Tag Archives: Pharmaceuticals

Are Indian patients victims of “unnecessary tests and procedures, rewards for referrals and irrational use of drugs?” A perspective

Posted on by
Reply

Since quite some time, serious concerns have been expressed by the media, government and the civil society at large about the means adopted by the pharmaceutical industry in general to get their respective brands prescribed by the doctors and why do some of the doctors prescribe what they prescribe to the patients out of multiple available choices.
The MCI Guidelines:
Being concerned mainly by the media outcry, the Medical Council of India (MCI), a year ago, amended their related guidelines for the doctor, clearly articulating what they can and cannot do during their interaction and transaction with the pharmaceutical and related industries.
The Ministry of Health believes that these guidelines, if strictly enforced, would severely limit what the doctors can receive from the pharmaceutical companies in terms of free gifts of wide ranging financial values, entertainments, free visits to exotic locations under various commercial reasons, lavish lunch and dinner etc. in exchange of prescribing specific brands of the concerned companies more…more…and more.
“The Lancet” report:
Let me now combine this scenario with a recent report on India dated January 11, 2011, published in ‘The Lancet’, which states in a similar, though not the same context, as follows:
1. “Reported problems (which patients face while getting treated at a private doctor’s clinic) include unnecessary tests and procedures, rewards for referrals, lack of quality standards and irrational use of injection and drugs. Since no national regulations exist for provider standards and treatment protocols for healthcare, over diagnosis, over treatment and maltreatment are common.”
2. “Most people accessed private providers for outpatient care – 78% in rural areas and 81% in urban areas.”
3. “India’s private expenditure of nearly 80% of total expenditure on health was much higher than that in China, Sri Lanka and Thailand.”
Considering the above three critical issues of India, as reported by ‘The Lancet’, the need to follow a transparent code of pharmaceutical marketing practices by the entire pharmaceutical industry is of utmost importance. Recently amended MCI guidelines for the doctors are welcome steps in the right direction.
Are patients just the pawns?
In the absence of all these, the patients of all socio-economic strata will continue to be exploited as pawns by some unscrupulous healthcare players to satisfy their raw greed for making fast bucks at the cost of the intense agony of the ailing patients and their near and dear ones.
As stated earlier, this phenomenon is not new at all. Over a period of time, many stakeholders of the pharmaceutical industry and the public at large have been raising the issue of physicians being influenced in their prescription decisions by various types of payments made to them by the pharmaceutical companies. Such types of significant and seemingly avoidable expenditures, presumed to be considered by the respective companies as a part of their ‘marketing costs’, are believed to be included in the maximum retail price (MRP) of medicines, making them more expensive to the patients.
On the other hand, most physicians believe that free entertainment, gifts, their travel costs and seminar sponsorships in no way influence their prescription decision for the patients.
This is not a just India specific issue. Some skeptics believe that it has now become an all pervasive global scandal.
Self-regulation by the industry is most desirable:
To address this issue effectively, some national and international pharmaceutical associations have come out with their own codes of ethical marketing practices along with appropriate stakeholder grievance redressal mechanism, effectively.
Despite all these, it is an undeniable fact that overall perceptual image of the pharmaceutical industry in this respect to the stakeholders, in general, is not as good as it should have been.
The Government intervened in India:
Being alarmed by various media reports on the alleged pharmaceutical marketing (mal) practices in the country, the Department of Pharmaceutical (DoP) had advised the pharmaceutical industry to develop an ‘Uniform Code of Marketing Practices (UCMP)’, which will be applicable to the entire pharmaceutical industry in India.
It has been reported that the said UCMP with its stakeholder grievance redressal mechanism in a transparent procedural format, was submitted to the government by the major pharmaceutical industry associations in India. However, because of dissent of some section of the industry, the UCMP has not received the ‘green signal’ of the government, as yet. It was expected that all stakeholders will help maintaining the sanctity of the UCMP to address this sensitive global and local issue, effectively.
An emerging trend of public disclosure:
Around third quarter of 2008, in an industry first step, Eli Lilly announced its intent of full disclosure of payments that the company made to the physicians for various commercial reasons. Eli Lilly indicated disclosure of payments of more than US $500 to the physicians for advice and speaking at the seminars. Over a period of time, the company indicated that it will expand such disclosure to include other forms of payments to the physicians like gifts, various entertainment and travel.
Eli Lilly was soon followed in this direction by global pharmaceutical majors like, Merck and GlaxoSmithKline (GSK).
However, in India, such instances have not been reported, as yet.
Skepticism with voluntary disclosure:
Some are still skeptical about announcements of such ‘voluntary disclosure of payment to the physicians’ by the global pharmaceutical majors to bring in better transparency in the functioning of the industry.

This section of people believes, there are hundreds and thousands of other pharmaceutical companies, who will not follow such precedence of voluntary disclosure in the absence of any properly enforced regulation.
Conclusion:
In all the countries and India is no exception, pharmaceutical companies, by and large, try to follow the legal ways and means to maximize turnover of their respective brands. Many follow transparent and admirable stringent self-regulations, stipulated either by themselves or by their industry associations.
‘Self-regulation with pharmaceutical marketing practices’ and ‘voluntary disclosure of payment to the physicians’ by some leading global pharmaceutical companies are laudable steps to address this vexing issue. However, the moot question still remains, are all these good enough for the entire industry?
It is about time that all players in the healthcare space realize, in case these voluntary measures of the industry and the guidelines of the regulators like MCI, do not work effectively for any reason, there will be no other option but for the government to step in with iron hand and ‘fool proof’ regulations.
The popular dictum, especially, used in the healthcare industry, “all these are for the patients’ interest” should not be allowed to be misused or abused, any further, by some unscrupulous elements and greedy profiteers, to squeeze out even the last drop of financial resource from the long exploited population of ailing patients of India.

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.

Have the successive ‘Drug Policies’ of India delivered? If not, why not?

