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Gilead: Caught Between A Rock And A Hard Place In India

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I had mentioned in my blog post of August 4, 2014, titled “Hepatitis C: A Silent, Deadly Disease: Treatment beyond reach of Most Indians” that in line with Gilead’s past approach to its HIV medicines, the company would offer to license production of sofosbuvir (brand name Sovaldi) to a number of rival low-cost Indian generic drug companies. They will be offered manufacturing knowhow, allowed to source and competitively price the product at whatever level they choose.

Sovaldi (sofosbuvir) is a once-a-day patented drug of Gilead for cure of chronic hepatitis C infection in most patients. Sovaldi has been priced at Rs 60,000 (US$ 1,000) per tablet in the developed markets with a three-month course costing Rs1.8 Crore (US$ 84,000), when it reportedly costs around U$130 to manufacture a tablet. This treatment cost is being considered very high even for many Americans and Europeans.

Gilead has also announced that it has set a minimum threshold price for Sovaldi of US$ 300 (Rs.18,000) a bottle, enough for a month. With three months typically required for a full course and taking into account the currently approved combination with interferon, the total cost of Sovaldi per patient would be about US$ 900 (Rs.54,000) for a complete treatment against its usual price of US$ 84,000 (Rs1.8 Crore). The company would offer this price to at least 80 countries.

Breaking-news in India:

On September 15, 2014, International media reported that Cipla, Ranbaxy, Strides Arcolab, Mylan, Cadila Healthcare, Hetero labs and Sequent Scientific are likely to sign in-licensing agreements with Gilead to sell low cost versions of Sovaldi in India.

It was also reported that these Indian generic manufacturers would be free to decide their own prices for sofosbuvir, ‘without any mandated floor price’.

Indian companies would require paying 7 per cent of their revenues as royalty to Gilead, which, in turn would ensure full technology transfer to them to produce both the Active Pharmaceutical Ingredients (API) and finished formulations. The generic version of Sovaldi is likely to be available in India in the second or third quarter of 2015, at the earliest.

Another reason of Gilead’s selecting the Indian generic manufacturers could possibly be, that of much of the global supply of generic finished formulations is manufactured in India, especially for the developing countries of the world.

Patent status, broad strategy and the possibility:

It is worth noting here that the Indian Patent Office (IPO) has not recognized Sovaldi’s (sofosbuvir) patent for the domestic market, just yet. This patent application has been opposed on the ground that it is an “old science, known compound.”

It is interesting that the Indian Pharmaceutical Association (IPA) and others, such as, Delhi Network of Positive People and Natco have reportedly opposed Sovaldi’s (sofosbuvir) patent application. If the patent for this drug does not come through, low priced generic versions of Sovaldi, without any licensing agreement with Gilead, would possibly capture the Indian market.

Conversely, due to unaffordable price of Sovaldi for most of the Hepatitis C patients, even if a patent is granted for this drug in India, the sword of Compulsory License (CL) on the ground of ‘reasonably affordable price’ looms large on this product.

To negate the possibility of any CL, in the best-case scenario of a patent grant, Gilead seems to have decided to enter into licensing agreement with seven other Indian generic manufacturers to create a sense of adequate competition in the market, as many believe.

However, if the IPO considers sofosbuvir not patentable in India, it would indeed be a double whammy for Gilead. Without any patent protection, all these in licensing agreements may also fall flat on the face, paving the way of greater access of much lesser priced generic sofosbuvir to patients, as indicated above.

The action replay:

If we flash back to the year 2006, we shall see that Gilead had followed exactly the same strategy for another of its patented product tenofovir, used in the treatment of HIV/AIDS.

1. Voluntary license:

At that time also Gilead announced that it is offering non-exclusive, voluntary licenses to generic manufacturers in India for the local Indian market, along with provision for those manufacturers to export tenofovir formulations to 97 other developing countries, as identified by Gilead.

Gilead did sign a voluntary licensing agreement with Ranbaxy for tenofovir in 2006.

The arrangement was somewhat like this. Gilead would charge a royalty of 5 percent on the access price of US$ 200 a year for the drug. Any company that signs a manufacturing agreement with Gilead to manufacture API of tenofovir would be able to sell them only to those generic manufacturers that have voluntary license agreements with Gilead.

