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A Disruptive Innovation in Healthcare – Personalized Medicines

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Tufts Center for the Study of Drug Development (Tufts University) in its publication named ‘Impact Report’, November/December 2010 articulated, “Biopharmaceutical companies are committed to researching and developing personalized medicines and within their development pipelines, 12%-50% of compounds are personalized medicines.”

Thus the disruptive innovation process towards ‘Personalized Medicines’ have already begun. Over a period of time ‘Personalized Medicines’ will be targeted to the biological/genomic profile of an individual to significantly improve the quality of healthcare to the patients.

This paradigm shift in the healthcare space would prompt similar changes in various disease diagnostic technologies, which will not only be able to detect a disease well before the appearance of symptoms, but would also  indicate which patients will best respond to or be adversely affected by which medications.

‘Personalized Medicines’ will in that process ensure a critical shift from the disease oriented treatment to a patient oriented treatment, which can be initiated much before the clinical manifestations of a disease are detected.

The technological march towards this direction is indeed risky and arduous one. However, the benefits that the humanity will accrue out of this disruptive innovation will far outweigh the risks in all forms.

Personalized Medicines:

Rapid strides in pharmacogenomics bring in a promise of radically different ways of treating diseases, as major pharmaceutical companies of the world make progress in developing much more effective medicines designed to target smaller populations.

The above ‘Impact Report’ defines Personalized Medicines as:

“Tailoring of medical treatment and delivery of health care to the individual characteristics of each patient—including their genetic, molecular, imaging and other personal determinants. Using this approach has the potential to speed accurate diagnosis, decrease side effects, and increase the likelihood that a medicine will work for an individual patient.”

‘Personalized Medicines’ are expected to be an effective alternative to quite unwieldy current ‘blockbuster drugs’ business model.

What is then the aim of ‘Personalized Medicines’?
The aim of ‘personalized medicines’ is, therefore, to make a perfect fit between the drug and the patient. It is worth noting that genotyping is currently not a part of clinically accepted routine. However, it is expected to acquire this status in the western world, very shortly.

Some interesting recent developments:

  1. The Economist, March 12-18, 2011 in its article titled “Toward the 15-minute genome” reported that ‘nanopore sequencing’ of human genome is now gaining momentum. This could make sequencing of entire genomes of cancerous and healthy cells possible to accurately point out what has exactly changed in individual patients, enabling the oncologists to determine patient specific drugs for best possible results in each case, separately.
  2. New cancer marker has been reported to aid earlier detection of the disease, where repetitive stretches of RNA are found in high concentrations in cancer cells.
  3. A new blood test will accurately detect early cancer of all types with an accuracy of greater than 95%, when repeated the accuracy will even be even greater than 99%.
  4. ‘Breast On A Chip’ will test nano-medical detection and treatment options for breast cancer
  5. A brain scan will detect the telltale “amyloid plaques,” the protein fragments that accumulate between nerves in Alzheimer’s disease

In what way ‘Personalized Medicines’ will be different?

With ‘Personalized Medicines’ the health of a patient will be managed based on personal characteristics of the individual, including height, weight, diet, age, sex etc. instead of defined “standards of care”, based on averaging response across a patient group. Pharmacogenomics tests like, sequencing of human genome will determine a patient’s likely response to such drugs.
These are expected to offer more targeted and effective treatment with safer drugs, and presumably at a lesser cost. Such medicines will also help identify individuals prone to serious ailments like, diabetes, cardiovascular diseases and cancer and help physicians to take appropriate preventive measures, simultaneously. ‘Personalized medicines’ in that process will focus on what makes each patient so unique, instead of going by the generalities of a disease.
To give a quick example, genetic differences within individuals determine how their bodies react to drugs such as Warfarin, a blood thinner taken to prevent clotting. It is of utmost importance to get the dosing right, as more of the drug will cause bleeding and less of it will not have any therapeutic effect.
‘Personalized medicines’, therefore, have the potential to bring in a revolutionary change the way patients are offered treatment by the medical profession. Genomic research will enable physicians to use a patient’s genetic code to arrive at how each patient will respond to different types of treatments.
In the field of cancer, genetic tests are currently being done by many oncologists to determine which patients will be benefitted most, say by Herceptin, in the treatment of breast cancer.
Expected benefits from ‘Personalized Medicines’:

The expected benefits from the ‘Personalized Medicines’, besides very early diagnosis as stated above, are the following:
1. More Accurate dosing: Instead of dose being decided based on age and body weight of the patients, the physicians may decide and adjust the dose of the medicines based on the genetic profiling of the patients.
2. More Targeted Drugs: It will be possible for the pharmaceutical companies to develop and market drugs for patients with specific genetic profiles. In that process, a drug needs to be tested only on those who are likely to derive benefits from it. This in turn will be able to effectively tailor clinical trials, expediting the process of market launch of these drugs.
3. Improved Health care: ‘Personalized Medicines’ will enable the physicians to prescribe ‘the right dose of the right medicine the first time for everyone’. This would give rise to much better overall healthcare.
Role of Pharmaceutical and Biotech companies:
Many research based pharmaceutical and biotechnology companies have taken a leading role towards development of ‘personalized medicines’ in line with their key role as healthcare enterprises. India is also taking keen interest in this science.
Some important issues:
However, there are some ethical and social issues in the development of ‘personalized medicines’ primarily in the area of genetic testing and consideration of race in the development of such medicines, which need to be effectively addressed, sooner.
Can it replace the ‘Blockbuster Drugs’ business model?
Realization of deficiencies in the economics of ‘block buster drugs’ R&D business model has made ‘personalized medicines’ a reality today.
Better efficacy and safety profile of ‘personalized medicines’ will prove to be cost-effective in the overall healthcare systems. Smaller and exclusive markets for ‘personalized medicines’ are also expected to be quite profitable for the pharmaceutical companies. However, such smaller segmentation of the market may not leave enough space for the conventional ‘blockbuster model’, which is the prime mover of the global pharmaceutical industry, even today.
Reports indicate that some renowned global pharmaceutical companies like, Roche, AstraZeneca, GlaxoSmithKline are making good progress towards this direction through collaborative initiatives.
Approximate cost of ‘Genome Sequencing’:
When human genome was first sequenced, the reported cost was staggering U.S$ 3 billion. However, with the advancement of technology, it came down to U.S$ 1 million, last year. Currently, the cost has further come down to U.S$ 60,000. With the rapid stride made in the field of biotechnology, combined with the economies of scale, cost of such genetic tests is expected to be around U.S$ 1,000 in near future, making it possible for people to obtain the blue print of their genetic code.
Savings on cost of Clinical trials with ‘Personalized Medicines’:
Genome sequencing will help identifying a patient population, which will be far more likely to respond positively to the new treatment. In that process, if it reduces costs of clinical trial by even 5%, expected net savings for the industry towards clinical trial have been reported to be around U.S$ 5 billion.
With ‘personalized medicines’ the innovator companies will be able to significantly reduce both time, costs and the risks involved in obtaining regulatory approvals and penetrating new markets with simultaneous development of necessary diagnostic tests. Such tests will be able to identify patients group who will not only be most likely to be benefitted from such medicines, but also will be least likely to suffer from adverse drug reactions.
Therefore, considerable cost advantages coupled with much lesser risks of failure and significant reduction in the lead time for clinical trials are expected to make ‘personalized medicines’ much more cost effective, compared to conventional ‘blockbuster drugs’.
Innovative and cost effective way to market ‘Personalized Medicines’:
With ‘personalized medicines’ the ball game of marketing pharmaceuticals is expected to undergo a paradigm shift. Roche’s model of combining necessary diagnostic tests with new drugs will play a very important role in the new paradigm.
Roche is ensuring that with accompanying required diagnostic tests, the new oncology products developed at Genentech can be precisely matched to patients.
Can ‘Personalized Medicines’ be used in ‘Primary Care’ also?
To use ‘personalized medicines’ in a ‘primary care’ situation, currently there is no successful model. However, it has been reported that in states like, Wisconsin in the U.S, initiative to integrate genomic medicines with ‘primary care’ has already been undertaken. Scaling-up operations of such pilot projects will give a big boost to revolutionize the use of ‘personalized medicines’ for precision and targeted treatment of the ailing population.

