Tag Archives: Tapan

Is Credibility Erosion of Pharma Accelerating?

Posted on by
Reply

‘Big Pharma’ now seems to be desperately trying to gain the long lost high moral ground by pushing  hard its gigantic image makeover juggernaut, maintaining a strong pitch on the relevance of stringent Intellectual Property Rights (IPR) in the lives of the patients. However, even more alert media, by reporting a number of unethical and fraudulent activities of some of its constituents on the ground, is taking much of the steam out of it. As a result, the pace of erosion of all important pharma credibility is fast accelerating.

Innovation – A critical need for any science-based business:

Innovation, which eventually leads to the issue of IPR, is generally regarded as extremely important to meet the unmet needs of patients in the battle against diseases of all types, especially the dreaded ones. Thus, it has always been considered as the bedrock of the global pharmaceutical industry. As we all know, even the cheaper generic drugs originate from off-patent innovative medicines.

At the same time, it is equally important to realize that just as the pharmaceutical or life-science businesses, innovation is critical for any other science based businesses too, such as IT, Automobile, Aviation, besides many others. Since many centuries, even when there were no ‘Patents Act’ anywhere in the world, leave aside robust ones, pharmaceutical industry has been predominantly growing through innovation and will keep becoming larger and larger through the same process, acrimonious debate over stringent IPR regime not withstanding.

India has also amply demonstrated its belief that innovation needs to be encouraged and protected with a well-balanced Intellectual Property regime in the country, when it became a member of the World Trade Organization and a part of the TRIPS Agreement, as I had discussed in my earlier blog post.

Simultaneously, a recent research report is worth noting, as well. The study reveals, though the pharmaceutical companies in the United States, since mid 2000, have spent around US$ 50 billion every year to discover new drugs, they have very rarely been able to invent something, which can be called significant improvement over already existing ones. This is indeed a matter of great concern, just as a very ‘stringent IP regime’ prompts ‘evergreening’ of patents, adversely impacting the patients’ health interest.

Though innovation is much needed, obscene pricing of many patented drugs is limiting their access to majority of the world population. On top of that, business malpractices net of fines, wherever caught, are adding to the cost of medicines significantly.

Key reasons for acceleration of credibility erosion:

I reckon, following are the three main factors accelerating credibility erosion of pharma in general and Big Pharma in particular:

  1. Large scale reported business malpractices affecting patients’ health interest
  2. Very high prices of patented medicines in general, adversely impacting patients’ access and cost of treatment
  3. Attempts to influence IP laws of many countries for vested interests

1. Accelerating credibility erosion due to business malpractices:

In the pharmaceutical sector across the world, including India, the Marketing and Clinical Trial (CT) practices have still remained very contentious issues, despite many attempts of so called ‘self-regulation’ by the industry associations. Incessant complaints as reported by the media, judicial fines and settlements for fraudulent practices of some important pharma players leave no breather to anyone.

To illustrate the point, let me quote below a few recent examples:

Global:

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder. According to the Italian regulator Avastin costs up to 81 euros, against around 900 euros for Lucentis. Out of the total amount, Novartis would require to pay 92 million euros and Roche 90.5 million euros. Roche’s Genentech unit and Novartis had developed Lucentis. Roche markets the drug in the United States, while Novartis sells it in the rest of the world. Quoting the Italian regulator, the report says that the said practices cost Italy’s health system more than 45 million euros in 2012 alone, with possible future costs of more than 600 million euros a year.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges. An investigation of those former employees of Sanofi unearthed that they had made illicit payments to get more orders from pharma dealer.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines.
  • In July 2012, GlaxoSmithKline was reportedly fined US$ 3 bn in the United States after admitting to bribing doctors and encouraging the prescription of unsuitable antidepressants to children. According to the report, the company encouraged sales reps in the US to ‘mis-sell’ three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.
  • Not so long ago, after regulatory authorities in China cracked down on GlaxoSmithKline for allegedly bribing of US$490 million to Chinese doctors through travel agencies, whistleblower accusations reverberated spanning across several pharma MNCs, including Sanofi. The company reportedly paid ¥1.7 million (US$277,000) in bribes to 503 doctors around the country, forking over ¥80 to doctors each time a patient bought its products.

All these are not new phenomena. For example, In the area of Clinical Trial, an investigation by the German magazine Der Spiegel reportedly uncovered in May, 2013 that erstwhile international conglomerates such as Bayer, Hoechst (now belongs to Sanofi), Roche, Schering (now belongs to Bayer) and Sandoz (now belongs to Novartis) carried out more than 600 tests on over 50,000 patients, mostly without their knowledge, at hospitals and clinics in the former Communist state. The companies were said to have paid the regime the equivalent of €400,000 per test.

India:

Compared to the actions now being taken by the law enforcers overseas, India has shown a rather lackadaisical attitude in these areas, as on date. It is astonishing that unlike even China, no pharmaceutical company has been investigated thoroughly and hauled up by the government for alleged bribery and other serious allegations of corrupt practices.

However, frequent reporting by Indian media has now triggered a debate in the country on the subject. It has been reported that a related Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing in the near future. It is worth noting that in 2010, ‘The Parliamentary Standing Committee on Health’ also had expressed its deep concern by stating that the “evil practice” of inducement of doctors by the pharma companies is continuing unabated as the revised guidelines of the Medical Council of India (MCI) have no jurisdiction over the pharma industry. The Government, so far, has shown no active interest in this area, either.

In an article titled, “Healthcare industry is a rip-off”, published in a leading business daily of India, states as follows:

“Unethical drug promotion is an emerging threat for society. The Government provides few checks and balances on drug promotion.”

