring are:

  • Medicines authorized after January 1, 2011 that contain a new active substance.
  • Biologics for which there is limited post-marketing experience.
  • Medicines with a conditional approval or approved under exceptional circumstances.
  • Medicines for which the marketing-authorization holder is required to carry out a post-authorization safety study (PASS).
  • Other medicines can also be placed under additional monitoring, based on a recommendation from the European Medicines Agency’s Pharmacovigilance Risk Assessment Committee (PRAC).

Conclusion:

Global regulatory experts do believe that in the concept of AL, there are still some loose knots to be tightened expeditiously to make it a fully implementable common drug marketing authorization process.  Appropriate pilot projects need to be undertaken in this area to establish beyond any doubt that AL will be decisively more preferable to the current regulatory process.

As and when AL will become the preferred drug-licensing pathway across the world, it is expected to offer greater real benefits of new drug development to the patients for their optimal use at an affordable price.

That said, some other experts do opine as follows:

“No matter how fast the authorization process operates, the merits of innovation will not be felt until they reach patients. And the barrier between authorization and patient access remains, in most of Europe, the issue of reimbursement.”

While all these are fast developing in the global CT scenario, in the jangle of Clinical Trials‘ in India, ‘Adaptive Licensing’ has still remained a critical missing ingredient even to encourage a wider debate.

By: Tapan J. Ray

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

Pharma Marketing in India: 10 Chain Events to Catalyze a Paradigm Shift

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In the matured markets of the world pharmaceutical marketing is quite different in many respect as compared to India. Besides doctors, different sets of customer groups like, healthcare providers, patient advocacy groups, pharmacy benefit managers, clinical assessment authorities play various critical roles for use and consumption of branded or generic pharmaceutical products and related healthcare services.

Quite in contrast, even today, individual doctors have continued to remain almost the sole target customers for the pharmaceutical players in India. This is mainly because, by and large, they are the only decision makers for usage of medicines and other healthcare facilities for most of the patients in the country.

Heralding a new paradigm:

As indicated above, though the current pharmaceutical marketing strategies continue to revolve mostly around the doctors, a distinct change, albeit slowly though, is now anticipated within the pharmaceutical marketing space in India.

Gradual emergence of healthcare providers with medical insurance and other related products, patient advocacy groups and standard treatment guidelines, just to name a few, are expected to facilitate heralding a new paradigm in the strategy dynamics of the Indian Pharmaceuticals Market (IPM) in the coming years. These changes will not be incremental in any way, but disruptive and radical in nature, as they will fully evolve.

This process of transformation, mainly driven by Government policy reform measures like, ‘Universal Health Coverage (UHC)’, ‘Free distribution of medicines’, mandatory prescriptions in generic names, could make the current pharmaceutical business strategy models of majority of companies irrelevant and obsolete, in not too distant future.

It is worth noting that the Government will spend around Rs.14,000 Crores (US$ 2.60 billion, approximately) from the year 2014 to 2017 just on medicine purchases at highly negotiated/discounted prices for free distribution to all through Government hospitals and dispensaries.

10 Chain events envisaged: 


In the evolving scenario, following chain events, taking place almost in tandem, in my view, will gradually usher in a new pharmaceutical marketing paradigm in India:

1. In addition to ‘Universal Health Coverage’, there will be a rapid increase in the number of other healthcare providers with innovative, tailor-made and value added schemes for various strata of the society.

2. This will trigger emergence of very powerful groups of negotiators for adopting treatment guidelines, pharmaceutical products usage and other healthcare related services.

3. These groups will have the wherewithal to strongly and significantly influence the doctors in their prescription and other treatment choices.

4. A significant proportion of the products that the pharmaceutical companies will market, a tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable.

5. Consequently, doctors will no longer be the sole decision makers for prescribing drugs and also the way they will treat the common diseases.

6. Pharmaco-economics or Health Technology Assessment (HTA) or outcome based pricing will gradually play an important role in pricing a healthcare products. Drug Price Control Order (DPCO 2013) has already signaled to this direction for a class of products.

7. An integrated approach towards disease prevention will emerge as equally important as treating diseases.

8. A shift from just product marketing to marketing a bundle of value added comprehensive disease management processes along with the product would be the order of the day.

9. More regulatory control measures on pharmaceutical sales and marketing are expected to be put in place by the Government to prevent alleged widespread sales and marketing malpractices in the country.

10. Over the counter (OTC) medicines, especially those originated from natural products to treat common and less serious illnesses, will carve out a sizable share of the market, as appropriate regulations would be put in place, adequately supported by AYUSH. This will be fueled by overall increase in general health awareness of the population.

Trapped in an ‘Archaic Strategy Cocoon’:

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

It is high time to come out of this cocoon and confront the ‘writing on the wall’ upfront, if not try to hasten the process of the evolving changes, boldly and squarely. This will require a strategic long term vision to be implemented in an orderly way to effectively convert all these challenges into possible high growth business opportunities.

A differentiated composite value delivery system:

Moreover, in today’s post product patent regime in the country, product pipelines of the domestic Indian companies with new ‘copycat’ versions of patented products have almost dwindled into nothing, making price competition in the market place even more ‘cut throat’.

In such type of changing environment, all pharmaceutical companies will be under tremendous pressure to create and deliver additional, well differentiated and composite value offerings, beyond physical products, to attract more patients, doctors, healthcare providers and others, in and around related disease areas, for business excellence.

Thus, ability to create and effectively deliver well-differentiated composite value offerings, along with the physical products, will separate men from the boys in the high growth pharmaceutical market of India, in the long run.

This could also possibly create an ‘Alibaba Effect’ for the successful ones in search of pots of gold in the pharmaceutical space of India.

New leadership and managerial skill set requirements:

In the new environment, required skill sets for both the leaders and the managers of Indian pharmaceutical companies will be quite different from what they are today. This will not happen overnight though, but surely will unfold gradually.

New skills:

Leaders and managers with knowledge in just one functional area like, R&D, manufacturing, marketing, regulatory, finance are unlikely to be successful without a broad-based knowledge in the new paradigm. To really understand and handle new types and groups of customers, they will need to break the operational silos and be proficient in other key areas of business too.

These professionals will require ensuring:

• Multi-functional expertise by rotating right people across the key functional areas, as far as possible, even with a stretch.

• Ability to fathom and correctly interpret patients’ clinical benefits against cost incurred to achieve the targeted clinical outcomes, especially in areas of new products.

• Insight into the trend of thought pattern of healthcare providers and other customers or influencers groups.

• Speed in decision-making and delivery…more importantly ability to take ‘first time right’ decisions, which can make or mar an important initiative or a commercial deal.

IPM growing fast, can grow even faster: 

India is now one of fastest growing emerging pharmaceutical markets of the world with 3rd global ranking in the volume of production and 13th in value terms. Domestic turnover of the industry is over US$ 13.1 billion in 2012 (IMS) representing around 1 percent of the global pharmaceutical industry turnover of US$ 956 billion (IMS 2011).

Since 1970, Indian pharmaceutical Industry has rapidly evolved from almost a non-entity to meeting around 20 percent of the global requirements of high quality and low cost generic medicines.

Financial reforms in the health insurance sector and more public investments (2.5% of the GDP) in the healthcare space during the 12th Five Year Plan Period will have significant catalytic effect to further boost the growth of the industry.

Stringent regulations and guidelines of the Government in various areas of pharmaceutical business in India are expected to be in place soon. Ability to ensure system-based rigid organizational compliance to those changing business demands in a sustainable way. will determine the degree of success for the pharma players in India.

One such area, out of many others, is the professional interaction of the Medical Representatives with the doctors and other customer groups.

Require a ‘National Regulatory Standard’ for Medical Representatives in India:

Medical Representatives (MRs) currently form the bedrock of business success, especially for the pharmaceutical industry in India. The Job of MRs is a tough and high voltage one, laced with moments of both elation and frustration, while generating prescription demand for selected products in an assigned business territory.

Though educational qualifications, relevant product and disease knowledge, professional conduct and ethical standards vary widely among them, they are usually friendly, mostly wearing a smile even while working in an environment of long and flexible working hours.

There is a huge challenge in India to strike a right balance between the level and quality of sales pitch generated for a brand by the MRs, at times even without being armed with required scientific knowledge and following professional conduct/ ethical standards, while doing their job.

Straying from the right course:

A recent media report highlighted that ‘Indian subsidiary of a Swiss pharma major has run into trouble with some executives allegedly found to be inflating and presenting fabricated sales data for an anti-diabetic drug.’

The report also indicated that officials from mid-management ranks to sales representatives were allegedly involved in those unethical practices. The company has responded to this incidence by saying that the matter is still under investigation.

It is critical for the MRs not just to understand scientific details of the products, their mode of action in disease conditions, precautions and side effects, but also to have a thorough training on how to ‘walk the line’, in order to be fair to the job and be successful.

As MRs are not just salesmen, they must always be properly educated in their respective fields and given opportunities to constantly hone their knowledge and skills to remain competitive. The role of MRs is expected to remain important even in the changing scenario, though with additional specialized skill sets.

Unfortunately, India still does not have a ‘National Code of Conduct or Regulatory Standards’ applicable to the MRs.

Only the clause 4 of ‘The Magic Remedies (Objectionable Advertisement) Act, 1954’ deals with misleading advertisements. It is about time to formulate not only a ‘National Code on Pharmaceutical Marketing Practices’, but also a mandatory ‘Accreditation program’ and transparent qualifying criteria for the MRs for the entire pharmaceutical industry in India, just like many other countries of the world.

‘Central Drugs Standard Control Organization (CDSCO)’ of the Ministry of Health and Family Welfare of the Government of India in its website lists the “Laws Pertaining to Manufacture and Sale of Drugs in India”. However, it does not specify any regulation for the MRs nor does it recommend any standard of qualification and training for them, which is so critical for all concerned.

