Tag Archives: Pharmaceuticals

Ensuring ‘health outcomes’ based drugs prescriptions will be more beneficial for the patients in India than just ‘price control’ of drugs

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Currently the global pharmaceutical market is undergoing a metamorphosis. The concept of ‘evidence-based medicine’ is gaining ground in the developed markets of the world, making the pharmaceutical companies generate requisite ‘health outcomes’ data using similar or equivalent products. Cost of incremental value that a product will deliver is of key significance. Some independent organizations like, the National Institute for Health and Clinical Excellence (NICE)in the UK have taken a leading role in this matter.Global pharmaceutical companies using more ‘health outcomes’ data to set pricing strategies:In early 2009, reported agreements between Sanofi-Aventis, Procter & Gamble and Health Alliance as well as Merck and Cigna vindicate this point. These agreements signify a major shift in the global pharmaceutical industry’s approach to gathering and using ‘health outcomes’ data

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

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

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

The ground realities in India:

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

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

However, we should keep in mind that making drugs just affordable in India, where about 65% of population does not have access to modern medicines, is indeed not a core determinant of either healthcare value or proven health outcomes or both.

Cost-effective ‘health outcomes’ based doctors’ prescriptions are more important:

Spending on medicines can be considered as an investment made by the patients to improve their health. To maximize benefits from such spending will require avoidance of products, which will not be effective and the use of lowest cost option with comparable ‘health outcomes’.

For this reason many countries have started engaging the regulatory authorities to come out with head to head clinical comparison of similar or equivalent drugs keeping ultimate ‘health outcomes’ of patients in mind. A day may come in India when the regulatory authorities will also concentrate on ‘outcomes-based’ pricing. However, in Indian context these appear to be very early days.

Till then…

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

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

3. Gradually extend STG in private medical practices.

4. Make implementation of STG a regulatory requirement.

Thus we need to discuss first what these STGs are.

Standard Treatment Guidelines (STG):

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

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

For a developing country like India formulation of STGs will ensure cost-effective healthcare benefits to a vast majority of population.

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

STGs, therefore will provide:

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

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

Conclusions:

Such an approach for drug usage will help both the doctors and the patients, significantly, to contain the cost of treatment in general and the cost of medicines in particular. Encouraging and implementing ‘health outcomes’ based medicines prescription in India will require, above all, a change in the mindset of all concerned. The use of an expensive drug with no significant improvement in ‘health outcomes’ should be avoided by the prescribers, initially through self regulation and if required through an appropriate regulation.

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.

Is the revised Mashelkar Committee Report a ‘please all’ report, without taking any chance to ‘rock the boat’?

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After repeated request and persuasion by the Government of India (GoI) in general and the Department of Industrial Policy and Promotion (DIPP) in particular ‘The Mashelkar Committee’re-submitted its reports to the GoI under the following terms of references:
Terms of Reference of the ‘The Technical Expert Group (TEG)’ Group:Following were the terms of references of the TEG:

1. Whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substance to new chemical entity or to new medical entity involving one or more inventive steps.

2. Whether it would be TRIPS compatible to exclude micro-organisms from patenting.

Today I shall restrict my comments only on the point 1 of the terms of reference. Keeping this mind, let me try to analyze what various stakeholders had expected from the report. Against those expectations, what the report has actually articulated. And how have all these comments/ recommendations been able to keep almost all the stakeholders, with widely varying expectations, reasonably happy.

Why is the revised report a ‘please all’ report?

The key stakeholders who were interested in the revised report are as follows:

A. Research-based pharmaceutical companies who expressed concerns on the patentability of ‘incremental innovation’.

B. The Government of India (GoI) who may not be keen to revisit section 3(d) of the Indian Patents Act 2005, at least for now.

C. All voices supporting price regulations for patented products, in some form, the Department of Pharmaceuticals (DoP) being one of them.

D. Domestic generic pharmaceutical companies who want safeguards within Indian Patents Act 2005 against ‘ever greening’ of patents to ensure that there is no delay in launching generics after patent expiry.

Well crafted and well reasoned revised report from the TEG has been able to please all these stakeholders, to a great extent, which I shall analyze hereunder:

A. Expectations of the Research-based pharmaceutical companies from the report:

The research-based pharmaceutical companies seem to have expected that the report will recommend in specific terms that Section 3(d) of the Patents Act 2005 is not TRIPS compliant, as it restricts patentability of ‘incremental innovation’.

What the report actually says:

- “The Technical Expert Group (TEG) concludes that it would not be TRIPS compliant (Article 27 of TRIPS) 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”.

- “The process of innovation is continuous and progressive leading to an ever extending chain of knowledge. Innovative incremental improvements based on existing knowledge and existing products is a ‘norm’ rather than an ‘exception’ in the process of innovation.”

“The TEG carefully examined the flexibilities allowed under the TRIPS Agreement to the member states (especially Articles 7 & 8 ) and also as a consequence of the Doha Declaration. The detailed analysis and reassessing provided in the report has led TEG to conclude that it is debatable as to whether national interest or the flexibility allowed under the agreement to member states would be accommodated by such ‘statutory exclusion’ of an entire class of (incremental)inventions.”

Very cleverly dodging the section 3(d) issue, the report supported the argument of the research-based pharmaceutical companies that ‘incremental innovation’ in pharmaceuticals cannot summarily be kept out of the criteria of patentability.