Interestingly, by that time Cipla had started selling one of the two versions of tenofovir, not licensed by Gilead. Cipla’s generic version was named Tenvir, available at a price of US$ 700 per person per year in India, against Gilead’s tenofovir (Viread) price of US$ 5,718 per patient per year in the developed Markets. Gilead’s target price for tenofovir in India was US$ 200 per month, as stated above.

2. Patent challenge:

Like sofosbuvir (Sovaldi), Gilead had filed a patent application for tenofovir (Viread) in India at that time. However, the ‘Indian Network for People Living with HIV/AIDs’ challenged this patent application on similar grounds.

3. Patent grant refused:

In September 2009, IPO refused the grant of patent for tenofovir to Gilead, citing specific reasons  for its non-conformance to the Indian Patents Act 2005. As a result, the voluntary license agreements that Gilead had already signed with the Indian generic manufacturers were in jeopardy.

Current status:

In 2014, while planning the launch strategy of sofosbuvir (Sovaldi) for India, Gilead seems to have mimicked the ‘Action Replay’ of 2006 involving tenofovir, at least, in the first two stages, as detailed above. Only the patent status of sofosbuvir from the IPO is now awaited. If IPO refuses patent grant for sofosbuvir, Gilead’s fate in India with sofosbuvir could exactly be the same as tenofovir, almost frame by frame.

Gilead and the two top players in India:

Very briefly, I would deliberate below the strategic stance taken by two top generic players in india, from 2006 to 2014, in entering into voluntary licensing agreements with Gilead  for two of its big products, as I understand.

Ranbaxy:

In my view, the stand of Ranbaxy in Gilead’s India strategy of voluntary licensing in the last eight years has remained unchanged. It involves both sofosbuvir and tenofovir.Thus, there has been a clear consistency in approach on the part of Ranbaxy on this issue.

Cipla:

Conversely, an apparent shift in Cipla’s strategic position during this period has become a bone of contention to many. For tenofovir, Cipla did not sign any voluntary license agreement with Gilead. On the contrary, it came out with its own version of this product, that too much before IPO refused to grant patent for this drug.

However, unlike 2006, Cipla decided to sign a voluntary license agreement with Gilead for sofosbuvir (Sovaldi) in 2014, though no patent has yet been granted for this product in India.

Has Cipla changed its position on drug patent?

I find in various reports that this contentious issue keeps coming up every now and then today. Some die-hards have expressed disappointments. Others articulated that the new dispensation in Cipla management, has decided to take a different stance in such matter altogether.

In my view, no tectonic shift has taken place in Cipla’s position on the drug patent issue, just yet.

The owner of Cipla, the legendary Dr.Yusuf Hamied has always been saying: ‘I Am Not Against Patents … I Am Against Monopolies’

He has also reportedly been quoted saying: “About 70 per cent of the patented drugs sold worldwide are not invented by the owning companies”.

He had urged the government, instead of having to fight for CL for expensive lifesaving medicines by the generic drug makers, where voluntary licenses are not forthcoming, the government needs to pass a law giving the generic players “automatic license of rights” for such drugs, making these medicines affordable and thereby improving access to patients. In return, the local generic manufacturers would pay 4 percent royalty on net sales to patent holders. He was also very candid in articulating, if Big Pharma would come into the developing markets, like India, with reasonable prices, Cipla would not come out against it.

According to Dr. Hamied, “When you are in healthcare, you are saving lives. You have to have a humanitarian approach. You have to take into account what it costs to make and what people can pay.”

Considering all these, I reckon, the core value of Cipla and its stand on patents have not changed much, if at all, for the following reasons:

  • The voluntary license agreement of Cipla with Gilead for sofosbuvir (Sovaldi) along with six other generic manufacturers of India, unlike tenofovir, still vindicates its strong opposition to drug monopoly, respecting product patents.
  • Cipla along with manufacturing of sofosbuvir, maintains its right to market the product at a price that it considers affordable for the patients in India.

Conclusion:

Indian Patents Act 2005 has the requisite teeth to tame the most aggressive and ruthless players in drug pricing even for the most feared diseases of the world, such as, HIV/AIDS, cancer, Hepatitis C and others.

Many global drug companies, resourceful international pharma lobby groups and governments in the developed world are opposing this commendable Act, tooth and nail, generating enormous international political pressure and even chasing it in the highest court of law in India, but in vain. Glivec case is just one example.

