How Relevant Is A Pharma Brand Name To Patients?

Posted on February 26, 2018 by Tapan Ray

Are brand names necessary for medicines? Well – its’s a contentious issue, at least, as on date. It becomes the subject of a raging debate when the same question is slightly modified to: – Are brand names necessary for prescription drugs?

The current reality is, almost all pharma companies believe, and have been following this practice. This has been happening for decades, regardless of the fact that unlike other branded non-pharma products, each and every drug also carries another specific name – the generic name. Which is why, questions are often raised, why can’t drugs be prescribed only in generic names by the doctors?

Before I proceed further, let me recapitulate the definition of a ‘brand’. One of the most comprehensive definitions of a brand is: Unique design, sign, symbol, words, or a combination of these that identifies a product and differentiates it from its competitors. It helps create a level of credibility, quality, and satisfaction in the consumer’s mind, by standing for certain benefits and value. And, the creative marketing practices followed in this process is termed as ‘branding’. Keeping this at the center, in this article, let me try to arrive at a relevant perspective on this subject.

The arguments in favor:

Votaries of pharma branding believe that a pharma brand helps establish an emotional connect with the consumers on various parameters, including quality, efficacy, safety and reliability. This is expected to establish a preferential advantage of a brand over its competitors. Quoting the ‘father of advertising’ David Ogilvy, some of these proponents relate the outcome of branding to offering ‘intangible sum of a product’s attributes’ to its consumers, and also prospective consumers.

Entrepreneur India puts across such favorable outcome of ‘branding’ very candidly, which is also applicable to branding medicines – both patented and generic ones. It says, “Consistent, strategic branding leads to a strong brand equity, which means the added value brought to your company’s products or services that allows you to charge more for your brand than what identical, unbranded products command.”

The general belief within the pharma industry is that, ‘branding’ facilitates doctors in choosing and prescribing medicines to patients, especially in those situations where the choices are many. Aficionados of pharma product branding argue, that to save time, doctors usually select those top of mind products, which they are familiar with and feel, can serve the purpose well. This belief prompts the necessity to go all out for ‘branding’ by the pharma companies, even when the process is an expensive one.

Where pharma ‘branding’ is necessary:

There are a few old publications of the 1980’s, which claim that studies based on human psychology have found that medicines with brand names can have a better perceived impact on the actual effectiveness of ‘Over the Counter (OTC)’ medications. One of the examples cited was of aspirin.

Be that as it may, the relevance of branding for OTC pharmaceutical products is undeniable, where a medicinal product is generally treated just as any other Fast-Moving Consumer Goods (FMCG) goods. Establishing an emotional connect of OTC brands with consumers is, therefore, considered an important process to create a preferential perceived advantage over its competitors.

There is no well-laid out legal or procedural pathway, as yet, for pharma OTC brands in India. No ‘Direct to Consumer (DTC) promotion is allowed in the country for Schedule H and Schedule X drugs – the only exceptions being Ayurvedic proprietary medicines and for homeopathy drugs. That said, the question continues to haunt, how relevant is branding for prescription drugs – now?

Relevance of ‘branding’ for prescription drugs:

The juggernaut of ‘branding prescription drugs’, riding mostly the wave of vested interests – of many hues and color, has been made to be perceived as necessary to ensure drug quality and safety for patients. It continues to move on, up until today, even for highly specialized prescription drugs. Nonetheless, some initiatives are visible from some Governments to gradually shift this contentious paradigm.

This move has been catalyzed by a blend of changing times with changing expectations of a large number of patients. They want to be an integral part in their treatment decisions, receive more personalized healthcare from both doctors and pharma companies. Patients, ultimately, want to feel confident that they’re receiving the best treatment – says a fresh study.

A number of other research papers also confirm that, a virtually static bar of patients’ expectations, in the disease treatment process – either for themselves or their near and dear ones, is slowly but surely gaining height, measurably. For better outcomes, patients have started expecting new types of services both from their doctors and the drug manufacturers. This process begins, even before a final decision is taken in the treatment process. As this paradigm shifts, pharma players would be significantly impacted – in several parameters.

Fast expanding digital empowerment options for all, across the world, is expediting this process further, including India. Placing oneself in the midst of it, one may ponder – how relevant is pharma branding today, as is being highlighted by many, since long.

In my view, a part of the answer to the above question arguably lies in a study titled, “Product Launch: The Patient Has Spoken”. The Key findings from the survey that covered 8,000 patients from three generations in the US, the UK, Germany and France, were published by ‘Accenture Life Sciences’ in January 2018. The research reveals how these patients evaluate and select new treatments in eight therapeutic areas (immune system, heart, lungs, brain, cancer, hormone/ metabolism and eye disease) across three generations, spanning across – Baby boomers, Generation X and Millennials.

