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Regulatory Data Protection (RDP) and its need in India: The Myth versus Reality

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THE MYTH:

An attempt to delay the launch of Indian generics:

Some in India feel that Regulatory Data Protection (RDP), is a deliberate attempt by the innovator companies to delay the launch of the generic equivalent of patented products in India, as long as they possibly can.

Thus they feel that why should one re-invent the wheel? Why should the generic pharmaceutical companies be not allowed to continue with the current requirement by the Drug Controller General of India (DCGI) to establish only the ‘bio-equivalence of an innovator drug to get the marketing approval of the generic equivalent in India?

RDP will effect export in non-regulated markets:
They further argue that India currently exports its pharmaceutical products to around 50 non-regulated markets of the world. Thus the enforcement of RDP would jeopardize Indian Pharmaceutical exports in those countries affecting the economy of the country.

RDP is a non-binding clause in TRIPS:

Regarding Article 39(3) of TRIPS, which indicates protection of regulatory data against “disclosure” and “unfair-commercial use”, this group opines that this is a non-binding Article of TRIPS, neither does it specify any timeline to protect such data. Moreover, they feel, that only the “undisclosed data” may be protected and the data already “disclosed” ‘need not to be protected’.

RDP is an attempt towards “evergreening” the patent:

The proponents of this interpretation believe that RDP is just an attempt to “evergreen” a patent, extending the patent life of a New Chemical Entity (NCE) or (NME) beyond 20 years.

THE REALITY:

Just Like Patents, Regulatory Data need to be protected to encourage innovation in India:

This group feels that generation of exhaustive regulatory data entails very significant investment in terms of money, energy and time. These are very high risk investments as approximately one in 5000 molecules researched will eventually see the light of the day in the market place. It is worth noting that clinical development of an NCE/NME costs around 70%, while the cost of discovery of the same NCE/NME is around 30% of the total costs. It is estimated that the entire process of drug development from discovery to market takes an average of 10 years and costs on an average U.S.$ 1.7 Billion in the developed markets of the world.

Since such voluminous regulatory data are not only costly and time consuming but also proprietary in nature, these need to be protected by the regulators. Regulatory Data Protection (RDP), therefore, has been widely recognized as an integral part of the Intellectual Property Rights (IPR).

The agreement on Trade Related aspects of Intellectual Property Rights (TRIPs) also recognizes the “protection of undisclosed information” as being an Intellectual Property, which needs to be protected.

Article 39.3 of TRIPs Agreement clearly articulates the following:

“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.”

Intellectual Property Rights (IPRs) mentioned in Article 39.3 of TRIPS are commonly referred to as “Data Exclusivity” in the U.S. and “Data Protection” or “Regulatory Data Protection” in the European Union (EU). These are all the very same.

RDP is an independent IPR; and should not be confused with other IPRs, such as patents:

Bringing an NCE/NME to the market involves two critical steps:

1. Discovery of NCE/NME:

The drug discovery right of the originator is protected in the form of a patent.

2. Drug development:

The innovator will require generating intensive, time consuming and expensive pre-clinical and
clinical data to meet the regulatory needs for bringing the new drug to the market. Such data
needs to be protected by the drug regulators.

It is understood that both the above steps are absolutely necessary to meet the unmet needs of the patients. The civil society gets the benefits of the new drugs only after these two steps are successfully completed.

The rationale for Regulatory Data Protection (RDP):

Irrespective of what has been indicated in Article 39.3 of TRIPS, RDP is clearly justifiable on the following grounds:

Generation of Data by the originator consists of “considerable efforts”. Submission of clinical data is a statutory regulatory requirement. Were it not for the obligation to provide these data to the Government, such data would have remained completely under control of the originator. It is, therefore, a reasonable obligation on the part of the Government as a ‘gate keeper’ to respect confidentiality of the data in terms of non-reliance and non-disclosure. Any failure by the Government to provide required protection to the data could lead to “unfair commercial use”.

Since such data are collected through various phases of clinical evaluation, involving considerable costs, time and energy, these are immensely valuable to the originator and need to be adequately protected by the drug regulators.

As these data are proprietary in nature, any access or permissibility for use of such data by the second applicant without concurrence of the originator is unfair on grounds of propriety and business ethics.

Given the imbalance between the costs to the originator of getting marketing approval for its product and the costs of the ‘copy cat’ coming to the market, the research based industry will not have adequate incentive without RDP to continue to get engaged in important R&D activities. In that scenario, newer and better drugs, particularly for untreated and under-treated medical conditions will not be available to the patients.

