Tag Archives: marketing

MCI has been dissolved but the guidelines to doctors must remain, carefully sanitizing the ambiguities within the process

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The recent developments within the MCI are indeed very disturbing and were definitely avoidable, if appropriate checks and balances were in place within the system. Even after the immediate ‘damage control measures’ by the Government, I reckon, the stigma on the credibility of MCI, may continue to haunt the institution, for a reasonably long time. The steps taken by the government, so far, are definitely necessary.

The new board appointed by the Ministry of Health, we expect, will work out an appropriate policy framework not only to restore the credibility of MCI, but also to put in place enough measures to prevent repetition of blatant misuse of power by the vested interests, in future.

The other side of it:

In today’s India, blatant commercialization of the noble healthcare services has reached its nadir, as it were, sacrificing the ethics and etiquettes both in medical and pharmaceutical marketing practices at the altar of unlimited greed. As a result of fast degradation of ethical standards and most of the noble values supposed to be deeply rooted in the healthcare space, the patients in general are losing faith and trust both on the medical profession and the pharmaceutical industry, by and large. Health related multifaceted compulsions do not allow them, either to avoid such a situation or even raise a strong voice of protest.

Growing discontentment – a stark reality:

Growing discontentment of the patients in the critical area of both private and public healthcare in the country, is being regularly and very rightly highlighted by the media to encourage or rather pressurize all concerned to arrest this moral and ethical decay and reverse the evil trend, without further delay, with some tangible regulatory measures.

It was a laudable move by the MCI, the current fiasco not withstanding:

In such a prevailing situation, recent steps taken by the ‘Medical Council of India (MCI)’ deserves kudos from all corners. It is now up to the medical profession to properly abide by the new regulations on their professional conduct, etiquette and ethics. The pharmaceutical industry of India should also be a party towards conformance of such regulations, may be albeit indirectly.

No room for ambiguity:

The amended MCI regulations, no doubt, are aimed at improving the ethical standards in the medical profession and are expected to achieve the desired objectives. However, in many places the guidelines lack absolute clarity.

Ambiguity, if any, in the MCI regulations, should be addressed through appropriate amendments, in case such action is considered necessary by the experts group and the Ministry of Health. Till then all concerned must ensure its strict compliance… for patients’ sake. The amended MCI regulations are only for the doctors and their professional bodies. Thus it is up to the practicing doctors to religiously follow these regulations without forgetting the ‘Hippocrates oath’ that they had taken while accepting their professional degree to serve the ailing patients.

If these regulations are implemented properly, the medical profession, I reckon, could win back their past glory and the trust of the patients, as their will be much lesser possibility for the patients to get financially squeezed by some unscrupulous elements in this predominantly noble profession.

A concern:

Although the new MCI regulations are steps in the right direction, the pharmaceutical industry, by and large, does have an apprehension that very important and informative ‘continuing medical education (CME)’, which in turn could help the patients immensely, may get adversely impacted with this new regulation; so are the areas involving medical/clinical research and trials.

What is happening in the global pharmaceutical industry?

Just like in India, a public debate has started since quite some time in the US, as well, on allegedly huge sum of money being paid by the pharmaceutical companies to the physicians on various items including free drug samples, professional advice, speaking in seminars, reimbursement of their traveling and entertainment expenses etc. All these, many believe, are done to adversely influence their rational prescription decisions for the patients.

USA:

In the USA ‘The Pharmaceutical Research and Manufacturers of America (PhRMA)’ has recently revised their code of marketing practices as follows:

• “Prohibits distribution of non-educational items (such as pens, mugs and other “reminder” objects typically adorned with a company or product logo) to healthcare providers and their staff. The Code acknowledges that such items, even though of minimal value, “may foster misperceptions that company interactions with healthcare professionals are not based on informing them about medical and scientific issues.”

• Prohibits company sales representatives from providing restaurant meals to healthcare professionals, but allows them to provide occasional meals in healthcare professionals’ offices in conjunction with informational presentations. The Code also reaffirms and strengthens previous statements that companies should not provide any entertainment or recreational benefits to healthcare professionals.