Posted on by
Reply

January 11, 2011 edition of ‘The Lancet’ in its article titled, “Financing health care for all: challenges and opportunities” commented as follows:
“India’s health financing system is a cause of and an exacerbating factor in the challenges of health inequity, inadequate availability and reach, unequal access, and poor-quality and costly health-care services. The Government of India has made a commitment to increase public spending on health from less than 1% to 3% of the gross domestic product during the next few years…. Enhanced public spending can be used to introduce universal medical insurance that can help to substantially reduce the burden of private out-of-pocket expenditures on health.”
The “Drug Policy “of India:
The new ‘Drug Policy’ of India, which is long overdue, should address all these key issues, as articulated by ‘The Lancet’. Unfortunately, outdated ‘1995 Drug Policy’ is still operational, since last fifteen years. The reason for inordinate delay in putting a new, robust and more reform oriented ‘Drug Policy ’in place is still not known to many, as it is probably languishing in the prison of indecision of the bureaucracy of the country.
The ‘Drug Policy 1986’ clearly enunciated the basic policy objectives relating to drugs and pharmaceuticals in India. After around 25 years, should not the government, at the very least, ponder to assess whether the successive drug policies have delivered to the nation the desirable outcome or not?
In my view, the objectives of the new ‘Drug Policy’ should help accelerating the all-round inclusive growth of the Indian pharmaceutical industry to make it a force to reckon with in the global pharmaceutical space. The drug policies are surely not formulated just to implement rigorous price control measures for drugs. The policy should also formulate other key measurable initiatives, assigning specific accountabilities, to contribute significantly towards achieving the healthcare objectives of the nation. The policy should also encourage working closely and in tandem of all the related ministries of the government.
Financial protection against medical expenses for all is very important:
One of the very major issues in the healthcare space of the country is high out of pocket expenses by the majority of our population. “Financial protection against medical expenditures is far from universal with only 10% of the population having medical insurance” in India. (Source: Lancet Jan 11, 2011).
A comparison of private (out of pocket) health expenditure: (Source: Lancet)
1. Pakistan: 82.5% 2. India: 78% 3. China: 61% 4. Sri Lanka: 53% 5. Thailand: 31% 6. Bhutan: 29% 7. Maldives: 14%
The key issue remains unresolved:
The above edition of ‘The Lancet’ has highlighted that outpatient (non-hospitalization) expenses in India is around 74% of the total health expenses in India and the drugs account for 72% of this total outpatient expenditure. The study has also highlighted that 47% and 31% hospitalization in rural and urban areas respectively are financed by loans and sell of assets.
Drug Prices in India:
The cost of medicines, especially the essential medicines in India, is one of the lowest in the world, even more economical than our neighboring countries like, Bangladesh, Sri Lanka and Pakistan. Moreover, as per DIPP data the inflation index of medicine in 2009 was much lower at 112.32 against the same for all commodities in the same year at 127.47. National Pharmaceutical Pricing Authority (NPPA) also indicated that there was almost no rise (+0.5%) of drug prices in 2010 over the previous year because of effective ‘Drug Price Monitoring mechanism’ by the regulator and fierce market competition.
Around 38% – 40% of Indian population can’t afford to spend on medicines:
While framing the ‘Drug Policy’, the government should also keep in mind that a population of around 38 to 40% of India, still lives below the poverty line and will not be able to afford any expenditure towards medicines. Adding more drugs in the list of essential medicines and even bringing them all under stringent price control will not help the country to resolve this important issue, in the prevailing situation.
The key focus area of successive ‘Drug Policies’ of India has been just ‘price’:
The reform initiatives enunciated by the government in the successive drug policies have been considered by the pharmaceutical industry, in general, as far from satisfactory. In the era of globalization, where market forces play a dominant role to control prices, including the essential commodities, the rigors of stringent price control on pharmaceuticals need to be addressed urgently. This was re-enforced even in the ‘National Economic Survey Report of 2009′.
Will continuation of the same focus be able to resolve the issue?
I do not think so. Continuation of the focus on price since last four decades has certainly enabled the government to ensure that drugs prices in India are cheapest in the world. However and very unfortunately the ‘Drug Policies’ with focus on price alone have not been able to ensure even today that 47% and 31% of hospitalization in rural and urban areas, respectively, are financed by robust healthcare financing systems and not by private loans and selling of assets by individuals.
Expectations from the new ‘Drug Policy’:
Adequate and immediate policy measures to respond to the needs of a robust healthcare financing model for all strata of the society are absolutely critical to address this pressing issue. Effective penetration of health insurance, will, therefore, be one of the key growth drivers not only for the Indian pharmaceutical industry, but also to ensure its inclusive growth, as desired by many.
Conclusion:
Unfortunately, the ‘Drug Policies’ of India have not been able to keep pace with the globalization process of the country as compared to even those industries, which are dealing with the essential commodities, like pharmaceuticals. The amended Indian Patents Act came into force in the country in January 2005. The drug policy of India, for various reasons, has not been able to articulate, as yet, specific key measures to encourage innovation, giving a new thrust to the pharmaceutical R&D space of the country, as much as it should have been.
The ‘New Drug Policy’ should have clear and transparent provisions of stringent drugs ‘price monitoring’ mechanism by the NPPA. The policy should also include an equally transparent system to ensure that errant pharmaceutical players, if any, who will be caught with profiteering motives, under any garb, at the cost of precious lives of the ailing patients, are brought to justice with exemplary punishments, as will be defined by law.

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.

Limiting FDI in Pharma is a protectionist cry: Does not benefit the common man.

Posted on by
Reply

“Protectionism is harmful” very aptly commented by Mr. Pranab Mukherjee, the Finance Minister of India, just the other day. This was in context of “recent US moves to hike visa fees and clamp down on outsourcing”.
While almost at the same time, both Indian and the foreign media reports indicate that being concerned by the recent acquisitions of the home grown relatively large pharmaceutical and biotech companies, the Department of Pharmaceuticals (DoP) and the Department of Industrial Policy and promotion (DIPP) of the Government of India are mulling a proposal to do away with the current practice of allowing 100% Foreign Direct Investments (FDI), as applicable to the pharmaceutical industry in India.

Even the Health Minister of India has been expressing this concern since ‘Abbott – Piramal deal’ was inked last year. He expressed the same apprehension, as he read out from his written speech, in an industry function in Mumbai held on January 7, 2011.