Some pharma majors of the world seem to be attempting to overcome this Act, which serves as the legal gatekeeper for the patients’ interest in India. Their strategy includes not just voluntary licenses, but also not so transparent, though well hyped, ‘Patient Access Programs’ and the so called ‘flexible pricing’, mostly when the concerned companies are able to sense that the product patents could fail to pass the scrutiny of the Indian Patents Act 2005.

It has happened once with even Gilead in 2006. The drug was tenofovir. Following the same old strategy of voluntary licenses and relatively lower pricing, especially when its drug patent is pending with IPO post patent challenges, Gilead intends to launch Sovaldi in India now.

Carrying the baggage of its past in India, Gilead seems to have been caught between a rock and the hard place with sofosbuvir (Sovaldi) launch in the country. On the one hand, the risk of uncertain outcome of its patent application and on the other, the risk of CL for exorbitant high price of the drug, if the patent is granted by the IPO. Probably considering all these, the company decided to repeat its 2006 tenofovir strategy of voluntary licenses, yet again in 2014, for Sovaldi in India.

As of today, Sovaldi strategy of Gilead in India appears to be progressing in the same direction as tenofovir, the way I see it. However, the final decision of IPO on the grant of its patent holds the key to future success of similar high-voltage, seemingly benign, marketing warfare of pharma majors of the world.

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.

Does Patent Expiry Matter Less For Difficult To Copy Drugs?

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“Patent expiry matters much less for difficult to copy drugs”.

Not so long ago, this is what many used to believe in the pharma industry. However, looking at the current trend involving the tech savvy generic players, it appears, gone are those days even for the home grown companies in India. As we witness today, a number of global generic players, including some from India, are overcoming the tough challenge of technological barrier of the original drugs with technology, boldly and squarely, and that too with reasonably good speed.

A global CEO felt quite the same:

Possibly encouraged by this commercial dogma, the Chief Executive of GlaxoSmithKline (GSK) Sir Andrew Witty reportedly felt in not too distant past that his company’s blockbuster drug Advair/Seretide, used for the treatment of asthma, would continue to remain a major product, despite losing US patent in end 2010. Witty thought so considering the intricate technology involved in making its high tech inhalation drug delivery system with exacting precision.

Technology based entry barrier:

Although, Advair/Seretide is a respiratory inhalation drug, it is not quite like a typical aerosol inhaler consisting of a pressurized canister filled with liquid medicine formulation. In such system, as the canister is compressed, the liquid inside comes out as a spray that is breathable in an amount as required for desirable clinical efficacy for the patients.

With the application of complex technology, Advair/Seretide was formulated not as a liquid, but as pre-determined fixed dose combination of powders that patients inhale into their respiratory tracts with a device called ‘Diskus’, which involves a complex and difficult to copy inhaler technology with a long patent life.

This precision technology was expected to create the requisite entry barrier for generic equivalents of this important medicine.

“Diskus” patent to continue:

It is important to note, though Advair/Seretide had gone off patent in end 2010, the patent protection for the “Diskus” device that dispenses the powder version of the fixed dose drugs combination, continues till 2016. For the inhaler device that dispenses the aerosol version of the same drugs, the patent remains valid until 2025.

New USFDA guidance:

Keeping these factors in mind, the USFDA in its latest guidance has clearly enunciated the characteristics that an inhaler should have, including a similar size and shape to Diskus. This new USFDA guidance for inhaled drugs, like Advair/Seretide, now requires only “relatively basic” preclinical tests and a short clinical trial.

Many believe that this new guidance is mainly to ensure that other generic devices also qualify for the GSK’s asthma drug combo, after its patent expiry.

Nevertheless a challenging task:

Despite this new USFDA guidance for inhaled drugs, some large generic manufacturers apprehended, even way back in 2010, that they doubt whether it will be possible for them to adequately replicate Advair/Seretide to meet the stringent “substitution” requirements of the USFDA on generics. This is exactly what Witty had envisaged earlier.

Almost two years after its patent expiry, in October 2012, the world’s largest generic drug maker Teva also announced that the company does not expect to see true substitutes for Advair/Seretide before 2018.

No immediate sales impact post-patent expiry:

As a result, in 2012, even a couple of years after its patent expiry, Advair/Seretide could successfully weather the impending storm, though GSK reported a lackluster overall business performance. The brand at that time was virtually immune to substitution threats from generic equivalents. The key reason being, as stated above, much unlike a patented chemical drug substance, the ‘Diskus’ system of the GSK inhaler is a hell of a task to copy by meeting the regulatory requirements of substitution.

