Tag Archives: Pharmaceuticals

Patients’ Safety, regulatory approval of Biosimilar Drugs in India and WHO Biosimilar guidelines

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Biopharmaceutical drugs are broadly defined as:

”Those medicines produced using a living system or genetically modified organism. These drugs are different from traditional chemical medicines in many ways. Size of the molecule is one of the most obvious distinctions: the molecules of a biopharmaceutical medicine are much larger, have far more complex spatial structures and are much more diverse (“heterogeneous”) than the chemical molecules which make up classical drugs.”

The Biosimilar drugs:

Biosimilar drugs are follow-on versions of original biopharmaceutical medicines. Biosimilar medicines are intended to have the same mechanism of action for the same diseases as the original biopharmaceutical drugs.

The term “bio generic” will be misleading for off patent biopharmaceutical products, as no two biopharmaceutical products could possibly be exactly identical. This is mainly because of the following reason:

“Whereas generics of chemistry based medicines are identical in the molecular structure and therefore copies of the original product, based on a strict definition of “sameness”, a corresponding definition cannot be established for biosimilar medicines because of their nature and the complexity of their manufacturing process. Here post-translational modifications are dependent of the host cell and the process.”

Thus the common terminologies used to describe such products when the original products go off-patent are follow-on biologics and biosimilars.

Manufacturing Conditions of biosimilars ultimately define the final product:

Unlike chemical drugs, the manufacturing conditions and the process followed to produce biopharmaceutical drugs largely define the final product and its quality. Any alteration to the manufacturing process may result in a completely different product. Additionally proteins are relatively unstable. Thus additional measures in their storage, formulation and delivery are very critical.

Key concerns with the existing regulatory approval process for Biosimilar drugs:

• Small changes in the manufacturing process of biosimilar drugs could significantly affect the safety and efficacy of the molecule.

• Due to the very nature of a biologic it is virtually impossible for two different manufacturers to manufacture two identical biopharmaceutical drugs. Identical host expression systems, processes and equivalent technologies need to be demonstrated in extensive comparability trials. Thus, as stated above, a ‘bio generic’ cannot exist.

• As against the situation applicable for generics of chemical molecules which can be replicated, biosimilar drugs cannot be replicated. At the most such biopharmaceuticals can be at the most “similar” but not “identical” to the original reference products. To ensure desired efficacy and safety of biosimilar products, these products should only be approved after charting out a formal and well validated regulatory pathway for the biosimilar drugs in India.

• Currently biosimilar drugs are given marketing approval by the regulator without such guidelines for large molecule biological and following just the bioequivalence model as specified in the Schedule Y of the Drugs and Cosmetics Act (D&CA) of India for small molecule chemical entities only, as the current Drugs and cosmetics Acts of India, very unfortunately, do not differentiate between large and small molecular drugs. This could, in turn, endanger patients’ safety with serious medical consequences.

Although, Central Drugs Standard Control Organization (CDSCO) and the Drugs Controller General of India (DCGI) are responsible for approvals of the new drug applications, health being a state subject, respective state regulatory authorities are responsible for granting manufacturing license to the pharmaceutical manufacturers.

Pharmaceutical manufacturers setting up facilities in the states, where regulatory oversight and incidences of weaker enforcement are common, will be able to market their products, including biosimilars, across the country. It is alleged that there are hardly any regulatory control over the mistakes or offences committed by the State Drug authorities who permit manufacture of drugs even unapproved by the DCGI. The existing issue of mushrooming of various irrational Fixed Dose Combinations (FDC) products in India will vindicate this point.

The Government’s response to this public health concern:

Express Pharma in its June 30, 2009 edition reported Dr M K Bhan, Secretary, Government of India, DBT, saying, “The first question is do we have written guidelines available to people? Currently, we have a large committee of about 30 people in the Review Committee on Genetic Manipulation (RCGM) which frequently discusses the current FDA and EMEA guidelines and makes sure that it is updated as per the guidelines in case by case approvals.”

