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Uniting Pharma With Business Ethics: A Bridge Too Far?

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Operating ethically not only is the right thing to do but also is fundamental to success in business. Poor governance and poor ethical business practices can lead to fines, public scrutiny and distrust – overshadowing good performance, destroying reputation, and undermining the morale and engagement of employees. …We must act in ways that build and maintain the trust of patients, healthcare professionals, governments and society. This was articulated in the Novartis Corporate Responsibility Report 2017, highlighting how important it is to unite pharma operations with business ethics for each company. But is it happening in reality?

The same question haunts yet again with the announcement of a new Code of Marketing Practice by the International Federation of Pharmaceutical Manufacturers and Associations’ (IFPMA),effective January 2019. The pronouncement prescribes ‘a global ban on gifts and promotional aids for prescription drugs wherever the association’s member companies operate.’

However, the overall scenario gets more complex to comprehend, when on January 03, 2019  Bloomberg Law reported: ‘The change is causing concern among both U.S.-based and multinational companies like Astra Zeneca, Bristol-Myers Squib, Johnson & Johnson, and Pfizer Inc. about how to balance appropriate business behavior with respect for cultural norms in other countries.’ Interestingly, the IFPMA membership virtually covers all MNC drug companies, operating across the world. Thus, any concern on its implementation, especiallyamong some of the bigger names, raises more questions than answers about its effectiveness. What exactly has been the outcome of all such actions being taken, especially by the multinational pharma industry associations, from time to time. Have the patients been benefited – at all?

Keeping this recent development as the backdrop, I shall try to gauge in this article, is the bridge still too far to mitigate the widening gap between overall pharma operations and the standard of business ethics -voluntary code of practices of pharma associations notwithstanding?

Why pharma ‘business-practices’ and ‘business-ethics’ are so important?

Before charting onto the sensitive areas of ‘business practices’ and ‘business ethics’, let me recapitulate the meaning of these two terminologies to fathom why these are so important in pharma to protect patient health interest.

  • Business practice is defined as a method, procedure, process, or rule employed or followed by a company in pursuit of achieving its objectives. Itmay also refer to these collectively.
  • Similarly, Business ethics is defined as a form of professional ethics that examines the ethical and moral principles and problems that arise in a business environment. It applies to all aspects of business conduct on behalf of both individuals and the entire company.

Thus, ethical business policies and practices for pharma industry, when worked out both by an industry association or an individual company, aims at addressing potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate responsibility and fiduciary responsibilities.

Ironically, despite well-hyped announcements of voluntary codes of practices from time to time, no commensurate changes in patients’ health interest are visible in real life. Thus, the very relevance of such edicts is now being seriously questioned by many.

What do reports reflect on ongoing pharma business practices?

To get an idea in this area, let me quote below from three reports, out of which one is specifically on the Indian scenario, which has not changed much even today:

“The interaction between physicians and medical representatives (MRs) through gift offering is a common cause for conflicts of interest for physicians that negatively influence pre- scribing behaviors of physicians throughout the world.” This was articulated in an article titled, “Gift Acceptance and Its Effect on Prescribing Behavior among Iraqi Specialist Physicians”, published by Scientific Research Publishing (SCIRP) in June 2014.

A couple of years before that, on September 07, 2012, Reuters also published an article with the headline: “In India, gift-giving drives drug makers’ marketing.” Thereafter, many similar articles were published in various newspapers and magazines, possibly to trigger remedial action by the regulators in the country.

Very recently, on January 18, 2019, The New York Times (NYT) came out with a mind boggling headline – “Study Links Drug Maker Gifts for Doctors to More Overdose Deaths.” Elaborating on this JAMA study, the NYT wrote: “Counties where the doctors got more meals, trips and consulting fees from opioid makers had higher overdose deaths involving prescription opioids.”

The point I want to drive home here is that freebies in the form of gifts, travel to exotic places with free meals and stay, fees of various types clubbed under a mysterious nomenclature ‘consulting fees’, purported to influence doctor’s prescribing behavior, are now rampant. These are adversely impacting patients, as they are often compelled to buy high-priced drugs, unnecessary drugs, including antibiotics, sedatives and opioids, to name a few.

Are big pharma companies following the codes – both in letter and spirit?

The doubt that surfaces, are these changes just for displaying to the stakeholders how well and with stringent measures, drug companies are self-regulating themselves, on an ongoing basis? Before jumping to any conclusion, let us try to make out whether, at least the big pharma players are following these codes in both letter and spirit.

To establish the point, instead of providing a long list of large pharma settlements with governments for various malpractices, I shall cite just the following two relatively recent ‘novel’ examples related two top global pharma companies, for you to have your own inferences.

  • The first one is related to reports that flashed across the world in May 2018 related to Novartis. One such article described, “Congress demands info from Novartis about its USD 1.2m in outflows to Michael Cohen, just as it was negotiating payments for its cancer drug.” The report further elaborated, Novartis’ USD 1.2 million payment was made in the shell company of Michael Cohen, President Donald Trump’s personal lawyer and so-called ‘fixer’.
  • The second one is the September 13, 2018 report of The New York Times. It revealed: ‘Dr. José Baselga, the chief medical officer of Memorial Sloan Kettering Cancer Center, resigned on Thursday amid reports that he had failed to disclose millions of dollars in payments from health care companies in dozens of research articles.”

The report also stated: “Dr. Baselga, a prominent figure in the world of cancer research, omitted his financial ties to companies like the Swiss drugmaker Roche and several small biotech startups in prestigious medical publications like The New England Journal of Medicine and The Lancet. He also failed to disclose any company affiliations in articles he published in the journal Cancer Discovery, for which he serves as one of two editors in chief.”

Indian companies aren’t trailing far behind, either:

Many Indian companies are, apparently, sailing on the same boat. Let me illustrate this point by citing an example related to India’s top ranked domestic pharma player.

What it said: Way back on November 13, 2010, Sun Pharmain a communication expressed its concern by saying: ‘Over four decades since Independence, the government nurtured a largely self-sufficient pharma industry. But the entry of MNCs is putting most drugs beyond the reach of millions.’

The communique further added: ‘Even as the domestic industry begins to feel the heat of an unprotected market, public health experts are examining why drug prices in India are higher than in Sri Lanka, which imports most of its drugs. The MNC takeover raises the specter of an MNC-dominated pharma sector selling drugs at un-affordable prices, a throw ‘back to the scenario just after Independence, which the government painstakingly changed over four decades. Are we setting the clock back on the country’s health security?’

The reality thereafter: It’s a different story that today, the same Sun Pharma, despite alleged ‘high price drugs of MNCs’, occupies the top ranking in the Indian pharmaceutical market. Be that as it may, the point to note that the same company is now facing similar charges from other countries, almost a decade after. On March 2017, a media report came with a headline: ‘Sun Pharma, Mylan face price fixing probe in US.’

Incidentally,the company is mired with allegation on governance related issues, as well. A media report dated November 20, 2018 carried a headline: ‘Governance cloud over Sun Pharma, stock at 6-month low.’ This example is quite relevant to this discussion, as well, for its link with ethical business practices, as discussed earlier.

Additionally, class-action lawsuits in the United States for alleged business malpractices, including ‘pay for delay conspiracies’, against Indian pharma companies are also on the rise – Sun Pharma and Dr. Reddy’s top the list in terms of those who face most class-action litigation, reported a leading Indian business daily on September 02, 2017.

Pharma malpractices continue, DOP is still to make UCPMP mandatory: 

In this quagmire, where self-regulation doesn’t work, the government usually steps in, as happened in the United States and Europe. Whereas, in India, no decisive government action is yet visible to curb this menace, especially for protection of patients’ health interest. Let me try to illustrate this point with the following chronology of four key events:

  • On May 08, 2012, the Parliamentary Standing in its 58th Report, strongly indicted the DoP for not taking any tangible action in this regard to contain ‘huge promotional costs and the resultant add-on impact on medicine prices’.
  • Ultimately, effective January 01, 2015, the Department of Pharmaceuticals (DOP) put in place the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) for voluntary implementation, despite knowing it has not worked anywhere in that format.
  • When voluntary UCPMP did not work, on September 20, 2016, the then secretary of the DoP reportedly said, the mandatory “UCPMP is in the last leg of clearance with the government. The draft guidance has incorporated suggestions of the pharma industry and other stakeholders.”
  • After another year passed by, on April 16, 2018, a news report reconfirmed: ‘4 years on, code to punish pharma firms for bribing doctors still in works.’ Its status remains unchanged till date.

