Takes ‘Two to Tango’: Encashing Opportunities with Biologic drugs in India

Posted on February 11, 2013 by Tapan Ray

Despite current ‘Patent Cliff’ ongoing research on biologics is now at the forefront of the Global Pharmaceutical Industry. The bottom-line impact of a successful new biologic molecule to treat intractable ailments like, cancer, blood disorders, Parkinson’s, Myasthenia Gravis, Multiple Sclerosis, Alzheimer’s diseases, will be huge.

Currently, faster growth of this segment as compared to conventional small molecules is primarily driven by novel technologies and highly targeted approaches, the final outcome of which is being more widely accepted by both physicians and patients.

Lesser generic competition makes it more attractive:

After patent expiry, innovators’ small molecule brands become extremely vulnerable to cut throat generic competition with as much as 90% price erosion.This is mainly because these small molecules are relatively easy to replicate by many generic manufacturers and the process of getting their regulatory approval is also not as stringent as biosimilar drugs in most of the markets of the world.

On the other hand biologic drugs involve difficult, complex and expensive processes for development. Such resource intensive scientific expertise together with stringent regulatory requirements for obtaining marketing approval, especially in the developed markets of the world like, EU and USA, help creating a significant market entry barrier for many players. That is why even after patent expiry, biologics enjoy significant brand protection from generic competition for quite some time, in many cases.

It is for this reason brands like the following ones are expected to go relatively strong even for some more time, without any significant competition from biosimilar drugs in many of the major markets of the world:

Brand	Company	Launch date
Rituxan	Roche/Biogen idec	1997
Herceptin	Roche	1998
Remicade	Centocor/J&J	1998
Enbrel	Amgen/Pfizer	1998

Global Market:

In 2011 the turnover of Biologic drugs increased to over US$ 175 billion in the total market of US$ 847 billion. The sale of Biosimilar drugs outside USA exceeded US$ 1 billion.

Six biologic drugs featured in the top 10 best selling global brands in 2012 with Humira of AbbVie emerging as the highest-selling biologics during the year. Roche remained the top company by sales for biologics with anticancer and monoclonal antibodies.

According to IMS Health, by 2015, sales of biosimilars are expected to reach between US$ 1.9 – 2.6 billion, an increase from US$ 378 million for the year to the first half of 2011.

Attractiveness:

The answer to the key question of why do so many companies want to enter into the biotech space of the business, in summary, could lie in the following:

Truly innovative small molecule discovery is becoming more and more challenging and expensive with the low hanging fruits already being plucked.
More predictable therapeutic activity of biologics with better safety profile.
Higher percentage of biologics have turned into blockbuster drugs in the recent past.
Market entry barrier for biosimilar drugs, after patent expiry of the original molecule, is much tougher than small molecule generics.
A diverse portfolio of both small and large molecules will reduce future business risks.

A 2012 report by PwC titled ‘From Vision to Decision: Pharma 2020’ states that “the next few years may look bleak for pharma, but we’re convinced that the following decade will bring a golden era of renewed productivity and prosperity.”

The document also points out that the global pharmaceutical industry is now focusing its R&D initiatives on biologics for the treatment of cancer and rare diseases. Nearly 30 percent of the 7,891 molecules currently in clinical testing cover cancer and autoimmune conditions.

Another emerging opportunity:

As stated above, unlike commonly used ‘small molecule’ drugs, ‘large molecule’ biologics are developed from living cells using very complex processes.

It is virtually impossible to replicate these protein substances, unlike the ‘small molecule’ drugs. One can at best develop a biologically similar molecule with the application of high degree of biotechnological expertise. These drugs are known as ‘Biosimilar Drugs’ and usually cost much less than the original ones.

Biosimilar drugs market is currently fast evolving across the world with varying degree of pace and stages of developments. The U.S currently holds the leadership status in the production of biologics, with around 45 percent of the total share. India’s share, now being at 7 percent is continuously increasing.

Biosimilar Monoclonal Antibodies (mAbs) in the Pipeline:

Company	Location	Biosimilar mAbs	Development Status
BioXpress	Switzerland	16	Preclinical
Gene Techno Science	Japan	6	Preclinical
Zydus Cadilla	India	5	Preclinical
PlantForm	Canada	3	Preclinical
BioCad	Russia	3	Preclinical
Celltrion	South Korea	2	Phase 3
LG Life Sciences	South Korea	2	Preclinical
Gedeon Richter	Hungary	2	Preclinical
Cerbios-Pharma	Switzerland	1	Preclinical
Hanwha Chemical	South Korea	1	Preclinical
PharmaPraxis	Brazil	1	Preclinical
Probiomed	Mexico	1	Phase 3
Samsung BioLogics	South Korea	1	Preclinical
Novartis	Switzerland	1	Phase 2
Teva	Israel	1	Phase 2
Zenotech	India	1	Phase 3
Spectrum	US	1	Preclinical
Biocon/Mylan	India/US	1	Preclinical

(Source: PharmaShare; as of September 10, 2011 from Citeline’s Pipeline database)

Future business potential with cost arbitrage of India:

In 2013, products like, Avonex of Biogen Idec, Humalog of Eli Lilly, Rebif of Merck KgaA, Nupugen of Amgen will go off-patent, paving the way of entry for lower priced biosimilar drugs. The sum total of revenue from all such drugs comes to over U.S$ 15 billion.

The report from the ‘Business Wire’ highlights that, ‘the manufacture and development of a biosimilar molecule requires an investment of about US$ 10 to 20 million in India, as compared to US$ 50 to 100 million in developed countries’, vindicates the emergence of another lucrative business opportunity for India for such drugs with significant cost arbitrage.

Government support in India:

In India, the government seems to have recognized that research on biotechnology has a vast commercial potential for products in human health, including biosimilars, diagnostics and immunobiologicals, among many others.

To give a fillip to the Biotech Industry in India the National Biotechnology Board was set up by the Government under the Ministry of Science and Technology way back in 1982. The Department of Biotechnology (DBT) came into existence in 1986. The DBT currently spends around US$ 300 million annually to develop biotech resources in the country and has been reportedly making reasonably good progress.

The DBT together with the Drug Controller General of India (DCGI) has now prepared ‘Regulatory Guidelines for Biosimilar Drugs’ in conformance to international quality and patient safety standards.

Currently, a number of both financial and non-financial incentives have been announced by the Central and the State Governments to encourage growth of the biotech industry in India, which include tax incentives, exemption from VAT and other fees, grants for biotech start-ups, financial assistance with patents, subsidies on investment from land to utilities and infrastructural support with the development of ten biotech parks through ‘Biotechnology Parks Society of India’.

A commendable DBT initiative:

Towards this direction, the Department of Biotechnology (DBT) of the Government of India has taken a commendable step to encourage the small and medium scale business outfits by setting-up ‘The Small Business Innovation Research Initiative (SBIRI)’. This scheme has been launched to boost ‘Public-Private-Partnership (PPP)’ projects in the country.

SBIRI supports ‘the high-risk pre-proof-of-concept research’ and ‘late stage development’ in small and medium size companies to get them involved in the development of biologics.

Some examples:

Examples of some among many of the PPP initiatives in the healthcare space under SBIRI are as follows:

No.	Company Name with Collaborator	Title of the Project Supported
1.	IcubedG Ideas Private Limited, New Delhi	Risk based Process Design for large scale Manufacturing of male injectable contraceptive (Phase I)
2.	Incozen Therapeutics Pvt. Ltd., Hyderabad	Discovery and Development of Novel, Selective and Potent Dihydroorotate Dehydrogenase Inhibitors in Inflammatory Bowel diseases. (Phase I)
3.	Mediclone Biotech Private Limited, Chennai	Commercial Production of Monoclonal Antibodies as an import substitute with special reference to Red Blood Cell Phenotyping (Phase II)
4.	Orchid Chemicals & Pharmaceuticals Ltd., Chennai in collaboration with AU-KBC Research Center, Chennai	Development and validation of a cell-tissue co-culture model for aiding liver specific studies and drug discovery applications. (Phase I)
5.	Reliance Life Sciences Pvt. Ltd., Navi Mumbai	An open label, multicenter, prospective clinical study to evaluate the safety and efficacy of tissue engineered R-STE-001 in patients with symptomatic cartilage defect of femoral condyle (Phase II)
6.	USV Limited, Mumbai	Development of a Vaccine capable for eliciting immunological memory for the prevention of Typhoid (Phase II)
7.	Virchow Biotech Private Limited, Hyderabad	Development of commercialization of a recombinant uricase for the prevention and treatment of tumor lysis syndrome associated with leukemia, lymphoma & solid tumor malignancies (Phase II)
8.	Virchow Biotech Private Limited, Hyderabad	Indigenous development of a recombinant Fuzeon for the treatment of AIDS (Phase II)
9.	Zenotech Laboratories Limited., Hyderabad	Development of humanized monoclonal antibodies against human epidermal growth factor receptor (Phase I)


10.	Advanced Neuro-Science Allies Pvt. Ltd, Bangalore in collaboration with Vittal Mallya Scientific Research Foundation, Bangalore	Pre-clinical studies of Human mesenchymal stem cells (MSCs) isolated and characterized from different sources in autoimmune disease, namely rheumatoid arthritis (RA) and type 1 diabetes (TIDM)(Phase I)
11.	Avesthagen Ltd., Bangalore	Hepatocyte-like cells generated from human embryonic stem cells (hESC) for hepatotoxicity screening of xenobiotics in the drug discovery process(Phase I)
12.	Avesthagen Limited, Bangalore	Scale-up and evaluation of high-value biosimilar product (Etanercept) aimed at providing cost-effective healthcare solutions to the emerging markets(Phase II)
13.	Bharat Serum and Vaccines Limited, Mumbai	Expression of recombinant proteins for development of synthetic pulmonary surfactant for Respiratory Distress Syndrome(Phase I)
14.	Cadila Pharmaceuticals Ltd., Ahmedabad	Development of Mycobacterium was an adjuvant for anti – rabies vaccine(Phase I)

Besides, Indian pharmaceutical majors like Dr. Reddy’s Laboratories (DRL), Reliance Life Science, Shantha Biotech, Ranbaxy, Biocon, Wockhardt and Glenmark have made good investments in biotech drugs manufacturing facilities keeping an eye on the emerging opportunities with Biosimilar drugs in the developed markets of the world.

Funding remains a critical issue:

That said, many industry experts do feel that R&D funding for the Biotech sector in the country is grossly inadequate. Currently, there are not many ‘Venture Capital’ funds for this sector and ‘Angel Investments’ almost being non-existent, Indian biotech companies are, by and large, dependent on Government funding.

Making India a global hub for biosimilar manufacturing:

However, with around 40 percent cost arbitrage, adequate government support and without compromising on the required stringent international regulatory standards, the domestic ‘biologic’ players should be able to establish India as one of the most preferred manufacturing destinations to meet the global requirements for particularly ‘biosimilar drugs’.

Experience in conforming to stringent US FDA manufacturing standards, having largest number of US FDA approved plants outside USA, India has already acquired a clear advantage in manufacturing high technology chemical based pharmaceutical products in India. Significant improvement in conformance to Good Clinical Practices (GCP) standards will offer additional advantages.

