Tag Archives: Pharmaceuticals

Recent Bayer Case Judgment: Patent Linkage: Encouraging Innovation in India

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Delhi High Court turned down the request of Bayer Corporation in August 18, 2009 to link patent status of its kidney cancer drug Nexavar (sorefenib tosylate) with the marketing approval of the generic equivalent of the same patented molecule manufactured by Cipla, during the patent life of Nexavar in India.Bayer received an Indian patent for Nexavar in March 2008, which is one of the potential blockbuster drugs of Bayer Corporation and is expected to clock an annual global sales turnover of around U.S $1 billion soon.In this particular case, Bayer argued that an approval for its generic equivalent from Cipla would infringe on their patent.

The interim and the final judgment of the Delhi High Court:

Honorable Delhi High Court granted an interim injunction in response to the petition filed by Bayer Corporation and refrained the Drug Controller General of India (DCGI) from granting marketing approval of the generic version of sorefenib tosylate of Cipla, until the final order is passed by the Court.

In its final judgment, the Delhi High Court ruled that Bayer should not have brought this case to the honorable court as the drug regulation is not linked to patent rights in India.

Further, the court could not, “conclude that unpatented drugs are spurious drugs” and said, “this court is constrained to observe that the present litigation was what may be categorized as speculative foray, and attempt to ‘tweak” public policies through court mandated regimes.”

Besides, the honorable Court has asked the Bayer Corporation to pay Rs 6.75 lakh to the Government and Cipla as legal costs.

Will this High Court ruling encourage more such incidence in India?

Some experts feel that the Delhi High Court ruling may encourage generic pharmaceutical companies to launch generic versions of patented drugs in India despite the risk of paying damages, if patent infringement is proved in a court of law.

Keeping all these in view, let us now discuss the relevance of Patent Linkage in India.

What really is a patent linkage?

The process of Patent Linkage establishes a desirable communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents granted in India.

It also ensures that one Government Department / Ministry does not impair the efforts of another Government Department / Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement.

However, the generic companies argue that the role of the DCGI is restricted to regulating safety and efficacy of the drugs, whereas ascertaining patent status of products fall within the ambit of Indian Patent Offices. Thus these two cannot be linked.

The argument in favour of a robust Patent Linkage system:

1. WTO TRIPS Article 28.1a says that the member countries agree to ensure exclusive rights to patent holder for a specific time period. In case of India, like most other countries, this time period is for 20 years.

2. During this period the member countries agree to prevent third parties from making, using, offering for sale the patented product without the owner’s consent.

3. In India there is no known strong deterrent for patent infringement. In absence of which, the opportunity to make significant commercial gain through patent infringement, on the pretext of extending benefits to patients could indeed be, many a times, difficult to resist.

4. Media reports that the National Pharmaceutical Pricing Authority (NPPA) has raised huge demand in crores of rupees for overcharging the common man, flouting the drug pricing norms, by some of these large companies involved in patent infringement litigations, vindicates the point of their basic overall intention of significant commercial gain over extending pricing benefits to the common man.

Who is responsible to ensure the sanctity of the product patent system in India?

1. The prevailing situation warrants a strong regulatory system, which could prohibit marketing approval of generic equivalents of patented molecules during their patent period.

2. The question that is often raised in this context is who exactly be held responsible for implementation of such a system in our country? While addressing this question one should realize that it is the Government in its entirety and not just the Patent offices or any particular ministry or ministries of the Governments is bound by the WTO TRIPS Agreement. Therefore, it is justifiably the responsibility of all Government departments/ministries to ensure that TRIPS obligations of the Government on proper enforcement of patent are properly met.

3. The process of granting marketing approval for patented molecules, in general, rests on the Ministry of Health (MoH) of WTO member states. Thus for WTO member states to meet TRIPS obligations effective communication between the MoH and the Patent offices of the country is absolutely essential. Such a system will help prevent approval of generic versions of patented molecules before expiration of the product patents.

4. Establishing this communication process will ensure that one department/ministry of the Government (say DCGI) does not impair the efforts of another Government department/ministry (say IPOs) to provide effective intellectual property protection as articulated in Article 28.1 of the WTO TRIPS Agreement.

5. This system will ensure that Health Regulatory Authorities do not, even unintentionally, undermine the commitment of the Government to conform to the TRIPS Agreement.

Will India be the unique country if such a system of “Patent Linkage” is put in place?

The answer is obviously ‘no’. The system of Patent Linkage exists around the world.

Following are some examples:

Australia – Health Authorities do not provide marketing approval for a generic copy which would infringe an existing patent.

Brazil – As of 2006, no copies of products still under patent have been launched in the market place. However, the Brazilian Health Agency (ANVISA), grants registration to copy products, based only on the merits of the case from the regulatory point of view, whether or not a patent has been granted for the same.

Canada – Health Regulatory Authorities do not provide marketing approval for pharmaceutical products protected by patents listed in the equivalent of the US FDA Orange Book.

China – The State Food & Drugs Administration (SFDA) must be satisfied that no patent is being infringed before it will issue marketing approval. If there has been litigation over a patent, SFDA will wait until the appeals process has been exhausted before acting.

Jordan – Marketing approval for a pharmaceutical product is not permitted during the period of patent protection.

Mexico – Applicants seeking marketing approval for generic pharmaceutical products in Mexico must certify that their patent rights are not infringed. The Health Regulatory Authorities then check with the Patent Office, which must respond within ten days to confirm whether a patent is involved. While Health Authorities will accept an application of marketing approval during the patent period, grant of marketing approval will be delayed until the patent expires.