Conclusion:

Even after Prime Minister Modi’s comment on April 2018 regarding the alleged nexus between doctors and pharmaceutical firms and doctors attending conferences abroad to promote these companies, decision paralysis of DOP continues on this important issue.

Pharma companies continue practicing what they deem necessary to further their business interest, alongside, of course, announcing their new and newer voluntary codes of practices. But, patients keep suffering, apparently for the apathy of the DOP to curb such malpractices forthwith.

Coming back to where I started from, when the malice is so deeply rooted, would any global ban ‘brand-reminders’, such as gifts, even if implemented religiously, work? Thus, the doubt lingers, for uniting pharma operations with corporate business ethics is the bridge still too far?

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.

‘Unbossing’ Pharma Culture For Millennials – A Sine Qua Non For Future Growth

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Wishing All My Readers A Very Happy, Healthy, Peaceful and Prosperous 2019

‘Unbossing’ an organizational culture is an interesting idea – more in the context of promoter driven Indian drug companies of all sizes and scale. The word – ‘unboss’ is associated with nonhierarchical and open leadership culture, aiming to achieve value-based higher goals, across the organization.Not many pharma companies are attempting to imbibe this culture, just yet, barring a very few.

‘The organizational culture is something that comes with the job’ – has been the general perception of all working for the company, including most CEOs, since long. Pharma industry being a more tradition bound, and hierarchic, such acceptance is more visible in drug companies. However, some industry majors have started challenging this status quo by asking: ‘Has our organizational culture, over a period of time, become too hierarchical and somewhat archaic? Are we still clinging on to the dated, and somewhat fossilized views and practices of the great predecessors, which were quite relevant in those days, but no longer now?’

In today’s changing scenario, the corporate culture of a pharma company should be able to unleash the full potential of its employees, who are an increasing number of vastly talented millennials, with generational differences in behavioral pattern.  They come with different values, mindset, expectations, aspirations, and feel comfortable working in a an ‘unbossy’ culture.

In this article, I shall explore how in the new millennium some pharma CEOs are going beyond mere tweaking, to usher in a substantive change in the sensitive area of organizational culture, keeping pace with time. This seemingly rare breed of head honchos clearly recognizes that developing a positive corporate or brand image, starts with the development of an enabling corporate culture.

Let me now start linking the organizational culture and business practices with brand or corporate image, through stakeholder loyalty, to corporate business excellence – all in the pharma context.

Intended corporate image starts from practices within the company: 

Instead of being always combative to prove how unreasonable are the stakeholder demands emanating from the complex business environment, drug companies need to accept some hard facts, and act accordingly. One such fact is – a positive corporate image or reputation based on an enabling corporate culture that is aligned with organization’s identity and good business practices, help earn stakeholder loyalty and enhance business performance.

This concept has passed the acid test in several research studies, over a period of time, e.g. the research paper on ‘Corporate Identity and Corporate Performance’, published in Scandinavian Journal of Business Research (Beta), (ISSN 1504-3134. Its findings may be summarized as: It is important for managers to understand that while building a strong reputation, the intended image projected by the company, needs to be consistent with the actual identity perceived inside the company, especially by the important internal stakeholder – the employees.

This is because, a positive corporate image reflects the way customers perceive a company’s product and service offerings to them and vice versa. This is not a recent phenomenon. It has been happening over decades. But only a few companies have taken it seriously to bring necessary changes within the organization, by remolding the organizational culture in sync with time. This point was also vindicated by the August 1998 article on ‘The Effect of Corporate Image in the Formation of Customer Loyalty’, published in the Journal of Service Research.

The findings of the above study from the goods and service sector are based on theory of consumer behavior, cognitive psychology, and social cognitive psychology. It clearly articulates that corporate image has a significant, but the indirect impact on customer loyalty. The authors claimed that customer loyalty is also driven by positive corporate image.

A positive corporate image originates from an enabling corporate culture:

That developing a positive corporate image or reputation starts with the development of an enabling corporate culture, is also corroborated by the above article featured in the Journal of Service Research. It highlights that a favorable corporate image is formed through a process of continuous updating without any behavioral time-lag within the organization.

Like many other industries, this holds good in the pharma sector, as well, to excel in business. Itis fundamental to ensure that the concerned pharma company always enjoys the confidence and loyalty of its internal customers – such as employees, along with the external customers that include employees, doctors, patients, Governments and the general public, among others.

This is equally important to make sure that the overall organizational culture does not get fossilized, at any period of time. It should always remain in conformance with the changing needs of time – new aspirations of the employees to unleash their full potential, for the best possible business outcomes through customer delight.

Some early indicators of an image problem:

In the pharma industry, some of the early signs of a company’s brand or corporate image problems get manifested by its indirect impact on customer/stakeholder or employee loyalty. The symptoms may encompass a whole gamut of areas, ranging from high employee turnover, through difficulty in getting brand prescription support from doctors and hospitals, into deteriorating relationship with the government, culminating to declining company share value with business growth stagnating or going south.

Positive or negative culture originates from the C-suites:

Many may be well-aware that both a positive or a negative corporate culture originates from the C-suites – mostly starting from the CEO office, including his direct reports, percolating down to even the first line managers, across various functions. A CEO should obviously carry the can and be held accountable, unless such incidences are aberrations or restricted in some functional areas. The reason being, an adverse company reputation or image, usually develops when the concerned CEO’s primary focus is on short-term results – not investing enough time on developing a positive and enabling organizational culture.

As the famous Warren Buffett once said:“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” This is important for all consider, especially in pharma, and in today’s scenario.

In the Indian context, one recent example, could be the ruckus created, especially in the United States and Europe, on the dubious quality and pricing of generic drugs. A bit older example is – how once top ranked Indian pharma corporate Ranbaxy almost vanished in the thin air, over good manufacturing practices and drug quality standards.

What culture would the millennials want with pharma companies?

The December 10, 2018 report on the Best Company Culture for 2018 of Comparably - a workplace culture and compensation monitoring site, highlight some important parameters on what type of organizational culture the millennials appreciate and look for. To illustrate this point, let draw the following examples from the report:

  • Open and collaborative company culture, where everyone is updated on the latest and greatest things happening to the company as a whole, across functions.
  • Autonomy with willingness to help, from all.
  • Everyone is trusted to do their job, no micromanaging.
  • Anyone can ask questions and provide input that will genuinely be heard.
  • Hanging out with each other.

These are just a few examples to get a flavor of the change. It is also quite likely that many senior pharma managers may say: ‘Oh! We are already doing these and much more.’ It’s a different matter, though, that millennials of the same company may not be on the same page with these managers.

Unbossing pharma culture – the ball has started rolling:

At the Forbes Healthcare Summit 2018, held in New York City from November 28 -29, 2018, the global CEO of Novartis - Vas Narasimhan, called for a cultural shift to cater to the millennial generation’s needs, expectations and aspirations at the work place. He said: “The goal we set out to do is create an ‘unboss’ culture.” Half of Novartis current 120,000 employee strength being millennials. This move is directed to enhance the company’s appeal to them. A part of ‘unbossing’ the company culture in Novartis would be relaxing the current rules, by allowing employees to wear jeans to work.

Expanding the point while talking to Business Insider, Vas Narasimhan said: “For many people, they love the idea of the culture change, everybody then wants to know why can’t it happen right away. So, then you have to explain to people, this takes time, leadership, it takes a lot of changes in how we work. But I think there’s been a lot of acceptance of the culture change, but now the hard work has begun.” 

Some key traits of ‘unboss’ culture:

The article titled, ‘5 signs that you might be an ‘unboss,’ appeared in YOURSTORY on April 08, 2017 explains: The word ‘Boss’ originates from the Dutch word ‘Baas’, meaning ‘Master’. Where there is a master, there are slaves, and that’s not a good thing. More often than not, this word leaves a bad taste in the mouth, and rightly so. Thus, in a ‘unboss’ company culture, the topmost quality that the person in-charge, irrespective of organizational functions should possess, is being ‘unbossy’.

Some common leadership traits that define a ‘unboss’ culture, as I sense from the above article, are as follows:

  • Giving a great importance to sharing of knowledge.
  • Quickly identifying the ability in others and bring out the best in each team member.
  • Never feeling insecure and passing on credit where it’s due and not coveting praise that’s rightfully others.
  • Being flexible enough and possessing maturity to also do the legwork when required.
  • Treating everyone the same, without playing favorites, ever.
  • Creating an environment of learning and encouraging the team to experiment.
  • Setting benchmarks for each individual member to assess their own career growth.