In the drug manufacturing quality area, USFDA and MHRA (UK) has recently announced a number of ‘Import Bans’ for drugs manufactured in some facilities of Ranbaxy and Wockhardt, as those medicines could compromise with the drug safety concerns of the patients in the US and UK. Even as recent as in late March 2014, the USFDA has reportedly issued a warning letter to another domestic drug maker USV Ltd on data integrity-related violations in good manufacturing practices occurred at the company’s Mumbai facility. This is indeed a cause of added concern.

Similarly, in the Clinical Trial area of India, responding to a PIL, the Supreme Court of the country and separately the Parliamentary Standing Committee also had indicted the drug regulator. The Committee in its report had even mentioned about a nexus existing between the drug regulator and the industry in this area.

2. Accelerating credibility erosion due to high patented drugs pricing:

On this subject, another March 2014 report brings to the fore the problems associated with access to affordable newer medicines, which goes far beyond India, covering even the wealthiest economies of the world.

The report re-emphasizes that the monthly costs of many cancer drugs now exceed US$ 10,000 to even US$ 30,000. Recently Gilead Sciences fixed the price of a breakthrough drug for hepatitis C at US$ 84,000 for a 12- week treatment, inviting the wrath of many, across the world.

Why is the drug price so important?

The issue of pricing of patented drugs is now a cause of concern even in the developed countries of the world, though the subject is more critical in India. According to a 2012 study of IMS Consulting Group, drugs are the biggest component of expenditure in the total Out Of Pocket (OOP) spend on healthcare, as follows:

Items Outpatient/Outside Hospital (%) Inpatient/Hospitalization (%)
Medicines 63 43
Consultation/Surgery - 23
Diagnostics 17 16
Minor surgeries 01 -
Private Consultation 14 -
Room Charge - 14
Others 05 04

Probably for the same reason, recently German legislators have reportedly voted to continue until the end of 2017 the price freeze on reimbursed drugs, which was introduced in August 2010 and originally set to expire at end of 2013.

However in India, only some sporadic measures, like the Drug Price Control Order (DPCO 2013) for essential drugs featuring in the National List of Essential Medicines (NLEM 2011), that covers just around 18 percent of the total domestic pharmaceutical market, have been taken. On top of this, unlike many other countries, there is no negotiation on price fixation for high cost patented drugs.

If caught, insignificant fine as compared to total profit accrued, has no impact:

Many stakeholders, therefore, question the business practices of especially those players who get exposed, as they are caught and fined by the judiciary and the regulatory authorities.

Do such companies prioritize high profits ahead of patients’ lives, creating a situation for only those with deep pockets or a good health insurance cover to have access to the patented medicines, and the rest of the world goes without?

It is also no surprise that highly secretive and well hyped so called “Patient Access Programs” of many of these companies, are considered by many no more than a sham and a façade to justify the high prices.

3. Accelerating credibility erosion due to unreasonable IP related demands:

Despite some well-justified measures taken by countries like, India in the IP area, the US and to a great extent extent Europe and Japan, continuously pressured by the powerful pharma lobby groups, are still pushing hard to broaden the IP protections around the globe through various Free Trade Agreements (FTAs). At the same time, Big Pharma lobbyists are reportedly trying to compel various governments to enact IP laws, which would suit their business interest at the cost of patients.

Fortunately, many stakeholders, including media, have started raising their voices against such strong-arm tactics, further fueling the credibility erosion of Big Pharma.

Conclusion:

In the midst of all these, patients are indeed caught in a precarious situation, sandwiched between unethical practices of many large pharma players and very high prices of the available life saving patented medicines, beyond the reach of majority of the global population.

That said, accelerating credibility erosion of pharma in general and the Big Pharma in particular could possibly lead to a stage, where it will indeed be challenging for them to win hearts and minds of the stakeholders without vulgar display or surreptitious use of the money power.

To avoid all these, saner voices that are now being heard within the Big Pharma constituents should hopefully prevail, creating a win-win situation for all, not by using fear of sanctions as the key in various interactions, not even raising the so called ‘trump card of innovation’ at the drop of a hat and definitely by jettisoning long nurtured repulsive arrogance together with much reported skulduggery, for patients’ sake.

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.

Is The Indian Patent Regime Weak?

Posted on by
Reply

“India misuses its own IP system to boost its domestic industries,” US Senator Orrin Hatch commented while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30.

The reasons for this low score, especially true in the case of the pharma sector, are the US view that India’s patentability requirements are in violations of Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the non-availability of regulatory data protection, non-availability of patent term restoration and the use of compulsory licensing (CL) for commercial, non-emergency situations.

Given this, one could, erroneously though, assume that the Indian Patent Act is weak and not TRIPS-compliant….

To read more of this article, along with another interesting expert view, please click on The Financial Express March 4, 2014.

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.

Just Born A Pharma Goliath: Would India Be Impacted?

Posted on by
Reply

Just born a potential pharma Goliath, as Actavis – the Dublin-based one of the largest global generic drug makers, in its biggest ever purchase, acquires New York based R&D based pharma major – Forest Laboratories, for a whopping US$ 25 billion.

It is worth noting that as on date Actavis has grown mainly through Mergers and Acquisition (M&A) route. In 2012, the company took over American generic drug major Watson Pharma for €4.5 bn and then Ireland’s Warner Chilcott, marketing patented drugs for gastrointestinal and urological conditions, for US $8.5 bn. Post buy out of Forest Laboratories, Actavis would have annual sales turnover of US$15 bn.

