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Should high prices of new drugs, causing low access to majority of patients, be attributed to high R&D cost?

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Many thought leaders have been arguing since long that pharmaceutical R&D expenses are being over stated and the real cost is much less. An article titled “Demythologizing the high costs of pharmaceutical research”, published by the London School of Economics and Political Science in 2011 indicates that the total cost from discovery and development stages of a new drug to its market launch was around US$ 802 million in year 2000. This was worked out in 2003 by the ‘Tuft Center for the Study of Drug Development’ in Boston, USA.

However, in 2006 the same figure increased by 64 per cent to US$ 1.32 billion, as reported by a pharmaceutical industry association. Maintaining similar trend, if one assumes that the R&D cost will increase by another 64 per cent by 2012, the cost to bring a new drug to the market through its discovery and development stages will be around US $2.16 billion. This will mean a 2.7 times increase from its year 2000 estimate, the article says.

The authors mentioned that the following factors were not considered while working out the 2006 figure of US$ 1.32 billion:

  • The tax exemptions that the companies avail for investing in R&D.
  • Tax write-offs amount to taxpayers’ contributing almost 40% of the R&D cost.
  • The cost of basic research (should not have been included), as these are mostly done in public funded universities or laboratories.

The article comments that ‘half the R&D costs are inflated estimates of profits that companies could have made if they had invested in the stock market instead of R&D and include exaggerated expenses on clinical trials’.

The authors alleged that “Pharmaceutical companies have a strong vested interest in maximizing figures for R&D as high research and development costs have been the industry’s excuse for charging high prices. It has also helped generating political capital worth billions in tax concessions and price protection in the form of increasing patent terms and extending data exclusivity.”

The study concludes by highlighting that “the real R&D cost for a drug borne by a pharmaceutical company is probably about US$ 60 million.”

Declining Pharmaceutical R&D productivity:

That pharmaceutical R&D productivity is fast declining has been vindicated by ‘2011 Pharmaceutical R&D Factbook’ complied by Thomson Reuters, the key highlights of which are as follows:

  • 21 new molecular entities (NMEs) were launched in the global market in 2010, which is a decrease from 26 NMEs of the previous year.
  • 2010 saw the lowest number of NMEs launched by major Pharma players in the last 10 years
  • The number of drugs entering Phase I and Phase II clinical trials fell 47% and 53% respectively during the year.

Does pharmaceutical R&D always create novel drugs?

According to a recent report, US-FDA approved 667 new drugs from 2000 to 2007. Out of which only 75 (11%) were innovative molecules having much superior therapeutic profile than the existing ones. However, more than 80% of 667 approved molecules were not found to be better than those, which are already available in the market.  Thus, the question very often being raised by many is, why so much money is spent on discovery and development of ‘me-too’ drugs and thereafter for their prescription generation through aggressive marketing, when the patients pay for the entire cost of such drugs including the profit after being prescribed by the doctors?

A global CEO challenged the status quo:

By challenging the status quo, Andrew Witty, the global CEO of GlaxoSmithKline (GSK) in his speech  in Mumbai on September 27, 2011 to the members of the Indian pharmaceutical industry commented that the cost of over a billion dollar to bring a new molecule to the market through its discovery and development stages is “unacceptable.” He attributed such high R&D expenses to the ‘cost of failure’ by the industry.

Witty said, “High in-house failure rates are slowing progress on pricing affordability… We need to fail less and deliver more”.

He commented during his deliberation that success in reducing the R&D cost to make innovative drugs more affordable to the patients of all income levels, across the globe, will be the way forward in the years ahead.

Ways to reduce the R&D cost:

Some other experts articulated that sharp focus in the following areas may help containing the R&D expenditure to a great extent and the savings thus made, in turn, can fund a larger number of R&D projects:

  • Early stage identification of unviable new molecules and jettisoning them quickly
  • Newer cost efficient R&D models, like one implemented by GSK
  • Significant reduction in drug development time.

An opposite view:

The book  titled “Pharmaceutical R&D: Costs, Risks, and Rewards”, published by the government of USA states that the three most important components of R&D investment are:

  • Money
  • Time
  • Risk

Money is just one component of investment together with a long duration of time to reap the benefits of success intertwined with a very high risk of failure. The investors in the pharmaceutical R&D projects not only take into account of how much investment is required for the project against expected financial returns, but also the timing of inflow and outflow of fund with associated risks.  It is thus quite understandable that longer is the wait for the investors to get their return, greater will be their expectations for the same.

The publication also highlights that the cost of bringing a new drug from the ‘mind to market’ depends on quality and sophistication of science and technology involved in a particular R&D process together with associated investment requirements for the same. In addition, regulatory requirements to get marketing approval of a complex molecule for various serious disease types are also getting more and more stringent, increasing their cost of clinical development simultaneously. All these factors when taken together make the cost of R&D very high and unpredictable.

Thus to summarize, high pharmaceutical R&D costs involve:

  • Sophisticated science and technology dependent high up-front financial investments
  • A long and indefinite period of negative cash flow
  • High tangible and intangible costs for acquiring technology with rapid trend of obsolescence
  • High risk of failure at any stage of product development

Conclusion:

While getting engaged in to this debate, one should possibly keep in mind that effective patent exclusivity period in the pharmaceutical industry is much limited as compared to any other industry across the globe. This is mainly because a long period of 8-10 years goes between drug discovery/grant of patent, drug development and market launch of the new molecule, when it starts recovering the cost and making a profit. Thus the period of effective commercial exclusivity that a new drug enjoys through patent protection usually lasts not more than 10 to 12 year period.

For all these reasons and despite such a huge controversy, I wonder, even if the R&D expenditures are brought down to the year 2000 level of US$ 802 million through various productivity improvement measures, whether it will really be possible to develop a commercial R&D model by any pharmaceutical company to deliver low price innovative drugs ensuring high access to majority of the patients. For that one should possibly look at other R&D models like, ‘Patent Pool’ and ‘Open Source Drug Discovery (OSDD)’ systems along with various funding options.

Thus in my view, high prices of new drugs, causing low access to majority of patients, should by and large be attributed to high R&D cost. However, there is not even an iota of doubt about commercial unsustainability of such ballooning research and development expenditures even in the medium term.

That said, the arithmetic of pricing for a new marketable molecule could change dramatically, if “the real R&D cost for a drug borne by a pharmaceutical company be just about US$ 60 million”, as argued by the authors of a publication quoted above, though the figure, I reckon, is quite unrealistic.

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.

Pharmaceutical innovation and Public Health Interest: Ways to achieving the dual objectives

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Healthcare industry in general and the pharmaceutical sector in particular have been experiencing  a plethora of innovations not only to cure and effectively manage ailments to improve the quality of life, but also to help increasing overall disease-free life expectancy of the population with various types of treatment and disease management options. Unfortunately despite all these, over half the global population is still denied of basic healthcare needs and support.

A 2011 official estimate of the current world population reads as 6.93 billion. Out of which over three billion live with a subsistence of less than US$ 2 per day. Another billion population is surviving on even less than US$ 1 per day. According to published reports around 18 million people die from poverty-related causes across the world, every year.

The World Health Organization (WHO) has estimated that over a billion population of the world still suffer from neglected tropical diseases.

On February 3, 2012, quoting a ‘World Bank and PwC report’, ‘The Economic Times’ reported that “70% of Indians spend all their income on healthcare and buying drugs.”

In a situation like this, challenges that the governments and the civil society are facing in many developing and to some extent even in some developed countries (although for different reasons), are multi-factoral. It has been well established that the humongous global healthcare challenges are mostly of economic origin.

In such a scenario, ongoing heated debate on innovation, Intellectual Property Rights (IPR) and public health interest keeps gaining momentum all over the globe and has still remained unabated.

Argumentative Indians have also got caught in this raging debate. I reckon rightly so, as India is not only the largest democracy of the world contributing 16.7% of the global population, it is also afflicted with 21% of the global burden of disease. Thus, the reason for similar heated debate in our country is indeed no brainer to any one.