Conclusion:

In my view, there does not seem to be any possibility of looking back now. The robust business model of ‘personalized medicines’, will now be the way forward, as much to the industry as to the patients. It is a win-win game.

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.

Explore the Emerging Markets with the ‘Wings of Courage’.

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Overall growth rate of the global pharmaceutical industry is currently hovering around 5%. Similar situation has been prevailing since last several years. There is no indication of acceleration of growth rate from any of the top 3 regions of the world namely the USA, EU and Japan, at least in the near future.

According to IMS, the global pharmaceutical market is expected to grow around 5%-7% in 2011 to US$ 880 billion, as compared to around 4%-5% of 2010.

The reasons of the slowdown, I have discussed several times in the past through this column and do not intend to dwell on that, at least, in this Article.

The Emerging Markets of the World:

Unlike developed markets, emerging pharmaceuticals market of the world, like, India, China, Brazil, Russia, Mexico, Turkey and Korea, are showing a robust growth rate, quite commensurate to the ascending GDP growth trend of these countries.

According to IMS, the projected CAGR trend of the developed and Emerging Markets for the period of 2007–11, are as follows:

Mature Markets

CAGR 2007-11

Emerging Markets

 CAGR 2007-11
USA 4-7% China 13-16%
Canada 6-9% Korea 8-11%
Japan 2-5% Brazil 9-12%
Germany 3-6% Russia 17-20%
France 2-5% Mexico 6-9%
Italy 3-6% India 11-14%
UK 4-7% Turkey 9-12%
Spain 5-8%

(Source IMS)

Branded Generics/Generics are now key growth drivers in the Emerging Markets:

It is worth noting, unlike the developed markets of the world, where high priced branded patented drugs drive the value growth of the industry, in the emerging markets, where investment towards R&D is relatively less, branded generic and the generic products are the key growth drivers.

Such an evolving situation has prompted large global majors like Pfizer, GSK, Sanofi-aventis, Daiichi Sankyo and Abbott Laboratories, to name a few, either to acquire large generic or Biosimilar drug companies or ink various interesting and win-win collaborative deals, in these markets, to maintain their respective business growth with the branded generic and generic products in the fast growing emerging markets of the world.

Will Emerging Markets be lucrative enough only with Generic and Branded Generic products, in the long run?

Some experts do feel that, in the long run, the emerging pharmaceutical markets, like India, may not prove to be as lucrative to the global pharmaceutical majors.

The key reason being, around 80% ‘out of pocket’ expenditure for medicines in India, could be the key impediment to expanded access to higher priced innovative medicines, in general. Such a situation could seriously limit the success of branded patented drugs in India following their global strategy, compared to the developed markets of the world. The issue of affordability of such medicines will continue to be a key factor for their improved access in India, if the ground reality remains unchanged. Top line business growth only with Generics and Branded Generics in the emerging markets may not be sustainable enough, in the long run, for the innovator companies to adequately fund their R&D initiatives to meet the unmet needs of the patients.

The other school of thought:

The other school of thought, however, argues that ‘out-of pocket” characteristic of  India is indeed more sustainable in terms of cost containment pressure, than those  markets where the government or health insurance companies cover a large part of the medical expenses for the population.

Every year around 1% of population comes above the poverty line in India together with a growing ‘middle income’ segment with increasing purchasing power. This cycle, in turn, will keep fueling the growth of healthcare space, contributing significantly to the progress of the pharmaceutical industry of the country.

‘One size fits all’ global strategy unlikely to succeed in the ‘Emerging Markets’:

In my view ‘One size fits all’ type of strategy, especially in the area of pricing, is unlikely to succeed in the emerging markets of the world. Pharmaceutical Companies will need to have  different types of ‘tailor made’ strategic approaches for markets like Brazil, Russia, India, China, South Africa, Mexico, Korea and Turkey.

Pricing Strategy will be a key determinant to success:

For better access to medicines, ‘differential pricing strategy’ has been the stated policy of large global companies like, GSK and MSD. If this trend continues, a win-win situation could be created, when unmet needs of a large number of patient groups could be met with innovative medicines, paving the way for the innovator companies to register a healthy, both top and bottom line, business growth in these markets to effectively fund their R&D projects, besides others.

The most successful brand launch in India, so far:

The credit for the most successful new patented product launch (launched in 2008) in the recent times, I reckon, should go to Januvia (Sitagliptin), an oral anti-diabetic molecule from the global major MSD. The reported global sales of Januvia in 2008 was US $1.4 billion and the sales reported in India was around Rs. 77 Crore (around US $17 million) in just over two years with around 2.4% market share in the large and fragmented Oral Ant-Diabetic segment (IMS, MAT March 2010). This could happen, in my view, not only due to a brilliant business strategy executed with military precision but also because of a differential pricing strategy adopted by the company for this particular product in India.

