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Would Affordable ‘Modicare’ Remain Just A Pipe Dream In India?

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When ‘Universal Health Care/Coverage (UHC)’, considering a critical socio-economic national responsibility’, has been implemented by the Governments in a large number of countries across the world, why has it still not been effectively addressed by the successive Governments in India, garnering adequate resources, at least, for its phased roll-out in the country?

According to published reports, not just all the developed countries of the world, a good number of developing nations too, including some in Africa, have various kinds of UHC mechanism already in place.

Even within the BRIC countries, India is still a laggard in this area.

Health related major national initiatives of this kind and scale, not only effectively addresses the issue of access to affordable healthcare for all, ensuring high quality of public health environment for a healthy society, but also helps improving economic productivity maintaining a healthy work force.

It goes without saying, UHC helps reducing ‘out of pocket expenses’ towards health, significantly.

OECD Health Statistics 2014: How does India compare?

Total health spending of India with only around 4.0 percent of GDP in 2012 was less than half the OECD average of 9.3 percent.

Public health spending usually tends to rise with the economic growth of a nation. However, despite high GDP growth in the past two decades, India ranks well below the OECD average in terms of per capita health expenditure, with spending of only US$ 157 in 2012 (calculated based on purchasing power parity), compared with an OECD average of US$ 3484.

It is indeed an irony that with highest billionaire wealth concentration, India still tops malnutrition chart in South Asia. (I discussed this subject in my blog post of January 26, 2015.)

Public sector usually becomes the main source of health funding:

In nearly all OECD countries, the public sector is the main source of health funding. However, in India, only 33 percent of health spending was funded by public sources in 2012, a much lower share than the average of 72 percent in OECD countries.

In India, health accounted for only 4.8 percent of total government spending in 2012, significantly lower than the 14.4 percent across OECD countries. Out-of pocket costs accounted for 60 percent of health spending in India in 2012, higher than in any other OECD country.

This trend has not improved much even today.

UHC deserves public funding:

In almost all OECD countries, including many developing nations, as well, UHC remains a key area of public health funding. 

Interestingly, very often UHC is projected as an idealistic social goal that is within reach of only the prosperous countries of the world. This is indeed a myth, as UHC is in place also in countries like, Bangladesh, Sri Lanka and even Rwanda in Africa, besides South-East Asian countries, such as, Japan, South Korea, Taiwan, Thailand, Singapore and China.

The strong relationship between health and economic performance of a country has now been well established globally.

Many case studies covering both the developed and developing nations, clearly point out that a country’s desirable focus on UHC does not just increase the life expectancy of its people, in general, but also facilitates economic growth in a sustainable way, which India is so keenly working towards.

Expectations for UHC received further boost from the new Government:

Just before the Union Budget Proposal 2015-16, in November 2014, national media reported: “ ‘Modicare’ to introduce free medicines, health insurance for citizens”.

It highlighted that in a major health sector reform, the new Government would ensure that every resident in India has access to affordable healthcare with provisions for free essential medicines while bringing over a dozen of diseases, including cancer and heart ailments, under the ambit of the proposed National Health Assurance Mission.

Another pre-budget media report on December 30, 2014, flashed: “The National Health Assurance Mission (NHAM) set to roll, once PM Modi gives go-ahead”.

It articulated, NHAM that has been in the works since 2011 when the erstwhile Planning Commission’s expert group submitted its report on UHC, is likely to take final shape in 2015. PM Narendra Modi is, however, still to see the presentation.

NHP 2015, bolstered hope for early adoption:

On December 31, 2014, when the present Government was in the midst of a series of major policy announcements for the country, The National Health Policy 2015 (Draft) was also released, further bolstering the hope for early adoption of UHC.

I discussed a related issue in my blog post of March 16, 2015 titled, “With Frugal Public Resource Allocation Quo Vadis Healthcare in India?”

Affordable ‘Modicare’ overshadows even ‘Obamacare’?

Universal Health Care (UHC), as narrated in the National Health Policy (NHP) 2015 (NHP 2015 Draft) of Narendra Modi Government, making health a ‘Fundamental Right’ for Indian Citizens, is indeed profound in its both content and intent.

In this article, I would term the new health policy as ‘Modicare’, just as many others did. If implemented in letter and in spirit, as it has been proposed, NHP 2015 has the potential to overshadow even ‘Obamacare’ of the United States…hands down.

A change in the fundamental narrative:

UHC, as detailed in NHP 2015, changes the fundamental narrative of the country’s approach to extend healthcare services to all Indians, irrespective of caste, creed, income level, age or any other pre-determined and conceivable parameters.

However, for this purpose, Modi Government would need to double the public healthcare expenditure from its current level of less than 1 percent to 2.5 of the GDP. It was also indicated that the required fund would be raised by levying healthcare tax to citizens, directly or indirectly.

Government to assume a key role in healthcare:

Currently, private players are playing dominating role with around 70-80 percent share (around US$ 40 Billion) of total healthcare services domain in the country. In other words, public healthcare services cater to no more than 20 percent of the total market, and mostly are of dubious quality standards.

It is interesting to note, NHP 2015 places the Government as the major provider of quality healthcare services for all. However, an individual would have the right to opt for private facilities, of course by paying significantly more.

The business scenario could change dramatically for private sector:

In NHP 2015, the Government becomes the major provider of UHC services. The private sector healthcare players would then probably require going back to the drawing boards to reorganize their business models.

They may well choose to embrace Public Private Partnership (PP) initiatives related to UHC or decide to turn into to niche players in the high-price private healthcare space or something else, as they would deem appropriate. But surely, they would have to take a step or two back from the current dominant role, where there is virtually no competition from the public sector, even in the mass healthcare market.

NHP 2015, underscores the need for affordable drug prices. Thus, the private players could also face tough pricing pressure, as well, while negotiating for large Government procurement.

Both the above issues, when put together and in perspective, would probably not make the private healthcare players terribly enthused or feel at ease. In that scenario, the Government has its task well cut out, mainly for navigating through tough resistance coming from both the national and international lobby groups, in the process of implementation of ‘Modicare’ in India, of course, if it fructifies any time soon or at all.

No control on quality even in private healthcare services:

In India, besides medicines, there is no quality control on any healthcare services, be it public or private.

As public healthcare services are hardly available to a vast majority of Indian population, common people remain virtually at the mercy of pricing diktats of the private healthcare providers, while availing the same. They usually do not have any inkling for high cost of such services, which generally follow the simple ‘demand and supply’ market economy model.

With the implementation of NHP 2015, the Government being the single largest buyer and provider of both healthcare products and services, would presumably negotiate hard both on quality and prices with the respective suppliers, benefitting the patients immensely.

Moreover, since Indian citizens would be paying for healthcare on an ongoing basis through direct and indirect taxes, NHP 2015 proposes free medicines and diagnostics facilities to all, as and when UHC would roll out.

Quietly comes the dampener:

When the Union Budget 2015-16 raised the national allocation for health only by 2 percent over the previous year, it literally extinguished the hope for healthcare reform in India, any time soon, even in a phased manner.

Central budgetary allocation for this initiative is very important, as UHC has been planned to be funded both by the Union and State Governments in 75:25 ratio.

In this intriguing phase, Reuters came out with the ‘Breaking News’.

On March 27, 2015, it reported, though the health ministry developed NHP 2015 on UHC in coordination with the prime minister’s office last year, along with an expert panel, including an expert from the World Bank, Prime Minister Narendra Modi has asked for a drastic cutback of the ambitious healthcare plan after cost estimates came in at US$18.5 billion over five years. Consequently, this would delay a promise on healthcare made in his well-publicized election manifesto, indefinitely.

Prime minister Modi’s manifesto, ahead of 2014 parliamentary election that brought him to power, accorded “high priority” to the health sector and promised a ‘Universal Health Assurance’ plan. The manifesto also said, previous public health schemes that have been mired in payment delays, had failed to meet the growing healthcare needs of the public, the above report highlighted.

Initially, the new Union Health Ministry reportedly proposed rolling out the system from April 2015, and in October 2014 projected its cost as US$25.5 billion over four years.

By the time the project was presented to Modi in January 2015, the costs were already brought down to US$18.5 billion over five years. Even that revised estimate was considered too much and the program was not approved by the Prime Minister, without assigning any timeframe even for a relook.