Conclusion:

With increasing support from the government and fueled by creative, scientific and technological inputs from various experts and entrepreneurs in the country, India has the potential to emerge as one of Asia’s best powerhouses in the field of biosimilars drugs by the end of this decade. It will take ‘two to tango’.

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.

An El Dorado…But Not Without Responsible Pricing:The Cancer Segment in India

Posted on February 4, 2013 by Tapan Ray

The affordability issue for cancer treatment has been the subject of a raging debate since quite some time, as the incidence of cancer is fast increasing across the world. Just for example a very recent report highlighted that cancer has now become the greatest health risk in the UK, with an average British boy born in 2010 running a 44 percent chance of being diagnosed with any form of cancer during his lifetime. The risk for a baby girl is slightly lower at 40 percent.

In India too, the problem of affordable cancer treatment has now become the center piece of a fiercer public opinion in the healthcare space, more than even HIV, prompting the Government to intervene in this dreadful disease area and address the problem in a holistic way both in the short and also on a longer term basis. This demand is supported by rapidly growing number of cancer patients in the country.

Out of the total number of new cancer patients globally, India now reportedly ranks third as follows:

Rank	Country	% Of total
1.	China	22
2.	USA	11
3.	India	7.5

As a consequence, cancer now reportedly accounts for one of the main causes of deaths in India, which is nearly 19 percent higher than deaths caused by heart diseases.

Number of new cancer patients staggering in India:

Over 60,000 new cases are reportedly diagnosed every year in India and 80 percent of them are at an advanced stage, which involve mostly the middle-aged and elderly population of the country, where affordability is even a greater issue.

Cervical and breast cancers are reportedly the most common, contributing over 26 per cent to the total cancer cases in India, followed by lung, mouth, pharynx, ovarian, pancreatic and esophagus cancers.

Whereas cervical cancer is reportedly most common in females with a mortality rate of nearly 15 per 10,000 females, lung cancer has the highest mortality rate of 28 per 10,000 males.

Incidentally, lung cancer is the most commonly diagnosed cancer even globally. Non-Small Cell Lung Cancer (NSCLC) accounts for approximately 90% of all lung cancers. The primary cause of lung cancer in up to 90% of patients is tobacco and represents one-fifth of all cancer-related deaths in India.

However, to address the havoc caused by this dreaded disease effectively, India will also need to bridge the huge gap of shortfall in disease diagnostic infrastructure in the country.

The humongous access gap for cancer patients needs to be effectively addressed by the Government sooner with Public-Private-Partnership (PPP) for diagnosis and treatment, in tandem with other proactive initiatives like, disease awareness campaigns targeted to ensure greater screening and disease prevention, wherever possible.

‘The Lancet’ finding:

Following are some of the important findings on cancer disease profile in India, as reported in May 12, 2012, edition of ‘The Lancet’:

- 6 percent of the study deaths were due to cancer

- 71 percent cancer deaths occurred in people aged 30—69 years

- Age-standardized cancer mortality rates per 100,000 were similar in rural and urban areas but varied greatly between the states, and were two times higher in the least educated than in the most educated adults.

This report further calls for immediate Government intervention in this area.

Growing patients number making ‘Oncology Market’ increasingly attractive:

As stated above, incidence of various types of cancer is rapidly increasing across the world, making oncology segment an ‘El Dorado’ for many pharmaceutical players prompting commensurate investments for product development in this area, be these are new molecules or biosimilars.

Thus, the global turnover of anti-cancer drugs, which was around US$ 50 billion in 2009, is expected to grow to US$ 75 billion in 2013 registering a jaw dropping growth rate in today’s turbulent global pharmaceutical market environment.

World Health Organization (WHO) has predicted over 20 million new cases of cancer in 2025 against 12 million in 2008.

Globally, the segment growth will mainly be driven by early detection, longer duration of treatment and the global ascending trend in the incidence and prevalence of cancer propelled by new treatments and improved access to cancer therapies in many countries.

Indian business landscape:

Oncology segment has now emerged as a leading therapeutic area in the Indian pharmaceuticals market too, being fourth largest in volume and tenth largest in value term, mainly driven by lower priced generic equivalents in volume term.

Despite only a smaller number of patients can afford any comprehensive cancer treatment protocol in India, the demand for cancer drugs in the country, where many drug companies follow various types of unconventional logistics systems to reach these drugs to patients, is increasing at a rapid pace.

Global players namely, Roche, BMS, Pfizer, Sanofi, GSK and Merck reportedly dominate the market with innovative drugs. Whereas, domestic companies like, Natco Pharma, Cipla, Sun Pharma, Dr. Reddy’s Lab (DRL), Biocon and others are now coming up with low price generic equivalents of many cancer drugs.

The fact that currently over 30 pharmaceutical companies market cancer drug in the country, demonstrates growing attractiveness of the Oncology segment in India.

Access to newer cancer drugs:

It has been widely reported that newer cancer therapies have significant advantages over available generic cancer drugs both in terms of survival rate and toxicity.

Unfortunately such types of drugs cost very high, severely limiting access to their therapeutic benefits for majority of patients. For a month’s treatment such drugs reportedly cost on an average US$ 3,000 – 4,500 or Rs 1.64 – 2.45 lakh to each patient in India.

More R&D investments in Oncology segment:

Another study recently published by ‘Citeline’ in its ‘Pharma R&D Annual Review 2012’ points out, more than half of the top 25 disease areas targeted for R&D falls under cancer therapy. Breast cancer comes out as the single most targeted disease followed by Type 2 diabetes.

This will ensure steady growth of the Oncology segment over a long period of time and simultaneously the issue of access to these medicines to a large number of patients, if the product pricing does not fall in line with socioeconomic considerations of India.

Cancer drug sales dominated in 2012:

It is interesting to note that around one-third of the ‘Top 10 Brands in 2012′ were for the treatment of cancer as follows:

Top 10 global brands in 2012

Rank	Brand	Therapy Area	Company	Sales: (US$ bn)
1.	Humira	Rheumatoid Arthritis and others	Abbott /Eisai (now AbbVie/Eisai)	9.48
2.	Enbrel	Anti-inflammatory	Amgen/Pfizer/Takeda	8.37
3.	Advair/Seretide	Asthma, COPD	GlaxoSmithKline	8.0
4.	Remicade	Auto-immune	Johnson & Johnson/Merck/ Mitsubishi Tanabe	7.67
5.	Rituxan	Anti-cancer	Roche	6.94
6.	Crestor	Anti-lipid	AstraZeneca/ Shionogi	6.65
7.	Lantus	Anti-diabetic	Sanofi	6.12
8.	Herceptin	Anti-cancer	Roche	6.08
9.	Avastin	Anti-cancer	Roche	5.98
10.	Lipitor	Anti-lipid	Pfizer/Astellas Pharma/Jeil Pharmaceutical	5.55

(Source: Fierce Pharma)

Responsible Pricing a key issue with cancer drugs:

In the battle against the much dreaded disease cancer, the newer innovative drugs being quite expensive, even in the developed markets the healthcare providers are feeling the heat of cost pressure of such medications, which in turn could adversely impact the treatment decisions for the patients.

Thus, to help the oncologists to appropriately discuss the treatment cost of anti-cancer drugs with the patients, the ‘American Society of Clinical Oncology’ recently has formed a task force who will also try to resolve this critical issue.

In many other developed markets of the world, for expensive cancer medications, the patients are required to bear the high cost of co-payment. This may run equivalent to thousands of U.S dollars, which many patients reportedly find difficult to arrange.

It has been reported that even the ‘National Institute of Health and Clinical Excellence (NICE), UK’ considers some anti-cancer drugs not cost-effective enough for inclusion in the NHS formulary, sparking another set of raging debate.

‘The New England Journal of Medicine’ in one of its recent articles with detail analysis, also expressed its concern over sharp increase in the price of anti-cancer medications, specifically.

An interesting approach:

Experts are now deliberating upon the possibility of creating a ‘comparative effectiveness center’ for anti-cancer drugs. This center will be entrusted with the responsibility to find out the most cost effective and best suited anti-cancer drugs that will be suitable for a particular patient, eliminating possibility of any wasteful expenses with the new drugs just for newness and some additional features. If several drugs are found to be working equally well on the same patient, most cost effective medication will be recommended to the particular individual.

India should also explore this possibility without further delay.

Indian Government trying to find an answer in CL/NLEM/NPPP 2012:

Going by the recent developments in Compulsory License (CL) area for high priced new and innovative cancer drugs, it appears that in the times to come exorbitant prices for cancer drugs may prove to be loaded with risks of grant of CL in India due to immense public pressure.

It appears from the grapevine that Government may also explore the possibility to include some of the newer cancer drugs under National List of Essential Medicines (NLEM) bringing them under price control in conformance with the National Pharmaceutical Pricing Policy 2012 (NPPP 2012), if not through the provision of pricing of patented drugs.

Thus responsible pricing of cancer drugs assumes huge importance for avoidance of the above unpleasant situation in India.

Cancer drug pricing related developments in India:

As stated above, cancer being the second largest killer in India and the patented cancer drugs being generally expensive, a large Indian pharmaceutical player has been reportedly insisting on the government to allow widespread use of “compulsory licenses” for cancer drugs. About 11 years ago various news reports highlighted that this company broke ‘monopoly ‘ of the multinationals by offering to supply life-saving triple therapy AIDS drug cocktails for under US$1 a day, which is about one-thirtieth the price of the global companies.

In May 2012, this same Indian company named Cipla, significantly reduced the cost of three medicines to fight brain, kidney and lung cancers in India, making these drugs around four times cheaper than the originators, as per the above news report. The company reportedly wants to reduce the prices of more cancer drugs in future.

Prompted by the above steps taken by Dr. Yusuf Hamied, the Chairman of Cipla, many global players have reportedly branded him as an Intellectual Property (IP) thief, while Dr. Hamied reportedly accused them of being “Global Serial Killers” whose high prices are costing many precious lives across the globe.

In the same interview Dr. Hamied said poverty-racked India “can’t afford to divide people into those who can afford life-saving drugs and those who can’t”.

Promising future potential for low cost newer generic cancer drugs:  

While R&D initiatives are going on full throttle for newer and innovative drugs for cancer, interestingly over a quarter of the following 15 brands, which will go off-patent in 2013 are for cancer, throwing open the door for cheaper newer generics entry and increasing access to these medicine for a larger population of cancer patients.