Thorny issues:

One of the thorny issues in this debate is the belief that huge R&D budgets of the global pharmaceutical companies are worked out without any consideration of relative value of such investments to the vast majority of population in our society, across the world. These thought leaders argue, as the poor cannot pay for the expensive innovative drugs, they are mostly denied of the fruits of pharmaceutical innovation in their battle against diseases.

These experts also say that safeguards built into the patent system in form of compulsory licenses are not usually broad enough to improve access to innovative medicines to a larger section of the society, whenever required.

In addition, they point out that wide scope of patent grants in areas of early fundamental research, quite often is strategically leveraged by the patentee to block further R&D in related areas without significant commercial considerations to them. Such a situation comes in the way of affordable innovative drug development for public health interest, when need arises.

Inadequate access to medicines in India:

The key issue in the country is even more complicated. Inadequate or lack of access to modern medicines reportedly impacts around 50% of our population. It is intriguing to fathom, why has the nation not been able to effectively address the challenge of access to relatively affordable high quality generic medicines to the deprived population of the society over a period of so many decades?

Thus IPR in no way be considered as the reason for poor access, at least, to generic medicines, especially in India. Neither, it is the reason for inadequate availability of affordable essential medicines for the diseases of the poor.

The key reason, as is widely believed, is inadequate focus on the deprived population to address their public health concerns by the government.

Pharmaceutical innovation and the burden of disease:

A study  titled, ‘Pharmaceutical innovation and the burden of disease in developing and developed countries’ of Columbia University and National Bureau of Economic Research, to ascertain the relationship across diseases between pharmaceutical innovation and the burden of disease both in the developed and developing countries, reported that pharmaceutical innovation is positively related to the burden of disease in the developed countries but not so in the developing countries.

The most plausible explanation for the lack of a relationship between the burden of disease in the developing countries and pharmaceutical innovation, as pointed out by the study, is weak incentives for firms to develop medicines for the diseases of the poor.

A healthy debate:

Many experts argue that greater focus on the development of new drugs for the diseases of the poor, should not be considered as the best way to address and eradicate such diseases in the developing countries. On the contrary, strengthening basic healthcare infrastructure along with education and the means of transportation from one place to the other could improve general health of the population of the developing world quite dramatically.

However, another school of experts think very differently. In their opinion, health infrastructure projects are certainly very essential elements of achieving longer-term health objectives of these countries, but in the near term, millions of unnecessary deaths in the developing countries can be effectively prevented by offering more innovative drugs at affordable prices to this section of the society.

Creation of IGWG by WHO:

Responding to the need of encouraging pharmaceutical innovation without losing focus on public health interest, in 2006 the ‘World Health Organization (WHO)‘ created the ‘Inter-governmental Working Group on Public Health, Innovation and Intellectual Property (IGWG)‘. The primary focus of IGWG is on promoting sustainable, needs-driven pharmaceutical R&D for the diseases that disproportionately affect developing countries.

‘Reward Fund’ for innovation and access – an idea:

A paper  titled, “Optional reward for new drug for developing countries” published by the Department of Economics, University of Calgary, Institute of Health Economics, proposed an optional reward fund for pharmaceutical innovation aimed at the developing world to the pharmaceutical companies, which would develop new drugs while ensuring their adequate access to the poor. The paper suggests that innovations with very high market value will use the existing patent system, as usual. However, the medicines with high therapeutic value but low market potential would be encouraged to opt for the optional reward system.

It was proposed that the optional reward fund should be created by the governments of the developed countries and charitable institutions to ensure a novel way for access to innovative medicines by the poor.

The positive effects of the debate:

One positive effect of this global debate is that some global pharmaceutical companies like Novartis, GSK and AstraZeneca have initiated their R&D activities for the neglected tropical diseases of the world like, Malaria and Tuberculosis.

Many charitable organizations like Bill & Melinda Gates Foundation and Clinton Foundation are allocating huge amount of funds for this purpose.

On January 30, 2012, on behalf of the research-based pharmaceutical industry, Geneva based International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) by a Press Release  announced donations of 14 billion treatments in this decade to support elimination or control of nine key Neglected Tropical Diseases (NTDs).

Without creating much adverse impact on pharmaceutical innovation ecosystem of the country, the Government of India is also gradually increasing its resource allocation to address the issue of public health, which is still less than adequate as of now.

All these newer developments and initiatives are definitely ushering in an era of positive change for a grand co-existence of pharmaceutical innovation and public health interest of the country, slow and gradual though, but surely a change for the better.

Innovation helps to improve public health:

In India, various stakeholders of the pharmaceutical industry feel that there is a need to communicate more on how innovation and IPR help rather than hinder public health. Some initiatives have already been taken in this direction with the pioneering ‘patent pool’ initiative of GlaxoSmithKline (GSK) in Europe and ‘Open Source Drug Discovery (OSDD)’ by the Council of Scientific and Industrial Research (CSIR) of the Government of India.

The pace needs to be accelerated:

The pace of achieving the dual objectives of fostering pharmaceutical innovation without losing focus on public health has to be accelerated, though progress is being slowly made in these areas through various initiatives. Additional efforts are warranted for sustainability of these initiatives, which have not yet gained the status of robust and sustainable work models.

However in India, the government in power should shoulder the key responsibility garnering all resources to develop and implement ‘Universal Health Coverage’ through appropriate innovative healthcare reform measures. Such steps will help achieving the country its national goal of providing affordable healthcare to all.

At the same time, creation of a variant of ‘reward fund’ to encourage smaller pharmaceutical players of India to pursue pharmaceutical innovation needs to be considered expeditiously. This will help encouraging pharmaceutical innovation in a big way within the country.

Address the basic issue of poverty:

It is a well-accepted fact that the price is one of the key determinants to improve access to modern medicines to a vast majority of the population. However, the moot question remains how does one make medicines more affordable by not addressing effectively the basic issue of general poverty in the country? Without appropriately resolving this issue, affordability of medicines will continue remain a vexing problem and a critical issue to address public health in India.

Conclusion:

Innovation, as is widely acknowledged, is the wheel of progress of any nation. This wheel should move on… on and on with the fuel of IPR, which is an economic necessity of the innovator to make the innovation sustainable.

In the book titled, ‘Pharmaceutical Innovation: Revolutionizing Human Health‘ the authors have illustrated how science has provided an astonishing array of medicines to effectively cope with human ailments over the last 150 years.

Moreover, pharmaceutical innovation is a very expensive process and grant of patents to the innovators is an incentive of the government to them for making necessary investments towards R&D projects to meet unmet needs of the patients. The system of patent grants also contributes to society significantly by making freely available patented information to other scientists to improve upon the existing innovation through non-infringing means.

Altruism, especially in the arena of public health, may be demanded by many for various considerations. Unfortunately, that is not how the economic model of pharmaceutical innovation and IPR works globally. Accepting this global reality, the civil society should deliberate on how innovation and IPR can best be used, in a sustainable manner for public health interest, especially for the marginalized section of the society.

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.

Healthcare Tourism: India needs to step on the gas

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Healthcare Tourism or Medical Tourism are the terminologies initially coined by the travel agents and the media when patients travel outside their national boundaries to seek either more specialized and/or cheaper but high quality healthcare available in other countries.

World Health Organization (WHO) defines Healthcare Tourism as an activity that covers:

  • Medical care
  • Sickness & well-being
  • Rehabilitation & recuperation

The reasons:

The main reasons of healthcare tourism are:

  1. High medical costs, especially for those patients who are under-insured or uninsured
  2. Long waiting period for elective surgery
  3. To avail technologically more advanced medical treatment and care

For example, USA though globally recognized as one of the technologically most advanced countries in providing high quality healthcare to the patients, the cost of comprehensive healthcare in the country is often beyond reach of many Americans.

In not too distant past (2000), the World Health Organization (WHO) ranked USA as the country with most expensive healthcare systems in the world. Moreover, it has also been reported that in the US, the fees paid to doctors for medical services are usually much higher for an ‘uninsured’ patient than one who is ‘insured’.