Brands don’t matter to most patients…outcomes do:

69 percent of patients said, the benefits of the product are more important to them than the brand of the product. The four top factors influencing patients’ while making decisions about their healthcare are listed in the report as:

The doctor/ physician relationship: 66 percent
The patient’s ability to maintain their current lifestyle: 55 percent
Patients’ ease of access to health care they’ll need: 53 percent
Patients’ financial situation / ability to pay: 51 percent. When this is read with another finding where, 48 percent of patients believe that their doctors discuss the whole range of product options with them, a more interesting scenario emerges.

Further, lack of knowledge about the treatments available, as expressed by 42 percent of patients obviously indicate, pharma players’ intent to better inform patients by educating the doctors through brand promotion is not working. Interestingly, brand loyalty or popularity appeared relatively unimportant, ranking twelfth out of 14 influencing factors. Just 25 percent of patients characterized themselves as having a strong affinity with brands in a healthcare setting – the above report revealed.

Could there be an alternative approach?

An effective ‘branding’ exercise should lead to creating a ‘brand loyalty’ for any product. For pharma companies, doctors’ brand loyalty should lead to more number of its brand prescriptions. This expectation emanates from the idea that the prescription brand will represent something, such as quality, trust, assured relief, or may well be anything else. That means pharma product ‘branding’ is primarily aimed at the medical profession.

In an alternative approach to the current practice, an article titled, “From Managing Pills to Managing Brands”, published sometime back in the March-April 2000 issue of the Harvard Business Review (HBR), finds its great relevance, even today. It says, pharma companies can retain the loyalty of customers by building a franchise around specific therapeutic areas based on a focused approach to R&D. In other words, their corporate brand can replace individual drug brands. For example, a doctor looking for a treatment for – say asthma, would look for the latest GlaxoSmithKline medicines. Let me hasten to add, I used this example just to illustrate a point. This may appear as a long shot to some. Nonetheless, it would significantly reduce the cost of marketing, and subsequently the cost of a drug to patients. Incidentally, I also wrote about the relevance of ‘Corporate Branding’ in this Blog on June 15, 2015.

Conclusion:

With this fast-emerging backdrop, the Accenture Study raises an important issue to this effect. It wonders, whether the expenses incurred towards branding medicines, especially, during product launch be significantly reduced and be made more productive?

Illustrating the point, the report says, in 2016, the US pharmaceutical and healthcare industry alone spent US$ 15.2 billion in marketing. To earn a better business return, could a substantial part of this expenditure be reallocated to other programs that matter more to patients, such as access to patient service programs, and creating ‘Real-World Evidence (RWE)’ data that can document improved health outcomes, particularly those that matter to patients?

Well-crafted pharma branding and other associated initiatives, targeted predominantly to the medical profession, may make a doctor emotionally obligated to prescribe any company’s specific brands, for now. However, in the gradually firming-up ‘patient outcomes’-oriented environment, where patients want to participate in the treatment decision making process, will it remain so?

Dispassionately thinking, to most patients, a brand is as good or bad as the perceived value it delivers to them in the form of outcomes. Or, in other words, prescription pharma brands may not even matter to most of them, at all, but the outcomes will be. Hopefully, before it is too late pharma players would realize that, especially the well-informed patients are becoming co-decision makers in choosing the drug that a doctor will prescribe to them. If not, the current targeted process of pharma prescription drug branding, may lose its practical relevance, over a period of time.

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.

Antimicrobial Resistance: A Recent Perspective

Posted on February 19, 2018 by Tapan Ray

On January 23, 2018, at the World Economic Forum in Davos, Switzerland – the first independent analysis of pharmaceutical industry efforts to tackle antibiotic drug resistance, was published by the Netherlands based Access to Medicine Foundation.

The issue of Antimicrobial Resistance (AMR) was brought under focus by the World Economic Forum (WEF) not for the first time at Davos in 2018. Its 2013 Annual Report on global risks, also underscored the gargantuan health hazard that AMR poses to mankind. It said, we live in a bacterial world where we will never be able to stay ahead of the mutation curve. A test of our resilience is how far the curve, we allow ourselves to fall behind. It’s indeed a profound statement!

In that sense, the AMF analysis is important. More so, when the global population is virtually at the threshold of facing a situation very similar to pre-antibiotic era, where even a common infection used to pose threat to a life. And now, a fast-developing AMR to many effective antibiotics or even super-antibiotics, are making them almost redundant in many serious conditions. Consequently, around 700,000 people die every year only due to antimicrobial resistance, the world over.