So far, mostly R&D based Pharma players acquired generic drug makers:

This acquisition is interesting. The reason being, since the last few years, mostly research based global pharmaceutical companies are taking over generic pharma players in the emerging markets with a reasonable speed. To cite a few examples:

In June, 2010, British drug major GlaxoSmithKline (GSK) announced acquisition of ‘Phoenix’, a leading Argentine pharmaceutical company focused on the development, manufacturing and marketing of branded generic products, for a cash consideration of around US $253 million. With this acquisition, GSK planned to accelerate its business growth in Argentina and the Latin American region.

Similarly, Paris based Sanofi with the acquisition of Zentiva, became an important player in the European generic drug market. Zentiva, is also a leading generic player in the Czech, Turkish, Romanian, Polish, Slovak and Russian markets, besides the Central and Eastern European region. In addition to Zentiva, in the same year 2009, Sanofi also acquired other two important generic players, Medley in Brazil and Kendrick in Mexico.

In February 2014, the German Drug major Bayer reportedly announced that it would buy Dihon Pharmaceutical Group Co of China, expanding the German company’s footprint in a key growth country. Dihon’s products are also sold in Nigeria, Vietnam, Myanmar and Cambodia. Privately held Dihon specializes in ‘Over-The-Counter (OTC)’ and herbal ‘Traditional Chinese Medicine (TCM)’ products.

Back home, MNCs acquired the following generic companies from 2006 to 2011:

Year Indian Companies Multinational Companies

Value ($Mn)

 Type of Deal
2006 Matrix Labs Mylan 736 Acquisition
2008 Ranbaxy Labs Daiichi Sankyo 4,600 Acquisition
Dabur Pharma Fresenius Kabi 219 Acquisition
2009 Shantha Biotech Sanofi-aventis 783 Acquisition
2010 Orchid Chemicals Hospira 400 Acquisition
Piramal Healthcare Abbott 3,720 Acquisition
Paras Pharma Reckitt Benckiser 726 Acquisition
2011 Universal Medicare Sanofi 110 Acquisition
2013 Mylan Agila Specialities 1750 Acquisition

Key drivers for generic acquisition:

From 2012 to 2015 patented drugs with a combined turnover of US$ 183 billion have already faced or would face intense generic competition resulting in, as high as, around 90 percent price erosion for those products. It is not just patent expirations that are exerting pressure on innovator companies. Added to this, a relatively weak R&D pipeline and increasing focus of various governments to reduce healthcare costs, have forced many research based global pharma players to imbibe the inorganic growth strategy in the generic space to quickly grab a sizable share of this large and fast growing market, especially in the emerging economies of the world.

Actavis acquisition is different:

In the above light Actavis’s acquisition of Forest Laboratories is quite different. Here, instead of a predominantly research-based company’s acquiring a generic player, a basically generic drug major has bought a research based global pharmaceutical player.

Interestingly, Forest Laboratories follows a unique R&D model. It is focused on, instead of discovering on its own, identifying strong medically relevant product candidates and guiding them through the complex development lifecycle, from proof-of-concept through post-marketing.

Strong global portfolio of both generic and patented drugs:

Post buy out, Actavis would have a strong combo-portfolio of generic drugs together with a relatively robust line-up of a diverse range of patented products, spanning across therapy areas such as Anti-Infective, Respiratory, Cardiovascular, Central Nervous System, Gastrointestinal, Obstetrics and Pain Management and that too not just in the emerging markets, but globally, unlike many others.

In addition, acquisition of Forest Laboratories would also provide Actavis access to former’s large US sales teams, transforming the merged entity a formidable force to reckon with in the topmost pharmaceutical market of the world, besides many others.

An intriguing recent decision:

That said, it is interesting to note that in January 2014, Actavis, then the second-biggest generic drug maker by market capitalization, announced that it would quit China as “It is not a business friendly environment… China is just too risky”. This is indeed intriguing, because by 2015, China’s generic market is expected to be close to US$ 82 billion.

Be that as it may, post acquisition Actavis would be in a position to offer all its customers in all the markets of the world a rainbow of products from patented to generics, carving out a critical strategic advantage for itself in the global pharmaceutical market.

Impact in India:

The question now boils down to what would be the impact of the just born Goliath on the domestic pharmaceutical industry in India.

Differentiated generic business:

The generic drugs market is usually classified as simple generics, super-generics and biosimilars. To differentiate, by adding value in the generic medicines, many domestic players are gradually entering into the ‘Super Generic’ and ‘biosimilar’ category of drugs. For example, Dr Reddy’s Laboratories has reportedly chosen to go for a difficult to copy drug formulation with its blood-thinner Fondaparinux. Sun Pharma, on the other hand, is focusing on innovative delivery platforms for its ophthalmic drugs and oral contraceptives. Cadila is looking at newer drug delivery modes for its painkiller Diclofenac. So is Lupin in other areas. In the biosimilar arena, Biocon has already developed Trastuzumab formulation of Roche. Moreover, the biosimilar business of Dr Reddy’s Laboratories continues with its impressive growth trend, besides many other Indian players in the same fray.

Simultaneously, India is improving its effectiveness in ‘Contract Research and Manufacturing Services (CRAMS) space. As we have recently witnessed in India the alliances between Merck & Co and Cipla and earlier with Sun Pharma. Even prior to that, collaborative agreements of Pfizer with Aurobindo Pharma; GSK with Dr Reddy’s Laboratories; Abbott India with Cadila and many more, would vindicate this point.