There are currently no comprehensive national standards for educational qualification, knowledge, ethics and professional conduct for the MRs. In the absence of all these, it is difficult to fathom, whether they are receiving right and uniform inputs to appropriately interact with the medical profession and others in a manner that will benefit the patients and at the same remain within the boundary of professional ethics and conduct.

Thus, a ‘National Regulatory Standard’ for MRs, I reckon, is absolutely necessary in India… sooner the better.

Global pharmaceutical players:

Facing a huge patent cliff, global pharmaceutical companies are now fast gaining expertise in the ball game of generic pharmaceuticals, especially in the developing markets of the world.

In the emerging markets like India, where branded generic business dominates, global pharmaceutical players seem to be increasingly finding it lucrative enough for a sustainable all round business growth.

However, to outpace competition, they too will need to capture the changing dynamics of the market and strategize accordingly without moaning much about the business environment in the country.

On the other hand, if majority of Indian pharmaceutical companies, who are not yet used to handling such changes, are caught unaware of this evolving scenario, the tsunami of changes, as they will come, could spell a commercial disaster, endangering even very survival of their business.

Managing transition:

During ensuing phase of transition in India, pharmaceutical companies would require to:

• Clearly identify, acquire and continuously hone the new skill sets to effectively manage the evolving challenge of change.

• Get engaged, having clarity in the strategic content and intent, with the existing public/private healthcare providers and health insurance companies like, Mediclaim, ICICI Lombard, large corporate hospital chains, retail chain chemists and others, proactively.

• Drive the change, instead of waiting for the change to take place.

• Ensure that appropriate balance is maintained between different types of marketing strategies with innovative ways and means.

Conclusion:

It may not be easy for the local Indian players to adapt to the new paradigm sooner and compete with the global players on equal footing, even in the branded generic space, with strategies not innovative enough and lacking required cutting edges.

In my view, those Indian Pharmaceutical companies, who are already global players in their own rights and relatively well versed with the nuances of this new ball game in other markets, will have a significant competitive edge over most other domestic players.

If it happens, the global-local companies will offer a tough competition to the local-global players, especially, in the branded generic space with greater cost efficiency.

So far as other domestic players are concerned, the fast changing environment could throw a new challenge to many, accelerating the consolidation process further within the Indian pharmaceutical industry.

As the new paradigm will herald, catalyzed by the above 10 chain events, there will be a metamorphosis in the way pharmaceutical marketing is practiced in India. A well-differentiated composite value delivery system would then, in all probability, be the name of the winning game.

By: Tapan J. Ray

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

 

Pharma Innovation Absolutely Critical: But NOT Shorn from Ethics, Propriety, Compliance and Values

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Significant value added innovation is the bedrock of progress of the pharmaceutical industry and is essential for the patients. This is a hard fact.

However, this current buzzword – ‘innovation’ can in no way be shorn from soft business necessities like, ethics, propriety, compliance and values… not just for longer term sustainability of business, but more in the larger interest of patients and patient groups.

Most importantly, ‘ethics, propriety, compliance and values’ are not meant for mere display  in the corporate websites like, any other business showpieces. These should neither be leveraged to create a false positive impression in the minds of the stakeholders with frequent PR blitzkriegs.

The creators of these soft ‘X factors’ are now being increasingly hauled up for gross violations of the same by the Governments in various parts of the world .These are not just legal issues. The net impact of all such acts goes much beyond.

In this article, I shall deliberate on these continuing and annoying issues both in global and local perspectives, quoting relevant examples at random.

The sole purpose of my argument is to drive home that all such repeated gross violations, as reported in the media, go against patients’ interests, directly or indirectly. None of these incidents, in any way, can be negated with stories of great innovations or with any other make of craftily designed shields.

Under increasing scrutiny in the developed world:

Ethics, propriety and business value standards of big pharma, besides various types of legal compliance, are coming under increasing stakeholders’ scrutiny, especially in the developed markets of the world.

Very frequently media reports from across the world, highlight serous indictments of the Government and even judiciary for bribery, corrupt business practices and other unbecoming conduct, aimed at the the global mascot for healthcare.

It is indeed flabbergasting to note that more and more corporates, with all guns blazing at the same time, publicize with equal zest various initiatives being taken by them to uphold high ethical standards and business practices, if not propriety, as the juggernaut keeps on moving forward, unabated.

The scope of ‘ethics and propriety’:

The scope of ‘ethical business conducts, propriety and value standards’ of a company usually encompasses the following, among many others:

  • The employees, suppliers, customers and other stakeholders
  • Caring for the society and environment
  • Fiduciary responsibilities
  • Business and marketing practices
  • R&D activities, including clinical trials
  • Corporate Governance
  • Corporate espionage

That said, such scope should not be restricted to the top management, but must be allowed to percolate downwards in a structured manner, looking beyond the legal and regulatory boundaries.

Statistics of compliance to ‘codes of business ethics and corporate values’ are important to know, but the qualitative change in the ethics and value standards of an organization should always be the most important goal to drive any corporation and the pharmaceutical sector is no exception.

‘Business Ethics and Values’ in the globalized economy:

Globalization of business makes the process of formulating the ‘codes of ethics and values’ indeed very challenging for many organizations in many ways. This is mainly because, the cultural differences at times create a conflict on ethics and values involving different countries.

For this purpose, many business organizations prefer to interact with the cultural and religious leaders in the foreign countries, mainly to ascertain what really drives culturally diverse people to act in certain ways.

With the wealth of knowledge of the local customs and people, the cultural and religious leaders can help an organization to unify the code of ethics and values of the globalized business.

Such leaders can also help identifying the ‘common meeting ground of minds’ from a specific country perspective, after carefully assessing the cultural differences, which are difficult to resolve in the near term.

The ‘common meeting ground of minds’ within a given society, thus worked out, could form the bedrock to initiate further steps to strengthen global business standards of ethics and values of an organization.

OECD with USA started early enacting ‘Foreign Corrupt Practices Act (FCPA)’: 

To prevent bribery and corrupt practices, especially in a foreign land, in 1997, along with 33 other countries belonging to the ‘Organization for Economic Co-operation and Development (OECD)’, the United States Congress enacted a law against the bribery of foreign officials, which is known as ‘Foreign Corrupt Practices Act (FCPA)’.

This Act marked the early beginnings of ethical compliance program in the United States and disallows the US companies from paying, offering to pay or authorizing to pay money or anything of value either directly or through third parties or middlemen. FCPA currently has significant impact on the way American companies are required to run their business, especially in the foreign land.

A dichotomy exists with ‘Grease Payment’:

OECD classified ‘Grease payment’ as “facilitating one, if it is paid to government employees to speed up an administrative process where the outcome is already pre-determined.”

In the FCPA of the US, ‘Grease Payment’, has been defined as “a payment to a foreign official, political party or party official for ‘routine governmental action,’ such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official’s action, only its timing.”

Many observers opine, ‘Grease Payments’ is an absolute dichotomy to the overall US policy for ethical standards and against corruption.

Currently besides US, only Canada, Australia, New Zealand and South Korea are the countries that permit ‘Grease payments’.

Notwithstanding, the governments of the US and four other countries allow companies to keep doing business without undue delay by making ‘Grease Payments’ to the lower government officials, such payments are considered illegal in most other countries, in which they are paid, including India.

In India such a business practice is viewed as bribery, which is not only perceived as unethical and immoral, but also a criminal offense under the law of the land. Even otherwise, right or wrong, ‘Grease Payments’ are viewed by a vast majority of the population as a morally questionable standard of ‘business conduct’.

Many companies are setting-up the ethical business standards globally:

While visiting the website of especially the large global and local companies, one finds that all these companies, barring a very few exceptions, have already put in place a comprehensive ‘code of business ethics and values’. Some of these companies have also put in place dedicated code compliance officers across the globe.

‘Practice as you preach’:

Despite all these commendable initiatives towards establishing corporate codes of business ethics and values, the moot question that keeps haunting many times and again: “Do all these companies ‘practice what they preach’ in real life?”

Instances are too many for breach in ethics, propriety and value standards:

The media is now increasingly reporting such instances of violations both locally and globally.

Some Indian examples: (At random, not in a chronological order)

Criminal drug regulatory manipulation:

One of India’s top pharma players reportedly will pay a record fine of US$ 500 million in the US for lying to officials and selling badly made generic drugs.

The company has pleaded guilty to improper manufacturing, storing and testing of drugs, closing a year long civil and criminal investigation into the matter.

Compensation for deaths related to Clinical Trials not paid:

In 2011 the Drug Controller General of India (DCGI) reportedly summoned nine pharma companies on June 6 to question them on the amount of compensation they have decided to pay the ‘victims of their clinical trials’, which is a mandatory part of any clinical trial, or else all other trials of these nine companies going on at that time or yet to start, will not be allowed.

Clinical Trial is another area of pharmaceutical business, especially in the Indian context, where more often than not, issues related to ethics and values are being raised. In an article titled, ‘Clinical trials in India: ethical concerns’ published by the World Health Organization (WHO) following observations have been made:

“The latest developments in India reflect a concerted effort on the part of the global public health community to push clinical trials issues to the fore in the wake of several high-profile cases in which pharmaceutical companies were shown to be withholding information from regulators.”

Alleged marketing malpractices:

In 2010, the Parliamentary Standing committee on Health reportedly expressed concern that the “evil practice” of inducement of doctors by the pharma players continues.

Congress MP Jyoti Mirdha sent a bunch of photocopies of air tickets to Prime Minister Manmohan Singh to claim that doctors and their families were ‘beating the scorching Indian summer’ with a trip to England and Scotland, courtesy a pharmaceutical company.