The delay in ‘Modicare’ is intriguing:

Inordinate delay in the commencement of implementation process of ‘Modicare’ or UHC in India is rather intriguing, primarily due to the following two basic reasons, besides some others:

- NHP 2015 proposes to fund the scheme through indirect and direct taxation on people, who would be covered by this new health policy.

- Experts, such as, Nobel Laureate Dr. Amartya Sen, in scholarly writings, have established with strong evidences, both from the developed and developing nations, that the national focus on UHC goes well beyond just increase in the life expectancy of the population. Besides many other tangible benefits, UHC helps facilitate sustainable economic growth of a nation significantly, which India is now so keenly working on.

Conclusion:

Over the past couple of decades, despite impressive GDP growth of the country, successive Governments in India have not shown desirable inclination to invest in a comprehensive public healthcare project, like UHC.

As a result, the nation still suffers from public health maladies, such as, grossly inadequate number of doctors, nurses, other paramedics, number of hospital beds and other related infrastructure to cater to even the basic healthcare needs of all Indians.

Ironically, at the same time, either the government fails to spend the paltry budgeted amount because of poor governance, or even that small amount faces a year end drastic budgetary cut from the Ministry of Finance to manage the fiscal deficit target of the year, as happened even in 2014-15.

Considering the series of events that followed the announcement of the draft NHP 2015, it appears, the prospects for affordable ‘Modicare’ in India is rather bleak, as it stands today.

There is also a possibility that in the implementation process of ‘Modicare’ the Government may encounter tough resistance from interested lobby groups, purely for business considerations, as deliberated above.

The real reason for delay of ‘Modicare’ has not come from the horse’s mouth, just yet. Nonetheless, it is certainly one of those much hyped and publicized public promises of the Government that remained unfulfilled, at least in the financial year of 2015-16.

Although one should not try to see ghosts where there isn’t any, the moot question that still keeps haunting today: ‘Would much publicized and well sought-after ‘Modicare’ continue to remain just a ‘Pipe Dream’ in India?’

By: Tapan J. Ray

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

 

Quantum Value Addition With Health Apps, Going Beyond Drugs

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Besides all important brand attributes and how well those are communicated to the doctors, the ‘game winning’ differentiating factors in the prescription drug business, as it appears today, would revolve around overall quality of patient-centric approach and offerings of pharma companies, craftily tagged with the associated products.

To hasten business growth, being more and more patient-centric, in increasingly competitive, demanding and complex environment, pharma players would require to leverage the cutting-edge technology to its fullest for significant value addition in their respective sales and marketing models too.

Keeping pace with today’s ‘technology revolution’, rapid advent of various game-changing and user-friendly digital health applications for consumers are showing immense potential for a refreshing catalytic change in the overall landscape for patient-centric healthcare services as a key differentiating tool from the pharma players’ perspective.

The capability and capacity of ‘out of box’ thinking, professional expertise to choose and customize the right technological tools, making them key components of pharma sales and marketing models and above all, their effective implementation on the ground, would eventually differentiate men from the boys in the ball game of competitive excellence in the Indian pharma industry.

This emerging opportunity brings to the fore immense potential to revolutionize the treatment process of many serious chronic ailments with significant value creation, even in India, generating a unique synergy between the drugs and customized disease related digital tools.

In this evolving ball game; wearable, decent looking and user-friendly ‘Health Apps’, installable in smartphones having Internet and Bluetooth connectivity along with touch screens; signal a great potential for augmentation of the overall disease treatment process.

Consequently, it would kick-start a healthy competition within the pharma companies to continuously raising the bar of unique value offerings to patients, more than ever before.

A close experience:

Purely prompted by my keen interest in technology for a long while,the ‘Health App’ that I have bought and installed in my iPhone and wearing for sometime, is basically a multifunctional and multi-dimensional fitness tracker.

From the decent looking digital ‘Wrist Band’ that comes with it, the Health App tracks on a daily basis, kilometers that I have walked (from pre-calibrated steps), calories that I have consumed with intake of different food types and burnt up through physical workouts, total duration of time that I have slept in a day, quality of my sleep (sound and light sleep) with duration, number of times that I woke up at night, precise daily intake with quantity of nutrition, such as, fluid, carbohydrate, protein, fiber, different types of fat, salt etc., pulse rate, breathing and mood, besides many others.

Current users:

Besides some global pharma companies that I shall deliberate below, the current users of ‘Health Apps’ are mostly those people who are increasingly becoming fitness and diet conscious (at any age) and also want to take proactive measures for prevention of many chronic ailments.

A study:

According to a report co-authored by an official of IMS Institute of Healthcare Informatics, a study based on nearly 43,700 purported Health or Medical Apps available on Apple’s iTunes App Store, found that 69 percent of those Apps targeted the consumers and patients, while 31 percent were built for use by clinicians. Most of the ‘Consumer Healthcare Apps’ were simple in design and do little more than provide information.

The study observes, a large number of Health Apps are being designed to track simpler data on health and fitness. However, the more sophisticated Apps are capable to perform advanced functions, such as, real-time monitoring and high-resolution imaging.

Possibility for much wider use in healthcare:

Although, many of these Apps have been devised as personal fitness and health trackers directly by the consumers, the information and hard data thus captured can possibly be shared with the medical practitioners by the patients, as and when required. This data could serve as valuable patient life-style information inputs for the doctors, while managing their serious chronic illnesses.

Health Apps could also help the users reduce, at least, the primary care costs through preventive self-monitoring measures and take control of their own basic health.

In tandem, I reckon, there is a good possibility for a much wider use of such Health Apps in India by the pharma companies, along with many drugs, especially those, which are used for chronic ailments.

For example, real-time data tracking on:

-Exercise, diet and Body Mass Index (BMI) for patients on anti-diabetic and anti-hypertensive drugs

- Quality of sleep for patients with sleep disorders and are on related medicines

- Mood for patients taking anti-depressant medications

The data captured by the Health Apps in all such related areas could be useful for both the doctors and the patients in the process of effective disease management along with the drugs. 

Going beyond drugs:

Based on this emerging trend, it is envisaged that in not too distant future, it won’t be very uncommon for patients, suffering from especially serious chronic diseases, to get prescriptions for both the drug and an the related customized Health App, for better quality of life through effective disease control.

Similarly, some hospital discharge orders may possibly include downloading of related mobile Health App on patients’ smartphones, primarily to provide an ongoing link between the doctor and the patient for better patient care and more effective follow-up visits.

Pharma players showing interest in Health App market:

It is, therefore, no surprise that pharma players have started showing keen interest in Health App market. In fact, this emerging market is now dominated by the big pharma players, with Bayer having 11.2 percent market share, followed closely by Merck, Novartis, Pfizer, and Boehringer Ingelheim.

The top 20 Health App makers are as follows:

No Company No. Of Health Apps
1. Bayer 139
2. Merck 111
3. Novartis 108
4. Pfizer 62
5. Boehringer Ingelheim 51
6. Janssen 45
7. AstraZeneca 44
8. GlaxoSmithKline (GSK) 41
9. Roche 41
10. Johnson &Johnson (J&J) 39
11. Novo Nordisk 32
12. Siemens 29
13. Amgen 28
14. Medtronic 27
15. Abbott 24
16. Biogen Idec 20
17. Merial 20
18. Sanofi 20
19. Genentech 19
20. Allergan 17

(Source: Pocket.md as of 12/2/2013) 

A novel business expansion opportunity:

Pharma players in India may consider to actively focus on, with requisite resource deployment, to collaboratively develop and market smartphones based digital Health Apps, for quantum value addition in their brand promotion.

Moving towards this direction, pharma sales and marketing strategy for a chronic disease treatment should consider making Health Apps an integral part of doctors’ prescription along with the related drugs of the company.