Such a scenario has given rise to situation where many Americans travel out of the country for a lower cost medical care, if not adequately insured.

‘Time Health’ in an article titled ‘A Brief History of Medical Tourism’ stated as follows:

-       In 2006: 150,000 US citizens underwent medical treatment abroad

-       In 2007: the number grew to an estimated 750,000

-       In 2008: it increased to 1.3 million

-       In 2010: the figure further swelled to an estimated 6 million citizens.

The article commented that “Patients are packing suitcases and boarding planes for everything from face lifts to heart bypasses to fertility treatments.”

The key influencers and preferred destinations:

The most common influencer for healthcare tourism globally, as stated earlier, is lack of or inadequate health insurance and the most common emerging destinations for healthcare tourism in the world are Thailand, Singapore, Costa Rica, Panama, Brazil, Mexico, Malaysia and India. This is mainly because of fact that the costs of availing high quality healthcare services in these countries are much cheaper- on an average around 80%. For example, a cardiac surgery, which will cost more than US$ 50,000 in the US, can be availed for US$ 20,000 in Singapore, US$ 12,000 in Thailand and between US$ 3,000 and US$ 10,000 in India.

Other factors influencing Healthcare Tourism, particularly in India, besides significant cost advantages, are:

  1. High quality treatment and hospital stay with world class medical technological support
  2. Rigid compliance with international treatment standards
  3. No language barrier with the western world
  4. Government taking active steps and interest in the medical tourism sector

In all these four areas significant advantages that India offers will need to be adequately leveraged in a sustainable manner by the country.

Most popular treatment areas:

The most popular treatment areas are as follows:

  1. Alternative medicines
  2. IVF treatment
  3. Bone-marrow transplant
  4. Cardiac bypass
  5. Eye surgery
  6. Dental care
  7. Cosmetic surgery
  8. Other areas of advanced medicine

Evolving scenario:

Since last several years healthcare tourism is fast evolving as one of the key growth drivers of the global healthcare sector as a whole.

Dr. Fred Hansen in his article titled, ‘A Revolution in Healthcare’, highlighted that increasing number of high-quality healthcare facilities in the developing coun­tries are attracting medical tourists from the developed countries like the US and the European Union (EU).

Apprehension in the US about growing Healthcare Tourism of India:

India Knowledge@Wharton in its June 2, 2011 issue reported as under:

  • In the past, US President Barack Obama had singled out India for what he sees as the country usurping American jobs and business.
  • In May 2009, he removed some tax incentives for US companies who allegedly preferred to outsource rather than create domestic jobs. “Buffalo before Bangalore” was his rallying call at the time.
  • In April 2011, he told a town hall gathering in Virginia that Americans shouldn’t have to go to India or Mexico for “cheap” health care. “I would like you to get it right here in the U.S.,” he said.
  • In January 2012, President Obama reiterated the same intent in the run up to the forthcoming US presidential election for his second term.

The Global Market:

In 2006 the global market for healthcare tourism was around US$ 60 billion. According to McKinsey & Company, this market is expected to expand to over US$110 billion by 2012.

India – a contender for supremacy:

Healthcare tourism in India, despite being smaller compared to the western world, is surging ahead both at the national and the regional levels with enormous potential for future growth, if explored appropriately with a carefully charted strategic game plan in its evolution process.

Currently India is emerging as one of the preferred destinations for global health tourists. The country received 150,000 medical tourists in 2004, which grew by 33% to 200,000 in 2008, mainly from the USA, UK and the Gulf countries, primarily due to low-priced and high quality healthcare in wide ranging disease areas. More and more people from these countries are finding the prospect of high quality and value added medical care in India financially attractive.  As per estimates, India will receive over 500,000 medical tourists per year come 2015.

While visiting India for healthcare, patients not only get treated by the best medical professionals with western medical training, but also are able to stay in deluxe accommodations fully equipped with the latest television set, refrigerator and in some cases even a personal computer, without facing any language barrier and that too by paying just around 1/10th of the price charged in the developed nations.

Moreover, according to John Lancaster of ‘The Washington Post’ (October 21, 2004) Indian private hospitals have a better mortality rate for heart surgery than American hospitals.

With over 8,500 beds ‘Apollo Hospitals’ chain runs 53 different hospitals across the country, followed by “Max Healthcare” that runs 8 medical centers in the National Capital Region (NCR) in India.

Indian Market:

Economic Times, in its January 6, 2009 edition reported, “Indian medical tourism to touch Rs 9,500 Crore (around US $ 2.1 billion) by 2015”.  Another report titled “Booming Medical Tourism in India”, published in December 2010 estimated that the medical tourism industry will generate revenues of around US$ 3 billion by 2013, though with a market share of just around 3% of the of global healthcare tourism industry.  Thus, in healthcare tourism, India still remains a smaller player with enormous growth potential.

New job creation:

Both Public and private sector studies estimate that healthcare tourism in India could attract around US$ 3 billion to the country by 2013 with around 40 million direct and indirect job opportunities.

Cost advantage in India:

Cost Comparison: India vs UK:

Nature of Treatment

Treatment Approximate Cost in India ($) *

Cost in other Major Healthcare Destination ($) *

Approximate Waiting Periods in USA / UK    (in months)

Open heart Surgery

4,500

> 18,000

9 – 11

Cranio-facial Surgery and skull base

4,300

> 13,000

6 – 8

Neuro-surgery with Hypothermia

6,500

> 21,000

12 – 14

Complex spine surgery with implants

4,300

> 13,000

9 – 11

Simple Spine surgery

2,100

> 6,500

9 – 11

Simple Brain Tumor -Biopsy -Surgery

1,000 4,300

> 4,300 > 10,000

6 – 8

Parkinson -Lesion -DBS

2,100 17,000

> 6,500 > 26,000

9 – 11

Hip Replacement

4,300

> 13,000

9 – 11

* These costs are an average and may not be the actual cost to be incurred.

(Source: Health Line)

The key components:

The following four basic components constitute the healthcare tourism industry: • Healthcare Providers: Hospitals, mainly corporate hospitals and doctors • Payers: Medical/ Health insurance companies • Pharmaceutical Companies: for high quality affordable medicines • IT Companies: operating in the healthcare space

Growth drivers and barriers:

Following are the key growth drivers:

  1. Government support through policies and initiatives
  2. High quality, yet low cost care
  3. Much less or no waiting time
  4. World class private healthcare infrastructure
  5. Rich source of natural and traditional medicines. Ministry of Tourism is  promoting the traditional systems of medicines, like,  Ayurveda, Siddha, and Yoga to project India as a the destination of choice for spiritual wellness and healing

In future, the world class and low cost private sector healthcare services are expected to drive the growth of the medical tourism in India.

However, any shortages in the talent pool and inadequacy in other basic infrastructural support like roads, airports and power could pose to be barriers to growth of this sector, if not addressed immediately.

Government Assistance:

The government of India is now supporting the hospitals to get the Joint Commission International (JCI) accreditation.

In 2009 the government announced a revised guidelines for ‘Marketing Development Assistance (MDA)’ scheme for approved Medical Tourism service providers like, representatives of hospitals accredited by Joint Commission for International Accredited Hospitals (JCI) and National Accreditation Board of Hospitals (NABH) and Medical Tourism facilitators (Travel Agents/Tour Operators approved by Ministry of Tourism, Government of India and engaged in Medical Tourism (MTSP) and to the approved Wellness Centers i.e. representatives of the Wellness Centers accredited by the State Governments.

All these measures are expected to accelerate the growth of healthcare Tourism industry in India.