30 family members of 11 doctors from all over the country reportedly enjoyed the hospitality of the concerned company.

Department of Pharmaceuticals reportedly roped in the Revenue Department under Finance Ministry to work out methods to link the money trail to offending companies.

Some global examples: (At random, not in a chronological order)

United States Government sues a Swiss pharma major for alleged multi-million dollar kickbacks:

The United States Government very recently reportedly announced its second civil fraud lawsuit against a Swiss drug major accusing the company of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs.

Fraud fines: 

Two largest drug makers of the world reportedly paid US$ 8 billion in fraud fines for repeatedly defrauding Medicare and Medicaid in the USA over the past decade.

Denigrating generics:

Another global pharma major reportedly has been recently fined US$ 52.8 million for denigrating generic copies.

Drug overcharging: 

Another global drug major reportedly stirred an ethics scandal and paid US$ 499 million towards overcharging the US government for medicines.

Bribing doctors:

  • A top global pharma player reportedly paid total US$ 60.2 million to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines. 
  • Another European pharma group reportedly was fined US$ 3bn after admitting bribing doctors and encouraging the prescription of unsuitable antidepressants to children.

 Concealment of important facts:

A judge in USA reportedly ordered a large pharma company to pay more than $1.2 billion in fines after a jury found that the company had minimized or concealed the dangers associated with an antipsychotic drug.

Off-label marketing:

  • A Swiss pharma major reportedly agreed to pay US$ 422.5 million to resolve an investigation into alleged off-label promotion of a drug, as well as civil allegations relating to five other products.
  • The U.S. Justice Department reportedly hit an American drug major with a US$ 322 million penalty for illegally promoting a drug before it received approval by the Food and Drug Administration for that condition.

Other illegal marketing practices:

Yet another European pharma group was reportedly fined USD 34 million by a court in the United States for illegal marketing practices for its medicine.

‘Illegal’ Clinical Trials: 

It was revealed on May 17, 2013 that global pharmaceutical companies reportedly paid millions of pounds to former communist East Germany to use more that 50,000 patients in state-run hospitals as unwitting guinea pigs for drug tests in which several people died.

All these are some random examples of alleged malpractices associated with ‘ethics, propriety, compliance and values’ in the pharma world, both local and global.

Middle and lower management becomes the ‘fall guy’: 

It is interesting to note that whenever, such incidents take place, the fingers are usually pointed towards the middle or lower management cadre of the corporations concerned for violations and non-compliance.

Corporate or top management ownership of such seemingly deplorable incidents still remains confined within a ‘black box’ and probably a distant reality.

Public perception is not encouraging:

In the pharmaceutical sector all over the world, many business practices have still remained very contentious, despite many well-publicized attempts of self-regulation by the industry. The flow of complaints for alleged unethical business practices have not slowed down either, across the world, even after so many years of self-regulation, penalty and severe indictments.

Government apathy in India:

Nearer home, the Government apathy, despite being pressured by the respective Parliamentary Committees and sometimes including judiciary in repose to Public Interest Litigations (PIL), has indeed been appalling, thus far.

The Department of Pharmaceuticals of the Government of India has already circulated a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for stakeholders to comment on it. The final UCPMP, when it comes into force, if not implemented by the pharmaceutical players in its ‘letter and spirit’, may attract government’s ire in form of strong doses of regulatory measures. However, the moot question remains, will the UCPMP come at all?

Similar issues are there in drug regulatory areas falling under the Ministry of Health, especially in the clinical trial area. In this matter, very fortunately Supreme Court has intervened against a Public Interest Litigation (PIL). Thus, one can expect to witness some tangible steps being taken in this area, sooner than later.

Walking the talk:

The need to formulate and more importantly effectively implement ‘Codes of Business Ethics & Values’ should gain increasing relevance in the globalized business environment, including in India.

It appears from the media reports, many companies across the world are increasingly resorting to ‘unethical behavior, impropriety and business malpractices’ due to intense pressure for business performance, as demanded primarily by the stock markets.

There is no global consensus, as yet, on what is ethically and morally acceptable ‘Business Ethics and Values’ across the world. However, even if these are implemented in a country-specific way, the most challenging obstacle to overcome by the corporates would still remain ‘walking the talk’ and owning responsibility at the top.

Conclusion:

Pharmaceutical innovation will continue to remain the launch pad for the industry growth in the battle against diseases of all types, forms and severity. However, that alone should in no way deserve to receive encouragement from any corner shorn from Ethics, Propriety, Compliance and Values.

Balancing pharmaceutical innovation with Ethics, Propriety, Compliance and Values, I reckon, will in turn help striking a right balance, to a considerable extent, between pharmaceutical innovation and public health interest for everyones’ satisfaction, mostly the patients.

Being equipped with the wherewithal to bring new drugs for the global population and being the fundamental source of growth momentum for the generic drug industry of the world, the innovator companies are expected to lead by setting examples in this area too. After all, as the saying goes:

“Caesar’s wife ought to be above suspicion. ‥Caesar himself ought to be so too”.

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.

 

 

Patented Drugs’ Pricing: Apprehensive Voices Could Turn into a Self-Defeating Prophecy

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On February 21, 2013, the Department of Pharmaceuticals in a communication to the stakeholders announced that the committee to examine the issues of ‘Price Negotiations for Patented Drugs’ has since submitted its report to the Department. Simultaneously the stakeholders were requested to provide comments on the same urgently, latest by March 31, 2013.

This committee was constituted way back in 2007 to suggest a system that could be used for price negotiation of patented medicines and medical devices ‘before their marketing approval in India’.

In that process, the Committee reportedly had 20 meetings in two rounds, where the viewpoints of the Pharmaceutical Industry including FICCI, NGOs and other stakeholders were taken into consideration.

Simultaneously, the Committee had commissioned a study at the Rajiv Gandhi School of Intellectual Property Law and Indian Institute of Technology (IIT), Kharagpur to ascertain various mechanisms of price control of Patented Drugs in many countries, across the world. The Committee reportedly has considered this ‘Expert Report’ while finalizing its final submission to the Government.

Scope of recommendations:

The Committee in its final report recommends price negotiations for Patented Drugs only for:

  • The Government procurement/reimbursement
  • Health Insurance Coverage by Insurance Companies

Issues to remain unresolved despite price negotiation:

In the report, the Committee expressed the following view:

  • Even after calibrating the prices based on Gross National Income with Purchasing Power Parity of the countries where there are robust public health policies, with the governments having strong bargaining power in price negotiation, the prices of patented medicines will still remain unaffordable to a very large section of the population of India. Such countries were identified in the report as UK, Canada, France, Australia and New Zealand
  • The government should, therefore, extend Health Insurance Scheme covering all prescription medicines to all citizens of the country, who are not covered under any other insurance /reimbursement scheme.

Three categories of Patented Drugs identified:

The committee has identified three categories of patented drugs, as follows:

1. A totally new class of drug with no therapeutic equivalence

2. A drug that has therapeutic equivalence but also has a therapeutic edge over the  existing ones

3. A drug that has similar therapeutic effectiveness compared to the existing one

The Committee recommended that these three categories of Patented Drugs would require to be treated differently while fixing the price.

A bullish expectation of the Government on Patented Drugs market:

The report highlights that the Indian Pharmaceutical Industry has currently registered a turnover exceeding US$ 21 billion with the domestic turnover of over US$ 12 billion.

The report also estimates that the total value turnover of patented medicines in India, which is currently at around US$ 5 million, is expected to grow at a brisk pace due to the following reasons:

  • Rapid up-gradation of patent infrastructure over the past few years to support new patent laws with the addition of patent examiners.
  • Decentralization of patent-filing process and digitization of records.
  • Increase of population in the highest income group from present 10 million to 25 million in next 5 years.

All these, presumably have prompted the Government to come out with a ‘Patented Drugs Pricing’ mechanism in India.

Pricing Mechanism in China: 

Just to get a flavor of what is happening in the fast growing neighboring market in this regard, let us have a quick look at China.

In 2007, China introduced, the ‘New Medical Insurance Policy’ covering 86 percent of the total rural population. However, the benefits have so far been assessed as modest. This is mainly because the patients continue to incur a large amount out of pocket expenditure towards healthcare.

There does exist a reimbursement mechanism for listed medicines in China and drug prices are regulated there with the ‘Cost Plus Formula’.

China has the following systems for drug price control:

  • Direct price control and competitive tendering

In this process the Government directly sets the price of every drug included in the formulary. Pharmaceutical companies will require making a price application to the government for individual drug price approval.The retail prices of the drugs are made based on the wholesale price plus a constant rate.

Interestingly, unlike Europe, the markup between the retail and wholesale price is much higher in China.

Apex body for ‘Patented Drugs Price Negotiation’: 

The Report recommends a committee named as ‘Pricing Committee for Patented Drugs (PCPD)’ headed by the Chairman of National Pharmaceutical Pricing Authority (NPPA) to negotiate all prices of patented medicines.

As CGHS, Railways, Defense Services and other Public/Private institutions cover around 23 percent of total healthcare expenditure, the members of the committee could be invited from the Railways, DGHS, DCGI, Ministry of Finance and Representatives of top 5 health insurance companies in terms of number of beneficiaries.

Recommended pricing methodology:

For ‘Price Negotiation of Patented Drugs’, the report recommends following methodologies for each of the three categories, as mentioned earlier:

  1. For Medicines having no therapeutic equivalence in India:
  • The innovator company will submit to the PCPD the details of Government procurement prices in the UK, Canada, France, Australia and New Zealand for the respective Patented Drugs.
  • In the event of the concerned company not launching the said Patented Drug in any of those reference countries, the company will require to furnish the same details only for those countries where the product has been launched.
  • The PCPD will then take into consideration the ratio of the per capita income of a particular country to the per capita income of India.
  • The prices of the Patented Drug would be worked out for India by dividing the price of the medicine in a particular country by this ratio and the lowest of these prices would be taken for negotiation for further price reduction.
  • The same methodology would be applicable for medical devices also and all the patented medicines introduced in India after 2005.