Thus the moot question is, will limiting FDI in pharmaceuticals be not considered by the world as a protective measure, just as ‘hiking visa fees and clamping down outsourcing’ from India by other countries?
Is it a mere speculation?
I would reckon so, as at this stage India cannot afford to take any retrograde anti-reformist measure in its endeavor to further accelerate the economic progress of the nation. The Finance Minister of India has also expressed so publicly, in the same context, quite recently.
Still the speculation is quite rife that a new cap of 49% FDI for pharmaceuticals would be able to keep the multinational companies (MNCs) away from having controlling stakes in the Indian companies, which will not jeopardize access to quality medicines at an affordable price to a vast majority of the population.
The key apprehensions:
The Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industries in its ‘Discussion Paper’ dated August 24, 2010, which was primarily on Compulsory Licensing (CL), also expressed some of the following key apprehensions towards foreign acquisitions of the Indian pharmaceutical companies by the MNCs:
1. Such takeovers could lead to an ‘oligopolistic market’ where a few companies will decide the prices of essential medicines, adversely impacting the ‘Public Health Interest (PHI)’.
2. If large Indian companies having the wherewithal to replicate any patented molecule are taken over by the MNCs, the ‘oligopolistic’ situation thus created and being strengthened by the exclusivity of products through product patent rights, will severely limit the power of the government to face the challenge of PHI by granting CLs.
3. In such a situation MNCs could well decide to sell only the high priced patented and branded generic drugs rather than the cheaper essential drugs, pushing up the drug prices and causing inconvenience to patients.
Addressing the key apprehensions:
Let me now try to address these apprehensions impartially and with as much data as possible.
1. Can Indian Pharmaceutical Market (IPM) be ever oligopolistic? Dictionary defines ‘Oligopolistic market’ as ‘a market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors’.
IPM has over 23,000 players and around 60,000 brands (source: IMS 2010). Even after, all the recent acquisition, the top ranked pharmaceutical company of India – Abbott, enjoys a market share of just 6.1% (source: AIOCD/AWACS , November 2010). Even the Top 10 groups of companies (each belonging to the same promoter group though different and not the individual companies) contribute just around 40% of the IPM.
Thus, IPM is highly fragmented. No company or group of companies enjoys any clear market domination. In a scenario like this, the apprehension of an ‘oligopolistic market’ being created through acquisitions by the MNCs is indeed unfounded.
2. The idea of creating a legal barrier in terms of limiting the FDIs to prevent the domestic pharma players from selling their respective companies at a price, which they would consider lucrative, just from the CL point of you, as mentioned in the ‘discussion paper’ of DIPP, sounds bizarre.
3. The market competition is also extremely fierce in India with each branded generic/generic drug (constituting over 99% of the IPM) having not less than 50 to 60 competitors within the same chemical compound. Moreover, 100% of the IPM is price regulated by the government, 20% under cost based price control and the balance 80% is under stringent price monitoring mechanism. In an environment like this, the very thought of any threat to ‘public health interest’ due irresponsible pricing, may be taken as an insult to the government’s own price regulators, who have contributed in making the medicine prices in India cheapest in the world, cheaper than even our next door neighbors like, Bangladesh, Pakistan and Sri Lanka.
Hard facts tell us a different story:
The apprehension that acquisition of Indian drug companies by MNCs will hurt the consumer interest is not based on hard facts. MNCs constitute 19% of the total share of the Indian pharmaceutical market in value terms. Of the 455 companies listed in IMS ORG, 38 are foreign owned (only 8.4%). The fragmented nature of the industry ensures high level of competition that has led to the lowest prices of essential medicines in India.

Ranbaxy was the first major Indian drug company to be acquired by the Japanese MNC Daiichi Sankyo in June 2008. Two years later, the prices of medicines of Ranbaxy have remained stable, some in fact even declined. As per IMS MAT June data, prices of Ranbaxy products grew only by 0.6% in 2009 and actually fell by 1% in 2010.
Access to world class science and technology:
Even the acquisition of Shantha Biotechnique by Sanofi-aventis has enabled the domestic bio-tech company to get world class R&D support and international exposure in partnership with the one of the world’s largest vaccines development company – Sanofi-Pasteur. It is worth noting that none of the prices of locally produced vaccines by Shantha Biotechnique has gone up after this acquisition.
Data also shows that the number of products under price control is now much higher for MNCs in general than the domestic drug companies.
Other positive fall outs of acquisitions/collaborations:
All these acquisitions were absolutely voluntary in every way and brought in for the country large amount of foreign investments as can be seen in the Piramal Healthcare buyout amounting to US $3.72 billion and earlier the Ranbaxy buyout of US $4.2 billion. Such acquisitions also help in shifting investment and R&D focus of the MNCs into India, which offers good science and technology base with a significant cost arbitrage.
Conclusion:
In my opinion, through partnering with MNCs, local drug companies have begun to gain access to international expertise, resources and good manufacturing practices. A number of local companies have already entered into alliances with MNCs to leverage these opportunities.
Thus limiting FDI in the pharmaceutical industry at this stage, when the government in fact is debating to open up the retail and the insurance sectors to foreign investments will indeed be a retrograde step for the country.

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.

Gone 2010…Comes 2011: Looking Back…Looking Ahead at the Healthcare Space of India

Posted on by
Reply

Our country, especially the media and the politicians (perhaps not so much the ‘Aam Aadmi’), appears to be totally engrossed now in uprooting the issue of corruption from the soil of India, once and for all. Politicians of all hues are not showing any sign of respite to let go this opportunity, without squeezing out the last drop of ‘political elixir’, out of the current high level of self-created cynicism. This is very important for them in the run-up to the next general and state elections for ultimate win in the political power-game. The ‘common man’, like you and me, on the contrary, is perhaps thinking about job creation, financial progress, infrastructure development, education and health.

The Fourth Estate of the country, especially the Electronic Media, seems to be lapping up any news, which could even remotely help the TRPs of their respective news channels going north.

In a chaotic situation like this, when even the country’s parliament is defunct, it appears, by and large the entire nation is currently being encouraged to get deeply engaged in ‘self-flagellation’, as it were. There seems to be a desperate need to prove to the world, time and again, how bad the Indians are. The ‘Brand India’ after taking so many powerful blows on its chin, is in tears now.

Be that as it may, has India achieved anything in the year 2010 with a public spend of just around 1% of the GDP towards healthcare? Let me try to capture some of those hard facts, which could appear as a laundry list though, at the very onset of the brand New Year. I have collated these details from various published sources.

Some doomsayers with ever ‘pontifying’ mind-set would nevertheless keep brushing all these aside. However, acknowledging these achievements, I would rather say, “all these are too little even for too few”.

Whatever it is, I am trying to put these details in one place for a comprehensive record of the year, just gone by.

Here it goes:

I. Healthcare Indicators:

I. The number of polio cases has sharply declined during the year. Only 41 polio cases have been reported as on November 30, 2010, against 633 in the corresponding period of 2009.

II. Adult HIV prevalence has declined from 0.41% in 2000 to 0.31% in 2009. The number of new annual HIV infections has declined by more than 50% from 2000 to 2010.(Source: National AIDS Control Organization )

III. Leprosy Prevalence Rate has declined to 0.71/10,000 in March, 2010. 32 State/UTs have achieved elimination by March 2010, leaving only Bihar, Chhattisgarh and Dadra & Nagar Haveli.

IV.TB mortality in has gone down from over 42/lakh population in 1990 to 23/lakh population in 2009 as per the WHO global report 2010. The prevalence of the disease in the country has reduced from 338/lakh population in 1990 to 249/lakh population by the year 2009 (Source: WHO global TB report, 2010).

II. New Initiatives:

  1. A bivalent oral polio vaccine (bOPV) was launched in the country in Bihar on January 9, 2010.
  2. A ‘Sports Injury Centre’ was dedicated to the nation at the Safdarjung Hospital, Delhi, with an inpatient capacity of 35 beds with all modern facilities.
  3. The Indian Pharmacopeia Commission published the 2010 version of Indian Pharmacopeia.
  4. Upgradation of the National Centre for Disease Control (NCDC), Delhi with an estimated cost of Rs 382.41. Crore.
  5. A scheme to support the State Government Medical Colleges for conducting paramedical courses with a total proposed project cost of Rs.1156.43 Crore.
  6. Setting up of 132 Auxiliary Nurse Midwives training schools at an estimated cost of Rs.5.00 Crores per school and 137 General Nursing and Midwifery training schools at an estimated cost of Rs.10.00 Crores per school.
  7. Ministry of Health and Family Welfare and Ministry of Railways signed a memorandum of Understanding for development of healthcare infrastructure along the railway network of the country.
  8. A new ‘National Program for Health Care of the Elderly’ (NPHCE) was approved with an outlay of Rs. 288.00 Crore for 2010-11 & 2011-12.
  9. Urban Slum Health Check-up Scheme for Diabetes and Blood pressure was launched in New Delhi on November 14, 2010. Pilot project is in progress in Bangalore, Hyderabad, Kolkata, Mumbai, Chennai and Ahmedabad.
  10. The revised National Program for Prevention & Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) was approved with a budgetary provision of Rs. 1230.90 Crore
  11. Under Central Government Health Scheme (CGHS), a pilot project of a standalone hemodialysis center has started at Sadiq Nagar CGHS Wellness center in collaboration with M/S Alliance Medicorp (India) Limited, Chennai, under Public Private Partnership (PPP).