Patent expiry in 2013

Rank	Brand	Generic name	Therapy Area	Company	Patent Expiry	Sales US$ billion (2012)
1.	Cymbalta	Duloxetine	Antidepressant, musculoskeletal pain	Eli Lilly/Shionogi	Dec 11	4.9
2.	Avonex	Interferon beta1a	Multiple Sclerosis (MS)	Biogen Idec	Dec 31	2.9
3.	Humalog	Insulin lispro	Anti-diabetic	Eli Lilly	May 7	2,52
4.	OxyContin	Oxycodone	Pain	Perdue	August 31,	2.35
5.	Rebif	Interferon beta-1a	Multiple Sclerosis (MS)	Merck KgaA	Dec 31	2.3
6.	Aciphex	Rabeprazole	Acid-peptic disorder	J&J, Eisai	May 8	1.93
7.	Xeloda	Capecitabin	Cancer	Roche	Dec 14	1.63
8.	Procrit	Epoetin Alfa	Anemia	J&J	Aug 29	1.41
9.	Neupogen	Filgrastim	Cancer	Amgen, Kirin, Roche, Royalty Pharma	Dec 12	1.29
10.	Zometa	Zoledronic Acid	Cancer	Novartis	March 2	1.26
11.	Lidoderm	Lidocaine patch 5%	Pain-relieving patch	Endo Health Solutions/ EpiCept	Sep 15	0.918
12.	Temodar	Temozolomide	Cancer	Merck, Bayer	Aug 31	0.882
13.	Asacol	Mesalamine	Ulcerative Colitis	Warner Chilcott, UCB, Zeria Pharma	Jul 30	0.891
14.	Niaspan	Niacin	Anti-lipid	Abbott, Teva	Sep 20	0.835
15	Reclast	Zoledronic acid injection	Osteoporosis	Novartis	March 02	0.612

(Source: Fierce Pharma)

A thought:

Initiatives for faster resolution of a pressing issue like providing affordable treatment for cancer should not be put in the back burner of a longer term planning process. The issue is very real, humanitarian, here and now, for all of us. The Government is expected to display some sense of urgency through its expeditious intervention in all the four of the following treatment processes for cancer to make them affordable, if not free for the general population:

Medical intervention and consultation
Diagnostic tests and detection
Surgical procedure and hospitalization
Medicines and chemotherapy

As ‘The Lancet” study mentions, cancer in India is all-pervasive. It has no rich or poor, urban or rural or even any gender bias. It needs to be addressed in a holistic way for the benefit of all.

Conclusion:

High incidence of cancer in India with even higher mortality rate, coupled with very high treatment cost has positioned this disease area in the eye of a stormy debate for quite some time. The naked fact that a large number of Indian population cannot afford the high treatment cost for cancer as ‘Out of Pocket’ expenditure, has made the issue even more sensitive and socially relevant in India.

Pricing issue for cancer drugs is not just India centric. Even in the developed countries, heated debate on expensive new drugs, especially, in the oncology segment is brewing up for a while. This could possibly assume a much larger proportion in not too distant future.

It is about time for also the private players to come forward and extend support to the Government in a joint endeavor to tame the destructibility and catastrophic effect of this dreaded disease on human lives, families and the society in general. Setting access improving tangible examples through Public Private Partnership (PPP) initiatives, rather than mere pontification of any kind, is the need of the hour.

If it does not happen, soon enough, willy-nilly the concerned players in this area may get caught in a much fiercer debate, possibly with a force multiplier effect, inviting more desperate measures by the Government.

Responsible pricing, for the patients’ sake, of each element of the cancer treatment process will ultimately assume a critical importance, not just for survival and progress of any business, but also to fetch pots of gold, as business return, from the ‘El Dorado’ of ‘Oncology Segment’ of India.

By: Tapan J. Ray

MCI asks Doctors to Prescribe Medicines in Generic Names

Posted on January 28, 2013 by Tapan Ray

Last week, on January 21, 2013, in a circular addressed to the Dean/Principals of all the Medical Colleges, Director of all the hospitals and Presidents of all the State Medical Councils, the Medical Council of India (MCI) called upon the doctors practicing medicine to prescribe Drugs with Generic names, as far as possible.

The MCI circular reinforced that all Registered Medical Practitioners under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 will comply with it without fail. At the same time, wide publicity of this regulation be given and necessary steps be taken to ensure observance of this provision in its letter and spirit.

PSC also recommended it:

Prior to this circular, Parliamentary Standing Committee (PSC) for Health and Family Welfare in its recommendation to the ‘Rajya Sabha’ of the Indian Parliament on August 4, 2010, also recommended prescription of medicines by their generic names.

The basic premises:

All these recommendations are reportedly based on the basic premises that high ‘Sales and Marketing’ costs of branded generic drugs in India can be significantly reduced, if prescription in generic names are encouraged, to make medicines available to patients at cheaper and much affordable prices.

‘Sales and Marketing’ expenses of ‘Branded’ drugs:

According to a recent report in BMJ every dollar that the pharmaceutical companies spend on “basic research,” US$ 19 goes toward promotion and marketing.

Another recent report from Forbes India titled “Will Pharma Companies Have to Stop ‘Gifting’ Doctors?“ states as follows:

“The budget that pharma companies have for freebies is huge. According to one estimate, the top 20 drug makers in India spend about $600 million a year on only freebies for doctors. It is still a paltry sum compared to the US, where drug makers spend $58 billion or more annually on marketing drugs, including freebies for doctors.

While the practice of giving gifts to doctors is rampant internationally, several sources told Forbes India that in India it borders on petty corruption. Doctors often refuse to write prescriptions unless they are offered at least Rs 50,000 in cash every time a new drug needs to be prescribed.”

The prescribers’ ‘diplomatic’ stand:

It is interesting to note that some doctors reportedly are of the view that:

“For the benefit of patients and to get the best possible results, highest quality drugs with best possible pharmacological properties should be used by all doctors. If the quality of generic drugs is up to high standards, doctors should prescribe generic medicines.”

This comment needs to be taken considering that it has been made in response to the above MCI circular by a doctor. However, I reckon, in the real world such intent, as reflected in various independent retail audit reports, is hardly seen getting translated into reality, at least not just yet.

Ongoing debate on the quality issue with generic medicines:

Many opine that there could be a huge quality issue with generic medicines, which could make such drugs unsafe for the patients.

In response, other school of thought leaders often raise, among many others, the following questions:

Are all generic medicines of dubious quality and branded generics are of good quality?
If quality parameters can be doubted for both in many cases, why then raise this issue only in context of generic medicines?
If the quality issues are not much with the larger companies and are restricted to only smaller companies, why then some branded generic drugs of smaller companies prescribed so much by the doctors?
Currently many large companies market the same drugs both as generics and also as branded generics, why then the branded generic versions sell more than their generic equivalents, though manufactured by the same large companies?
Why are the generic medicines available at ‘Jan Aushadhi’ outlets (though small in number) cost a fraction of their branded generic equivalents?
Why do the doctors also not show much interest in prescribing generic medicines as of date?
Why not those who argue that phonetically similar or wrong reading of generic names at the chemist outlets may cause health safety hazard to the patients, also realize that many already existing phonetically similar brand names in totally different therapy areas may cause similar hazards too?
How does a doctor while prescribing a branded generic or generic medicine decide which ones are of good quality and which others are not?

A recent study:

As reported by the US FDA, ‘A recent study evaluated the results of 38 published clinical trials that compared cardiovascular generic drugs to their brand-name counterparts. There was no evidence that brand-name heart drugs worked any better than generic heart drugs. [Kesselheim et al. Clinical equivalence of generic and brand name drugs used in cardiovascular disease: a systematic review and meta-analysis. JAMA. 2008; 300(21) 2514-2526]‘.

Similar studies are also required in India to resolve much hyped ‘quality issue’ for generic medicines.

Some countries are taking similar steps:

Just to cite an example, as reported by ‘The Guardian” on August 23, 2011, the Spanish government enacted a law compelling the doctors of Spain to prescribe generic drugs rather than more expensive patented and branded pharmaceuticals, wherever available. This move is expected to help the Spanish government to save €2.4 billion (£2.1billion) a year, as in Spain the drugs are partly reimbursed by the government.

As a result, the doctors in Spain will now have to prescribe only in the generic or chemical names of the respective drugs. Consequently the pharmacies will be obliged to dispense ‘the cheapest available versions of drugs, which will frequently mean not the better-known brand names sold by the big drugs firms’.

Interestingly, the above point, though considered as a positive fall-out in Spain, is reportedly taken negatively in India with the oft repeated argument, ‘India is different’.

Prescriptions for generic medicines were a record high in America in 2010:

As per published reports, last year i.e. in 2010, generic medicines accounted for more than 78 percent of the total prescriptions dispensed by retail chemists and long-term care facilities in the US. This is a record high and is four percentage points more than what it was in 2009 and came up from 63% as recorded in 2006.

This vindicates that prescription in generic names is encouraged in the US too for various reasons.

Concerns over pharmaceutical marketing malpractices in India:

Ethical concerns on significant expenditure towards alleged sales and marketing malpractices since quite some time has further strengthened the demand for prescriptions only in the generic name of a drug.

Frequent reports by Indian media have already triggered a raging debate in the country on the subject, involving even the Government and also the Parliament. It has been reported that a related case is now pending with the Supreme Court for hearing in not too distant future.

In 2010, “The Parliamentary Standing Committee on Health’ expressed its deep concern that ‘the evil practice’ of inducement of doctors continued because the Medical Council of India (MCI) has no jurisdiction over the pharma industry and it could not enforce the code of ethics on it.”

It was widely reported that the letter of a Member of Parliament, Dr. Jyoti Mirdha to the Prime Minister Dr. Manmohan Singh, attaching a bunch of photocopies of the air tickets claiming, “Doctors and their families were beating the scorching Indian summer with a trip to England and Scotland, courtesy a pharmaceutical company”, compelled the Prime Minister’s Office (PMO) to initiate inquiry and action on the subject.

The letter had claimed that as many as 30 family members of 11 doctors from all over India enjoyed the hospitality of the said pharmaceutical company.

In addition Dr. Mirdha reportedly wrote to the PMO stating, “The malpractice did not come to an end because while medical profession (recipients of incentives) is subjected to a mandatory code, there is no corresponding obligation on the part of the healthcare industry (givers of incentives). Result: Ingenious methods have been found to flout the code.”

The report also indicated that the Department of Pharmaceuticals (DoP) is trying to involve the Department of Revenue under the Ministry of Finance to explore the possibilities in devising methods to link the money trail to offending companies and deny the tax incentives.

Incidences of such alleged malpractices related to financial relationship between the pharmaceutical companies and the medical profession are unfolding reasonably faster now. All these issues are getting increasingly dragged into the public debate where government can no longer play the role of a mere bystander.

Taking the first step closer to that direction, Central Board of Direct Taxes (CBDT), which is a part of Department of Revenue in the Ministry of Finance, has now decided to disallow expenses on all ‘freebies’ to Doctors by the Pharmaceutical Companies in India.

A circular dated August 1, 2012 of the CBDT that the any expenses incurred by the pharmaceutical companies on gifts and other ‘freebies’ given to the doctors will no longer be allowed as business expenses.

The response in favor of ‘Branded Generics’:

The proponents of ‘Branded Generics’ argue that the brand name is built on various differential value parameters to create a proper position of the brand in the minds of healthcare professionals as well as the patients. Thus, brand names offer a specific identity to generic drugs and is of high importance for both the doctors and the patients.

The areas of complexity:

Those who favor branded generics also highlight, among others, the following three areas of complexity:

1. In India, over 50% medicines prescribed by the physicians are for Fixed Dose Combinations (FDCs), spanning across almost all therapeutic categories. Thus, it could be difficult for doctors to prescribe such medicines in generic names and might equally be difficult for the chemists to dispense such prescriptions.