He acknowledged, to make sure that the product is identical or original is harder for biological than for chemical entities and said, “So the next question is, what is the degree of difficulty you create to be sure that some of the products in the in vitro laboratories and the strength of the biomolecule, are to be characterized in details, and the other side is how expensive should the chemical evaluation be? At this moment, RCGM is seeing the issues and is in touch with both the FDA and the EMEA, and they are taking case by case decisions while trying to standardize the minimum information that is required to show how companies have characterized their products.”

“If we ask a big established company on this issue they will tell us to be strict, whereas a smaller company will suggest otherwise. What we are trying to do is being very scientific and come to a conclusion,” reported Express Pharma quoting Dr. Bhan.

The current practice:

Much water has flown down the bridge since the above interview was published. Nothing much has changed on ground regarding this critical issue, thus far. The industry sources allege that even today regulatory approval of biosimilar drugs (large molecules) are granted based on Phase III clinical trials, as specified in the schedule Y of the Drugs and Cosmetics Acts for the small molecules (chemicals) and that too conducted mostly on just 40 to 45 patients. At times the number of patients studied is even lesser. Immunogenicity study, which is so important for biosimilar drugs is, more often than not, overlooked. This could seriously compromise patients’ safety with such category of drugs.

Conclusion:

It is, indeed, quite surprising that in our country there is still no separate transparent and published guidelines for regulatory approval of Biosimilar drugs even when the World Health Organization (WHO) has come out with the same and India had actively participated in that exercise.
The question, therefore, comes to my mind whether the Biosimilar drugs manufactured in India would conform to international quality and safety standards, like in the U.K or what has been recently announced in the USA? If not, who will address the safety concerns of the patients administering these life saving medicines?

Such a concern gets vindicated by widely reported serious quality problems, detected by the drugs regulatory authorities, at some large and well known Biosimilar drug’s manufacturing units in India, in not too distant past and also from the condition of some vaccine manufacturing units in our country. The recent example of WHO cancelling the pre-qualification of ‘Shan 5’ (Shanta Biotech) vaccines for quality related problems, perhaps may help opening the eyes of our regulators, on the related patients’ safety issues arising out of regulatory laxity.

This issue assumes even greater importance considering the very recent development of the Department of Biotechnology (DBT) unfolding an interesting scheme to encourage development of biosimialr dugs in India by offering financial support to the domestic pharmaceutical and biopharmaceutical industry.

The proposed new regulatory pathway for the marketing approval of Biosimilar drugs in India will immensely help paving the way for the Biopharmaceuticals drugs manufacturers in India to adequately prepare themselves to grab a significant share of the fast emerging Biosimilar drugs markets, particularly, in Europe and the USA, in the years to come.

The Ministry of Health and the Department of Biotechnology of the Government of India should, therefore, urgently and jointly consider amending the Drugs & Cosmetics Acts of India accordingly and establish robust regulatory guidelines for marketing approval of biosimilar drugs in the country, acknowledging the widespread concern for patients’ safety.

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.

Leverage the potential of ‘Telemedicine’ to effectively address the healthcare needs of India

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The World Health Organization (WHO) has defined telemedicine as follows:

“The delivery of healthcare services, where distance is a critical factor, by all healthcare professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for continuing education of healthcare providers, all in the interests of advancing the health of individuals and their communities”

Telemedicine is gradually becoming popular in India, like in many other countries of the world. This emerging technology based healthcare service, will surely meet the unmet needs of the patients located in the far flung areas, by providing them access to medical specialists for treatment of even tertiary level of their ailments, without requiring to travel outside their villages or small towns where they reside. Telemedicine is, therefore, slowly but gradually emerging as a convenient and cost-effective way of treating even complicated diseases of the rural population.

The applications of Telemedicine:

1. To extend affordable quality healthcare services to those places where these are not available due to basic healthcare infrastructure and delivery issues.

2. Electronic transmission of clinical information of both synchronous and asynchronous types, involving voice and data transfer of patients to distantly located experts and get their treatment advice, online.

3. To effectively train the medics and the paramedics located in distant places and proper management of healthcare delivery/service systems.

4. Disaster management.

The Process:

The process can be:

- ‘Real time’ or synchronous when through a telecommunication link real time interaction between the patients and doctors/experts can take place. This technology can be used even for tele-robotic surgery.

- ‘Non-real time’ or asynchronous type when through a telecommunication link, stored diagnostics/medical data and other details of the patients are transmitted to the specialists for off-line assessment and advice at a time of convenience of the specialists.