B. Government of India (GoI):

The GoI wanted to keep section 3(d) unchanged, till some sort of stakeholders’ consensus is arrived at in favor of its amendment, if at all.

What the report actually says:

“The 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.”

The TEG with this comment keeps the GoI satisfied, as the lawmakers are of the view that section 3(d) is not against incremental innovation. They believe, section 3(d) helps to avoid ‘frivolous’ innovation and ‘evergreening’ of patents by ensuring that all patentable ‘incremental innovations’ have ‘properties leading to incremental efficacy’. The revised TEG report, some people argue, vindicates this important point.

C. All voices supporting some form of price regulations of patented products, which include the DoP.

Both the DoP and other stakeholders want to keep the price of patented products under GoI control.

What the report actually says:

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

Thus the report satisfies the proponent of ‘affordable prices’ for patented products

D. Domestic generic pharmaceutical industry:

A large majority of the domestic generic pharmaceutical companies is of the opinion that most ‘incremental innovations’, are usually attempts to ‘evergreen’ patents for sustained commercially monopoly over the products for a much longer period of time than what it should have been otherwise. Hence patentability for ‘incremental innovation’ is to be restricted by law.

What the report says:

“TEG recommends that 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.”

Many will believe, with the above recommendations in their revised report, the TEG also meets the expectations of the domestic generic pharmaceutical industry, on this contentious issue.

Conclusion:

The revised report of ‘The Mashelkar committee’ has definitely addressed its terms of references, pretty well. However, being ‘advisory’ in nature, the report was expected to be more specific, unambiguous and directional. Unfortunately, the comments/recommendations are neither specific without any ambiguity nor directional in nature; unless, between the lines the ‘please all’ report suggests its agreement with all stakeholders in unison, with perfect balance and elan, without making even a slightest attempt to ‘rock the boat’ in any manner, whatsoever.

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.

Are pharmaceuticals related more to chemicals than health?

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I received a call from Professor Sam Gupta yesterday.

(please refer to my article at: http://www.tapanray.in/profiles/blogs/the-professor-counterfeit)

He is returning to the US next week. Before that, he felt, it will be nice if he and I can manage some time to have a leisurely chat on various issues related to the pharmaceutical industry in India.

Sam had time, so did I on the following Sunday. We agreed to meet and discuss the subject while going for a long drive through the ‘Western Ghats’, leaving Mumbai early morning.

On the ‘D day’, I took the wheel. We fastened our seat belts and soon were on the highway. While leaving behind ‘aamchi Mumbai’ and taking the first ‘ghat road’, our Sam deviated from his usual humorous chat on America’s ‘Uncle Sam’ and fired his first salvo, “the Government of India (GoI) just created a new department called the ‘Department of Pharmaceuticals’, presumably to have greater focus on the pharmaceutical Industry. Why is that the department has still been kept under the Ministry of Chemicals & Fertilizers and not under the Ministry of Health?” Taking a short breather, professor quipped, ‘does GoI consider pharmaceuticals related more to chemicals rather than health?’

What a first salvo!…indeed thought-provoking, at least to me. I soon lost myself to the question, diving deep into my memory lane, at the same time keeping both my right and left brain active to ponder over this interesting subject. Professor’s inquisitive chat gradually faded away from my ears…

Creation of the Department of Pharmaceuticals (DoP):

I had a quick recap on this subject.

In mid 2008, GoI had set up a new department under the Ministry of Chemicals & Fertilisers (MC&F), called the ‘Department of Pharmaceuticals (DoP)’. The department was created primarily to have a greater focus on the pharmaceutical sector.

Historically, issues and policies related to pharmaceuticals used to be handled by the Department of Chemicals and Petrochemicals. A separate Department of Fertilisers still handles all issues related to fertilizers in India. Both the departments were within the MC&F.

The then Minister of MC&F probably felt that the pharmaceuticals sector has very complex issues, besides others, related to pricing, access and availability, IPR, and other international commitments that necessitate integration of work with other ministries. A separate department for pharmaceuticals was, therefore, necessary to do justice to the pharmaceuticals industry of India. The proposal, I reckon, was there for quite some time though.

Which Ministries the DoP will have to co-ordinate with…the most?

As stated above let us have a look at the key areas of focus of the DoP, one by one and try to ascertain which Ministry currently deals with each one of these issues, as follows:

1. Pricing:

Currently DoP looks after ‘drugs pricing’ under the MC&F. This activity will remain unchanged in the new scenario.

2. ‘Access’ and ‘Availability’:

Availability of pharmaceuticals is intimately linked to access to pharmaceuticals… and access to pharmaceuticals to a vast majority of population of India depends on availability of requisite healthcare infrastructure. ‘Jan Aushadhi’ scheme of the DoP will be more meaningful in terms of its purpose and objectives, when adequate health related infrastructural facilities will be made available, in tandem, to the common man as a part of integrated healthcare initiative. Ministry of Health is responsible to create such healthcare related infrastructure.

3. IPR:

To give some examples, for the researched-based pharmaceutical companies, there are some burning pharmaceuticals related Intellectual Property Rights (IPR) issues, pending since long, like ‘Patent Linkage’ and ‘Regulatory Data Protection’ along with pharmaceuticals related other regulatory issues. All these are again currently looked after by the Ministry of Health.