Some examples:

To give an idea of the evolving trend, I am citing below a few examples, out of lot many, in this emerging area:

- Betaseron (interferon beta-1b) of Bayer: This drug is indicated for the treatment of relapsing forms of multiple sclerosis to reduce the frequency of clinical exacerbations. The company launched its first iPhone App, named ‘myBETAapp’ with ‘Personalized Tools’ to assist people on Betaseron (interferon beta-1b) in managing their Multiple Sclerosis (MS) treatment.

myBETAapp provides patients with injection reminders, injection site rotation assistance and injection history.  Through Internet, myBETAapp also gives patients access to the BETAPLUS Web page on Betaseron.com, including links to educational tools, peer support and contacts listed on the site.  With active phone service, patients enrolled in the BETAPLUS program can dial directly to speak to BETA Nurses, who are specially trained in MS.

- Tobi Podhaler (tobramycin inhalation powder) of Novartis: This drug is indicated for the treatment of Cystic Fibrosis.

Podhaler Pro App is an iPhone based navigation tool for patients and also the doctors during treatment with Tobi Podhaler. This Health App is a customizable digital pocket companion that helps, besides many others, with timely reminders to keep track of treatments, real patient stories and access to a live PodCare nurse to answer questions about taking treatment.

- Pradaxa (dabigatran etexilate)of Boehringer Ingelheim: This drug is indicated for ‘Reduction of Risk of Stroke and Systemic Embolism in Non-Valvular Atrial Fibrillation; Treatment of Deep Venous Thrombosis and Pulmonary Embolism and Reduction in the Risk of Recurrence of Deep Venous Thrombosis and Pulmonary Embolism’. It comes with a Health App, available in online ‘Apple Stores’. This is a tool providing healthcare professionals with information about stroke risk in Von-valvular Atrial Fibrillation.

Pradaxa Health App contains a ‘Stroke Risk Calculator’, ‘Bleeding Risk Calculator’, Renal function and dosing and administration information.

Pradaxa Health App also has a great resource section, split into ‘Patient and Health Care Professionals’ sections, which can be sent to patients via email.

- Xarelto (rivaroxaban) of Janssen Pharmaceuticals: This drug is indicated for ‘Reducing Stroke Risk in Patients With Non-valvular Atrial Fibrillation (AF); Treating Deep Vein Thrombosis (DVT) and Pulmonary Embolism (PE) and Reducing the Risk of Recurrence; DVT Prophylaxis After Knee or Hip Replacement Surgery’. It  also comes with a Health App, called Xarelto Patient Center and available in online ‘Apple Stores’.

Xarelto Patient Center App features include, personalize questions that help patients speak with their doctors about treatment with Xarelto, Appointment reminder, Xarelto ‘Savings Programs’, Registration to receive more information, Videos that share more information on Xarelto and hear from others who have been treated with the drug, After receiving a prescription the patient can enroll in the ‘XARELTO CarePath’ patient support and savings program.

Thus, especially for high-risk ailments, such iOS Apps directed at patients with information on the drug, including interactions with other medicines, dietary requirements, fitness/health trackers, besides many others, can add additional value both to the prescribers and the patients in the process of effective disease management.

Tightening the loose knots:

A 2014 report titled, ‘r2g mobile Health Economics’ by ‘Research2Guidance’ states, even though they try hard, most of the pharma companies fail to have a significant impact on the mHealth App market. Some pharma companies have published more than 100 Apps available for iOS and Android, but have generated only limited downloads and usage.

It states, pharma companies have created only little reach within the smartphone/tablet App user base. In fact, the leading pharma companies have been able to generate 6.6m downloads since 2008 and have less than 1m active users.

Analysis and comparison of the App activities of the top 12 Pharma companies in the report, gives reasons why pharma companies have not succeeded in becoming leading mHealth Apps providers, as follows:

- The App portfolios are not globally available:  Almost half of the pharma companies’ Apps target only local markets. This means that their apps are available only in 3 or less countries.

- The App portfolio is built around the core products of the pharma companies and not around the actual market demand:  For example, if a company specializes in the treatment of hematological diseases, the App portfolio reflects that. Apps in this case would provide references to the latest research, support diagnosis and facilitate information exchange with/between the experts. There exists an App market for such products, but there are other segments e.g. health tracking, weight loss, fitness or diabetes condition management, which attract more users.

- No cross-referencing or common and recognizable design:  So far, pharma companies have not used the full potential of cross-referencing between their Apps. They also do not use common style guides for their App portfolio. Both of these could improve their App visibility as well as strengthen their corporate identity in the App market.

From this research analysis, it is quite evident that there is a need to tighten the loose knots in the Health Apps space by the pharma players. All improvement areas, as indicated above, should be addressed, sooner, especially, the need to targeting patients globally and inclusion of segments such as health/fitness tracking, weight loss, together with patient management focus areas of chronic illness conditions, such as, diabetes or hypertension, which have been attracting more users.

A comprehensive look and well thought-out action would help realizing true potential of the Health Apps market in India.

Conclusion:

Based on the emerging trend, it appears, those days are not quite far off, when it will become quite common for the doctors and also for the hospitals to co-prescribe with the drugs, user-friendly, disease related smartphone based Health Apps for the patients. This practice would provide an ongoing link between the doctors and the patient, leading to not just better quality of treatment, but a comprehensive overall healthcare in that specific disease condition.

However, currently there does exist a down side to this approach, which can’t be totally ignored either. The reason being, such Health Apps are not quite affordable to many, just yet, especially in a country like India. This affordability barrier could probably be overcome, if Indian IT software and hardware development companies consider this area lucrative from an emerging business opportunity perspective, as the country moves on with its ‘Make in India’ campaign.

If it makes sense…probably it does, it needs to be tried out sooner, in a much larger scale, for a win-win outcome.  To begin with, the interested pharma players can tailor these well differentiated value offerings, at least to suit those, who can afford such augmented treatment process for a better quality of life, going much beyond drugs.

By: Tapan J. Ray

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

 

Pharma Sales Communication: Would ‘Cafeteria Approach’ Be More Productive Today?

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For sales communication, quality of access of pharma Medical Representatives (MRs) to many important and busy doctors has been steadily declining over the past several years, all over the world, and India is no exception.

This is mainly because the number of patients coming to these busy practitioners is fast increasing and the doctors are trying to see all these patients within the same limited time that was available to them in even earlier days. In tandem, their other obligations of various kinds, personal or otherwise, are also overcrowding the same highly squeezed time space.

In a situation like this, increasing number of MRs, which has almost doubled in the past decade, is now fiercely competing with each other to get a share of lesser and lesser available time of the busy doctors.

Added to this, a gross mismatch between the inflow of doctors with similar prescription potential and ever increasing inflow of patients, is making the situation even worse.

According to a study done by CMI Communication Media Research, about half of physicians restrict visits from MRs in one-way or another.

Thus the critical question that needs to be answered now, from purely pharma sales and marketing perspective is:

How to make sales communication effective to such busy medical practitioners in this extremely challenging scenario?

Pharma players are trying to respond:

This pressing issue has prompted many pharma companies, across the globe, to reevaluate their traditional sales communication models, which are becoming increasingly expensive as a result of diminishing commensurate returns from the MR calls.

Some drug companies have also introduced interesting digital interventions, though within the same traditional pharma sales communication process, to add speed and novelty, especially in sales administration and its execution processes.

Experimentations are visible even in India:

In India too, pharma companies are trying with several different approaches, in various combinations to make the prescription generation process through sales communication more productive.

Some pharma players also tried to push up the overall sales productivity through additional rural market coverage. In this regard, a 2012 report of ‘IMS Consulting’ states, acknowledging the seriousness around rural consumers, many drug companies in India are now expanding their sales operation to Tier IV cities and below. Quite a few of them even succeeded in their endeavor to create profitable business models around the hinterland and rural geographies.

These pharma players believe that extra-urban geographies require different approaches, though with the same traditional sales communication models. These approaches include, different product portfolio, distribution-mix, pricing/packaging and promotional tools, considering majority of the doctors are not as busy as their counterparts in the metro cities and large towns.

Initial strategic changes:

The above ‘IMS Consulting’ paper also highlights a few of the initial changes in the following lines:

  • Business Unit Structure (SBU): To bring more accountability, manage evolving business needs and use equity of organization for reaching to the middle of the accessible pyramid.
  • Therapy Focus Promotion: Generally seen where a portfolio is specialized, therapy focused, and scripts are driven through chosen few doctors; generally in chronic segment.
  • Channel Management: Mostly adopted in OTC /OTX business; mature products with wider portfolio width.
  • Hospital Task Force: Exclusively to manage hospital business.
  • Specialty Driven Sales Model: Applicable in scenarios where portfolio is built around 2 or 3 specialties.
  • Task Force: Generally adopted for niche products in urban areas, such as fertility clinics or for new launches where the focus is on select top rung physicians only.
  • Out-Sourced Sales Force: Generally used for expansion in extra-urban geographies or with companies for whom medico marketing is secondary (such as OTC or Consumer Healthcare companies).