They also argue that in case of any mistake of dispensing the wrong drug by the chemist inadvertently, the patients could face serious consequences.

2. Currently doctors use brand names to differentiate one formulation from the others. Different brands of even single ingredient medicines may have inherent differences in their formulations like, in the drug delivery systems (controlled/sustained release), kind of coatings allowing dissolution in different parts of alimentary canal, dispersible or non-dispersible tablets, chewable or non-chewable tablets etc. Since doctors are best aware of their patients’ conditions, they may wish to prescribe a specific type of formulation based on specific conditions of the patients, which may not be possible by prescribing only in generic names.

3. Patients also could face other difficulties due to generic prescribing. As is known, different brands of FDCs may have different proportions of same active ingredients. If chemists do not know or have the exact combination prescribed by the doctor in their shops, they would possibly substitute with a different combination of same drugs, which could well be less effective or even harmful to the patients.

The common perception:

The entire issue arises out of the key factor that the patients do not have any say on the use/purchase of a brand/brands that a doctor will prescribe.

It is generally believed by many that doctors predominantly prescribe mostly those brands, which are promoted to them by the pharmaceutical companies in various questionable ways, as reported above.

Thus, in today’s world and particularly in India, the degree of commercialization of the noble healthcare services, as often reported by the media, has reached a new high, sacrificing the ethics and etiquette both in the medical and also in the pharmaceutical sales and marketing practices at the altar of greed and conspicuous consumption.

Conclusion:

The recent MCI circular to doctors calling upon them to prescribe medicines in the generic names making them more affordable to patients, may be an important step towards a better future.

This assumes even greater importance when medicines constitute over 70 percent of the total treatment cost, especially for domiciliary treatment, and around 80 percent of total healthcare expenses is ‘out of pocket’ in our country.

However, the moot point is, the need of the hour calls for a total change in the mindset of all concerned. The importance of genuine care for the societal needs, while being in pursuit of professional excellence, in tandem, should ideally be demonstrated through voluntary measures by the concerned players in this area, leaving enforcement of stringent regulations as a last resort by the Government.

That said, while generic drugs per se are in no way bad for the patients, a careful analysis of all possible risk factors against expected benefits, especially for FDCs and different drug delivery formulations, will be important in the Indian perspective. Without effectively addressing the above issues, if prescriptions in generic names are made mandatory for all drugs, it could possibly be counter productive jeopardizing patients’ safety and interest.

By: Tapan J. Ray

‘Disease Oriented Treatment’ to ‘Patient Oriented Treatment’ – An evolving trend

Posted on January 7, 2013 by Tapan Ray

The quest for moving away from conventional and error-prone ‘Disease Oriented Treatment’ paving the way for unconventional individual patient-specific ones, may soon come to fruition. Dramatic progress in the research for developing ‘Personalized Medicines’ could soon offer a choice for individual ‘Patient Oriented Treatment’ with precisely predictable efficacy and safety, especially for the treatment of various intractable and dreaded diseases.

Sir John Bell, Professor of Medicine at Oxford University, adviser on genetics to the government and chair of its human genomics strategy group has reportedly said in early December 2012 that ‘Personalized Medicine’ for all could soon be a clear possibility, as everybody will be able to have their entire DNA make-up mapped for as little as £100 (Rs.8, 700 approx.).

This estimate seems to be quite realistic as Sir John said, the price of genome sequencing has fallen by 100,000-fold in 10 years and genetics being a key component of all common diseases, genome sequencing will help immensely in the use of new drugs, as well.

Raising a flag:

While watching the pursuit of excellence by the genetic scientists in the realm of disease treatment, some experts have reportedly been sounding a note of caution. They strongly feel that DNA code sequencing brings to light a “very real privacy concerns” of individuals.

GeneWatch UK, is an organization that investigate how genetic science and technologies will impact on our food, health, agriculture, environment and society. They have been strongly arguing, if genome sequencing is extended to entire population, individuals and their relatives could then be identified and tracked by matching their DNA with the genome stored in the respective health records. This move, as contemplated by them, could “wipe out privacy” with an impact on the society.

Thus, the ethical and social issues in the development of ‘Personalized medicines’ primarily in the area of genetic testing and consideration of race in the development of such medicines, these thought leaders feel, need to be effectively addressed, sooner.

That said, the Prime Minister of UK Mr David Cameron has reportedly said:

“By unlocking the power of DNA data, the NHS will lead the global race for better tests, better drugs and above all better care. We are turning an important scientific breakthrough into a potentially life-saving reality for NHS patients across the country. If we get this right, we could transform how we diagnose and treat our most complex diseases not only here but across the world, while enabling our best scientists to discover the next wonder drug or breakthrough technology.”

Increasingly more in development pipeline:

Rapid strides in pharmacogenomics bring in a promise of radically different ways of treating diseases, as major pharmaceutical companies of the world make progress in developing much more effective medicines designed to target smaller populations.

Tufts Center for the Study of Drug Development (Tufts University) in its publication named ‘Impact Report’, November/December 2010 articulated, “Bio-pharmaceutical companies are committed to researching and developing personalized medicines and within their development pipelines, 12% – 50% of compounds are personalized medicines.”

Experts envisage that over a period of time ‘Personalized Medicines’ will be targeted to biological/genomic profile of a patient or patient types to significantly improve the quality of treatment.

The definition:

The above report defines Personalized Medicines as “Tailoring of medical treatment and delivery of health care to individual characteristics of each patient, including their genetic, molecular, imaging and other personal determinants. Using this approach has the potential to speed accurate diagnosis, decrease side effects, and increase the likelihood that a medicine will work for an individual patient.”

Mainly due to all these reasons, ‘Personalized Medicines’ are expected to be an effective alternative to quite unwieldy current ‘blockbuster drug’ business model.

Makes a perfect fit:

The aim of ‘personalized medicines’ is, therefore, to make a perfect fit between the drug and the patient. It is worth noting that genotyping is currently not a part of clinically accepted routine. However, it is expected to acquire this status in the western world, very shortly.

Consequent changes and shifts:

This potential paradigm shift in the healthcare space would prompt similar changes in various disease diagnostic technologies, which will not only be able to detect a disease well before appearance of symptoms, but would also indicate which patients will best respond to or be adversely affected by which medications.

‘Personalized Medicines’ will in that process ensure a critical shift from the ‘Disease Oriented Treatment’ to a ‘Patient Oriented Treatment’, which can be initiated even before the clinical manifestations of a disease are detected.

The technological march towards this direction is indeed risky and arduous one. However, the benefits that the humanity will accrue out of this disruptive innovation will far outweigh the risks in all forms.

Towards this direction:

The Economist, March 12-18, 2011 in its article titled “Toward the 15-minute genome” reported that ‘nanopore sequencing’ of human genome is now gaining momentum. This could make sequencing of entire genome of cancerous and healthy cells possible to accurately point out what has exactly changed in individual patients, enabling the oncologists to determine patient specific drugs for best possible results in each case, separately.

New cancer marker has been reported to aid earlier detection of the disease, where repetitive stretches of RNA are found in high concentrations in cancer cells.

A new blood test will accurately detect early cancer of all types with an accuracy of greater than 95%, when repeated the accuracy will even be even greater than 99%.

‘Breast On A Chip’ will test nano-medical detection and treatment options for breast cancer.

A brain scan will detect the telltale “amyloid plaques” ,the protein fragments that accumulate between nerves in Alzheimer’s disease.

A difference that matters:

With ‘Personalized Medicines’ the health of a patient will be managed based on personal characteristics of the individual, including height, weight, diet, age, sex etc. instead of defined “standards of care”, based on averaging response across a patient group. Pharmacogenomics tests like, sequencing of human genome will determine a patient’s likely response to such drugs.

All these are expected to offer more targeted and effective treatment with much safer drugs, and in all probability at a lesser real cost. Such medicines will also help identify individuals prone to serious ailments like, diabetes, cardiovascular diseases and cancer and help physicians to take appropriate preventive measures, simultaneously.

Each patient is unique:

‘Personalized medicines’ in that process will focus on what makes each patient so unique, instead of going by the generalities of a disease.

To give a quick example, genetic differences within individuals determine how their bodies react to drugs such as Warfarin – a blood thinner taken to prevent clotting. It is of utmost importance to get the dosing right, as more of the drug will cause bleeding and less of it will not have any therapeutic effect.

‘Personalized medicines’, therefore, have the potential to usher in a revolutionary change, the way patients are offered treatment by the medical profession. Genomic research will enable physicians to use a patient’s genetic code to arrive at how each patient will respond to different types of available treatments.

In the field of cancer, genetic tests are currently being done by many oncologists to determine which patients will be benefited most, say by Herceptin, in the treatment of breast cancer.

Indian initiatives:

Some companies, both well known and little known, are making quiet collaborative progress in the genome sequencing area in India, which will ultimately make expensive treatments like cancer more affordable to many.

Other advantages:

The expected benefits from the ‘Personalized Medicines’, besides very early diagnosis as stated above, are the following:

1. More Accurate Dosing: Instead of dose being decided based on age and body weight of the patients, the physicians may decide and adjust the dose of the medicines based on the genetic profiling of the patients.

2. More Targeted Drugs: It will be possible for the pharmaceutical companies to develop and market drugs for patients with specific genetic profiles. In that process, a drug needs to be tested only on those who are likely to derive benefits from it. This in turn will be able to effectively tailor clinical trials, expediting the process of market launch of these drugs.

3. Improved Healthcare: ‘Personalized Medicines’ will enable the physicians to prescribe ‘the right dose of the right medicine the first time for everyone’ without any trial or error. This would give rise to much better overall healthcare.

Reduced Clinical Trial cost:

Genome sequencing will help identifying a patient population, which will be far more likely to respond positively to the new treatment. In that process, if it reduces costs of clinical trial by even 5%, expected net savings for the industry towards clinical trial in real term will be significant.

With ‘personalized medicines’ the innovator companies will be able to significantly reduce both time, costs and the risks involved in obtaining regulatory approvals and penetrating new markets with simultaneous development of necessary diagnostic tests. Such tests will be able to identify patients group who will not only most likely to be benefited from such medicines, but also will be least likely to suffer from adverse drug reactions.

Therefore, considerable cost advantages coupled with much lesser risks of failure and significant reduction in the lead time for clinical trials are expected to make ‘personalized medicines’ much more cost effective, compared to conventional ‘blockbuster drugs’.

A sustainable business model:

Realization of deficiencies in the deep-pocket economics of ‘block buster drug R&D business model’ has made ‘personalized medicines’ a reality today. Large number of smaller and exclusive markets for ‘personalized medicines’ is also expected to be quite profitable for the pharmaceutical companies. On the other hand, better efficacy and safety profile of ‘personalized medicines’ will prove to be cost-effective in the overall healthcare systems.

However, smaller segmentation of the market may not leave enough space for the conventional ‘blockbuster model’, which is the prime mover of the global pharmaceutical industry, even today.