2. For medicines having a therapeutic equivalent in India:

  • If a therapeutically equivalent medicine exists for the Patented Drug, with better or similar efficacy, PCPD may consider the treatment cost for the disease using the new drug and fix the Patented Drug price accordingly
  • PCPD may adopt the methodology of reference pricing as stated above to ensure that the cost of treatment of the Patented Drug does not increase as compared to the cost of treatment with existing equivalent medicine

3. For medicines introduced first time in India itself:

  • PCPD will fix the price of such drugs, which are new in the class and no therapeutic equivalence is available, by taking various factors into consideration like cost involved, risk factors and any other factors of relevance.
  • PCPD may discuss various input costs with the manufacturer asking for documented evidence.
  • This process may be complex. However, the report indicates, since the number of medicines discovered and developed in India will not be many, the number of such cases would also be limited.

Negotiated prices will be subjected to revision:

The report clearly indicates that ‘the prices of Patented drugs so fixed will be subjected to revision either periodically or if felt necessary by the manufacturer or the regulator as the case may be.’

Strong voices of support and apprehension:

A.  Support from the domestic Indian Pharmaceutical Industry

Interestingly there have emerged strong voices of support on this Government initiative from the domestic Indian Pharmaceutical Industry, as follows:

  • Indian Pharmaceutical Alliance (IPA) has commented, “This policy is in the right direction as we know that Compulsory License (CL) cannot address the need of price control for all patented drugs, so this policy takes care of that issue of a uniform regulation of price control for all patented drugs”. IPA had also suggested that the reference pricing should be from the developed countries like UK, Australia and New Zealand where the 80 percent of the expenditure being incurred on public health is borne and negotiated by the government.
  • Pharmexcil - another pharma association has commented, “This report is balanced and keeps India’s position in the global market in mind while recommending a pricing formula.”
  • Federation of Pharma Entrepreneurs (FOPE) & Confederation of Indian Pharmaceutical Industry (CIPI) had submitted their written views to the Committee stating that FOPE supports price negotiation mechanism for Patented Drugs and strongly recommends that Compulsory License (CL) provisions should not get diluted while going for price negotiation.
  • Indian Drug Manufacturer Association (IDMA) supported price negotiation for all Patented Drugs and recommended that the issue of CL and price negotiation should be dealt separately.

However, the Organization of Pharmaceutical Producers of India (OPPI) feels, as the report indicates, ‘Price Negotiations for Patented Products’ should be made only for Government purchases and not be linked with ‘Regulatory Approval’. They have already expressed their serious concern on the methodology of ‘Patented Products Pricing’, as detailed in the above report.

B. Apprehension within the Government

Even more interestingly, such apprehensive voices also pan around the Government Ministries.

Though the DoP has proposed in the report that once the Patented Drug Policy is implemented the issuance of CL may be done away with, the Department of Industrial Policy and Promotion (DIPP) has reportedly commented with grave caution, as under:

“If it is decided that Price Negotiations on Patented Drugs should be carried out then, the following issues must be ensured:

(i) Negotiations should be carried out with caution, as the case for Compulsory License on the ground of unaffordable pricing of drugs [Section 84(b) of the Patent Act] will get diluted.

(ii) Re-Negotiations of the prices at periodic intervals should be an integral part of the negotiation process.”

C. Apprehension of other stakeholders 

The NGOs like, “Lawyer’s Collective HIV/Aids Unit” and “Medicines Sans Frontiers (MSF)” reportedly have urged that the price negotiation should not be allowed to weaken the position of CL for the Patented Drugs.

They had mentioned to the Committee as follows:

“As regards the plea of the patent holder that they had spent a large sum on R&D, one should note that most of the funds for R&D come from the Governments of their respective countries”. They further stated, “when the cost of production of the patented drugs is not known, it would be impossible to negotiate the price in a proper manner.”

The DoP report states that the other members of the NGOs also seconded these views.

Conclusion:

Not so long ago, on January 12, 2013, one of the leading dailies of India first reported that in a move that is intended to benefit thousands of cancer patients, Indian Government has started the process of issuing Compulsory Licenses (CL) for three commonly used anti-cancer drugs:

-       Trastuzumab (or Herceptin, used for breast cancer),

-       Ixabepilone (used for chemotherapy)

-       Dasatinib (used to treat leukemia)

For a month’s treatment drugs like, Trastuzumab, Ixabepilone and Dasatinib reportedly cost on an average of US$ 3,000 – 4,500 or Rs 1.64 – 2.45 lakh for each patient in India.

I reckon, a robust mechanism of ‘Price Negotiation for Patented Drugs’ could well benefit the global pharmaceutical companies to put forth even a stronger argument against any Government initiative to grant CL on the pricing ground for expensive innovative drugs in India. At the same time, the patients will have much greater access to patented drugs than what it is today, due to Government procurement of these drugs at a negotiated price.

On the other hand, apprehensive voices as are now being expressed on this issue, just hoping for drastic measures of grant of frequent CL by the Government for improved patients’ access to innovative drugs, could well turn into a self-defeating prophecy – making patients the ultimate sufferers, yet again, as happens most of the time.

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.

MCI asks Doctors to Prescribe Medicines in Generic Names

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Last week, on January 21, 2013, in a circular addressed to the Dean/Principals of all the Medical Colleges, Director of all the hospitals and Presidents of all the State Medical Councils, the Medical Council of India (MCI) called upon the doctors practicing medicine to prescribe Drugs with Generic names, as far as possible.

The MCI circular reinforced that all Registered Medical Practitioners under the Indian  Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 will comply with it without fail. At the same time, wide publicity of this regulation be given and necessary steps be taken to ensure observance of this provision in its letter and spirit.

PSC also recommended it:

Prior to this circular, Parliamentary Standing Committee (PSC) for Health and Family Welfare in its recommendation to the ‘Rajya Sabha’ of the Indian Parliament on August 4, 2010, also recommended prescription of medicines by their generic names.

The basic premises:

All these recommendations are reportedly based on the basic premises that high ‘Sales and Marketing’ costs of branded generic drugs in India can be significantly reduced, if prescription in generic names are encouraged, to make medicines available to patients at cheaper and much affordable prices.

‘Sales and Marketing’ expenses of ‘Branded’ drugs:

According to a recent report in BMJ every dollar that the pharmaceutical companies spend on “basic research,” US$ 19 goes toward promotion and marketing.

Another recent report from Forbes India titled “Will Pharma Companies Have to Stop ‘Gifting’ Doctors?“ states as follows:

“The budget that pharma companies have for freebies is huge. According to one estimate, the top 20 drug makers in India spend about $600 million a year on only freebies for doctors. It is still a paltry sum compared to the US, where drug makers spend $58 billion or more annually on marketing drugs, including freebies for doctors.

While the practice of giving gifts to doctors is rampant internationally, several sources told Forbes India that in India it borders on petty corruption. Doctors often refuse to write prescriptions unless they are offered at least Rs 50,000 in cash every time a new drug needs to be prescribed.” 

The prescribers’ ‘diplomatic’ stand:

It is interesting to note that some doctors reportedly are of the view that:

“For the benefit of patients and to get the best possible results, highest quality drugs with best possible pharmacological properties should be used by all doctors. If the quality of generic drugs is up to high standards, doctors should prescribe generic medicines.”

This comment needs to be taken considering that it has been made in response to the above MCI circular by a doctor. However, I reckon, in the real world such intent, as reflected in various independent retail audit reports, is hardly seen getting translated into reality, at least not just yet.

Ongoing debate on the quality issue with generic medicines:

Many opine that there could be a huge quality issue with generic medicines, which could make such drugs unsafe for the patients.

In response, other school of thought leaders often raise, among many others, the following questions:

  1. Are all generic medicines of dubious quality and branded generics are of good quality?
  2. If quality parameters can be doubted for both in many cases, why then raise this issue only in context of generic medicines?
  3. If the quality issues are not much with the larger companies and are restricted to only smaller companies, why then some branded generic drugs of smaller companies prescribed so much by the doctors?
  4. Currently many large companies market the same drugs both as generics and also as branded generics, why then the branded generic versions sell more than their generic equivalents, though manufactured by the same large companies?
  5. Why are the generic medicines available at ‘Jan Aushadhi’ outlets (though small in number) cost a fraction of their branded generic equivalents?
  6. Why do the doctors also not show much interest in prescribing generic medicines as of date?
  7. Why not those who argue that phonetically similar or wrong reading of generic names at the chemist outlets may cause health safety hazard to the patients, also realize that many already existing phonetically similar brand names in totally different therapy areas may cause similar hazards too?
  8. How does a doctor while prescribing a branded generic or generic medicine decide which ones are of good quality and which others are not?

A recent study:

As reported by the US FDA, ‘A recent study evaluated the results of 38 published clinical trials that compared cardiovascular generic drugs to their brand-name counterparts. There was no evidence that brand-name heart drugs worked any better than generic heart drugs. [Kesselheim et al. Clinical equivalence of generic and brand name drugs used in cardiovascular disease: a systematic review and meta-analysis. JAMA.  2008; 300(21) 2514-2526]‘.

Similar studies are also required in India to resolve much hyped ‘quality issue’ for generic medicines.