Without RDP, the originator of the innovative drugs would be placed at an unfair, commercial disadvantage when compared to their generic competitors, who do not incur similar costs of meeting the mandatory requirements of drug regulatory authorities for marketing approval of the drug.

The distinctiveness of the two incentives, namely, Patent Protection and Data Protection is recognized in countries which are leading in research and development in pharmaceuticals.

RDP will not affect exports of Indian pharmaceutical products to the non-regulated markets:

This is because RDP deals with marketing of products patented in India within the territory of India. RDP will in no way affect the ability of any generic manufacturer either to produce the bulk drug active or to formulate its dosage forms for exports in the non-regulated markets, as long as the product is not sold within the territory of India for which both the patent and RDP will be valid.

Disadvantages of not having RDP in India:

According to the U.S. National Institute of Health (NIH), lack of RDP in India is the primary reason why India ranks only 9th (compared to China which ranks 2nd), in funding given by NIH outside U.S.A.

An Expert Committee under the Chairmanship of Dr. R.A. Mashelkar, an eminent scientist, also highlighted significance of Regulatory Data Protection, as below:

“In order to ensure enabling environment, the regulatory division dealing with the applications concerning new drugs and clinical trials would be required to develop suitable mechanisms to ensure confidentiality of the submissions.”

RDP – The International Scenario:

A review of National Laws relating to the protection of Registration Data in the major WTO Member-States reveals that most of the countries have recognized and appreciated the role of RDP.

Although there is no uniform standard that is followed by the countries while enacting and implementing the laws related to RDP, there is however a common principle that is followed. The laws generally specify the conditions under which Regulatory Data Protection can be sought and the period for which the “originator” can enjoy the exclusivity after the marketing approval is granted in the country. The period of RDP is typically between 5 – 10 years.

As per an article titled “Complying with Article 39.3 of TRIPs… A Myth or Evolving Reality” by Dr. Prabuddha Ganguli, around sixty nations around the world including China follow RDP in their respective countries.

RDP and the generics:

Regarding the arguments that RDP provisions will act as a barrier to the development of generics, resulting in the erosion of generics market. This argument is based on invalid assumptions. The following facts will prove the irrelevance of these arguments propounded by the domestic generic lobby:

1. Data Protection refers only to new products registered/patented in India. It will not affect the generic drugs already in the market.

2. U.S.A. is an outstanding example which shows that research based industry and generic industry can co-exist, giving dual benefits of innovative medicines and cheaper copies of off-patent medicines to the general public.

3. More the patented medicines, more will be generic drugs after expiry of their patents.

4. In the U.S.A. which has a long standing Data Protection (Exclusivity) regime, the market penetration of generics is amongst the highest in the world and stands at nearly half of all the prescriptions.

5. After introduction of Hatch Waxman Act in 1984, which provided for a 5 year period of Data Protection, there has been a spurt of development of new drugs as also entry of off-patent generics into the US market.

RDP is not ‘evergreening’ :

In most of the cases, the period of patent protection and RDP will run concurrently. The ground reality will be that innovator companies will launch their products in India within as short a time gap as possible from the launch of those products anywhere in the world. The period between introduction of new drugs elsewhere and their introduction in India has been continuously shrinking. The range of such period between 1965 and 1988 was 4 years to 13 years. The period during 1990 to 1999 ranges between 0.25 year and less than 2 years.

During the debate on Data Protection it is asserted in some quarters that RDP and patents offer “double protection”. They do not, by any means. Fundamentally, the two forms of Intellectual Property are like different elements of a house which needs both a strong foundation and a roof to protect its inhabitants. RDP cannot extend the length of a patent which is a totally separate legal instrument. While patent protects the invention underlying the product, RDP protects invaluable clinical dossier submitted to the drugs regulatory authority, from unfair commercial use and disclosure. The duration of RDP, as stated above, is typically half or less of the product patent life.

Conclusions:

In my view RDP will benefit the pharmaceutical innovation eco system India, as it has done to many other countries. Hence India should implement RDP without further delay. It will be reasonable to have a provision of at least 5 years of RDP from the date of marketing approval in India, on the same lines as China.

RDP should be provided by making an appropriate amendment in Schedule Y of the Drugs & Cosmetics Act to bring India into conformity with its international legal obligations and with the practices of other members of the WTO from both the developed and developing nations of the world.

These provisions, in my view, will go a long way in sending a very positive signal to the international community as well as to our own research based pharmaceutical companies to accelerate investment in this vital sector making India emerge as a global powerhouse in pharmaceuticals, sooner than later.