4. International commitments:

International debate on ‘Counterfeit drugs’, ‘clinical trials’ etc is now spearheaded by the Ministry of Health.

Thus the objective of GoI to have greater focus on pharmaceuticals will be better achieved, if the DoP becomes a part of the Ministry of Health.

What should be the key objectives of the DoP?

The key objective of the DoP should be to “ensure access to affordable modern medicines to all”. To achieve this objective the mindset of the ministers and especially beaurocrats, should change from ‘empire building’ to serving the ‘common man’ with right earnest. With this change in the mindset, I hope that the DoP would try to align itself more with health than just chemicals.

If this happens, the newly created DoP will be able to deliver far more to the ‘common man’ and justify its creation and existence by spending huge amount of taxpayers’ money.

Yes Professor… you have a point:

A steep climb ahead on the ‘ghat’, compelled me to focus on driving. Meanwhile, noticing a long pause at my end, probably professor Gupta thought initially that I was inattentive to his first question… and like a thorough gentleman that he is, remained quiet. Time passed by, in pregnant silence, till I replied, “Yes professor you have a point” and then continued driving through the meandering ‘ghat’ road, in the sweltering heat of summer…still pondering why on earth our politicians still relate pharmaceuticals more to chemicals rather than health?

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.

Is rural India emerging as the new ‘Eldorado’ for the Indian pharmaceutical industry?

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“If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative consumers, a whole new world of opportunity will open up,” wrote the management guru C K Prahalad in his well known book titled, “The Fortune at the Bottom of the Pyramid”.I am not sure whether the above profound observation is encouraging the pharmaceutical companies to spread their wings, at a much organized way, in rural India, where over 70% of the Indian population live and most of them are poor.Rural reforms have commenced in India at a much faster pace than ever before. Even many die-hard skeptics will now agree that the “Rural India has started Shining”. The shine, however, may not be as much as it ought to be. But surely, it is happening. The result of recent General Election in India perhaps will vindicate this point.

Is rural India the new growth opportunity for the pharmaceutical industry?

Decent business prospects in largely un-tapped rural India are making the pharmaceutical companies to move into this uncharted frontier. Reaching out to about 65% of the population who do not have access to modern medicines, could prove to be the new ‘Eldorado’ for the industry. Some well organized but small preparatory steps are already being taken towards this direction, which ultimately could lead to taking a giant leap towards this new frontier.

Some companies have started charting in a new way in this much uncharted frontier:

Possibly as a testimony to this new business approach we can now see:

1. Novartis with its “Arygoya Parivar” initiative working out a tailor-made program for rural areas of seven selected states, to start with. They have developed special packs of essential medicines with special prices to reach out to the rural marketing population.

2. Novo Nordisk screening patients suffering from diabetes in the rural areas of Goa with mobile clinics.

3. Eli Lilly developing a program along with the Self-Employed Women’s Association in Ahmedabad to educate and encourage rural patients suffering from tuberculosis to go for treatment.

4. Ahmedabad based Cadila Pharma setting up a dedicated rural marketing arm called ‘Explora’, which has already clocked a reported annual turnover of Rs. 50 crore.

5. Vadodara based Alembic Chemicals creating a rural business unit called ‘Maxis’.

6. Piramal Healthcare launching a pilot project in Rajasthan to take its products to rural areas where there is no proper public health system.

These are just a few illustrations and not an exhaustive list. However, the question is whether the rural marketing initiatives will continue to remain an illusion to the pharmaceutical companies in India or will get translated into a decent strategic move?

Going by various published reports, it appears that fortune still exists at the bottom of the pyramid.
In 2007 the rural markets registered a growth of over 40% over the previous year. This scorching pace of rural market growth is expected to continue in the next decades.

Moreover, according to McKinsey Report, rural markets will contribute about 27% of the total consumption of India by 2020 and by 2015, rural India will account for over 24% of the domestic pharmaceutical market from its current level of 17%.

Rural market size:

The rural markets currently contribute about 17% of U.S$8.1 billion pharmaceutical market in India. As reported in ‘India Pharma 2015’ of McKinsey,” by 2015 rural pharma market size is expected to reach U.S$4.8 billion from U.S$1.2 billion in 2005.”

Key growth drivers, as McKinsey indicated in this report, will be as follows:

• Income growth: 40%
• Medical infrastructure: 20%
• Health insurance penetration: 15%

Rural markets are currently dominated by ailments related to various types of infections. This disease pattern is expected to change by the next decade to non-infectious chronic illness, like diabetes, cardiac diseases, cancer, hypertension etc.

The opportunities in the rural markets:

‘The Fortune at the Bottom of the Pyramid’, the famous observation of the management guru C.K. Prahalad is equally apt for the pharmaceutical industry of India, where the just 35% of the population has access to affordable modern medicines.

Further, 20 million middle class households living in about 6,00,000 villages, which is almost the same as the number of middle class households residing in urban India, is currently instrumental to significant increase towards healthcare spending in rural India.

Rural market entry strategy:

Instead of transplanting the urban marketing strategy into rural India, some companies like, Novartis, Novo Nordisk and Eli Lilly, as mentioned above, have taken the community-welfare route to make the rural population aware of particular disease segments like, tuberculosis, diabetes, waterborne diseases etc together with the treatments available for such ailments.