In recent times, it has not been difficult to record a turnover of around US $ 20 – 25 million by a large pharmaceutical brand either in India or China.

Conclusion:

If this does not happen, due to one reason or the other, it would arguably be quite challenging for the global innovators to be able to keep engaged in the high-cost and high-risk R&D initiatives, by driving their business growth mainly with generic and branded generic medicines in the fast growing emerging markets of the world.

Thus the name of the game for the global innovator companies will be to Explore the Emerging Markets with the ‘Wings of Courage’.

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.

The issue of ‘Counterfeit Drugs’ in India: An “Ostrich Syndrome’

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Ellen‘t Hoen, former Policy Advocacy Director of MSF’s Campaign for Access to Essential Medicines wrote in April 2009 as follows:

“People often seem to confuse counterfeit, substandard and generic medicines – using the terms interchangeably. But they are very separate issues and clearly defining their differences is critical to any discussion”.

In November 7, 2009, Financial Express reported with a headline, “Generic drug companies see a bitter pill in counterfeit“, because some believe that it has an in-built intellectual property right connotation.
The WHO debate:

‘Intellectual property Watch’ in May 20, 2010 reported as follows:

“Brazil and India claimed that WHO’s work against counterfeit and substandard medicines is being influenced by brand-name drug producers with an interest in undermining legitimate generic competition. The Brazilian ambassador told Intellectual Property Watch there is a “hidden agenda” against generics from countries like Brazil.

“India and Brazil filed requests for consultations with the European Union and the Netherlands over the seizure of generics medicines in transit through Europe. This is the first step towards a dispute settlement case, and if issues cannot be resolved via consultations then formation of a dispute settlement panel could be requested in the coming months”.

In response to such allegations the International Federation on Pharmaceutical Manufacturers and Associations (IFPMA) released a document titled, “ten principles on counterfeit medicines” and categorically stated that “patents have nothing to do with counterfeiting and counterfeiting has nothing to do with patents.”

In this seemingly volatile scenario, the key point to understand is the definition of a ‘Counterfeit Drug’.

The dictionary definition:
The word ‘Counterfeit’ may be defined as follows:
1. To make a copy of, usually with the intent to defraud
2. To carry on a deception or dissemble
4. To make fraudulent copies of something valuable
5. A fraudulent imitation.
What does the Indian Drugs and Cosmetics Act say?
Presumably in the spirit of the above definition, the Drugs and cosmetics Act (D&CA) of India has specified that manufacturing or selling of the following types of drugs are punishable offence:
Section 17: Misbranded drugs
Section 17-A: Adulterated drugs
Section 17-B: Spurious drugs
The question therefore arises, as misbranding could involve trademark and design, why does it fall under D&CA?
This was done in the past by the law makers, as they believed that any attempt to deliberately and fraudulently pass off any drug as something, which it really is not, could create a serious public health issue, leading to even loss of lives.
Be that as it may, the pharmaceutical industry all over the world sincerely believes that counterfeit drugs involve heinous crime against humanity.

Another argument:

Some voices in India have also expressed that ‘Counterfeit Drugs’ are a Health issue. Why are we then mixing up non-health IPR issues like trademarks and designs along with it?

Should the definition of ‘Counterfeit Drugs’ cover all types of medicines, which are not genuine?

Definition of counterfeit drugs should, therefore, cover the entire gamut of medicines, which are not genuine. Such medicines could be a fraudulent version of patented, generic or even traditional medicines and have nothing to do with patents or patent infringements.
At the same time it sounds very reasonable that a medicine that is authorized for marketing by the regulatory authority of one country but not by another country should not be regarded as counterfeit on this particular ground in any country, unless it has been made available fraudulently. It will be absolutely improper for anyone to term generic drugs as counterfeits, in the same way.

The magnitude of the problem:

International Medical Products Anti-Counterfeiting Task Force (IMPACT) reported in 2006 as follows:

“Indian pharmaceutical companies have suggested that in India’s major cities, one in five strips of medicines sold is a fake. They claim a loss in revenue of between 4% and 5% annually. The industry also estimates that spurious drugs have grown from 10% to 20% of the total market.”

CDSCO surveys on ‘Spurious’ and ‘Sub-standard’ drugs in India:

Central Drugs Standard Control Organization (CDSCO) of the Government of India has released the following details on ‘Counterfeit Drugs’ in India from 2006 to 2010.

Year Drugs samples tested % of sub-standard drugs % of spurious drugs Prosecution for crime Persons arrested
2006 – 07

34738

5.8

0.22

115

12
2007 – 08

39117

6.2

0.19

120

122
2008 – 09

45145

5.7

0.34

220

133
2009 -10

39248

4.95

0.29

138

147

TOTAL

158248

5.66

0.26

593

414

It is indeed very surprising to note from the above CDSCO report that from 2006 to 2010 the number of both arrests and prosecutions for this heinous crime in India is abysmally low.

To assess the magnitude of the menace of counterfeit drugs, Financial Express dated November 12, 2009 reported that much hyped “world’s largest study on counterfeit drugs” conducted by the Ministry of Health of the Government of India with the help of the Drug Controller General of India’s office, has come to the following two key conclusions:
1. Only 0.046% of the drugs in the Indian market were spurious
2. Only 0.1% of drugs are of sub-standard quality in India

Is there really nothing to worry about?

From these reports, it appears that India, at this stage, has nothing to worry about this public health hazard!

It is indeed equally baffling to understand, why did the government keep ‘misbranded drugs’, as specified in the Drugs and Cosmetics Act of India, outside the purview of this study.
In my opinion, the above recent survey has raised more questions than what it had attempted to answer. Such questions are expected to be raised not only by the pharmaceutical industry of India, its stakeholders and the civil society at large, but by the international community, also.
The problem of ‘Counterfeit Drugs’ is more prevalent in countries where regulatory enforcement is weak:
The menace of counterfeit medicines is not restricted to the developing countries like, India. It is seen in the developed countries, as well, but at a much smaller scale. Thus it is generally believed that the issue of counterfeit drugs is more common in those countries, where the regulatory enforcement mechanism is weak.
A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand, the problem is less than 1%. On the other hand, in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits.
The role of ‘The World health Organization (WHO)’:
To effectively eliminate this global menace, the leadership role of the WHO is extremely important. Across the world, patients need protection from the growing menace of ‘Counterfeit Medicines’. As a premier organization to address the needs of the global public health issues and especially for the developing world, the WHO needs to play a key and much more proactive role in this matter.