Singapore – Applicants seeking marketing approval for generic pharmaceutical products in Singapore must declare that the application does not infringe any patent.

U.A.E – The Health Regulatory Authorities do not provide marketing approval for pharmaceutical products that remain under patent protection in the country.

U.S.A – U.S. FDA maintains a listing of pharmaceutical products known as the Orange Book. The Electronic Orange Book is also available via the internet at: http://ww.fda.gov/cder/ob The U.S. FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book.

Europe – Instead of Patent Linkage, the period of data exclusivity is for 10/11 years.

The Patent Linkage System is in progress in countries like Bahrain, Chile, Dominican Republic – Central America FTA (DR-CAFTA), Morocco and Oman.

Conclusions:

I therefore submit the following recommendations to ensure proper enforcement of products patent in India:

 The status of the grant of patent should be reviewed, through appropriate drug regulatory mechanism, before granting marketing permission to generic formulations and if the concerned innovative product is already patented in India, marketing permission for the generic formulation should be withheld.

 Appropriate mechanism/system should soon be worked out in co-ordination with other Ministries to avoid cases of infringement of product patents in India.

 The procedure (Patent Linkage) of checking the patent status of a product before granting marketing approval already exists in the Form 44. This procedure needs to be effectively implemented soon to encourage innovation in India.

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 Government of India accepts the Mashelkar Committee Report on ‘Incremental Innovation’ – what does it really mean?

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‘The Mashelkar Committee’ re-submitted its report in March 2009, which primarily deals with incremental innovation related to Pharmaceuticals Research.The conclusion of the report on the incremental innovation reads as follows:“It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only, since it prima facie amounts to a ‘statutory exclusion of a field of technology”.

Government accepts the Mashelkar committee Report:

It has now been reported that the Government has accepted this revised report, last week. With this the questions raised in the raging debate, whether incremental innovation is TRIPS compliant or not have possibly been answered well, beyond any further doubt.

The acceptance of this report by the Government further vindicates the point that all patentable innovations are not “eureka type” or “path breaking”. Innovation is rather a continuous process and more so in pharmaceuticals. Such type of innovation in the pharmaceutical industry is quite similar to what one observes in the IT industry, where incremental innovation based on existing knowledge is more a norm than an exception. With incremental innovation not just efficacy of a product, but many other important unmet needs of the patients like safety, convenience and ease of administration of the drugs can be successfully met.

Thus innovations whether “path breaking” or “incremental” in nature, need to be encouraged and will deserve patent protection, if they are novel, have followed inventive steps and are industrially applicable or useful.

R&D based Indian Pharmaceutical industry gains considerably:

Many Indian Pharmaceutical Companies have already started working on the ‘incremental innovation’ model. Appropriate amendment of section 3(d) of the Indian Patents Act 2005 will thus help all concerned – the patients, the industry and other stakeholders, as long as the prices of such medicines do not become unaffordable to majority of the population for various reasons. In any case, the Government has the law available within the patents Act to deal with any such situation, if arises at all.

Does section 3(d) warrant an amendment now?

Mashelkar committee categorically observes the following:

1. “It would not be TRIPS compliant to limit granting of patents for pharmaceutical substance to New Chemical Entities only, since it prima facie amounts to a statutory exclusion of a field of technology”, as stated above.

2. “Innovative incremental improvements based on existing knowledge and existing products is a ‘norm’ rather than an ‘exception’ in the process of innovation. Entirely new chemical structures with new mechanisms of action are a rarity. Therefore, ‘incremental innovations’ involving new forms, analogs, etc. but which have significantly better safety and efficacy standards, need to be encouraged.”

Thus, taking these recommendations together will the DIPP now finally conclude that Section 3(d) of the Patent Acts 2005 is not TRIPS compliant and recommend necessary amendments, accordingly to satisfy the needs of the Research based pharmaceutical industry?

Wait a minute – wait a minute:

The report also suggests:

1. “The Technical Experts Group (TEG) was not mandated to examine the TRIPS compatibility of Section 3(d ) of the Indian Patents Act or any other existing provision in the same Act. Therefore, the committee has not engaged itself with these issues.”

Will this comment make the Government conclude that Section 3(d) is TRIPS compliant, which includes ‘incremental innovation’ in general, however, with the rider of ‘properties related to significant improvement in efficacy’?

2. “Every effort must be made to provide drugs at affordable prices to the people of India”.

What will these efforts mean and how will these be implemented by the Government?

3. The TEG also recommends, “every effort must be made to prevent the practice of ‘ever greening’ often used by some of the pharma companies to unreasonably extend the life of the patent by making claims based sometimes on ‘trivial’ changes to the original patented product. The Indian patent office has the full authority under law and practice to determine what is patentable and what would constitute only a trivial change with no significant additional improvements or inventive steps involving benefits. Such authority should be used to prevent ‘evergreening’, rather than to introduce an arguable concept in the light of the foregoing discussion (paras 5.6 – 5.8 and paras 5.12 – 5.29) above of ‘statutory exclusion’ of incremental innovations from the scope of patentability.”

Will the Government (mis)interpret it as a vindication of Section 3(d), which does does not mean “statutory exclusion of incremental innovations from the scope of patentability” but has just made necessary provision within this section “to prevent the practice of ‘ever greening’ often used by some of the pharma companies to unreasonably extend the life of the patent by making claims based sometimes on ‘trivial’ changes to the original patented product”, as recommended by the Mashelkar Committee?