• Includes new provisions that require companies to ensure that their representatives are sufficiently trained about applicable laws, regulations and industry codes of practice – including this Code – that govern interactions with healthcare professionals. Companies are also asked to assess their representatives periodically and to take appropriate action if they fail to comply with relevant standards of conduct.

• Provides that each company will state its intentions to abide by the Code and that company CEOs and Compliance Officers will certify each year that they have processes in place to comply, a process patterned after the concept of Sarbanes-Oxley compliance mechanisms. Companies also are encouraged to get external verification periodically that they have processes in place to foster compliance with the Code. PhRMA will post on its Web site a list of all companies that announce their pledge to follow the Code, contact information for company compliance officers, and information about the companies’ annual certifications of compliance.

• Other additions to the Code include more detailed standards regarding the independence of continuing medical education (CME); principles on the responsible use of non-patient identified prescriber data; and additional guidance for speaking and consulting arrangements with healthcare professionals, including disclosure requirements for healthcare providers who are members of committees that set formularies or develop clinical practice guidelines and who also serve as speakers or consultants for a pharmaceutical company.

• Other changes to the Code include, PhRMA’s recent acceptance of the revised Physician Payments Sunshine Act in the Senate.”

Raging ongoing debate on the financial relationship between industry and the medical profession:

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into the public debate, it appears that there is a good possibility of making disclosure of all such payments made to the physicians by the pharmaceutical companies’, like the proposed Physician Payments Sunshine Act in the USA, mandatory in many other countries, probably even in India.

Exemplary voluntary measures taken by large global pharmaceutical majors:

Eli Lilly, the first pharmaceutical company to announce such disclosure voluntarily around September 2008, has already uploaded its physician payment details on its website. US pharmaceutical major Merck has also followed suit and so are Pfizer and GSK. However, the effective date of their first disclosure details is not yet known.

Meanwhile, Cleveland Clinic and the medical school of the University of Pennsylvania, US are also in the process of disclosing details of payments made by the Pharmaceutical companies to their research personnel and the physicians. Similarly in the U.K the Royal College of Physicians has been recently reported to have called for a ban on gifts to the physicians and support to medical training, by the pharmaceutical companies. Very recently the states like Minnesota, New York and New Jersey in the US disclosed their intent to bring in somewhat MCI like regulations for the practicing physicians of those states.

Transparency is the key for drug industry relationships – 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 things, a standard to address potential conflicts of interest from unrestricted relationships between pharmaceutical companies and healthcare professionals, which may harm consumers, for example through inappropriate prescribing by healthcare professionals.

The Code prohibits pharmaceutical companies from providing entertainment and extravagant hospitality to healthcare professionals, with the requirement that all benefits provided by companies 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.

Conclusion:

Currently in the US, both in Senate and the House of Congress two draft bills on ‘The Physician Payment Sunshine Act’ are pending. It appears quite likely that Obama Administration, with the help of this new law, will make the disclosure of payments to physicians by the pharmaceutical companies mandatory.

If President Obama’s administration takes such regulatory steps, will India prefer to remain much behind? The new amended MCI regulations together with such disclosure by the pharmaceutical companies, if and when it comes, could make the financial transactional relationship between the physicians and the pharmaceutical industry squeaky clean and totally transparent.

By Tapan 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.

Differentiating Seven ‘Ps’ of Marketing-Mix for Health Food Products – A strategic overview

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As estimated by Nicholas Hall the health food products market in India is currently around U.S.$ 1.3 Billion with a huge marketing potential. However, the marketing-mix for such groups of health food products will need to be crafted in an innovative way and carefully tailored to suit the need of individual brands, by an astute marketer.
Definition of Health Food Products:In my view, the health food products are those, which have a favorable impact on human health, their physical performance or state of mind. Such products include various types of food substances, dietary supplements with medical benefits and are used mostly for the prevention of various types of diseases.

The global market:

The global market for health food products is projected to be around U.S.$ 190 Billion by 2010 with a CAGR of 6.1% during 2000 – 2010. In 2007 its market size was reported to be U.S.$ 166 Billion.

Categories of health food products:

Before we delve into the space of marketing-mix, let me try to categorize these products under the following six categories:

• Functional Foods:

- These are dietary components, which provide health benefits beyond basic nutrition, like
isabgool or psyllium husk, whey proteins, bran or oats

• Medicinal Foods:

- These are functional foods with more medicinal value, for e.g. cranberry juice, anti-diabetic/anti-obesity health
bars with added medication etc.