Merck Serono of Germany also announced a partnership to co-develop a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies (MAbs) with Dr. Reddy’s Laboratories. The partnership covers co-development, manufacturing and commercialization of the compounds around the globe, with some specific country exceptions. Mylan has also signed similar agreement with Biocon.

Glenmark Pharma has chosen yet another route, by entering into collaboration with Forest Laboratories (now Actavis) in 2013, for the development of a novel mPGES-1 inhibitor for chronic inflammatory conditions, including pain management.

Advantage India, provided…

Global generic drugs market would get its next booster dose with reportedly around 46 drugs going off patent opening a market of another US$ 66 billion from monopolistic to intense generic competition in 2015.

Details of ANDA status from the US-FDA source, as I indicated in my earlier blog post, probably indicate that several Indian players have already started moving in that direction at a brisk pace, keeping their eyes well fixed on the crystal ball. Over 30 percent of Abbreviated New Drug Applications (ANDAs) and around half of the total Drug Master Filings (DMF) now come from the Indian Companies. In 2013 alone, the US-FDA granted 154 ANDAs and 38 tentative ANDAs to the Indian companies.

Despite all these, a serious apprehension does creep in, which finds its root in much-publicized fraudulent behavior of a few large Indian drug manufacturers, seriously compromising with the cGMP standards of some high profile global drug regulators. This challenge has to be overcome, sooner, to reap rich harvest out of the emerging global opportunities in the space of generic drugs.

Conclusion: 

Geographically, North America is the largest consumer of generic drugs followed by Europe and Japan. However, the highest growth of the generic drugs market is observed in the Asia-Pacific region. Besides Actavis, some of the major generic drugs manufacturers of the world are Mylan, Apotex, Hospira, Par Pharmaceutical., Sandoz International and Teva Pharmaceutical.

From India, Ranbaxy Laboratories (before the recent fiasco), Dr. Reddy’s Laboratories, Lupin and Sun Pharma, besides many others, are competing quite well in the global generic drugs market with success.

Though Actavis has its manufacturing operations in India with its registered office located in Mumbai, the company is not yet engaged in serious local marketing operations in the country. In 2006 as Watson Pharma Pvt Ltd., the company acquired Sekhsaria Chemicals in a move to push forward its generic drug agenda globally. In 2005, it acquired a manufacturing facility in Goa from Dr. Reddy’s Laboratories to produce solid dosage generic drugs for the US market.

Taking all these into considerations, if much deliberated cGMP issues with the foreign drug regulators are resolved sooner, Actavis is not expected to make any major difference for Indian pharma players either in the domestic market or for that matter globally, any time soon.

Thus Indian pharma players are unlikely to be adversely impacted with the emergence of this new potential Goliath in the global pharmaceutical landscape.

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.

Threats to Indian Generics: Failing in US Inspections is Just Half The Story

Posted on by
Reply

At a recent event of the American Enterprise Institute, Dr. Harry Lever, a senior cardiologist at the Cleveland Clinic in Ohio, reportedly expressed his concern based on his personal experience regarding inconsistent quality among Indian generics. As a result, he requires switching patients off them, almost routinely, for desired therapeutic effects.

Many reasons may be attributed to such medical concerns on Indian generics in the United States, however limited those may be, the core issue can nevertheless be wished away.

Back home in India, many doctors reportedly have also expressed similar apprehensions on the quality of many generic formulations produced by over 10,000 pharmaceutical manufacturers in the country.

US-FDA on its part has taken action to protect health safety of the patients in the United States through import bans of drugs manufactured in all those facilities, which failed to meet its cGMP standards during inspection.

Not an old story:

Not so long ago, just in 2013, quality related concerns with generic drugs exported by India came to the fore after Ranbaxy reportedly pleaded guilty and paid a hefty fine of US$ 500 million for falsifying clinical data and distributing ‘adulterated medicines’ in the United States.

Thereafter, US-FDA banned drug imports from Ranbaxy and Wockhardt, manufactured in all those facilities that failed to conform to its cGMP quality standards.

Those are the stories for generic formulations. Most recently, following yet another ‘import ban’ and this time for Active Pharmaceutical Ingredients (API) manufactured at its Toansa plant, Ranbaxy has suspended all shipments of APIs pending review. With this step, Ranbaxy would virtually have no access to the top pharmaceutical market of the world.

A not very responsible remark either:

Unfortunately, in the midst of such a scenario, instead of taking transparent and stringent measures, the Drug Controller General of India (DCGI) was quoted as saying, “We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

The DCGI made this comment as the US-FDA Commissioner Margaret Hamburg was wrapping up her over a weeklong maiden trip to India in the wake of a number of ‘Import Bans’ arising out of repeated cGMP violations by some large domestic generic drug manufacturers. Whereas, Hamburg reiterated the need for the domestic drug makers of India to make sure that that the medicines they export are safe for patients, the DCGI’s above comment appears rather arrogant and out of tune, to say the least.

Just recently, on the above comments of the DCGI, the American Enterprise Institute reportedly commented, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”

Failing in US-FDA inspection is just half of the story:

Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are now sold in the United States come from India. All most all of these are cheaper generic versions of patent expired drugs. Total annual drug export of India, currently at around US$ 15 billion, is more than the domestic turnover of the pharma industry. Hence, India’s commercial stake in this area is indeed mind-boggling.

It is now well known, if such ‘Import Bans’ continue or grow due to shoddy compliance of required cGMP standards, there could be a serious challenges for the Indian drug exporters to salvage their reputation on drug quality for a long time to come. Consequently, this will offer a crippling blow not just to their respective organizational business outlook, but also to future drug exports of India. It is worth mentioning that drugs and pharmaceuticals are currently a net foreign exchange earner for the country.