List of JCI Accredited Hospitals in India:

Following are the JCI Accredited Hospitals in India till 2007:

Name and Place Accredited on
1. Indraprasta Apollo Hospital, New Delhi June 18, 2005
2. Wockhardt Hospital, Mumbai August 25, 2005
3. Apollo Hospitals, Chennai January 29, 2006Disease- or Condition-Specific Care (DCSC)Certification for Acute Stroke: 29 April 2006
4. Shroff Eye Hospital, Mumbai February 18, 2006
5. Apollo Hospitals, Hyderabad April 28, 2006
6. Asian Heart Institute, Mumbai October 20, 2006
7. Satguru Pratap Singh Apollo Hospital, Punjab February 3, 2007
8. Fortis Hospital, Mohali June 15, 2007

Source: Joint Commission International, 2007

The challenges:

Following are the key challenges that India will need to address to emerge as a healthcare tourism hub of the world:

  • Improving the infrastructure
  • Adequate training of the staff
  • Enhancement of the image of India as a corruption-free country
  • Continuous improvement of overall service to the patients

Conclusion:

While encountering the global economic meltdown many corporate business houses, even in the developed nations of the world, are under a serious cost containment pressure, which includes medical expenses for their employees. Such cost pressure has already started prompting many companies to send their employees to low cost destinations for treatment, without compromising on the quality of their healthcare needs. This trend could offer an additional growth opportunity in the healthcare tourism sector in India.

According to the ‘Medical Tourism Climate Survey 2010’ report, the leading medical tourism destinations are currently India, Thailand, Hungary and Malaysia and the leading source of patients being again the USA, UK and Russian Federation.

The survey rates Thailand, India and Singapore as the best in terms of quality of overall patients’ care. Insurance and liability issues for the patients from some major markets of the world could pose to be a challenge for speedy growth of this industry.

Countries like, Thailand, Singapore and Malaysia, located in quite closer proximity to India, will continue to offer a tough competition in the healthcare tourism space of the country.

In an increasingly heated-up fast evolving competitive scenario, the name of the game for India will be to ‘step on the gas’, sooner and effectively.

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.

‘Empowered Patients’: The changing dynamics of the pharmaceutical industry

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In good old days, at the time of someone falling sick in the family, a friendly local general medical practitioner, who was also known as a ‘family doctor’, used to be called to provide relief to the patient from pain and agony of the ailment.

Thorough knowledge of the patient’s medical history gained over a period of time, of these almost vanishing breed of caring doctors, was very common and used to come very handy to them while treating the patients. Their smiling or at times admonishing look at the patients for falling sick due to avoidable reasons, a caring approach – just like or even more than a family member and willingness to answer all questions related to sickness, used to instill a great confidence and hope in the minds of the patients for getting well soon, quite often even before the treatment had started.

Today the situation is very different. The concept of a family doctor mostly does no longer exist, even in the urban families of India. Though the elite groups belonging to the creamy layer of the society still talk in terms of ‘my dentist’ – ‘my cardiologist’ – ‘my physician’, patients by and large have started experiencing that their healthcare needs have been greatly compromised.

However in future, may not exactly be like a ’family doctor’, one can perhaps hope to call a doctor home for treatment in India, which will not cost a bomb as it happens today. ‘Times Of India’’, January 18, 2012 edition reports that “IIM-A student to deliver doctors at your door step.” This service is expected to provide both doctors and medicines at our doorstep at a phone call.”

Changing doctor-patient relationship:

The doctor–patient relationship has undergone a vast change over a period of time. The healthcare environment now very often smacks of commercial gain and loss of the service providers.

In India, even recently the government had to intervene to help restoring the ethical standards of both the medical profession and the pharmaceutical industry. That said, medical ethics and compliance, for all practical purpose, are still confined mostly in the text books, codes or in the carefully crafted ‘Standard Operating Procedures (SOPs)’ as a ‘show piece’, as it were, more for bending them at the least possible opportunity for hard commercial gains, rather than their conformance in terms of both letter and the spirit.

Individual ‘Patient Empowerment’:

Under the prevailing scenario, the civil society should encourage individual ‘Patient Empowerment’ by making him/her understand how the healthcare system is currently working on the ground, what and who are the key obstacles in getting a reasonably decent healthcare support and what should be done to uproot these obstacles in civilized ways.

It started in America:

The movement for ‘Patient Empowerment’ 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.

The essence of ‘Patient Empowerment’:

‘Natural Health Perspective’ highlighted ‘Patient Empowerment’ as follows:

  • Health, as an attitude, can be defined as being successful in coping with pain, sickness, and death. Successful coping always requires being in control of one’s own life.
  • Health belongs to the individual and the individuals have the prime responsibility for their own health.
  • The individual’s capacity for growth and self-determination is paramount.
  • Healthcare professionals cannot empower people; only people can empower themselves.

‘Patient empowerment’ prompts the ‘Patient-Centric’ postures:

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

Other stakeholders will have no other option but to take a ‘Patient-Centric’ posture, under the circumstances, which has already started happening. In India, as ‘out-of-pocket’ healthcare expenses are skyrocketing in the absence of a comprehensive and affordable universal health  coverage, ‘Empowered Patients’ will increasingly demand to know more of not only the available treatment choices, but also about the medicine prescription options.

‘Patient empowerment’ as the change agent:

Not so long ago, to generate increasing prescription demand and influence the prescription decision of the doctors, the pharmaceutical players 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 very well in India, is no longer fetching the desired results to the pharmaceutical companies, especially in the developed markets of the world. ‘Empowered Patients’ have already started demanding much more from the pharma players. 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 with growing ‘Patient Empowerment’ the basic sales and marketing models of the pharmaceutical companies are expected to undergo a radical change. 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.

Role of ‘Empowered Patients’ in healthcare decision making process:

In the years ahead, more and more ‘Empowered Patients’ are expected to play an important role in their healthcare decision making process, initially in the 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 situation has not changed much as on date.

‘Empowered Patients’ can influence even 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 ‘Empowered 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.

Meeting the challenge of change:

To respond to the challenge posed by the ‘Empowered Patients’ pharmaceutical companies, especially in the US 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, to respond to this challenge of change 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.

To cite one more 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.

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 so many years from now, especially in the developed countries of the world, pharmaceutical companies have been talking about being ‘Patient-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 patients or the patient groups.

However, in many cases the prevailing healthcare provisions, the structure and culture together with stiff resistance of the regulators to let the industry engage directly with the patients, have inhibited the ‘Patient-Centric’ intent of the stakeholders in general, 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-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 ‘Patient Empowerment’ initiatives… ultimately.

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.

Encourage vaccine research and improve its access to demonstrate ‘prevention is better than cure’

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Vaccines are one of the most successful and cost-effective public health interventions, which help preventing over 2 million deaths every year.

The World Health Organization (WHO) defines vaccines as:

“A vaccine is any preparation intended to produce immunity to a disease by stimulating the production of antibodies. Vaccines include, for example, suspensions of killed or attenuated microorganisms, or products or derivatives of microorganisms. The most common method of administering vaccines is by injection, but some are given by mouth or nasal spray.”

Types of Vaccines:

As per the ‘National Institute of Health (NIH)’ of USA, following are some types of vaccines that researchers usually work on:

  • Live, attenuated vaccines
  • Inactivated vaccines
  • Subunit vaccines
  • Toxoid vaccines
  • Conjugate vaccines
  • DNA vaccines
  • Recombinant vector vaccines

The first vaccine:

In 1796, Edward Anthony Jenner not only discovered the process of vaccination, alongside developed the first vaccine of the world for mankind – smallpox vaccine. To develop this vaccine Jenner acted upon the observation that milkmaids who caught the cowpox virus did not catch smallpox.

As per published data prior to his discovery the mortality rate for smallpox was as high as up to 35%. Thus, Jenner is very often referred to as the “Father of Immunology”, whose pioneering work has “saved more lives than the work of any other person.”

Later on in 1901 Emil Von Behring received the first Nobel Prize (ever) for discovering Diphtheria serum therapy.

The future scope of vaccines:

The future scope of vaccines is immense as several potentially preventable diseases, as indicated below remain still unaddressed.