These value added marketing strategies offer benefits to both the patients and the company concerned. The local medical practitioners, in turn, are also benefitted as they get increasing number of patients in their clinics through such disease awareness community program by the pharmaceutical companies.

Key challenges:

There are some key challenges, as well, for effective rural penetration by the Indian pharmaceutical industry, which are as follows:

• Inadequate basic healthcare infrastructure. Only 20% of total healthcare infrastructure of the country is in rural areas where over 70% population lives.

• Density of doctors per 10,000 populations in India is just 6. About seven lakh villages in India do not have doctors. As per AC Neilsen study, an average rural Indian has to travel about 6 km to visit a doctor. A Medical Representative will require travelling about 250 to 300 km every day just to meet about 10 doctors and 4 dealers.

• Villages are not well connected by proper all season roads.

• Lack of appropriate supply chain network and logistics support.

National Rural Health Mission (NRHM) – a key facilitator:

Be that as it may, greater focus of the new UPA Government on NRHM will help immensely to overcome many of these challenges in various different ways.

In the interim budget 2009, the Government has allocated U.S$ 2.35 billion for the NRHM. It is expected that this initiative, if implemented well, will help improving not only the healthcare infrastructure in rural India, but also supply of affordable medicines, in these long neglected areas.

Conclusion:

With required infrastructural support and tailor made value added marketing strategies for rural India, simultaneously delivering both preventive and curative therapies under one umbrella, it may not be difficult for the Indian pharmaceutical companies to discover ‘The Fortune at the Bottom of the Pyramid’ – a win-win situation indeed for both the ‘haves’ and a vast majority of ‘have nots’ living 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 Professor, Counterfeit Drugs, CDA Bill and the New Health Minister

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Just a couple of days ago, I met Professor Sam Gupta, an American professor of Indian origin. Prof. Gupta has specialized in nuclear medicine and hails from a well reputed North American University. Dr. Gupta, like many others, had left the shores of India decades ago when he was just a student. During his long arduous journey on the beaten path of life, he almost lost contacts with his roots in India.
An incident that triggered intense passion in Prof. Gupta:

When I met him just the other day, I heard him passionately speaking about the menace of substandard and counterfeit medicines, in the world in general and India, in particular. He was reminiscing how had he decided to wage a war, as it were, against this injustice against humanity. Despite having a nuclear medicine background, Prof. Gupta is fighting this crusade against evil with an intense passion, as intense as it could possibly be.

The professor still teaches and researches on nuclear medicine in North America… but he spends all his balance time driven by this passion, to bring home some change in the uncertain treatment environment, involving well being of a large number of patients, especially in India. What then triggered this ‘burning desire’ in the mind of a seemingly quite and extremely polite Prof. Gupta?

Not a very long ago, a person, very dear and near to the professor, while visiting India became a tragic victim of a counterfeit medicine. Professor lost his dear one, in India. Intense sadness due to loss of this otherwise healthy individual, that too so suddenly, got converted into a potent rage in him… and… the rage into a passion… a passion to stop the menace of substandard and counterfeit medicines, in whatever way he possibly can.

Professor’s dear one is not the sole victim of spurious, substandard and counterfeit medicines in India. Such tragedy strikes many hundreds and thousands of Indians every year. We come to know very seldom and very little about such instances, for various reasons. Real reasons of most of these tragic deaths, usually remain unknown to the civil society, at large… but the ‘merchants of death’ keep making fast bucks with their cash counters constantly ringing. Heart rending cries for loss of human lives, because of their mischief, do not mean anything to them. To the regulators, ironically, price of medicines appears to be more important than the quality of medicines.

Minimum acceptable quality standards for medicines:

Though medicines should offer and promise maximum possible quality standards, in India we are satisfied with the ‘minimum acceptable quality standards’ even for medicines and of varying degree of quality, just as any other commodities. It is not unknown to many that in India, we have broadly two types of quality – one type of quality exists for the domestic consumption and use and the other type of quality is for people living outside India and mainly in the western world, which is termed as ‘exports quality’. ‘Exports quality’ products attract a premium in India to the common man, even in the 21st. century.

Varying degree of acceptable drug quality in India:

Just like ‘domestic’ and ‘exports’ quality, for medicines we have many acceptable quality standards, in India: GMP quality, WHO GMP quality, US-FDA quality just to name a few. It appears that our regulators are just satisfied in ensuring availability of cheaper priced medicines with ‘minimum acceptable’ or ‘varying’ quality standards. If not, why is there no concerted effort by the drug regulator to strike at the root cause of proliferation of substandard and counterfeit medicines in India? When we see so many regulators working so well to ensure ‘affordability’ of medicines, why is the drug regulator failing to stop proliferation of substandard and counterfeit medicines in the country, in a systematic way? Who is accountable, when a patient takes affordable medicines of poor quality and suffer from undesirable consequences? Some estimates indicate that at least 10% of medicines produced in India are substandard.

Some good initiatives were implemented and some equally good initiatives were stalled – why?