Reports indicate that some renowned global pharmaceutical companies like, Roche, AstraZeneca, GlaxoSmithKline are making good progress towards this direction through collaborative initiatives.

A different marketing ball game:

With ‘personalized medicines’ the ball game of marketing pharmaceuticals is expected to undergo a paradigm shift. Roche’s model of combining necessary diagnostic tests with new drugs will play a very important role in the new ball game.

Roche is reportedly ensuring that with accompanying required diagnostic tests, the new oncology products developed at Genentech can be precisely matched to patients.

Use in ‘Primary Care’:

Currently there is no widely successful model for use of ‘personalized medicines’ in a ‘primary care’ situation. However, it has been reported that in states like, Wisconsin in the U.S, initiative to integrate genomic medicines with ‘primary care’ has already been undertaken.

Scaling-up operations of such pilot projects will give a big boost to revolutionize the use of ‘personalized medicines’ for precision and targeted treatment for the ailing population.

Current Applications:

Though these are still the early days, initial benefits of ‘personalized medicines’ are now being reported in many areas like:

Genetic analysis of patients dealing with blood clots: Since 2007, the U.S. Food and Drug Administration has been recommending genotyping for all patients being assessed for therapy involving Warfarin.
Colorectal cancer: For colon cancer patients, the biomarker that predicts how a tumor will respond to certain drugs is a protein encoded by the KRAS gene, which can now be determined through a simple test.
Breast cancer: Women with breast tumors can now be effectively screened to determine which receptors their tumor cells contain.

Above applications of ‘personalized medicines’ will help saving not only significant expenses, but also precious time, which is usually spent for ‘trial-and-error treatments’. In addition, this approach also helps clinicians to determine quickly which therapies are most likely to succeed.

A truly patient centric treatment approach:

Generally speaking, unlike conventional ‘one size fits all’ type treatment approach, where same medicine with varying efficacy is tried on a large number of patients with equally varying rates of failure, ‘personalized medicines’ in true sense starts with the patients.

This may not necessarily mean unique treatment for each patient every time. With ‘personalized medicine’-based treatment approach, depending on biological, genetic and genomic characteristics, patients can be divided into groups and targeted treatment with specific drugs showing most efficacy and least side-effects can be worked out for each of these groups. Hence ‘personalized medicines’ by all means are truly patient centric.

Conclusion:

One of the key issues today in the realm of conventional ‘Disease Oriented Treatment’ is that lot many drugs do not work on significantly large number of patients with same efficacy and safety standards. ‘Personalized medicines’ will be able to address this issue with right diagnosis, ensuring treatment with the right medicine in right doses for the right type of patients.

Though in Europe and to some extent in the US, ‘Patient Oriented Treatment’ approaches with ‘personalized medicines’ have already been initiated, these are still early days for this novel concept to get translated into reality for wider use.

Lot many grounds may still need to be covered especially in the areas of medical research and also to work out the regulatory pathways for ‘personalized medicines’ in healthcare by the pioneers of this great concept.

That said, the evolving transition from the conventional ‘Disease Oriented Treatment’ to unconventional ‘Patient Oriented Treatment’ seems to be irreversible 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 and also do not contribute to any other blog or website with the same article that I post in this website. Any such act of reproducing my articles, which I write in my personal capacity, in other blogs or websites by anyone is unauthorized and prohibited.

The Game Changers in 2012 and A Crystal Gazing into 2013

Posted on December 31, 2012 by Tapan Ray

Wish You and Your Dear Ones Best of Health, Happiness, Success and Prosperity in The Brand New Year.

Welcome 2013

The Global Pharmaceutical Industry (GPI), by and large, used to be considered as ‘recession-proof’ for various valid reasons. However, the waves of ‘global economic meltdown’ since last several years prompted the rating service Moody to downgrade its outlook to ‘Negative’ in 2007.

However, on September 24, 2012 the same rating service upgraded the outlook of the GPI to ‘Stable’ from “Negative,” indicating subsiding impact of the wave of drug patent expiration, come 2013.

Various other sources also vindicate that the GPI has in fact now bottomed-out. Available data from IMS Health estimates that the industry will grow from US$ 956 billion in 2011 to around US$ 1004 billion by end 2012 with a growth of approximately 5 percent driven mainly by:

- Cost optimization

- Higher disease prevalence across the world

- Increasing per capita income

The United States continue to maintain its top slot in the industry followed by the European Union and Japan.

All may not be hunky-dory in the GPI just yet, nevertheless 2013 does point towards some early signs of revival after a very uncertain period, prompting a paradigm shift, especially in the mind-set of the global players. This emerging trend could well form a separate topic of discussion altogether in some other time.

Buoyancy in India:

Back home in India the situation is quite different. The Indian Pharmaceutical Industry (IPI) still remains recession-proof. The market buoyancy continued as ‘PharmaTrac India’ reported a turnover of the domestic pharmaceutical market at around US$ 12.6 billion growing over 15 percent annually.

In this article I shall focus on the domestic pharmaceutical market of India.

The Game Changers of 2012:

Looking back, during the year 2012 the ‘Top Five Game Changers’ for the Indian Pharmaceutical Market (IPM), in my opinion, are as follows:

1. A DIFFERENT ‘Drug Policy’ after 10 years:

The ‘National Pharmaceutical Pricing Policy 2012 (NPPP 2012)’ heralds a paradigm shift in the pharmaceutical price control regime of India for the years ahead with a switch from the ‘Cost Based Pricing CBP)’ methodology to ‘Market Based Pricing (MBP)’ and also in its ‘National List of Essential Medicines 2011 (NLEM 2011)’ based span of price control.

The industry has already articulated, though the new policy will make an immediate and significant adverse financial impact on them, market based pricing is directionally prudent for all in the longer term. They feel that MBP is expected to help improving both affordability and availability of medicines.

Such a policy, some stakeholders believe, along with the Government initiative to make essential medicines available free of cost through public hospitals and health centers will benefit all sections of the society, giving a boost to overall consumption of pharmaceutical products in India. It is also good to note that the new policy promises price control exemptions for patented drugs and products with NDDS developed in India through indigenous R&D.

NPPP 2012, is expected to be a game changer for the industry by many, as it will help bringing more stability in the pharma pricing regulation system of India.

However, there is a flip side to this story.

All stakeholders are not equally happy with the NPPP 2012.

In this context, it is worth noting that in an ongoing Public Interest Litigation before the Supreme Court by ‘All India Drug Action Network (AIDAN)’, the petitioner has already drawn the attention of the Court to their ‘Interim Application’ challenging the NPPP 2012 by stating that the ‘policy finalized by the Government will in effect do away with the very notion of price controls’. In response the apex court reportedly had observed that it will consider the averments of AIDAN in the next hearing of January 15, 2013, once the printed Gazette Notification is put on record before the Court by the Government.

2. First ever grant of Compulsory License in India:

On March 12, 2012, Indian Patent Office (IPO), in its landmark ruling, granted its first ever Compulsory License (CL) for Bayer’s patented kidney and liver cancer drug Nexavar (Sorafenib), to the generic pharma player Natco, broadly citing the following reasons:

Reasonable requirements of public under Section 84 have not been satisfied.
The Patented Drug was not available to the public at a reasonably affordable price as per Section 84 (1) (b).
Patented invention is not worked in the territory of India as per Section 84 (1) (c)

The 62 page order of the Controller General of Patents, Designs and Trade Mark (CGPDTM) granted the CL to Natco for the rest of patent life of sorafenib in India at the high end of the UNDP 2001 royalty guidelines at 6 percent.

Though the research based pharmaceutical industry across the world expressed its deep disappointment and anguish over the judgment, many experts and NGOs from different parts of the globe, on the contrary, have reportedly hailed this order as a game changer to improve access to high-priced patented medicines in the country with a firm conviction that the ‘Intellectual Property Rights (IPR)’ and ‘Patients’ Access Issues’ can not tread different paths. They have reportedly opined that CGPDTM has set a right precedence by granting a CL for an exceptionally high-priced sorafenib, which will ensure, in the times to come, that “patent monopolies are kept limited, especially when the patented products are not ‘reasonably affordable’, as stated in the statute”.

Many people, therefore, envisage that if responsible pricing strategy for patented medicines is not followed in India even after the grant of first ever CL by the IPO, one could well expect other generic players applying for CL mainly for the imported high priced patented medicines purely as a business strategy, but citing the reason of improving patients’ access in the country.

3. First ever Guidelines for Biosimilar Drugs in India:

Across the world, biologic drugs have a successful record in treating many life threatening and other complicated ailments. Expiration of product patents of the first major group of originators’ biologic molecules has led to the development of products that are designed to be ‘similar’ to the originators’ products, as it is virtually impossible to replicate any protein substances, unlike the ‘small molecule’ drugs. These are ‘Biosimilar Drugs’, which rely, in part, on prior information obtained from the innovators’ products and demonstration of similarity with the originator’s molecule based on detailed and comprehensive product characterization, for their marketing approval.

India has the potential to become one of the key players in the development and manufacture of biosimilar drugs, not only to serve the needs of the local population, but also for export to large developed markets. However, for this dream to materialize, a science-driven ‘Biosimilar Guidelines’ are absolutely necessary. These guidelines provide a regulatory framework or pathway to ensure that ‘Biosimilar Drugs’ are of good quality and demonstrably similar in efficacy, safety and immunogenicity to the original reference products.

Considerable developments have occurred across the globe, in the scientific and regulatory understanding of biosimilar drugs. Nearly all developed nations and many developing countries have now defined appropriate regulatory framework for the same. However, due to lack of such guidelines in India, until recently, there have been instances of so called ‘biosimilar drugs’ being approved for marketing, reportedly with sub-optimal testing and dossiers, thereby putting into question product quality, comparability and patient safety.

Under this back-drop, the need for such a regulatory framework and comprehensive guidelines is even greater in India, mainly in the light of sub-optimal pharmacovigilance system in the country, besides other reasons.

Keeping these issues in view, the Ministries of Health & Family Welfare and the Science and Technology released India’s first “Guidelines on Similar Biologics: Regulatory Requirements for Marketing Authorization in India” in 2012. These Guidelines have been made operational effective September 15, 2012.

Long awaited new ‘Biosimilar Guidelines’ of India, demonstrating an overall similarity in the philosophy and approach with the those in the U.S and Europe, though a belated move by the Government, but certainly yet another game changer of 2012.

I reckon, this critical step will help ‘Made in India’ biosimilar drugs availing opportunities in the emerging biosimilar markets of the world including Europe and America.

4. Increase in National Health Expenditure Budget from 1% to 2.5% of GDP:

This decision of the Government in 2012 could help paving the way to provide basic healthcare services to all citizens of India through “Universal Health Coverage (UHC)”, which has the vast potential to be another game changer in the healthcare space of India.

It is envisaged that UHC will ensure guaranteed access to essential health services for every citizen of the country, including cashless in-patient and out-patient treatment for primary, secondary and tertiary care. All these services will be available to the patients absolutely free of any cost.