III. National Rural Health Mission (NRHM)

  1. Healthcare Infrastructure:

I. New construction and upgradation of 433 District Hospitals, 2921 Community Health Centers (CHCs), 4165 Primary Health Centers (PHCs) and 11856 Health Sub-Centers.

II. 9120 PHCs became functional for 24 hours, as compared to only 1262 in 2005.

  1.                III.  2426 health facilities which include District Hospitals, Sub-District Hospitals and Community Health Centers started functioning as First Referral Units (FRUs) as compared to 955 in 2005.

 

  1.                IV.  1653 Mobile Medical Units are operating in different States providing services in the interior areas.
  2. Human Resource:

I. 2394 Specialists, 8284 MBBS doctors, 9578 AYUSH doctors, 26734 staff nurses, 53552 ANMs and 18272 other Para-medical staff were added to the health system to improve the services.

II. Over 8.33 lakh trained ASHA/community workers were engaged to link the households with the health facility.

 

3.  Healthcare System:

 

I. State and District Health Societies were set up in all the States and Union Territories (UTs).

  1.                               II.  Planning capacity at the district level was strengthened and Integrated District Health Action Plan prepared by 540 districts.

4. Community Engagement:

Effective and efficient decentralized management of health system is being achieved through communalization of facilities, adequate and flexible financing with community accountability, monitoring progress against Indian Public Health Standards, innovations in human resources, together with engagement and building of capacity at all levels.

I. 29904 ‘Rogi Kalyan Samitis’ were registered in the health facilities up to PHC level.

  1.                               II.  4.93 lakh Village Health and Sanitation Committees (VHSCs) were constituted and 4.82 lakh joint accounts at the Village Health and Sanitation Committees and Health Sub-Centers were opened.
  2.                            III.  23.61 million Village Health & Nutrition Days were held at village level over the last three years to provide immunization, maternal and child healthcare and other public health related services at ‘Anganwadi’ centers.

5. Service Delivery:

I. Under the ‘Janani Suraksha Yojana (JSY)’, which is cash transfer scheme to promote institutional delivery, over 100.78 lakh pregnant mothers were covered in 2009-10 as against 7.39 lakh in 2005-06.

  1.                               II.  53500 male health workers were hired for all the Sub Health Centers (SHC) in 235 high focus districts for disease control with a total costs of Rs. 385.52 Crores per year.

6. Family Planning:

  1.                                 I.  Fixed day Fixed Place Family Planning Services round the year through PHCs
  2.                               II.  ‘Santushti’ strategy was implemented through ‘Janasankhya Sthrirata Kosh’, to provide private sector gynecologists and vasectomy surgeons an opportunity to conduct sterilization operations through Public Private Partnership (PPP) initiatives.

7. Disease Control:

  • National Tuberculosis Control Program:

I. Treatment success rates increased from 25% to 87% in 2010.

II. Death rates have declined from 29% to 4% in 2010

III. Treatment success rate is now >85% and new sputum positive (NSP) case detection rate is currently more than the global target of 70%.

  • The National Program for Control of Blindness started providing financial assistance to NGOs for cataract operations and treatment of other eye diseases.
  • 75 districts were added to the National Program for Prevention and Control of Deafness (NPPCD), making it a total of 176 districts of 15 States and 4 UTs. Rs.11.50 Crore has been provided for the current year.
  • Phase–I of ‘Pradhan Mantri Swasthya Suraksha Yojana’ projects commenced with an allocation of Rs 9307.60 Crore.

IV. Healthcare Legislation:

1. The Indian Medical Council (Amendment) Bill 2010 was introduced in the ‘Lok Sabha’ to give effect to amendments to the IMC Act 1956 by which in certain specified situations Government can dissolve the elected Medical Council and replace it, for a period not exceeding one year with a nominated Board of governors.

2. The “National Institute of Mental Health and Neuro Sciences Bangalore Bill, 2010” was introduced in the ‘Rajya Sabha’ to facilitate NIMHANS to develop as an Institute of National Importance on the lines of All India Institute of Medical Sciences, New Delhi,

3. The Clinical Establishments (Registration & Regulation) Bill, 2010 was passed by both Houses of Parliament and notified. The Act aims at providing registration & regulation of clinical establishments in the country with a view to prescribing minimum standards of facilities and services.

V. International Cooperation:

  • A MoU on the Establishment and Operation of Global Disease Detection (GDD) – India Centre, between National Centre for Disease Control, New Delhi and Centre of Disease Control and Prevention, Atlanta, USA, was signed during the recent visit of the US President Mr. Barack Obama in November 2010.
  • India raised the issue of counterfeit medicines and “urged countries to steer clear from the commercially motivated debates over the ‘counterfeit’ issue which have hampered public health by preventing access to good quality and low cost generic drugs”. As a result WHA adopted a resolution establishing a time limited and result oriented working group on substandard / spurious / falsely-labeled / falsified / counterfeit medical products comprised of and open to all Member States.

VI. Health Research:

I. Draft National Health Research Policy prepared during the year, is being debated across the country.

II. Draft Policy for Knowledge Management Policy for Health – services, education and research prepared and debates completed.

III. Based on guidelines for use of assisted reproductive technologies a draft Bill has been prepared.

IV. Guidelines for management of cancers of buccal mucosa, stomach & cervix has been developed.

My wish-list for 2011:

In my view, the following 5 important issues, if addressed effectively in 2011,could make a significant impact on the Healthcare space of India:

1. Announcement of a robust, reform oriented long overdue pharmaceutical ‘Drug Policy’ in India.

2. More budgetary allocation and a transparent delivery system for the National Rural Health Mission (NRHM) and the Rashtriya Bima Yojana (RBY) to improve access to healthcare and ensure inclusive growth in the healthcare sector, covering majority of the population of the country.

  1.               3.  A strong healthcare financing model covering all strata of  society to reduce  the burden of huge ‘out of pocket’ healthcare expenses and make healthcare more accessible and affordable to all.