Conclusion:

In the re-submitted report of the Mashelkar committee, the TEG has made quite a few very profound comments, recommendations and suggestions, the implications of all of which are important to all the stakeholders in various different ways. Will the acceptance of this report, as a whole, by the Government and subsequent attempt by the authorities for its implementation both in the letter and spirit, will amount to “chasing a rainbow”, as it were?

Only time will us, how this “satisfy all” zig-saw-puzzle gets solved in future.

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.

‘Prevention is better than cure’: Such a healthcare policy focus could effectively reduce the disease burden in India

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First National Health Policy was passed by the Parliament of India in 1983 and was last updated in 2002. How much of the policy intent has seen the light of the day is anybody’s guess.
Healthcare issues are not being effectively addressed:
Even after six decades of independence only one in three Indians has access to basic sanitation facility like toilets, exposing a large number of population to various types of ailments. World Health Organization (WHO) reports that around 9 lakh Indians die every year breathing polluted air and drinking contaminated water. Maternal mortality rate is the highest in India. Almost half of the children in our country are grossly underweight and this phenomenon is growing at a rate which is nearly double the rate of even Sub-Saharan Africa. One third of the world’s tuberculosis patients live in India. It is indeed an irony that even today India belongs to one of those four countries of the world where polio has not been successfully eradicated, as yet.

Increasing incidences of chronic ailments are exerting further pressure on the disease burden:

Along with diseases originating due to poor hygienic conditions and life style, new challenges are coming up with rapid emergence of non-infectious chronic diseases like, diabetic, cardiovascular and psychosomatic disorders.

Chronic diseases could soon become the most critical issue in the Indian healthcare system, if these are not prevented and successfully managed. It has been reported that population suffering from, for example, diabetes could generate health care costs which are almost double of those without this ailment.

All these factors together are leading to an abnormally high disease burden in the country where very unfortunately over 65% of the population are not having access to modern medicines, either due to lack of infrastructural facilities or the people just cannot afford the basic costs of healthcare.

Most of the diseases are preventable:

Many of these chronic ailments ascribe to common preventable risk factors. Poor hygienic conditions, unhealthy nutrition, lack of proper physical activity, alcohol and tobacco abuse are the major risk factors for these diseases. An integrated approach towards disease prevention, though challenging for the nation, is the need of the hour. It is a pity that our healthcare systems do not support this process. India as a whole carries an abysmally poor track record for a well thought out and structured healthcare promotion and disease prevention policies and strategies.

Indian healthcare system is highly skewed towards disease treatment rather than disease prevention:

Current healthcare systems of India, which offer access to modern medicines just to 35% of the population, are aimed mostly towards responding to urgent needs of patients.

Relieving symptoms of the disease with an expectation of curing the ailment are the basic pattern of healthcare in our country, wherever it is available and in whatever scales and proportion. Preventive health care is quite different from the above approach.

Australia has shown a way:

Australian National Health and Hospitals Reforms Commission report titled, “A healthier future for all Australians”, published in July 2009 recommends the establishment of an independent National Health Promotion and Prevention Agency, with a significant budget for creating a robust evidence base to find out what exactly works in prevention of a disease. Like for example , the report highlights “comparison of the relative efficacy of a medical intervention (gastric bypass), a pharmaceutical intervention (an anti-obesity drug), an allied health intervention (an exercise and diet program) and a population health intervention ( a community walking program) in reducing obesity.”

The report clearly articulates that just collecting evidence on prevention will not be enough; disease prevention should be put on the same footing as the treatment of the disease.

Are we listening?

The way forward in India:

As many diseases are preventable, every interaction with a healthcare professional should include advice and follow-up on the preventive measures. When with an integrated and systematic approach, patients will be provided with information and practices to reduce health risks, it is quite likely that they will then try to maintain a healthy and hygienic life style with regular exercise, drinking safe water, eating healthy food which they can afford, practicing safe sex, avoiding tobacco and alcohol abuse.

Such integrated and systematic preventive healthcare measures can significantly help reducing the disease burden of individuals and families, besides improving vastly the quality of life. To promote prevention in healthcare, the very basic requirement is the change in mindset of both the policy makers and the civil society. A collaborative or partnership approach involving all concerned to create mass awareness is absolutely essential to ensure commitment of the common man towards such an important healthcare initiative.

Important areas for action:

• Effective use of persuasive communication tools to establish that preventive health care can help avoiding expensive disease burden and improve quality of life

• Mass awareness and demonstration program to help creating a positive attitude and required skill sets in disease prevention activities within the community

• Motivate healthcare professionals to make prevention an integral part of every interaction with the patients

• Medical insurance and healthcare policies to offer adequate incentives for preventive healthcare through innovative means

What the government of India is doing towards preventive healthcare:

The Planning Commission of India reports as follows:

• Health education for primary and secondary prevention of Non Communicable Diseases (NCDs) through mobilization of community action

• Development of treatment protocols for education and training of physicians in the prevention and management of NCDs

• Research support for: Multi-sectoral population-based interventions to reduce risk factors

• Explanation of the role of nutrition and lifestyle-related factors

• The development of cost effective interventions at each level of care.

All these are very appreciable statements of intent. However, how much of these intents are getting translated into reality will be very difficult fathom by the common mortals.

Conclusions:

Most of the serious types of ailments of a vast majority of the population of India can be prevented and the disease related complications can be effectively avoided, if we all have a will to do that. Can we take a leaf out of the formation of “National Health Promotion and Prevention Agency” in Australia?

Healthcare costs of the nation and utilization of its scarce resource can be successfully optimized by properly focusing on disease prevention related activities. In my view, effective measures towards preventive healthcare can quite efficiently address many pressing healthcare issues of the nation.