In 2013, close to three years after its patent expiry, Advair/Seretide ranked fourth within the top 10 global best-selling drugs of that year, clocking annual revenue of US $8.25 billion.

The first competition:

In the midst of all these, the first generic equivalent of Advair/Serevent with a new inhalation device, carrying a name AirFluSal Forspiro from the Sandoz unit of Novartis, started warming up to obtain regulatory approval from several countries within the European Union (EU).

The product was first approved in Denmark on December, 2013 with subsequent marketing authorizations received in Germany, Sweden, Hungary, Romania, Bulgaria, and Norway.

The heat started being felt now:

The overall position of the brand started changing thereafter. According to published reports, sales trend of Advair/Seretide in Europe and other markets are on the decline in 2014. In Europe, the drop was around 3 percent and in the US around 19 percent in the last quarter, due to a combined impact of many factors.

According to Bloomberg, the sales of Advair/Seretide are expected to drop from US$8.25 billion in 2013 to US$5.9 billion in 2016 with the entry of generics.

A large and growing market to invest into:

According to the World Health Organization (WHO), in every 10 seconds, Chronic Obstructive Pulmonary Disease (COPD) that includes conditions such as chronic bronchitis and emphysema kills one person globally. It is expected to be the third leading cause of death worldwide by 2030.  However, though more number of people suffers from asthma globally, its mortality rate is still much less, WHO says.

Bloomberg estimates that COPD market, including asthma, is expected to reach over US$30 billion by 2018.

Cipla came next crossing the ‘technology hurdle’:

Though the leader in the global generic market – Teva, expressed its inability to introduce the generic version of Advair/Seretide before 2018, this month, the Indian pharma major Cipla introduced its version of the product in two European countries, just next to Novartis. Consequently, Cipla demonstrated its ability to overcome the technological hurdle of the product faster than most others and mastering the intricate NDDS technology in record time, with precision.

The Cipla product is named as ‘Serroflo’ in Germany and ‘Salmeterol/Fluticasone Cipla’ in Sweden. As reported in the media quoting Cipla Chairman Dr. Yusuf Hamied, the product has also been launched in Croatia. By now, Cipla has obtained regulatory approvals of this product in 10 countries in total, with an approval pending in the GSK’s own domestic turf, the United Kingdom (UK). Other country-wise launches in Europe would probably take place much before the end of 2014, according to Dr. Hamied.

The product is expected to be launched in the US in the next three to four year’s time, though one media report mentioned about its 2015 launch in that market. Dr. Hamied also said that his company is now planning its first-ever manufacturing plant in America, which might focus on producing HIV medicines.

On a conservative estimate, the market analysts expect Cipla to generate around US$50 million in sales from the EU markets by 2016 and around US$110 million by 2018, as the company gains increasing market access with not more than 4-5 generic competitors competing in this segment.

Be that as it may, getting regulatory approval for launch of a generic version of Advair/Seretide in the regulated markets, by itself, is a huge achievement of technological prowess that Cipla has demonstrated, yet again.

Not too many generic competition expected:

Because of high quality technological requirements to develop a replaceable generic version of the GSK product, not too much competition is expected in this segment.

Thus far, another global generic drug major Mylan is expected to file for a generic version of Advair/Seretide in the US by the third quarter of 2015 for a 2016 launch. Besides Cipla and Novartis, Mylan, Teva and Actavis are expected come out with the generic version of this drug.

Opportunities in ‘difficult to copy’ drugs:

According to a recent ‘RnR Market Research Report’, over 1,400 drugs with New Drug Delivery System (NDDS) have since been approved globally. This includes inhalation devices too.

The oral drugs contribute the largest share of the overall NDDS market with over 52 percent of the total pie. This segment is expected to attain a turnover of over US$90 billion by 2016 at a CAGR of 11 percent. The injectable new drug delivery market is expected to reach a turnover of over US $29billion by 2015, according to this report.

I have deliberated this subject in one of my earlier blog posts titled. “Moving Up The Generic Pharma Value Chain”.