The World Health Organization (WHO) also reiterated its grave concern in this area by a news release on September 20, 2017. It cautioned, “Antimicrobial resistance is a global health emergency that will seriously jeopardize progress in modern medicine.” Against that backdrop, in this article, I shall dwell on some latest developments in this area, both globally and also in India.

Dire need for newer antibiotics – but dry R&D pipeline:

At the very outset, let me flag another critical area that is intimately related to this concern. An article titled, “Where Are the Antibiotics?”, published by the AARP Foundation adds more to this growing concern. It writes, in an era when many breakthrough innovative drugs are curing some of our most deadly afflictions, the quest for meeting the unmet medical needs, seems to have shifted away from development of critically needed breakthrough antibiotics to effectively address AMR, for various reasons.

The author further highlighted that between the time penicillin was discovered in 1928, and the 1970s – 270 antibiotics were approved – a robust arsenal of powerful drugs that kept almost all bacterial infections at bay. However, since then, research into new antibiotics has declined dramatically. Today, just five of the top 50 big drug companies are reportedly developing innovative antibiotics – the article reiterates. Nevertheless, some recent developments in this area can’t be ignored, either, which I shall touch upon in this discussion.

Global initiatives for a multi-pronged concerted action:

It is understandable that there are no magic bullets to address the fast-growing menace of AMR. It calls for a multi-pronged strategy with well-orchestrated concerted efforts for its effective implementation with military precision. Following are the three primary constituents who should lead from the front in the battle against AMR, as I reckon:

The world leaders
Each country, individually
Pharmaceutical industry, both global and local

The medical profession, including hospitals, nursing homes, the retail chemists and individual patients, also play a significant role to alleviate this problem, especially in India and other developing countries. But, I shall keep that as a subject for a separate discussion, altogether. Let me now touch-upon the first three constituents, one by one, as follows:

1. The world leaders’ initiative:

Realizing that failure to act on AMR will result in a global health and financial crisis, the world leaders met to address this growing menace. Accordingly, on September 21, 2016, the United Nations General Assembly (UNGA) passed a declaration aimed at slowing the spread of antibiotic-resistant superbugs. At this meeting in New York City, the top UN leaders successfully urged all governments to sign a political declaration to tackle the problem of AMR, both globally and in their respective countries. The joint declaration requires each country to develop a 2-year plan to protect the potency of antibiotics for both livestock and humans. The progress of the initiative for each country at the end of those 2 years will be evaluated. However, in this article, I shall focus only on the agreed human-specific actions, which include the following:

Antibiotics should be prescribed only when they are absolutely necessary
A massive education campaign about antibiotic resistance.
Greater monitoring of superbugs to understand the scope and magnitude of the problem.
Safeguarding current antibiotic stockpile.

The leaders suggested that people should be encouraged to help prevent the crisis from turning into a death sentence for millions, with the steps, such as:

Get available vaccines to prevent illness
Stop asking doctors for antibiotics when they have the cold or flu, as antibiotics treat neither
To urge their political leaders to commit to action in combating antibiotic resistance.

2. Country-specific initiatives:

In September 2016, just a year after the UNGA high-level meeting on AMR, an update by the United Nations Foundation reported that 151 countries out of 195 WHO member states have responded. The overall response includes the following, among others:

85 percent of countries are developing or have developed National Action Plans (NAC).
52 percent of countries have a fully developed plan with ‘One Health’ approach that seeks to unify human and veterinary medicine, agriculture, and food providers against the progression of AMR by reducing agricultural antimicrobial use.
52 percent of Low and Middle-Income Countries (LMICs) have national-level measures in place on ‘Infection Prevention and Control (IPC)’ measures in human healthcare.

3. Pharmaceutical industry initiatives:

I shall cite only the latest commendable developments in this area, as I see it. On Jan. 21, 2016 a document titled the ‘Declaration on Combating Antimicrobial Resistance’, was launched, again, as part of the World Economic Forum at Davos, Switzerland.

For the first time, 85 pharmaceutical, biotechnology, generic-drug, and diagnostic companies agreed on a common set of principles for global action to support antibiotic conservation and the development of new drugs, diagnostics, and vaccines. The document, outlining several critical measures the government and industry must take to increase antibiotic effectiveness worldwide, was also drafted and signed by nine industry associations spanning 18 countries.