In the pharma industry, not many leaders, I reckon, possess these qualities. Some drug companies, both local and global, may pontificate about practicing these qualities, but the majority of employees may not experience most of these in the real work situation.

Conclusion:

In most pharma companies, including India, much of the workforce, in addition to field staff, constitutes of millennials, which will continue to show an ascending trend. Thus, it is critical to align the company culture to attract and retain talents from the new generation A large number of companies still don’t consider this issue as a priority task for the corporation. The example set by the Novartis CEO, as quoted above is refreshing, in that sense.

Moreover, a number of research studies have established that organizational culture helps form the context within which corporate identity and corporate image are established. There can’t be a better time for a relook at the respective organizational culture, as the image of pharma industry has still not found its bottom.

A positive image, irrespective of whether it is a brand or a company, based on a robust organization culture, establishes a stout emotional connect with stakeholders. This is central for a long-term business success, and vice versa. It isn’t an easy task for any pharma player, especially for the promoter driven Indian companies of all sizes and scale, but not impossible, either.

Be that at it may, with the pharma business environment facing increasingly strong headwind, ‘unbossing’ pharma culture for millennials, I reckon, is sine qua non for long-term success – from the corporate perspective.

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.

Holistic Disease Treatment Solution: Critical For Pharma Success

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The speculation over quite some time has ended now. The most important C-suite office of the world’s top pharma company will find a brand-new occupant at the dawn of a brand-new year, on January 01, 2019. Albert Bourla will now be on the saddle to lead Pfizer moving towards a new horizon of success, in place of Ian Read.

What makes this change interesting to me, is the new leader’s not just shaking up the top team at Pfizer, but his simultaneous announcement for another brand-new C-Suite role in the company – The Chief Digital Officer (CDO). She will ‘lead the company’s digital efforts across research, discovery and business processes.’

Merck & Co. also joined ‘the chief digital officer parade’ on October 17, 2018 when it announced the appointment of chief information and digital officer, also as a member of the company’s Executive Committee. Notwithstanding a few global pharma companies’ have already started creating this role, the timing of this initiative by the top global pharma player, sends an interesting signal to many. Undoubtedly, it is a strategic move, and is surely backed by a profound intent. In this article, while exploring this point I shall try to fathom whether or not any fundamental change is taking shape in the strategic space of pharma business.

A fundamental change is taking shape:

This fundamental change, I reckon, is driven by realization that just discovery of new medicines, high quality manufacturing and high voltage marketing can no longer be regarded as success potent in the industry. There emerges a palpable and growing demand for holistic solutions in the disease treatment process, for optimal clinical outcomes and reduction of the burden of disease.

That several top global pharma companies have recognized this fact, is vindicated by what the Sandoz Division of Novartis acknowledged on its website. It quoted Vas Narasimhan – CEO of Novartis saying: “We are on the verge of a digital revolution across every aspect of the healthcare sector, from the lab bench to the patient’s bedside.”

Interestingly, pharma stakeholders’ interests and expectations, including those of patients, are also progressing in the same direction. This, in turn, is changing the way of leading and managing a pharma business – requiring a kind leadership with specific expertise in several new areas. The new C-suite position for a CDO is a proof of this change gathering strong tailwind.

What prompts this change?

As I see it, besides scores of other associated factors that digital technology offers to all, a single characteristic that stands out is the changing patients’ expectations for optimal clinical outcomes out of an affordable and involved disease treatment process.

This has always been so, but is now changing from mere expectations or just a hope, to patients’ demand, from both physicians and the pharma companies. This is a clear writing on the wall in the days ahead, and all concerned should take note of it, seriously. Does it mean that the broad flowchart of the disease-treatment-process, as I call it, has changed? Before delving into that area, let me briefly explain what exactly I mean by saying so.

A flowchart of the disease-treatment-process:

The broad flowchart for most of the disease-treatment-process, have primarily 6 ‘touchpoints’ or points of references, as I see it, which may be summarized as follows:

Patients – Signs & Symptoms – Doctors – Diagnosis – Medicines – Clinical outcomes

This means, patients with signs and symptoms of a disease come to the doctors. With various diagnostic tests, the disease or a combination of diseases is diagnosed. Then, doctors prescribe medicines or any other required medical interventions for desired clinical outcomes.

Has it changed now?

There doesn’t seem to be any fundamental change in this flowchart even today. But, the way the pharma players cherry-pick their areas of focus from its various touch points, is undergoing a metamorphosis.

As it stands today, to sell medicines – innovative or even generic pharma companies primarily focus on the doctors and off-late on patients – but just a few of them, to offer clinical outcomes better or same as others. In the evolving new paradigm, a successful drug companies would need to focus on each of these six elements of the flowchart with great expertise and sensitivity, from the patients’ perspective.

The position of CDO is expected to be a great enabler to facilitate the process of integrating all the touchpoints in the disease-treatment-flow. This will, in turn, offer a holistic treatment solution for patients – selling more medicines being the endpoint of this objective. If it doesn’t happen, the touchpoints where pharma is not focusing today would be captured soon by the non-pharma tech players. This will make achieving the financial goals of the organization even more difficult.

Let me illustrate this point by adding just one important area from this flowchart to the traditional pharma focus areas. This touchpoint goes hand in hand with the prescription of medicines – medical diagnosis. Providing patient- friendly disease prevention and monitoring tools may be yet another such area.

Current accuracy of medical diagnosis – ‘only correct in 80 percent of cases’:

The above was quoted by Sandoz (a Division of Novartis) in its website. It highlighted that the researchers at John Radcliffe Hospital in Oxford, UK found that several medical diagnoses based on a limited range of factors are only correct in 80 percent of cases. It means ‘a diagnosis may miss imminent heart attacks, or it may lead to an unnecessary operation,’ it said.

The January 31, 2018 article published by Futurism.com - the publishing arm of Futurism, based in New York City, also underscores some interesting facts in this regard, including the above example. Some of these are fascinating, as I quote hereunder:

  • Researchers at the John Radcliffe Hospital in Oxford, England, developed an AI diagnostics system that’s more accurate than doctors at diagnosing heart disease, at least 80 percent of the time.
  • At Harvard University, researchers created a “smart” microscope that can detect potentially lethal blood infections with a 95 percent accuracy rate.
  • A study from Showa University in Yokohama, Japan revealed that a new computer-aided endoscopic system can reveal signs of potentially cancerous growths in the colon with 94 percent sensitivity, 79 percent specificity, and 86 percent accuracy.
  • In one study, published in December 2017 by JAMA, it was found that deep learning algorithms were able to better diagnose metastatic breast cancer than human radiologists when under a time crunch. While human radiologists may do well when they have unrestricted time to review cases, in the real world a rapid diagnosis could make the difference between life and death for patients.
  • When challenged to glean meaningful insights from the genetic data of tumor cells, human experts took about 160 hours to review and provide treatment recommendations based on their findings. IBM’s Watson took just ten minutes to deliver the same actionable advice.

Thus, the bottom-line is: Medical or clinical diagnosis is a crucial area where the tech savvy environment can add significant unmet needs to save lives of many. Consequently, this space is emerging as an Eldorado, as it were, for all those who are seriously interested in diving deep in search of a golden future in the related business.

Technological players are making forays:

Several tech companies have sensed the reward of a pot of gold in the above space, despite the journey being quite arduous. Consequently, many of them are coming up with user-friendly and disease-specific digital tools and health apps, compatible with smart phones or smart watches. These help patients monitoring their own health data, independently, and be aware of the disease progression, if any. Simultaneously, it also enables physicians not only to accurately diagnose a disease, but also to keep a careful vigil on the progress of the treatment.

To illustrate the point with an example – say about Apple. The company began making inroads into the healthcare space with health apps and fitness-tracking via iPhone and Apple Watch. Interestingly, riding on partnership and acquisition initiatives, it is now carving a niche for itself to provide complete health records of the users by capturing relevant disease-specific clinical data.

Apple Watch Series 4, for example, has ECG feature and the ability to detect irregular heart-rhythm, which is US-FDA approved. Reports indicate the company is also in the process of developing a non-invasive glucose monitoring tool, besides many others. Curiously, the company has already given a signal to extend the usage of iPhone to a reliable diagnostic tool for many disease conditions. Most important to note is, this concept is fast gaining popularity.