• Nutraceuticals:

- This category comprises of substances which are foods or part of a food with usually preventive health benefits
like vitamins, minerals, gingko biloba, coenzyme Q10, carnitine, ginseng, garlic, tulsi, kalmegh, brahmi, saffron,
ashwagandha, green tea, karela powder etc.

• Phytochemcials:

- These products are like lycopene found in tomatoes or flavanoids in fruits. Such substances usually do not
possess any nutritive value but offer some disease preventive properties.

• Ayurvedic and Herbal Medicines:

- These are derived from plants and are used as such or in form of extracts and possess disease preventive
properties.

• Other health related products are like sports nutrition and various types of organic foods.

Key Drivers:

In my view following are the four key drivers of the health food products market in India:

• Consumer awareness:
- Increasing consumer health consciousness will increase the popularity of health food products

• Changing lifestyle:
- Incidence of lifestyle diseases like hypertension, diabetes, obesity, cardiovascular diseases has been
increasing with fast changing consumer lifestyle. Moreover, increasing cost of serious medical treatment is
also encouraging people to go for preventive health care.

• Ageing population:
- Ageing population in India is expected to contribute significantly to increase the demand for health foods
supplements and functional foods to address various types age related health conditions.

• New scientific evidence of various health foods:
- Ongoing scientific research studies to establish health benefits of various food substances and dietary
supplements will help expanding the ambit health food products at a faster speed.

Key challenges for Herbal Food Products:

Herbal products taken from two or more different sources may not necessarily have the same potency, leading to concerns of batch to batch product quality variations in terms of efficacy, which depends on the potency of the material used.

Differentiating the marketing-mix:

For health food products, instead of conventional four Ps of marketing, one will need to consider the following seven Ps:

1. Product :

Health food products will need to have the following:

• Scientifically documented health benefits
• Innovative product development targeting different consumer segments
• Clear brand differentiation
-Without this ‘Horlicks Vs Viva’ story is expected to be repeated more often than in the past with enlightened consumer base.
• Reasonable standardization

2. Place:

Innovative use of this ‘P’ will play a critical role in the success of any health food product.

The following distribution outlets for the health food products are important:

• Kirana / Grocery stores
• Supermarkets

However, equally important is the availability of these products in pharmacies as many consumers will perceive these products as important as medicines and may enquire at the pharmacy outlets for their availability.

• Multi Level Marketing (MLM)
- MLM can be used innovatively for health food products marketing, as is being done currently by Amway, Herbal Life etc.

3. Price:

Price of a health food product like many other products is a function of values that the brand will offer and will also depend on:

• Differential brand features and benefits
• Product life cycle

However, pressure on margin for health food products will be more due to:
• Strong bargaining power of distributors’ chain / supermarket stores, unlike pharmaceutical products where retail and wholesale margin is fixed in India
• High promotional expenditure due to usage of both mass media and relatively intensive personal selling.

4. Promotion :

For health food promotion following common tools just like any consumer product marketing will help:

• Advertising through mass media
• Point of Purchase Promotion (POP)
• Sampling

In addition, following campaigns may prove to be highly beneficial for such products:

• Awareness campaign for usefulness of disease prevention measures
• Medical promotion
- This will be important especially for health food products designed for children where the parents usually seek a doctor’s opinion about the product benefits. Doctors may not necessarily prescribe the product but their ‘yes’ or ‘no’ answer in reply to parents’ questions on the product may prompt whether the parents will continue with this product for the child or not.

Other types of promotion for health food products may be the following:

• Multi level marketing
• Promotion in schools, sports clubs etc.
• Telemarketing of brand services
- These are especially important for health food products meant for children. In such cases, a telemarketing cell consisting of trained nurses or dieticians, will enquire about the progress of the child with the product and give various advices to the mothers for the child, as required by them. Such types of telemarketing services through specialists will help adding a premium image to the brand to indirectly boost up the sales.
• Internet / social forums
- These tools can also be innovatively used for health food brand promotion.