Some countries are taking similar steps: 

Just to cite an example, as reported by ‘The Guardian” on August 23, 2011, the Spanish government enacted a law compelling the doctors of Spain to prescribe generic drugs rather than more expensive patented and branded pharmaceuticals, wherever available. This move is expected to help the Spanish government to save €2.4 billion (£2.1billion) a year, as in Spain the drugs are partly reimbursed by the government.

As a result, the doctors in Spain will now have to prescribe only in the generic or chemical names of the respective drugs. Consequently the pharmacies will be obliged to dispense ‘the cheapest available versions of drugs, which will frequently mean not the better-known brand names sold by the big drugs firms’.

Interestingly, the above point, though considered as a positive fall-out in Spain, is reportedly taken negatively in India with the oft repeated argument, ‘India is different’.

Prescriptions for generic medicines were a record high in America in 2010:

As per published reports, last year i.e. in 2010, generic medicines accounted for more than 78 percent of the total prescriptions dispensed by retail chemists and long-term care facilities in the US. This is a record high and is four percentage points more than what it was in 2009 and came up from 63% as recorded in 2006.

This vindicates that prescription in generic names is encouraged in the US too for various reasons.

Concerns over pharmaceutical marketing malpractices in India:  

Ethical concerns on significant expenditure towards alleged sales and marketing malpractices since quite some time has further strengthened the demand for prescriptions only in the generic name of a drug.

Frequent reports by Indian media have already triggered a raging debate in the country on the subject, involving even the Government and also the Parliament. It has been reported that a related case is now pending with the Supreme Court for hearing in not too distant future.

In 2010, “The Parliamentary Standing Committee on Health’ expressed its deep concern that ‘the evil practice’ of inducement of doctors continued because the Medical Council of India (MCI) has no jurisdiction over the pharma industry and it could not enforce the code of ethics on it.”

It was widely reported that the letter of a Member of Parliament, Dr. Jyoti Mirdha to the Prime Minister Dr. Manmohan Singh, attaching a bunch of photocopies of the air tickets claiming, “Doctors and their families were beating the scorching Indian summer with a trip to England and Scotland, courtesy a pharmaceutical company”, compelled the Prime Minister’s Office (PMO) to initiate inquiry and action on the subject.

The letter had claimed that as many as 30 family members of 11 doctors from all over India enjoyed the hospitality of the said pharmaceutical company.

In addition Dr. Mirdha reportedly wrote to the PMO stating, “The malpractice did not come to an end because while medical profession (recipients of incentives) is subjected to a mandatory code, there is no corresponding obligation on the part of the healthcare industry (givers of incentives). Result: Ingenious methods have been found to flout the code.”

The report also indicated that the Department of Pharmaceuticals (DoP) is trying to involve the Department of Revenue under the Ministry of Finance to explore the possibilities in devising methods to link the money trail to offending companies and deny the tax incentives.

Incidences of such alleged malpractices related to financial relationship between the pharmaceutical companies and the medical profession are unfolding reasonably faster now. All these issues are getting increasingly dragged into the public debate where government can no longer play the role of a mere bystander.

Taking the first step closer to that direction, Central Board of Direct Taxes (CBDT), which is a part of Department of Revenue in the Ministry of Finance, has now decided to disallow expenses on all ‘freebies’ to Doctors by the Pharmaceutical Companies in India.

A circular dated August 1, 2012 of the CBDT that the any expenses incurred by the pharmaceutical companies on gifts and other ‘freebies’ given to the doctors will no longer be allowed as business expenses. 

The response in favor of ‘Branded Generics’:

The proponents of ‘Branded Generics’ argue that the brand name is built on various differential value parameters to create a proper position of the brand in the minds of healthcare professionals as well as the patients. Thus, brand names offer a specific identity to generic drugs and is of high importance for both the doctors and the patients. 

The areas of complexity:

Those who favor branded generics also highlight, among others, the following three areas of complexity:

1. In India, over 50% medicines prescribed by the physicians are for Fixed Dose Combinations (FDCs), spanning across almost all therapeutic categories. Thus, it could be difficult for doctors to prescribe such medicines in generic names and might equally be difficult for the chemists to dispense such prescriptions.

They also argue that in case of any mistake of dispensing the wrong drug by the chemist inadvertently, the patients could face serious consequences.

2. Currently doctors use brand names to differentiate one formulation from the others. Different brands of even single ingredient medicines may have inherent differences in their formulations like, in the drug delivery systems (controlled/sustained release), kind of coatings allowing dissolution in different parts of alimentary canal, dispersible or non-dispersible tablets, chewable or non-chewable tablets etc. Since doctors are best aware of their patients’ conditions, they may wish to prescribe a specific type of formulation based on specific conditions of the patients, which may not be possible by prescribing only in generic names.

3. Patients also could face other difficulties due to generic prescribing. As is known, different brands of FDCs may have different proportions of same active ingredients. If chemists do not know or have the exact combination prescribed by the doctor in their shops, they would possibly substitute with a different combination of same drugs, which could well be less effective or even harmful to the patients.

The common perception:

The entire issue arises out of the key factor that the patients do not have any say on the use/purchase of a brand/brands that a doctor will prescribe.

It is generally believed by many that doctors predominantly prescribe mostly those brands, which are promoted to them by the pharmaceutical companies in various questionable ways, as reported above.

Thus, in today’s world and particularly in India, the degree of commercialization of the noble healthcare services, as often reported by the media, has reached a new high, sacrificing the ethics and etiquette both in the medical and also in the pharmaceutical sales and marketing practices at the altar of greed and conspicuous consumption.

Conclusion:

The recent MCI circular to doctors calling upon them to prescribe medicines in the generic names making them more affordable to patients, may be an important step towards a better future.

This assumes even greater importance when medicines constitute over 70 percent of the total treatment cost, especially for domiciliary treatment, and around 80 percent of total healthcare expenses is ‘out of pocket’ in our country.

However, the moot point is, the need of the hour calls for a total change in the mindset of all concerned. The importance of genuine care for the societal needs, while being in pursuit of professional excellence, in tandem, should ideally be demonstrated through voluntary measures by the concerned players in this area, leaving enforcement of stringent regulations as a last resort by the Government.

That said, while generic drugs per se are in no way bad for the patients, a careful analysis of all possible risk factors against expected benefits, especially for FDCs and different drug delivery formulations, will be important in the Indian perspective. Without effectively addressing the above issues, if prescriptions in generic names are made mandatory for all drugs, it could possibly be counter productive jeopardizing patients’ safety and interest.

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. 

 

“Pharmaceutical Marketing Malpractices are Barriers to Healthcare Access” – The Relevance of Government Code of Ethical Marketing Practices in India

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Last week (July 19, 2012), most of the leading English business dailies of India reported that much-awaited “Uniform Code of Pharmaceutical Marketing Practices (UCPMP)” authored by the Department of Pharmaceuticals, quite in line with the amended guidelines for the Medical Profession by the Medical Council of India (MCI), is expected to be notified by the government next month for implementation by the entire pharmaceutical industry on a voluntary basis, to start with.

This is only because the draft UCPMP has already specified the following:

“This is a voluntary code of Marketing Practices for Indian Pharmaceutical Industry, for the present and its implementation will be reviewed after a period of six months from the date of its coming into force and if it is found that it has not been implemented effectively by the Pharma Associations/Companies, the Government would consider making it a statutory code.”

This decision of the government is the culmination of a series of events, covered widely by the various sections of the media, at least, since 2004.

The series of events:

Way back, in its January – March, 2004 issue, ‘Indian Journal of Medical Ethics (IJME)’ in the context of marketing practices for ethical pharmaceutical products in India commented: “If the one who decides, does not pay and the one who pays, does not decide and if the one who decides is ‘paid’, will truth stand any chance?” Three years later in 2007, the situation remained unchanged when IJME (April – June 2007 edition) once again reported: “Misleading information, incentives, unethical trade practices were identified as methods to increase the prescription and sales of drugs. Medical Representatives provide incomplete medical information to influence prescribing practices; they also offer incentives including conference sponsorship. Doctors may also demand incentives, as when doctors’ associations threaten to boycott companies that do not comply with their demands for sponsorship.”

‘The Times of India’ also reported the following in its December 15, 2008 edition:

“1. More drugs a doctor prescribes of a specific company, greater are the chances of his/ her winning a car, a high-end fridge or a TV set. 2. Drug companies dole out free trips with family to exotic destinations like Turkey or Kenya. 3. In the West, unethical marketing practices attract stiff penalties. 4. In India, there are only vague assurances of self-regulation by the drug industry and reliance on doctors’ ethics”.

Thus, it has been quite a while from now, serious concerns are being expressed by the media, government and the civil society at large about the means adopted by the pharmaceutical industry in general to get their respective brands prescribed by the doctors.

The discontentment still growing:

Many within the civil society feel, as a result of fast degradation of ethical standards, moral and the noble values, just in many other areas of public life, in the healthcare space as well, the patients in general have started losing their absolute faith and trust both on the medical profession and the pharmaceutical companies, by and large. However, health related multifaceted compulsions do not allow them, either to avoid such a situation or even raise a strong voice of protest against the vested interests.

Growing discontentment of the patients both in the private and public healthcare space in the country, is being regularly and very rightly highlighted by the media all over the world, including reputed medical journals like, ‘The Lancet’ to help arrest this moral and ethical decay with demonstrable and tangible proactive measures.

The issue:

The entire issue arises out of the key factor that the patients do not have any say on the use/purchase of a medicine brand/brands that a doctor will prescribe.

It is generally believed by the civil society that doctors predominantly prescribe mostly those brands, which are promoted to them by the pharmaceutical companies in various ways.  Thus, in today’s world and particularly in India, the degree of commercialization of the noble healthcare services, as reported quite often by the media, has reached a new high, sacrificing the ethics and etiquette both in medical and pharmaceutical marketing practices at the altar of unlimited greed, want and conspicuous consumption.