Calls for of a holistic approach in the disease-treatment process-flow: 

As this trend keeps going north, many pharma companies are realizing the underlying opportunity to adopt a holistic strategic business approach to move into the new frontier. This would encompass the entire disease-treatment-process-flow with digital technology, across the organization. Before other non-pharma companies firmly position themselves on the saddle while entering into this area, pharma needs to move fast. This calls for an urgent action to collaborate with tech companies in all the critical touchpoints of this flow, including diagnosis. That this realization gas dawned in pharma is evident from a number of related developments. Let me quote just a couple of examples, as follows:

  • Onduo, a US$500-million diabetes-focused joint venture between Sanofi and Verily Life Sciences, an Alphabet company was founded in September 2016. Onduo recently launched its first product – an app plus, a continuous glucose-monitoring device plus an insulin pump that are all linked together. The Onduo app has a built-in coach (i.e., an electronic assistant) to help patients better manage their diabetes and accomplish their health goals.
  • GlaxoSmithKline (GSK) and Verily (formerly Google Life Sciences) have formed a joint venture to develop and commercialize bioelectronic medicine – miniaturized nerve implants that modulate electrical impulses to treat certain diseases.

Lack of digital leadership talent within the pharma industry?

It is interesting to note that both the Pfizer and Merck CDOs were recruited from non-pharma companies – Pfizer’s from Quest Diagnostics and Merck’s from Nike.  Earlier, in mid 2017, former Walmart CIO was named the Chief Digital and Technology Officer of GlaxoSmithKline. This trend probably brings to the fore, the lack of top digital leadership talent within the pharma industry.

Conclusion:

Increasingly pharma companies are realizing that enormous efforts and money spent in just marketing a drug, is producing a lesser and lesser yield, as the new paradigm unfolds. As we move on, patients no longer will want to buy just a medicine from the pharma players. They will want an integrated solution for prevention, cure or management of a disease.

At the same time, strong technology players, such as Apple, Google, IBM’s Watson are on the verge of capturing a sizeable ground, offering a gamut of patient-friendly offerings in the healthcare space. This would eventually make prescription of digital therapy a new reality. These tech companies are now entering through several virtually open doors in the disease-treatment-flow process, as I call it, primarily covering – diagnosis, disease monitoring and preventive care.

To effectively compete and grow in this environment, drug companies have to cover all the touchpoints of this process, not just the selective ones as are generally happening even today.

Creation of a new C-suite position of Chief Digital Officer to address this issue in a holistic away, across the organization, gives a clear signal to this realization. Thus, I reckon, offering a holistic treatment solution, covering all the touchpoints in the disease-treatment-flow process will be a new normal for pharma, not just for excellence in business, but for a long-term survival 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.

Trees Die From The Top: Apt For Pharma Leadership Too?

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The Management Guru of all-time – Peter F. Drucker once said: “The spirit of an organization is created from the top… If an organization is great in spirit, it is because the spirit of its top people is great.” As “Trees die from the top”, no one should ever become a strategist unless he or she is willing to have his or her character serve as a model for subordinates – Drucker emphasized.

Decades after this assertion from Drucker, meant for management practitioners, it is discernible even today how irrefutable these axioms are.  In the contemporary times, as well, particularly when reality bites a company hard, being caught on the wrong side of ‘generally acceptable’ ethics, value and compliance standards.

While zeroing in to pharma, soundbites usually generated at that time, especially from the top echelon of the management, seem to hint that employees down the rung are responsible for such misdeeds, besides, of course, the legacy factor.

At this moment of truth, it is also not unusual for them to romancing the utopia, as it were. Senior management comes out with several ideas, which are squeaky clean in terms of optics. Some of them also talk about introducing behavior metric on ethics and values in employee performance appraisal before releasing any performance related pay out. In this article, I shall focus on this leadership issue in view of some latest developments in this area.

The latest developments:  

Let me now come straight to the latest developments in this area, as I see around.

“Novartis links bonuses to ethics in bid to rebuild reputation” – was a headline of Reuters on September 18, 2018. It reported: “Swiss drug maker Novartis has revealed its employees only get a bonus if they meet or exceed expectations for ethical behavior as it seeks to address past shortcomings that have damaged its reputation.”

Some interesting points stand out from this report on the ownership of such alleged malpractices. These reconfirm that the reasons for the same, including the repeated allegations of such nature, are being passed on to others by the top management. For example:

  • To past practices or the legacy factor, even if the current CEO has been a part of that corporate environment, since long.
  • To employees responsible down the line, and a new system is being adopted to address the issue.

In this case, as Reuters reports: “Chief Executive Vas Narasimhan has made strengthening the Swiss drug maker’s ethics culture a priority after costly bribery scandals or legal settlements in South Korea, China and the United States.”

Interestingly, as reported by the media, “the company was also this year embroiled in a political controversy over payments it made to U.S. President Donald Trump’s ex-attorney.”  Previously, even in the clinical trial area, Japanese authorities, reportedly “uncovered serious misconduct during a trial of its leukemia drug, Tasigna.”

As I said above, in response to such incidents, the General Counsel of Novartis, reportedly expressed: “This allows us to look at the behavior metric before any money leaves Novartis and catch potential misconduct before there is any risk to our reputation.” The official further added, “You can expect us to continue focusing on resolving the legacy issues that we read about in the press, ensuring we address any remaining underlying behaviors.”

Such steps not taken for the first time by a pharma company: 

EvenGlaxoSmithKline tried something akin in the past.

“GSK scraps sales rep targets after scandal,” was the headline of December 17, 2013 edition of the Financial Times. It reported: “GlaxoSmithKline is to scrap individual sales targets for its commercial staff as it seeks to repair its image and reform working practices in the wake of allegations in China that its staff paid officials up to $500m in bribes. The move comes amid concerns over aggressive marketing across the pharmaceutical industry and follows a series of damaging regulatory probes leading to a record $ 3bn fine in the US last year.”

However, later on GlaxoSmithKline, reportedly “altered the plan when its sales began to suffer in the world’s largest market.”

Where is the real issue lying?

As“PwC‘s 21st CEO Survey: Preparing for disruption” found, 71 percent of CEOs surveyed said that their organizations face greater pressure to deliver business results in less time.

There isn’t an iota of doubt, I reckon, that pharma CEOs are under constant performance pressure from the investors and other stakeholders to deliver expected financial results. This makes them keep their eyes primarily glued on to the grindstone for churning out expected profits from the business. This also means that they expect management efforts to be generally directed to deliver ‘values’ at the least possible cost.

On the other hand, the same PwC survey findings reiterated that with rising drug costs, the demand for the drug companies to demonstrate the treatment efficacy, is increasing by manifold. Thus, “to remain competitive, Big Pharma will have to do things faster (like drug development) and cheaper for the patient, add more value for the same money, and become more proactive partners with patients and doctors in both wellness and cure” - one of the findings of this study emphasized.

It is quite common for most large to medium sized pharma companies to have in place a well-articulated organizational ‘ethics, compliance and values’, together with requisite checks and balances in the form of rigorous rules, regulations and other guidelines.

Most often these adorn the respective websites too, for public knowledge. The question, therefore, surfaces what could then possibly go wrong in the organization and where exactly does the real issue lie, while effectively managing the organizational growth?

“Non-compliance – A serious challenge to growth”: 

Serious malpractices and their related fallout in pharma business – not just in marketing, but clinical trials, manufacturing, quality assurance and other areas, are not usually due to any lack of requisite processes or expertise. These are generally serious consequences of non-compliance of various organizational norms. At times, with the indirect support of senior management, or senior management keeps their eyes closed on such non-compliances, under demanding obligation for delivering expected financial results and business growth.

Tweaking areas, such as employee performance-incentive norms, as happened in the cases of GSK or Novartis, can’t fetch a long-lasting solution in such a situation, as I see it. Nonetheless, the survey report findings of Deloitte, titled “Non-compliance – A serious challenge to growth,” are interesting to get a sense of the reasons behind the same.