Another high tech area – biosimilar drugs:

As the high priced biologic drugs of the innovator companies go off patent, large molecule biosimilar drugs, involving high technology, would emerge as another lucrative growth opportunity for the generic players having requisite wherewithal.

Recombinant vaccines, erythropoietin, recombinant insulin, monoclonal antibody, interferon alpha, granulocyte cell stimulating factor like products are now being manufactured by a number of domestic biotech companies. Some of the Indian companies that have already entered into the biosimilar segment are Dr. Reddy’s Laboratories (DRL), Lupin, Biocon, Panacea Biotech, Wockhardt, Glenmark, Emcure, Bharat Biotech, Serum Institute, Hetero, Intas and Reliance Life Sciences, besides others.

The ultimate objective of all these Indian companies is to get regulatory approval of their respective biosimilar products in the US and the EU either on their own or through collaborative initiatives.

Overall improvement in the quality of ANDA filings:

In the last few years, overall quality of ANDA filings of the domestic Indian pharma players has also improved significantly. Their regulatory filing schedules now include many complex molecules, injectibles, oral contraceptives, ophthalmic preparations, inhalers/other drug delivery systems and biosimilars, beside Para IV/FTFs. All these are now contributing a growing share in their new product initiatives for the regulated markets.

Conclusion:

In the largest pharma market of the world – the United States, global generic companies are increasingly facing cutthroat price competition with steep price erosion, registering mixed figures of business performance and growth.

However, a new trend is fast emerging. Even when global innovator companies are including increasing number of difficult to copy medicines in their product portfolio, some pharma players are reaping a rich harvest by moving up the value chain with the generic versions of those products, post patent expiry. These copycats offer much higher margin than non-differentiated generics.

Some Indian generic companies too have started focusing on building value added, difficult to manufacture, and technology intensive generic product portfolios in various therapy areas. DRL is reportedly all set to take its complex generic drug Fondaparinux sodium injection to Canada and two other emerging markets.

Those Indian pharma companies, which would be able to develop a robust product portfolio of complex generics and other differentiated formulations for the global market, would now be much better placed in positioning themselves significantly ahead of the rest, both in terms of top and the bottom line performance.

The myth, as epitomized in the good old saying, “Patent expiry matters less for difficult to copy drugs”, seems to be partly true in delaying entry of generics immediately after the end of the monopoly period, at least, for now. However, I reckon, this gap of delay would eventually get much reduced, if not eliminated altogether, as we move on. Armed with cutting edge technology Cipla has almost busted the myth, as it came close second to Novartis with the launch of a complex generic equivalent of Advair/Seretide in the EU and other markets.

Pharma majors of the country, such as, DRL, Cipla, Lupin and Biocon, to name a few, are taking great strides, setting examples for many others to emulate and excel in this area. The groundswell has already begun for a long haul global journey of the Indian pharma into the El Dorado of high tech generics fetching higher rewards.

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.

 

“Fire in The Blood”: A Ghastly Patents Vs Patients War – for Pricing Freedom?

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International award winning documentary film, ‘FIRE IN THE BLOOD’ could possibly set a raging fire in your blood too, just like mine. It made me SAD, REFLECTIVE and ANGRY, prompting to share ‘MY TAKE AWAYS’ with you on this contentious subject, immediately after I put across a brief perspective of this yet to be released film in India.

FIRE IN THE BLOOD is an intricate tale of ‘medicine, monopoly and malice’ and narrates how western pharmaceutical companies and governments aggressively blocked access to low-cost HIV/AIDS drugs in African countries post 1996, causing ten million or more avoidable deaths. Fortunately, in the midst of further disasters in the making, some brave-hearts  decided to fight back.

The film includes contributions from global icons, such as, Bill Clinton, Desmond Tutu and Joseph Stieglitz and makes it clear that the real struggle of majority, out of over 7 billion global population, for access to life-saving affordable patented medicines is far from over. This film has been made by Dylan Mohan Gray and narrated by Academy Award winner, William Hurt.

Two trailers worth watching:

Please do not miss watching, at least, the trailer of this the sad and cruel movie by clicking on the link provided on the word ‘trailer’ above and also here. To get an independent perspective, please do watch the review of the film along with interesting interviews by clicking here.

(Disclaimer: I have no personal direct or even remotely indirect interest or involvement with this film.)