A credible international report: Let me now combine this scenario with a relatively recent report on India dated January 11, 2011, published in ‘The Lancet’, which states in a similar (though not the same) context, as follows:

1. “Reported problems (which patients face while getting treated at a private doctor’s clinic) include unnecessary tests and procedures, rewards for referrals, lack of quality standards and irrational use of injection and drugs. Since no national regulations exist for provider standards and treatment protocols for healthcare, over diagnosis, over treatment and maltreatment are common.” 2. “Most people accessed private providers for outpatient care – 78% in rural areas and 81% in urban areas.” 3. “India’s private expenditure of nearly 80% of total expenditure on health was much higher than that in China, Sri Lanka and Thailand.” Considering the above three critical issues of India, as reported in ‘The Lancet’, the need to follow a transparent code of pharmaceutical marketing practices by the entire pharmaceutical industry is of utmost importance.

A global phenomenon:

Since quite some time, this issue has indeed become a global phenomenon. Many countries, including India, are taking note of such examples of socioeconomic decay, that too in the healthcare sector.

Just the other day, the July 4, 2012 edition of ‘The Guardian’, while reporting that GlaxoSmithKline has agreed to pay $3bn (£1.9bn) to settle a series of old criminal and civil investigations by the US authorities into the sales and marketing of some of its best-known products, commented, “GlaxoSmithKline’s bribes are evidence that Big Pharma isn’t working – the inadequacies of relying solely on market forces for our drugs are clearer than ever. This scandal should prompt a rethink.”

The Guardian further commented:

“After all, this has happened before. All the giants – AstraZeneca, Bristol-Myers Squibb, Merck, Eli Lilly, Pfizer – have been investigated for bribery. One of the most notorious episodes of misconduct involved Merck’s anti-inflammatory drug Vioxx, withdrawn in 2004 after the company persistently played down its risk of causing cardiovascular problems.”

The New York Times  (NYT) in its April 12, 2010 edition in an article titled, “Data on Fees to Doctors is Called Hard to Parse”, reported that though some big pharmaceutical companies have started disclosing payments to doctors who act as consultants or speakers, many still find it far too difficult to follow the money trail.

NYT reported in the same article, “Senate researchers have found that some prominent doctors at academic medical centers have failed to disclose millions of dollars in drug company payments, despite university requirements that they do so. Federal prosecutors say some payments are really kickbacks for illegal or excessive prescribing”.

General scenario was not much different even in the US until recently:

‘The New England Journal of Medicine’, April 26, 2007 reported that virtually, all doctors in the US take freebies from drug companies, and a third take money for lecturing, and signing patients up for trials. The study conducted on 3167 physicians in six specialties (anesthesiology, cardiology, family practice, general surgery, internal medicine and pediatrics) reported that 94% of the physicians had ‘some type of relationship with the pharmaceutical industry’, and 83% of these relationships involved receiving food at the workplace and 78% receiving free drug samples. 35% of the physicians received re-reimbursement for cost associated with professional meetings or Continuing Medical Education (CME). And the more influential a doctor was, the greater the likelihood that he or she would be benefiting from a drug company’s largess. As a result of some strict regulatory measures, the situation in the US has presumably started changing now.

However, such issues are not related only to physicians. ‘Scrip’ dated February 6, 2009 published an article titled: “marketing malpractices: an unnecessary burden to bear”. The article commented:

“Marketing practices that seem to be a throwback to a different age continues to haunt the industry. Over the past few months, some truly large sums have been used to resolve allegations in the US of marketing and promotional malpractices by various companies. These were usually involving the promotion of off-label uses for medicines. One can only hope that lessons have been learnt and the industry moves on.”

“As the sums involved in settling these cases of marketing malpractices have become progressively larger, and if companies do not become careful even now, such incidents will not only affect their reputation but financial performance too.”

‘The Physician Payment Sunshine Act’:

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into the public debate, disclosure of all such payments made to the physicians by the pharmaceutical companies has been made mandatory by the Obama administration, as a part of the new US healthcare reform process.

As a result, ‘The Physician Payment Sunshine Act’, originally proposed in 2009 by Iowa Republican Charles Grassley and Wisconsin Democrat Herb Kohl, became a part of the US healthcare law in 2010. This Act came as an integral part of the healthcare reform initiatives of President Obama to reduce healthcare costs and introduce greater transparency in the system.

The Act requires all pharmaceutical and medical device companies of the country to report all payments to doctors above US $10. As stated earlier, the industry’s gifts to physicians in the US, reportedly, can range from expensive hospitality/dinner in exotic locations, pricey golfing vacations in various places of interest to consulting and speaking fees. As the Act came into force with all its rules in place, failure to provide such details will attract commensurate penal provisions.

Australia sets another example: The Australian Competition and Consumer Commission (ACCC) has decided to grant authorization for five years to Medicines Australia’s 16th edition of its Code of Conduct. The Code sets standards for the marketing and promotion of prescription pharmaceutical products in Australia. The Code provides, among other measures, a standard to address potential conflicts of interest from unrestricted relationships between pharmaceutical companies and the doctors, which may harm the consumers through inappropriate prescriptions. The Code also prohibits the pharmaceutical companies from providing entertainment and extravagant hospitality to doctors with the requirement that all benefits provided by companies should be able to successfully withstand public and professional scrutiny. “The requirement for public disclosure was imposed by the ACCC as a condition of authorization of the previous version of Medicines Australia’s Code and was confirmed on appeal by the Australian Competition Tribunal.” Edition 16 of the Code fully incorporates the public reporting requirements.

“Market malpractices are barriers to healthcare access”: The WHO report of 2006:

A 2006 report of the ‘World Health Organization (WHO) and ‘The Ministry of Health and Family Welfare, Government of India’ titled ‘Options for Using Competition Law/Policy Tools in Dealing  with Anti-Competitive Practices in Pharmaceutical Industry and Health Delivery System, states:

“The right to health is recognized in a number of international legal instruments. In India too, there are constitutional commitments to provide access to healthcare. However despite the existence of any number of paper pledges assuring the right to health, access to health remains a problem across the world”.

“There are several factors that are responsible for such deprivation. Market malpractices in general, and in particular, anti-competitive conduct in the pharmaceutical industry and the health delivery system are also among them.”

India Today: 

The current scenario in India though not very much different, in terms of seriousness of the issue, from what is being reported in the US, the evolving regulatory standards in the US in this matter are definitely more robust and far superior to what we see in our country.

In India, over 20, 000 pharmaceutical companies of varying size and scale are currently operating. It has been widely reported in the media that the lack of regulatory scrutiny is prompting many of these companies to adapt to ‘free-for-all’ types of aggressive sales promotion and cut-throat marketing warfare involving significant ‘wasteful’ expenditures. Such practices reportedly involve almost all types of their customer groups, excepting perhaps the ultimate consumer – the patients.

It has been well reported that industry’s gifts to physicians in India can range from expensive cars, dinners in exotic locations, pricey vacations at various places of interest of the world and sometimes with the doctors’ families, to hefty consulting and speaking fees.

Unfortunately in India there is no single government agency, which is accountable to take care of the entire healthcare needs of the patients and their well-being, in a holistic way.

The pharmaceutical industry in India, in general, has already expressed its desire for self-regulation of marketing practices, instead of any regulatory compulsion by the Government.

However, many activists groups and NGOs still feel that the bottom-line in this scenario is the demonstrable transparency by the pharmaceutical companies in their dealings with various customer groups, especially the physicians/doctors.

Ministry of Health blinked first by amending the MCI Guidelines:

Being concerned with the media outcry, MCI, in 2009, amended their guidelines of ‘Professional Conduct, Etiquette and Ethics’ for the doctors, clearly articulating what they can and cannot do during their interaction and transaction with the pharmaceutical and related industries.

MCI, through amendment of the “Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulation 2002” introduced a new code of conduct for doctors and their professional associations in their relationship with the pharmaceutical and allied industry in India. The amended regulations are known as the “Indian Medical Council (Professional Conduct, Etiquette and Ethics) (Amendment) Regulations, 2009 – Part-I”, which prohibit the doctors from accepting, among many others, any travel facility or hospitality, including gifts of any value, from any pharmaceutical companies.

The Ministry of Health believes that these guidelines, if strictly enforced, would severely limit what the doctors can receive from the pharmaceutical companies in terms of free gifts of wide ranging financial value, entertainments, free visits to exotic locations under various commercial reasons, lavish lunch and dinner etc. in exchange of prescribing specific pharmaceutical brands of the concerned companies.

‘Draft Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ from the DoP:

In May 2011, the Department of Pharmaceuticals (DoP) released a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for the Pharmaceutical Industry of India for comments by the stakeholders.

Some Key features of the DoP Code are as follows:

  • All promotional material must be consistent with the requirements of this Code.
  • Brand names of products of other companies must not be used for comparison without prior consent of the concerned companies.
  • Paid or arranged publication of promotional material in journals must not resemble editorial matter.
  • The names or photographs of healthcare professionals must not be used in promotional material.
  • Audio-visual material must be accompanied by all appropriate printed material to ensure compliance of the Code.
  • Samples should be provided directly to prescribing authority and be limited to prescribed dosages for three patients and in response to a signed and dated request from the recipient. Each sample pack shall not be larger than the smallest pack presented in the market.
  • Medical and Educational events for doctors should be organized in the appropriate venue in India and all expenses must be incurred only for the events held in India.
  • Outline of a detailed Complaint Lodging and Redressal mechanism (Committee for Code of Pharma Marketing) to ensure compliance of the marketing code.