Conclusion:
All stakeholders of the pharmaceutical industry must be made aware, on a continuous basis, of the health hazards posed by counterfeit medicines in India. Authorities and organizations like the Drug Controller General of India (DCGI) and its regulatory and enforcement agencies, healthcare professionals, patients, all pharmaceutical manufacturers, drug distributors, wholesalers and retailers should collaborate to play a very active and meaningful role in curbing the counterfeit drugs from reaching the innocent patients.

Instead of all these, as we witness today, the country keeps on demonstrating an ‘Ostrich Syndrome’, shouting from the roof top, as it were, that no health hazards due to prevalence of ‘Counterfeit Drugs’ exist 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

EU-FTA, TRIPS-Plus provisions, Data Exclusivity, Public Interest and India

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Business Standard in its January 27, 2011 edition reported, “Data Exclusivity still key hurdle to India-EU FTA”
Before deliberating on this important issue of “Free Trade Agreement (FTA)”, let me touch upon very briefly, for the benefit of all concerned, the pros and cons of the FTAs.
Free Trade Agreements (FTAs):
Free Trade Agreements (FTAs), as we know, are treaties signed between the governments of two or more countries, where the countries agree to partially or completely lift the import tariffs, taxes, quotas, special fees, other trade barriers and regulatory issues to allow increased business, benefitting each country.
The Pros and Cons:
Consumers of each country are the key beneficiaries of FTAs with increased supply of various products of wider choices at lesser prices with consequent increase in market competition and market penetration.
The cons of the FTAs are apprehensions that arising out of fierce competition and increasing supply of imported products at lesser prices, the demand for domestic goods decline, leaving an adverse impact on the domestic business performance with consequent job losses, especially, in the manufacturing sector. In addition, because of lower import tariff, revenue collection of the government may also get adversely affected.
The scenario is no different for the pharmaceutical sector of the country.
A recent example:
The most recent example is the FTA between India and Japan. This will include both trade and investments, increasing the bilateral trade and commerce between the two countries to around US$ 11 billion. With this Agreement, Indian pharmaceutical products will be able to get access to the highly regulated and the second largest pharmaceutical market of the world.
The key issues with EU FTA:
1. It wants to include IPR issues like Regulatory Data Protection (RDP) or Data Exclusivity (DE) 2. RDP is a TRIPS-plus provision and its inclusion will delay the launch of generics 3. Delayed launch of generics would adversely impact the ‘public interest’.
A paradigm shift has taken place in India:
As we know, January 1, 1995 ushered in a new era, when the agreement of the World Trade Organization (WTO) on Trade-Related Aspects of Intellectual Property Rights (TRIPS), became effective for its member countries. This Agreement significantly changed the international Intellectual Property (IP) regime with the introduction of the principle of minimum intellectual property standards.
This would, therefore, mean that any IP related agreement that will be negotiated subsequent to TRIPS between WTO members can only create higher than the specified minimum standards.
What is ‘TRIPS Plus’?
The ‘TRIPS-plus’ concept usually would encompass all those activities, which are aimed at increasing the level of IP protection for the right holders beyond what is stipulated in the TRIPS Agreement.
Some section of the civil society nurtures a view that ‘TRIPS Plus’ provisions could significantly jeopardize the ability, especially, of developing countries to protect the ‘public interest’.
Some common examples of ‘TRIPS Plus’ provisions:
Common examples of ‘TRIPS plus’ provisions could include:
- Extension of the patent term beyond usual twenty-year period – Introduction of provisions, which could restrict the use of Compulsory    Licenses (CL) – Delaying the entry of generics
Is section 39.3 an example of ‘TRIPS Plus’ provision?
The raging debate around Regulatory Data Protection (Data Exclusivity) as indicated under Article 39.3 of TRIPS is perhaps unique in terms of apprehension of the generic pharmaceutical industry on its possible adverse impact on their business and very recently of the Government of India because of the share of voice of the pressure groups following the EU-FTA.
Be that as it may, the moot question is, even if these provisions are ‘TRIPS Plus’, are these good for India?

Key arguments in favor of RDP in India:
1. It will not extend Patent life and promote evergreening:
However, there is hardly any evidence that RDP does not get over well before the patent expires. Thus RDP does extend the patent life of a product and hence is not ‘Evergreening’.
2. It will not delay the launch of generics because of safeguards provided in the Indian Patent Act, just like in the USA:
A robust ‘Data Exclusivity (DE)’ regime is effective in the USA since over decades. Despite DE, the world witnesses quickest launch of generic products in that country without any delay whatsoever. This has been possible in the USA, because of existence of the‘Bolar Provision’, which allows the generic players to prepare themselves and comply with all regulatory requirements, using the innovators data wherever required and keep the generic product ready for launch immediately after the patent of the innovator product expires in the country.
I reckon similar ‘Bolar like provision‘ exists in the section 107A of the Indian Patent Act. This particular section allows, in a similar way that generic entry is not delayed in India after patent expiry of the respective innovator products.
Though the generic players of India, by and large, are up in arms against RDP (protection against disclosure and unfair commercial use of the test data) in India, highest number of ANDAs are being filed by the Indian companies, just next to the USA, despite a stringent DE provisions being in force there.
Moreover, inspite of very stringent IPR regulations, Generic prescriptions are quite popular in the USA. Around 62% of the total prescriptions in that country are for generic pharmaceuticals.
Thus the key apprehension that the RDP provision in the EU-FTA will delay the launch of generic  pharmaceutical products in India and will go against ‘Public Interest’ seems to be unfounded to me.
Government report indicates RDP is good for India:
The Government of India appointed ‘Satwant Reddy Committee’ report (2007) also categorically recommended that RDP is good for the country and should be introduced in a calibrated way.The committee examined two industries:
- Pharmaceuticals – Agrochemicals
Meanwhile, a 3 year RDP for Agrochemicals has been accepted by the Government of India, vindicating the fact that even if section 39.3 is considered as ‘TRIPS Plus’, RDP, as such, is good for the country.
Thus the question whether Section 39.3 is ‘TRIPS Plus’ or not, does not appear to be relevant while discussing EU-FTA, after following the above sequence of events in India.
Conclusion:
The issue of RDP appears to me more a regulatory than an IPR related subject in EU-FTA negotiation process and should be treated as such. It means RDP is more related to the ‘Drugs and Cosmetics Act’ of India rather than the ‘Patent Act 2005′. The media hype that an IPR issue in the form of RDP is being taken up in the EU-FTA negotiation also seems to be misplaced.
Let me hasten to add that I do not hold any brief directly or indirectly for or against the EU-FTA. Neither do I wish to make any general comment on the EU-FTA as such, because the agreement will deal with various other important issues of our nation’s interest involving intensive negotiations between the sovereign countries, at the government level.
However, even without going into the merits or demerits of the EU-FTA, it appears to me that the arguments put forth by a group of people against RDP related to the EU-FTA are indeed not robust enough and possibly have been prompted more by the vested interest groups rather than the ‘Public Interest’.