International newspaper reviews:

The NYT in its review commented as follows:

“The only reason we are dying is because we are poor.” That is the heartbreaking refrain heard twice in the documentary “Fire in the Blood,” about an urgent and shameful topic: the millions of Africans with AIDS who have died because they couldn’t afford the antiretroviral drugs that could have saved their lives. Former President Bill Clinton, the intellectual property lawyer James Love, the journalist Donald G. McNeil Jr. of The New York Times and others offer perspectives on this situation and also on the concern that pharmaceutical companies value profits over lives.”

The Guardian reviewed the film as follows:

“A slightly dry, yet solid reportage on a humanitarian disgrace: the failure of western pharmaceutical companies to provide affordable drugs to patients in the developing world. As presented, the corporate defense sounds horribly racist: that poorer Africans’ inability to read packaging or tell the time leaves them ill-suited to following any medication program… hope emerges in the form of the Indian physicist Yusuf Hamied, whose company Cipla undertook in the noughties to produce cheap, generic drugs in defiance of the Pfizer patent lawyers.”

MY TAKE AWAYS:

Discrimination between human lives?

Life, as we all have been experiencing, is the greatest miracle of the universe and most astonishing creation of the Almighty. Among all types of lives, the human lives indeed have been playing critical roles in the development and progress of humanity over many centuries. These lives irrespective of their financial status, cast, creed, color and other inequities need to be protected against diseases by all concerned and medicines help achieving this objective.

What’s the purpose of inventing medicines?

“The purpose of business is to create and keep a customer”, said the management guru of global repute,  Peter F. Drucker. What is then the purpose of inventing new medicines in today’s world of growing financial inequity? 

Further, in his well acclaimed book, “Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits”, C.K. Prahalad, explained that the world’s over five billion poor make up the the fastest growing market in the world. Prahalad showed how this segment has vast untapped buying power, and represents an enormous potential for companies, who can learn how to serve this market by providing the poor with innovative products that they need. Do the Big Pharma players have any lesson to learn from this doctrine?

R&D is not free, has costs attached to it:

Medicines protect human lives against various types of diseases. Pharmaceutical companies surely play a critical role in this area, especially the innovator pharma players, by making such medicines available to patients.

These companies identify new products largely from academic institutions and various research labs, develop and bring them to the market. This has obviously a cost attached to it. Thus, R&D cannot be considered as free and the prices of patented products should not be equated with off-patent generic drugs. Innovators must be allowed to earn a decent return on their R&D investments to keep the process of innovation ongoing, though the details of such costs are not usually made available for scrutiny by the experts in this field. 

Discourage insatiable fetish for profiteering:

Respective governments must always keep a careful vigil to ensure that earning a decent profit does not transgress into a limitless fetish for profiteering, where majority of people across the world will have no other alternative but to succumb to diseases without having access to these innovative medicines. This situation is unfair, unjust and should not be allowed to continue.

Big Pharma – strongest propagators of innovation…bizarre?

It is indeed intriguing, when patients are the biggest beneficiaries of pharmaceutical innovations, why mostly the Big Pharma MNCs, their self-created bodies and cronies, continue to remain the most powerful votaries of most stringent IPR regime in a country, though always in the garb of ‘encouraging and protecting innovation’.

Thinking straight, who do they consider are really against innovation in India? None, in fact. Not even the Government. India has under its belt the credit of many pioneering innovations over the past centuries, may not be too many in the field of medicine post 2005, at least, not just yet. Do we remember the disruptive invention of ‘Zero’ by the Indian mathematician Brahmagupta (597–668 AD) or the amazing ‘Dabbawalas’ of Mumbai?  India experiences innovation daily, it has now started happening in the domestic pharma world too with the market launch of two new home grown inventions.

Coming back to the context, India, as I understand, has always been pro-innovation, in principle at least, but is squarely and fairly against obscene drug pricing, which denies access to especially newer drugs to majority of patients, in many occasions even resorting to frivolous innovations and evergreening of patents.

Mighty pharma MNCs are increasingly feeling uncomfortable with such strong stands being taken by a developing nation like India, in this regard. Thus, expensive and well orchestrated intense lobbying initiatives are being strategized to project India as an anti-innovation entity, while pharma MNCs, in general, are being highlighted as the sole savior for encouraging and protecting innovation in India. The whole concept is indeed bizarre, if not an open display of shallow and too much of self-serving mindset. 