The other half of the story:

Threats related to export of Indian generic drugs on quality parameters, as flagged by the US-FDA in India, is just half the story. The other half of the story begins in the US, instead of in India, and is related to stringent new measures taken by the same regulator in its own land to have a check on the quality of imported generic drugs consumed by the patients in America.

A recent report highlights that around twelve academic centers of the United States are now involved in the firstever widespread safety and quality evaluation of generic drugs. This program is run by the US-FDA and would continue through 2017.

This initiative has been prompted by the fact that generic drugs currently contribute over 80 percent of prescriptions written in the US. In 2014, the said program will reportedly focus on cardiovascular drugs, ADHD treatments, immune-suppressants, anti-seizure medicines, and antidepressants. The grand plan is highlighted to project the priority emphasis of the US-FDA on the quality of generic drugs, especially after it banned medicine import from four India-based facilities over a period of last nine months.

Some Examples:

- A widespread testing program of USFDA followed its 2012 finding that generic copies of antidepressant medication Wellbutrin XL did not work as good as the original. This study eventually led the largest generic drug player of the world -Teva to withdraw its generic version from the market in 2012.

- According to the report, US-FDA is now reviewing a 2013 study done by a Boston-based researcher that found widespread impurities in the generic version of Pfizer’s anti- cholesterol drug Lipitor manufactured outside of the US. The research reportedly found that some generic versions of Lipitor produced overseas were rendered ineffective as a result of manufacturing impurities. However, US-FDA action on the same is not known, as yet.

Thus, the other half of the story unfolds the reality that, even if any exporter escapes USFDA inspection in India, there is a fair chance now that the generic formulations could be tested in the US itself under the above program and if found wanting in quality parameters, concerned generic formulation could face a ban in the United States.

Conclusion:

There is nothing like tightening all loose knots in the required cGMP process for all drugs manufactured in India, without bothering much about their testing in the US. If the drug quality consciousness becomes robust in the shop floor, well before the products leave the shores of India, there is no reason why the country would face similar embarrassing incidents in future, along with a strong global furore.

The US-FDA Commissioner’s recent calling on the DCGI to join hands with the US to enforce more rigorous oversight of drug manufacturing facilities, needs to be followed up with due earnest, the above avoidable comment of the DCGI not withstanding.

The Commissioner reportedly reiterated that the US would increase the number of FDA inspectors in India from 11 to 19 as it intensifies inspections of drug manufacturing plants, simultaneously with arranging cGMP compliance related workshops for the drug exporters. The DCGI also made an announcement that India intends to increase its inspectors from 1,500 to 5,000 over the next five years.

A deepening economic spat over cheaper generic drugs, not withstanding, all these good intents to maintain a robust drug quality standard need to be translated into reality.

Trying to find ghosts nurturing dubious intentions against India, especially in areas pertaining to drug quality standards, may not augur well for the patients at large, not just of the United Stated, but for our own homeland too.

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.

For Affordable Healthcare: Synergize Resources Through PPP Models

Posted on by
Reply

According to a 2012 study of IMS Consulting, the key factor of significantly high ‘Out of Pocket (OOP)’ expenditure on healthcare in India is that people are pushed into seeking costlier private care services due to imbalanced infrastructure of healthcare workers, medicines and facilities.

Currently, 74 percent of patients in ‘Out-Patient (OP)’ care and 65 percent in ‘in-Patient (IP)’ care seek healthcare in the private channels. In private inpatient care, the average cost of treatment exceeds the average monthly household income at 121 percent for the affording population and 217 percent for the poor population, forcing many families to borrow money or sell assets.

Thus, the affordability challenges for healthcare of the country, as manifested by high OOP spend, is mostly a consequence of a large patient population using the private healthcare channel due to still inadequate availability of public healthcare services.

The situation is looking up:

According to IMS study 2012, currently, on an average about 54 percent of the patients are receiving free medicines from the Government hospitals. In progressive states like, Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka this number goes up to 85 percent. At the same time, in rural India, which constitutes around 70 percent of the total 1.2 billion populations of India, usage of Government facilities for OP care has increased from 22 percent in 2004 to 29 percent in 2012, mainly due to the impact of National Rural Health Mission (NRHM).

Consequently, this increase will also have significant impact in reducing OOP healthcare expenses of the rural poor.

Medicines constitute highest component of OOP:

Medicines still constitute the highest component of OOP expenses in OP care, though its percentage share has decreased from 71 percent in 2004 to 63 percent in 2012.  Similarly for IP care, the share of medicines in total OOP has also decreased from 46 percent in 2004 to 43 percent in 2012.

However, still 46 percent of the patients seeking healthcare in public channels had to purchase medicines from private channels. Recently announced drug procurement system through Central Medical Services Society (CMSS) after hard price negotiation and distribution of those drugs free of cost from Government hospitals and health centers, could address this issue effectively.

Further scope to reduce OOP:

The study highlights that OOP spend could be lowered by 22 percent with:

  • Improved availability of healthcare facilities at public hospitals and health centers, which can be achieved through effective implementation of “National Health Mission” with higher budgetary allocation.
  • Improved availability of medicine at the public channels, which is feasible through effective implementation of already announced “Free Medicine” scheme of the Government across the country.

A total reduction of ~40% in overall OOP spend appears to be possible, the study reiterates, when more people would get confidence that public healthcare can meet all their needs.