Global progress assessment of AMR initiatives in 2018:

This brings me back to where I started from, while analyzing what happened in this regard a year after the above declaration was signed. On January 23, 2018, at the World Economic Forum in Davos, Switzerland – the first independent analysis of pharmaceutical industry efforts to tackle drug resistance, was revealed by the AMF. It found companies are developing new drugs, as well as dismantling the incentives that encourage sales staff to oversell antibiotics, setting limits on the concentration of antibiotics in factory wastewater released into the environment, and tracking the spread of superbugs.

In the AMR Benchmark, GSK and Johnson & Johnson lead among the largest research-based pharmaceutical companies. A separate ranking of manufacturers of generic antibiotics features Mylan, Cipla, and Fresenius Kabi Global, in the leading positions. While Mylan leads the generic medicine manufacturers, Entasis, reportedly, leads the biotechnology group.

Twenty-eight antibiotics are in late stages of development:

The other key findings of the 2018 study include mention of 28 antibiotics that are in later stages of development, targeting pathogens deemed critical AMR priorities by the WHO, and/or US Centers for Disease Control and Prevention. However, only two of these 28 candidates are supported by plans to ensure they can be both made accessible and used wisely if they reach the market. Be that as it may, the benchmark finds room for all companies to improve in this space, the report indicated.

Some major initiatives in India:

The good news is, ‘The National Policy for Containment of Antibacterial Resistance’, with similar objectives, was put in place in India by the Directorate General of Health Services, Ministry of Health & Family Welfare, way back in 2011. Further, on March 20, 2015, to strengthen the surveillance of antimicrobial resistance (AMR) in the country, Indian Council of Medical Research (ICMR) had set up a National Antimicrobial Resistance Research and Surveillance Network (AMRRSN) to enable compilation of national data of AMR at different levels of health care.

Again, in February 2017, the Indian Council of Medical Research (ICMR) has put a new ‘Treatment Guidelines for Antimicrobial Use in Common Syndromes’, to achieve the same objectives. Despite this, as many medical experts opine, a large number of General Practitioners (GP), including hospitals, nursing homes continued over-prescribing antibiotics. Alarmingly, considered as the last line of defense antibiotics by many doctors – Colistin and Carbapenem resistant infections have also been reported from several Indian hospitals. All this adds further fuel to the AMR fire.

Another matter of huge worry in India:

The February 04, 2018 article titled, ‘Threats to global antimicrobial resistance control Centrally approved and unapproved antibiotic formulations sold in India,’ published in the British Journal of Clinical Pharmacology, highlight serious hurdles for controlling antimicrobial resistance in India, which has had parliamentary investigations into the failures of the country’s drug regulatory system. The study was conducted by researchers from Queen Mary University in London, Newcastle University and Lakshya Society for Public Health Education and Research in Pune. Some of the key findings of the study are as follows:

Extensive use unapproved of fixed dose combination (FDC) antibiotics is contributing to the rising rate of AMR in India, which is already one of the highest in the world.

Out of the 118 of FDC antibiotics being sold in India, only 43 (36 percent) were approved by the CDSCO. These 118 antibiotic formulations are being sold in 3307 brand names and manufactured by 476 entities. Of these, 464 were Indian manufactures, and 12 were MNCs.

The authors recommend work on understanding why unapproved formulations are being prescribed by medical professionals.

Conclusion:

As the above AARP Foundation article highlights, like all living beings, bacteria constantly evolve to survive. While encountering a new antibiotic, they quickly find ways to evade it, and continue to live or exist. Some have even developed cell wall like virtually impregnable shields, as it were, keeping antibiotics out. Others pump antibiotics out when they get in. Several deadly bacteria have even devised ways to deactivate antibiotics.

The comments made in the article titled, ‘The Future of Antibiotics and Resistance,’ published by The New England Journal of Medicine (NEJM) on January 24, 2013, is also worth noting. It says, the converging crises of increasing resistance and collapse of antibiotic research and development are the predictable results of policies and processes we have used to deal with infections for 75 years. If we want a long-term solution, the answer is not incremental tweaking of these policies and processes. Novel approaches, based on a reconceptualization of the nature of resistance, disease, and prevention, are needed.

The bottom line still remains, AMR is a humongous threat to the global population, not just in India. While its awareness is gradually increasing, much more painstaking work remains to be done by all, both individually and collectively, to contain this global health menace. It’s our responsibility to protect the well-being of our future generations.

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.

Drug Pricing Pressure to Escalate Further?

Posted on February 12, 2018 by Tapan Ray

On February 09, 2018, NITI Aayog released its “Healthy States, Progressive India” Report. The study ranked the States based on ‘health index’. Kerala, Punjab and Tamil Nadu featured as top three in terms of overall performance in 2015-16. However, the interstate variation of ‘health indices’ was quite significant, with the highest being 76.55 (Kerala) and the lowest in Uttar Pradesh with 33.69, during the same period.