- The 2010 ‘World Health Report’ of the ‘World Health Organization (WHO)’ “provided governments of various countries with practical guidance on ways to finance healthcare expenses. Taking evidence from all over the world, the report showed how all countries, rich and poor, can adjust their health financing mechanisms so more people get the healthcare they need.” I reckon, policy makers in India will exert enough efforts in 2011 for speedy implementation of such reform oriented healthcare initiatives in the country in its endeavor to fulfill the long overdue promise – ‘health for all.’

4. Progressive policy and fiscal measures to encourage innovation and pharmaceutical R&D within the country

5. Speedy resolution of all Intellectual Property related disputes through ‘Fast Track IP Courts’ to create appropriate innovation oriented ‘Echo System’ in the country.

Conclusion: 

All the achievements of the year just gone by, are good… but are these enough? India in its ‘Healthcare Policy’ statement, way back in mid-1980 promised, ‘health for all’ by the year 2000. We are not there, not just yet.

Though the country is trying hard to achieve the ‘Millennium Development Goals (MDG)’ by 2015, as the situation stands today, it appears a remote possibility, in many areas.

Non-communicable diseases are now posing a major threat to the country, significantly increasing the burden of disease. The World Health Organization (WHO) has cautioned that India would be the ‘diabetic capital’ of the world with a population of around 80 million diabetic patients by 2030. Further, the ‘Cardiological Society of India’ predicts that there would be around 100 million cardiac patients in the country by 2020, which roughly works out to be around 60% of the total cardiac patient population of the world.

Keeping all these in view, the achievements made by the country in the year 2010, though should be taken note of… but the moot question still remains, ‘aren’t all these too little even for too few?’

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.

To accelerate increasing ‘Access to Modern Medicines’ in India: A Strategic Approach

Posted on by
Reply

Currently no one knows what the ‘Access to Modern Medicines’ in India is, in real term. Like many others, both local and global. I myself was quoting the World Medicines Situation of 2004 report, the base year of which is actually 1999. Thus there should not be even an iota of doubt in anybody’s mind that the above reported situation has changed quite significantly during the last decade in India and the statement that both the government and the industry alike has been making since then, ‘only 35% of the population of the country, against 53% in Africa and 85% in China has access to modern medicines’, is indeed quite dated. It does not make sense, at all, in the recent times of the Pharmaceutical industry in India.

More surprisingly, an updated information on the subject does not seem to be available anywhere, as yet, not even with the World Health Organization (WHO). However, the good news is, it has been reported that the ‘World Medicines Situation’ is currently being updated by the WHO.

 Access to modern medicines is improving in India:

Be that as it may, CAGR volume growth of the pharmaceutical industry since the last ten years has been around 10%, leave aside another robust growth factor being contributed through the introduction of new products, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas certainly signals towards significant increase in the domestic consumption of medicines in India. In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets clearly supports the argument  of increasing ‘Access to Modern Medicines’ in India. The improve in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to medicines in India.

For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% of the growth per year, for the last nine year over the base year, to improved access to medicines, it will indicate, at least, 57% of the population of India is currently having access to modern medicines and NOT just 35%, as I wrote in this blog earlier.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefers to live on to our past.

Be that as it may, around 43% of the population will still not have ‘Access to Medicines’ in India. This issue needs immediate attention of the policy makers and can be achieved with a holistic approach to resolve this issue. A robust model of healthcare financing for all socio-economic strata of the population, further improvement of healthcare infrastructure and healthcare delivery systems are the need of the hour.

Percentage growth in the healthcare budget is higher than that of the GDP:

With the increase of healthcare expenditure by 15% for 2008-09 and further increase in 2010-11, as announced by the Finance Minister in his recent Budget Speech, the healthcare expenditure as a percentage to GDP still remains around 1.0%, which is quite inadequate to address the key healthcare issues of the country.

The Prime Minister has already has expressed his intent that India will be able to increase its public healthcare spend to around 2.5% of the GDP, when GDP growth will touch the double digit figure of 10%, which I reckon, is no longer a pipe dream.

Explore a Public-Private Partnership (PPP) with the stakeholders of the Pharmaceutical Industry:

To address the critical issue of access to modern medicines, policy makers should now actively consider a series of closely integrated PPP initiatives. These PPP initiatives will initially include ‘Below the Poverty Line’ (BPL) families of our country, which not only constitute a significant part of our population, but also will have almost nil purchasing power for medicines. Thereafter, the scheme, slightly modified, should be extended to all ration card holders in India.

Possible impact of such PPP initiatives on improving access to medicines:

If such PPP initiatives are carefully and innovatively strategized, carefully planned and diligently executed, the access to modern medicines in India could increase from current 57% to over 63% of our population within a year’s time  and to over 82% of the population over a period of next five years.

A ‘Back of the Envelope’ Strategy Outline:

The Objective:

To improve access to medicines to over 60% of the population one year after the execution of the strategy and to over 80% within the next five years. The key stakeholders, especially the pharmaceutical companies in India, will work closely with the Government under PPP initiatives for the improvement of access to modern medicines initially to the BPL families, significantly, who have almost no purchasing power for medicines.

The Plan:

- The stakeholders, mainly the pharmaceutical industry, to work out a suitable methodology to help the Government to reach all pharmaceutical formulations covered under ‘National List of Essential Medicines (NLEM)’ to the BPL families across the country and gradually extend it to all ration card holders in India.

- The government would extend appropriate Tax cuts to the concerned companies, as an incentive towards their involvement in the PPP initiatives.

- The National Pharmaceutical Pricing Authority (NPPA) would continue to strictly implement its drug price monitoring mechanism for all categories of drugs to keep their prices well under control, always.
Key Assumptions:
- According to Planning Commission of India (2007) the population of India is 116.9 Crore or 1.169 billion.

- According to ‘Centre for Science & Environment (August 2007)’ the latest figures on poverty place 27% of India’s population below the poverty line (BPL) out of which 72% reside in rural areas.

- No price of medicines will be affordable to the BPL families.

- The National Sample Survey Organization (NSSO) report on “Public Distribution System & Other Sources of Household Consumption, 2004 – 05” shows that only 28% of the rural poor have benefited from any type of government food assistance schemes, including ‘Public Distribution System’ and for urban areas the figure is just 9.5%. That means about 72 Million people below the poverty line are having ration cards.

- According to 1995 World Bank Study, the established per capita health spending is around Rs.320 per year.

- McKinsey in their report “India Pharma 2015” has stated that expenditure on medicines is 15% of total healthcare spend i.e. Rs.48 per year.

Methodology:

- Identify the number of BPL families who hold ration cards to receive free/subsidized medicine.

- Determine the cost to be incurred by the Government for purchase of medicines under NLEM.

- Devise a system of generating commensurate funds to improve access to BPL families.

- Operationalize the distribution of medicines to BPL families with public transparency

- Increase penetration of ‘Jan Aushadhi’ outlets simultaneously as a supportive incremental measure

Projected increase in ‘Access to NLEM Drugs’:

Million
Population of India

1169
27% of Population is BPL

316
72% rural

228
28% urban

88
28% of 228 million have ration cards

64
9.5% of 88 million have ration cards

8
Total BPL ration card holders

72
Current Access to Modern medicines of 57%

666
When all ration card holders get NLEM drugs the access improves to:

738

�
SO, IF AT LEAST THE BPL RATION CARD HOLDERS GET NLEM MEDICINES, ACCESS IMPROVES FROM 57% TO 63.2%.