These processes facilitate access to specialists’ healthcare services by the rural patients and the rural medical practitioners reducing avoidable travel time and related expenses. At the same time such interaction helps upgrading the knowledge of the rural medical practitioners and paramedics.

The Promise:

‘Telemedicine’ is capable of taking modern healthcare to remote rural areas using Information Technology (IT), as specialists are mostly based in the cities. As majority of the diseases do not require surgery, ‘telemedicine’ will prove to be very conducive to such patients and economical too.
Relevance of Telemedicine in India:

With its over 1.12 billion population and equally huge and not so well addressed disease burden, spreading across distant and remote semi-urban and rural areas where over 70 per cent of the population of the country lives, India by any standard is a country, which should focus on ‘Telemedicine’ to meet the unmet healthcare needs of the common man.

Telemedicine, therefore, is very relevant for the country, as it faces a scarcity of both hospitals and medical specialists. In India for every 10,000 of the population just 0.6 doctors is available. According to the Planning Commission, India is short of 600,000 doctors, 10 lakh nurses and 200,000 dental surgeons. Over 72 percent of Indians live in rural areas where facilities of healthcare are still grossly inadequate. Most of the specialists are reluctant to go to the rural areas. In addition, 80 percent of doctors, 75 percent of dispensaries and 60 percent of hospitals, are situated in urban India.

Telemedicine should be leveraged to bridge the gap of healthcare divide:

Equitable access to healthcare is the overriding goal of the National Health Policy 2002. Telemedicine has a great potential to ensure that the inequities in the access to healthcare services are adequately addressed by the country.

ISRO and the progress of Telemedicine in India:

The concept of ‘Telemedicine’ is relatively new in India and started drawing attention of the Government since 1999, when the Indian Space Research Organization (ISRO) deploying a SATCOM-based telemedicine network took its pioneering step towards this direction and is currently playing a key role in the evolution and development of ‘telemedicine’ in India. ISRO with its effective application of world class satellite communication technology with modern medical science and information technology has engaged itself very seriously to ensure availability of specialty healthcare services right at the doorsteps of a vast majority of deprived population living even in the distant and remote places of the rural India.

Government and private initiatives:

Since then the Ministry of Health and Family welfare with its initiative through information technology in some country level projects forming the National Telemedicine Taskforce, some private healthcare institutions like Apollo and various State Governments like, Tamil Nadu, Andhra Pradesh, Kerala and West Bengal also took admirable initiatives to translate the concept of ‘telemedicine’ into reality, especially for the rural India.

Subsequently, private telemedicine solution providers have now started coming-up, in a very sporadic manner though. Active participation of the civil society and meaningful Public private Partnership (PPP) projects are essential not only to get engaged in creating awareness for ‘telemedicine’ within India, but also to ensure that required blend of a high quality of technical and medical manpower that the country currently possesses are effectively utilized to establish India as a pioneering nation and a model to emulate in the field of telemedicine.

The market of Telemedicine in India:

Frost & Sullivan has estimated the telemedicine market of India at US$3.4 million, which is expected to record a CAGR of over 21 percent between 2007 and 2014.

Practices of Telemedicine in India:

Not only the central government of India, many state governments and private players are also entering into telemedicine in a big way with the Indian Space Research Organization (ISRO) playing a pivotal role, as indicated earlier. Some of the encouraging examples are as follows:

Telemedicine in Tamil Nadu:

Wi-Fi video conferencing network has now enabled ophthalmologists in the country to treat patients located in distant rural areas.

For example in an eye clinic in Andipatti village of Tamil Nadu state patients are connected through an inexpensive Wi-Fi video conferencing network with an ophthalmologist located about 15 kilometers away at the Aravind Eye Hospital in the city of Theni, for diagnosis and treatment of ophthalmological conditions. It has been reported that in the last six years eight such vision centers have been opened in the Theni district to provide eye treatment through ‘telemedicine’ to the affected population. These centers are managed by ophthalmic assistants trained to conduct a full eye examination, administer diagnostic tests, treat simple ailments and prescribe glasses. An ophthalmologist located as far away as 150 kilometers gives the final advice to the patients through videoconferencing and incurring a fraction of the expenses of what the patient would have otherwise incurred for getting treated at the district hospital of Theni.