Pharma MNCs took greater strides:

In addition, to increase sales revenue further, many innovator pharma MNCs engaged themselves in co-promotion of their patented products, besides out-licensing. A few of them pushed further ahead by adopting newer innovative promotional models like Patient Activation Teams, Therapy Specialists, or creating patient awareness through mass media.

Brand value augmentation offering a mix of tangibles and intangibles:

Realizing quickly that patients are increasingly becoming strong stakeholders in the business, some of the pharma MNCs also started engaging the customers by extending disease management services to patients administering their products.

This is indeed a clever way of augmenting the brand perception, through a mix of well-differentiated tangible and intangible product related value offerings.

These pharma MNCs engage even the patients by providing a basket of services at their home. Typical services include:

  • Counseling
  • Starter kits
  • Diagnostic tests
  • Medical insurance
  • Personalized visits
  • Exercising equipment
  • Emergency help
  • Physiotherapy sessions
  • Call centers for chronic disease management

Related doctors are reported about the status of the patients and the patients do not require paying anything extra for availing these services from the MNC pharma companies.

Despite all these, declining productivity of the traditional pharma sales communication models continue, predominantly from the extremely busy and very high value medical practitioners/experts/specialists, as mentioned above.

Communication preferences of busy doctors need to be factored-in:

From the above facts, it appears that pharma sales communication is usually tailored to focus on customer/market types and characteristics, rather than emerging unique customer preferences towards medium of sales communication and also differentiated message requirements for specific brands.

Should status quo be maintained?

Probably not, as many still believe that MR’s quality of access to doctors for productive sales communication would continue to remain a critical issue and become increasingly complex.

Even in this changing scenario, pharma companies, by and large, have kept the basic communication medium and traditional process of messaging unchanged, except some digital tweaking here or there. Some of these innovative means and user-friendly digital interfaces, at times, may attract quality attention to sales communication for top of mind brand recall by the doctors.

Is it enough? Again, probably not, as there is an urgent need to exploring various other medium and new ways of delivering strong and effective tailor-made brand messages, based on hard data of painstaking research.

e-marketing started taking roots, though in bits and pieces:

In 2013, facing this challenge of change, Pfizer reportedly started using digital drug representatives to market medicines, leaving the decision in doctors’ hands as to whether they would want to see them.

Prior to that, in 2011, a paper published in the WSJ titled, “Drug Makers Replace Reps With Digital Tools” stated that pharmaceutical companies in the United States are downsizing their sales force with increasing usage of iPad applications and other digital tools for interacting with doctors.

Lot many other fascinating experimentations with pharma e-marketing have now commenced in several places of the world, many with considerable initial success.

However, most of these efforts seem to be swinging from one end of ‘face-to-face’ sales communication with doctors, to the other end of ‘cyber space driven’ need-based product value sharing with customers through digital toolkits.

Two key questions:

All these experimentations and developments with various pharma sales communication models would probably prompt the following two key questions:

  • Whether or not traditional sales approach would continue to be as relevant as opposed to digitally customized sales applications?
  • Whether or not MRs would continue to remain as relevant in all areas of pharma prescription generation process, in the years ahead?

Not an ‘Either/Or’ situation:

According to AffinityMonitor™ 2014 Research Report, pharmaceutical and biotech companies have today at their disposal more than a dozen of promotional channels to include in their strategy, including traditional methods, like detailing and speaker programs, and digital ones, including email, microsites and videos.

The report states, every doctor engages with these channels in his or her own unique manner. Some physicians want to interact with MRs; others restrict MR details and instead get information from their peers. One doctor might regularly use a mobile application for product information, often during a patient consultation. Conversely, another physician, who might work in the same practice, would rarely wish to surf the Web for information. And some doctors simply won’t engage with any sales communication no matter what the channels are.

Thus, ‘one size fits all’ type of sales communication, delivered even by the best of MRs, is not likely to be productive in the changing macro environment.

Many facets of communication preferences:

Today, there are many facets of doctors’ choices and preferences to brand value communication medium.

As AffinityMonitor 2014 Research Report states, based on the availability of time and interest, each doctor engages with these channels in his or her own unique manner. For example, some doctors may want to interact with the MRs, while some others may restrict MR’s product details. A few others may prefer getting information from their peers, instead

Since doctors’ engagement with pharma brands is critical for the drug companies, it has now become absolutely imperative for them to know individual affinities of the doctors in this regard, or what channels and processes each physician would typically prefer to get engaged with a brand, directly or indirectly.

Pharma companies should, therefore, gather this particular information doctor-wise, to customize both the medium and the message for effective brand value communication, accordingly.

A shift to ‘Cafeteria Approach’:

Taking all the above research inputs into consideration, it appears, when many busy physicians’ doors appear closed to traditional pharma sales communication, drug companies should have the keys to unlock them with ‘Cafeteria Approach’ of sales communication, purely based on customer research. This approach would offer the ‘difficult to meet doctors’ a variety of choices regarding both the medium and also the message, that would best suit their temperaments, needs, time and interests, as discussed above.

It is important to repeat, to ensure productive outcome of the ‘Cafeteria Approach’, customized sales communication strategy for each important and otherwise busy doctor should purely be based on contemporary customer research.

Sales force remains the top channel out of several others:

According to AffinityMonitor Research Study, though MR’s quality access to busy doctors has declined steadily over the past decade, the sales force still remains the top channel for physician engagement, closely followed by ‘Digital’ ones.

Overall, around 47 percent of all Health-Care Providers (HCPs) consider ‘face-to-face’ promotion as one of the top three channels, which includes about 80,000 physicians, who favor the sales force as their second or third-strongest channel.

Of the 514,000 HCPs examined in AffinityMonitor Research Study, 162,000 show the strong affinity for ‘face-to-face’ promotion, 118,000 for digital push and 65,000 for digital pull or personal remote channels.

Increasing just ‘Sales Force Effectiveness’ not enough:

Thus, generally speaking, even the best of global sales force excellence programs could at best increase the MR productivity primarily for these 47 percent of doctors.

Brand sales communication reach and effectiveness to a large number of rests of the doctors would, therefore, call for innovative thinking and willingness to chart the uncharted frontiers.

Conclusion:

The decline in pharmaceutical MR’s quality of access to physicians for sales communication is now well documented. For example, in 2008, 23 percent of US doctors had restrictions on MRs, but that number rose to 49 percent in 2014, according to AffinityMonitor Research Study.

Therefore, the knowledge of whether a doctor would like to engage with traditional sales communication method by seeing a MR, or would just prefer to get his/her required information through any digital medium, is critical for success in the new ball game of generating increasing number prescriptions for any pharma brand.

Majority of the doctors’ choices would, in all probability, involve MRs, while a notable number of other choices may probably be independent of MRs.

In any case, that’s not going to be the main issue, as MRs are not going to disappear – not in any foreseeable future and would continue to remain a critical part of the overall pharmaceutical selling process, all over the world.

However, closely following the emerging trend, I reckon, ‘Cafeteria Approach’ is worth considering for effective customized brand communication, ensuring productive sales outcome.

By: Tapan J. Ray

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

 

 

With Frugal Public Resource Allocation Quo Vadis Healthcare in India?

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The memory is still afresh in India. A new political dispensation took charge of the governance of the country, riding on the tidal waves of people’s hope and aspirations, with presumed credibility to ‘Walk the Talk’. The expectations were skyrocketing for a change…better days for all, sooner. This covered the public healthcare space, as well.

Responding to such genuine public expectations, when in May 2014, the then new Union Health Minister Dr. Harsh Vardhan reportedly announced that his ministry would soon start working on distribution of free medicines through public hospitals across the country, a hope for a long-awaited healthcare reform in India, sooner, was rekindled.

This happened despite the fact that similar promises were made by the immediate past Government too.