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.

‘Prescription-brand’ loyalty and engaged field force – exploring the direct relationship.

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Well known English writer and one of the most prominent members of the famous ‘Huxley family’, Aldous Huxley once said in the context of nature, “Everything has a cause and the same cause usually produces same effect. The law of cause and effect is fixed.”
‘Cause and effect’ relationship between ‘employee satisfaction’ and ‘customer satisfaction’:Following such ‘cause and effect’ relationship, there are many studies, which establish a direct correlation between ‘customers satisfaction’ and ‘satisfied employees’. Within the pharmaceutical industry, it has now been well established that there is a cause-and-effectrelationship between Doctors’ prescription-brand loyalty and a satisfied or properly engaged sales & marketing staff.

For most organizations, the objective of improving the satisfaction level or increasing the degree of engagement of an employee in the organization is an article of faith. Research studies on this subject indicate that building customer loyalty has a significant impact on profitability of the organization. A study based on 46,000 business-to-business surveys reports that a “totally satisfied” customer contributes 2.6 times more revenue than a “somewhat satisfied” customer.

‘Walking the talk’ is the name of the game:

It is extremely difficult if not impossible to create a critical mass of loyal doctors’ base for a brand or brands without a creating a team of satisfied, engaged or loyal sales & marketing team. The best employees usually prefer to work for companies where managers ‘walk the talk’, set examples and deliver superior values.

Acid test of leadership:

A work environment of such kind helps to create employee satisfaction, loyalty and engagement, which ultimately gets translated into building customer loyalty. Ensuring employee loyalty and creating employee satisfaction is, therefore, considered widely as the acid test of leadership.

Creating a positive psyche within employees is important, usual skill training is just not enough:

To create employee loyalty the organization will need to understand the mind of its employee and always try to have a positive influence on their psyche. Usual skill training will not help to achieve it.
Just as sowing a seed is no guarantee that it will grow into a plant, a highly skilled sales person is no guarantee that it will contribute to the growth of the organization. Just as one will need to create an environment for the seed grow into a plant, the organization will need to create an environment for employee satisfaction to enable them contributing towards the growth of the organization.

In HR invest resources where the mouth is:

It is very important for the managers to devote more resources both in terms of money and time to play the role of a mentor to each one of his or her direct reports to improve their satisfaction level with the organization. These satisfied employees will in turn help create a core group of prescription brand loyal doctors for the organization.

‘Charity begins at home’:

However, ironically most of these managers do not realize that attempts at their end towards this objective, many a times, are just cosmetic in nature. As the saying goes, “charity begins at home”…real enhancement in the level of customer services, indeed starts from extending superior services, support and satisfaction level to the sales force, the bedrock for generation of prescription demands for the prescription brands.

Facing the ‘moments of truths’ of every day positively:

Pursuit of an organization in providing great services to the patients through doctors ultimately depends on the people who provide those services…the sales force. It can only happen through one’s willingness to go beyond what is required of people who serve on the front lines.

Excellence in organizational performance takes place through efforts of frontline employees who make up their minds to face the “moments of truth” of every day, as positively as they possibly can. Such enthusiasm, loyalty, or devotion none will be able to impose on any one. These ordinary people are transformed into ‘brave hearts’ and highly satisfied top performers only through well articulated “shared values”, which take their deep roots within the organizational environment. In a situation like this one can easily make out the visible passion and pride of the frontline staff, emanating from deep within, of each one of them.

Some research findings:

Following are some examples from various research findings, which reinforce the hypotheses that there is a ‘cause and effect’ relationship between ‘customers satisfaction’ and ‘satisfied employees’:

• “For every one percent increase in internal service climate there is a two percent increase in
revenue”.

• “In cardiac care units where nurses’ moods were depressed, patient death rates were four times
higher than in comparable units”.

• Emotional commitment of the sales force and sense of identity with the company are key factors in
providing excellent service to the doctors.

• The reason of poor prescription demand of a company’s products is related to the degree of its sales
staff turnover.

Conclusion:

Therefore, one tends to believe that “a company’s external customer service is only as strong as the company’s internal leadership and the culture of commitment that this leadership creates”.

To transform one’s organization from “Good to Great” it is of utmost importance to build a team of loyal and satisfied ‘internal customers’ by creating a commensurate organizational culture, work environment, ethics and values. Various training & development programs or seminars, aiming only at employee ‘skill development’, are just not enough.

By Tapan Ray

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

Increasing penetration of Health Insurance: an important way to improve affordability and access to healthcare

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While India is making rapid strides in its economic growth, the country is increasingly facing constraints in providing healthcare benefits to a vast majority of its population. This is mainly because of the following reasons:1. Inadequate healthcare infrastructure and delivery system2. Lack of proper healthcare financing/insurance system for all strata of society

3. Difficulty in managing costs of healthcare even when the country is producing drugs for the world market

In this article I shall touch upon only on the healthcare financing/insurance part of the problem.

Sporadic initiatives:

We find some sporadic initiatives for population below the poverty line (BPL) with Rashtriya Swasthya Bima Yojana (RSBY) and other health insurance schemes through micro health insurance units, especially in rural India. It has been reported that currently around 40 such schemes are active in the country. Most of the existing micro health insurance units run their own independent insurance schemes.

Some initiatives by the State Governments:

Following initiatives are being taken by the state governments:

1. The Government of Andhra Pradesh is planning to offer health insurance cover under ‘Arogya Sri Health Insurance Scheme’ to 18 million families who are below the poverty line (BPL).