World Health Organization (WHO) in its recent report has highlighted that about one third of the 45 million blind population of the world, live in India with majority of the causes being easily treatable cataracts and diabetes. It is worth mentioning that India has pledged to eliminate avoidable blindness in 10 years, under WHO 2020 initiative.

The Government of India is contemplating to create 20,000 more rural vision centers in the next few years.

Telemedicine in Kerala:

In Kerala selected referral Telemedicine Centers which are ‘Taluk Hospitals’ are connected to the Specialty hospitals through ISDN dial-up connection and the Telemedicine software MERCURY for creating and transferring the Electronic Medical Record (EMR) from sources like ECG, Microscope and Scanner.

A Telemedicine system for Cancer Patients called ‘CancerNet’ has also been created in the state for cancer detection, treatment, pain relief ,patient follow-up and continuity of care in peripheral hospitals (nodal centers) of Regional Cancer Centre (RCC). This facility connects RCC, Trivandrum and five nodal outreach centers. More than 3000 patients are treated or consulted in these nodal centers offering significant financial benefits to patients.

The specialty centers are located at:

• Medical College Hospital, Thiruvananthapuram
• Sree Chitra Thirunal Institute of Medical Science and Technology, Thiruvananthapuram
• Regional Cancer Center,Thiruvananthapuram
• Mental Health Centre, Thiruvananthapuram

The remote nodal centers are located at:

• Taluk Hospital, Neyyattinkara
• Taluk headquarters Hospital, Quilandy
• Taluk Hospital, Mavelikkara
• Taluk Hospital, Vythiri, Wayanad

Telemedicine in Andhra Pradesh:

Among the private initiatives the Apollo group of hospitals took a pioneering initiative in ‘telemedicine’ with a pilot project at a secondary level hospital in Aragonda village located about16 km away from the town Chittoor in Andhra Pradesh, covering a population of 5000.

Telemedicine in West Bengal:

Telemedicine for Tropical Diseases utilizing Technology developed by WEBEL & IIT Kharagpur has been developed by the state for diagnosis and monitoring of skin and blood related tropical diseases in West Bengal. The facility has been installed in School of Tropical Medicine, Kolkata and two District Hospitals. This is now being upgraded and extended to cover two referral hospitals and four District hospitals.

Telemedicine in North Eastern States:

A facility of Telemedicine Solution is being developed in Kohima Hospital of Nagaland under a Public Private Partnership (PPP) between the Government of Nagaland, Marubeni India Ltd, Apollo Hospitals and the Ministry of Communications and Information Technology. Two telemedicine centers are being set up connecting hospitals in the capitals of the North-eastern states, Sikkim and Tripura with super-specialty hospital under Community Information Centre scheme of DIT. North Eastern Council of India is planning to cover all 75 districts in seven states through Telemedicine.

Allocate more fund for Telemedicine:

Telemedicine now shows an immense potential, within the frugal healthcare infrastructure of India, to catapult rural healthcare services, especially secondary and tertiary, to a different level altogether. Current data indicate that over 278 hospitals in India have already been provided with telemedicine facilities. 235 small hospitals including those in rural areas are now connected to 43 specialty hospitals. ISRO provides the hospitals with telemedicine systems including software, hardware, communication equipment and even satellite bandwidth.

In 1999, India based one of the largest healthcare providers in Asia, The Apollo Hospitals Group also entered into telemedicine space. Today, the group has quite successfully established over 115 telemedicine locations in India, It has been reported that a ‘tele-consultation’ between the experts and the rural center ranges from 15 to 30 minutes in these facilities.

The state governments and private hospitals are now required to allocate adequate funds to further develop and improve penetration of Telemedicine facilities in India.

Issues with Telemedicine in India:

- Telemedicine is not free from various complicated legal, social, technical and consumer related issues, which need to be addressed urgently.

- Many a time, doctors feel that for Telemedicine they need to work extra hours without commensurate monetary compensation, as per their expectations.

- The myth created that setting up and running a Telemedicine facility is expensive needs to be broken, as all these costs can be easily recovered by any hospital through nominal charges to the patients.