The roadmap to achieve the goal:

Fundamentally there are five ways to deal with the affordability issue:

1. Reduction in demand: Creating a better health environment,

2. Reduction in costs: Through price control, increased competition, group purchasing power

3. Increase in financial support from government

4. Increased penetration of health insurance programs

5. Increase per-capita income of households

All these five areas, I reckon, would not be difficult to address through well-structured and strategic Public Private Partnership (PPP) initiatives.

It is increasingly recognized that there are many other healthcare challenges, which do not fall exclusively under either the public or the private sectors. These challenges need to be addressed with combined efforts… with well structured Public Private Partnership (PPP) models.

Private sector should play its role:

The private sector is already a major provider of health services in India. Hence, it has the wherewithal to support implementation of Government’s flagship healthcare programs, especially in the area of service delivery, to enhance their overall effectiveness.

As the Universal Health Care (UHC) proposal made by the High Level Experts Group (HLEG) to the Planning Commission of India highlighted, the government would provide the budget, while the private sector would take the responsibility for delivery of healthcare services.

Accountability for PPP should not fall through the systemic cracks:

The above study indicates, the private parties could include individual physicians, commercial contractors, large private and corporate super-specialty hospitals, not-for-profit agencies (NGOs), pharmaceuticals and device manufacturers. Expertise of all these stakeholders should be appropriately leveraged.

It is absolutely essential to make sure that the accountability of the PPP initiatives does not fall through the cracks now existing in the system.

To control costs and ensure required standards are met, all contractual agreements for PPPs, as recommended, must have adequate built-in monitoring and supervision mechanisms of the highest order, assigning clear roles and responsibilities for each party.

Similarly, NGOs need to be given a larger role of monitoring the activities or services rendered at such facilities to make sure the designated institutions are fulfilling their obligations to the public.

Conclusion:

To make healthcare affordable in India, well-strategized PPP initiatives would have critical roles to play.

Thus, instead of resorting to blame games with Government accusing the private sector to be exploitative and the private sector continuously moaning for ‘unfriendly’ business policies of the government, there is a fundamental need for both the constituents working closely together.

As a result, patients will have greater access to quality healthcare at an affordable price, the industry will grow faster in a sustainable way and the government will have its public healthcare obligations fulfilled to a reasonable extent.

Some of the major sectors in India where PPP has been quite successful are infrastructure, telecom, irrigation, power and airports. So, why should it not work for the healthcare sector of the country, as well?

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.

Astronomical Prices of Patented Cancer Drugs: A Solution in Sight?

Posted on by
Reply

Astronomical prices of patented anti-cancer dugs have become a subject of great concern not just in India. It is becoming an issue across the world.

After issuing the first ever Compulsory License (CL) for Nexavar of Bayer in India, the grapevine is reportedly still abuzz on the progress of issuing CL for some commonly used high priced patent protected anti-cancer drugs, such as, dasatinib (Sprycel) of Bristol-Meyer Squibb. It is believed that a CL on dasatinib will reduce the product price to around Rs 8,000 for a month’s therapy as compared to Rs. L 1.65 for “Sprycel, benefitting the patients suffering from Chronic Myelogenous Leukemia (CML).

Whenever, a discussion on such pricing issues comes up in India, the counter arguments from the pharma MNCs are put as under:

  • Does India have adequate diagnostic facilities for the disease?
  • How many diagnosed patients would be able even the low cost product?

The intent of these questions appears to be diversionary in nature and has hardly any relationship with the real issue.

Yes, diagnosing cancer at an early stage is still a challenge in India for various socio-economic reasons, which need to be addressed expeditiously. But, what happens to majority of those diagnosed patients, who cannot afford to pay over Rs. 1.65 for a month’s therapy for a product like dasatinib? Won’t the reduced price of say Rs. 8,000 expand access of the drug to many more additional patients, though may not be to all.

US researchers also point out high cancer drugs cost:

It is interesting to note, that in a in a review article published recently in ‘The Lancet Oncology’, the US researchers Prof. Thomas Smith and Dr. Ronan Kelly identified drug pricing as one area of high costs of cancer care. They are confident that this high cost can be reduced, just as it is possible for end-of-life care and medical imaging – the other two areas of high costs in cancer treatment.

Besides many other areas, the authors suggested that reducing the prices of new cancer drugs would immensely help containing cancer costs. Prof. Smith reportedly said, “There are drugs that cost tens of thousands of dollars with an unbalanced relationship between cost and benefit. We need to determine appropriate prices for drugs and inform patients about their costs of care.”

Pricing pressure in Europe too:

Another recent report highlights that Germany is contemplating legislation shortly that would force drug manufacturers to report the reduced prices they negotiate with insurers, potentially pressuring prices lower elsewhere in Europe.

The report highlights that drug manufacturers have had to negotiate rebates on new innovative medicines with German insurers for the past three years. Now, instead of referring to rebates negotiated between drug manufacturers and insurers, the law will refer to reimbursement. The shift may seem small, but it means the talks are really about price, not discounts, which is often good for a limited time or volume and is renegotiable.

It is worth noting from the report that countries including Spain, France and Italy have reduced the number of drugs for which they will reimburse patients, mandated the increased use of generic medicines and lowered the amount they will pay for some products since the economic crisis.

A solution in sight?

Coming back to the Indian scenario, unlike many other developed and developing countries of the world, there is no system yet in place in India to negotiate prices of patented drugs, including those used for cancer.

CL for all patented anti-cancer drugs may not be a sustainable measure for all time to come, either. One robust alternative is price negotiation for patented drugs in general, including anti-cancer drugs, as provided in the Drug Policy 2012. The issue has been under consideration of the Department of Pharmaceuticals (DoP) since 2007. The bizarre report produced by a committee formed for the purpose earlier had no takers.