By: Tapan J Ray

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

Does China provide a more robust IPR environment than India?

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Soon after the Product Patent Act was reintroduced in India effective January 1, 2005, a raging global debate commenced focusing on the robustness of the Indian Patent system. Quite often, many participants in the debate continue to compare the adequacies of the Chinese patent system with the inadequacies of the same in India.

‘The Pharma Letter’ dated October 26, 2010 published an Article captioned, “Intellectual property concerns and domestic bias hold back R&D in Asia-Pacific.”

Asia-Pacific still lags behind in terms of global R&D investments:

Unlike the common perception in India that China is attracting a significant part of the global investments towards R&D, latest data of MedTRACK revealed that only 15% of all drugs development are taking place in Asia-Pacific despite the largest growth potential of the region in the world. The Pharma Letter also reported, “In December 2009, China unveiled that it would give domestic companies making innovative products an advantage in qualifying for government purchases. This measure is likely to further limit foreign investment in product development in China, and negatively affect growth of foreign brands.”

Such type of domestic bias and protectionist’s measures are yet to be witnessed in India.

Since US is a pioneering country in the field of global R&D and its commercial interest related to such initiatives spans across the globe, let me try to analyze this subject, in this article, quoting only from official US publications.

IPR environment in China – the US perspective:

So far as the current IPR environment in China is concerned, US Embassy based in that country has commented as follows:

“Despite stronger statutory protection, China continues to be a haven for counterfeiters and pirates. According to one copyright industry association, the piracy rate remains one of the highest in the world (over 90 percent) and U.S. companies lose over one billion dollars in legitimate business each year to piracy. On average, 20 percent of all consumer products in the Chinese market are counterfeit. If a product sells, it is likely to be illegally duplicated. U.S. companies are not alone, as pirates and counterfeiters target both foreign and domestic companies”.

In the same context the following remarks of Mr. Shaun Donnelly, Senior Director, International Business policy, National Association of Manufacturers (NAM) , USA, made at the Intenational Trade Commission on June 15, 2010 on IPR environment in China, is also quite interesting:

“Unfortunately China remains Ground Zero for international product counterfeiting and Piracy. Despite considerable efforts over many years by US Government agencies and other international partners as well as Chinese Government the Progress has been minimal…. China continued to be the number one source country for pirated goods seized in the US borders accounting for 79% of the total seizures…The top sectors of IPR infringing products seized included footwear, consumer electronics, apparel, computer hardware, pharmaceuticals…”

Patent enforcement in China – the US perspective:

Regarding product patent enforcement is concerned the US Embassy in China comments:

“Though we have observed commitment on the part of many central government officials to tackle the problem, enforcement measures taken to date have not been sufficient to deter massive IPR infringements effectively. There are several factors that undermine enforcement measures, including China’s reliance on administrative instead of criminal measures to combat IPR infringements, corruption and local protectionism, limited resources and training available to enforcement officials, and lack of public education regarding the economic and social impact of counterfeiting and piracy”.

“Notwithstanding the increased number of applications, many patent owners (both foreign and domestic) continue to experience problems with infringement in China. Counterfeiting and other infringing activities are rampant, and critics frequently complain of lax enforcement of intellectual property laws. As a result, any party considering introducing a patented (or patentable) technology into China – especially one that could be easily reverse engineered or duplicated – would be well advised to proceed with extreme caution, seek legal advice from the outset, and plan fastidiously”.

Regulatory Data Protection (RDP) in India:

Regulatory Data Protection (RDP) for Pharmaceutical Products is still not in place in India, as the Government of India has already articulated that RDP is a ‘TRIPS Plus’ requirement and is non-binding to the country. The Government further reiterated that if any or more interested parties will feel that it is not so, they can certainly go to the WTO forum for the redressal of their grievances in this matter.

RDP in China – the US perspective:

However, on this subject the US feels that though RDP for a 5 year period is now in place in China, ‘inadequacies in their current regulatory environment allow for unfair commercial use of safety and efficacy data generated by the global innovator companies.”

In such a scenario the sanctity of RDP gets significantly diluted and may prove to be a virtually meaningless exercise.

Conclusion:

R. Fernando and D. Purkayastha of ICMR Center for Management Research in their article titled, “Pfizer’s Intellectual Property Rights Battles in China for Viagra” had commented as follows:

“Though the foreign research-based pharmaceutical companies were not happy with the lax IPR regime, the booming Chinese pharmaceutical market provided enough incentive for these companies to stay put and fight it out with the local firms for a share in this emerging market”.

Under these circumstances, while recommending for a world class robust patent regime in India to foster innovation in the country, if anybody wants to draw examples from China on the subject, it would indeed be foolhardy.

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.

Why does the Government divert focus on to fringe issues to address critical healthcare concerns of the nation?

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The Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industry of the Government of India has recently initiated a public debate through a ‘Discussion Paper on Compulsory Licensing (CL) of Patented Pharmaceutical Products’.

The key intent of the discussion is presumably to improve access to quality medicines at an affordable price to the people of the country.

Could such debate serve any meaningful purpose?

Since the issue of CL involves only patented products, I wonder, whether this debate would in any way help sorting out the issue of poor access to modern medicines in our country or this is just another ‘hog wash’ or ‘diversion ploy’ of the decision makers to divert the attention of the stakeholders from the core issues of poor access to healthcare for the common man of India.

Will CL be able to address abysmally poor access to medicines issues in India?

A quick analysis of the prevailing situation related to access to modern medicines in India suggests that the usage of patented pharmaceutical products account for much less than 1% of the sum total of all medicines consumed in India in value terms. In volume terms it will be even more miniscule in terms of percentage.

As per IMS (MAT July, 2010) Indian Pharmaceutical Market size is Rs. 44,476 Crore, even 1% market share of the patented pharmaceutical products will mean Rs. 445 Crore, which is quite far from reality.