2. The Government of Karnataka has partnered with the private sector to provide low cost health insurance coverage to the farmers who previously had no access to insurance under “Yeshaswini Insurance scheme”. This scheme covers insurance cover towards major surgery, including pre-existing conditions.

3. Some other state governments have also started offering public health insurance facilities to the rural poor. In fact, some private health insurers like Reliance General Insurance and ICICI Lombard General Insurance were reported to have won some projects on health insurance from various state governments.

Cost of healthcare is rising but the penetration of health insurance is still very poor:

All over India costs of all types of healthcare be it primary, secondary or tertiary, are going beyond the reach of common man. Even in rural India penetration of such schemes is almost as poor as the organized health insurance schemes available in urban India. In a situation like this one will need to ponder why the penetration of health insurance and micro health insurance is so low in our country covering just around 35 to 40 million of the population.

Government spend on health is too low:

Even today the Government spends just 1.2% of GDP on health. When both public and private sectors expenditures are put together this number works out to not more than 5%.

It has been reported that in 2005-06 the total private expenditure towards healthcare was around Rs 1, 35,000 crore. This number is expected to grow at a 5-year CAGR of around 16%.

High ‘out of pocket’ expenditure towards healthcare:

Currently around 78% of healthcare expenditure is ‘out of pocket’ and without any health insurance cover. A recent survey of the National Survey Organization has reported that around 40% of the people who get admitted to hospitals for treatment go through extreme financial hardship and many a times are compelled to abandon the treatment or need to sell of their property to meet such unavoidable expenditure towards health.

Disease pattern undergoing a shift increasing healthcare expenditure:

As the disease pattern is undergoing a shift from acute to non-infectious chronic illness, the cost of treatment is becoming even more. In a situation like this there is an urgent need to have a robust healthcare financing system within the country.

Covering domiciliary treatment through health insurance is important:

Currently heath insurance schemes only cover expenses towards hospitalization. However, medical insurance schemes should also cover domiciliary treatment costs and loss of income along with hospitalization costs.

Government policy reforms towards health insurance are essential:

Currently Indian health insurance segment is growing at 50% and according to PHD Chamber of Commerce and Industry the segment is estimated to grow to US$ 5.75 billion by 2010. Even this number appears to be much less than adequate for a country like India.

It is high time that the Government creates a conducive environment for increased penetration of health insurance within the country through some innovative policy measures. One such measure could be to make it mandatory for all employers, who are required to provide provident fund facilities to their employees to also offer health insurance facilities to all of them.

It is a pity that the concept of health insurance has not taken off in our country, as yet, though has immense growth potential in the years to come. Innovative policy measures of the government towards this direction along with increasing the cap on Foreign Direct Investment (FDI) for health insurance will encourage many competent and successful global players to enter into this market. With the entry of efficient successful global players in health insurance segment, one can expect to see many innovative insurance products to satisfy the need of a large number of Indian population in the healthcare space. Such measures will also help increasing their retail distribution network with a wide geographic reach, significantly improving the affordability and access to healthcare of a large number of population of the country.

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.

Dire need of quality ‘Cold Chain’ infrastructure for pharmaceuticals in India and its efficient management through Public Private Partnership initiatives.

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Why Cold Chain for pharmaceuticals?Drugs are complex entities and many of these are temperature sensitive in nature. This entails them requiring precise and continuous temperature conditions in transit in order to retain their potency and resultant efficacy.Many life saving drugs including biotech products and vaccines fall under such category. Any break in the cold chain process for such drugs can lead to immediate denaturing or deterioration in their quality parameters. It is imperative that a careful consideration is given by all concerned including government agencies mainly at the seaports and airports while providing storage space at their warehouses for such drugs.

Current bottlenecks and lack of proper cold chain infrastructure:

Currently in India there are bottlenecks at the Airports and Seaports that include authorities not being able to assure cold room space despite getting advance notices from the pharmaceutical companies about the possible unloading of large consignments of temperature sensitive products.

Some of the other gaps include improper training and refresher courses for the handling staff who handle such products at the ports. Storage of Pharmaceutical products along with meat and food products is against the GMP norms.

Cold Chain medicines require different and special temperature control:

Cold Chain Medicines require special temperature controlled Cold storage. There are two commonly recommended temperatures specified on labels of cold chain products:

1. Products requiring temperature between 2 to 8 degree centigrade

2. Products requiring temperature around -10 to -20 degree centigrade

Cold Chain should be an uninterrupted series of storage and distribution activities which will maintain required temperature range of 2 to 8 degree centigrade or -10 to -20 degree centigrade as per products requirements.

Proper Cold Chain Management system is essential to ensure right product quality:

Proper Cold Chain Management of pharmaceuticals will ensure that the right quality of such products is maintained not only during storage but during transportation also to meet regulatory specifications. There is a greater focus and stringent regulatory guidelines/standards are in place today in the developed markets around the world for strict adherence to right storage and transportation process for cold chain sensitive pharmaceuticals.

It should be kept in mind always that Cold Chain products are mostly sensitive biological substances that can become less effective or lose potency if not properly stored.

Some examples:

Products requiring 2 to 8 degree storage will not be effective if:

i. They are frozen or stored below 2 degree centigrade
ii. Exposed to temperatures above 8 degree centigrade
iii. Exposed to direct sunlight or fluorescent light

The loss of potency is cumulative and irreversible. If products are exposed to conditions outside the established range, the quality may be adversely affected, reducing their assigned shelf life, diminishing their effectiveness or making them ineffective. The exposed product may look just as the same – the loss of potency may not be visible.