Examples of effective Vaccines Examples of Potentially VaccineTreatable Diseases
Bacterial
  • Diphtheria
  • Haemophilus influenza type B
  • Meningitis A, C
  • Pneumococcus
  • Enterococcus
  • Meningitis B, W, Y
  • Group A Streptococcus
  • Staphylococcus
Viral
  • Varicella
  • Hepatitis B and C
  • Influenza
  • Polio
  • Pandemic influenza
  • RSV
  • West Nile Virus
  • Epstein Barr Virus
Other
  • Cancer
  • Alzheimer’s disease
  • Substance abuse
  • Autoimmune disorders

Source: Deutsche Bank Report 

Expanded focus for vaccines:

The focus of the global vaccine industry also has been expanded from prophylactic vaccination for communicable disease (e.g. DTP vaccine) to therapeutic vaccines (e.g. Anti-cancer vaccines) and then possibly non-communicable disease vaccines (e.g. vaccines for coronary artery disease).

The Issues and Challenges:

To produce a safe and effective marketable vaccine, it takes reportedly around 12 to 15 years of painstaking research and development process involving an investment ranging between US $500 million and over $1 billion dollars (Ibid, 7).

Moreover, one will need to realize that the actual cost of vaccines will always go much beyond their R&D expenses. This is mainly because of dedicated and highly specialized manufacturing facilities required for mass-scale production of vaccines and then for the distribution of the same mostly using cold-chains.

Around 60% of the production costs for vaccines are fixed in nature (National Health Policy Forum. 25. January 2006:14). Thus such products will need to have a decent market size to be profitable.

Unlike many other medications for chronic ailments, which need to be taken for a long duration, vaccines are administered for a limited number of times, restricting their business potential.

Thus, the long lead time required for the ‘mind to market’ process for vaccine development together with high cost involved in their clinical trials/marketing approval process, special bulk/institutional purchase price and limited demand through retail outlets, restrict the research and development initiatives for vaccines, unlike many other pharmaceutical products.

Besides, even the newer vaccines will be required mostly for the diseases of the poor, like Malaria, Tuberculosis, HIV and ‘Non Communicable Diseases (NCDs)’ in the developing countries, which may not necessarily guarantee a decent return on investments for vaccines, unlike many other newer drugs. As a result, the key issue for developing a right type of newer vaccine will continue to be a matter of pure economics.

A great initiative called GAVI: 

Around 23 million children of the developing countries are still denied of important and life-saving vaccines, which otherwise come rather easily to the children of the developed nations of the world.

To resolve this inequity in January 2000, the Global Alliance for Vaccines and Immunization (GAVI) was formed. This initiative was mainly aimed at generating sufficient fund to ensure availability of vaccines for children living in the 70 poorest countries of the world.

The GAVI Alliance has been instrumental in improving access to six common infant vaccines, including those for hepatitis B and yellow fever. GAVI is also working to introduce pneumococcal, rotavirus, human papilloma virus, meningococcal, rubella and typhoid vaccines in not too distant future.

A recent example:

As if to vindicate the above points, Reuters on December 16, 2011 reported that  “Pfizer and GlaxoSmithKline are increasing sales of cut-price pneumonia vaccine to developing countries by more than 50 percent, marking the scale-up of an international program to protect millions of children.

GAVI is buying an additional 180 million doses of Pfizer’s pneumococcal vaccine Prevenar 13 and a similar quantity of GSK’s Synflorix at a deeply discounted price of US $3.50 a shot.”

Success with vaccines in disease prevention:

Diphtheria incidence in the US  – Mortality 5/10,000 cases Peak Incidence (1921) Incidence today

2,06,939

1

 

Tetanus incidence in the US – Mortality 3/10 cases Peak Incidence (1927) Incidence today

1,314

40

 

H. Influenza type B incidence in the US – Mortality 2-3/100 cases Peak Incidence (1927) Incidence today

20,000

363

Source: Ehreth Vaccine 21:4105-4117

Development of vaccines through the passage of time:

No. of vaccines

Year

Vaccines
1. 1780-1800

Smallpox

(first vaccine for any disease)
2. 1860-1880

Cholera
1880-1900

Rabies
6.

Tetanus

Typhoid fever

Bubonic plague
11 1920-1940

Diphtheria

Pertussis

Tuberculosis

Yellow fever

Typhus
16 1940-1960

Influenza

Polio

Japanese encephalitis

Anthrax

Adenovirus-4 and 7
24 1960-1980

Oral polio

Measles

Mumps

Rubella

Chicken pox

Pneumonia

Meningitis

Hepatitis B
28 1980-2000

Haemophilus influenzae type b

Hepatitis A

Lyme disease

Rotavirus
29 2000-2010

Human papilloma virus

Current trend in vaccine development:

Malarial Vaccine:

Reuters on December 20, 2011 reported that an experimental malaria vaccine has been developed by the British scientists, which has the potential to neutralize all strains of the most deadly species of malaria parasite.

In October 2011, the data published for a large clinical trial conducted in Africa by GlaxoSmithKline on their experimental malaria vaccine revealed that the risk of children getting malaria had halved with this vaccine. Reuters also reported that other teams of researchers around the world are now working on different approaches to develop a malaria vaccine.

Tuberculosis vaccines:

On August 11, 2011, Aeras and the Oxford-Emergent Tuberculosis Consortium (OETC) announced with a ‘Press Release’ the commencement of a Phase IIb ‘proof-of-concept efficacy trial’ of a new investigational tuberculosis (TB) vaccine. OETC indicated that clinical trial for the drug will be undertaken by them in Senegal and South Africa with primary funding support from the European and Developing Countries Clinical Trials Partnership (EDCTP).

Cancer vaccines:

Cancer vaccines are, in fact, biological response modifiers, which work by stimulating or restoring the ability of the immune system to fight the disease. There are two broad types of cancer vaccines:

  • Preventive vaccines:  To prevent cancer in healthy people
  • Therapeutic vaccines:  To treat cancer by strengthening the natural defense mechanism of the human body against the disease.

The United States Food and Drug Administration (US-FDA) has approved the following cancer vaccines, which protect against two types of HPV that cause approximately 70% of all cases of cervical cancer globally:

  • Gardasil of Merck & Company
  • Cervarix of  GlaxoSmithKline

The US FDA has also approved a cancer preventive vaccine that protects against HBV infection, which can cause liver cancer. It has been reported that the original HBV vaccine was approved in 1981 and currently most children in the US are vaccinated against HBV after their birth.

In addition, the US regulator has also approved a cancer vaccine for treatment of certain types of metastatic prostate cancer.

HIV Vaccines:

‘The AIDS Vaccine 2011 conference’ held in Bangkok in the month of September, 2011 discussed some of the latest findings on the following two vaccines for prevention and control of HIV disease progression:

  • A large trial of RV 144 vaccine in Thailand demonstrated the proof of concept that a preventive vaccine with a risk reduction of 31% could effectively work.  The trial was supported by the World Health Organization (WHO) and UNAIDS.
  • Bionor Pharma announced that clinical trial participants who received Vacc-4x “experienced a 70% viral load decrease relative to their level before starting Anti-Retroviral Therapy (ART), compared with no notable reduction among placebo recipients.”