Cost implications of Increasing Access from 57% to 63.2%:

  1.  72 million ration card holders will need Rs.48 worth medicines per year i.e. Rs.3456 million or Rs.346 Crores.
  2. If Industry contributes 0.6% of its turnover which will attract full tax (both direct and indirect) exemptions from the Government, the industry contribution works out to Rs.170 Crores.
  3. A similar amount should be provided by the Government for purchase of free/subsidized medicines for exclusive dispensing to the BPL families.

To operationalize improved ‘Access to Medicines’:

- All ration card holders to be provided with a separate card (if not a smart card) for issue of medicines with a Unique Identification Number.

- Each ration shop will have a separate counter named ‘Jan Aushadhi’ for medicine, which will cater to only registered BPL families.

- Government to arrange to train the Ration Shop owners/employees in Pharmaceutical storage and dispensing

- Doctors of Primary Healthcare Centers, Block Dispensaries will be directed to provide free treatment and prescribe NLEM medicines to the members of BPL families holding such ration cards.

- Subsidized/free supply of medicines will be made against prescriptions from the ‘Jan Aushadhi’ counters of the Ration Shops to these families.

- The doctors’ prescriptions with a copy of the bill will be retained by the respective Ration Shops to account for such purchases of medicines by the BPL families.

- More & more members of BPL family will be encouraged to register for ration cards and be eligible for free / subsidized medicines.

Conclusion:

On completion of this scheme for BPL families and after covering all ration card holders, overall the access to modern medicines in India could increase from 57% to over 80% over a period of 5 years.

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 concept of ‘Value Based Pricing (VBP)’ gaining ground to reduce cost of healthcare and improve access…but India is quite different

Posted on by
Reply

So far as the pharmaceutical pricing and increasing access to healthcare are concerned, year 2010 perhaps will be remembered as one of the very significant years, at least, in the recent times. In this year with new healthcare reform, President Obama expanded access to Health Insurance to additional around 40 million Americans, the Government in Japan brought in, not much talked about, “premium for the development of new drugs and elimination of off-label drug use” and the Governments in UK and European Union, including the largest market in the EU – Germany, introduced stringent cost containment measures for pharmaceutical products.

Pharmaceutical pricing model is changing across the world:

Overall scenario for pharmaceutical pricing model has undergone significant changes across the world. The old concept of pharmaceutical price being treated as almost given and usually determined only by the market forces with very less regulatory scrutiny is gradually but surely giving away to a new regime.

It started, especially in the developed world, with the generation and submission of pharmacoeconomics data to the regulators for pharmaceutical pricing, by the pharmaceutical companies. However, shortcomings in that system gradually became subject of a raging debate. The newer concepts of Health Technology Assessment (HTA), Health Outcomes Analysis (HOA) and Value Based Pricing (VBP), have started gaining grounds.

Value Based Pricing (VBP):

Value based pricing is basically offering the best value for the money spent. It ‘is the costs and consequences of one treatment compared with the costs and consequences of alternative treatments’.
For pharmaceutical players, VBP perhaps would mean not charging more than the actual value of the product.

On the other hand, price being a function of value that a product would offer, it is also important for the regulators to understand what value in totality that the product would offer, not just for the patients’ treatment in particular, but for the civil society at large.

However, in India, the regulators are still far behind and groping in the dark to find out an appropriate solution to this critical issue. They seem to be quite contended with taking arbitrary, non-transparent populist decisions.

The concept is gaining ground:

The concept of ‘evidence-based medicine’ , as stated earlier, is gaining ground in the developed markets of the world, prompting the pharmaceutical companies generate requisite ‘health outcomes’ data using similar or equivalent products. Cost of incremental value that a product will deliver is of key significance. Some independent organizations like, the National Institute for Health and Clinical Excellence (NICE) in the UK have taken a leading role in this matter.

VBP could help in ‘freeing-up’ resources to go to front-line healthcare:

On November 11, 2010 ‘Pharma Times’ in a news item titled, “Government (UK) to consult on drug pricing in December’ reported the following:

“Consultation on the government’s plans to introduce value-based pricing (VBP) for medicines will begin next month, the Department of Health has announced.
The consultation will run until next March, the Department reveals in its newly-published business plan for 2011-15. The plan sets out the coalition government’s structural reform priorities for health care, which are to: – create a patient-led NHS; – promote better healthcare outcomes; – revolutionize NHS accountability; – promote public health; and -reform social care.
These reforms ‘will help to create a world-class NHS that saves thousands more lives every year by freeing up resources to go to the front line, giving professionals power and patients choice, and maintaining the principle that healthcare should be delivered to patients on the basis of need, not their ability to pay,’ says the Department”.

Global pharmaceutical companies using more ‘health outcome’ data to set pricing strategies:

Some global pharmaceutical majors have already taken pro-active measures on the subject. In early 2009, reported agreements between Sanofi-Aventis, Procter & Gamble and Health Alliance as well as Merck and Cigna vindicate this point. These agreements signify a major shift in the global pharmaceutical industry’s approach to gathering and using ‘health outcomes’ data

In the Sanofi-Aventis/Procter & Gamble-Health Alliance agreement, the concerned companies agreed to reimburse Health Insurance companies expenses incurred for patients suffering from non-spinal bone fracture while undergoing treatment with their drug Actonel.

In the Merck/Cigna agreement, Cigna will have the flexibility to price two diabetes drugs based on ‘health outcomes’ data.

‘Outcomes-based’ pricing strategies are expected to become the order of the day, in not too distant future, all over the world.

The ground realities in India are very different:

Medicines are very important and constitute a significant cost component of modern healthcare systems, across the world. In India, overall healthcare system is fundamentally different from many other countries, even China. In most of those countries around 80% of expenses towards healthcare including medicines are reimbursed either by the Governments or through Health Insurance or similar mechanisms. However, in India situation is just the reverse, about 80% of overall healthcare costs including medicines are private or out of pocket expenses incurred by the individuals/families.

Since 1970, the Government of India (GoI) has been adopting various regulatory measures like cost based price control and price monitoring to make medicines affordable to the common man. For those products, which are patented in India, it has now been reported that the Government is mulling the approach of price negotiation with the respective companies.

However, we should keep in mind that making drugs just affordable in India, where a large number of population does not have access to modern medicines for non-price related factors, is indeed not a core determinant of either healthcare value or proven health outcomes or both.

Till VBP is considered, cost-effective ‘health outcome’ based medical prescriptions should get priority:

Expenditure towards medicines can be considered as an investment made by the patients to improve their health and productivity at work. Maximizing benefits from such spending will require avoidance of those medicines, which will not be effective together with the use of lowest cost option with comparable ‘health outcomes’.