- Inadequate and uninterrupted availability of power supply could limit proper functioning of a telemedicine center.

- High quality of Telemedicine related voice and data transfer is of utmost importance. Any compromise in this area may have significant impact on the treatment outcome of a patient.

- Lack of trained manpower for Telemedicine can be addressed by making it a part of regular medical college curriculum.

- Legal implications, if arise, out of any Telemedicine treatment need to be clearly articulated.

- A system needs to be worked out to prevent any possible misuse or abuse of the confidential Telemedicine treatment data of a patient.

- Reimbursement procedure of Telemedicine treatment costs by the medical insurance companies needs to be effectively addressed.

Conclusion:

Because of a very large population of India living in remote and distant rural areas, ‘telemedicine’ would play a very special and critical role in India to address the healthcare needs of the common man. With increasing coverage of telemedicine, it is imperative that required regulatory standards and guidelines for the same is put in place across the country.

Some significant and path breaking advances have indeed been made in the field of ‘telemedicine’ in India. It is though unfortunate that enough awareness for an optimal spread of this critical facility has been created, as yet to address the healthcare needs of a vast majority of the population in India, effectively. The pioneering role that ISRO has been playing in this field is also not known to many. All powerful ‘Fourth Estate’, I reckon, should now take more interest to initiate a healthy discussion and debate on this important healthcare solution, within the civil society.

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 First Pharmaceuticals Census of India – a commendable initiative by the National Pharmaceutical Pricing Authority (NPPA)

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Currently there is indeed a crying need for the pharmaceutical industry to generate a robust data base to formulate not only various healthcare related policies, but also to measure the level of their effective implementation. In the absence of such dependable and credible facts, most of the arguments, which take place between the government and other stakeholders, are mainly based on ‘your views’ versus ‘our views’.

An admirable initiative:

To address this critical need, more than a couple of years ago in February 2008, the National Pharmaceutical Pricing Authority (NPPA) announced their intent to initiate the first pharmaceuticals census of India (FPCI). The main purpose of this census is to create a structured, comprehensive and dependable pharmaceutical industry related database in the country to capture valuable information, which could be prudently used by the government towards effective planning, policy making and good governance. NPPA is also expected to publish this census data for all stakeholders and other ministries within the government for appropriate actions.

Create a ‘Common Thread’:

This ‘Pharmaceutical Map’, I guess, will be able to create a common thread for the Ministry of Health, Departments of Pharmaceuticals and Biotechnology, Ministry of Commerce & Industries and the Ministry of Finance based on which each of them will frame their respective healthcare related policies targeting the needs of a vast majority of the population of the country, for inclusive growth.

The ‘Methodology’ will be very important:

I understand that the FPCI is expected to cover over 10,000 manufacturing units in the country in a well-structured manner to produce an elaborate healthcare related credible data bank for India. The methodology that will be followed for this census will determine the credibility of the data thus generated.

My expectation from the FPCI is that, as announced, this will be able to provide credible details, among others, on the following ten key areas of the Pharmaceutical Manufacturing Units (PMUs) to enable the policy makers to frame policies based on the ground realities and at the same time measure the level of their effective implementations:

• Turnover by types and class (Micro, Small, Medium, and Large)
• Locations with separate details of Export Oriented Units (EOUs)
• Capacity installed, capacity utilized by major products
• Number of ‘own’ and ‘loan’ licenses units and by type of units, license issued by the respective state
drug controllers
• Types, class and pattern (plant & machinery, land & building) of investments
• Consumption of indigenous and imported inputs and utilities
• Adherence to GMP
• Product types and pricing
• Pattern of expenditure on R&D, clinical trials and quality control
• Employment generated in the country by the pharma sector

All these data will be available state-wise and district-wise by class and types of industry (API, formulations), among others.

It has been reported that NPPA has by now progressed quite a lot with the FPCI and the Final Report may be published soon.

Conclusion:

It would have been excellent, if FPCI would also have generated data on ‘Access to Modern Medicines’ in India.

Be that as it may, this is an admirable initiative by the NPPA. Data thus generated will be immensely useful to all stakeholders, if updated in every 3 to 5 years to maintain their relevance.

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.