Under UHC all citizens of India will be free to choose between Public Sector facilities and ‘contracted-in’ Private Providers for healthcare services. It is envisaged that people would be free to supplement the free of cost healthcare services offered under UHC by opting to pay ‘out of pocket’ or going for private health insurance schemes.

Thus, UHC, I reckon, will also be able to address simultaneously the critical issue of high ‘out of pocket’ healthcare expenses of the common citizens and at the same time increase consumption of overall healthcare, giving a boost to the growth of the pharma industry together with other healthcare sectors.

Implemented sooner, ignoring motivated stalling tactics by the vested interests, if any, could usher-in the dawn of a new healthcare reform process in India for all.

5. Announcement of Distribution of Essential Drugs free of cost to all, from Government Hospitals and Dispensaries:

In July 2012 the Government of India took a landmark ‘Public Healthcare’ related initiative to provide unbranded generic formulations of all essential drugs, featuring in the ‘National List of Essential Medicines 2011’, free of cost to all patients, from the public hospitals and dispensaries across the country.

This social sector project was expected to roll out, as reported in the media, from October/November 2012 with a cost of around US$ 5 billion during the 12^th Five Year Plan period of the country. Considering medicines account for around 70% of the total ‘Out of Pocket’ expenses, this particular initiative is expected to be yet another game changer to benefit, especially the poorer patients of the society.

This new scheme, I reckon, has also the potential to hasten the overall growth of the pharmaceutical industry, as poor patients who could not afford will now have access to essential medicines. On the other hand, rapidly growing middle class population will continue to favor branded generic drugs prescribed by the doctors at the private hospitals and clinics.

Some people are apprehending that generic drug makers will have brighter days as the project starts rolling on. This apprehension is based on the assumption that large branded generic players will be unable to take part in this big ticket drug procurement process of the Government, which seems to be imaginary.

However, in my view, it could well be a win-win situation for all types of players in the industry, where both the generic-generic and branded-generic businesses will continue to grow simultaneously.

That said procedural delays and drug quality issues, while procuring cheaper generics, may pose to be a great challenge for the Government to ensure speedier implementation of this project. Drug regulatory and law enforcing authorities will require to be extremely vigilant to ensure that while sourcing cheaper generic drugs, “Public health and safety” due to quality issues do not get compromised in any way.

A Crystal Gazing into 2013:

While Crystal Gazing into 2013, following seven possible developments come to the top of my mind:

New Drug Policy may get caught in Public Interest Litigation (PIL).
UHC related pilot projects may start coming up.
More stringent regulatory requirements for Clinical Trials, Product Marketing approvals, Pricing of Patented Medicines and Ethical Marketing practices may come into in-force.
Along with public investments more private initiatives, both global and local, are expected in the healthcare infrastructure space including in e-healthcare.
Domestics Pharma Companies could challenge increasing number of patents and may also apply for Compulsory Licenses following the set precedence of 2012.
The Supreme Court judgment on Glivec case could bring more clarity in ‘incremental innovation’ in general and the Section 3(d) in particular.
More consolidation within the pharmaceutical industry may take place with valuation still remaining high.

Conclusion:

The year 2012, especially for the pharmaceutical industry in India, was indeed eventful. The ‘Top Five’ that I have picked-up out of various interesting developments during the year, could in many ways be the ‘Game Changers’ for the industry during the years ahead.

Key measures, both in the public and private space, be it fostering R&D or improving access to healthcare for the general population, fell well short of adequate even in 2012.

My ‘Crystal Gazing into 2013’, if comes true, will make the year even more eventful in India. The new year could signal herald of yet another interesting paradigm. A paradigm that may churn quite different sets of rapidly evolving issues requiring more innovative honed skill-sets for their speedy redressal, as the time keeps moving on.

By: Tapan J Ray

The Conundrum of Stringent IPR Regime in India: Responsible Pricing still remains ‘The Final Frontier’

Posted on November 26, 2012 by Tapan Ray

In his management classic named, ‘The Practice of management’, published in 1954, the universal management guru Peter Drucker postulated that any successful business is driven by only the following two fundamental functions:

Marketing
Innovation

…and all the rests are costs. Drucker’s above postulation is as valid today as it has been in the past for so many decades. Cutting edge expertise in managing innovation, which may not necessarily mean the Intellectual Property Rights (IPR), and marketing the same better than competition will continue to remain the name of the game for business excellence, perhaps in all time to come, across the world and India is no exception. No doubt, for the same reason the current decade has been termed as ‘the decade of innovation’ by none other than the Prime Minister of India.

The innovators’ financial and non-financial claims on the fruits of value-adding creations following the prescribed inventive steps is epitomized in the IPR, which confers a legal protection to the innovator based on the relevant national IP Act of individual countries. Any successful innovation will give rise to meeting an unmet need with innovative products or services for doing things more efficiently and effectively than ever before.

Excellence in the financial performance of business organizations driven by innovation is expected to keep this wheel of progress moving with optimal speed in perpetuity. Thus, innovation must be encouraged through appropriate legal protection of IP, creating a win-win socioeconomic environment for a country.

Why protect patent?

The pharmaceutical major Eli Lilly had very aptly summarized the reason for patent protection in their website called ‘LillyPad’, as follows:

“Pharmaceutical companies continue to invest in innovation not only because it is good for business, but it is what patients expect. If we want to continue to have breakthrough products, we need patent protection and incentives to invest in intellectual property. The equation is simple, patents lead to innovation – which help lead to treatments and cures”.

Positive impact of an IPR regime:

In a paper titled “Strengthening the Patent Regime: Benefits for Developing countries – A Survey”, published in the Journal of Intellectual Property Rights, the authors concluded that innovativeness of developing countries has now reached a stage where it is positively impacted by a robust Intellectual Property regime. The authors further stated that a robust patent ecosystem is among other important policy variables, which affect inflow of Foreign Direct Investments (FDI) in the developing nations.

Another paper titled, “The Impact of the International Patent system in the Developing Countries”, published by the ‘World Intellectual Property Organization (WIPO)’, though a bit dated of October 2003, states that a robust national patent system in developing countries contributes to their national socioeconomic development. The paper also highlights the experience of some developing nations, which found usefulness of a strong patent system in creation of wealth for the nation.

IPR debate is not non product exclusivity:

It is important to understand, though a raging debate is now all pervasive related to the level of IPR protection for drugs, across the world, there has not been many questions raised by most stakeholders on the exclusive rights on patents by the innovators. The center piece of the arguments and counter-arguments revolves predominantly around responsible pricing of such IPR protected medicines affecting patients’ access.

Need to go beyond IPR:

Echoing similar sentiments in the Indian context the Global CEO of GSK commented in October 18, 2012 that while intellectual property protection is an important aspect of ensuring that innovation is rewarded, the period of exclusivity in a country should not determine the price of the product. Witty said, ‘At GSK we will continuously strive to defend intellectual property, but more importantly, defend tier pricing to make sure that we have appropriate pricing for the affordability of the country and that’s why, in my personal view, our business in India has been so successful for so long.’

Is this view shared by all in the global pharma industry?

Not really. All in the global pharmaceutical industry does not necessarily seem to share the above views of Andrew Witty and believe that to meet the unmet needs of patients, the Intellectual Property Rights (IPR) of innovative products must be strongly protected by the governments of all countries putting in place a robust product patent regime and the pricing of such products should not come in the way at all.

The industry also argues that to recover high costs of R&D and manufacturing of such products together with making a modest profit, the innovator companies set a product price, which at times may be perceived as too high for the marginalized section of the society, where government intervention is required more than the innovator companies. Aggressive marketing activities, the industry considers, during the patent life of a product, are essential to gain market access for such drugs to the patients.

In support of the pharmaceutical industry the following argument was put forth in a recent article:

“The underlying goal of every single business is to make money. People single out pharmaceutical companies for making profits, but it’s important to remember that they also create products that save millions of lives.”

IPR, product price and patients’ access:

In the paper titled ‘TRIPS, Pharmaceutical Patents and Access to Essential Medicines: Seattle, Doha and Beyond’, published in ‘Chicago Journal for International Law, Vol. 3(1), Spring 2002’, the author argues, though the reasons for the lack of access to essential medicines are manifold, there are many instances where high prices of drugs deny access to needed treatments for many patients. Prohibitive drug prices, in those cases, were the outcome of monopoly due to strong intellectual property protection.

The author adds, “The attempts of Governments in developing countries to bring down the prices of patented medicines have come under heavy pressure from industrialized countries and the multinational pharmaceutical industry”.

While the ‘Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS)’ of the World Trade Organization (WTO) sets out minimum standards for the patent protection for pharmaceuticals, it also offers adequate safeguards against negative impact of patent protection or its abuse in terms of extraordinary and unjustifiable drug pricing. The levels of these safeguards vary from country to country based on the socioeconomic and political requirements of a nation.

The Doha Declaration:

Many independent experts in this field consider the Doha Declaration as an important landmark for recognizing the primacy to public health interest over private intellectual property and the rights of the members of WTO to use safeguards as enumerated in TRIPS, effectively. To protect public health interest and extend access to innovative medicines to majority of their population whenever required, even many developed/OECD countries do not allow a total freehand for the patented products pricing in their respective countries.

How much then to charge for an IPR protected drug?

While there is no single or only right way to arrive at the price of an IPR protected medicine, how much the pharmaceutical manufacturers will charge for such drugs still remains an important, yet complex and difficult issue to resolve, both locally and globally.

A paper titled, “Pharmaceutical Price Controls in OECD Countries”, published by the US Department of Commerce, after examining the drug price regulatory systems of 11 OECD countries concluded that all of them enforce some form of price controls to limit spending on pharmaceuticals. The report also indicated that the reimbursement prices in these countries are often treated as de facto market price. Moreover, some OECD governments regularly cut prices of even those drugs, which are already in the market.

An evolving rational system for responsible pricing of IPR protected drugs:

The values of health outcomes and pharmacoeconomics analysis are gaining increasing importance for drug price negotiations/control by the healthcare regulators even in various developed markets of the world to ensure responsible pricing of IPR protected medicines.

In countries like, Australia and within Europe in general, health outcomes data analysis is almost mandatory to establish effectiveness of a new drug over the existing ones.

Even in the US, where the reimbursement price is usually negotiated with non-government payors, many health insurers have now started recognizing the relevance of these data.

Such price negotiations at times take a long while and may also require other concessions by manufacturers, just for example:

In the UK, a specified level of profitability may constrain the manufacturers.
Spain would require a commitment of a sales target from the manufacturers, who are made responsible to compensate for any excess sales by paying directly to the government either the incremental profit or by reducing the product price proportionately.

Metamorphosis in Pharmaceutical pricing models:
Pharmaceutical pricing mechanism is undergoing significant metamorphosis across the world. The old concept of pharmaceutical price being treated as almost given and usually determined only by the market forces with very less regulatory scrutiny is gradually but surely giving away to a new regime. Currently in many cases, the prices of patented medicines differ significantly from country to country across the globe, reflecting mainly the differences in their healthcare systems and delivery, along with income status and economic conditions.

Global pharmaceutical majors, like GSK and Merck (MSD) have already started following the differential pricing model, based primarily on the size of GDP and income status of the people of the respective countries. This strategy includes India, as well.