The Cost and the Span:

The erstwhile Planning Commission of India had estimated that a countrywide free generic drug program would cost Rs 28,560 Crore (roughly around US$ 5 Billion) during the 12th Five-Year Plan period. The Centre will bear 75 percent of the cost while the states would provide the rest.

Under the previous government plan, 348 drugs enlisted in the National List of Essential Medicines 2011 (NLEM 2011) were to be provided free at 160,000 sub-centers, 23,000 Primary Health Centers, 5,000 community health centers and 640 district hospitals of the country.

Previous action:

Late 2012, the previous Union Government made its first move in this regard by formally clearing Rs. 13,000 Crore  (around US$ 2.2 billion) towards providing free medicines for all through government hospitals and health centers.

To facilitate the process, in November 2013, the then Union Health Ministry by a notification reportedly made the public drug procurement system in the country through ‘Central Medical Services Society (CMSS)’ formally operational. For different flagship program of the Government such as, National Health Mission, the drug procurement was planned through the CMSS.

The notification said:

The CMSS will be responsible for procuring health sector goods in a transparent and cost-effective manner and distributing them to the States/UTs by setting up an IT enabled supply chain infrastructure including warehouses in 50 locations.

Unfortunately, due to resource constraint of the previous Union Government, the program of distribution of free medicines for all through public hospitals across the country could not be translated into reality.

The fresh hope scaled greater heights:

In the first Union Budget Proposal (2014-15) of the new Government, some high impact healthcare areas were addressed as follows:

A. Access improvement:

- “Health for All”: Free drugs and diagnostic services for all would help improving ‘Access’ to healthcare by manifold.

- Universal access to early quality diagnosis and treatment to TB patients would again help millions.

- Deeper penetration of health insurance and its innovative usage would also help a significant number of populations of the country having adequate ‘Access’ to healthcare.

B. Affordability:

- HIV AIDS drugs and diagnostic kits were made cheaper through duty rationalization.

- “Health for All” – Again, free drugs and diagnostic services for all would help answering the issue of ‘Affordability’, as well.

C. Capacity building:

- Two National Institutes of Aging (NIA) at AIIMS, New Delhi, and Madras Medical College, Chennai to come up.

- Four more AIIMS-like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Purvanchal in UP, for which Rs 500 Crores were set aside.

- Additional 58 government medical colleges, including 12 colleges where dental facilities, were also proposed.

- The fund for 15 Model Rural Health Research Centers (MHRCs) in states for better healthcare facilities in rural India was provided.

- Central assistance to strengthen the States’ Drug Regulatory and Food Regulatory Systems by creating new drug testing laboratories and strengthening the 31 existing state laboratories was announced.

D. Innovation:

- Cluster-led biotech development was announced.

E. Ease of doing business:

- Number of common pan-industry initiatives enlisted in the Union Budget 2014-15 proposals, would improve overall ‘Ease of Doing Business’ in the healthcare sector too.

A concern remained…even at that time:

Despite all these, there was a concern. In the Union Budget proposals 2014-15, the health sector attracted a total outlay of Rs 35, 163 Crore, which was a very low increase from the previous year’s Rs 33, 278 Crore. I wondered at that time also, whether this increase would be sufficient enough to meet all healthcare commitments, as it does not even take inflation into account.

Draft ‘National Health Policy’ further boosted the expectations:

In the midst of growing expectations for healthcare reform in India, the Union Ministry of Health and Family Welfare through its draft National Health Policy, 2015 (NHP 2015) proposed making health a fundamental right.

The draft policy reiterates, “Many industrialized nations have laws that do so. Many of the developing nations that have made significant progress towards universal health coverage, such as Brazil and Thailand, have done so, and … such a law is a major contributory factor. A number of international covenants to which we [India] are joint signatories give us such a mandate – and this could be used to make a national law. Courts have also rulings that, in effect, see healthcare as a fundamental right — and a constitutional obligation flowing out of the right to life.”

The draft NHP 2015 even states, “The Centre shall enact, after due discussion and on the request of three or more states a National Health Rights Act, which will ensure health as a fundamental right, whose denial will be justiciable.”

The new draft policy acknowledges that primary healthcare of date covers not more than 20 per cent of the health needs and that a very high ‘Out of Pocket’ health expenditure (over 61 percent for of that is on medicines) is pushing nearly 63 million people into poverty every year.

One of the key features of the draft NHP 2015 is a universal medical insurance scheme that will be virtually free for the poor and affordable for the rest.

To translate all these good intents into reality, speedy implementation of a robust healthcare reform roadmap, backed by adequate budgetary support, is critical. Only such well coordinated and comprehensive action plan, when effectively put in place, would be able to send strong signals to the stakeholders about the seriousness of the Government to fulfill its much-hyped promises and obligations towards healthcare reform in India.

Required budgetary allocation:

The 12th Fiver Year Plan of the erstwhile Government of India, the fate of which is still not clearly known, acknowledged that the health sector expenditure by the central and state governments, both plan and non-plan will have to be substantially increased during the plan period. It also stated that the health expenditure was increased from 0.94 per cent of GDP in the 10th Plan to 1.04 per cent in 11th Plan and it should be increased to 2.5 per cent of GDP by the end of 12th Five Year Plan period.

That said, the bottom-line is, the current public spending on healthcare (excluding water and sanitation) is stagnating around 0.9 percent of the GDP.

Instead of increase, a steep cut in health budget of 2014-15:

Despite prevailing lackluster public healthcare scenario, in December 2014, just prior to the proposal of Union Budget 2015-16, the new Government reportedly ordered more than Rs 6,000 Crore or US$948 million cut (20 percent) from its own budget allocation of around US $5 billion for the financial year ending March 31, 2015, due to fiscal constraints.

The finance ministry reportedly also ordered a spending cut this year (2014-15) for India’s HIV/AIDS program by about 30 percent to US$ 205.4 million.

A report from Reuters, quoting one of the health ministry officials, stated that this budget cut could crimp efforts to control the spread of diseases. More newborns die in India than in poorer neighbors such as Bangladesh, and preventable illnesses such as diarrhea kill more than a million children every year.

India’s public healthcare expenditure one of the world’s lowest:

It is worth mentioning that at around 0.9 percent of GDP, India’s public health expenditure is already among the lowest in the world, as compared to 2.7 percent in China, 4.2 percent in Brazil, 1.4 percent in Bangladesh, 1.6 percent in Sri Lanka, 2.9 percent in Thailand and 8.5 percent in the United States.

It is noteworthy that the public sector is the main source of health funding in nearly all OECD countries. However, in India, only 33 percent of health spending was funded by public sources in 2012, a much lower share than the average of 72 percent in OECD countries.

Moreover, health accounted for only 4.8 percent of total government spending in 2012, significantly lower than the 14.4 percent across OECD countries.

Similarly, ‘Out-of Pocket’ costs accounted for over 60 percent of health spending in India in 2012, higher than in any other OECD country.

Are the successive Governments ignoring healthcare in India:

Despite such worrisome scenario in the healthcare space, India’s healthcare budget has already witnessed a 29 percent decline over the past year, from Rs. 29,165 Crore in 2013-14 to Rs 20,431.4 Crore (post cut) in 2014-15.

This assumes even greater significance, when India, contributing 21 percent of the global disease burden, accounts for just a fraction of global spending on health.

The hope flickers:

As stated earlier, to meet its fiscal deficit target the Government has slashed the health budget by 20 percent for 2014-15.

Despite the above huge budgetary cut, the hope of the stakeholders continued to flicker, expecting some major announcement on healthcare related financial allocation in the Union Budget of 2015-16. The stakeholders expected, at least this time the new Government would ‘Walk the Talk’ to fulfill its own promises, made thus far, on healthcare.

Very surprisingly, even from the reform oriented new Government, the Union Budget 2015-16 came as a dampener for the healthcare space in the country. The budgetary allocation for healthcare has been proposed as Rs. 33,152 Crore, a tad more than Rs. 30,645 Crore of 2014-15, with no visible indication for any healthcare reform measure in the country, any time soon, adequately backed by commensurate budgetary allocation.

It is worth noting that in the first three years of the 12th Five-Year Plan, the total health spend has been round Rs 70,000 Crore. This is significantly less than Rs. 2,68,000 Crore allocated for 2012-17 period.