Importantly, the report also noted: “About one-third of the States have registered a decline in their performance in 2016 as compared to 2015, stressing the need to pursue domain-specific, targeted interventions.” It’s worth noting, the reported decline in performance was registered despite several promises of the Government in this space, during immediately preceding years.

Apparently, as a corrective measure to this effect, the world’s largest government-funded health care program – the ‘National Health Protection Scheme (HPS)’ of India was announced in the Union Budget Proposal, on February 01, 2018. HPS is expected to provide insurance cover of up to ₹500,000 to 100 million poor and vulnerable families, covering around 500 million population in the country.

As enshrined in the National Health Policy 2017 (NHP 2017), HPS too seeks to ensure improved access and affordability of quality secondary and tertiary care services with a significant reduction in Out of Pocket Expenditure (OOPE) on health care, for the common citizens in the country.

Such a massive public health care program as HPS, is obviously expected to use a transparent drug procurement and logistics framework. This, in turn, would necessitate tough price negotiations with the pharma manufacturers for the purchase of medicines, leading to significant reduction in drug prices. This is already happening in some States, like Tamil Nadu.

High OOPE on health:

According to the December 2016 report of the Union Ministry of Health and Family Welfare, of the total 64.2 percent OOPE in 2013-14, 53.46 percent was spent on medicines and 9.95 percent was spent on diagnostics, in India. 82.29 percent of the total OOP medicines expenditure and 67 percent of total OOP diagnostic expenditure was for outpatient treatment. Of the total OOPE, 15.96 percent was on traditional medicines/ AYUSH, of which equal proportion was spent on outpatient and inpatient care.

In an interview, published on December 18, 2017, the Chairman of the Insurance Regulatory and Development Authority of India (IRDAI), reportedly, also said, OOPE makes up about 62 percent of all health care costs in India, causing impoverishment of many patients. In a comparative yardstick, OOPE is about 20 percent in the U.S. and the U.K. and 20-25 percent in BRICS countries. Thus, there is a need to significantly bring it down in India, he said.

Curiously, the ‘Health in India’ report, which draws data from the 71st round of the National Sample Survey conducted from January to June 2014, presents a somewhat different picture. It reportedly says, of the total OOPE, 72 percent in rural and 68 percent in urban areas was towards buying medicines for non-hospitalized treatment. The Health in India report shows, in rural India, 25 percent patients relied on “borrowings” for hospitalization, and 68 percent on household income and other savings. In urban India, 18 percent patients had to borrow while admitted in hospital, and 75 percent relied on income or savings – the report further added.

Containing OOPE – a dire necessity:

Be that as it may, OOPE for health in India and, especially, on drugs, is indeed very high, by any measure. To contain this burden on the general population in the private market, the Government had introduced, since quite some time, a balancing mechanism through various Drug Price Control Orders (DPCO).

Similarly, to contain its own health care expenditure, as HPS comes into force, the Government is expected to choose a digitalized and transparent drug procurement process. This would, almost certainly, prompt tough price negotiations for the purchase of medicines, as well.

Thus, HPS may further add to the current discomfort of the pharma players in this area, as they mostly want free pricing of drugs that will only be regulated by market forces. Unfortunately, market forces do not work for drugs. I explained it in an article, published in this blog on April 27, 2015, titled “Does Free Market Economy Work For Branded Generic Drugs In India?”

Industry lobbying for free pricing of drugs and devices:

It is well known that pharma industry, supported by other businesses dependent on it, including a section of the media, is still against such a move by the Indian policy makers, for various reasons. The primary one being, such pressure on drug prices would stifle innovation, impacting patient access to the best possible health care.

Pharma Multination Corporations (MNC) appear to be in the forefront of this ‘innovation’ bandwagon to score a brownie point in this area, as many say. This is an ongoing process for them. Even recently, in the report titled, ‘2017 Accomplishments’, the US-India Business Council’s (USIBC) made a strong assertion in this regard, quite expectedly, though.

The report articulated, as part of advocacy around price controls, USIBC had sent a letter to the National Pharmaceutical Pricing Authority (NPPA), detailing American industry concerns on setting up ceiling prices for drugs and medical devices. USIBC, reportedly has also sent a letter, expressing its concern on the “serious problems for US companies that sell these products in the Indian market.” Advocacy initiatives of this kind, reportedly included the then Foreign Secretary, Minister of Commerce and Industries of India, and the Prime Minister’s Principal Secretary, as well.