Reference pricing model is yet another such example, where the pricing framework of a pharmaceutical product will be established against the price of a reference drug in reference countries.

The reference drug may be of different types, for example:

Another drug in the same therapeutic category
A drug having the same clinical indications available in the country of interest e.g. Canada fixes the drug prices with reference to prices charged for the same drug in the US and some European Union countries.

Responsible pricing in the changing paradigm:

Taking note of the above scenario, while looking at the big picture, the global pharmaceutical players, experts believe, should take note of the following factors while formulating their India-specific game plan to be successful in the country without worrying much about invocation of Compulsory License (CL) for not meeting ‘Reasonably Affordable Price’ criterion, as provided in the Patents Act of the country:

While respecting IPR and following Doha declaration, the government focus on ‘reasonably affordable drug prices’ will be even sharper due to increasing pressure from the Civil Society, Indian Parliament and also from the Courts of the country triggered by ‘Public Interest Litigations (PIL)’
India will continue to remain within the ‘modest-margin’ range for the pharmaceutical business with marketing excellence driven volume turnover.
Although innovation will continue to be encouraged with IPR protection, the amended Patents Act of India is ‘Public Health Interest’ oriented, including restrictions on patentability, which, based on early signals, many other countries are expected to follow as we move on.
This situation though very challenging for many innovator companies, is unlikely to change in the foreseeable future, even under pressure of various “Free Trade Agreements (FTA)”.

Many global companies are still gung-ho about India:

Despite above scenario, many global companies like GSK are reportedly still quite gung-ho about India as evident in the following recent statement of their Global CEO, Andrew Witty:

“I am a huge bull on India and I have a very strong sense of optimism about the future potential of this country. Of course, there continues to be policy uncertainties in certain areas of government decision-making, particularly in pharma. While there are the areas under question, but the overall picture makes you feel positive about India.”

Late 2011, echoing similar sentiment the Global CEO of Sanofi and now the ‘President Elect’ of the European Pharmaceutical Association EFPIA commented as follows:

“I do not want us to be a colonial company with a colonial approach where we say we decide on the strategy and pricing. If you have to compete locally then the pricing strategy cannot be decided in Paris but will have to be in the marketplace. People here will decide on the pricing strategy and we have to develop a range of products for it.”

Recognition of national healthcare priorities:

It may be prudent to recognize and accept that a paradigm change is taking place, slowly but surely, in the way pharmaceutical businesses are conducted in India, where replication of any western business model could be counterproductive. The strategy has to be India specific, accepting the priorities of the countries.

Be a part of the solution process:

To achieve excellence in the pharmaceutical market of India, there is a dire need for all stakeholders to join hands with the Government, without further delay, to contribute with their global knowledge, experience and expertise to help resolving the critical issues of the healthcare sector of the nation. This will help demonstrating that the global pharmaceutical industry is extending its hands to be a part of the healthcare solution process of India, like:

Creation and modernization of healthcare infrastructure leveraging IT
In the implementation of ‘Universal Health Coverage’ project
Reaching out to help formulate win-win regulatory policies
Help Creating employable skilled manpower
Ensure availability of reasonably affordable medicines for the common man through a robust government procurement and delivery system

Right attitude of all stakeholders to find a win-win solution for all such issues, instead of adhering to the age-old blame game in perpetuity, as it were, without conceding each others’ ground even by an inch, is of utmost importance at this hour.

In this rapidly changing scenario, the name of the game for all players of the industry, both global and local, I believe, is recognition of the changing socioeconomic environment and market dynamics of India, active engagement in its paradigm changing process and finally adaptation to the countries changing aspirations and priorities to create a win-win situation for all.

Government should reach out:

It is high time for the Government of India, I reckon, to also reach out for reaping a rich harvest from the emerging lucrative opportunities, coming both from within and the outside world in the healthcare space of the country. Effective utilization of these opportunities, in turn, will help India to align itself with the key global healthcare need of providing reasonably affordable healthcare to all, despite a robust IPR protected regime across the world.

Conclusion:

While encouraging innovation and protecting it with an effective IPR regime is very important for any country, no nation can afford to just wish away various socioeconomic expectations, demands and requirements not just of the poor, but also of the powerful growing middle class intelligentsia, as gradually getting unfolded in many parts of the globe.

At the same time, it should be recognized by all that there should be full respect, support and protection for innovation and the IPR system in the country. This is essential not only for the progress of the pharmaceutical industry, but also to alleviate sufferings of the ailing population of the country, effectively.

Having said that, available indicators do point out that the civil society would continue to expect in return just, fair, responsible and reasonably affordable prices for the innovative medicines, based on the overall socioeconomic status of the local population. It is, therefore, now widely believed that pharmaceutical products, which play a pivotal role in keeping the population of any nation healthy and disease free to the extent possible, should not be exploited by anyone.

Pharmaceutical companies are often criticized in this area by those stakeholders who claim to be genuinely concerned with the well-being of particularly the underprivileged population across the world.

Some experts have already opined that prices of IPR protected drugs will no longer remain ‘unquestionable’ in increasing number of countries. In that scenario, responsible pricing may, therefore, emerge as the ‘Final Frontier’ to address the conundrum of a robust IPR protected regime in India.

By: Tapan J. Ray

Finance Ministry Disallows Expenses on ‘Freebies’ to Doctors by Pharma Companies in line with MCI Guidelines: A Possible Game Changer?

Posted on August 6, 2012 by Tapan Ray

Things are unfolding reasonably faster now related to the financial relationship between the pharmaceutical companies and the medical profession. All these issues are getting increasingly dragged into the public debate where government can no longer play the role of a mere bystander.

Last month, around middle of July, most of the leading English business dailies of India reported that much-awaited “Uniform Code of Pharmaceutical Marketing Practices (UCPMP)” authored by the Department of Pharmaceuticals, quite in line with the amended guidelines for the medical profession by the Medical Council of India (MCI), is expected to be notified by the government by August, 2012 for implementation by the entire pharmaceutical industry on a voluntary basis for six months, to start with.

Department of Revenue now steps in:

Closely following the recent series of events, it now appears that there is a good possibility of framing a robust financial regulation by the Government of India to make the disclosure of all payments made to the physicians by the pharmaceutical companies’ mandatory, like the ‘Physician Payments Sunshine Act in the USA’.

I reckon, this is just a matter of time that similar steps are taken in India, perhaps in stages.

CBDT disallows expenses on all ‘freebies’ to Doctors:

However, taking the first step closer to that direction, Central Board of Direct Taxes (CBDT), which is a part of Department of Revenue in the Ministry of Finance has now decided to disallow expenses on all ‘freebies’ to Doctors by the Pharmaceutical Companies in India.

MCI Guidelines are the basis:

The above decision of the CBDT is based on the notification of the Medical Council of India (MCI) dated December 10, 2009 amending the “Indian Medical Council (Professional Conduct, Etiquette and Ethics), Regulations 2002”, prohibiting the medical practitioners and their professional associations from taking any gift, travel facility, hospitality, cash or monetary grant from the pharmaceutical and allied health sector Industries. Amended guidelines of the MCI came into force with effect from December 14, 2009.

Areas of stricter MCI regulations: The above notification of MCI clearly specifies stricter regulations for doctors in their relationship with the ‘pharmaceutical and allied health sector industry and associations’ in the following areas: 1. Gifts 2. Travel facilities 3. Hospitality 4. Cash or Monetary grants 5. Medical Research 6. Maintaining Professional Autonomy 7. Affiliation 8. Endorsement

Tax Assessing Officers have also been instructed:

Based on this amendment, CBDT has now decided that all claims related to expenses incurred in providing the above mentioned or similar ‘freebies’ in violation of the provisions of Regulations 2002 of the MCI on ‘Professional Conduct, Etiquette and Ethics’ of the doctors, shall now be inadmissible under section 37(1) of the Income Tax Act being an expense prohibited by the law.

This disallowance shall be made in the hands of all such pharmaceutical or allied health sector industries or other assesses which have provided the ‘freebies’ mentioned above and claimed it as deductible business expenses in their respective accounts against income.

CBDT has directed its assessing officers, with the above circular, to follow this new practice.

CBDT Circular:

“INADMISSIBILITY OF EXPENSES INCURRED IN PROVIDING FREEBEES TO MEDICAL PRACTITIONER BY PHARMACEUTICAL AND ALLIED HEALTH SECTOR INDUSTRY

CIRCULAR NO. 5/2012 [F. NO. 225/142/2012-ITA.II], DATED 1-8-2012

It has been brought to the notice of the Board that some pharmaceutical and allied health sector Industries are providing freebees (freebies) to medical practitioners and their professional associations in violation of the regulations issued by Medical Council of India (the ‘Council’) which is a regulatory body constituted under the Medical Council Act, 1956.

2. The council in exercise of its statutory powers amended the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (the regulations) on 10-12-2009 imposing a prohibition on the medical practitioner and their professional associations from taking any Gift, Travel facility, Hospitality, Cash or monetary grant from the pharmaceutical and allied health sector Industries.

3. Section 37(1) of Income Tax Act provides for deduction of any revenue expenditure (other than those failing under sections 30 to 36) from the business Income if such expense is laid out/expended wholly or exclusively for the purpose of business or profession. However, the explanation appended to this sub-section denies claim of any such expense, if the same has been incurred for a purpose which is either an offense or prohibited by law.

Thus, the claim of any expense incurred in providing above mentioned or similar freebees in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 shall be inadmissible under section 37(1) of the Income Tax Act being an expense prohibited by the law. This disallowance shall be made in the hands of such pharmaceutical or allied health sector Industries or other assesse which has provided aforesaid freebees and claimed it as a deductible expense in its accounts against income.

4. It is also clarified that the sum equivalent to value of freebees enjoyed by the aforesaid medical practitioner or professional associations is also taxable as business income or income from other sources as the case may be depending on the facts of each case. The Assessing Officers of such medical practitioner or professional associations should examine the same and take an appropriate action.

This may be brought to the notice of all the officers of the charge for necessary action.”

The turning point:

In 2010, ‘The Parliamentary Standing Committee on Health’ expressed its deep concern that “the evil practice” of inducement of doctors continued because the Medical Council of India had no jurisdiction over the pharma industry and it could not enforce the code of ethics on it.’

It was widely reported that the letter of the Congress Member of Parliament, Dr. Jyoti Mirdha to the Prime Minister Dr. Manmohan Singh, attaching a bunch of air tickets to claim that ‘doctors and their families were beating the scorching Indian summer with a trip to England and Scotland, courtesy a pharmaceutical company’, compelled the Prime Minister’s Office (PMO) to initiate inquiry and action on the subject.

The letter had claimed that as many as 30 family members of 11 doctors from all over India enjoyed the hospitality of the pharmaceutical company.

In addition Dr. Mirdha reportedly wrote to the PMO that “The malpractice did not come to an end because while medical profession (recipients of incentives) is subjected to a mandatory code, there is no corresponding obligation on the part of the healthcare industry (givers of incentives). Result: Ingenious methods have been found to flout the code.”