The quality of UCPMP:

The UCPMP draft document is well written, balanced and by and large fair. The DoP should indeed be commended on the great work that they have done in putting all details of pharmaceutical marketing practices together in this document in a very comprehensive manner.

Draft UCPMP does not seem to pose any major extra restrictions to the pharmaceutical companies as compared to the MCI guidelines. All concerned should welcome this decision of the DoP, as the same ethical standards will now be applicable to all small, mid-sized and large pharma players, equally. The main focus of the DoP should be in ensuring that all companies across the pharmaceutical industry follow these well-defined standards in their marketing practices and interactions with the doctors.

The draft UCPMP also states that companies must maintain a detailed record of expenditures incurred on these events. It is not quite clear though, as to what extent the pharmaceutical companies are expected to keep these detail records and how long?  It is also not clear whether such records have to be maintained on file by the individual companies and supplied to the DoP only on specific requests for the same or all these details are expected to be disclosed on a regular basis to the regulator.

The draft UCPMP indicates that industry associations must upload full details of received complaints on their respective websites. Although this provision could help making the system transparent, the DoP should clearly articulate the details about the specific information that will require to be disclosed in cases of any proven breach of the marketing code.

It is interesting to note that the draft UCPMP states that media reports and published letters alleging that a company has breached the UCPMP will be treated as complaints.

Skepticism with the UCPMP:

Some are quite skeptical about the effectiveness of UCPMP in containing unethical marketing practices within the Indian Pharmaceutical Industry.

This section of people believes, with thousands of pharmaceutical companies operating in India, just self-control with UCPMP without any properly enforceable stringent Government regulation, will simply not work.

Conclusion:

In all countries and India is no exception, pharmaceutical companies, by and large, have been articulating that they try to follow the legal ways and means to maximize turnover of their respective brands. Many of them do follow transparent and admirable stringent self-regulations, stipulated either by themselves or by their industry associations.

‘Self-regulation with pharmaceutical marketing practices’ and ‘voluntary disclosure of payment to the physicians’ by some leading global pharmaceutical companies are laudable steps to address this vexing issue. However, the moot question still remains, are all these good enough for the entire industry in India?

It appears, immediately after the Department Related Parliamentary Standing Committee on Health and Family Welfare presented its 58th Report on the action taken by the DoP on the recommendations / observations contained in the 45th report to both the Lower and the Upper houses of the Parliament on May 08, 2012, the DoP has reportedly taken an extra step forward towards this direction last week. The amended MCI regulations for the doctors coupled with the notified UCPMP for the entire pharmaceutical industry should make the financial transactional relationship between the physicians and the pharmaceutical industry in India clean and transparent.

It was also reported  last week that Government will soon decide whether there will be an independent industry appointed ‘Ombudsman’ for the enforcement of UCPMP across the country or the implementation of the code will strictly be monitored under the Government control.

It is worth reiterating that the draft UCPMP very categorically warns, in case the self-control with UCPMP by the industry appointed independent ‘Ombudsman’ does not work effectively, the Government would seriously consider making it statutory for the entire pharmaceutical industry of India. This is indeed quite a strong signal from the government to the industry for ‘Shaping Up’… sooner the better.

The popular dictum, especially used by the healthcare industry, “patients’ interest come first”, should not be allowed to be misused or abused, any further, by some unscrupulous elements and greedy profiteers, to squeeze out even the last drop of financial resource from the long exploited population of ailing patients of India, as “Pharmaceutical Marketing Malpractices are Proven Barriers to Healthcare Access”.

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.

Healthcare Malpractice in India: Even Medical Association distastes the ‘Bitter Pill’

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At a peak of repeated overdose of media sensationalism covering various facets of happenings around us, at times almost mimicking ‘self-flagellation’ though, the program ‘Satyamev Jayate (Truth Alone Triumphs) ’ of Bollywood icon Aamir Khan has the potential to be a ‘game changer’ in terms of transformation of mindset of ‘We the People of India’  towards ‘What we can do for the country’ and JUST NOT ‘What the country can do for us’.

My perspective:

As I see it, the show endeavors to instill a sense of introspection in the viewers’ mind providing relevant information and knowledge, especially when for misdeeds of all shades, hues and colors around our lives, we tend to instinctively blame others, positioning ourselves on the illusive high pedestal of probity and considering ourselves ‘Lilly-white’ …and just the victims of circumstances.

What made me aware of it?

Personally, I became aware of the show, when one of my good friends strongly recommended watching its ‘Episode 4′ titled, “Every Life Is Precious: Does Healthcare Need Healing?’  He in fact mailed me even the video link of the same. Thereafter, I collected similar video links for previous other episodes from the internet and was highly impressed with the sense of purpose of the program.

What did it want to achieve?

As far as I am concerned, I am quite convinced that this particular episode highlights that:

“People trust medical practitioners, believing that they are equipped with the knowledge and skills to safeguard their health. But when this knowledge is misused to exploit this trust, medical care becomes a nightmare. The profession is riddled with unscrupulous doctors and hospitals out to make big bucks at the cost of patients, but there are still medical practitioners who stand up for the Hippocratic Oath, and those who want to clean up the profession.”

Dishonest acts in healthcare need to be opposed with courage:

In the program, Aamir Khan started by saying that that the episode was not about mistakes and negligence that a doctor may commit but about dishonest acts of some doctors, which were committed undoubtedly with equally dishonest intentions, amounting to fraud and a breach of trust between doctors and the patients.

The ‘Episode 4′ not only highlighted the deficiencies in the existing system related to medical ethics, but also issues pertaining to pricing of drugs, medical education and  the functioning of the Medical Council of India (MCI).

Strong protests do not prove innocence:

Unfortunately, instead of appreciating the social transformation efforts of the program, many doctors reportedly protested against this particular episode.

I shall not be surprised, if some more protests from other quarters reach Aamir Khan in a different guise, even in the guise of seemingly support, especially from those who are perpetually in a denial mode stating: ‘what all were shown in the program are misguiding/misleading’, ‘you don’t know the facts/reality’, ‘what was shown is just half truth’, ‘our way is the right way’ and ‘we were not given a chance to express our views’.

However, as we all know that strong and venomous protests, even protests well concealed in the guise of support, do not prove innocence of the perpetrators, at all, though we all have a right to protest in our country.

In a protest credibility also matters:

A leading magazine of the country, ‘India Today’ in its August 25, 2011 edition titled ‘Address sick state of the health system’, reported in a different context:

“Among the multitude of people who flocked to the Ramlila grounds this week in support of the anti-corruption crusader Anna Hazare were some surprises. A delegation of the Indian Medical Association (IMA) met Hazare and extended support to his fight against corruption”.

“Subsequently branches of the association all over the country were told to organize candle light vigil and sit-ins against corruption. IMA is the largest professional body of Indian doctors and their support to the anti-graft movement should be taken seriously. After all, doctors are considered strong opinion makers in the society”.

“However, a careful look at the association’s past and its stand on the issue of corruption in medical community makes one wonder if IMA’s views on corruption have any value at all”, the report added.

Reports of protest on “Every Life Is Precious: Does Healthcare Need Healing?’ :

The daily newspaper ‘DNA’ in its June 2, 2012 issue reported, “Indian Medical Association asks Aamir Khan to apologize.”

The report elaborated that the Indian Medical Association demanded an immediate apology from Aamir Khan for having ‘defamed’ the medical profession in his TV show and warned him of legal action if he fails to comply with their demand.

Voices of sanity:

Being in unison with many other voices of sanity, against the demand of apology by the medical association, the lyricist and social activist Javed Akhtar reportedly had commented, “The Indian Medical association wants Aamir to apologize for exposing corruption in their profession. That is really sick.”

The Crusader remains unfazed against threats:

However, as reported by NDTV, Aamir Khan has refused to apologize and said, “I will not apologize to the doctors, I have not insulted the medical profession. Those doctors who indulge in unethical practices have defamed the profession, not me.”

Some other examples of ‘Medical Negligence’:

As reported by ‘Livemint (WSJ)’ in its May 15, 2012 edition, “Dozens of hospitals all over the country are ransacked each year by irate relatives and other ‘socially conscious’ citizens in an attempt to get back at alleged cases of medical malpractice. In many cases patients are crippled for life or even killed, and many of these cases may indeed involve instances of incompetence or malpractice. This does not in any way condone the violence, but then the victims have little recourse to justice or investigation”.

Highlighting similar medical negligence, ‘Times of India’ ‘ on October 22, 2011 reported that ‘The National Consumer Disputes Redressal Commission (NCDRC)’ on October 21, 2012 ordered a compensation amount of Rs 1.73 Crore to be paid to the US-based husband of a child psychologist who died in Mumbai due to medical negligence.

Very few doctors punished for Medical Malpractice:

Effective January 1, 2011, just 17 doctors from all over India were found guilty on account of Medical Negligence/Misconduct and received varying degree of punishment from the MCI.

It is worth noting, unlike other countries and despite all these maladies being faced by a common man reportedly on a daily basis, not a single erring doctor’s name has been removed permanently from the Indian Medical Register/State Medical Register by the MCI or any State Medical Council, since 2008?

Some very recently reported actions by MMC and MCI:

Meanwhile the news daily ‘DNA’ in its June 6, 2012 edition reported that  for different errant behavior, so far, the Maharashtra Medical Council (MMC) has sent show-cause notices to 31 doctors in the state and suspended registrations of five doctors.

Not so long ago to maintain desirable ethical standards within the Medical Profession, the notification of the Medical Council of India (MCI) dated December 10, 2009 amending the “Indian Medical Council (Professional Conduct, Etiquette and Ethics), Regulations 2002″ was also welcomed by concerned right thinking individuals including a large section of the medical profession.