Key reasons for non-compliance: 

The Deloitte report identifies some key contributors to malpractices and non-compliance in the pharma sector, indicating the percentage of survey respondents involved against each, as follows:

  • Lack of an efficient internal control/ compliance system:  61 percent
  • Weak regulatory enforcement / action taken against fraudsters:  55 percent
  • Inadequate utilization of technology tools available to identify red flags:  45 percent
  • Lack of a zero-tolerance approach towards malpractice and regulatory non-compliance:  45 percent
  • Inadequate due diligence on employees/ third party associates:  36 percent
  • Unrealistic targets/goals linked to monetary compensations:  33 percent
  • Senior management override of controls:  24 percent
  • Inadequate oversight by the Board/ Audit Committee:  06 percent

As I mentioned before, most key contributors to malpractice and non-compliance point towards a lack of senior management efficiency in internal controls, systems, and “inadequate utilization of technology tools available to identify red flags.” Curiously, no one mentions about the requirements for any fresh measures or systems to curb such incidents, in the future.

Just tweaking the present system may not help:

Just for changing the optics, tweaking the present system often doesn’t help. Many similar instances in the past, such as GSK’s example, as cited above, would vindicate this point. In the GSK case, at least, it’s the then CEO – Sir Andrew Witty expectedly realized that ‘unrealistic targets/goals linked to monetary compensations’ lead to such corruptions.

But total delinking of the core responsibility of any sales staff, namely ‘generation of top-level numbers both in volume and value’, with performance incentive, could throw some future challenges. Similar reason, presumably prompted GSK altering the plan when its sales began to suffer, at a later date.

Similarly, Novartis is, reportedly introducing a new behavioral metric as qualifying criteria for its employees to earn bonuses or incentives. Intriguingly, despite the existence of rigorous rules, regulations, guidelines and associated punitive provisions for not complying with the company ethics and values for a long-time, malpractices are still being reported today.

Thus, I wonder, how will an additional system of similar nature prevent recurrence of such incidents in the future? Anyway, only the future will tell whether a tweaking of this nature in the present system that did not work in the past, will work in this particular case effectively.

Conclusion:

The reasons for less than adequate internal controls of an organization, I reckon, fall squarely on the senior management, especially for repeat offences. Passing the blame to employees down the line or tweaking their performance appraisal system by introducing a ‘behavioral metric’, is likely to be short term, finger-pointing on the legacy factor notwithstanding.

On the contrary, these may likely to be construed as manifestations of knee-jerk reactions, and not so well-thought-out strategic measures. Neither do such repeated malpractices demonstrate a great spirit of the organization, nor do these evince astute leadership qualities of its top management.

Coming back to where I started from, quoting what the management guru Peter Drucker once said: “The spirit of an organization is created from the top… If an organization is great in spirit, it is because the spirit of its top people is great.” He also reiterated, no one should ever become a strategist unless he or she is willing to have his or her character serve as a model for subordinates This is certainly not the situation for those pharma players mired with alleged malpractices, repeatedly – not just in marketing, but in other operational areas too.

As the good old saying goes: “trees die from the top,” so is also an organization when its senior management lacks a moral compass on ethics, compliance and values. Considering what is being often reported on business malpractices within the drug industry, isn’t the saying equally apt for pharma leadership, as well?

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.

Making Drug Pricing Transparent May Work Better Than Price Control

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“Now, one-fourth of the Indian pharma market to be under price control.” This possibility was reported by some national dailies, on July 03, 2018. The new methodology of drug price control could be anything – ranging from earlier ‘cost-based’ model to the current ‘market-based’ one – to even the new pharmaceutical index, as proposed by the Government ‘think tank’ – Niti Aayog. This gives an indication of acceptance by the policy makers that none of the price control mechanisms have worked as intended, till the last 48 years. Otherwise, why are such changes taking place?

On the other hand, the drug pricing models of the pharma industry, are also not working. Drug pricing related issues, directly or indirectly, continue driving pharma reputation down south. Strong negative vibes on the industry continues, despite a vigorous and expensive advocacy of the industry trade associations, primarily positioning the need to encourage ‘drug innovation’ right at the front. No perceptible impact of this pharma strategy on the policy makers is still visible, besides a few spoon-fed media editorials – as many believe. The saga continues. The pricing focus keeps remaining solely on a company’s financial interest. How far the price of a drug can be stretched to benefit the company, is the point to ponder. Why aren’t the basis and rationale of drug pricing made transparent, voluntarily? In this article, I shall discuss on this contentious issue.

Current pricing approach becoming counterproductive: 

The good news is, of late, some global drug majors apparently have been compelled to realize that this approach is gradually becoming more and more counterproductive, inviting more drastic measures from many Governments. Even recently in the United states, ‘Trump wants U.S. Health Secretary to get tough on drug prices, opioids.’ This situation demands, more than ever before, that a measurable quantum of all-round health benefits accrued by patients with the medicine, have to be factored into the drug pricing model, now.

Can pharma too, look for an ‘Out of the box’ solution?

I found two excellent examples of ‘looking outside the box’ in an article featured in the Pharmaceutical Executive, on March 06, 2018. Both the illustrations from non-pharma companies focus on product output to the consumer rather than inputs on the same by the companies, such as the cost of a drug innovation to an innovative company. Many find difficult to accept – why for extending life of cancer patients by just three to six months, an innovative oncology drug would cost thousands of rupees more to the sufferers, or their family?

Couple of interesting ideas:

The two interesting ideas are as follows:

- Erstwhile Monsanto, the article says, ‘had historically been able to maintain its market position and technological edge in developing superior genetically modified seeds through patents and contracts with farmers. In order to fully capture the value of its genetically modified seeds, however, Monsanto went a step further and shifted to a royalty type price model, charging a fee after the crops were harvested based on the yield. This end-use fee shifted Monsanto’s price model from seed-based to yield-based pricing, i.e., from input- to output based.”

-  The second one comes from a time “when Michelin developed a new tire that lasted 25 percent longer than existing tires, the company found it difficult for customers to accept a premium” – the paper highlights. “Rather than giving away the innovation, Michelin changed its pricing model. Truck fleets, a key customer segment, track cost per mile for each truck as their revenue model is also based on charging its customers per mile. Michelin decided to adapt its pricing model and to offer the new tires on a price per mile rather than per tire basis. The company then offered a contract to replace the tires after they wore down. Under this new pricing model, customers perceived a parity price as they were not asked to pay more, while longer lasting tire from Michelin was able to capture a premium for its innovation” – the article emphasized.

Two patient-oriented pharma pricing models:

Looking somewhat ‘outside the box’ and trying to factor in patients’ overall interest, some global majors are contemplating the following two broad approaches:

  • Value based pricing (VBP)
  • Outcomes based pricing (OBP)

The Drug Pricing Lab (DPL) based at Memorial Sloan Kettering Cancer Center defines these two models as follows:

Value-based pricing: When the price of a drug is based on its measured benefits, for instance, in clinical trials leading to its approval.  Methods used to determine value-based prices are transparent, reproducible and data driven.

Outcomes-based pricing: Refers to arrangements between manufacturers and payers, in which the manufacturer is obligated to issue a refund or rebate to the payer that is linked to how well the therapy performs in a real-world population. This refund or rebate is off of a list price that the manufacturer sets.

These concepts are neither very new or untried. Nevertheless, these are being used very selectively by some global pharma majors, from time to time. There doesn’t seem to be any consistent approach with these two models, thus far. For example, in 2005, with its erectile dysfunction drug Levitra (vardenafil), Bayer entered into a “no cure, no pay” initiative in Denmark, where patients dissatisfied with the treatment get a refund. Moreover, there are several instances of interchangeable use of these two definitions, in various literature. But, I shall stick only to the above definition, in this deliberation.

Are there any takers for VBP?

A few other pharma majors, such as Eli Lilly, have accepted the need in finding a right balance between investment on innovation and providing affordable medicines, as the key to bettering the health of the world with value-based pricing. It will call for requisite engagement between the drug manufacturers and health planners, covering the following two points, especially in the Indian context:

  • Critical scientific evidence about new drugs would create a pathway to set accurate rates for better availability to patients who need treatment.
  • Making drug price regulators and health policy planners better anticipate the holistic impact of the drug on patients, leading to generation of more accurate efficacy and pricing/health economics data.

The major issue with VBP:

The critical point to note, that for a meaningful discussion on VBP, the pharma players will require to share their pricing data with the competent authorities. In this regard, the article, titled “Pricing Turning Point: The Case for Innovating Pharma’s Model,” published by Pharmaceutical Executive on March 06, 2018, flags an important reality.