85% of the patented new drugs have therapeutic equivalents…they do not increase the cost of treatment for the common man: Points…Counterpoints

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Affordability of patented drugs has become a major controversial and at the same time a very sensitive issue in the healthcare space of India, just as in many other parts of the world. The government, the NGOs and other stakeholders, on the one hand, seem to be quite concerned about it. Innovator companies, on the other hand, also have quite robust arguments in their favor.

Meanwhile, the daily newspaper ‘DNA’ published a report on June 15, 2010 with a headline, “NPPA may cap cancer drug prices via Para 10’.

Let us now try to go through the points and counterpoints of this raging debate.

The basic reasons of concern:

The key points for this concern, I reckon, is based on the following two beliefs:

1. All our citizens should have access to all new drugs
2. All these new drugs are essential to treat most of the related disease conditions

Points in favor of free pricing for patented new drugs:

- Price is a function of the value that a patented new drug will offer to the patients. The price of new drugs will, in addition, include components of the cost incurred by the innovators towards research and development, to offer these products to the patients. This is absolutely essential to ensure continuous investment towards R&D by the innovator companies to meet the unmet needs of the patients.

- It has been reported that currently only 2.3% of the Indian Pharmaceutical Market (IPM) will represent drugs, which have no therapeutic equivalent. This means over 97% of the IPM constitutes of medicines, which have one or more therapeutic equivalents.

- So far as the patented products are concerned, over 85% of all those will have therapeutic alternatives. Empirical evidence suggests that just around 15% of the patented molecules have significant therapeutic advantages over existing drugs and cannot be replaced.

- Beta-lactam, Cephalosporin and Quinolone group of antibiotics are still relevant today and will remain for many more years. So are the likes of Beta Blockers, Calcium antagonists, Ace inhibitors, Proton Pump inhibitors and Statins.

- Therefore, all patients with any common disease profile will have adequate and a good number of cheaper treatment options with the generic drugs. As all new drugs are not essential to treat all related disease conditions, generic and patented medicines should co-exist to cater to the healthcare needs of patients of all income groups. Those who can afford to pay extra for the incremental value of such patented drugs should also have an option.

The Counter points:

- The opponents of the above argument raise the counter question, “if 85% of the patented drugs will have appropriate therapeutic equivalents, why then the pharmaceutical companies spend such a huge amount of money and other resources towards R&D to invent molecules, which do not add significant and substantial value to the existing ones to treat patients? Rationalization of such avoidable R&D expenditures will help reducing the price of even path-breaking patented molecules for the treatment of many disease conditions of the ailing patients”

- In this context ‘Australian Prescriber (2004; 27:136-7)’ commented:

“The patent system, which assumes that investment in the development of new drugs, is so important that the principles of the free market should be abrogated to reward pharmaceutical companies with a legally enforced period of protection from competition”.

- NGOs with a differing view point ask, “Many patented products are still not available in India, does the medical profession in the country find themselves seriously handicapped for not having access to these drugs?’

- This group puts forth the counter argument, “patent protection is based on the fundamental belief that for continuing investment to invent newer drugs, innovations must be adequately rewarded through appropriate protection of the patents. Thus patent protection should only be given to those innovations for which no therapeutic equivalents are available.”

Conclusion:

A die-hard protagonist for fostering innovation commented, though the exclusivity for a patented drug given to an innovator would last for 20 years, the real commercial benefits will be available for just around 10 years, that too after spending a fortune towards R&D. Whereas, post patent expiry, the commercial benefits to the generic manufacturers (virtually spending nothing towards R&D) for the same molecule will last in perpetuity…for the patients’ sake!

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.

George Washington University Law School’s “The India Project” – Arguments and Counter Arguments

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Recently we witnessed yet another huge controversy on the ‘IP Summit’ organized by the George Washington University Law School (GWULS), USA. It was alleged that this summit supported by law firms, some pharmaceutical companies and others, was intended to influence the participating sitting judges on the pharmaceutical patent related cases currently being fought in various courts in India.

The Arguments:

However, the GWULS reiterated that this summit is intended to help India to build capacity in the IP law of the country. GWULS states the following in its magazine of winter 2009:

“From New Delhi to Bangalore, GW Law is building bridges of understanding between the United States and Indian legal communities through its fast-growing India Project, a collaborative enterprise fostering broad-based relationships and heightened international dialogue on issues of mutual concern”.