By Tapan Ray

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

For greater transparency in the relationship between physicians and the pharmaceutical companies, does India need an Act like, proposed ‘The Physician Payment Sunshine Act’ of the USA?

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As we discussed earlier, to make the pharmaceutical companies disclose and report various types of payments made to the physicians, two Senators of the United States of America, Chuck Grassley and Herb Kohl introduced a bill called ‘The Physician Payment Sunshine Act’ in January, 2009.If this bill is passed in 2010, the government will make available to the public by 2011 all types of payments made to the physicians by the pharmaceutical companies over a cumulative value of US $ 100.Items of disclosure:

Among various other heads, the following items related to the “payment made to the physicians’’ will require to be reported:

• Consulting Fees

• Compensation for services other than consulting

• Honoraria

• Gifts

• Entertainment

• Food

• Travel

• Education

• Research

• Charitable Contributions

• Royalties or licenses

• Current or prospective ownership or investment interests

• Compensation for serving as a faculty member or as a speaker for a continuing medical education program

• Grant

• Reporting will be required for compensation towards serving as faculty, or as a speaker for a CME program, and grants.

• Any other nature of the payment or other transfer of value as defined by the government

Research payments:

Pharmaceutical companies will also require reporting aggregate amounts of research payments in a specified manner.

Items exempt from disclosure:

There will be items, as mentioned below, which will be exempted from such reporting:

• Product samples

• Payments in the aggregate of less than $100

• The loan of a device for less than 90 days

• Patient education materials

• Warranty replacements (devices)

• Items for use as a patient

• Discounts and rebates

• In-kind items used in charity care

• Dividends from a publicly-traded company

Penalties for default from disclosure:

Proposed penalties have been categorized as follows:

• For unintentional failure to report: fines from US $1,000 – US $10,000 for each payment not reported with a cap of US $150,000/year

• For intentional failure to report: fines from US $10,000 – US $100,000 for each payment not reported with a cap of US $1 million/year.

World Medical Association (WMA) Statement Concerning the Relationship Between Physicians and Commercial Enterprises:

Meanwhile, WMA is also trying to address this vexing issue and coming closer to some sort of voluntary disclosure at their end, as well.

Such type of statement was first adopted by the WMA in its General Assembly at Tokyo, Japan in October 2004. Recently in its General Assembly held at New Delhi in October 2009, the statement was further amended coming closer to the disclosure of payments.
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The preamble of the amended statement articulates the following:

“In the treatment of their patients, physicians use drugs, instruments, diagnostic tools, equipment and materials developed and produced by commercial enterprises. Industry possesses resources to finance expensive research and development programmes, for which the knowledge and experience of physicians are essential. Moreover, industry support enables the furtherance of medical research, scientific conferences and continuing medical education that can be of benefit to patients and the entire health care system. The combination of financial resources and product knowledge contributed by industry and the medical knowledge possessed by physicians enables the development of new diagnostic procedures, drugs, therapies, and treatments and can lead to great advances in medicine.

However, conflicts of interest between commercial enterprises and physicians occur that can affect the care of patients and the reputation of the medical profession. The duty of the physician is to objectively evaluate what is best for the patient, while commercial enterprises are expected to bring profit to owners by selling their own products and competing for customers. Commercial considerations can affect the physician’s objectivity, especially if the physician is in any way dependent on the enterprise.

Rather than forbidding any relationships between physicians and industry, it is preferable to establish guidelines for such relationships. These guidelines must incorporate the key principles of disclosure, avoidance of obvious conflicts of interest and the physician’s clinical autonomy to act in the best interests of patients.
These guidelines should serve as the basis for the review of existing guidelines and the development of any future guidelines.”

This new statement of the WMA, having a remarkable similarity with the ‘Codes of marketing Practices’ of the pharmaceutical industry associations in India, like Organization of pharmaceutical Producers of India (OPPI) and Indian Drug Manufacturers’ Association (IDMA) is indeed a welcome step in the right direction.

Conclusion:

Along with the self regulation initiatives by both the industry and WMA, this bill, if passed, will surely and significantly improve the transparency related to the transaction between the pharmaceutical companies and the physicians to the public at large in the US to start with. However, bringing research within the ambit of this bill could possibly be a contentious issue.

Be that as it may, in India a large section of the civil society still feels that it is now high time for the Government of India to decide whether the nation needs an Act like the proposed ‘Physician Payment Sunshine Act’ of the US to bring in greater transparency in the process of various financial transactions between the pharmaceutical industry in India and the physicians, along with the continuing initiatives of self-regulations by both the industry and the physicians.