A major amendment in the Drugs & Cosmetics Act, 1940, proposed in October 2007 and enacted into a law in 2008, has increased the minimum jail term for counterfeit drug offenders from 5 to 10 years and the minimum fine for such offenses increased from Rs. 10,000 (about U.S$ 220) to Rs. 10 lakh (about U.S$ 22,000).

However, the amendment of the Drugs & Cosmetics Act, 1940 to create a Central Drug Authority (CDA) has not seen the light of the day, as yet, due to various vested interests. The CDA, if created, would have been responsible for the entire drug regulatory mechanism in India including all marketing approvals and uniform quality standards of medicines, across the country.

What happens today for manufacturing and marketing approval of drugs in India?

Currently, although the Drug Controller General of India (DCGI) gives marketing approval of all new drugs, imported or domestic, the manufacturing permission of these drugs in India is granted by concerned state drug regulatory authorities. It is believed that there is a perceptible variation within the states in quality of inspection, monitoring and enforcement of various regulatory systems and maintenance of uniform drug quality standards.

It is worth noting that ‘new drug’ status of a formulation type, remains for four years. After this period the state drug authorities can grant marketing approval of such products. Huge regulatory quagmire created with unabated proliferation of Fixed Dose Combination products (FDC) in India, is a testimony of how the drug regulatory systems works in India.

Despite existence of such variation in standard from state to state, it is indeed an irony that drugs approved and produced in any state are allowed to be marketed and sold across India or even be exported outside the country. It is quite possible that substandard drug producers can locate themselves in states with weaker regulatory controls and make their cheaper substandard products available for sales across the country, making hundreds and thousands of innocent citizens vulnerable to a possible life threatening risk.

Drug regulatory mechanism deserves a revamp in India without further delay:

Some people believe that hectic efforts by politicians and vested interests from the states with weaker regulatory controls have prevented the CDA bill from getting translated into reality, showing scant respect to the need of patients who may not have any other option but to use these substandard drugs.

How does the western world care for their patients with high quality medicines?

In the western world, drug regulators have taken specific measures to ensure availability of highest quality of medicines for their citizens. It is for that reason Food and Drug Administration of the United States of America (US-FDA) has opened its establishment in India to ensure that the drugs, which are manufactured in India and exported to the USA, are of highest quality standards.

Lackadaisical approach of the Indian drug regulatory authorities has created an environment within the country where many pharmaceutical manufacturers, including some large ones have allegedly placed themselves in a peculiar ‘comfort zone’ by not following prescribed procedures of generating required essential documents, while manufacturing drugs of high quality standards.

Continuous living in such comfort zones led to the largest pharmaceutical company of India, facing ban of 30 of their product formulations in the USA in 2008, against the charge of ‘falsifying’ the product manufacturing documents – a stigma on the pride of India in general and the Indian pharmaceutical industry, in particular, which will remain till the issue is sorted out. As if this was not enough, close on its heel some more incidents came into light with the names of other top Indian companies falling under the scanner of US FDA for not conforming to their regulatory requirements related to drugs manufactured for use in the US market.

When regulators of other countries are so active, why then are our own drug regulators failing to clean up the menace of spurious, substandard and counterfeit medicines in India? Why important bills like CDA are being stalled by the vested interests with the help of politicians, exposing a large number of patients to medical risks?

Will the new government be any different?

I sincerely hope that our new Minister of Health, Shri Ghulam Nabi Azad will sincerely address this very pressing health issue for the country. I also believe that under his astute leadership, the menace of spurious, substandard and counterfeit medicines will receive due consideration of the cabinet and the CDA bill will soon be a law.

Till then…crusade of Prof. Gupta continues:

If it happens, just as Dr. Gupta, the Indian American professor of Nuclear Medicine will get a huge sense of accomplishment, after fighting a long and arduous battle to save patients from the danger of substandard and counterfeit medicines in India, the civil society of our country will at the same time feel a unique sense freedom… the freedom from fear… the fear of substandard and counterfeit medicines.

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.

New Drug Policy 2009 – suggesting key elements for a strategic shift in the policy framework

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The new drug policy of the Government of India (GoI) is long overdue. Despite so many reform measures taken by various Governments over last two decades, Indian Pharmaceutical Industry has not seen a new ‘drug policy’since 1995.As an individual who has been closely observing the pharmaceutical industry during this period, I would expect the new UPA Government to work out a new ‘drug policy’, without further delay, after having a fresh look at the current policy, which has outlived its time. The new ‘drug policy’should be aimed at achieving inclusive growth, keeping pace with the progressive outlook and aspirations of young India.Broad policy objectives:

The broad objective of the new ‘Drug Policy’ should undoubtedly be ‘ensuring access to affordable modern medicines to all’, clearly addressing the following key elements, in detail:

1. Affordability:

• The new policy should ensure adequate availability of all ‘National List of Essential Medicines’ (NLEM) at affordable prices.

• ‘Jan Aushadhi’ initiative of the Department of Pharmaceuticals (DoP) should be strengthened further through public-private-partnership (PPP) initiatives, using strong public distribution outlets like ration shops and post offices for effective rural penetration of the scheme.

2. Access:

• Around 65% of the Indian population does not have access to affordable modern medicines even today, against 47% in Africa and 15% in China.

• GoI should make effective use of its existing initiatives, take some new initiatives and dovetail them as follows:

- ‘National Rural Health Mission’ (NRHM): to create rural healthcare infrastructure.