5. People :

For health food products marketing, people with the following skill sets have been found immensely beneficial:

• Sales person with additional training inputs on concerned health related subjects
• Telemarketing of services with people having nursing or a dietician’s background

6. Process :

- All other ‘P’s’ may work with absolute efficiency, but if the marketing process remains inefficient, the branding exercise may be adversely impacted. Thus following areas need to concentrated upon with equal zest:

• Process efficiency
• Process speed
• Process innovation
• Efficiency of IT interface within the marketing process

7. Physical Evidence :

Now a day’s individual enlightened consumer usually wants to know the ability of the manufacturer and the environment in which a product is manufactured, along with the quality of services that is delivered for the brand. Hence, while considering the marketing-mix for health food products the ‘P’ of ‘physical evidence’ is expected to play an increasingly important role.

Conclusion:

It is therefore of immense importance for the marketers to consider the differentiated marketing-mix of seven ‘Ps’ for health food products in their branding exercise.

By Tapan 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.

To restore patients’ confidence MCI has amended its regulations… to strengthen it further will the government consider an Indian version of ‘Physician Payment Sunshine Act’?

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In today’s India, blatant commercialization of the noble healthcare services has reached its nadir, as it were, sacrificing the ethics and etiquettes both in medical and pharmaceutical marketing practices at the altar of unlimited greed. As a result of fast degradation of ethical standards and most of the noble values supposed to be deeply rooted in the healthcare space, the patients in general are losing faith and trust both on the medical profession and the pharmaceutical industry, by and large. Health related multifaceted compulsions do not allow them, either to avoid such a situation or even raise a strong voice of protest.

Growing discontentment – a stark reality:

Growing discontentment of the patients in the critical area of both private and public healthcare in the country, is being regularly and very rightly highlighted by the media to encourage or rather pressurize all concerned to arrest this moral and ethical decay and reverse the evil trend, without further delay, with some tangible regulatory measures.

A laudable move by the MCI:

In such a situation, recent steps taken by the ‘Medical Council of India (MCI)’ deserves kudos from all corners. It is now up to the medical profession to properly abide by the new regulations on their professional conduct, etiquette and ethics. The pharmaceutical industry of India should also be a party towards conformance of such regulations, may be albeit indirectly.

No room for ambiguity:

Ambiguity, if any, in the MCI regulations, which has been recently announced in the official gazette, may be addressed through appropriate amendments, in case such action is considered necessary by the experts group and the Ministry of Health. Till then all concerned must ensure its strict compliance… for patients’ sake. The amended MCI regulations are only for the doctors and their professional bodies. Thus it is up to the practicing doctors to religiously follow these regulations without forgetting the ‘Hippocrates oath’ that they had taken while accepting their professional degree to serve the ailing patients. If these regulations are implemented properly, the medical profession, I reckon, could win back their past glory and the trust of the patients, as their will be much lesser possibility for the patients to get financially squeezed by some unscrupulous elements in this predominantly noble profession.

What is happening in the global pharmaceutical industry?

Just like in India, a public debate has started since quite some time in the US, as well, on allegedly huge sum of money being paid by the pharmaceutical companies to the physicians on various items including free drug samples, professional advice, speaking in seminars, reimbursement of their traveling and entertainment expenses etc. All these, many believe, are done to adversely influence their rational prescription decisions for the patients.

Raging ongoing debate on the financial relationship between industry and the medical profession:

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into the public debate, it appears that there is a good possibility of making disclosure of all such payments made to the physicians by the pharmaceutical companies’ mandatory by the Obama administration, as a part of the new US healthcare reform process.

Exemplary voluntary measures taken by large global pharmaceutical majors:

Eli Lilly, the first pharmaceutical company to announce such disclosure voluntarily around September 2008, has already uploaded its physician payment details on its website. US pharmaceutical major Merck has also followed suit and so are Pfizer and GSK. However, the effective date of their first disclosure details is not yet known. Meanwhile, Cleveland Clinic and the medical school of the University of Pennsylvania, US are also in the process of disclosing details of payments made by the Pharmaceutical companies to their research personnel and the physicians. Similarly in the U.K the Royal College of Physicians has been recently reported to have called for a ban on gifts to the physicians and support to medical training, by the pharmaceutical companies. Very recently the states like Minnesota, New York and New Jersey in the US disclosed their intent to bring in somewhat MCI like regulations for the practicing physicians of those states.