‘Health’ is a State subject:

In his Union Budget speech of 2015-16 , the Finance Minister has articulated clearly that health being a State subject, individual States would require to take appropriate measures in the healthcare area, especially after substantial devolution of resources to the States by the 14th Finance Commission.

That said, a well-coordinated national action plan for healthcare, championed by the Union Ministry of Health, is equally important. This would also require appropriate budgetary resource deployment at the center.

Conclusion:

As we have all witnessed, in the healthcare domain of India, various good intents have been announced with appropriate media attention in the recent months, as was done by the previous Government earlier. However, none of these seemingly ‘off the cuff’ announcements is supported by any clear strategic road map with clearly earmarked budgetary allocations. On the contrary, some retrograde steps have already been taken in this area, as mentioned above.

While the draft NHP 2015, emphasizing the need of its effective implementation, strongly encourages a framework that will “specify approved financial allocations and linked to this, measurable numerical output targets and time schedules”, there is no mention of it even on a long-term budgetary allocation perspective in the Finance Minister’s budget speech, not even the program on ‘free medicines’ and the National Health Assurance Mission, which the prime minister is expected to launch in April 2015.

All these assume high significance, as a quantum leap in budgetary allocation for health would be warranted in the years ahead to fulfill the promises that have been already made for healthcare reform in India.

With this backdrop, while looking through the kaleidoscope of Government slogans on development in various spheres of national interest, including individual life, society and business, I still find hope around, painted craftily with different hues and colors, albeit faded though.

In the midst of this ongoing semi mass euphoria, as it were, possibly due to long-awaited change in governance of the country, none seems to still bother too much on the healthcare needs of the common man, far from creating through an informed discourse a ground swell for public healthcare reform process in India, soonest.

As things stand today, I wonder, with continuing frugal public resource deployment, and that too for such a long time, ‘Quo Vadis’ healthcare in India?

By: Tapan J. Ray

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

 

Would “Digital Health Equity” Augment Healthcare For All in India?

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A June 2014 report titled “Digital Health Equity: Humanizing e-Health” published by ‘ZeroDivide’, which helps transform communities through technology in the United States, highlighted that the digital revolution of daily life has significantly impacted healthcare in many parts of the world.

As a result, the relationship between the consumers and healthcare providers has just begun to change significantly, though in bits and pieces at present. Wherever it is happening, the consumers expect to get highly engaged in managing their own health, primarily using online and mobile tools and other devices.

“Digital Health”/ “e-Health” to ensure equity in healthcare:

Advancement in e-Health is currently restricted mainly to economically and socially privileged populations. Those with the access, resources and basic digital skills are reaping disproportionate benefits from the technology and other associated infrastructure available for this purpose.

Unfortunately, underserved population, mostly in rural hinterland and some in urban areas still do not have much access to this technical advancement in the healthcare space.

Ensuring “Digital Health” in the new age digital India, would help augmenting quality healthcare support with equity to all in the country.

A beginning has been made:

It is good to note that key stakeholders in health related areas both in public and private sectors are now exploring the ways in which the Internet, digital devices and other related applications can improve patient care, reduce the cost of care and improve overall population health.

Central and State Governments, policymakers, technologists and health insurance providers are eager to connect underserved consumers to online health services and other e-Health applications. Regrettably, few digital tools have been designed with these consumer populations in mind, to date. The nascent field of e-Health research has thus far poorly characterized the impact of race, ethnicity, gender and socioeconomic status on e-Health adoption and use.

General barriers to e-Health:

The previous policy paper of ‘ZeroDivide’ titled, “e-Health and Underserved Populations,” identified 8 barriers, though in the US perspective, that underserved communities face in accessing and utilizing e-Health tools. These are as follows:

• Lack of health literacy

• Lack of linguistic and cultural competency in e-Health

• Access limitations for people with disabilities

• Privacy concerns and distrust in the health system

• Lack of digital literacy

• Limited or no access to broadband and mobile data

• Limited or no access to technology platforms and interoperability

• Lack of awareness of e-Health

Very surprisingly even today all these 8 barriers are very relevant to India, as well.

A key concern:

‘ZeroDivide’ report also highlighted a key area of concern in e-health initiatives. This is ‘Interpersonal relationships’ between the healthcare consumers and the healthcare providers. Consumers’ perception in the study was that technology interfered with the patient-provider relationship.

In their view, technology can alienate providers from their patients, impeding the relationships that are important to providing quality care.

In India, it appears, this perception is equally valid and needs to be addressed effectively, in the process of implementation of e-healthcare in the country.

e-Health in India:

In August 2014, the Director General Health Services (DGHS), Ministry of Health and Family Welfare reportedly announced that his Ministry “has already prepared the white paper of the e-Healthcare service, which will be a boost to raise awareness among the people in the country, who remain completely deprived of the health services initiated by the government,”

He also said, e-Healthcare system basically being a web portal, would help the government connecting with the people on every health-related program and various schemes that would enable them getting free medical treatment.

Accenture – a global management consulting, technology services and outsourcing company, in one of its reports of 2014 titled, “Delivering e-health in India – Analysis and Recommendations” also echoed that a ‘Citizen Portal’ is expected to serve as a single point of access for consolidated health information and services.

It also recommended that keeping population diversity in mind, the web portal should have multi lingual support and be available both on web and mobile (also through an SMS/IVR gateway). People in rural areas would, therefore, be able to access citizen portal more easily through mobile applications as mobile penetration is quite significant in India.

Accenture also acknowledged that a small fraction of population now uses a web portal to interact and share information with providers. With the introduction of state health portals for the citizens, the use of health portals is likely to skyrocket in the coming years. If that happens, its impact on healthcare would indeed be phenomenal.

Moving towards this direction, some experts have also suggested the Government to set up ‘National e-Health Authority of India (NeHAI)’ immediately to formulate the National e-Health Strategy (NeHS) and chart an innovative actionable pathway in this area.

It is interesting to note that according to the Ministry of Health, over 39 million people in India still remain deprived of basic healthcare services, which in most cases lead to death.

Types of e-Health program in India and challenges:

According to a 2014 paper titled, “In e-Health in India today, the nature of work, the challenges and the finances: an interview-based study”, published in ‘BMC Medical Informatics and Decision Making 2014: 14:1’, a range of e-Health programs is currently being run in India, including point-of-care in rural and urban areas, treatment compliance, data collection and disease surveillance, and distant medical education. Most programs provide point-of-care to patients or other beneficiaries in rural areas.

The article states that technology is not a limiting factor, but the unavailability of suitable health personnel is a major challenge, especially in rural areas. Financial sustainability is also a concern for most programs, which have rarely been scaled up. Government facilities have not been very effective in e-Health on their own, just yet, but collaborations between the government and non-profit (in particular) and for-profit organizations have led to impactful programs.

Though increasing number of various e-Health service providers is coming up in India, lack of general awareness and also acceptance of e-Health among potential healthcare consumers continue to remain a critical challenge.

I deliberated on different issues with e-Health in my blog post of May 9, 2011 titled, “e-healthcare: A new vista to improve access to quality and affordable healthcare in India”

Conclusion:

India is a nation with vast unmet medical needs. At least now, every citizen of the country should be provided with the facilities to meet most of those unmet medical needs.

e-Health through “Digital Health Equity”, has the potential to improve the quality of healthcare in India and ensure its adequate access, especially, to the underserved population of the country.

It is imperative, therefore, to scale up design and development of innovative and cost-effective e-health related digital tools to ensure equity in healthcare and, at the same time, augment quality healthcare services for all in India.

This endeavor would entail much stronger efforts towards health literacy programs and translating existing digital tools into multi-lingual versions to reach the underserved health consumer, especially in rural India.

As e-Health continues to evolve in India in an organized manner, many critical challenges currently faced in the health systems of the nation, would potentially be mitigated through wide deployment of Information and Communications Technology (ICT).

Some of these key challenges are:

  • Shortages of health workers, especially in rural India
  • Variable quality of cares; between urban and rural, as well as, public and private healthcare providers
  • Uncertainty in patient compliance
  • Fraud in healthcare delivery system

Propelled by the Government initiative all stakeholders; such as technology designers/engineers, healthcare providers, policymakers, payers and especially the consumers; should work in unison to achieve the long cherished health outcomes in India: “Health For All”.