By Tapan Ray

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

‘Medical Outsourcing’ – a fast evolving area in the healthcare space with high business potential.

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Medical outsourcing is an evolving area in the global healthcare space. It can offer immense opportunity to India, if explored appropriatly with a carefully worked out strategic game plan from the very nascent stage of its evolution process. This sector could indeed be a high potential one in terms of its significant financial attractiveness by 2015.
Key components of medical outsourcing:

The following four basic components constitute the medical outsourcing industry:

• Healthcare providers: Hospitals, mainly corporate hospitals and doctors

• Payer: Medical/ Health insurance companies

• Pharmaceutical Companies

• IT companies operating in the healthcare space

So far as payers are concerned, currently they are primarily involved in the data entry work, the present market of which in India is estimated to be around U.S$ 100 million.

Key drivers and barriers for growth:

The world class cost-effective private sector healthcare services are expected to drive the growth of the medical outsourcing sector in India. However, shortages in the talent pool and inadequate infrastructure like roads, airports and power could pose to be the major barriers to growth.

At present, majority of medical outsourcing is done by the US followed by the UK and the Gulf countries.

How is this market growing?

Medical Tourism, by itself, is not a very recent phenomenon all over the world. Not so long ago for various types of non-essential interventions like, cosmetic surgeries, people from the developed world used to look for cheaper destinations with relatively decent healthcare facilities like, India, Thailand etc.

Now with the spiraling increase in the cost of healthcare, many people from the developed world, besides those who are underinsured or uninsured have started looking for similar destinations for even very essential medical treatments like cardiac bypass surgery, knee replacement, heap bone replacements, liver and kidney transplants, to name just a few.

Significant cost advantage in India with world class care:

It has been reported that for a cardiac bypass surgery, a patient from abroad will require to pay just around U.S$ 10,000 in India, when the same will cost not less than around U.S$ 130,000 in the US. These patients not only get world class healthcare services, but also are offered to stay in high-end ‘luxury’ hospitals fully equipped with the latest television set, refrigerator and even in some cases a personal computer. All these are specially designed to cater to the needs of such groups of patients.

Recently ‘The Washington Post’ reported that the mortality rate after a cardiac bypass surgery is better in Indian private hospitals than their equivalents in the USA.

An irony:

It is indeed an irony that while such private hospitals in India are equipped to provide world class healthcare facilities for their medical outsourcing business and also to the rich and super rich Indians, around 65 percent of Indian population still does not have access to affordable modern medicines in the country.

Is the government indirectly funding the private medical outsourcing services in India?

In India, from around 1990, the government, to a great extent, changed its role from ‘healthcare provider’ to ‘healthcare facilitator’. As a result private healthcare facilities started receiving various types of government support and incentives (Sengupta, Amit and Samiran Nundy, “The Private Health Sector in India,” The British Journal of Medical Ethics 331 (2005): 1157-58).

While availing medical outsourcing services in India, the overseas patients although are paying for the services that they are availing from the private hospitals, such payments, it has been reported, only partially fund the private hospitals. If such is the case, then the question that we need to answer: Are these medical tourists also sharing the resources and benefits earmarked for the Indian nationals?

Conclusion:

Due to global economic meltdown many business houses in the developed world are under a serious cost containment pressure, which includes the medical expenses for their employees. Such cost pressure prompts them to send their employees to low cost destinations for treatment, without compromising on the quality of their healthcare needs.

Other countries in quite close proximity to ours like, Thailand, Singapore and Malaysia are offering tough competition to India in the medical outsourcing space. However, superior healthcare services with a significant cost advantage at world class and internationally accredited facilities, treated by foreign qualified doctors, supported by English speaking support staff and equipped with better healthcare related IT services, will only accelerate this trend in favor of India. In this ball game it surely is, ‘Advantage India’.

By Tapan Ray

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

Healthcare reform for the needy and poor in the richest and the most populous countries of the world. What about the largest democracy of our planet?

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Healthcare reform to ensure access to affordable high quality healthcare services for all, is considered as an integral part of the economic progress of any country. During recent global financial meltdown, this need became visible all over the world, even more.In my last article, I wrote how the most populous country of the earth – China, unfolded the blueprints of a new healthcare reform process in April, 2009, taking an important step towards this direction.Around the same time, in the richest country of the world, after taking over as the new President of the United States of America, President Barak Obama also reiterated his election campaign pledge for a comprehensive healthcare reform process in the USA.

These measures, in both the countries, intend to ensure access to affordable, high quality health care coverage and services to every citizen of the respective nations. In America, the reform process also intends to bridge the healthcare coverage gap in their Medicare prescription drugs program for the senior citizens.