Conclusion:

Currently in the US, both in Senate and the House of Congress two draft bills on ‘The Physician Payment Sunshine Act’ are pending. It appears quite likely that Obama Administration, with the help of this new law, will make the disclosure of payments to physicians by the pharmaceutical companies mandatory. If President Obama’s administration takes such regulatory steps, will India prefer to remain much behind? The new MCI regulations together with such disclosure by the pharmaceutical companies, if and when it comes, could make the financial transactional relationship between the physicians and the pharmaceutical industry squeaky clean and totally transparent.

By Tapan 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.

Amendment of ‘Professional Conduct, Etiquette and Ethics’ Regulations for the Doctors by the MCI could dramatically change the Pharmaceutical Marketing Practices in India, hereafter.

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As reported in the media, 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″ has been welcomed by the medical profession.
Areas of stricter regulations:

The notification specifies stricter regulations for doctors in the following areas, in their relationship with the ‘pharmaceutical and allied health sector industry’:

1. Gifts
2. Travel facilities
3. Hospitality
4. Cash or Monetary grants
5. Medical Research
6. Maintaining Professional Autonomy
7. Affiliation
8. Endorsement

These guidelines have come into force with effect from December 14, 2009.

Possible implications:

With this new and amended regulation, the MCI has almost imposed a ban on the doctors from receiving gifts of any kind, in addition to hospitality and travel facilities from the pharmaceutical and allied health sector industries in India.

Moreover, for all research projects funded by the pharmaceutical industry and undertaken by the medical profession, prior approval from the appropriate authorities for the same will be essential, in addition to the ethics committee.

Although maintaining a cordial and professional relationship between the pharmaceutical industry and the doctors is very important, such relationship now should no way compromise the professional autonomy of the medical profession and a medical institution, directly or indirectly.

It also appears that the common practices of participating in private, routine and more of brand marketing oriented clinical trials could possibly be jettisoned as a pharmaceutical strategy input.

The new MCI regulations is much stricter:

Since the new amended regulations of the MCI are much stricter than the existing codes of marketing practices of the pharmaceutical industry associations, there could be an emerging disconnect between these two practices till such time a clearer picture emerges after due deliberations by all concerned, in this matter.

It is also interesting to note, how would the pre December 14, 2009 commitments for the post December 14, 2009 period, of both the medical profession and the industry related to such regulated practices, be handled by the MCI, in future.

Conclusion:

Be that as it may, the new ball game of pharmaceutical marketing strategies and practices will no longer be driven by more of a ‘deep pocket’ syndrome and less of ‘cerebral power’, by all concerned.

If this happens, I shall not be surprised to witness a dramatic change in the prescription share of various companies in the next 3 to 5 years thereby impacting the ranking of these companies in the Indian pharmaceutical industry league table.

Thus, the name of the game in the pharmaceutical marketing space, in not too distant future, will be “generation and effective implementation of innovative ideas”.

By Tapan 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.

For greater transparency in the relationship between physicians and the pharmaceutical companies, does India need an Act like, proposed ‘The Physician Payment Sunshine Act’ of the USA?

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As we discussed earlier, to make the pharmaceutical companies disclose and report various types of payments made to the physicians, two Senators of the United States of America, Chuck Grassley and Herb Kohl introduced a bill called ‘The Physician Payment Sunshine Act’ in January, 2009.If this bill is passed in 2010, the government will make available to the public by 2011 all types of payments made to the physicians by the pharmaceutical companies over a cumulative value of US $ 100.Items of disclosure:

Among various other heads, the following items related to the “payment made to the physicians’’ will require to be reported:

• Consulting Fees

• Compensation for services other than consulting

• Honoraria

• Gifts

• Entertainment

• Food

• Travel

• Education

• Research

• Charitable Contributions

• Royalties or licenses

• Current or prospective ownership or investment interests

• Compensation for serving as a faculty member or as a speaker for a continuing medical education program

• Grant

• Reporting will be required for compensation towards serving as faculty, or as a speaker for a CME program, and grants.

• Any other nature of the payment or other transfer of value as defined by the government

Research payments:

Pharmaceutical companies will also require reporting aggregate amounts of research payments in a specified manner.