World class SOPs for Cold Chain storage and handling facilities are essential :

Quality of storage and handling of Cold Chain Pharmaceutical products at Airports and Seaports in the course of export from or import into India requires special care and attention. Since multiple products are stored and handled at Seaports/ Airports, personnel may not be able to appreciate the special need for Cold Chain pharmaceuticals’ storage & handling. Thus, there should be Standard Operating Procedures (SOPs) for storage and handling of pharmaceuticals laid down by the Port Management authorities, so that the personnel handling pharmaceuticals strictly adhere to the pre-set norms.

Pharmaceutical products requiring cold chain facilities are rapidly growing in numbers:

Pharmaceutical Products for which efficient Cold Chain facilities are required are rapidly growing in numbers. In their movement across the supply chain from the manufacturers to the patients, the medicines are handled and stored by various stakeholders like transporters, Airports, Seaports, Distributors, Stockists, Retailers etc. Since the storage and handling of Cold Chain Pharmaceuticals Products are unique, an uninterrupted Cold Chain is to be maintained in the entire supply chain network without any discontinuity, even for a short while. This will ensure that medicinal products of high quality reach the patients, always. it is, therefore, very important for all concerned stakeholders to ensure maintenance of proper Cold Chain facilities.

Government plan of “Pharma Zones” in India:

The Drugs Controller General of India (DCGI) has planned a separate dedicated controlled environment – ‘Pharma Zone’, within the cargo premises at Airports and Seaports for proper storage of Pharmaceutical products in line with Good Manufacturing Practices and Good Distribution Practices so as to assure right quality, safety and efficacy of Pharmaceutical products, which are to be either imported or exported.

Currently no ‘Pharma Zones’ in India:

At present there are no ‘Pharma Zones’ in India. However, Mumbai International Airport Private Limited (MIAL) has created 4 new cold rooms for pharmaceuticals. It has been reported that the new Cargo Terminal of Delhi International Airports Limited (DIAL), which is expected to be commissioned later in the year, will have around 4000 square metres of additional cold room capacity compared to the current cold room capacity of 400 square metres. Similarly, MIAL is also planning for a dedicated Cold Room facility for Pharmaceutical Products in their new set–up.

Need for outsourcing Cold Chain services:

In the developed markets of the world there are private cold chain storage and third party logistics providers to offer contract logistics and storage services especially to cater to the growing demands of the Biopharmaceutical segment, which is now the fastest growing manufacturing sector within global pharmaceutical industry.

It is expected that spend of the Biopharmaceutical companies towards outsourcing of cold chain facilities will grow by over 10% to 15% for the next three to five years in the developed markets. India being the second largest producers of Biopharmaceuticals after China, similar opportunities exist in the country.

In India some renowned international courier companies like DHL and World Courier have been reported to have developed an efficient cold-chain management process, especially for the pharmaceutical companies to properly maintain the cold chain in their logistics network.

Conclusion:

A world class cold chain infrastructure and its efficient management within the country will help immensely to Indian domestic pharmaceutical companies, as well, as they are exploring more and more opportunities to export Biopharmaceuticals in the global market. To achieve this objective modern cold chain warehouses and their efficient management as per regulatory guidelines will play a key role in ensuring right product quality standard that India will export.

Over a period of time cold-chain management practices of global standards will be required to achieve this goal. Currently for both import and export of cold-chain sensitive pharmaceuticals, as indicated above, the available infrastructural facilities pose to be one of the key challenges encountered by the industry to maintain high product quality during shipment and warehousing at the ports. Individual pharmaceutical companies like Eli Lilly, India have their own vehicles equipped with cold-chain management systems for transportation of their cold chain sensitive products.

Greater initiative by the DCGI in particular in this area, in collaboration with the Indian pharmaceutical industry, sooner, is absolutely essential. 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.

Patent Linkage: an important step yet to be taken by the Government of India for proper enforcement of product patents granted in the country

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The process of Patent Linkage establishes a desirable communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents granted in India. It also ensures that one Government Department / Ministry does not impair the efforts of another Government Department / Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement.
The system of Patent Linkage exists around the world:Following are some examples:

Australia – Health Authorities do not provide marketing approval for a generic copy which would infringe an existing patent.

Brazil – As of 2006, no copies of products still under patent have been launched in the market place. However, the Brazilian Health Agency (ANVISA), grants registration to copy products, based only on the merits of the case from the regulatory point of view, whether or not a patent has been granted for the same.

Canada – Health Regulatory Authorities do not provide marketing approval for pharmaceutical products protected by patents listed in the equivalent of the US FDA Orange Book.

China – The State Food & Drugs Administration (SFDA) must be satisfied that no patent is being infringed before it will issue marketing approval. If there has been litigation over a patent, SFDA will wait until the appeals process has been exhausted before acting.

Jordan – Marketing approval for a pharmaceutical product is not permitted during the period of patent protection.

Mexico – Applicants seeking marketing approval for generic pharmaceutical products in Mexico must certify that their patent rights are not infringed. The Health Regulatory Authorities then check with the Patent Office, which must respond within ten days to confirm whether a patent is involved. While Health Authorities will accept an application of marketing approval during the patent period, grant of marketing approval will be delayed until the patent expires.

Singapore – Applicants seeking marketing approval for generic pharmaceutical products in Singapore must declare that the application does not infringe any patent.

U.A.E – The Health Regulatory Authorities do not provide marketing approval for pharmaceutical products that remain under patent protection in the country.

U.S.A – U.S. FDA maintains a listing of pharmaceutical products known as the Orange Book. The Electronic Orange Book is also available via the internet at: http://ww.fda.gov/cder/ob The U.S. FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book.