The pharmaceutical industry response to healthcare reform in the USA:

Responding to this major policy initiative of the government, very responsibly David Brennan, Chief Executive Officer of AstraZeneca and the Chairman of Pharmaceuticals Research and Manufacturers of America (PhRMA) announced recently:

“PhRMA is committed to working with the Administration and Congress to help enact comprehensive health care reform this year. We share a common goal: every American should have access to affordable, high-quality health care coverage and services. As part of that reform, one thing that we have agreed to do is support legislation that will help seniors affected by the coverage gap in the Medicare prescription drug benefit.”

For this purpose Brennan publicly announced the following:

1. America’s pharmaceutical research and biotechnology companies have agreed to provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient’s Part D plan of Medicare, when purchased in the coverage gap.

2. The entire negotiated price of the Part D covered medicine purchased in the coverage gap would count toward the beneficiary’s out-of-pocket costs, thus lowering their total out-of-pocket spending.

American Pharmaceutical Industry pledges U.S$ 80 billion towards healthcare reform of the nation:

With the above announced commitment, it has been reported that the US Pharmaceutical and Biotech companies have offered to spend U.S$ 80 billion to help the senior citizens of America to be able to afford medicines through a proposed overhaul of the healthcare system of the country.

This is a voluntary pledge by the American pharmaceutical industry to reduce what it charges the federal government over the next 10 years.

What is the Medicare plan of America?

According to the explanation of the program given by Medicare, it is a prescription drug benefit program. Under this program, senior citizens purchase medicines from the pharmacies. The first U.S$ 295 will have to be paid by them. Thereafter, the plan covers 75 percent of the purchases of medicines till the total reaches U.S$ 2,700. Then after paying all costs towards medicines ‘out of pocket’ till it reaches U.S $ 4,350, patients make a small co-payment for each drug until the end of the year.

American citizens’ support on the new healthcare reform of President Barak Obama:

A leading American daily reports that American citizens overwhelmingly support substantial changes to the country’s healthcare system and are strongly behind a government run insurance plan to compete with private insurers.

According to the latest New York Times/CBS News poll most Americans would be willing to pay higher taxes, so that every individual could have health insurance. Unlike in India, Americans feel that the government could do a better job of holding down healthcare costs than the private sector.

Current American healthcare: High quality – high cost

85 percent of respondents in this survey said the country’s healthcare system should be completely overhauled and rebuilt. The survey also highlighted that American citizens are far more unsatisfied with the cost of healthcare rather than its quality.

President Obama has been repeatedly emphasizing the need to reduce costs of healthcare and believes that the health care legislation is absolutely vital to American economic recovery. 86 percent of those polled in the survey opined that the rising costs of healthcare pose a serious economic threat.

An interesting recent study from the George Washington University School of Public Health and Health Services:

A recent study conducted by the George Washington University School of Public Health and Health Services reports that as a part of the new healthcare reform initiative in the US, if the health centers are expanded from the current 19 million to 20 million patients, the country can save U.S$ 212 billion from 2010 to 2019 against a cost of U.S$ 38.8 billion that the government would have incurred to build the centers. This is happening because of lower overall medical expenses for these patients.

Last year the health centers already generated health system savings of U.S$ 24 billion.

What then is happening in the largest democracy of the planet – our own India, towards such healthcare reform?

India in its 1983 National Healthcare Policy committed ‘healthcare to all by the year 2000′. However, the fact is, in 2009, only 35 percent of Indian population is having access to affordable modern medicines. So many commendable policy announcements have been made by the government thereafter. Due to poor governance, nothing seems to work effectively in our country.

Conclusion:

People with access to the corridors of power appear to believe that when the country will clock the magic number of GDP growth of 9 percent, India will have adequate resources to invest in healthcare. Till then frugal healthcare initiatives will continue at the abysmal level of speed of execution, denying access to affordable modern medicines to 65 percent of population of the country.

If and when the healthcare reform plans will be unfolded in India, hopefully like in the USA, all stakeholders will come forward with their own slice of contribution to ensure access to affordable high quality healthcare to all the citizens of our nation.

When the world believes that healthcare reform measures to cover the entire population of the country to provide access to affordable, high quality healthcare services is fundamental to economic progress of a country, the government of India seems to nurture a diametrically opposite view in this regard. The policy makers appear to sincerely believe that 9 percent economic growth is essentiall to provide access to affordable high quality healthcare to all.

Are we engaged in the well known “Catch 22” debate at the cost of health to all?

By Tapan Ray

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