Items exempt from disclosure:

There will be items, as mentioned below, which will be exempted from such reporting:

• Product samples

• Payments in the aggregate of less than $100

• The loan of a device for less than 90 days

• Patient education materials

• Warranty replacements (devices)

• Items for use as a patient

• Discounts and rebates

• In-kind items used in charity care

• Dividends from a publicly-traded company

Penalties for default from disclosure:

Proposed penalties have been categorized as follows:

• For unintentional failure to report: fines from US $1,000 – US $10,000 for each payment not reported with a cap of US $150,000/year

• For intentional failure to report: fines from US $10,000 – US $100,000 for each payment not reported with a cap of US $1 million/year.

World Medical Association (WMA) Statement Concerning the Relationship Between Physicians and Commercial Enterprises:

Meanwhile, WMA is also trying to address this vexing issue and coming closer to some sort of voluntary disclosure at their end, as well.

Such type of statement was first adopted by the WMA in its General Assembly at Tokyo, Japan in October 2004. Recently in its General Assembly held at New Delhi in October 2009, the statement was further amended coming closer to the disclosure of payments.
.
The preamble of the amended statement articulates the following:

“In the treatment of their patients, physicians use drugs, instruments, diagnostic tools, equipment and materials developed and produced by commercial enterprises. Industry possesses resources to finance expensive research and development programmes, for which the knowledge and experience of physicians are essential. Moreover, industry support enables the furtherance of medical research, scientific conferences and continuing medical education that can be of benefit to patients and the entire health care system. The combination of financial resources and product knowledge contributed by industry and the medical knowledge possessed by physicians enables the development of new diagnostic procedures, drugs, therapies, and treatments and can lead to great advances in medicine.

However, conflicts of interest between commercial enterprises and physicians occur that can affect the care of patients and the reputation of the medical profession. The duty of the physician is to objectively evaluate what is best for the patient, while commercial enterprises are expected to bring profit to owners by selling their own products and competing for customers. Commercial considerations can affect the physician’s objectivity, especially if the physician is in any way dependent on the enterprise.

Rather than forbidding any relationships between physicians and industry, it is preferable to establish guidelines for such relationships. These guidelines must incorporate the key principles of disclosure, avoidance of obvious conflicts of interest and the physician’s clinical autonomy to act in the best interests of patients.
These guidelines should serve as the basis for the review of existing guidelines and the development of any future guidelines.”

This new statement of the WMA, having a remarkable similarity with the ‘Codes of marketing Practices’ of the pharmaceutical industry associations in India, like Organization of pharmaceutical Producers of India (OPPI) and Indian Drug Manufacturers’ Association (IDMA) is indeed a welcome step in the right direction.

Conclusion:

Along with the self regulation initiatives by both the industry and WMA, this bill, if passed, will surely and significantly improve the transparency related to the transaction between the pharmaceutical companies and the physicians to the public at large in the US to start with. However, bringing research within the ambit of this bill could possibly be a contentious issue.

Be that as it may, in India a large section of the civil society still feels that it is now high time for the Government of India to decide whether the nation needs an Act like the proposed ‘Physician Payment Sunshine Act’ of the US to bring in greater transparency in the process of various financial transactions between the pharmaceutical industry in India and the physicians, along with the continuing initiatives of self-regulations by both the industry and the physicians.

By Tapan 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.

Will mandatory disclosure of ‘payments to physicians’ by the pharmaceutical companies be an overall part of “Healthcare reform process” in the US and what about India?

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The brief Scenario in India:
In India over 20, 000 pharmaceutical companies of varying size and scale of operations are currently operating. It is alleged that 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 involve almost all types of their customer groups, excepting perhaps the ultimate consumer, the patients.

Unfortunately in India there is no single regulatory agency, which is accountable to take care of the healthcare needs of the patients and their well being.

The pharmaceutical industry of India, in general, has expressed the need to self-regulate itself effectively, in the absence of any regulatory compulsion. However, many activists groups and NGOs 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.