During their recent visit to India, in an announcement to the media GWULS explained the following:

“We have contributed to education by heightening the dialogue and understanding between India and the U.S. on IP law. We have done so in a collaborative way, as we have much to learn from our Indian counterparts. For example, the new Indian patent law, enacted in 2005, involves a range of issues that require clarification, and the project has resulted in a two-way discussion of real importance to the future of IP protection in India and across the world. Is the new law in compliance with Indian constitutional standards? How does it compare with U.S. law in addressing issues that arise during the processing of a patent application? (With regard to this question we recently held educational sessions with patent examiners at various Indian patent offices). Is it consistent with international standards? These are just some of the issues that attract the attention of people associated with GW’s India Project.”

The Counter Arguments:

The other group strongly counter argues highlighting that Indian judiciary and lawmakers have a long history of dealing with the patent laws since 1911. Although in between from 1970 to 2004, the situation slightly changed with the abolition of ‘Pharmaceutical Product Patent’, the re-introduction of the same effective January 1, 2005, does not call for an ‘un-called for’ indirect intervention in the judicial process of the country by law schools located beyond the shores of India.

This group feels that GWULS indirectly casts aspersions on the legal standard of the country and the competence of Indian judiciary, which needs to be protested, unequivocally. Moreover, the group argues, “even if IP awareness had to be taken to the people once again after the 2005 amendment, why did GWULS mount such a major campaign here?”

So far the Patent Law is concerned; this group accepts that our Patent Attorneys and particularly those lawyers who will argue the cases in front of the judges must possess impeccable knowledge in the nuances of patent law with all its nitty- gritty. Thus lawyers rather than judges should regularly update their knowledge on the details of patent related issues.

Laws are by and large country specific, with an exception probably of international law. After hearing the arguments of respective lawyers, this group feels that the judge will interpret the law of the land and give his/her judgment accordingly, as happens in any other comparable sphere of law. Just as for laws related to ‘terrorist’ act, India will not require its judges to be trained by other countries, this group reiterates, the same argument holds good for patent law, as well.

The Times of India (March 29, 2010), a leading daily of the country, reported the following in a news item titled, “’Vested interests behind discussion on patents”:

“Several civil society groups have come together to question the commerce and industry ministry’s alleged complicity in allowing meetings and interactions undermining India’s legal position on intellectual property (IP). These interactions are being organized annually with Indian judges and policy makers by the George Washington University Law School (GW Law), under its India Project, with funding from multinational pharmaceutical companies, industry associations and corporate law firms”.

Conclusion:

Be that as it may, the arguments from either side do not seem to be unbiased without any vested interests and are not convincing enough. In a globalized economy, from such comments it appears that the one group is feeling that Indian legal system is inefficient, if not incompetent, to deal with its patent related cases involving global pharmaceutical companies. On the other side, the local voice seems to be afraid of a ‘foreign hand’ intruding into the judicial space of India, which in my view is stretching the imagination far too much.

Overall, Indian Judiciary has a long tradition of keeping the institution robust enough and free from any external influences, whatsoever, notwithstanding GWULS coming to India almost every year, since around 2005.

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.

Abbott – Piramal deal: the way future is expected to shape up

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In my view, these are still very early days for such acquisitions of large domestic Indian pharmaceutical companies by the Global Pharma majors to gain momentum in the country. However, there is no doubt that in the near future, we shall rather witness more strategic collaborations between Indian and Global pharmaceutical companies, especially in the generic space.

Squeezing margin due to cut-throat domestic and international competition may affect future valuation of the domestic companies:

I reckon, the number of such high profile mergers and acquisitions will significantly increase, as and when the valuation of domestic Indian companies appears quite attractive to the global pharma majors. This could happen, as the domestic players face more cut-throat competition both in Indian and international markets, squeezing their profit margin.
Abbott possibly has a well-structured game plan for seemingly high valuation of the deal:
Having said that let me point out, during Ranbaxy-Daiichi Sankyo deal, analysts felt that the valuation of the deal was quite high. US $ 3.7 billion Abbott – Piramal deal has far exceeded even that valuation. Does this deal not make any business sense? I do not think so. Abbott is a financially savvy seasoned player in the M&A space. It is very unlikely that they will enter into any deal, which will not have any strategic and financial business sense.