- ‘Jan Ausadhi’ scheme: to extend the reach of affordable medicines to a vast majority of
rural population.

- Innovative ‘Health Insurance Schemes’ to be worked out for all sections of the society through PPP, like for example, ‘Yashasvini’, pioneered by Dr. Devi Shetty of Bangalore and the Government of Karnataka, which is possibly the world’s cheapest comprehensive Health Insurance scheme, at Rs.5 (11 cents) per month, for the poor farmers of the state.

3. Research & Development:

• Patents (Amendment) Act, 2005 ushered in a new paradigm for the pharmaceutical industry of India. There is a great opportunity for the domestic Indian pharmaceutical companies to discover, develop and market their own New Molecular Entities (NMEs) throughout the world. The new policy should plan to provide adequate fiscal incentives for R&D initiatives taken by the pharmaceutical industry of India.

• R&D in India costs almost a fraction of equivalent expenditure incurred in the west. Because of availability of highly skilled manpower with proficiency in English together with cost advantages, the country has the potential to become the largest global hub for ‘Contract Research’ and other R&D related work being outsourced by the global Pharmaceutical Companies.

• As India is poised to be a global hub for Clinical Trials, the new policy should extend adequate support to companies carrying out clinical studies in India not only to help them record a healthy growth, but also to attract more ‘foreign direct investments’ (FDI) for the country.

4. Exports:

• The Ministry of Chemicals & Fertilizers reported in its ‘Annual Report of 2006-07′ that exports of Drugs & Pharmaceuticals have doubled during the last four years. To give greater boosts to exports PHARMEXIL should be further strengthened to act as an effective nodal centre for all pharmaceutical exports, together with the responsibilities for conducting extensive promotional activities to accelerate growth for this sector.

• It is estimated that in the next three years sales of over U.S.$ 60 billion being generated by some blockbuster pharmaceutical products patented in the western countries and not in India, will go off patent. This will open the door of significant opportunities for Indian pharmaceutical exports. GoI should help the domestic pharmaceutical companies to encash this opportunity through adequate financial measures and other support, wherever required.

5. Employment generation:

• Indian pharmaceutical industry with its encouraging pace of growth is making good contribution towards employment generation initiatives of the country, both within skilled and unskilled sectors of the population.

• With projected CAGR of around 14%, the employment opportunity, especially for the qualified professionals is expected to increase significantly in the coming years, across the industry, from core pharmaceutical sectors, right through to contract research, manufacturing services (CRAMS) and clinical trials space.

• Recommendations to be provided in the new drug policy should further accelerate such employment generation opportunity by the industry.

6. Contribution to Economic Growth of the Country:

• The new ‘drug policy’ should also address how will the pharmaceutical industry in India contribute more to the economic development of the country through various reform measures, in areas like, R&D, CRAMS, Clinical Trial (CT) and also towards health insurance, for all strata of society.

Innovative new ‘drug policy’ initiative of the new government will not only ensure a stimulating inclusive growth for the industry, but also will help attract adequate FDI for the country.

Broad Strategic shift towards ‘Access to affordable modern medicines for all’:

Ensuring ‘access to affordable modern medicines for all’ should be made one of the key objectives of the DoP. Resorting to populist measures like ‘drugs price control’ may sound good. Unfortunately at the ground level, it has not helped a vast majority of 650 million population of India, thus far.

Therefore, ‘Drugs Price Control’ since 1970 has not been able to ensure ‘access to affordable modern medicines’ to more than just 35% of Indian population. The new ‘drug policy’ should, therefore, shift its focus from ‘Price Control’ to ‘Price Monitoring’, which has been proved to be of great success to keep medicines affordable to the common man, as indicated by the ‘National Pharmaceutical Pricing Authority’ (NPPA). However, for government purchases, made to address the healthcare needs of the ‘common man’ there should always be room for price negotiation with the concerned companies, as is being practiced in many countries of the world.

Conclusion:

To achieve the proposed ‘new drug policy objective’ of ‘ensuring access to affordable modern medicines for all’, the policy makers should try to think ‘outside the box’. ‘The old wine in a new bottle’ policy will just not be 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.

Leverage Information Technology (IT), Health Insurance and ‘Jan Aushadhi’ initiatives to address the burning issue of ‘Access to Affordable Integrated Healthcare to all’ in India.

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Despite so much of general focus, stringent Government control, debate and activism on the affordability of modern medicines in India, a vast majority of Indian population still do not have access to basic healthcare facilities.The degree of poor access to healthcare in general may vary from state to state depending on economic resources and the quality of governance. However, despite the success of the Government to make medicines available in India cheaper than even Pakistan, Bangladesh and Sri Lanka, it has been reported that about 65% of Indian population still do not have access to affordable modern medicines compared to 15% in China and 22% in Africa.Lack of adequate healthcare infrastructure:

One of the key reasons of such poor access is lack of adequate healthcare infrastructure. As per the Government’s own estimate of 2006, India records a shortage of:

1. 4803 Primary Health Centres (PHC)
2. 2653 Community Health Centres (CHS)
3. Almost no large Public Hospitals in rural areas where over 70% of the populations live
4. Density of doctors in India is just 0.6 per 1000 population against 1.4 and 0.8 per 1000 population in China and Pakistan respectively , as reported by WHO.