In the next five years, would the ‘Digital India’ spearheaded by the “Smart Cities” be able to ensure “Digital Health Equity” to augment healthcare services for all in India?

By: Tapan J. Ray

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

Union Budget Proposal 2015-16 of India : Is Pharma Industry Now Out of Focus?

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Budget Expectations:

Overall expectations of the Pharma Industry in India from the Union Budget perspective was very modest this year. The key areas were as follows:

- To encourage  innovation, in-house R&D exemption limit was expected to be raised from 200 percent to 250 percent

- Excise duty rationalization was expected on:

Formulations (5 percent)
API (10 percent)

- A reduction of MAT (20 percent) was expected on SEZ

Union Budget Proposals:

Status quo

Impact:

In view of this scenario, there has been virtually no sector-specific direct impact of the Union Budget 2015-16 on the Pharma Industry. This critical sector seems to be out of focus of the Government from the budget perspective, at least for now.

By: Tapan J. Ray

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

‘Data Protection’: Needs A Clear Direction…But Is It An IPR Issue?

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The terminologies ‘Data Exclusivity’ and ‘Data Protection’ are quite often used interchangeably by many, creating a great deal of confusion on the subject. However, in a true sense these are quite different issues having critical impact on public health interest of a nation.

In several media reports as well, one can notice the interchangeable use of these two terms. It is especially happening when the reports are speculating whether or not the Government of India is considering putting in place ‘Data Exclusivity’/ ‘Data Protection’ along with ‘Patent Linkage’ through administrative measures, without making any amendments in the Patents Act 2005 of the country.

Tracking this development, the last week, I wrote about ‘Patent Linkage’. In this article, I shall dwell on the same area, but from ‘Data Exclusivity’/ ‘Data Protection’ perspective.

A brief overview:

Close to a decade ago, Government of India constituted ‘Satwant Reddy Committee’ to recommend a direction that India should follow on ‘Data Protection’ in the country involving pharmaceutical and agricultural products.

In 2007 the Committee submitted its report recommending ‘Data Protection’ in the country to be introduced for pharma products in a calibrated manner. However, the report did not specify a timeline for its implementation.

Interestingly, even this committee did not differentiate between the terminologies ‘Data Protection’ and ‘Data Exclusivity, as we now see in the first draft of the ‘National IPR Policy.’

According to available reports, after due deliberation, the erstwhile Government decided not to take any action on the committee’s recommendations for ‘Data Protection’ in India.

Difference between ‘Data Protection’ and ‘Data Exclusivity’:

In an article published in ipHandbook, titled “Data Protection and Data Exclusivity in Pharmaceuticals and Agrochemicals”, the author Charles Clift with a great deal of experience in the U.K. Department of International Development (DFID) and a former Secretary, Commission on Intellectual Property Rights, Innovation and Public Health, World Health Organization; differentiated these two terminologies as follows:

Data Protection (DP): Protection of commercially valuable data held by the drug regulator against disclosure and unfair commercial use.

Data Exclusivity (DE): A time bound form of Intellectual Property (IP) protection that seeks to allow companies recouping the cost of investment in producing data required by the regulatory authority.

Arguments in favor of ‘Data Exclusivity’:

International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), Geneva, in its website argues in favor of ‘Data Exclusivity’ as follows:

- Health authorities require, as part of a submission for a marketing authorization, that proprietary information be disclosed in order to ensure public health and patient safety.

- The innovator assumes the entire risk for the generation of the data, what requires expensive and lengthy clinical trials.

- ‘Data Exclusivity’ is necessary to provide a measure of certainty to the innovator that they will be provided with a period of protection for their efforts of testing a drug.

- Patents and ‘Data Exclusivity’ are different concepts, protect different subject matter, arise from different efforts, and have different legal effects over different time periods

Arguments suspecting the intent of ‘Data Exclusivity’:

The above paper of Charles Clift highlights the following on DE:

- The effect of DE is to prevent entry of generic competitors, independent of the patent status of the product in question.

- DE law, wherever applicable, prevents generic manufacturers from using innovators’ test data, though it would allow the drug regulator to analyze this data prior to market approval.

- Even if the patent period has expired or there is no patent on a product, DE will act independently to delay the generic entry until the period of DE is over.

- In that way DE compensates innovators for delayed market entry and concomitant loss of potential profits.

- DE is a much stronger right than a patent, mainly because, unlike patent law, there is no exceptions or flexibilities that allow the governments to provide the equivalent of Compulsory License (CL).

- DE acts as a barrier to CL of a patent on the same product by preventing marketing approval for a CL.

TRIPS Agreement talks about DP, but not DE:

Article 39 of TRIPS Agreement on “Protection of Undisclosed Information” contains a general clause on the obligations of the members of the WTO, where Article 39.3 specifies three obligations for its member countries as follows:

- To protect data on New Chemical Entities (NCE), the collection of which involves considerable effort, against unfair commercial use.

- To protect these data against disclosure, except where necessary to protect the public

- To protect such data against disclosure, unless steps are taken to ensure that the data are protected against unfair commercial use

According to Charles Clift, Article 39.3 only articulates widely accepted trade secret and unfair competition law, and is not an invitation to create new IP rights per se for test data. Nor does it prevent outside parties from relying on the test data submitted by an originator, except in case of unfair commercial practices.

Some developed countries, such as the United States and the European Union have argued that Article 39.3 of TRIPS requires countries to create a regime of DE, which is a new form of time-limited IP protection. However, it is worth noting that in both these countries DE regime was adopted prior to TRIPS Agreement. Hence, many experts construe such approaches and pressure, thus created for DE, as ‘TRIPS Plus’.

What is ‘TRIPS Plus’?

The ‘TRIPS-Plus’ concept would usually encompass all those activities, which are aimed at increasing the level of IP protection for the right holders, much beyond what is required for conformance of TRIPS Agreement by the World Trade Organization (WTO).

Some section of the civil society nurtures a view that ‘TRIPS Plus’ provisions could significantly jeopardize the ability, especially, of developing countries to protect the public health interest adequately.

Some common examples of ‘TRIPS Plus’ provisions:

Common examples of ‘TRIPS Plus’ provisions could include:

- Extension of the patent term beyond usual twenty-year period

- Introduction of provisions, which could restrict the use of CL

- Delaying the entry of generics

Is ‘Data Protection’ an IPR issue?

In my view, the issue of ‘Data Protection’ is more a drug regulatory than an IPR related subject and should be treated as such. This is because ‘Data Protection’ is more related to the ‘Drugs and Cosmetics Act’ of India rather than the ‘Patents Act 2005′.

Thus, it is quite intriguing to make out why ‘Data Protection’, which will be governed by ‘Drugs and Cosmetics Act’, is featuring in the IPR Policy of the country.

I wrote on the draft National IPR Policy in my blog post of January 19, 2015, titled “New “National IPR Policy” of India – A Pharma Perspective”.

Conclusion:

After jettisoning the ‘Satwant Committee Report’ on ‘Data Protection’, the Government was in no mood, until recently, to discuss anything about DP and DE, despite intense pressure from the pharma MNC lobby in India. However, the issue first resurfaced during EU-FTA negotiation, when India rejected these provisions outright and unambiguously.

However, the ghost started haunting India, yet again, when the US Government started flexing its muscle on this issue, at the behest of the American pharma companies.

Although DP is a drug regulatory issue, curiously, it features in the draft National IPR Policy. Even there, the subject has taken an interesting turn, when in the first draft of ‘National IPR Policy’ of India, the six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan clearly recommended “Protection of undisclosed information not extending to data exclusivity.”

In my opinion this is indeed a very pragmatic recommendation. It deserves support from all concerned so that the profound intent continues to feature in the final IPR Policy of India, to protect public health interest of the nation.

Just like ‘Patent Linkage’, as I discussed in my last week’s article, finding a middle ground to put ‘Data Protection’ in place through administrative measures, without making any amendments either in the Drugs & Cosmetics Act or in the Patents Act of the country, seems to be desirable and very much possible, as well.

However, the very thought of considering ‘Data Exclusivity’ in India, in my view, should prompt a clear ‘No…No’ response from the present Government of India.