It says,a drug pricing model consists of two parts – How to charge (the details of the rationale)? And how much to charge (the level)? The article reinforces that the pricing decisions in the pharma industry generally focus on ‘how much to charge’, for the last 100 years. This process is now being stretched to a mind boggling level that raises many eyebrows in ‘disbelief’. I, therefore, reckon, it would be a real challenge for the drug maker to make the basis or rationale of a pricing decision transparent to all. In that case, the moot question is, how would the value-based pricing work?

Are there any takers for OBP?

According to reports,  the erstwhile CEO of Novartis – Joe Jimenez, and his Amgen counterpart at that time – Robert Bradway, among others, publicly spoke about pegging drug costs to their outcomes. Intending to be a part of the drug pricing solution, Novartis inked performance-based contracts with Cigna and Aetna on its new heart failure medication Entresto, so did Amgen on its anti-lipid drug – Repatha. Novartis also fleshed out the details of outcomes-based pricing model in a comprehensive report, describing its benefits to address the affordability challenge. However, such initiatives have not gained momentum, just yet.

OBP may not be the right option, and why:

Thereafter,the Drug Pricing Lab (DPL), based at Memorial Sloan Kettering Cancer Center,analyzed that the methods manufacturers use to generate list prices are typically opaque, inconsistent, and driven more by market factors than clinical data. These methods are often referred to by manufacturers as “pricing to what the market will bear”.

‘The Drug Pricing Lab’ illustrated the basic difference to patients between the ‘value-based’ and ‘out-come’ based pricing models by looking into Amgen’s outcome-based refund contract with Harvard Pilgrim for Repatha (Evolocumab). Amgen had agreed to refund Harvard Pilgrim the cost of medication for patients who have a heart attack or stroke, an estimated 3.5 percent of individuals on the drug. This equates to a reduction in annual list price from US$ 14,100 to US$ 13,620. In contrast, the ‘Institute for Clinical and Economic Review’finds that a value-based price for Repatha would be US$ 2,200 to US$ 5,000 per year, one third to one fifth the expected price resulting from the outcomes-based contract.

VBP comes out as a better option:

Based on the available data, it appears that VBP is a better option that focuses on tangible value delivery of a drug to individual patients. This is quantified with the help of available statistical tools, in a transparent manner. Application of Health economics is also being tried in this area.

Thus, the core concept behind VBP is that any drug price should be a function of the differential value that it delivers over the conventional ones, generally used for treating the same disease. Unfortunately, arriving at a consensus on the ‘value assessment’ metrics for a drug, often throws a tough challenge, especially to the manufacturers.

Conclusion:

Recently, with exorbitantly high-priced new drugs coming into the market, the issue of drug pricing mechanism has become a major concern for all stakeholders. Pharma companies can’t wish it away, any longer, even with the high decibel advocacy of ‘protecting and encouraging innovation’ of new drugs. The consequent potential risks are becoming too costly.

This situation prompts the pharma players to reengage with the consumers, providing quantifiable details about the differential value that a drug offers to patients and its relationship to the price that the company charges.  This is easier said than done. It’s time for drug companies to establish a solid link between these two. As I said before, many stakeholders are refusing to accept, just to extend life for a few months, why should an innovative anti-cancer drug cost thousand or even lakhs of rupees more than a conventional one – pushing families into dire financial distress?

Pharma players can’t afford to remain a part of this critical problem, any longer. They should take responsibility to become a part of the solution. With VBP or with any other credible alternatives, making drug pricing transparent – voluntarily, may work better for them than facing mandatory price control. It’s a different ball game altogether, requiring a new mindset, and… the name of the game is: ‘out of the box’ Ideas.

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.

Prescription Digital Therapy Now A Reality

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The pursuit of offering ‘prescription digital therapeutics’ or ‘digiceuticals’ by Big Pharma, to ensure better clinical outcomes for patients, has apparently come to fruition now.

On April 18, 2018, by a media release, Novartis announced that the Sandoz Division of the Company has entered into collaboration with Pear Therapeutics to commercialize and continued development of digital therapeutics, designed to effectively treat disease and improve clinical outcomes for patients.

The collaboration brings on to the table, a synergy between Sandoz expertise in launching and commercializing various disease treatments, with Pear’s leading experience in digital therapeutics design and implementation. This deal has attracted attention of many. Mainly because, any pharma player will, for the first-time, detail a digital therapy treatment directly to the medical profession, and seek their prescription support.

It is worth noting that Pear’s flagship digital therapeutic – reSET is the first USFDA-cleared mobile medical application with both a safety and efficacy label to help treat patients with Substance Use Disorder, in September 2017. According to published reports, several studies have established that it is two-times more effective than conventional in person therapy sessions. Interestingly, the rate of treatment efficacy increases even up to tenfold, in refractory patients.

Just the beginning of a long run: 

The above market launch of a digital therapy by Novartis signals just the beginning of a long run in changing in the disease treatment archetype for better outcomes. Incidentally, prior to this announcement, on March 1, 2018, the same Company had announced, “Novartis and Pear Therapeutics to collaborate on prescription software applications aimed to treat patients with schizophrenia and multiple sclerosis.”

The media release underscored:“Psychiatric and neurodegenerative diseases place a heavy physical, mental and economic burden on patients and their families. With widespread adoption of digital devices, prescription digital therapeutics could potentially play an important role in future treatment models for a range of diseases with high unmet medical need”.

The scope and potential:

An article titled – ‘Digital therapeutics: Preparing for takeoff’,published by McKinsey & Company in February 2018, captures its scope succinctly. It says, “digital therapeutics tend to target conditions that are poorly addressed by the healthcare system today, such as chronic diseases or neurological disorders. In addition, they can often deliver treatment more cheaply than traditional therapy by reducing demands on clinicians’ time.”

A separate McKinsey interview article, titled ‘Exploring the potential of digital therapeutics’, published in the same month, elucidated the potential of digital therapy equally well.  It highlighted:“A digital therapeutic is an intervention based on software as the key ingredient, which has a direct impact on a disease. This is what distinguishes this category from the broader term digital health. We will see digital therapeutics and digital diagnostics integrate into the health system…”

‘Prescription digital therapy’ are not just ‘Fitness and Well-being’ Apps:

Prescription digital therapy are not just to monitor a person’s general fitness level against pre-identified parameters, and overall well-being. Whereas, digital therapeutics help patients to regularly and consistently monitor relevant and tailor-made disease related data - in real-time to detect behavioral, lifestyle and requisite biological changes on a daily basis. However, this is not ‘a so well-realized necessity’ today, especially, in the treatment of certain serious disease conditions, to ensure significantly better clinical outcomes for patients.

Digital therapeutics can ensure making a favorable change in patient behavior, which is not merely as efficient as administering medicines, but could also ensure greater effectiveness than conventional medications. Further, it assists patients to better understand, manage and control several disease conditions, and more importantly, sans any untoward side-effects.

Besides, with digital therapy, the required treatment interventions will reach patients faster than traditional treatment processes. Both the patient request and the medical response for the same can be quickly exchanged, together with relevant data support, through smartphones or other wearable digital interfaces – either in the form of voice or text or both. I shall dwell on this later in the article. Thus, digital therapy may not require patients to meet the doctor every time a need arises.

Moreover, fitness and wellbeing Apps do not require marketing approval from a country’s drug regulator. Mostly because, they help monitoring general and generic fitness parameters, capturing some low-risk changes. Whereas, a custom-made prescription digital therapy would necessarily require such regulatory nod.

In tandem, various studies are also being conducted on wearables, such as an Apple Watch, as an interface. The following are examples of some of these studies:

Digital therapy study with Apple Watch as an interface:

In February 2017, Takeda Pharmaceuticals U.S.A. and Cognition Kit Limited, announced a collaboration to pilot the use of a specially designed app on an Apple Watch wearable to monitor and assess cognitive function in patients with Major Depressive Disorder (MDD).

In November 2017, they presented results from ‘Digital Wearable Technology Study’ in patients with MDD. The observational study involved 30 participants, aged 18-65, with a clinical diagnosis of mild to moderate depression who have been prescribed antidepressant monotherapy for MDD.

The study also evaluated feasibility and participant compliance with measures of mood and cognition on wearable technology; and compared measures of mood and cognition on wearable technology using traditional neuropsychological testing and patient reported outcomes on depression symptoms at 6 weeks. Participants were provided with an Apple Watch on which brief cognitive and mood tests were administered daily.