Pricing pressure getting more intense, even in the US:

Curiously, a similar and equally interesting scenario is rapidly developing alongside in the largest pharma free-market economy in the world – the United States. On January 30, 2018, during his State of the Union address, President Donald Trump said that he wants his administration “to make fixing the injustice of high drug prices one of our top priorities.”

Likewise, as reported by Bloomberg on February 09, 2018, President Trump’s Health and Human Services Secretary – Alex Azar reaffirmed that he plans to take up the President’s promises to do something about pharmaceutical prices to reduce patients’ out-of-pocket spending. He assured, “The president is firmly committed in this space.” Incidentally, Alex Azar is a former executive at drug maker Eli Lilly & Co.

HPS needs efficient public procurement and logistics mechanisms:

As the cost of drugs and devices contribute so much to the total OOPE on health, together with ensuring patients’ easy access to convenient to reach primary, secondary and tertiary health care facilities – access to drugs, devices and diagnostics for the target population of HPS must also increase, effectively. Thus, bulk procurement and distribution of these, free of cost, at the designated health centers, assumes paramount importance for its success. Consequently, the trust of the HPS beneficiaries will keep ascending.

The Public Health Foundation of India (PHFI) too, had aptly asserted, any inefficiency due to poor governance, lack of transparency and inequities in public health financing and delivery would greatly impede access to medicines and diagnostics for those who would need these most.

Admitting its importance, the NHP 2017 noted: “Quality of public procurement and logistics is a major challenge in ensuring access to free drugs and diagnostics through public facilities. An essential prerequisite that is needed to address the challenge of providing free drugs through the public sector, is a well-developed public procurement system.”

Thus, putting in place an effective framework and process for this purpose, at both the central and the state government levels, as the situation would warrant, requires to be a key priority focus area of the HPS implementation process. There doesn’t seem to be any other viable choice, either.

Any need to ‘reinvent the wheel’?

The answer is, of course, ‘no’. Perhaps, to attain similar goals, the Government had established the fully autonomous Central Medical Services Society (CMSS) as a Central Procurement Agency (CPA). This was intended to streamline drug procurement and distribution system of the Ministry of Health and Family Welfare of India. Accordingly, the Gazette Notification on the formation of CMSS said that it:

Will be responsible for procuring health sector goods in a transparent and cost-effective manner and distributing them to the States/UTs by setting up an IT enabled supply chain infrastructure including warehouses in 50 locations.
Will ensure uninterrupted supply of health-sector goods to the State Government, which will then maintain the flow to the government health facilities, such as district hospitals, primary health centers and community health centers.
All decisions on procurement will be taken by the CMSS without any reference to the Ministry of Health and Family Welfare.
The Ministry will be responsible only for policy decisions concerning procurement and for monitoring its performance.
The CMSS will also assist the State Governments to set up similar organizations in states to reform their procurement.

Currently, CMSS carries out procurement for following ‘Disease Control and Welfare Programs’ of the Union Ministry of Health & Family Welfare:

Revised National Tuberculosis Control Program (RNTCP)
National Vector Borne Disease Control Program (NVBDCP)
Family Welfare Program (FWP)
National Aids Control Organization (NACO)

The scope of services of CMSS includes tendering, bid Evaluation, procurement decision, concluding rate agreement, placing purchase orders, receiving in stores, sampling and testing, releasing payment to suppliers and keeping stocks of drugs available in warehouses for distribution to state program offices.

So far as State Governments are concerned, a World Bank article says, the Tamil Nadu Medical Services Corporation (TNMSC) had successfully demonstrated a cost-effective model. This IT enabled system is an integral part in the supply chain infrastructure to support the management decisions, and adequate attention to quality in drug procurement.

CMSS follows similar processes to procure and distribute supplies to States through web-connected warehouses in State capitals. An IT vendor takes up the IT work with a quality control framework in place. Its warehouses are being equipped with necessary storing and warehousing equipment, which will distribute to the States the items that are procured by the Ministry. Since the warehouses will be connected through the IT system, it will be possible for the Society to monitor the inventory in warehouses preventing stock outs and wastage.

Many State governments have also adopted a similar reform process. However, any duplication in the drug procurement and logistics systems needs to be avoided.

Conclusion:

Hence, I reckon, CMSS can be extended to the procurement process of both the new ‘Health Protection Scheme (HPS)’ and also for the ‘Health and Wellness Centers,’ without trying to ‘reinventing the wheel.’

As stated before, this seemingly transparent drug procurement process for public use, would naturally involve tough price negotiations, leading to significant reduction, not just in drug prices, but also containing the overall HPS cost to the Government, enabling the country to experience the roll out of Universal Health Coverage (UHC) for all. From this perspective, it appears, while translating into reality, this noble Government intent of providing wider access to health care, including free medicines, overall pressure on drug prices may escalate further.