Promising ‘Therapeutic Vaccines’ undergoing clinical trial:

‘FierceVaccines’ in its October 27, 2011 reported the following 10 most promising therapeutic vaccines, which are now undergoing clinical trials on humans:

Molecule Company Indication
ICT-107 ImmunoCellular Therapeutics Glioblastoma
VGX-3100 Inovio Pharmaceuticals Cervical cancer
MAGE-A3 GlaxoSmithKline Skin, lung cancer
Neu-Vax RXi Pharmaceuticals Breast cancer
AE37 Antigen Express Breast cancer
NexVax2 ImmusanT Celiac disease
ADXS-HPV Advaxis Cervical, head and neck cancer
CRS-207 Aduro BioTech Pancreatic cancer
PEV7 Pevion Biotech Recurrent vulvovaginal candidiasis
GI-4000 GlobeImmune Pancreatic cancer

Future scope for cancer vaccines:

One school of scientists firmly believes that out of all cancers diagnosed each year globally, various types of microbes contribute 15% to 25% as a causative factor for this dreaded disease, as indicated below:

Infectious Agents

Type of Organism

Associated Cancers
Hepatitis B virus (HBV)

Virus

 Hepatocellular carcinoma(a type of liver cancer)
Hepatitis C virus (HCV)

Virus

 Hepatocellular carcinoma(a type of liver cancer)
Human papilloma virus (HPV) types 16 and 18, as well as other HPV types

Virus

 Cervical cancer; vaginal cancer;vulvar cancer; oropharyngeal cancer(cancers of the base of the tongue,

tonsils, or upper throat);

anal cancer; penile cancer;

squamous cell carcinoma of the skin
Epstein-Barr virus

Virus

 Cancer of the upper part ofthe throat behind the nose
Human herpes virus 8 (HHV8)

Virus

 Kaposi sarcoma
Human T-cell lymphotropic virus

Virus

 Adult T-cell leukemia/lymphoma
Helicobacter pylori

Bacterium

 Stomach cancer
Schistosomes

Parasite

 Bladder cancer
Liver flukes

Parasite

 Cholangio carcinoma(a type of liver cancer)

Source: The International Agency for Research on Cancer (IARC)

These findings open the doors of unique opportunities to develop both preventive and therapeutic vaccines to address the life threatening near fatal ailment of mankind – cancer.

Conclusion:

Developing countries of the world are now demanding more of those vaccines, which no longer feature in the immunization schedules of the developed nations. Thus to supply these vaccines at low cost will be a challenge, especially for the global vaccine manufacturers, unless the low margins get well compensated by high institutional demand.

To effectively focus on all important disease prevention initiatives, there is also a need to build a vibrant vaccine business sector in India. To achieve these dual objectives the government should create an enabling ecosystem for the vaccine manufacturers, academics and the government funded vaccine R&D centers to concentrate more with the relevant vaccine development projects ensuring a decent return on investments, for long term public health interest.

More often than not, the above stakeholders find it difficult to deploy sufficient fund to take their vaccine projects successfully through various stages of clinical development to obtain marketing approval from the drug regulator, working out a decent return on investments. This critical issue needs to be appropriately and urgently addressed by the Government to make the disease prevention initiatives in the country sustainable, demonstrating to all concerned that disease ‘prevention is better than cure’.

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.

Infections may cause NCDs like, diabetes and cancer: Ongoing scientific quest to decipher the mystery

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To create a positive health impact on the lives of billions of people, the United Nations (UN) on September 19, 2011 unanimously adopted a ‘Political Declaration’ on ‘Non Communicable Diseases (NCDs)’.  In the years ahead, this path-breaking initiative on NCDs, with global commitment, is expected to make a huge difference in the lives of many, across the world.

NCDs have now been identified as a key healthcare challenge of this century and include ailments like, cardiovascular, chronic pulmonary diseases, diabetes, arthritis and cancer. In the developing countries, over 80% of all deaths are related to NCDs.

There are times when NCDs raise issues related to social justice and human rights. For example, in a country like India where out of pocket expenses towards healthcare is around 80%, a major illness like cancer even in a middle income group family, can drive the entire household to huge socioeconomic hardship.

NCDs are preventable:

According to the World Health Organization (WHO), adequate physical activity, healthy diet/nutrition and tobacco avoidance can prevent:

  • 80% of premature heart disease
  • 80% of type II diabetes
  • 40% of cancers

Currently, as we shall see below, immunization is also being considered as a preventive therapy for certain types of NCDs.

NCDs may be of infectious origin:

Dr. Bennett Lorber in his article titled, ‘Are All Diseases Infectious?’, published in the ‘Annals of Internal medicine’ wrote that many common NCDs like, cardiovascular, diabetes, peptic ulcer, arthritis and even certain types of cancer originate from infections by micro-organisms.

Mainly because of this reason and its consequent adverse socioeconomic impact, the low and middle income countries of the world will require controlling many types of infections, possibly through immunization, before they ultimately develop into NCDs.  Such measures, in turn, will help them reducing the risk factors of morbidity and mortality related to NCDs.

Infections and NCDs:

As indicated above by Dr. Bennett Lorber, following are some examples of reported relationship between infection and NCDs:

Reactive Arthritis:

Reactive arthritis or spondyloarthropathy has been known to follow intestinal infection with Salmonella typhimurium and Yersinia enterocolitica or urethral infection with Chlamydia trachomatis.

Scientists from the United Kingdom have already announced that they will soon begin human trial of an experimental rheumatoid arthritis vaccine.

Peptic Ulcer and Gastric Carcinoma:

Helicobacter pylori is known to cause of gastritis and peptic ulcer disease and is an important risk factor for gastric carcinoma.

Researchers at Rhode Island Hospital in collaboration with the University of Rhode Island and EpiVax Inc, have identified a potential vaccine to reduce colonization of Helicobacter pylori, which is known to cause peptic ulcer and gastric carcinoma.

Acute Renal Failure:

It was reported that about 10% of infected persons younger than 10 years of age develop hemolytic uremic syndrome, and as many as 75% of cases of the syndrome in the United States are complications of intestinal infection with E. coli.

Vasculitis:

The most common cause of vascular damage in secondary vasculitis is now considered to be related to different types of microorganisms. Patients were reported to have developed polyarteritis nodosa a few months after having hepatitis B infection.

It is widely reported that in the developed countries most common vasculitis is related to hepatitis B and C. However, in the developing world HIV related vasculitis appears to be  common.

Inflammatory Bowel Disease (IBS)/ Crohn’s Disease:

The precise etiology of Crohn’s Disease though remains to be conclusively deciphered, it is  believed by many researchers that the disease develops due to a reaction to a persistent intestinal infection in vascular endothelial cells.

Diabetes:

A good number of experts support a link between infection with enteroviruses in the pancreata and insulin-dependent diabetes mellitus.

To arrest or slow the autoimmune response that destroys insulin-producing cells in diabetes, it has been reported that the Diamyd vaccine, now in Phase III clinical trial in both USA and Europe, has shown very promising results.

Coronary Artery Disease:

A study published in the journal of ‘Clinical Infectious Disease’, Volume 40, Issue 8 ‘demonstrates a significant association between high titers to C. pneumoniae IgG and IgA and acute Myocardial Infarction (MI) in a cohort of young men and suggests that recent or chronic active infections could be associated with an increased risk for MI.’

In other studies also, patients with acute myocardial infarction were found to have elevated serum antibody levels to Chlamydia pneumoniae. This opens up possibility of preventing heart attacks with a vaccine.

Cancer:

The US FDA has already approved two types of vaccines for cancer prevention:

  • Vaccines against the hepatitis B virus, which can cause liver cancer.
  • Vaccines against human papillomavirus, which are responsible for about 70% of cervical cancers.

In addition, US FDA has also approved another cancer vaccine for metastatic prostate cancer.

A type of cancer known as Kaposi sarcoma is linked to an infectious agent found in patients with  acquired immune-deficiency syndrome. Scientists are in the process of developing treatment vaccines against many types of cancer.

Conclusions:

In the field of NCD, a not so widely publicized scientific revolution is in the making. Many well researched findings have, to a great extent, established that infectious agents could be the causative/precipitative or risk factors for NCDs like, chronic pulmonary and cardiovascular diseases, diabetes and cancer.

The moot question raised by Dr. Bennett Lorber earlier:  ‘Are all diseases infectious?’, is gradually getting answered through intensive scientific research. Otherwise, who would have thought, until recently, that vaccines could be developed for diabetes, certain types of cancer or even peptic ulcer?

Such path breaking scientific research findings are, in turn, creating a hope and opportunity for disease prevention through immunization for many NCDs, especially for the developing nations of the world.

It is very heartening to know that United Nations (UN) have taken note of these revolutionary developments in the ‘Non Communicable Disease’ space and are deliberating on the effective ways to combat NCDs caused by infections with the development and use of appropriate vaccines.