The researchers observed that patients were compliant with the wearable Apple Watch device on a daily basis to evaluate mood (95 percent) and cognition (96 percent). The study also demonstrated that abbreviated daily assessments delivered through the wearable Apple Watch device corresponded with objective Cambridge Neuropsychological Test Automated Battery (CANTAB) cognitive tests and full-length patient reported outcomes, PHQ-9 and PDQ-D, assessed during weeks 1, 3 and 6. No adverse events were reported in the study.

According to another report, this user interface with Apple’s smart-watch versions 2 and 3 is now being used in a number of studies for chronic conditions, such as Parkinson’s disease – combining biometric data with user input. Again, in February 2017, Johns Hopkins University announced a project to use the smart-watch for research on possible triggers of epileptic seizures.

When used as an interface with prescription digital therapy, the provision of e-SIM and GPS in Apple Watch Series 3, I reckon, would also help patients to immediately communicate with the remote therapy centers using the same device, anytime – as and when the patients want.

Digital therapy initiatives in India:

Initiative on digital therapy has already started rolling in India, as well. Its pace is also quite encouraging. For example, Wellthy Therapeutics is building a patient centric solution for diabetes through digital intervention and management. On February 20, 2018, the Company, reportedly, shared the interim results of an ongoing real-world pilot to evaluate the effectiveness of the Wellthy Diabetes Smartphone App (WD). The results were shared at the 11th International Conference on Advanced Technologies and Treatments for Diabetes (ATTD 2018) in Vienna, Austria.

The data demonstrated how the use of WD improved glycemic control. On completion of 16 weeks, participants showed a reduction in their HbA1c by (-0.61%) on average, with 61.5% of participants having showed significant reduction in their HbA1c with an average of (-1.17%) reduction.

Conclusion:

As indicated in my article titled, ‘Digiceuticals: A Force Multiplier to Contain Chronic Diseases’, published in this blog on October 23, 2017,prescription digital therapies are primarily of two types – one for “medication augmentation” and the other for “medication replacement.”

Be that as it may, prescription digital therapyimproves clinical outcomes for patients by manifold. It also shows potential to take over from traditional treatment with medicines in several serious and virtually crippling ailments, mostly related to human behavior and lifestyle, such as a host of chronic diseases, and without causing any side-effects.

Thus, prescription digital therapy is now a reality. It has come to stay for long – can’t be wished away, any longer.

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.

Moving Beyond The Pill: No Longer An Option

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Many of us would prefer to live, as long as possible, in the comfort zones of old paradigms, hoping to succeed in the same way as we had succeeded in the past. But the wheel of time keeps moving, triggering a significant shift in various paradigms. This includes even the health care space. Most of these changes, as they tend to attain a critical mass, capture the imagination of some in the pharma industry – escaping the attention of many.

One such area of a shifting paradigm is increasing patient preference to get actively engaged in their health care. More specifically, such preferences span across the entire chain of any disease management process – from diagnosis to treatment, often including continuous monitoring, whenever required.

Thus, the creation of well-differentiated value-added patient engagement services, based on credible research data of statistical significance, craftily bundled around the pill, will assume paramount importance. More importantly, such value offerings should lead to demonstrable improvement in treatment outcomes.

This, I reckon, would be the new recipe for pharma marketing excellence in the coming years. In this article, I shall focus on this fast-evolving landscape.

Dawns a new realization:

Early realization of this change is working as an impetus for some global pharma majors to redraw their strategic business models, making appropriate course corrections, which are mostly fundamental in nature.

The article titled ‘How Pharma Can Offer More than Pills’, published in the Harvard Business Review (HBR) on July 23, 2015 identifies the following two realizations as the impetus behind moving beyond the pill initiatives:

  • Medicines alone are often not enough for patients to achieve optimal clinical outcomes.
  • As pharmaceutical pipelines dry up, beyond-the-pill businesses can be valuable new sources of revenues.

Joseph Jimenez, the global CEO of Novartis, appears to be one of the first and foremost to recognize this requirement when he said in 2014 that: “Creating value by embedding products into a holistic offering with the aim to improve patient outcomes and provide tangible competitive advantages.” Jimenez said at that time, “Beyond-the-pill is a logical and inevitable path forward for all.”

As this new realization gets effectively translated into cutting-edge business strategies, “Medicines could accordingly reach market with a label that includes an ‘around the pill’ solution such as a wearable or another tracking device”, as the above HBR article foresees.

Shifting success requirements:

Going forward, delivering only the value of a pill won’t be quite enough to make the sales revenue and profit trend moving north, registering a steep gradient.

As more patients want to experience differential values in the entire disease treatment process through greater participation and engagement, business success requirements of pharma players call for a major shift, accordingly. This would involve moving away from the traditional model – from increasing sales through a growing number of treatments, to boosting revenue through patient-centric well-differentiated value offerings. I repeat, the entire process should ultimately lead to quantifiable improvement in treatment outcomes.

Direct ‘patient engagement’ is easier said than done:

Direct patient engagement is easier said than done. It is not just something that is ready to happen at any given point of time. Pharma companies will require to first equip much greater number of patients, through various means, to become actively engaged in health care, as they step into this direction.

It is envisaged that most of these direct patient engagement endeavors of pharma will be on various digital platforms. The process would require accurately identifying the target groups, what exactly they consider of immense value for such engagement –  and finally effectively delivering those value offerings in innovative and customized ways to them, for improved treatment outcomes.

‘Patient engagement’ should be measurable:

The level of such engagement needs to be continuously measured through ‘patient activation’ tools to establish cost-efficient improved outcomes. Researchers have established that patients with a lower ‘activation score’ ultimately incur higher costs.

An interesting article on ‘patient activation’ describes this terminology as ‘the skills and confidence that equip patients to become actively engaged in their health care.’ It says that health care delivery systems are now turning to ‘patient activation’ as yet another tool to help them and their patients improve outcomes and influence costs. To establish this point, the paper examined the relationship between ‘patient activation levels’ and billed care costs.

In this analysis of 33,163 patients, the researchers found that patients with the ‘lowest activation levels’ had predicted average costs that were 8 percent higher in the base year and 21 percent higher in the first half of the next year than the costs for patients with the highest activation levels. Both are significant differences.

Following an analogous approach, Novartis has been able to demonstrate better disease outcomes with its cardiovascular drug Entresto, as reported in the Financial Times dated April 14, 2017. Ably supported by remote monitoring and coaching programs for patients with advanced heart failure, Novartis has reportedly been able to establish that its customized disease treatment solution brings down hospitalization and cardiovascular death rate by around 20 percent.

Greater pharma accountability needed for treatment cost versus outcomes:

The authors of this paper, further established ‘patient activation’ as a significant predictor of cost even after adjustment for a commonly used “risk score” specifically designed to predict future costs. This trend, when reaches the decisive moment, is likely to assign greater accountability for costs and outcomes, even to the pharma players.

While moving into this direction:

Accurately knowing patients’ ability and willingness to manage their health will be a critical piece of information for the drug companies. This would prompt the pharma marketers to be highly proficient in generating a huge pool of credible data on target patient groups in various relevant areas, including expectations, aspirations, preferences and treatment related behavior. Thereafter, strategic game plan for business excellence should be based on in-depth analysis of this huge database, created on an ongoing basis.

If any skill gap exists in generating and analyzing the data meaningfully, pharma companies may wish to collaborate with external expertise in this area. A few excellent examples in this area have already started being reported, such as

Astra Zeneca’s partnering with Vida Health to offer free health coaching services to heart attack sufferers, or Sanofi partnering with Verily (previously known as Google Life Sciences) to develop new services for patients to manage diabetes better.

With similar initiatives, pharma players can effectively demonstrate to their stakeholders, details of better health outcomes that their patient-centric disease treatment solutions are offering – eventually taking their brands to a new trajectory of more inclusive success.

Conclusion:

Those days are not too far when many patients, especially with chronic diseases, such as hypertension, arthritis or diabetes, would prefer to buy a comprehensive disease management solution to lead a better quality of life, instead of just buying a pill – and quite often for lifelong.

In a new paradigm, with changing ‘value expectations’ of many patients in the entire treatment process, ‘value creation’ and ‘value delivery’ mechanisms of drug companies are likely to change accordingly. One of the key barriers to this shift is mostly the traditional business culture of most pharma players. Another significant one is its slow pace of moving into the digitized world, as compared to other science and technology driven industries.