Moreover, doctors themselves do not want work in rural areas, probably because of lack of basic infrastructural facilities. We have witnessed public agitation of the doctors on this issue, in not so distant past.

National Health Policy and Healthcare Expenditure:

Two key primary focus areas of the Government, everybody agrees, should be education and health of its citizens. Current National Health Policy also planned an overall increase in health spending as 6% of GDP by 2010. However India spent, both public and private sectors put together, an estimated 5% of GDP on healthcare, in 2008.

If we look at only the spending by the Government of India towards healthcare, it is just 1.2% of GDP, against 2% of GDP by China and 1.6% of GDP by Sri Lanka, as reported in the World Health Report 2006 by WHO.

During the current phase of global and local financial meltdown, as the government will require to allocate additional resources towards various economic stimulus measures for the industrial and banking sectors, public healthcare expenditure is destined to decline even further.

The silver lining:

However we have seen the United Progressive Alliance (UPA) Government allocating around US$2.3 billion for the National Rural Health Mission (NRHS). The Government announced that NRHS aims to bring about uniformity in quality of preventive and curative healthcare in rural areas across the country.

Inefficient healthcare delivery system:

Despite above silver lining of additional resource allocation, the net outcome does not appear to be so encouraging even to an eternal optimist, because of prevailing inadequacy within the system.

The reasons for such inadequacies do not get restricted to just rampant corruption, bureaucratic delay and sheer inefficiency. The way Government statistics mask inadequate infrastructural facilities is indeed equally difficult to apprehend. A recent report from ‘The Economist’, which reads as follows, will vindicate this point:

‘…around 20% of the 600,000 inhabited villages in India still have no electricity at all. This official estimate understates the extent of the problem, as it defines an electrified village—very generously—as one in which at least 10% of households have electricity’.

Leveraging the strength of Information Technology (IT) to considerably neutralize the system weaknesses:

One of the ways to address this problem is to utilize the acquired strengths of India wherever we have, to neutralize these weaknesses. Proficiency in ‘Information Technology’ (IT) is one of the well recognized key acquired strengths that India currently possesses. If we can optimally harness the IT strengths of India, this pressing healthcare issue could possibly be addressed to a significant extent.

One such IT enabled technology that we can use to address rural healthcare issues is ‘cyber healthcare delivery’ for distant diagnosis and treatment of ailments. Required medicines for treatment could be made available to the patients through ‘Jan Aushadhi’ initiative of the Department of Pharmaceuticals (DoP), by utilising the Government controlled distribution outlets like, public distribution system (ration shops) and post offices, which are located even in far flung and remote villages of India.

Please use the following links to read more about these subjects:

http://www.tapanray.in/profiles/blogs/healthcare-services-in-india

http://www.tapanray.in/profiles/blogs/jan-aushadhi-medicines-for

Sources of Healthcare financing in India:

Currently the sources of healthcare financing are patchy and sporadic as follows, with over 70% of the population remaining uncovered:

1. Public sector: comprising local, State and Central Governments autonomous public sector bodies for their employees

2. Government health scheme like:

• ‘Rashtriya Swasthya Bima Yojana’: for BPL families to avail free treatment in more than 80 private hospitals and private nursing homes.
• ‘Rajiv Gandhi Shilpi Swasthya Bima Yojana’ by Textile Ministry: for weavers.
• ‘Niramaya’ by Ministry of Social Justice and Empowerment: for BPL families.

3. Private sector: directly or through group health insurance for their employees.

4. ‘Karnataka Yeshavini co-operative farmers’ health insurance scheme: championed by Dr. Devi Shetty without any insurance tie-up.

5. ‘Rajiv Aarogyasri’ by the Government of Andhra Pradesh for BPL families: a Public Private Partnership initiative between Government, Private insurance and Medical community.

6. Individual health insurance policies.

7. External Aid like, Bill & Melinda Gate Foundation, Clinton Foundation etc.

Grossly inadequate health care financing in India, out of pocket expenses being over 70%:

Proportion of healthcare expenditure from financing source in India has been reported as follows:

• Central Government: 6%
• State Government: 13%
• Firms: 5%
• Individual Health Insurance: 3.5%
• Out of pocket by individual household: 72.5%

Need for Health Insurance for all strata of society to address the issue of affordability:

Even after leveraging IT for ‘cyber healthcare diagnosis’ and having low priced quality medicines made available from ‘Jan Aushadhi’ outlets of DoP, healthcare financing to make healthcare delivery affordable to a vast majority of the population will be an essential requirement.

According to a survey done by National Sample Survey Organisation (NSSO), 40% of the people hospitalised in India borrow money or sell assets to cover their medical expenses. A large number of populations cannot afford to required treatment at all.

Hence it is imperative that the health insurance coverage is encouraged in our country by the government through appropriate incentives. Increasing incidence of lifestyle diseases and rising medical costs further emphasise the need for health insurance. Health insurance coverage in India is currently estimated at just around 3.5% of the population with over 70% of the Indian population living without any form of health coverage.

Conclusion:

Therefore, in my view an integrated approach by leveraging IT, appropriately structured Health Insurance schemes for all strata of society, supported by well and evenly distributed ‘Jan Aushadhi’ outlets, deserves consideration by the Government. A detail and comprehensive implementable plan is to be prepared towards this direction to address the pressing issue of improving ‘Access to Affordable Integrated Healthcare’ to a vast majority of population in India, if not to ALL.