The brief scenario in the US:

Like in India, a public debate has started since quite some time in the US, as well, on allegedly huge sum of money being paid by the pharmaceutical companies to the physicians on various items including free drug samples, professional advice, speaking in seminars, reimbursement of their traveling and entertainment expenses etc. All these, many believe, are done to adversely influence their rational prescription decisions for the patients.

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into a raging public debate, it appears that there is a good possibility of making disclosure of all such payments made to the physicians by the pharmaceutical companies mandatory by the Obama administration, as a part of the new US healthcare reform process.

As I said in my earlier article, Eli Lilly, the first pharmaceutical company to announce such disclosure voluntarily around September 2008 has already uploaded its physician payment details on its website.

US pharma major Merck has also followed suit and so are Pfizer and GSK. However, the effective date of their first disclosure details is not yet known.

In the meantime, Cleveland Clinic and the medical school of the University of Pennsylvania, US are in the process of disclosing details of payments made by the Pharmaceutical companies to their research personnel and the physicians. Similarly in the U.K the Royal College of Physicians has been recently reported to have called for a ban on gifts to the physicians and support to medical training, by the pharmaceutical companies.

Conclusion:

Currently in the US, both in Senate and the House of Congress two draft bills on ‘The Physician Payment Sunshine Act’ are pending. It appears quite likely that Obama Administration, with the help of this new law, will make the disclosure of payments to physicians by the pharmaceutical companies mandatory, along with its much discussed new healthcare reform process.

If President Obama’s administration takes such regulatory steps will Dr. Manmohan Singh government prefer to stay much behind?

I shall try to explore that emerging scenario in my next blog post.

By Tapan 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.

Ethical Pharmaceutical Marketing Practices: ‘Self-Regulation’…’Voluntary Physician Payments Disclosure’…What’s next?

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Over a period of time, many stakeholders of the pharmaceutical industry and the public at large have been raising the issue of physicians being influenced in their prescription decisions by various types of payments made to them by the pharmaceutical companies. Such types of significant and seemingly avoidable expenditures, considered by the respective companies as a part of their ‘marketing costs’, are believed to be included in the maximum retail price (MRP) of medicines making them more expensive to the patients.On the other hand, most physicians believe that free entertainment, gifts, their travel costs and seminar sponsorships in no way influence their prescription decision for a patients.This issue is not India specific. It is indeed a global issue.

Self regulation by the industry is considered to be the name of the game:

To address this issue effectively, international pharmaceutical associations, like International Federation of Pharmaceuticals Manufacturers and Associations (IFPMA) and Pharmaceutical Research and Manufacturers of America (PhRMA) have come out with their own codes of ethical marketing practices with appropriate stakeholder grievance redressal mechanism to respond to stakeholder complaints, effectively.

In India, pharmaceutical industry association like Organization of Pharmaceutical Producers of India (OPPI) and Indian Drug Manufacturers’ Association (IDMA) have also formulated their own codes of ethical marketing practices.

Despite all these, it is indeed an undeniable fact that the perception and the allegation of the stakeholders including the general public towards the pharmaceutical industry, in general, have not changed much.

The government intervened in India:

Being alarmed by various media reports on the current pharmaceutical marketing (mal) practices scenario, the Department of Pharmaceutical (DoP) convened a meeting of the pharmaceutical Industry on the subject this year and advised the pharmaceutical industry to develop a ‘Uniform Code of Marketing Practices (UCMP)’, which will be applicable to the entire pharmaceutical industry in India.

‘Uniform Codes of Marketing Practices (UCMP)’:

It is believed that the UCMP is in its final stages of release along with its stakeholder grievance redressal mechanism in a transparent procedural format. Everybody expects that all stakeholders will help maintaining the sanctity of the UCMP to address this sensitive global and local issue effectively.

A new trend of public disclosure of ‘payments to the physicians’ by the global pharmaceutical companies:

Around third quarter of 2008, in an industry first step, Eli Lilly announced its intent of full disclosure of payments that the company made to the physicians for various commercial reasons. Eli Lilly indicated disclosure of payments of more than US $500 to the physicians for advice and speaking at the seminars. Over a period of time, the company indicated that it will expand such disclosure to include other forms of payments to the physicians like gifts, various entertainment and travel.

Eli Lilly was soon followed in this direction by global pharmaceutical majors like Merck and GlaxoSmithKline (GSK).