The entire world eagerly awaits more actionable outcome of the ongoing scientific quest to decipher the mystery related to many more NCDs to ensure better health of mankind of the Planet Earth.

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.

Indian Pharmaceutical Landscape: Looking back (2011), Looking Ahead (2012)

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2011 witnessed many interesting developments within the pharmaceutical industry of India. All these developments may not be appreciated by all stakeholders alike, nonetheless had an impact on the industry of varying degree both in the qualitative and quantitative terms.

That said, the list of ‘unfinished agenda’ of the government to improve healthcare access and simultaneously to fuel the growth engine of the industry with reform oriented policy initiatives, kept on increasing staggeringly.

The issue of improving access to modern medicines with comprehensive measures continued to remain unaddressed even in the draft National Pharmaceuticals Pricing Policy 2011. Similarly, the Prime Minister’s dedication of the decade of 2010 as the decade of innovation remained a pipe dream for the pharmaceutical industry of the country.  Policy paralysis of the decision makers during the year failed to translate even this praiseworthy intent into reality.

Increasing consumption of medicines in India: 

Indian Pharmaceutical Market (IPM) continued to grow at a scorching pace of around 15% registering a turnover of Rs 59,621 Crore during the year. (Source: Nov 2011- AIOCD/AWACS).

Fast increasing consumption of medicines in the country continued to position IPM not just as another global success story, but also an emerging pharmaceutical force to reckon with, especially in the development and manufacturing of high quality and low cost generic pharmaceuticals together with its world-class  Contract Research and Manufacturing Services (CRAMS).  Indian pharmaceutical players now cater to about 20% of global requirements of high quality and affordable generic medicines of all types.

Consolidation process continues:

At the same time, ongoing consolidation process within the pharmaceutical industry continued in 2011 with Aventis Pharma (Sanofi) acquiring Universal Medicare and Zydus Cadila shopping for Biochem Pharma.

November 30, 2011: Signaled beginning of the end of the blockbuster drug era:

On November 30, 2011, the patent expiry of the world largest ever brand Lipitor (Pfizer), clocking an annual turnover of over US$ 14 billion and accounting for more than 20% of the company’s sales turnover until recently, I reckon, heralds beginning of the end of the blockbuster drug era.  To equal the turnover of Lipitor with another brand will be a huge challenge not only for Pfizer, but also for any other company in the near to medium term.

Patent expiry of Lipitor will now help opening up the super size Atorvastatin market of the developed world to the Indian generic players.

Launch of innovative products:

Launch of several innovative and patented products in India by the global players during 2011, reconfirmed the attractiveness of the IPM to the global innovator companies. Some of these innovative products are Revolade (Eltrombopag) , Votrient (Pazopanib Hydrochloride) of GlaxoSmithKline, Flexbumin solution of Baxter and BD Ultra-Fine III Nano of Becton Dickinson.

Looking back (2011):

During 2011, the industry witnessed a number of initiatives from the government as an ongoing process, some of which are as follows:

  • Establishment of dedicated Pharma Zones in Mumbai, Hyderabad and Delhi airports, including cold rooms to help achieving world-class cold-chain logistics in India in the medium term.
  • For the first time in 2011, the government initiated steps to put the ‘Biosimilar Guidelines’ in place to ensure high safety standards for follow-on biologics in India. The Department of Biotechnology (DBT) and the Central Drugs Standard Control Organization (CDSCO) prepared these guidelines in consultation with the industry, the effective implementation of which is keenly awaited. This important step will also help Indian biosimilar drug manufacturers to prepare themselves well to explore the opportunity of gradually opening-up biosimilar drugs markets in the western world, like the USA and EU.
  • The Department of Pharmaceuticals (DoP) came out with a draft Uniform Code of Pharmaceutical Marketing Practices (UCPMP) in 2011 to curb alleged unethical practices of ‘bribing doctors’ by pharma companies. The code initially is expected to be of voluntary in nature and its effective implementation will be ensured by the pharmaceutical companies and the industry associations over a period of six months. Thereafter, if the implementation level of UCPMP does not measure up to the expectations of the DoP, it will be made mandatory under strict regulatory control.  However, the final UCPMP has not been announced by the government, as yet.
  • The Ministry of Health and Family Welfare constituted a twelve member task force to evolve a long term strategy to address various issues faced by the Indian Pharmaceutical Industry. Unfortunately, tangible outcome from this committee is still awaited.
  • Following the Supreme Court directive to the government to bring essential drugs under price control, after a very long time, the Government came out hurriedly with a draft National Pharmaceuticals Pricing Policy 2011 (Draft NPPP 2011) by increasing the span of effective price control to over 65% of the IPM. This flawed draft policy, if implemented, could stifle the growth of the industry.
  • During the year the Ministry of Health and Family Welfare finalized the National Vaccine Policy to strengthen the institutional framework required for the universal immunization program. The policy is also expected to streamline the decision-making process on new and underutilized vaccine introduction, besides addressing issues of vaccine security, management, regulatory guidelines and vaccine research and development.
  • The Ministry of Health and Family Welfare also came out with the National Health Research Policy in 2011 to overcome the weaknesses of the publicly funded health structures, which restrict research in the priority health areas. This policy is expected to help maximizing the returns on investments in health research through creation of a robust health research system.
  • New National Manufacturing Policy (NMP), which ultimately saw the light of the day during the year, is expected to promote the productivity of the pharmaceutical sector, as well. The policy will help enhancing the share of total manufacturing of all industrial sectors put together from the current level of 15% to 25% of the GDP within a decade and would also help creating 100 million jobs in the country.
  • 100% FDI in the Pharmaceuticals sector of India remained unchanged, which will attract more foreign investments in this sunrise sector of India.
  • ‘Universal Health Converge’, announced during the year by the Planning Commission of India, will help reducing significantly the ‘out of pocket’ expenses incurred towards healthcare, improving its access to all.

Looking Ahead (2012):

  • The good news for 2012 is that the Planning Commission has decided to increase the national spending on health to 2.5% of the GDP in the 12th Five Year Plan starting from 2012.
  • In 2012, if the ‘NPPP 2011’ is implemented as in its current draft form, it could seriously impede the court of the vibrant pharmaceutical industry of India.
  • Introductions of DTC and GST: The ‘Discussion Paper’ on the draft ‘Direct Taxes Code Bill, 2009’ highlighted the possibility that the GST regime could have multiple rates based on classification of goods that are to be listed under the exempted category, like goods which would attract lower rate and another category of goods qualifying for standard rate. This concept of multiple rate of tax under GST regime could impact the pharma/health science industry as the business models followed by this industry typically involves import/manufacture and sale of life saving drugs, medical devices and other formulations, which presently attract either NIL rate of duty under central excise/VAT or lower rate of excise duty at 4%. Presently clinical trial services/R&D services attract service tax at 10.30%.
  • The growth trajectory of the IPM is expected to continue to go north despite slowdown in the US and European economies in 2012.

Conclusion:

Like many other sectors, the pharmaceutical industry of India also witnessed the reform oriented policy paralysis of the government in 2011, barring some superficial, half- hearted and incomplete initiatives, as indicated above.

Key areas of general public health interest, encouraging innovation, fostering R&D and improving access to medicines to alleviate healthcare related problems of the common man and at the same time to propel the industry to the inclusive high growth trajectory, have still remained unanswered.

Faster recovery from reform-oriented policy paralysis of the government and effective translation into reality of the seemingly good intent of the policy makers, is now eagerly awaited in 2012.

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.

Business Ethics, Values and Compliance: Walking the Talk

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Wish you and your family all happiness, prosperity, peace and good health in the brand new year 2012

Business Ethics, Values and Compliance: Walking the Talk

Ethical business conduct and value standards, especially of medium, large to very large corporations are coming under increasing stakeholders’ scrutiny and being severely criticized for non-compliance in many instances. At the same time, more and more corporate initiatives are being taken towards this direction by both the global and local companies with special emphasis to combat bribery/ corrupt business practices and contribute to social justice and environmental protection.