Thus, CL of patented medicines would have no sustainable and meaningful impact on improving access to modern medicines for the common man of the country. Moreover, around 40% of the population of India live below the poverty line (BPL). These ‘Children of a lesser God‘ very unfortunately, will not be able to afford any price of medicine, however cheap these could be. Vast majority of the such population who lack the financial capability to pay for even the cheapest off-patent generic medicines, which comprise more than 99% of the total medicines consumed within the country, will continue to be left in the lurch.

65% of Indians do not have access to WHO list of essential medicines, which surpasses even the African countries:

Our government also admits that 65% of Indians do not have access to even WHO list of essential medicines, none of which holds a valid patent in the country. This should be the key concern in the country. Moreover, the World Health Organization (WHO) reported that during 2000-2007, India had poorer access to essential medicines than even many African countries. It is worth noting that many of these African countries has a patent life for pharmaceuticals for around 30 years, against of 20 years in India. What are we then talking about?

Provisions of CL in the Indian Patents Acts are robust enough:

In any case, the provisions of CL in the Indian Patents Acts are not only quite clear and well articulated, but also at the same time offer flexibility in the decision making process to the Indian Patent Offices (IPOs) to invoke CL in a justifiable situation. Thus proposed guidelines related to CL would possibly invite more questions than answers. Consequently, it will be an extremely complicated process for the IPOs to categorize all the situations related to CL. Therefore, in my view, such initiatives, as initiated by the DIPP to frame guidelines for CL could prove to be totally counterproductive, as such guidelines, as stated above, would seriously limit the flexibility of the IPOs to take appropriate action, even when it would require to do so.

Moreover, it is absolutely imperative for the Government to ensure that the primacy of the patent statutes is not disturbed in any way, as such guidelines related to CL would only be consistent with the appropriate provisions within the statute and cannot be used beyond the Patent Law of the land. It goes without saying that any dispute between the parties related to the interpretation of the provisions within the statute related to CL, should only be resolved by the judiciary.

Conclusion:

How could then CL possibly offer answers to the vexing healthcare access issues of the nation? Is the Government not wasting its precious little time, instead of trying to ‘take the bull by the horns’ and resolve the critical ‘access to affordable quality medicines’ issue of India through Public Private Partnership (PPP) initiatives?

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.

Creating an IPR friendly robust ‘Echo-System’ and ‘Improving Access to Affordable Medicines’ are not either/or situation in India

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Last year, though the growth of the Global Pharmaceutical Industry with a turnover of US$ 752 billion significantly slowed down to just 6.7% due to various contributing factors, the Indian Pharmaceutical Industry continued to maintain a robust of growth of 18% with a turnover of US$ 8.1 billion (IMS 2009).

Need to invest more in R&D:

On a longer term perspective, the domestic industry growth will be significantly driven by the newer products, which will be the outcome of painstaking innovative research and development initiatives. Keeping this point in mind, the fact that today India accounts less than one per cent of over US$130 billion of the worldwide spending on research and development for pharmaceuticals, despite its known strength in process chemistry and abundant talent pool, has started attracting attention of the government.

Robust IPR regime and addressing the needs of the poor both are equally important:

The Prime Minister of India, Dr Manmohan Singh in his address at the Fortune Global Forum in New Delhi in October, 2007 clearly enunciated, “We have affirmed our commitment to the protection of intellectual property rights. But, the global economy, the global community cannot afford the complete privatization of research, of knowledge generation, especially in fields like medicine. We need to evolve mechanisms that protect intellectual property and at the same time, address the needs of the poor”.

Thus encouragement, reward and protection of IPR and addressing the crying needs of the poor are definitely not an either/or situation. The country needs to address both with equal importance and focus.

‘Vision 2020’ of the Department of Pharmaceuticals:

It is encouraging to note that the Department of Pharmaceuticals (DoP) of the Government of India through its ‘Vision 2020’ initiatives is planning to create a new echo-system in the country to promote new drug discovery platforms. This is expected to catapult the country as one of the top five global pharmaceutical hubs, by 2020 attracting additional investments of around US$ 20 billion to the GDP of the country.

The Primary role of the Pharmaceutical Industry in India, like in many other countries of the world, is to make significant contribution to the healthcare objectives of the nation by meeting the unmet needs of the ailing patients, with innovative affordable medicines. This role can be fulfilled by developing newer medicines through painstaking, time-consuming, risky and expensive basic research initiatives. To help translate this vision into reality appropriate echo-system needs to be created in the country, urgently, for the Pharmaceutical Industry in India to commit themselves to its one of the prime functions of discovering and developing newer medicines not only for the patients in India but for all across the world.

Ongoing efforts in Research & Development (R&D) would require a robust national policy environment that would encourage, protect and reward innovation. Improving healthcare environment in partnership with the Government remains a priority for the Research based Pharmaceutical Companies in India.

Need to tighten the loose knots:

However, in the new paradigm, which has been designed to foster innovation in the country, there are still some loose knots to be tightened up to achieve the set objectives for the nation, in the longer term perspective.

Uncertainty over weak enforcement of patent in the country should be dispelled, with efficient administration of the new patent regime. Regulatory Data Protection should be introduced to spur R&D investment and global collaborative opportunities. This will, in turn, help improving the competitiveness of India vis-à-vis countries like China to attract appreciable investments towards R&D of pharmaceutical and bio-pharmaceutical products. It is believed that the capacity of our judiciary should be expanded and specialized courts that can enforce Pharmaceutical patents be provided with requisite technical expertise.

How to address the core issue of ‘availability of quality medicines at affordable prices’?

India needs to address the root cause of the ‘pricing issue’ affecting ‘access to quality medicines at affordable prices’ to a vast majority of its population, in a holistic way, rather than superficially with a piecemeal approach, as is being done since long.

The policy of ‘stringent price control of medicines’ of the government since 1970, has certainly enabled India to ensure availability of medicines at the lowest price in the world, lower than even the neighbouring countries like, Pakistan, Bangladesh and Sri Lanka. However, the core issue of ‘affordability of medicines’ has still remained elusive and will remain so, if we continue to tread this much beaten path, though not so successful in the perspective of the core issue, even today.

This is mainly because, around 40% of our population still costitutes of ‘Below the Poverty Line (BPL)’ families, who, very unfortunately, will not be able to afford any price of medicines. This is vindicated by the WHO report, quoted by even our government that 65% of Indian population has no access to modern medicines, as against 15% in China and 47% in Africa, despite medicines prices being the cheapest in India.