By: Tapan J. Ray

Union Budget 2018: The ‘WOW’ Moment for Indian Healthcare?

Posted on February 5, 2018 by Tapan Ray

The 2018-19 Union Budget proposals, presented before the Parliament on February 01, 2018. Especially for those who take keen interest in the Indian healthcare environment, was there a ‘WOW’ moment in the budget? Some say, this long-awaited moment came with the Union Finance Minister’s (FM) announcement of the ‘Ayushman Bharat Program (ABP)’ – the “world’s largest healthcare program,” taking a major step towards the Universal Health Coverage (UHC) for all, in India.

Two other health care related major announcements made by the FM in his 2018 Union Budget proposal are:

24 new government medical colleges by upgrading existing district hospitals. This is to bridge the gap between doctor-patient ratio in the country.

An allocation of ₹60 million for nutritional support to all tuberculosis patients – ₹ 500 per month per patient for 10 months, during the duration of their treatment.

The ‘Ayushman Bharat Program (ABP)’:

In this article, I shall not touch upon what expectations of pharma and healthcare industries were not met with the budget, as that will no more than an academic deliberation, at this stage. I shall rather restrict my discussion to ABP, for obvious reasons. This potential game changer, covers two commendable initiatives, as follows:

1. The New Health Protection Scheme (HPS) offering health insurance coverage of ₹500,000 per family per annum, is expected to take under its wings 100 million vulnerable families, or around 500 million beneficiaries. The total budgetary allocation for this mega proposal, for which the detail contours, apparently, are yet to be fleshed out and made public.

Some Senior Government officials, though, have put across its sketchy outline during post-budget Television coverage, on last Thursday. However, many industry watchers construe HPS as an expanded version, with a different name, of the current ‘Rashtriya Swasthya Bima Yojana (RSBY)’, which provides annual coverage of just ₹30,000 for poor families.

A fund of just ₹20 billion has been earmarked for this mega project in the Union Budget 2018-19.

2. Creation of 150,000 health and wellness centers to provide ‘comprehensive health care’ – for prevention and treatment of both communicable and non-communicable diseases (NCDS), including maternal/child health services, and free essential drugs alongside diagnostic services. This will “bring healthcare closer to home”, as the FM articulated.

A sum of ₹1.2 billion (₹1200 crore) had been allocated for this project in the 2018 budget proposal. The FM also requested contributions from the private sectors through CSR, besides philanthropic entities, in adopting these centers.

The points to ponder before saying ‘WOW!’

So far so good. However, as the saying goes, the devil is in the detail. From that angle, sans any meaningful details, does it look merely as an expression of the Government’ intent? Or it is for real! This serious doubt emanates from some key considerations. Three of which, as I reckon, are as follows:

I. Is it the beginning of implementation of the much-awaited National Health Policy 2017 (NHP), where the Government had committed and expenditure for UHC around 2.5 percent of the India’s GDP? This number currently hovers around 1.4 percent – reportedly, less than even Nepal (2.3 percent) and Sri Lanka (2 percent). There is no mention of this in the Union Budget Proposal 2018, either, how much it will now go up to. By the way, the same report, as above, of January 2018 also indicated that health costs push 39 million Indians back into poverty, every year.

Attaining the NHP 2017 objectives, prompts a rise of around 40 percent in the public health expenditure of the Government. Whereas, the allocated reported expenditure for health in 2018-19 at ₹52.8 billion over the revised estimate of ₹50.1 billion in 2017/18. This works out to an increase of just around 5.4 percent.

The allocated expenditure of ₹20 billion for ABP in 2018-19, over the last year’s (2017-18) very similar health budget for ‘National Health Mission (NRM)’, reportedly, of ₹26.70 billion, looks rather pale. The financial arithmetic doesn’t appear to add up, defying simple logic. Is the allocation enough to support the ABP for 2018-19, even if the ABP funding is shared in the ratio of 60:40 between the Central and the State Governments?

Diving slightly deeper, on February 02, 2018, quoting a Government official Reuters reported, the cost of providing health insurance to 100 million vulnerable families or close to about half the country’s population would require an estimated ₹110 billion (USD$ 1.72 billion) in central and state funding each year.

The government estimates the cost of insuring each family would be about ₹1,100 rupees (US$17.15), the above report says. Curiously, on the face of it, this huge amount appears as an ‘off balance sheet’ expenditure, as of now.