Moving ‘beyond the pill’ would necessitate a basic shift in the mindset – from selling a pill to selling better health outcomes. In this endeavor, pharma CEOs require leading from the front. Instilling courage within the organization to ensure this fundamental strategic shift in the company’s business model taking place on the ground, is their prime responsibility. Thus, stepping into this new paradigm with requisite wherewithal, sooner, would no longer be just for business excellence, but for its long-term survival 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.

 

Marketing Practices: Why Pharma Does What It Does?

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It started way back – spanning across many developed countries of the world. However, probably for the first time in the last five years, an international media group focused on this issue thriving in India, with so much detail.

Reuters reported it with a headline “In India, gift-giving drives drug makers’ marketing.” The report was supported by a detailed description of the relevant events, with ‘naming and shaming’. It drew the attention of some, apparently including the Department of Pharmaceuticals (DoP), but escaped the attention of many, and finally – got faded away with time, without any reported official investigation.

In this article, I shall revisit this subject against the backdrop of draft pharma policy 2017. My focus will be on the current marketing practices, with the moot question ‘why pharma does what it does’ occupying the center stage of this piece.

Bothering many across the world:

Pharma marketing practices wear different hues and shades. Many of these are contentious, and often perceived as gross ‘malpractices’. Nevertheless, across the world, these have mostly become an integral part of pharma business. Many law-enforcing authorities, including in the US, Europe, Japan and even China, have started taking tough penal action against those transgressions. Interestingly, the draft pharma policy 2017 intends to take this raging bull by its horn, with a multi-pronged approach, as I see it.

It’s a different debate, though, whether the policy makers should bring the mandatory Uniform Code of Pharmaceutical Marketing Practices (UCPMP) under the Essential Commodities Act, or the Drugs and Cosmetics Act of India. Let’s wait and see what exactly transpires in scripting the final version of the new National Pharma Policy to address this issue, comprehensively.

The net impact of the fast evolving ‘newer norms’ of pharma ‘marketing’ practices, has been bothering a large section of the society, including the Governments, for quite some time. Consequently, many top-quality research studies are now being carried out to ascertain the magnitude of this problem. The top ranked pharma market in the world – the United States (US) are leading the way with such analysis. However, I haven’t come across similar India-specific analytical reports, just yet, probably due to lack of enough credible data sources.

Four recent studies:

Several interesting studies supported by a robust database have been carried out in the US during 2016 and 2017 to ascertain whether any direct relationship exists between payments in various forms made to the doctors by the pharmaceutical companies and physicians’ prescribing various drugs in brand names. For better understanding of this issue, I am quoting below, as examples, the gist of just four of such studies:

One of these studies conducted by ProPublica was published in March 2016. It found that physicians in five common medical specialties who accepted, at least one industry payment were more likely to prescribe higher rates of brand-name drugs than physicians who did not receive any payments. More interestingly, the doctors receiving larger payments had a higher brand-name prescribing rate, on an average. Additionally, the type of payment also made a difference: those who received meals alone from companies had a higher rate of brand-name prescribing than physicians receiving no payments, and those who accepted speaking payments had a higher rate of the same than those drawing other types of payments.

The details of the second study published in PLOS on May 16, 2016 states, “While distribution and amount of payments differed widely across medical specialties, for each of the 12 specialties examined the receipt of payments was associated with greater prescribing costs per patient, and greater proportion of branded medication prescribing. We cannot infer a causal relationship, but interventions aimed at those physicians receiving the most payments may present an opportunity to address prescribing costs in the US.”

The third example of such investigative study appeared in the Journal of American Medical Association (JAMA) on August 2016. This cross-sectional analysis, which included 279,669 physicians found that “physicians who received a single meal promoting the drug of interest, with a mean value of less than $20, had significantly higher rates of prescribing rosuvastatin as compared with other statins; nebivolol as compared with other β-blockers; olmesartan as compared with other angiotensin-converting-enzyme inhibitors and angiotensin-receptor blockers; and desvenlafaxine as compared with other selective serotonin and serotonin-norepinephrine reuptake inhibitors.”

This study also concluded that “Receipt of industry-sponsored meals was associated with an increased rate of prescribing the brand-name medication that was being promoted. The findings represent an association, not a cause-and-effect relationship.”

And the fourth analysis on the same subject featuring in the British Medical Journal (BMJ) of 18 August 2016 concluded that “Payments by the manufacturers of pharmaceuticals to physicians were associated with greater regional prescribing of marketed drugs among Medicare Part D beneficiaries. Payments to specialists and payments for speaker and consulting fees were predominantly associated with greater regional prescribing of marketed drugs than payments to non-specialists or payments for food and beverages, gifts, or educational materials.”

Exceptional steps by a few global CEOs – would the rest follow through?

As this juggernaut continues to move unrelenting, a few global CEOs have been taking some exceptional steps in this regard, e.g.:

- In December 2013, Sir Andrew Witty –  erstwhile global CEO of  GlaxoSmithKline tossed out the ‘Big Pharma marketing playbook’. He announced, no longer will his company pay doctors to promote its drugs or shell out bonuses to sales reps based on their ability to boost prescription numbers.

- Around September 2015, Brent Saunders – the Global CEO of Allergan was the first major drug company chief to explicitly renounce egregious price increases. Outlining his company’s “social contract with patients,” he vowed that Allergan would:

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

- In October 2016, Joseph Jimenez – the current global CEO of Novartis said, “We tell people, we don’t want you to deliver at any cost. We want you to deliver, but we want you to deliver in the right way,”

It’s probably a different matter, though, that one of these CEOs has already stepped down, another will do so early 2018, and third iconoclast is still in the saddle. They all are still relatively young, as compared to several of their counterparts.

These are some of the laudable steps taken by a few CEOs for their respective global operations. However, the moot question remains: would rest of the Big Pharma constituents come on board, and successfully follow these initiatives through?

That said, the overall scenario in this area, both in India and abroad, continues to remain mostly unchanged.

Why pharma does what is does?

This may not be akin to a million-dollar question, as its right answer is no-brainer – to generate more, and even more prescription demand for the respective focused brands of the concerned pharma companies. In a scenario, as we have seen above, when money can buy prescriptions with relative ease, and more money buys more prescriptions, how do the prescribers differentiate between different brands of the same molecules or combination of molecules, for greater support?

As evident from various available reports, this kind of intangible product differentiation of dubious nature, doesn’t necessarily have a linear relationship with the quantum of money spent for this purpose. Many believe, it is also intimately related to the nature or kind of various ‘gratis’ extended, some of which are highly contentious. Illustratively, how exotic is the venue of so called ‘Continuing Medical Education (CME)’ event, whether located in India or beyond its shores, bundled with the quality of comfort provided by the event managers, or even whether the spouses can also join the doctors for a few days of a relaxed trip with fabulous sight-seeing arrangements.

Regardless of many pharma players’ terming these events as purely educational in nature, lots of questions in this regard – accompanied by proof, have reportedly been raised on the floor of the Indian Parliament, as well, cutting across virtually all political party lines.

Conclusion:

Should anyone tag the term ‘marketing’ against any such pharma business practices, or even remotely accept these as integral parts of any ‘branding exercise’? For better understanding of my readers, I had explained what this buzzword – ‘branding’ really means in the marketing vocabulary.

Be that as it may, where from the pharma companies recover the huge cost of such vexed business practices? Who ultimately pays for these – and, of course, why? So far, in India, the basic reasoning for the same used to be – branded generics provide significantly better and more predictable drug quality and efficacy than non-branded generics, for patients’ safety.

This logic is anchored mainly on the argument that bioequivalence (BE) and bioavailability (BA) studies are mandatory for all generic drug approvals in India. Interestingly, that loose knot has been tightened in the draft pharma policy proposals 2017. Hope, this commendable policy intent will ultimately see the light of the day, unless another innovative new reason pops-up.

Against this backdrop, many ponder: Are the current pharma ‘marketing’ practices, especially in India, akin to riding a tiger? If the answer is affirmative, the aftermath of the new pharma policy’s coming into force – broadly in its current form and with strict enforcement measures, could well be too tough to handle for those drug players without a Plan B ready.

That said, pharma ‘marketing’ ballgame is getting increasingly more complex, with the involvement of several third-parties, as is often reported. Alongside, it’s equally challenging to fathom ‘why pharma does what it does’ to generate more prescription demand at an incremental cost, which far exceeds commensurate incremental value that branded generics provide to patients in India.

By: Tapan J. Ray 

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