The report also indicated at that time that the Department of Pharmaceuticals is trying to involve the Department of Revenue under the Ministry of Finance to explore the possibilities in devising methods to link the money trail to offending companies.

Conclusion:

Be that as it may, it now appears that the new ball game of working out winning pharmaceutical marketing strategies and practices will no longer be driven by more of a ‘deep pocket’ syndrome and less of ‘cerebral power’, by all concerned.

If the new regulations are implemented effectively by the Government, I shall not be surprised to witness a dramatic change in the prescription share of various companies in the next 3 to 5 years, thereby impacting the ranking of these companies in the Indian pharmaceutical industry league table significantly, separating men from the boys.

Thus, the name of the game in the pharmaceutical marketing space, in not too distant future, is expected to be decided by the winning innovative ideas, whose time has just become ripe.

By: Tapan J Ray

e-Patients: Quality and Cost Empowered Patients Will Help Reducing Healthcare Costs in India Significantly

Posted on July 30, 2012 by Tapan Ray

Currently many important stakeholders of the healthcare industry, reportedly, are using or rather exploiting the individual patients not just to derive petty commercials gains, but also for quite significant strategic commercial advantages, mainly due to ignorance or helplessness of a large section of the ailing population of India.

The Lancet:

A relatively recent report on India dated January 11, 2011, published in ‘The Lancet’, states in a similar, though not exactly the same context, as follows: 1. “Reported problems (which patients face while getting treated at a private doctor’s clinic) include unnecessary tests and procedures, rewards for referrals, lack of quality standards and irrational use of injection and drugs. Since no national regulations exist for provider standards and treatment protocols for healthcare, over diagnosis, over treatment and maltreatment are common.” 2. “Most people accessed private providers for outpatient care – 78% in rural areas and 81% in urban areas.” 3. “India’s private expenditure of nearly 80% of total expenditure on health was much higher than that in China, Sri Lanka and Thailand.” Considering the above critical issues of India, as reported by ‘The Lancet’, it is rather apparent that these stakeholders could be doctors, hospitals, diagnostic centers, pharmaceutical industry, even activists and politicians. It is unfortunate that they all, sometime or the other use the patients as pawns to achieve their respective commercial or political goals or to achieve competitive gains of various types prompted by vested interests.

e-Patients:

e-Patients or empowered patients can play a very important role in India to take this raging bull by its horn to liberate themselves from such kind of a pathetic environmental condition.

The term e-Patients may be defined as those who seek or are encouraged to seek information regarding various therapeutic options, which will enable them to actively participate in the decision making process on whether or how to undergo a diagnostic or therapeutic procedure at the right cost or the pros and cons of pursuing other available alternatives.

In this sense, a large majority of patients in India are not empowered at all with health and disease related information. Despite unprecedented access to health related information in the cyberspace and elsewhere, not only a large section of the industry, but also majority within the medical profession, in general, does not seem to quite believe in the concept of e-Patients, as yet.

Though all concerned speak and even pontify about ‘Patient Centric’ approaches, at the ground level, most of them do not seem to walk the talk for tangible benefits of the patients.

In this context the news appeared earlier this month reporting that patients would soon be able to find the most affordable alternative to the medicine prescribed by the doctors through an SMS-based service, is a breath of fresh air.

The report stated, “The government plans to cover at least two-thirds of the prescription market through this scheme, which would include all widely used therapies like anti-infectives, painkillers, respiratory and gastro-intestinal drugs.”

This initiative, if becomes successful, can certainly be termed as one of the praiseworthy e-Patient related schemes of the Government.

Role of the Civil Society along with the Government:

Under the prevailing scenario, the government and the civil society, in tandem, should encourage creation of more and more e-Patients by making them understand how the healthcare system is currently working on the ground, what and which are the key obstacles in getting reasonably decent healthcare support in India and what should be done to uproot these barriers in civilized ways.

A movement yet to gather its full steam:

e-Patient movement first started in America in the 70’s, which asserts that for truly healthy living, one should get engaged in transforming the social situation and environment affecting their lives, demanding a greater say in their treatment process and observing the following tenets:

Patients’ choice and lifestyle cannot be dictated by others.

‘Patient empowerment’ is necessary even for preventive medicines to be effective.
Patients, just like any other consumers, have the right to make their own choices.

The ‘Empowered Patient’ should always play the role of a participating partner in the healthcare process.

e-Patients will help reducing the growing trust-deficit:

In today’s world, the distrust of patients on the healthcare system, pharmaceutical companies and the drug regulators, is growing all over the world, including in India. This situation makes an e- Patient resolve to actively participate in the decision making process of his/her required medical treatment.

Under the above circumstances, other stakeholders will have no other option but to take a ‘Patient-Centric’ posture in its real sense, the seeds of which are slowly and gradually being sown in India, as cited above.

In India, as ‘out-of-pocket’ healthcare expenses are skyrocketing, in the absence of a comprehensive and affordable universal health coverage, e- Patients’ will increasingly demand to know more of not only the available treatment choices, but also about the medicine prescriptions options.

e-patients will prompt a change in basic sales and marketing models of the pharmaceutical companies:

Not so long ago, to generate increasing prescription demand and influence the prescription decision of the doctors, the pharmaceutical companies used to provide product information to the medical profession through various persuasive means of the sales forces along with samples and a variety gifts, besides meeting their unmet needs with innovative medicines.

The above approach though still working well in India, will no longer fetch desired results to the pharmaceutical companies, as we move on, just as what is happening in the developed markets of the world.

e- Patients have already started demanding much more from the pharma players even through their doctors. As a result, many global companies are now cutting down on their sales force size to try to move away from just hard selling by gaining more time from the doctors. They have started taking new initiatives to open up a chain of direct communication with their primary and secondary customers with an objective to know more about them to satisfy them better.

In future, growing number of e-Patients is expected to prompt a radical change in the basic sales and marketing models of the pharmaceutical companies. At that time, so called ‘Patient-Centric’ companies of today will have no choice but to walk the talk.

Consequently, they will have to willy-nilly switch from the ‘hard-selling mode’ to a new process of achieving business excellence through constant endeavor to satisfy both the expressed and the un-expressed needs of the patients, not just with innovative products, but more with innovative and caring services.

Growing influence of e-patients in their healthcare decision making process:

In the years ahead, growing number of e- Patients is expected to play an important role in their healthcare decision making process, initially in urban India, ensuring further improvement not just in the public and private healthcare systems, but also in inviting the pharmaceutical industry to be a part of that changing process.

In the book titled, “The Empowered Patient: How to Get the Right Diagnosis, Buy the Cheapest Drugs, Beat Your Insurance Company, and Get the Best Medical Care Every Time”, Elizabeth Cohen articulated as follows:

“The facts are alarming. Medical errors kill more people each year than AIDS, breast cancer or car accidents. A doctor’s relationship with pharmaceutical companies may influence his choice of drugs for you. The wrong key word on an insurance claim can deny you coverage.”

‘USA Today’ dated August 31, 2010 in an article titled, “More empowered patients question doctors’ orders,” reported:

‘In the past, most patients placed their entire trust in the hands of their physician. Your doc said you needed a certain medical test, you got it. Not so much anymore.’

Unfortunately in India, the pace of this change is rather slow as on date. All stakeholders of the healthcare industry need to think now more of inclusive growth, not just the commercial growth of the respective organizations, which could further widen the socioeconomic divide in India, creating numbers of serious social issues. As we know, this divide has already started widening at a brisk pace, especially in the healthcare sector of the country, the impact of which we have started reading in the media much too often now.

Influence of e-patients in the R&D process:

Reinhard Angelmar, the Salmon and Rameau Fellow in Healthcare Management and Professor of Marketing at INSEAD, was quoted saying that ‘Empowered Patients’ can make an impact even before the drug is available to them.

He cited instances of how the empowered breast cancer patients in the US played a crucial role not only in diverting funds from the Department of Defense to breast cancer research, but also in expediting the market authorization and improving market access of various other drugs.

Angelmar stated that e- Patients of the UK were instrumental in getting NICE, their watchdog for cost-effectiveness of medicines, to change its position on the Age-related Macular Degeneration (AMD) drug Lucentis of Novartis and approve it for wider use than originally contemplated by them.

e-Patients have started influencing the global pharma companies:

To respond to the challenges of change posed by the e-Patients, pharmaceutical companies, especially in the US and Europe are in the process of developing a more direct relationship with the patients (consumers). Creation of ‘Patient Empowered’ social networks may help to address this issue effectively.

For example, Becton, Dickinson and Co. created a web-based patient-engagement initiative called “Diabetes Learning Center” for the patients, not just to describe the causes of diabetes, but also to explain its symptoms and complications. From the website a patient can also learn how to inject insulin, along with detailed information about blood-glucose monitoring. They can even participate in interactive quizzes, download educational literature and learn through animated demonstrations about diabetes-care skills.

To cite one more example, companies like, Novo Nordisk is developing a vibrant patient community named ‘Juvenation’, which is a peer-to-peer social group of individuals suffering from Type 1 diabetes. This program was launched by the company in November 2008 and now the community has over 16,000 members, as available in its ‘Facebook’ page.

Some other Pharmaceutical Companies, who are in the process of engaging with the customers through social media like Twitter, are Pfizer, Johnson & Johnson, Novartis, Boehringer Ingelheim, AstraZeneca, Bayer, GlaxoSmithKline, Sanofi, Roche and Merck.

Conclusion:

Since the last few years, especially in the developed countries of the world, pharmaceutical companies have been talking about being ‘Patient Interest-Centric’ to ride squarely the increasingly powerful tide of ‘Patient Empowerment’ in their endeavor to satisfy the assertive demands of the new generation of healthcare consumers – the e-Patients.

However, in many cases the prevailing healthcare provisions, its structure and culture, together with stiff resistance of the regulators to let the industry engage directly with the patients, have inhibited the ‘Patient Interest-Centric’ intent of the stakeholders to take off the ground in a meaningful way.

At the same time, the aggressive marketing focus of the pharmaceutical industry and blatant commercialization of the system by the healthcare professionals, have more often than not failed to translate the good intent of ‘Patient Interest-Centric’ healthcare process into reality.

Increasing general awareness and rapid access to information on diseases, products and the cost-effective treatment processes through internet, in addition to fast communication within the patients/groups through social media like, ‘Twitter’ and ‘Facebook’ by more and more patients, I reckon, are expected to show the results of creation of more number of e-Patients in India.

As reported by the World Health Organization (WHO), at the First European Conference on ‘Patient Empowerment’ held in Copenhagen, Denmark on 11–12 April 2012, Robert Johnstone of the International Alliance of Patient Organizations said:

“What needs to happen is for doctors to come down off their pedestal and for patients to get up off their knees.”

To reduce healthcare costs significantly in India, let the government together with the civil society accelerate the process of creating more and more e-Patients – Quality and Cost-Empowered Patients in the country, avoiding any further delay. In that endeavor likes of SMS based services, as stated above, are expected to be just the small steps before a giant leap is taken towards this direction.

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.

PILMAN

A Tapan Ray Website

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e-Patients: Quality and Cost Empowered Patients Will Help Reducing Healthcare Costs in India Significantly