Europe – Instead of Patent Linkage, the period of data exclusivity is for 10/11 years.

The Patent Linkage System is in progress in countries like Bahrain, Chile, Dominican Republic – Central America FTA (DR-CAFTA), Morocco and Oman.

Some people question why should India follow Patent Linkage system in the regulatory approval process?

In India ground realities in the patent enforcement process are quite unique. Thus there is an urgent need for having a Patent Linkage system in place for the following reasons:

1. The Government is granting product patent to encourage, protect and reward innovation in India, it will not be in the best interest of the innovators if the same Government grants marketing approval for a generic equivalent of the patented molecule during the patent life of the product.

2. Unlike many other countries, the Indian Patent Law has provision for both pre-grant and post-grant oppositions. Therefore, if anyone wants to challenge the patent, enough time will be available for the same.

3. After patent is granted for a product in India, if marketing approval is given to a generic equivalent of the same molecule, a dispute or patent infringement may arise. As per the Patents Act 2005, such disputes regarding patent infringement have to be challenged in a High Court. The judicial process is a long drawn one and it is quite possible that the patent life of the concerned molecule would expire during the dispute settlement period, which in turn, would raise doubts about the sanctity of granting a product patent to an innovator in our country.

Conclusions:

I therefore submit the following recommendations to ensure proper enforcement of products patent in India:

 The status of the grant of patent should be reviewed, through appropriate drug regulatory mechanism, before granting marketing permission to generic formulations and if the concerned innovative product is already patented in India, marketing permission for the generic formulation should be withheld.

 Appropriate mechanism/system should soon be worked out in co-ordination with other Ministries to avoid cases of infringement of product patents in India.

 The procedure (Patent Linkage) of checking the patent status of a product before granting marketing approval already exists in the Form 44. This procedure needs to be implemented.

India has instances where marketing permission has been granted by the DCGI for a generic product even when a product patent already exists for the same molecule in India. Such instances put the patent holder in a hardship and avoidable litigation involving huge resources both in terms of time and money. Situation like this can be effectively avoided by ascertaining the patent status before granting marketing permission to a generic manufacturer through an appropriate drug regulatory system, as indicated above.

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.

Contract Research – a rapidly evolving business opportunity in India: Is the Pharmaceutical Industry making the best use of it?

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A quick perspective of the ‘new-era’ pharmaceutical R&D in India:
Since 1970 up until 2005, Indian pharmaceutical industry used to be considered as the industry of ‘reverse engineering’ and that too with an underlying disparaging tone… and also as the industry of ‘copycat’ medicines’.

However, it will be absolutely unfair on my part to comment that only domestic Indian pharmaceutical companies launched ‘copycat’ versions of patented products in India and no multinational companies (MNCs) resorted to this practice, during this period.

Long before Indian Product Patent regime was put in place, in January 1, 2005, around 1998/99 Dr. Reddy’s Laboratories (DRL) entered into a bilateral agreement with Novo Nordisk and Ranbaxy with Bayer of Germany to out-license two New Chemical Entities (NCEs) and a New Drug Delivery System (NDDS), respectively for further development.

Opened the new vistas of opportunities:

These research initiatives opened the new vistas of opportunities for the Indian pharmaceutical industry in terms of R&D, in the pharmaceutical science. The above new developments also brought in a sense of determination within the research oriented domestic pharmaceutical players to enter into the big ticket game of the global pharmaceutical industry called ‘product discovery research’.

The jubilation of the industry having demonstrated its initial capability of taking a leap into forthcoming new paradigm of that time, received a set back momentarily when Novo Nordisk terminated the development of both the NCEs of DRL, after a couple of years, because of scientific reasons. However, DRL continued to move on to its chosen path, undeterred by the initial set back.

Need to focus on R&D and create world class ‘Intellectual Properties’:

In a letter addressed to the shareholders of DRL in one of its recent annual reports, the founder and the chairman of the company Dr. Anji Reddy expressed his following vision:

“Excelling in the basic business operations will be necessary, but not sufficient. To maintain a long-term presence in the global pharmaceuticals markets and to grow profitably will require companies to be even more focused on R&D and creation of successful IPR’s [intellectual property rights].”

After India signed the World Trade Organization (WTO) agreement, Indian pharmaceutical companies were quick to make out that the ball game of doing pharmaceutical business in the new IPR regime will be quite different. Having pharmaceutical product patents will indeed be important in future, for the domestic R&D based pharmaceutical companies.

The Past versus Present R&D models in India:

Domestic research based pharmaceutical companies did realize in the early days that a radical shift in their focus from ‘process research’ to ‘product discovery research’ may not be prudent or practical either.

Some of these companies initiated step-wise approach from mid 90’s to meet the challenge of change, come year 2005. During the transition period of 10 years as given by the WTO to India from 1995 to 2005, some domestic companies wanted to make full use of their past R&D model.

The past model:

Before the product patent regime, Indian pharmaceutical companies used to manufacture and market generic equivalents of the patented drugs at a fraction of the price of the originators, with non-infringing process technology in the Indian domestic market and also for export to the other non-regulated markets. During the WTO transition period of 10 years, they increased the pace of utilization of this model and launched as many ‘copycat’ versions of the new products as possible to boost up their sales and profit.

The present model for regulated markets:

Following two strategies are followed:

1. Indian companies doing generic business in the regulated markets like the USA submit
“Abbreviated New Drug Application” (ANDA) to the drug regulator for approvals of drugs,
which will go off patent within the next few years, so that the generic products could be launched
immediately after patent expiry.