In such a situation, even if prices of all drugs featuring under the National List of Essential Medicines (NLEM), anti-cancer and other drugs are brought under stringent price control, the same ‘affordability of medicines’ issue will continue to linger.

Moreover, the recent announcement by the National Pharmaceutical Pricing Authority (NPPA), “as per the Secondary Stock Audit Report of ORG-IMS for the month of April 2010, which covers 60,000 packs, in the non-schedule category, the percentage of packs whose prices have increased on monthly basis during 2009-10, is only in the range of 0.0003 to 4.75%, while the remaining have shown stable to declining prices,” clearly vindicates that unusual price increase of medicines is also not a problem either, in India.

Considering all these points, as I have been suggesting since long, the government should, at least now, allocate adequate fund to cover all BPL families under “Rashtriya Bima Yojona’ and ensure its effective implementation by creating adequate healthcare infrastructure and measurable/transparent delivery systems. Similarly, the rest of the population of the country should be covered by encouraging opening-up and deep penetration of a variety of medical insurance products to suit all pockets together with appropriate tax incentives, as is currently being extended to the ‘Mediclaim’ policy holders.

In all developed countries and many emerging markets like China (where about 85% of the population are covered by different types of healthcare expenditure reimbursement schemes), the issue of ‘affordability of medicines’ has been addressed with such type of approach and other social security measures by their respective governments.

 

“Employers must take health cover for staff or lose tax gains”: Montek Singh Ahluwalia

It is indeed quite encouraging to note from the report of The Hindu Business Line dated September 9, 2010, as this critical issue is being regularly deliberated through this column, the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, has “mooted denial of tax deductibility on wage payment if the employer in the organised sector does not take steps to enrol the employee in a group health insurance scheme. Mr Ahluwalia said employers in the organised sector should be encouraged to make it compulsory for their employees to join a group health insurance scheme, in which the employer and the employee make contributions. As an incentive for this, the insurance premium that is paid can be exempt from tax as India will never be able to expand insurance for which people pay unless an element of incentive-cum-compulsion is introduced”. Mr. Ahuluwalia further commented, “If you leave it to people, only rich people will buy insurance, even middle class people will not buy insurance,” He insisted that “his proposal is feasible and the Government should give it a very serious consideration”.
High incidence of mortality and morbidity burden of India can only be addressed by improving ‘Access to Healthcare’:

Therefore, improving access to healthcare in general and medicines in particular should be on the top priority agenda of the policy makers in our country. High incidence of mortality and morbidity burden in a country like ours can only be addressed by improving Access to healthcare through a concerted partnership oriented strategy. Thus, Pharmaceutical Industry in India should be committed to actively support all efforts from all corners towards this direction to improve Access to Medicines to a vast majority of population in India. Although sporadic, efforts to this direction are being made through various laudable Corporate Social Responsibility (CSR) Initiatives by both local and global pharmaceutical companies within the country.

Pharmaceutical Industry also needs to behave as a responsible corporate citizen:

Another area of focus should be on good corporate governance. This encompasses adherence to high ethical standards in clinical trials, regulatory and legal compliance, working to prevent corrupt activities, high ethical standard in promotion of medicines and addressing all other issues that support good healthcare policies of the Government. In addition, the Pharmaceutical Industry should take active measures to involve all concerned to fight the growing menace of counterfeit and spurious medicines which significantly harm the patients all over the country.

Conclusion:

It is obvious that the Pharmaceutical Industry alone will have a limited role to address the key healthcare issues of our nation. All stakeholders like the government, corporate and the civil society in general must contribute according to their respective capabilities, obligations and enlightened societal interests to effectively address these pressing issues.

However, it is worth reiterating that the Pharmaceutical Industry in India should continue to act responsibly and demonstrate commitment to work closely in collaboration with all stakeholders to make newer innovative medicines both preventive and therapeutic available and accessible adequately at an affordable price to the ailing population of the nation. Thus, in my view, for the progress of the nation, creating a robust IPR friendly ‘Echo System’ and ‘Improving Access to Quality Medicine at an Affordable Price’, are certainly not an either/or situation for the astute policy makers in India, as is being made out to be at some quarters.

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.

The traditional ‘Business Models’ of R&D focused Global Pharmaceutical majors are undergoing a metamorphosis

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Mounting pressure on the P&L account, as the products go off patent:

Patented new products are the prime growth driver of the research based pharmaceutical companies of the world. Since last few years, because of various reasons, the number of launch of such products has been greatly reduced. To add fuel to the fire, 2010-12 will witness patent expiries of many blockbuster drugs, depleting the growth potential of the most of the research based pharmaceutical companies.

The existing model of growth engine needs a relook:

The blockbuster model of growth engine of the innovator companies effectively relies on a limited number of ‘winning horses’ to achieve the business goal and meeting the Wall Street expectations. In 2007, depleting pipeline of the blockbuster drugs hit a new low in the developed markets of the world. It is estimated that around U.S. $ 140 billion of annual turnover from blockbuster drugs will get almost shaves off due to patent expiry by the year 2016. IMS reports that in 2010 more than U.S. $ 30 billion will be adversely impacted because of patent expiry. Another set of blockbuster drugs with similar value turnover will go off patent the year after i.e. 2011. It will not be out of context to mention, that last year around U.S. $ 27 billion worth of patented drugs had gone off-patent.

Decline in R&D productivity is not related to investments:

The decline in R&D productivity has not been due to lack of investments. It has been reported that between 1993-2004, R&D expenditure by the pharmaceutical industry rose from U.S.$ 16 billion to around U.S.$ 40 billion. However, during the same period the number of applications for New Chemical Entities (NCEs) filed annually to the U.S. FDA grew by just 7%.

Total global expenditure for pharmaceutical R&D was reported to have reached U.S. $ 70 billion in 2007 and is expected to be around U.S. 90 billion in year 2010. 75% of this expenditure was incurred by the U.S alone. It is interesting to note that only 22 NMEs received marketing approval by the US FDA during this period against 53 in 1996, when R&D expenditure was almost less than half of what was incurred in 2007 towards R&D.

Be that as it may, the pressure on the P&L (Profit and Loss) accounts of these companies is indeed mounting.

The silver linings:

However, there seem to be following two silver linings in the present scenario, as reported by IMS:

1. Number of Phase I and Phase II drugs in the pipeline is increasing.

2. R&D applications for clinical trials in the U.S. rose by 11.6% to a record high of 662 last year.

Significant growth of generic pharmaceuticals is expected in near future, far surpassing the patented products growth:

Patent expiry of so many blockbusters during this period will fuel the growth of generic pharmaceutical business, especially in the large developed markets of the world. The market exclusivity for 180 days being given to the first applicant with a paragraph 4 certification in the U.S. is, indeed, a very strong incentive, especially for the generic companies of India.