For this reason, many countries have started engaging the regulatory authorities to come out with head to head clinical comparison of similar or equivalent drugs keeping ultimate ‘health outcomes’ of patients in mind. A day may come in India, as well, when the regulatory authorities will concentrate on ‘outcomes-based’ pricing. However, in the Indian context, it appears, this will take some more time. Till then for ‘health outcome’ based medical prescriptions, working out ‘Standard Treatment Guidelines (STG)’ , especially for those diseases which are most prevalent in India, should assume high importance.

Standard Treatment Guidelines (STG):

STG is usually defined as a systematically developed statement designed to assist practitioners and patients in making decisions about appropriate cost-effective treatment for specific disease areas.

For each disease area, the treatment should include “the name, dosage form, strength, average dose (pediatric and adult), number of doses per day, and number of days of treatment.” STG also includes specific referral criteria from a lower to a higher level of the diagnostic and treatment requirements.

For an emerging economy, like India, formulation of STGs will ensure cost-effective healthcare benefits to a vast majority of population.

In India, STGs have already been developed for some diseases by the experts. These are based on review of current published scientific evidence towards acceptable way forward in diagnosis, management and prevention of various disease conditions. STGs, therefore, will provide:

- Standardized guidance to practitioners.
- Cost-effective ‘health outcomes’ based services.

GoI should encourage the medical professionals/institutions to lay more emphasis and refer to such ‘heath-outcomes’ based evidences, while prescribing medicines. This will ensure more cost effective ‘health outcomes’ for their patients.

Steps necessary for ‘Standard Treatment Guidelines (STG):

1. Get Standard Treatment Guidelines (STG) prepared for the diseases more prevalent in India, based on, among other data, ‘health outcomes’ studies.

2. Put the STG in place for all government establishments and private hospitals to start with.

3. Gradually extend STG in private medical practices.

4. Make implementation of STG a regulatory requirement.

Conclusions:

Till VBP concept is considered appropriate for India by the regulators, STG model for drug usage would help both the doctors and the patients equally to contain the cost of treatment in general and the total cost of medicines in particular. Encouraging implementation of STGs in India, as a first step towards VBP, especially for prescription medicines, the country will require, above all, a change in the overall mindset of all concerned. The use of an expensive drug with no significant improvement in ‘health outcome’ should be avoided by the prescribers at any cost, initially through self-regulation and if it does not work, stringent regulatory measures must be strictly enforced for the same… for patients’ sake.

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.

Non-Communicable Diseases (NCD) are hitting the poor even harder, economically: a time to ponder and a time to act

Posted on by
Reply

November 11, 2010 edition of ‘The Lancet’ published an article titled, “Raising the priority of preventing chronic diseases: a political process”. The article enumerated the following:

“Chronic diseases, especially cardiovascular diseases, diabetes, cancer, and chronic obstructive respiratory diseases, are neglected globally despite growing awareness of the serious burden that they cause. Global and national policies have failed to stop, and in many cases have contributed to, the chronic disease pandemic. Low-cost and highly effective solutions for the prevention of chronic diseases are readily available; the failure to respond is now a political, rather than a technical issue.”

The situation is no different in India. The disease pattern in India is also showing a perceptible shift from age old ‘Infectious Diseases’ to ‘Non-infectious Chronic Illnesses’. As reported by IMS, incidence of chronic ailments in India has increased from 23 percent in 2005 to 26 percent in 2009. It has been estimated that chronic illnesses will be the leading cause of both morbidity and mortality by the next decade.

As a consequence of such findings healthcare needs and systems of the country should need to undergo a paradigm shift with the emergence of a carefully planned concept of ‘Preventive Healthcare’ in the country.

It is a myth that non-infectious illnesses are more prevalent in higher socio-economic strata:
There is a common perception that non-communicable diseases are more prevalent within higher socio-economic strata of the society, a national survey done in India shows that diseases related to misuse of alcohol and tobacco are higher in the poorest 20 percent quintile of our society.

Current healthcare system in India:

Currently the medical alleviation of the acute symptoms and the disease that a particular patient is suffering from is the key concern of all concerned starting from the doctor to the patient and his/her family. The process of the medical treatment revolves round symptom relief, diagnostic measures and appropriate treatment protocols and procedures conforming to the proper diagnosis of the ailments. While addressing the acute problems of the patients’ ailments is very important, proper assessment of the underlying diseases or evaluation of their risk factors do not get as much or no attention. As a result the important advice on preventive healthcare from the doctor properly highlighting its importance is not available to most of the patients.

Keeping such common practices in view and noting that ‘Preventive Healthcare’ is significantly different from ‘Curative Healthcare’, developing an appropriate protocol for ‘Preventive Healthcare’ has become the crying need of the hour.

‘Preventive Healthcare’ in India should be made mandatory:

The ‘Preventive Healthcare’ system in India is in its very nascent stage. If appropriate measures are taken in this area, like learning to reduce the impact of stress, avoiding sedentary life style, taking healthy diet, avoidance of tobacco and alcohol consumption, leading healthy sex life etc., it can in turn help the population to remain disease free and thereby to improve their respective work productivity in a very significant way.

Taking all these points into consideration, through policy initiative, The Medical Council of India (MCI) should make ‘Preventive Healthcare’ an integral part of each interaction of a patient with a doctor through appropriate regulations.

Chronic illnesses will significantly increase the disease burden of the country:

Many of the diseases like cancer, chronic respiratory disorders, cardiovascular, diabetes can be identified with preventable risk factors and. Therefore, such diseases can be prevented effectively, provided the healthcare policy of the country supports the ‘Disease Prevention’ process, program and initiatives through adequate resource allocation.

Role of a medical professional in customized ‘disease prevention plan’:

Role of medical professionals in the disease prevention process is also very important. The interaction of the patients with the doctors when they meet to address any ailment provides huge opportunity to the doctors to advice the patients about the ways of specific disease prevention, for which the individual patients have high exposure.

Need to raise general public and political awareness towards ‘Preventive Healthcare’:

Raising the level of awareness for ‘Preventive Healthcare’ is indeed very important. It requires a change in the mindset of the community in general together with healthcare policy makers, medical profession, employers, patients and their families.

National Non-Communicable Disease (NCD) prevention program of the government:

As per the Planning Commission, the government of India has reported to have initiated structured measures for the prevention of NCD, the main features of which are as follows:

• “Health education for primary and secondary prevention of NCDs through mobilizing community action
• Development of treatment protocols for education and training of physicians in the prevention and management of NCDs
• Strengthening/creation of facilities for the diagnosis and treatment of CVD and stroke, and the establishment of referral linkages
• Promotion of the production of affordable drugs to combat diabetes, hypertension, and myocardial infarction
• Development and support of institutions for the rehabilitation of people with disabilities
• Research support for: Multispectral population-based interventions to reduce risk factors
• The role of nutrition and lifestyle-related factors
• The development of cost effective interventions at each level of care”

Conclusion:

Many diseases in India with proper ‘Disease Prevention’ measures can be effectively averted. Some common measures which can be easily practiced through community initiatives are maintenance of proper hygiene, sanitation, adequate physical activities, moderation in alcohol and tobacco consumption, healthy sexual activities, avoidance of unhealthy food etc.