Unfortunately administrative lethargy and lack of requisite sense of urgency have not allowed the Department of Pharmaceuticals (DoP) to progress much on this important subject, beyond customary lip service, as on date. Intense lobbying on the subject by vested interests from across the world has further pushed the envelope in a dark corner.

Recent report indicates, the envelope has since been retrieved for a fresh look with fresh eyes, most probably, as a new leader now on the saddle of the department.

An inter-ministerial committee has now reportedly been formed by the Department of Pharmaceuticals (DoP) under the chairmanship of one of its Joint Secretaries, to suggest a mechanism to fix prices of patented drugs in India.
Other members of the committee are Joint Secretary, Department of Industrial Policy and Promotion (DIPP); Joint Secretary, Ministry of Health and Family Welfare; and Member Secretary, National Pharmaceutical Pricing Authority (NPPA).

It appears, inputs will be taken from various industry associations, yet again.

Conclusion:

Pharmaco-economics input, I reckon, would be of immense value for this exercise. Since the ‘Public Health Foundation of India (PHFI)’ has one such unit doing lots of good analysis, this inter-ministerial group may also consider inclusion of this unit in the committee, as advisor.

The pricing of newer patented medicines, especially those used for the treatment of cancer, are of critical importance for the country and the committee should ground the issue satisfactorily within a specified period without further delay.

Hopefully, a well thought out report of the inter-ministerial committee would help resolving this issue soon once and for all, including a large number of cancer patients in India.

By: Tapan J. Ray

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

 

 

Big Pharma: Now A ‘Chink in Its Armor’?

Posted on by
Reply

Emerging trends bring to the fore a possible ‘Chink in the Armor’ of the ‘Big Pharma’, despite a number of recent belligerent moves.

One such move I had deliberated in my earlier blog post. There I mentioned that 2014 report on ‘International Intellectual Property (IP) Index’ of the US Chamber of Commerce’s Global Intellectual Property Centre (GIPC) highlights India’s featuring at the bottom of 25 countries on Intellectual Property (IP) protection. Accordingly, the US Chamber having put forth a set of recommendations reportedly urged the US Trade Representive (USTR) to classify India as a ‘Priority Foreign Country’. This nomenclature is usually attributed to the worst offenders of ‘Intellectual Property Rights (IPR)’, which could culminate into trade sanctions.

The move attempts to dissociate IPR from ‘access to medicines’:

Though the methodology and alleged biases of this report were the topics of raging debates, according to USTR, this move of the US Chamber of Commerce is reportedly just against the IP regime in India and ‘not about access to medicines.’

This clarification is indeed bizarre, as most of the issues related to creation of intense political pressure from overseas for stringent IP regime in a country, such as India, revolve around access to patented medicines. The twin issue of IP and ‘access to patented medicines’ can hardly be separated.

Same old contentious example of ‘Glivec Access Program’:

The example of ‘Glivec Access Program’ does not appear to have many takers within the experts either for well-argued reasons.

Even then, to substantiate the point that the IP issues in India are not related to ‘access to patented medicines’, the US Chamber of Commerce states, yet again:

“In the case of Glivec, Novartis provided the leukemia drug to 95 per cent of patient population for free. The annual cost for Glivec generic treatment is approximately three to for times the average annual income in India”.

It is worth noting that the Swiss drug-maker Novartis reportedly gave the same example while defending the patent protections of Glivec before the Supreme Court without success. The apex judiciary ultimately dismissed the case last year.

Post Glivec judgment, the same ‘patient access program’ was debates in television programs too. However, its relevance for enhancing access could not be established in either of these two high profile public deliberations, as there were hardly any takers.

That said, I do not have any inkling, whether the protagonists of this much-touted “Glivec Access Program” would at anytime, in future, be able to establish their claim beyond any reasonable doubt that, ‘95 percent of the total patients population suffering from chronic myeloid leukemia receive Glivec free of cost from Novartis’.

Visible ‘Chink in its Armor’:

Not so long ago, Global CEO of Bayer reportedly proclaimed in public that:

“Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western Patients that can afford it.”

In tandem various other tough uttering, well crafted by the global communication agencies of ‘Big Pharma’, followed on the same IPR related issues, projecting its tough monolithic dimension.

However, after keenly watching a good number of much contentious moves being taken on IP and various other related areas by its lobby groups, both in India and overseas, it appears that all constituents of the ‘Big Pharma’ are not on the same page for all these issues, clearly exposing the ‘Chink in its Armor’, as it were.

Let me now give some examples, spanning across various issues, to vindicate this point:

I. Differences on ‘public disclosure of all Clinical Trial data’:

As discussed in my blog post earlier, The Guardian reported an incident on the above issue in July 2013. The article stated that the global pharmaceutical industry has “mobilized” an army of patient groups to lobby against the plan of European Medicines Agency (EMA) to force pharma companies publishing all Clinical Trial (CT) results in a public database for patients’ interest.

Important global pharma industry associations strongly resisted to this plan. The report indicated that a leaked letter from two large pharma trade associations, the Pharmaceutical Research and Manufacturers of America (PhRMA) of the United States and the European Federation of Pharmaceutical Industries and Associations (EFPIA), had drawn out the above strategy to combat this move of EMA.

The Chink:

However despite this grand strategy, some constituents of Big Pharma, such as, Abbott, GlaxoSmithKline (GSK), Johnson & Johnson decided to disclose the results of all applicable/covered clinical trials, regardless of outcome, in a publicly accessible clinical trials results database.