Big ticket Indian Pharma deals:

So far India has seen four such major deals starting from Ranbaxy – Daiichi Sankyo, Dabur Pharma – Fresenius, Matrix – Myalan and Orchid – Hospira, besides some global collaborative arrangements, such as, Pfizer with Aurobindo/Claris/Strides GSK with DRL, AsraZeneca with Torrent and again Abbott with Zydus Cadila.

Key drivers for these deals:

Such acquisitions and collaborations will be driven by following eight key factors:

1. R&D pipelines of the global innovative companies are drying up
2. Many blockbuster drugs will go off-patent in the near future
3. Cost containment pressure in the western world exerting pressure on the bottom lines
of the global pharma majors
4. Increasing demand of generics in high growth emerging and developing markets
5. The new Healthcare Reform in the US will promote increased usage of generic drugs.
6. The fact that India already produces 20% of the global requirement for generic drugs
increases the attractiveness.
7. The fact of domestic Indian companies account for 35% of ANDAs highlights the future
potential of the respective companies.
8. Highest number of US-FDA approved plants, next to the US, is located in India.

A strategic move by Abbott:

As announced by Abbott from its headquarter in Chicago that Abbott in India will increase its sales four times to around Rs. 11,000 Crores by 2020 with the acquisition of 350 brands of ‘Piramal Healthcare’ business.

Facing the stark reality of a ‘patent Cliff’, cost containment pressures especially in the US and EU, low single digit growth rate of the developed markets and high growth of branded generic dominated emerging markets, Abbott has taken a new global initiative aimed at the emerging markets with the creation of its global ‘Established Products’ Business’. This initiative started with worth US $ 6.2 billion acquisition of branded generic business of Solvay Pharma, which has a sizeable presence in the EU markets.
Recently announced licensing agreement of Abbott with Zydus Cadila to market 24 products initially in 15 emerging markets of the world is another step towards this direction.

Advantage Abbott India:

The asset based acquisition of ‘Piramal Healthcare’ by Abbott will help its Indian arm to increase its domestic market penetration, significantly, both for branded generic and patented products in urban, semi-urban and rural markets spearheaded by around 7000 strong sales force. This strategy perhaps will also help Abbott in India distancing itself from the number 2, in the Indian Pharma league table, probably with a handsome margin.

Global players want a risk-cover with the generic business and minimize tough competition:

Like Abbott, it is quite likely that other major global players are also planning to reduce their business risks by expanding the business from mainly high risk and expensive R&D intensive patented products to a more predictable and rapidly expanding branded generic business.

Will such move have any significant effect on competition?

Such M&A initiatives may seemingly minimize the cut throat competition from large generic players from India. However, I do not envisage any significant impact on over all competition between the generic players for such moves, as their will be mounting competition from more number of new entrants and emerging players, entry barrier in Indian generic pharmaceutical market being quite low.

Conclusion:

In the globalized economy where the ‘world is flat’ such types of business consolidation initiatives are inevitable. The domestic Indian companies across the industry are also in the prowl for suitable global targets, which are at times of world class ‘Crown Jewels’ like Arcelor, Chorus or Jaguar/Land Rover. Pharmaceutical industry is, therefore, no exception.

By Tapan Ray

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

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

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

The global market:

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

Categories of health food products:

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

• Functional Foods:

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

• Medicinal Foods:

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

• Nutraceuticals:

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

• Phytochemcials:

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

• Ayurvedic and Herbal Medicines:

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

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

Key Drivers:

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

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

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

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

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

Key challenges for Herbal Food Products:

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

Differentiating the marketing-mix:

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

1. Product :

Health food products will need to have the following:

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

2. Place:

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

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

• Kirana / Grocery stores
• Supermarkets

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

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

3. Price:

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

• Differential brand features and benefits
• Product life cycle

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

4. Promotion :

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

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

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

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

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

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

5. People :

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

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

6. Process :

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

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

7. Physical Evidence :

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

Conclusion:

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

By Tapan Ray

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