To address this issue ‘The Lancet’ November 11, 2010, in the article, as mentioned above, prescribed three specific strategies as follows:

1. “Reframe the debate to emphasize the societal determinants of disease and the inter-relation between chronic disease, poverty, and development
2. Mobilize resources through a cooperative and inclusive approach to development and by equitably distributing resources on the basis of avoidable mortality
3. Build on emerging strategic and political opportunities, such as the World Health Assembly 2008—13 Action Plan and the high-level meeting of the UN General Assembly in 2011 on chronic disease”.

The government should spearhead the paradigm shift towards this direction with appropriate regulation, generating increased societal and political awareness within the country and through mobilization of adequate resources. All these will ultimately help us to translate the well-known dictum into reality, ‘prevention is better than cure’.

Otherwise, especially the poorer section of the society will continue to get caught in the vicious cycle of debt and illness, seriously jeopardizing the economic progress of the country.

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 importance of ‘Supply Chain Integrity’ in ‘Global Supply Chain Management (GSCM)’ process

Posted on by
Reply

Since the last decade with increasing pace of change, mostly in the western world has accelerated the globalization process in the Pharmaceutical Industry across the world. The key drivers to these changes are as follows:

1. A large number of patent expiration hugely impacting the top-line growth
2. Research pipeline is drying-up
3. The cost of bringing a new molecule from ‘the mind to market’ has now touched around US $ 1.75 billion
4. Regulatory requirement to get the marketing approval is getting more and more stringent, basically for patients’ safety, making clinical development more expensive and time consuming
5. Cost containment measures of various governments around the world is putting an immense pressure on product price, significantly affecting the profit margin

Changing Business Process:

All these factors are triggering other sets of consequential strategic events of enormous significance. Among those, following key corporate strategic steps indeed stand out:

1. More mergers and acquisitions of various size and scale to achieve both revenue and cost synergy, with new products and newer types of resources

2. Transformation in the fundamental operating models, e.g. R&D focused companies like Pfizer, GSK, sanofi aventis are extending their business interest in the pharmaceutical generics space, as well

3. Increasing globalization process and more focus on the emerging markets of the world like, Brazil, Russia, India, China, Turkey, Mexico

4. Growing emphasis on partnering, as we see in India, like for example, between Pfizer and Aurobindo, Claris and Biocon, GSK with Dr. Reddy’s Lab (DRL), AstraZeneca with Torrent, sanofi aventis with Zydus Cadila etc.

5. Global outsourcing in the ‘Contract Research and Manufacturing Services (CRAMs)’’ space

Increasing importance of GSCM:

In today’s evolving scenario, Global Supply Chain Management (GSCM) process has assumed a key importance. The need to reduce costs significantly and minimize the risks associated with the procurement activities of the business, have compelled many innovator companies to extend the activities of their Supply Chain management process to the Global arena, instead of just confining to the local space.

The changing requirements of all hues and types in various areas of the business, like in sales and marketing, manufacturing, research and development etc., have created a challenging, if not a rather volatile operating environment.

Such an evolving scenario will make the GSCM to increasingly play a key role in the overall business process of an organization to ensure that the right products are available at the right place, at the right time, at a right price and following the right processes…Always.

Emerging GSCM hubs:

There is at the same time, a new trend emerging to provide world class outsourcing services, especially from countries like India and China. These initiatives, which in turn will make these two countries the key global outsourcing hubs, are definitely not due to just cost arbitrage. It encompasses increased integrated value proposition for the overseas customers. Cost is just one of the key factors, others being quality, speed and suppliers’ integrity and reliability. Nothing in this value chain is mutually exclusive. GSCM will need to go through a set of complex algorithms to strike a right balance between all these vital parameters.

Importance of GSCM integrity:

In the days to come by, one of the greatest challenges in GSCM will be to improve the supply chain integrity and security. An appropriate definition of integrity for supply chains could be:

“…the requirement that the system performs its intended function in an unimpaired manner, free from deliberate or inadvertent manipulation.”

A safe and secure supply chain is definitely not a new requirement. However, in the list of priority of importance, it has now come up significantly, compared to what it was just a few years back. Though the issue of improving supply chain integrity and security has now assumed global importance, unfortunately, any uniformity in national regulatory requirements for this vital parameter is glaringly missing. Such a lack of regulatory uniformity clearly highlights that the pharmaceutical companies, engaged in manufacturing, are still not aligned with each other on what will be the right way to ensure absolute integrity, safety and security in the supply chain operating process to guarantee patients’ safety.

Globally, many Pharmaceutical Companies are getting engaged in improving supply chain integrity, security and patients’ safety with the introduction RFID. This, as many may know, is an inventory tracking system for improved product traceability, which in turn extends some protection to its customers with genuine products from the genuine pharmaceutical manufacturers. It is worth noting that RFID is just one component of overall patients’ safety initiative.

Along with high tech measures like RFID, to improve supply chain integrity, I reckon, pharmaceutical companies will need to further enhance their respective ‘supplier qualification process’. The process of supplier audits should include all important and critical areas of manufacturing, testing and quality, related to each individual product.

Stringent supplier qualification standard is of prime importance:

Only a stringent supplier qualification process will be able to guarantee integrity, safety and the quality of outsourced products from the suppliers.

An example of a GSCM related tragedy:

Before I conclude, I would like reinforce my recommendation with the example of the ‘Heparin tragedy’ where the supply chain integrity was violated and seriously challenged thereafter.

In the beginning of 2008, there were media reports on serious adverse drug events, some even fatal, with Heparin, a highly-sulfated glycosaminoglycan of Baxter International. Heparin is widely used as an injectable anticoagulant. Baxter voluntarily recalled almost all their Heparin products in the U.S. Around 80 people died from contaminated Heparin products in the U.S. The US FDA reported that such contaminated Heparin was detected from at least 12 other countries.

A joint investigation conducted by Baxter and the US FDA ascertained that the Heparin used in batches associated with the serious adverse drug events was contaminated with over sulfated chondroitin sulfate (OSCS). It was reported that his Heparin was supplied to Baxter by Scientific Protein Laboratories, Changzhou, China.

The cost of OSCS is just a fraction of the ingredient used in Heparin. Being driven by the criminal profiteering motive the manufacturers in Changzhou, China had reportedly used OSCS for highly-sulfated glycosaminoglycan as the former could not be detected by the pharmacopeia test in use, until 2008. This is because OSCS mimics Heparin in the pharmacopeia test. Post this criminal event, at present, all over the world more specific pharmacopeia test methods have been adopted for Heparin.

Conclusion:

Let us all ensure that such a tragedy does not get repeated in future due to a breach in the supply chain integrity, anywhere in the world…for the patients’ sake.

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.