Healthcare reform of March/April 2010 in the USA is expected to give a further boost to this trend.

Pressure on traditional Marketing strategies:
The marketing expenditure for pharmaceutical of the global pharmaceutical companies as reported by Scrip is U.S. $ 57.5 billion. However, an industry association reported that research based pharmaceutical companies in the U.S. spent $ 29.4 billion on R&D and $ 27.7 billion on promotional activities.

New Product Differentiation could be a big issue:

Products in R&D pipeline could face problems of ‘differentiation’ in terms of value offering to the patients, once they are launched. This issue is expected to surface especially with products in the oncology disease area. IMS Health reports that about 55 oncology projects are now in Phase III and 8 in the pre-registration stage. Thus about 50 new oncology products are expected to hit the market by end 2010. Many experts anticipate that there may not be significant brand differentiation between the brands of the ‘same basket’, leading to cut-throat competition and further pressure on expenditure towards marketing of brands.

The changing business strategy of global pharmaceutical companies during this trying time:

In this trying time, the global pharmaceutical companies are resorting to an interesting strategy, combing both old and the new ones. I shall touch upon the following seven strategies:

1. Mergers and Acquisitions (M&A):
Mega M&A strategies are still being actively followed by some large Pharmaceutical companies mainly to enrich R&D pipeline and achieve both revenue and cost synergies.
However, some of these large global companies have started realizing that ‘powerhouses’ created through past mega mergers and acquisitions have now become too large to manage effectively for various reasons. Mismatch between two different organization cultures also throws a great challenge to obtain desired output, many a times. Moreover, the merged R&D set up could become too large to manage, impacting the R&D productivity very adversely.

2. Extension of the Product Life Cycle and Effective Product Life Cycle Management:
Many global pharmaceutical companies are now engaged in ‘product life cycle management’ of their existing products by extending the ‘product life cycle’, effectively. In that process they are trying to maximize the brand value of these products in the international markets. For example, AstraZeneca has developed once daily treatment with their anti-psychotic drug Seroquel XR. This extended-release formulation of the same drug will help patients avoid 5 to 7-day titration required with the immediate-release version.
Towards similar initiative, Pfizer has also recently set up a dedicated “Established Product Business Unit” within worldwide pharmaceutical operations, to hasten business growth in the international markets.

3. OTC Switch:
Prescription to ‘Over the Counter’ (OTC) switch is another business strategy that many innovator companies are now imbibing, at a much larger scale.

This strategy is helping many global pharmaceutical companies, especially in the Europe and the U.S to expand the indication of the drugs and thereby widening the patients base.

Recent prescription to OTC switches will include products like, Losec (AstraZeneca), Xenical (Roche), Zocor (Merck), etc.

4. Emerging of Preventive Therapy, like Vaccines:
Many large global companies, like GSK, Sanofi Aventis and Merck are getting attracted by the emerging opportunities in the fast developing vaccines market. This trend has been triggered primarily by heightened awareness and greater focus on preventive medicines almost all over the world. It is estimated that in 2011, the vaccines market will grow from U.S.$ 13 billion to U.S.$ 30 billion registering a growth of 18% each year during this period. PricewaterhouseCoopers (PwC) estimates vaccine market to be U.S. $ 42 billion by year 2015 based on data of 245 pure vaccines and 11 combination vaccines currently under clinical development. It is interesting to note that 90 of these are therapeutic vaccines for cancer.

5. Entry into highly contentious market of Biosimilar drugs:
The Generic Pharmaceutical Association (GPhA) has estimated that it is possible to save US$ 10 billion – 108 billion over a period of 10 years with biosimilars in the top 12 categories of biological drugs. Some of these biological are already off patent and for others the patents will expire shortly.
Only a few biosimilar drugs have reached the global markets as on date because of their regulatory restrictions in most of the developed markets of the world. Even those biosimilar drugs, which have since been launched in Europe like, human growth hormone (HGH) Somatropin and Epoetin alfa for anemia, are yet to make a mark in the market place.

IMS Health reports that Omnitrope (somatropin) of Sandoz, the first biosimilar drug launched in the developed world, has registered less than 1% of the U.S. $ 831 million HGH market in Europe. Moreover, the launch of 3 more biosimilar versions of epoetin alfa in 2007, made almost negligible impact in the market. Such a low acceptance of biosimilars in the western world, so far, could well be due to lingering safety concern of the medical profession with such types of drugs.

Currently, Japan and USA are working on formal guidelines for biosimilar drugs, whereas Health Canada has already issued draft regulatory guidelines for their approval in Canada.

In April 2010, Reliance Life Science has already announced its intent to enter into the Biosimilar market of the EU in not too distant future.

6. Entry into Generic Markets:

Some large global pharmaceutical companies have already made a firm commitment to the generics market. Novartis paved the way for other innovator companies to follow this uncharted frontier, as a global business strategy. Last year the generic business of Novartis (under Sandoz) recorded 19% of their overall net sales, with turnover from generics registering U.S$ 7.2 billion growing at 20%.

Keen business interest of Sanofi Aventis to acquire Zentiva, the generic pharmaceutical company of Czechoslovakia; it’s very recent acquisition of the generic pharmaceutical company Laboratorios Kendrick of Mexico and Shantha Biotech in India and acquisition of Ranbaxy Laboratories of India by Daiichi Sankyo, will vindicate this point.

Pfizer has also maintained its generics presence with Greenstone in the U.S. and is using the company to launch generic versions of its own off patent products such as Diflucan (fluconazole) and Neurontin (gabapentin).

7. Collaboration with the Indian Companies:

Another emerging trend is the collaboration of MNCs with the Indian pharmaceutical companies to market generics in the global market, like, Pfizer with Aurobindo and Claris, GSK with Dr. Reddy’s Laboratories (DRL), Astra Zeneca with Torrent. I guess that similar trend will continue, in future, as well.

Conclusion:
Another ‘new pharmaceutical sales and marketing model’ is gradually emerging in the global markets. This model emphasizes partnership by bundling medicines with services. The key success factor, in this model, will depend on which company will offer better value with an integrated mix of medicines with services. PwC indicates that in this ‘new pharmaceutical marketing model’, besides required medicines, the expertise of a company to effectively deliver some key services like, patient monitoring and disease management could well be the cutting edge for future success.

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.