Skepticism with such voluntary disclosure will still exist:

Many are still skeptical about such ‘voluntary disclosure of payment to the physicians’ announcements by the global pharmaceutical majors to bring in better transparency in the functioning of the industry. They believe that there are hundreds and thousands of pharmaceutical companies who will not follow such precedence of voluntary disclosure in the absence of any properly enforced regulation.

Conclusion:

‘Self-regulation of pharmaceutical marketing practices’ and ‘voluntary disclosure of payment to the physicians’ by some pharmaceutical companies are laudable steps to address this problem. However, the moot question still remains: are all these enough?

By Tapan 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.

Changing pharmaceutical marketing environment demands a change in mindset for a new strategic direction.

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Will the Tsunami of change hit India too?
In the matured markets of the global pharmaceutical industry, individual doctors are no longer the prime target customers. Healthcare providers, patient advocacy groups, pharmacy benefit managers, clinical assessment authorities etc have already emerged as key decision makers for use of various branded or generic medicines and other kind of healthcare facilities/ support for the patients.In India even today individual doctors are the prime target customers for the pharmaceutical companies as, by and large, they are the key decision makers for usage of medicines and other healthcare facilities for the patients.

However, a distinct change, albeit slowly though, is now noticeable within healthcare financing system in India. Slow but gradual emergence of healthcare providers with medical insurance and other related products, patient advocacy groups, standard treatment guidelines etc, are expected to bring in a radical change the way current pharmaceutical marketing strategy is formulated, which continue to revolve round the doctors, mainly. The small ripples of change, blessed by adequate dose of the Government’s financial policy reform measures, may soon get converted into a Tsunami of change, destroying the current pharmaceutical business strategy directions of majority of the companies. Rapid increase in the number of healthcare providers and other related stakeholders with attractive schemes for various strata of the civil society, will herald the emergence of very powerful groups of negotiators for products’ price and other healthcare related services. These groups will be capable to very strongly and significantly influence doctors’ products and other treatment choices.

Marketing will be a ‘composite value delivery system’:

In addition, during the coming years of post product patent regime in the country, pipelines of the domestic Indian companies for new ‘copycat’ versions of patented products are expected to completely dry up, making the price competition in the market place even more ‘cut throat’. In such type of environment Indian pharmaceutical companies will be under tremendous pressure to provide additional composite value, not just the physical products, as differential offerings to the patients, doctors, healthcare providers and other stakeholders, in and around the related disease areas. Ability to deliver such composite differential value along with the product will enable a company to acquire the competitive cutting edge.

Required leadership and managerial skill sets will be quite different:

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

Skill requirements:

Leaders and managers with only individual functional expertise like, R&D, manufacturing, marketing, regulatory, finance etc will no longer be successful in the new paradigm. To handle new types and groups of customers, the leaders and managers will need to ensure:

• Multi-functional expertise by rotating right people across the key functional areas

• Knowledge of ‘Pharmaco-economics’ and/or ‘health technology assessment’ (HTA)

• Ability to interpret patients’ clinical benefits against cost incurred by the payors to achieve the targeted clinical outcome, especially in the areas of new products

• Insight about the thought pattern of the healthcare providers and other customers or influencers groups

• Speed in decision making and more importantly ability to take ‘first time right’ on the spot decision, which can make or mar a commercial deal.

Managing the phase of transition:

During the ensuing phase of transition in India, pharmaceutical companies should:

• Clearly identify, acquire and hone the new skill sets, which would drive the changing scenario

• Get strategically engaged 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 in both types of marketing strategies, in innovative ways.

Conclusion:

Indian pharmaceutical industry has been trapped in a difficult to explain ‘strategic inertia’, as it were, since long. It is high time now to come out of it and face the change upfront boldly and squarely to translate this challenge into a possible growth opportunity. Global pharmaceutical companies are now gaining expertise in the new ball game in the developed markets of the world. If majority of the Indian pharmaceutical companies, who are not yet used to handling such change, are caught unaware of this possible future trend, the tsunami of change could spell a commercial disaster to them. However, I strongly hope that this new and yet another challenge of change will be met with a clear and well thought out strategic initiatives to give a further boost to the growth engine of the industry.

By Tapan 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.