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.

Global API manufacturers are poised to penetrate the Indian market in a bigger way – will the API ‘marketing warfare’ be even more intense, in future?

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India currently plays a relatively dominant role in the Global Active Pharmaceutical Ingredient (API) Market with China being ahead of India. While this is the current scenario, many experts in this field contemplates that important players from the regulated markets will soon start making significant inroads in India.Current API Market situation in India:In 2007 the API output value in India was around US $4.1 billion registering a 5 year CAGR of around 19% and ranking fourth in the world API output. According to the Tata Strategic Management Group, Indian API export value is expected to increase to US $12.75 billion in 2012.

Currently in India about 400 different types of APIs are manufactured in around 3000 plants, Ranbaxy Laboratories, Lupin, Shasun Chemicals, Orchid Chemicals, Aurobindo Pharma, Sun Pharmaceuticals Ipca Laboratories and USV being the top API manufacturers of the country. Indian domestic companies source almost 50 percent of their API requirements from China, because of lower cost in that country.

In terms of global ranking, India is now the third largest API producers of the world just after China and Italy and by 2011 is expected to be the second largest producer after China. However, in Drug Master File (DMF) filings India is currently ahead of China.

In addition, India scores over China in ‘documentation’ and ‘Environment, Health and Safety (EHS)’ compliance. All these have contributed to India having around 100 US FDA approved world class manufacturing facilities, which is considered the largest outside the USA.

Indian API manufacturers are facing a cut throat competition from their Chinese counterparts mainly because of lower costs in China. Considerably higher economies of scale and various types of support that the Chinese API manufacturers receive from their Government are the main reasons for such cost differential.

Growing competiton from the regulated markets:

We now observe a new trend within the API space in India. Many of the global innovators and generic companies are keen to enter into the API space of India.

It is known that API manufacturers from the regulated markets are already selling their products in India. However, at present, the numbers of Indian registrations for API applied by some of the large global companies, as reported by ‘Thomson Reuters Newport Horizon Premium’, are quite significant, which are as follows:

1. Novartis, Switzerland:20
2. Pfizer, USA:16
3. Sanofi-Aventis, France: 26
4. Teva, Israel: 45
5. Schering-Plough, USA:39
6. BASF: 37
7. DSM: 26
8. E.ON AG: 16
9. Kyowa Hakko: 23

All these companies who are entering into the API business space in India, I am sure, have worked out a grand design to compete not only with the the low cost domestic API manufacturers, but also with the cheaper imports, particularly from China.

What will then be the competitive edge of these companies in India?

It appears that each of these companies has weighed very carefully the existing strategic opportunities in the API sectors of India, both in terms up technology and also in terms of domestic demand.

Strategic gap in API manufacturing technology:

India, undeniably, is one of the key global hubs in the API space, with competitive edge mainly in ‘non-fermentation technology’ product areas. This leaves a wide and perceptible technological gap in the areas of products requiring ‘fermentation technology‘.

Significant demand from domestic formulations manufacturing :

India is much ahead of China in pharmaceutical formulations manufacturing, especially in the area of exports to the regulated markets like, the USA and EU. Over 25 domestic Indian companies are currently catering to exports demand of the U.S market. However, it is interesting to note that the global manufacturers like Sandoz, Eisai, Watson, Mylan have already set up their formulations manufacturing facilities in India and some more are expected to follow suit over a period of time. Hence, fast growing domestic demand for APIs, especially for exports, will drive the business plan of the global API players for India.

Is the cost advantage in India sustainable?

Indian API manufacturers although currently have a cost advantage compared to their counterparts in the regulated market, this advantage is not sustainable over a period of time because of various reasons. The key reason being sharp increase in cost related to more stringent environmental and regulatory compliance, besides spiralling manpower and other overhead costs.

Indian regulatory requirements for the global API players:

To sell their APIs into India, global companies are now required to obtain the following regulatory approvals from the Indian authorities:

1. Foreign manufacturing sites for the concerned products
2. APIs which will be imported in the country

The Drug Controller General of India (DCGI) has stipulated a fee of U.S$1,500 to register the manufacturing premises and U.S$1,000 to register each individual API. Since January 2003, around 1,200 registration certificates have been issued in India. Large number of Indian registrations is attributed by many to the strategic technology gap in India, as stated above, demand of high-quality API for finished formulations required by the regulated markets like the U.S and EU, and relatively cheaper product registration process.

As we see above Teva has gone for maximum number of Indian registrations, so far and most probably selling the APIs to their contract formulations manufacturers in India. Similarly, Schering-Plough and Sanofi-Aventis, if not Pfizer are perhaps catering to the API demand of their respective formulations manufacturing plants in the country.

Whatever may be the reasons, these global players are now exporting APIs at a much larger scale to India and in that process have started curving out a niche for themselves in the Indian API market. Impressive growth of the domestic pharmaceutical formulations manufacturing market fueled by increasing domestic consumption and exports to the regulated markets, coupled with gradual improvement in the regulatory environment of the country, is expected to drive the growth of API business of the global players.

However, the moot question is how significant will this competition be?

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.