Conclusion:

Medical malpractice, of course, is not just an Indian issue. ‘The Wall Street Journal’ in an article titled, ‘How Other Countries Judge Malpractice’, published on June 30, 2009 reported that in his speech to the ‘American Medical Association’, President Barack Obama held out the tantalizing possibility of reforming medical malpractice law as part of a comprehensive overhaul of the U.S. health-care system.

With TV shows like ‘Satyamev Jayate (Truth Alone Triumphs)’, let us collectively move towards the day, transforming ourselves as the change agents, when all of us rich, middle-class or poor will live in a country where things will be quite different from what we are experiencing today.

Many erudite medical practitioners of our country who still stand up for the ‘Hippocratic Oath’, will expectedly take initiative to clean up their profession, being harsh on the ‘Black Sheep’, probably through stringent self-regulations, even if the MCI continues to keep its eyes closed.

Let us all conscientiously try to pave the way for that day, when despite socioeconomic disparity people from all strata of our society will be able to get quality healthcare, driven by competent regulators, socially conscious industry and above all the dedicated medical profession, who under ‘Hippocrates Oath’ will consider each life equally precious, taking their noble profession almost back to the earlier high pedestal of a ‘Human God’!.

Against the mighty power of rejuvenated human will, all concerned in the healthcare space, willy-nilly, hopefully will have to swallow the ‘Bitter Pill’, not just in India, but across the world, for the sake of humanity.

Let ‘Truth Alone Triumph’….‘Satyamev Jayate’.

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.

Business Ethics, Values and Compliance: Walking the Talk

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Wish you and your family all happiness, prosperity, peace and good health in the brand new year 2012

Business Ethics, Values and Compliance: Walking the Talk

Ethical business conduct and value standards, especially of medium, large to very large corporations are coming under increasing stakeholders’ scrutiny and being severely criticized for non-compliance in many instances. At the same time, more and more corporate initiatives are being taken towards this direction by both the global and local companies with special emphasis to combat bribery/ corrupt business practices and contribute to social justice and environmental protection.

The scope of ‘ethical business conducts and value standards’ of a company usually encompasses the following, among many others:

  1. The employees, suppliers, customers and other stakeholders
  2. Caring for the society and environment
  3. Fiduciary responsibilities
  4. Business and marketing practices
  5. R&D activities, including clinical trials
  6. Corporate Governance
  7. Corporate espionage

That said, codes of ethical conduct, corporate values and their compliance should not only get limited to the top management, but must get percolated downwards, looking beyond the legal and regulatory boundaries.

Statistics of compliance to codes of business ethics and corporate values are important to know, but the qualitative change in the ethics and value standards of an organization should always be the most important goal to drive any business corporation and the pharmaceutical sector is no exception.

Business Ethics and Values in the globalized economy:

Globalization of business makes the process of formulating the codes of ethics and values indeed very challenging for many organizations. This is mainly because of the fact that the cultural differences at times create a conflict on ethics and values involving different countries.

For this purpose, many business organizations prefer to interact with the cultural and religious leaders in the foreign countries, mainly to ascertain what really drives culturally diverse people to act in certain ways.

With the wealth of knowledge of the local customs and people, the cultural and religious leaders can help an organization to unify the code of ethics and values of the globalized business.Such leaders can also help identifying the ‘common meeting ground of minds’ from a specific country perspective, after carefully assessing the cultural differences, which are difficult to resolve in the near term.

The ‘common meeting ground of minds’, thus worked out, could form the bedrock to initiate further steps to strengthen global business standards of ethics and values of an organization.

OECD with USA started early enacting ‘Foreign Corrupt Practices Act (FCPA)’:

To prevent bribery and corrupt practices, especially in a foreign land, in 1997, along with 33 other countries belonging to the ‘Organization for Economic Co-operation and Development (OECD)’, the United States Congress enacted a law against the bribery of foreign officials, which is known as ‘Foreign Corrupt Practices Act (FCPA)’.

This Act marked the early beginnings of ethical compliance program in the United States and disallows the US companies from paying, offering to pay or authorizing to pay money or anything of value either directly or through third parties or middlemen. FCPA currently has significant impact on the way American companies are required to run their business, especially in the foreign land.

But a dichotomy exists in the US for ‘Grease Payment’:

‘Grease payment’ is classified by OECD as “a facilitating one if it is paid to government employees to speed up an administrative process where the outcome is already pre-determined.”

In the FCPA of the US ‘grease payment’, has been defined as “a payment to a foreign official, political party or party official for ‘routine governmental action,’ such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official’s action, only its timing.”

Considering all these ‘grease payments’ seem to be an absolute dichotomy to the overall US policy for ethical standards and against corruption.

Currently besides US, only Canada, Australia, New Zealand and South Korea are the countries that permit ‘Grease payments’.

Notwithstanding the fact that the governments of the US and four other countries allow companies to keep doing business without undue delay by making ‘grease payments’ to the lower government officials, such payments are considered as illegal in most other countries, if not all, in which they are paid, including India.

In India such a business practice is viewed as bribery, which is not only perceived as unethical and immoral, but also a criminal offense under the law of the land. Even otherwise, ‘grease payments’ are viewed by a vast majority of the population as a morally questionable standard of ‘business conduct’.

Many companies are setting-up the ethical business standards globally:

While visiting the website of especially the large global and local companies, one finds that all these companies barring a very few exceptions have already put in place a comprehensive ‘code of business ethics and values’. Some of these companies have also put in place dedicated code compliance officers across the globe.

However, it is important to ensure that the persons who are appointed either as the ‘Watch Dogs’ for such commendable initiatives or to head any committee on the subject, are individuals with squeaky clean record of adherence to the ‘Code of Ethics and Values’. Otherwise, the entire exercise may be perceived as making a mockery of the whole purpose.

Despite all these commendable initiatives towards establishing a corporate codes of business ethics and values, the moot question that haunts many time and again: “Are all these companies ‘walking the talk’?”

Otherwise, why does one read news items like ‘Dirty Secrets In Soap Prices’ as appeared in the ‘Wall Street Journal’ dated December 9, 2011 reporting that P&G, Colgate and Henkel have been fined $484 million by the French Government for ‘Price Fixing’ of laundry soap.

Or why do we see reports like one in the “Fierce Pharma’ dated October 5, 2010 stating that in the US eleven pharmaceutical companies have paid a total of over $6 billion to the government in 22 months for unethical marketing practices Or a ‘Bloomberg’ report dated January 17, 2011 with the headline, “Glaxo Sees $3.5 Billion Charge Related to Avandia Claims, Sales Practices.”

Or…

It is perhaps a sheer coincidence that whenever, such incidents take place, the fingers are usually pointed towards the middle or lower management cadre of the corporations concerned for non-compliance. The Corporate or top management ownership of such seemingly avoidable incidents still remains a distant reality.

Public perception of ethical standards of Pharmaceutical companies is not encouraging:

In the pharmaceutical sector all over the world, the marketing practices have still remained a very contentious issue despite many attempts of self-regulation by the industry. The flow of complaints for alleged unethical business practices have not slowed down significantly, across the world, even after so many years of self-regulation.

Nearer home, the Department of Pharmaceuticals of the Government of India has already circulated a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for stakeholders to comment on it. The final UCPMP, when it comes into force, if not implemented by the pharmaceutical players in its ‘letter and spirit’, may attract government’s ire in form of strong doses of regulatory measures.

A study on the UCPMP:

Ernst & Young released the key findings of a survey report on the UCPMP in September, 2011 titled ‘Pharmaceutical marketing: ethical and responsible conduct’, which are as follows:

  • Around two-third of the respondents felt that the implementation of the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) drafted by the Department of Pharmaceuticals, would change the manner in which the pharma products are currently marketed in India
  • More than 50% of the respondents are of the opinion that UCPMP guidelines may lead to manipulation in recording of actual sampling activity
  • More than 50% of the respondents indicated that the effectiveness of the code will be very low in the absence of legislative support provided to the UCPMP committee
  • Majority of the respondents (90%) felt that pharma companies in India should focus on building a robust internal controls system for ensuring compliance with the UCPMP
  • Around 72% of the respondents felt that the MCI was not stringently enforcing its medical ethics guidelines
  • Only 36% of the respondents felt that the MCI’s guidelines would have an impact on the overall sales of the pharma companies

Thus the quality of implementation of self-regulatory ‘Code of Marketing Practices’ is not only attracting heavy criticism from the stakeholders in many countries in the world, including India, but also indicating a trust deficit between the industry and the civil society in general.

Clinical Trials in India: Ethics and values

Clinical Trial is another area of pharmaceutical business, especially in the Indian context, where more often than not, issues related to ethics and values are being raised. In an article titled, ‘Clinical trials in India: ethical concerns’ published by the World Health Organization (WHO) following observations have been made:

“The latest developments in India reflect a concerted effort on the part of the global public health community to push clinical trials issues to the fore in the wake of several high-profile cases in which pharmaceutical companies were shown to be withholding information from regulators.”

Similarly ‘Times of India’ in its June 6, 2011 issue reported, “Clinical trials claimed 25 lives in 2010, only 5 paid compensation.”

Conclusion:

The need to formulate ‘Codes of Business Ethics & Values’ and even more importantly their compliance are gaining increasing importance and relevance in the globalized business environment. Unfortunately, at the same time, many companies across the world are being increasingly forced to come to terms with the heavy costs and consequences of ‘unethical behavior and business practices’ by the respective governments, perhaps arising out of intense pressure for the business performance.

There is no global consensus, as yet, on what is ethically and morally acceptable ‘Business Ethics and Values’ across the world. However, even if it these are implemented in a country-specific way, the most challenging obstacle to overcome by the corporates would still remain ‘walking the talk’ and owning the responsibility.

The million dollar question thus emerges ‘How to make it happen?’

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.