2. Many other companies follow the second avenue, simultaneously, which is though risky but very
remunerative. In this case, the generic market entry takes place by challenging the patents of the
innovators.

It is believed that this model is being used by the Indian pharmaceutical companies, primarily to raise financial resources to get more engaged in their drug discovery initiatives or to generate wherewithal for collaborative or contract research initiatives.

For short term business growth and to raise fund for discovery research, their non-infringing process research initiatives have been proved to be quite useful. These R&D based Indian pharmaceutical companies; seem to understand very well that discovery of NCEs/NMEs or getting involved in this process will ultimately be ‘the name of the game’ to fuel longer term business growth of their respective organizations.

Contract Research (CR) in India:

Contract research is another business model within the overall R&D space, where a significant part of the investments come from the collaborators. CR business model currently explore the following two key options:

Intellectual Property Rights (IPR) for the discovery will go to the global collabolator and the
Indian CR organization will get an upfront or milestone payments.

 Along with funding support to the CR organization, IPR is shared by both the companies
depending on the terms of agreement.

There could be many other terms/clauses in such CR agreements, which are not within the scope of this discussion.

Types of Contract Research (CR):

Frost & Sullivan in one of their studies on Indian R&D opportunities indicated following three models of contract research:

1. Joint research: Here two or more collaborators will work jointly

2. Collaborative research: In this type of research, scientists of different disciplines work together on a project e.g. Ranbaxy has recently entered into a collaborative research program with GlaxoSmithKline (GSK) or collaboration of Ranbaxy to develop an anti-malarial NCE Rbx 11160 with Medicines for Malaria Venture (MMV), Geneva.

3. Complete outsourcing: When an altogether different research organization is assigned a research project by another organization. Some Indian research based pharmaceutical companies have already got engaged in these types contract research activities. The market of contract research is expected to grow much faster in the near future.

India – an attractive contract research destination:

A global survey done by the Economist Intelligence Unit (EIU) couple of years ago on the preferred centres for overseas contract research, published as follows:

• 39% preference for China

• 28% preference for India

Attractiveness as preferred contract research center was based on the following criteria:

• A place where companies can tap into existing networks of scientific and technical expertise

• Has good links to academic research facilities

• Provides an environment where innovation is supported and easy to commercialize.

Many global pharmaceutical companies believe that China scores over India on the third point, as mentioned above.

Indian pharmaceutical companies have commenced targeting contract research opportunities:

Research based Indian pharmaceutical companies companies like, Piramal Healthcare, Ranbaxy, DRL, Zydus Cadilla, Glenmark etc are now actively targeting international companies for contract research in custom synthesis, medicinal chemistry and clinical studies.

A medium-sized pharma company Shasun Chemicals and Drugs has been reported to have defined its business as an “integrated research and manufacturing solutions provider”. Similarly Divi’s Laboratories, a pharmaceutical company of similar size has collaborated with global multinational companies for both custom synthesis and contract research projects.

Some international CROs, like Quintiles have its establishments in Ahmedabad, Bangalore and Mumbai with great expectations and a robust business model.

New contract research opportunities in Biopharmaceuticals:

Besides pure pharmaceutical companies, an emerging opportunity is seen within the biotech companies in India, which are mostly engaged in a contract model. Novartis has inked a three year deal with Synergene (Biocon) for various research projects primarily in the early stages of development in cardiovascular and oncology therapy areas.

Likewise, Reliance Life Sciences are involved in chemistry, biology and contract clinical research activities.

Another research process outsourcing company, Avesthagen is engaged in collaborative research in metabolics, proteomics, genomics and sequencing. The company shares the IPR with the collaborators.

Jubilant Biosys of India, which has already partnered in a drug development deal with Eli Lilly has recently entered into another research and development deal with AstraZeneca, estimated to be worth up to US$220 million. This research collaboration will be funded by AstraZeneca for five years and they will own the patent of any neuroscience molecule that will come out of this collaborative agreement.

Contract research – a lucrative business model:

A UBS Warburg study indicated that around 20% to 25% of R&D investments in the US go towards contract research. This percentage is expected to increase as the pressure to contain R&D expenses keeps mounting, especially in the US and EU.

Currently the cost of bringing an NCE/NME to market from its R&D stage is estimated to be around US$ 1.7 billion. Across the world efforts are being generated to bring down these mounting expenses towards R&D.

Many experts believe that cost of innovation in India will be almost half of what it will be in the US and EU. A report from Zinnov Management Consulting forecasts that towards outsourcing by the global pharmaceutical companies, India has the potential to earn about US$2.5 billion by 2012.

Conclusion:

Currently, within CR space India is globally considered as a more mature venue for chemistry related drug-discovery activities than China. However, in biotech space China is ahead of India. Probably, because of this reason, companies like, Divi’s Laboratories, Avesthagen, Ranbaxy, Synergene, Jubilant Biosys, Reliance Life Science, DRL, Zydus Cadilla, Glenmark and Piramal Healthcare could enter into long-term collaborative arrangements with Multinational Companies (MNC)to discover and develop New Chemical Entities (NCEs).

As I said earlier quoting Korn/Ferry that in the CR space China’s infrastructure is better than India, primarily due to firm commitment of the Chinese government to derive maximum benefits of the globalization process in the country.

Prudent policy reforms and other measures as expected from the new UPA Government will hopefully help bridging the gap between the Chinese and Indian pharmaceutical industry in the space of overall CR business including biotechnology, as Indian R&D based pharmaceutical companies will start realizing and encashing the potential of this important business model.

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.