II. Differences on ‘leaked pharma lobbying plan against South African draft IP Policy’:

February 3, 2014 issue of ‘The Lancet’ states, among other issues, the draft IP policy of South Africa seeks to address patent ever-greening, a contentious strategy in which drug firms tweak formulations to extend the 20-year life of a patent.

The leaked 9 page document of the PR firm, Public Affairs Engagement (PAE), titled, ‘Campaign to Prevent Damage to Innovation from the Proposed Draft National IP Policy in South Africa’, was reportedly prepared for ‘Pharmaceutical Researchers and Manufacturers of America (PhRMA)’ based at Washington DC and the lobby group representing research-based pharmaceutical companies in South Africa – ‘Innovative Pharmaceuticals Association of South Africa (IPASA)’.

The Chink:

As deliberated in my earlier blog post, when the above lobbying plan was leaked out, Swiss drug maker Roche and Denmark’s Novo-Nordisk reportedly resigned from the IPASA. Both the companies said that neither do they support this campaign nor have they given any approval to it and hence they are resigning from IPASA. However, the above report quoting IPASA states, “IPASA maintains that the departure of Roche and Novo-Nordisk did not weaken the association’s position.”

III. Other recent major differences within ‘Big Pharma’ constituents:

The Chink:

A. Merck Sereno:

Indian pharma regime may appear to be not encouraging or protecting innovation to the US Chamber of commerce, but one of the oldest constituents of the ‘Big Pharma’ – Merck Sereno has reportedly articulated quite a different take on this score.

In an interview to ‘The Economic Times’, Stefan Oschmann, member of the executive board and CEO, Merck, Germany made some very important observations on:

Patentability:

“Some of the strategies used in the past were developing 20 products and slightly differentiating them. That doesn’t work anymore. This industry has to do its home work.” He added that it makes little sense to adopt a confrontationist attitude towards sensitive issues.

Access:

Oschmann said, “Companies are rightly or wrongly criticized in spending all their money on 20 percent of the richest people of the world and neglecting the rest of the population. This is changing.”

Pricing:

He would not criticize governments such as India for trying to protect consumers from spiraling health-care costs. “Pricing and tier-pricing are worth looking into”.

Governments across emerging markets have been trying to find a way to the same challenges of increasing access to affordable healthcare. Oschmann feels, “This is legitimate to any government. What matters is rules are transparent, fair and non-discriminatory. Rules shouldn’t be used as a tool for industrial policy to only foster local industry.”

Another Chink:

B. GlaxoSmithKline:

Another icon in the global pharmaceutical industry Sir Andrew Witty, the CEO of GlaxoSmithKline, reportedly commented a few months ago on the following, with a pragmatic approach to the situation:

Pricing:

“I think it is wholly reasonable for a country that is having a tremendous growth with challenges has to think about pricing. I don’t think that it is a ridiculous proposition. Of course it hurts the period you go through that price adjustments, there are alternative ways to achieve and having a good dialogue may create positive ways to do it.”

Patented medicines:

“I am not one of those CEOs who is gonna stand here and say that you have to have a same approach as you have in other country. India is a very unusual country. It starts from different place than a Britain or a France or a USA, therefore we have to think about what is the right way for India to balance its needs.”

IP:

Sir Andrew emphasized, “And the key to that isn’t to get rid of patents; the key to that is to fix the R&D and manufacturing processes. And that’s what we’ve got to realize in the world we are going to be living in the next 30 or 40 years; companies cannot just turn up and have any price they want. Companies will have to come with a competitive and efficient business model, which will bring real innovation to the people.”

Conclusion: 

Culling all these important developments together, while traveling back in recent times, it does appear, whether the issues are on IP, access or even pricing of medicines, seemingly overpowering might (or may just be simple bullying tactics) of US Chamber of commerce is drowning some very important ‘Big Pharma’ constituents’ voices and numbing many others, despite a visible ‘Chink in its Armor’.

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.

A Snap Shot of Indian Pharmaceutical Market in January 2014

Posted on by
Reply

According to the retail audit dated February 2014 of well reputed AIOCD Pharmasofttech AWACS Pvt. Ltd, in January 2014 the Indian Pharmaceutical Market (IPM) registered a turnover of Rs. 6,227 Crore (around US$1 billion) with a growth of 8.5 percent. The growth break-up is as follows:

-       3.5 percent from existing products or volume (Volume growth was 1.6 percent in January 2013)

-       3.4 percent from new launches

-       1.6 percent from price increases

Number of new products (brands) launched in the month:

- 83

Top performers in growth within ‘Top 10 Companies’: 

-       Emcure at 20.9 percent

-       Sun Pharma at 20.1 percent

-       Lupin at 15.4 percent

 Monthly growth of Indian Companies against MNCs:

-       Indian companies at 11.4 percent

-       MNCs at 1.0 percent

Top growing MNCs for the month:

-       Allergan at 35.7 percent

-       MSD at 17.0 percent

-       Merck Serono at 15.0 percent

Top 5 growing therapy areas for the month:

-       Opthalmologicals/Otologicals at 18.0 percent

-       Anti-diabetic at 17.5 percent

-       Dermatologicals at 16.0 percent

-       Gastrointestinal at 10.0 percent

-       Respiratory at 9.8 percent

Top growing brands (branded generics): 

-       Skinlite at 40 percent

-       Telma at 32 percent

-       Glycomet-GP at 31 percent

-       Phensedyl at 25 percent

-       Dexorange at 14 percent

Conclusion:

It appears that the revival of IPM post Drug Price Control Order 2013 has commenced.