This analysis appears more convincing, when genuine patients’ groups, instead of supporting the pharma MNCs in their so called ‘crusade’ for ‘innovation’, keep on vehemently protesting against obscene drug pricing, across the world. 

Obscene pricing overshadows the ‘patient centric’ facade:

Obscene pricing of patented medicines, in many cases, overshadows the façade of much hyped and overused argument that ‘innovation must be encouraged and protected for patients’ interest’. This self-created ‘patient centric’ facade must now be properly understood by all.

I reckon, India has now assumed a critical mass attaining a global stature. This will not allow any successive governments in the country to change the relevant laws of the land, wilting under intense pressure of global and local lobbying and expensive PR campaigns. 

Genuine innovation must be protected:

  • Genuine innovations, as explained in the Patents Act of India, must be encouraged and protected in the country, but not without sending a strong and clear signal for the need of responsible pricing.
  • It is also a fact, though some people may have different views, that Intellectual Property Rights (IPR) encourage innovation.
  • At the same time, the real cost of R&D must be made transparent by all innovators and available for scrutiny by the experts in this field to put all doubts to rest on the subject.

When Corporate Social Responsibility (CSR) is being widely discussed globally, which has now been made mandatory in India, these players keep arguing almost unequivocally that, thinking about ‘have nots’ is the sole responsibility of the Government.

Patents guarantee market exclusivity, NOT absolute pricing freedom:

Patent gives right to the innovators for 20 years market exclusivity, but NOT absolute pricing freedom in the absence of any significant market competition in that area.

Innovator companies do argue that patented products also compete in their respective therapeutic classes. This is indeed baloney. If patented products meet the unmet needs, how can it be ‘me too’ even in a therapy class? Unless of course, insatiated fetish of Big Pharma for market monopoly with free pricing even for ‘me too’ types of so called ‘innovative products’, becomes the key motive behind such an argument.

Who benefits more with patented medicines?

Who gets benefited more with these patented medicines? Certainly a small minority living in the developed world and NOT the vast majority of the developing world.

At the same time, huge profits earned by these companies from a small minority of these patients make them so rich and inexplicably arrogant that they do not bother at all for others without having adequate deep pockets, even in India. 

Conclusion:

I have a huge problem in accepting the pharma MNCs’ argument that ‘IPR’ and lack of ‘Access’ to IP protected drugs for ‘affordability’ reasons, are unrelated to each other. For heaven’s sake, how can they be?

As I said before, absolute pricing freedom for patented drugs is obscene, if not vulgar and must be curbed forthwith with the application of intelligent and well-balanced sensible minds and also in a way, which is just for all, both the innovators and the patients.

Big pharma MNCs can no longer afford to remain just as huge profit making entities, responsible only to their shareholders, shorn of societal needs for affordable medicines, required for around six out of over seven billion human lives of the world. 

Modern society, key opinion leaders and respective governments should not allow them to shirk their responsibility in this area any more, as we move on.

If not, will narratives like ‘FIRE IN THE BLOOD’, not keep us haunting again, again and again, on similar incidents taking place in some other countries, at some other time, involving extinction of millions of precious lives for not having access to affordable new drugs? They may be ‘have nots’, so what? 

By: Tapan J. Ray

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

 

 

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

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

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

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

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

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

Number of new cancer patients staggering in India:

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

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

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

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

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

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

‘The Lancet’ finding:

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

-       6 percent of the study deaths were due to cancer

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

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

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

Growing patients number making ‘Oncology Market’ increasingly attractive:

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

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

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

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

Indian business landscape:

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

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

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

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

Access to newer cancer drugs:

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

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

More R&D investments in Oncology segment:

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

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

Cancer drug sales dominated in 2012: 

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

Top 10 global brands in 2012

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

(Source: Fierce Pharma)

Responsible Pricing a key issue with cancer drugs:

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

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

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

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

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

An interesting approach:

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

India should also explore this possibility without further delay.

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

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

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

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

Cancer drug pricing related developments in India:

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

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

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

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

Promising future potential for low cost newer generic cancer drugs: 
 

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

Patent expiry in 2013 

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

(Source: Fierce Pharma)

A thought:

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

  1. Medical intervention and consultation
  2. Diagnostic tests and detection
  3. Surgical procedure and hospitalization
  4. Medicines and chemotherapy

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

Conclusion: 

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

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

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

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

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

By: Tapan J. Ray 

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.