The scope of ‘ethical business conducts and value standards’ of a company usually encompasses the following, among many others:

  1. The employees, suppliers, customers and other stakeholders
  2. Caring for the society and environment
  3. Fiduciary responsibilities
  4. Business and marketing practices
  5. R&D activities, including clinical trials
  6. Corporate Governance
  7. Corporate espionage

That said, codes of ethical conduct, corporate values and their compliance should not only get limited to the top management, but must get percolated downwards, looking beyond the legal and regulatory boundaries.

Statistics of compliance to codes of business ethics and corporate values are important to know, but the qualitative change in the ethics and value standards of an organization should always be the most important goal to drive any business corporation and the pharmaceutical sector is no exception.

Business Ethics and Values in the globalized economy:

Globalization of business makes the process of formulating the codes of ethics and values indeed very challenging for many organizations. This is mainly because of the fact that the cultural differences at times create a conflict on ethics and values involving different countries.

For this purpose, many business organizations prefer to interact with the cultural and religious leaders in the foreign countries, mainly to ascertain what really drives culturally diverse people to act in certain ways.

With the wealth of knowledge of the local customs and people, the cultural and religious leaders can help an organization to unify the code of ethics and values of the globalized business.Such leaders can also help identifying the ‘common meeting ground of minds’ from a specific country perspective, after carefully assessing the cultural differences, which are difficult to resolve in the near term.

The ‘common meeting ground of minds’, thus worked out, could form the bedrock to initiate further steps to strengthen global business standards of ethics and values of an organization.

OECD with USA started early enacting ‘Foreign Corrupt Practices Act (FCPA)’:

To prevent bribery and corrupt practices, especially in a foreign land, in 1997, along with 33 other countries belonging to the ‘Organization for Economic Co-operation and Development (OECD)’, the United States Congress enacted a law against the bribery of foreign officials, which is known as ‘Foreign Corrupt Practices Act (FCPA)’.

This Act marked the early beginnings of ethical compliance program in the United States and disallows the US companies from paying, offering to pay or authorizing to pay money or anything of value either directly or through third parties or middlemen. FCPA currently has significant impact on the way American companies are required to run their business, especially in the foreign land.

But a dichotomy exists in the US for ‘Grease Payment’:

‘Grease payment’ is classified by OECD as “a facilitating one if it is paid to government employees to speed up an administrative process where the outcome is already pre-determined.”

In the FCPA of the US ‘grease payment’, has been defined as “a payment to a foreign official, political party or party official for ‘routine governmental action,’ such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official’s action, only its timing.”

Considering all these ‘grease payments’ seem to be an absolute dichotomy to the overall US policy for ethical standards and against corruption.

Currently besides US, only Canada, Australia, New Zealand and South Korea are the countries that permit ‘Grease payments’.

Notwithstanding the fact that the governments of the US and four other countries allow companies to keep doing business without undue delay by making ‘grease payments’ to the lower government officials, such payments are considered as illegal in most other countries, if not all, in which they are paid, including India.

In India such a business practice is viewed as bribery, which is not only perceived as unethical and immoral, but also a criminal offense under the law of the land. Even otherwise, ‘grease payments’ are viewed by a vast majority of the population as a morally questionable standard of ‘business conduct’.

Many companies are setting-up the ethical business standards globally:

While visiting the website of especially the large global and local companies, one finds that all these companies barring a very few exceptions have already put in place a comprehensive ‘code of business ethics and values’. Some of these companies have also put in place dedicated code compliance officers across the globe.

However, it is important to ensure that the persons who are appointed either as the ‘Watch Dogs’ for such commendable initiatives or to head any committee on the subject, are individuals with squeaky clean record of adherence to the ‘Code of Ethics and Values’. Otherwise, the entire exercise may be perceived as making a mockery of the whole purpose.

Despite all these commendable initiatives towards establishing a corporate codes of business ethics and values, the moot question that haunts many time and again: “Are all these companies ‘walking the talk’?”

Otherwise, why does one read news items like ‘Dirty Secrets In Soap Prices’ as appeared in the ‘Wall Street Journal’ dated December 9, 2011 reporting that P&G, Colgate and Henkel have been fined $484 million by the French Government for ‘Price Fixing’ of laundry soap.

Or why do we see reports like one in the “Fierce Pharma’ dated October 5, 2010 stating that in the US eleven pharmaceutical companies have paid a total of over $6 billion to the government in 22 months for unethical marketing practices Or a ‘Bloomberg’ report dated January 17, 2011 with the headline, “Glaxo Sees $3.5 Billion Charge Related to Avandia Claims, Sales Practices.”

Or…

It is perhaps a sheer coincidence that whenever, such incidents take place, the fingers are usually pointed towards the middle or lower management cadre of the corporations concerned for non-compliance. The Corporate or top management ownership of such seemingly avoidable incidents still remains a distant reality.

Public perception of ethical standards of Pharmaceutical companies is not encouraging:

In the pharmaceutical sector all over the world, the marketing practices have still remained a very contentious issue despite many attempts of self-regulation by the industry. The flow of complaints for alleged unethical business practices have not slowed down significantly, across the world, even after so many years of self-regulation.

Nearer home, the Department of Pharmaceuticals of the Government of India has already circulated a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for stakeholders to comment on it. The final UCPMP, when it comes into force, if not implemented by the pharmaceutical players in its ‘letter and spirit’, may attract government’s ire in form of strong doses of regulatory measures.

A study on the UCPMP:

Ernst & Young released the key findings of a survey report on the UCPMP in September, 2011 titled ‘Pharmaceutical marketing: ethical and responsible conduct’, which are as follows:

  • Around two-third of the respondents felt that the implementation of the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) drafted by the Department of Pharmaceuticals, would change the manner in which the pharma products are currently marketed in India
  • More than 50% of the respondents are of the opinion that UCPMP guidelines may lead to manipulation in recording of actual sampling activity
  • More than 50% of the respondents indicated that the effectiveness of the code will be very low in the absence of legislative support provided to the UCPMP committee
  • Majority of the respondents (90%) felt that pharma companies in India should focus on building a robust internal controls system for ensuring compliance with the UCPMP
  • Around 72% of the respondents felt that the MCI was not stringently enforcing its medical ethics guidelines
  • Only 36% of the respondents felt that the MCI’s guidelines would have an impact on the overall sales of the pharma companies

Thus the quality of implementation of self-regulatory ‘Code of Marketing Practices’ is not only attracting heavy criticism from the stakeholders in many countries in the world, including India, but also indicating a trust deficit between the industry and the civil society in general.

Clinical Trials in India: Ethics and values

Clinical Trial is another area of pharmaceutical business, especially in the Indian context, where more often than not, issues related to ethics and values are being raised. In an article titled, ‘Clinical trials in India: ethical concerns’ published by the World Health Organization (WHO) following observations have been made:

“The latest developments in India reflect a concerted effort on the part of the global public health community to push clinical trials issues to the fore in the wake of several high-profile cases in which pharmaceutical companies were shown to be withholding information from regulators.”

Similarly ‘Times of India’ in its June 6, 2011 issue reported, “Clinical trials claimed 25 lives in 2010, only 5 paid compensation.”

Conclusion:

The need to formulate ‘Codes of Business Ethics & Values’ and even more importantly their compliance are gaining increasing importance and relevance in the globalized business environment. Unfortunately, at the same time, many companies across the world are being increasingly forced to come to terms with the heavy costs and consequences of ‘unethical behavior and business practices’ by the respective governments, perhaps arising out of intense pressure for the business performance.

There is no global consensus, as yet, on what is ethically and morally acceptable ‘Business Ethics and Values’ across the world. However, even if it these are implemented in a country-specific way, the most challenging obstacle to overcome by the corporates would still remain ‘walking the talk’ and owning the responsibility.

The million dollar question thus emerges ‘How to make it happen?’

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.