This is mainly because, besides all other reasons as mentioned above, even if the patent period for a molecule has expired or there is no patent on a product, DE will act independently to delay the generic entry until the period of ‘Data Exclusivity’ gets over.

By: Tapan J. Ray

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

 

‘Patent Linkage’: Can The Core Issue Be Resolved?

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On February 10, 2015, a leading business daily of India, quoted the Commerce Secretary of India – Rajeev Kher, saying, “India needs to relook at its Intellectual Property Rights (IPR) Policy with a view to bring in a differentiated regime for sectors that have a greater manufacturing potential.”

In the present Government regime, it appears virtually impossible to make such important comments out of turn by a senior bureaucrat without the blessings of the Prime Minister’s Office (PMO). I hold this view, despite the fact that the Commerce Secretary reportedly added that his suggestion is “a highly controversial subject and if I discussed this in the government, I think I will be shot down in the very first instance”.

Be that as it may, as I indicated in my just previous article, several recent media reports also speculated, around the same time, that the Government of India is probably considering putting in place ‘Patent Linkages’ and ‘Data Exclusivity’ through administrative measures, without making any amendments in the Patents Act 2005 of the country.

As I had indicated in my blog post of January 19, 2015 titled, “New ”National IPR Policy” of India – A Pharma Perspective”, these speculations originated mainly from the following events:

  • During Prime Minister Narendra Modi’s visit to the United States in September 2014, a high-level Indo-US working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries.
  • Almost immediately after the Prime Minister’s return to India, in October 2014, the Government formed a six-member ‘Think Tank’ to draft the ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas. The notification mandated the ‘Think Tank’ to examine the current issues raised by the industry associations, including those that have appeared in the media and give suggestions to the ministry of Commerce and Industry as appropriate.

Speculations arising out of these two events were almost simultaneously fuelled by the following developments:

A. US Trade Representative Mike Froman’s reported affirmation of the following to the US lawmakers during a Congressional hearing held on January 27, 2015:

- “We have been concerned about the deterioration of the innovation environment in India, and we have engaged with the new government since they came into office in May of last year about our concerns.”

- “We held the first Trade Policy Forum in four years in November. I just returned from India yesterday as a matter of fact … and in all of these areas, we have laid out a work program with the government of India to address these and other outstanding issues.”

- “We are in the process of providing comments on that draft policy proposal on IPR, and we are committed to continuing to engage with them to underscore areas of work that needs to be done in copyright, in trade secrets as well as in the area of patents.”

- “We’ve got a good dialogue going now with the new government on this issue, and we’re committed to working to achieve concrete progress in this area.”

B. Union Minister of Commerce and Industry of India specifically seeking American Government’s inputs in the finalization process of the new National IPR policy of the country.

Keeping these in perspective, let me try to explore whether or not it would be fair for India deciding to put in place ‘Patent Linkages’ and ‘Data Exclusivity’ through administrative measures, without making any amendments in the Patents Act of the country.

In this article, I shall deliberate on my personal take on ‘Patent Linkage’ and in the next week’s article on ‘Data Exclusivity’.

Definition:

Patent linkage is broadly defined as the practice of linking market approval for generic medicines to the patent status of the originator reference product.

A brief background in India:

The ‘Patent Linkage’ saga has an interesting background in India. I would now try to capture the essence of it, as stated below.

About 7 years ago, probably prompted by intense lobbying by the Pharma MNCs, the then Drug Controller General of India (DCGI) reportedly informed the media, on April 28, 2008, the following:

“We (DCGI) are going to seek the list of the drugs from innovator companies that have received patent in India. Once we have the database of the drugs which have been granted patent, we will not give any marketing approval to their generic versions…The DCGI has issued internal guidelines to this effect and it will also co-ordinate with the health ministry to give a formal shape to the initiative. The government expects to finalize a proper system within the next 2-3 months.”

It was also reported in the same article that Patent attorney Pratibha Singh, who along with Arun Jaitley was representing Cipla in the Tarceva case against Roche said:

“The DCGI does not have the authority to reject marketing application of a generic drug on the grounds that an innovator company has received the patent for the same drug in the country.”

Immediately following the above reported announcement of the DCGI on ‘Patent Linkage’, another media report flashed that the domestic drug companies are strongly objecting to the DCGI’s plans to link marketing approval for a drug with its patent status in the country, citing requirement of additional resources for the same and concern that it could block access to affordable medicines by suppressing competitive forces.

Despite this objection of the domestic Indian pharma companies, a senior official in DCGI office reportedly reaffirmed the DCGI’s intent of establishing the linkage so that no slips happen in the future. The same media report quoted that Government official as saying:

“We will have to amend the rules in the Act. We have to put it before the Drugs Consultative Committee first and this could be around the end of this year.”

Current ‘administrative’ status in India:

Currently in India, there is no provision for ‘Patent Linkage’, either in the Statute or through any administrative measure.

After those potboiler reports, it is quite challenging to fathom, what exactly had happened for the reverse swing thereafter at the DCGI’s office. The bottom line is, the above initiative of the then DCGI for ‘Patent Linkage’ in India ultimately got killed in the corridors of power. Hence, there does not exist any direct or indirect measure for ‘Patent Linkage’ in India, as I write this article.

Current legal status:

In 2008 Bayer Corporation had filed a Writ Petition before the Delhi High Court against Union of India, the DCGI and Cipla seeking an order that the DCGI should consider the patent status of its drug, Sorefenib tosylate, and refuse marketing approval to any generic versions of this drug.

It is worth mentioning, Sorefenib tosylate is used to treat renal cancer and was being reportedly sold in India by Bayer at Rs. 2,85,000 for 120 tablets for a monthly course of treatment.

The appeal in the Delhi High Court was filed against a judgment delivered by Justice Ravindra Bhat on 18 August 2009, rejecting Bayer’s attempt to introduce the patent linkage system in India through a court direction. But, in a landmark judgment on February 9 2010, a division bench of the Delhi High Court dismissed the appeal of Bayer Corporation in this regard. Thereafter, Bayer Corporation moved Supreme Court against this Delhi High Court order.

However, in December 01, 2010, a Division Bench of the Supreme Court rejected the appeal filed by Bayer Corporation against the February 2010 decision of the Delhi High Court. The Apex Court of India ordered, since the Drugs Act does not confer power upon the DCGI to make rules regarding the ‘Patent Linkage’, any such attempt would constitute substantive ultra vires of the delegated power.

RTI helps to get the marketing approval status of drugs:

Currently relevant information on marketing approval application status of generic drugs are not available at the CDSCO website. Hence, some innovator companies have resorted to using Right To Information (RTI) Act to ferret out such details from the DCGI office and initiate appropriate legal measures for patent infringement, well before the generic version of the original drug comes to the market.

A middle ground:

In view of the above order of the Supreme Court, the government of India may try to seek a middle ground without amending any provision of the Patents Act, in any way.

Even avoiding the word ‘Patent Linkage’, the Ministry of Health can possibly help the pharma MNCs achieving similar goal, through administrative measures. It can instruct the DCGI to upload the ‘Marketing Approval’ applications status for various generic products in the Central Drugs Standard Control Organization (CDSCO) website. If for any patented drugs, applications for marketing approval of generic equivalents are made, the available information would enable the patent holder taking appropriate legal recourse for patent infringement, much before the drug is marketed at a heavily discounted price.

It is quite possible that the interested constituents had put requests for such administrative measures even before the earlier Government. As no tangible action has been taken even thereafter, the erstwhile Government probably felt, if introduced, such a system would adversely impact quick and early availability of the generic drugs in the market place.

Conclusion: 

I wrote an article on similar issue in my blog post of August 24, 2009 titled, “Recent Bayer Case Judgment: Patent Linkage: Encouraging Innovation in India.”

Taking all these into consideration, in my view, it is quite possible for the present Indian Government to resolve the core issue related to ‘Patent Linkage’ through administrative measure, without amending any Acts or breaching any case laws of the land.

In the present IPR imbroglio, the above administrative measure could well be a win-win solution for all.

It would help facilitating early judicial intervention by the patent holder in case of prima facie patent infringements, enabling the Government to send a clear reiteration that the patents granted to pharmaceutical products will be appropriately enforced and protected in the country.

By: Tapan J. Ray

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