Intriguingly, when the ABP is still not in place, there has been, reportedly, a 2.1 percent decline in the allocation towards the NRM in 2018-19. Currently, NHM provides financial support to States to strengthen the public health system, including upgradation of existing or construction of new infrastructure. In addition, there is a 7 percent cut in the allocation for the ‘Swachh Bharat Mission’ Budget from 2017-18’s revised estimates.

II. The second question is equally critical. Just as the erstwhile State Sales Tax (now a part of GST), healthcare is also a state subject. Thus, a similar process of intensive consultation with all State Governments, as happened before the implementation of GST, to take them on board, has to be replicated for a consensus. This will include a commitment for 60:40 funding, alongside the mechanisms for effective implementation of ABP – step by step. Has that happened? Have all the States agreed to contribute 40 percent of total funding requirements in their respective states for ABP?

If the answer is yes – excellent! If not, when will the ABP be rolled out? Different senior government officials have indicated different dates on Television. Some said on the Independence Day this year – August 15, 2018. Some other official said on October 02, 2018 – Gandhi Jayanti of this year. Yet another responsible official said the actual implementation may, actually, take even more time. This could mean only one thing, the ABP has been announced without any fixed timeframe for its implementation.

III. The third question lies in the effectiveness of insurance-driven health care system, such as in the United States. The key question often is raised on this system: Do the health insurance companies derive more benefit out of this system rather than the patients?

Concurring with the experts of many other countries, India’s own – Dr. (Professor) K. Srinath Reddy, globally acclaimed cardiologist and the President, Public Health Foundation of India, reportedly is also of the opinion that “Government-funded social insurance schemes do increase access to advanced care. But they have not been shown to provide financial protection as they cover only part of the hospitalization cost and none of the expense of prolonged outpatient care which forms a higher percentage of out-of-pocket spending.”

Insurance-driven healthcare has been found wanting to properly balancing health insurance costs with access, quality of care and outcomes in several countries. The experience of most of those people in India who can avail the benefits of insurance-driven – the Rashtriya Swasthya Bima Yojana (RSBY) or Employee State Insurance Schemes (ESIS), are not very pleasant, either.

On the other hand, despite some peripheral issues, many prefer, the government run UHC, such as in Britain. These generally offer a broader health coverage to all, and most health and care related services are available free to the citizens. The UHC is fully funded by taxes there, though a private health care system exists along with it. Thus, serious apprehensions related to the depth of health care access, reach in the rural heartland, and the quality of product and services to be generally provided by the insurance-driven new HPS, continue to haunt.

Conclusion:

Considering all these aspects, renamed HPS, as it was announced by the FM on February 01, 2018, and subsequent incongruent and very tentative clarifications expressed through the media by some Senior Government officials, raises even more questions than answers.

Sans any transparent and well-laid out financial road map, detail mechanism of its operation, level of involvement and consensus reached with all the States on funding and implementation, specific timeframe for its rollout, besides addressing almost a collapsing public health-infrastructure framework in most States, the Government appears rather unprepared with HCP rollout in 2018.

Does this announcement for HCP, therefore, not reflect a bit of haste, if not an intent to achieve any other non-related objective? Thus, this edict didn’t fetch a WOW moment to me, at least for this year, or…did it?

By: Tapan J. Ray

For Improving Drug Quality in India – A Bizarre Intent

Posted on January 29, 2018 by Tapan Ray

On January 16, 2017, quoting a Government source, a media report revealed, “India’s drug regulator is looking to inspect US pharmaceutical facilities, making critical medicines so that only high-quality products are imported from them.”

This intent follows a similar decision of the apex regulatory body – the Central Drugs Standard Control Organization (CDSCO), against some Chinese manufacturers on drug quality concern. The latest proposal to this effect was sent to the health ministry the previous week – the above report adds.

In this article, I shall explore the fundamental basis of this specific initiative. If it has any, I shall try to fathom whether it’s yet another case of misplaced priority of the decision makers, if not a bizarre one.

The current perspective:

About a couple of years ago, an article published in the global financial daily – the Financial Times, on September 9, 2015 titled, ‘Indian drugs: not what the doctor ordered’, articulated that the Indian pharma industry ‘now face a serious credibility crisis, as they battle to allay western regulators’ concerns about their manufacturing practices — especially the reliability of data from trials of their medicines.’

The report also pointed out: ‘Overseas regulators have been scrutinizing and banning products from some of India’s biggest and most reputable groups — including Sun Pharmaceuticals, IPCA, and Wockhardt – many of which have ongoing relationships with large multinational drug companies.’

Has anything changed now?

Nothing perceptibly seems to have changed in this area since then, to set our ‘own house in order’. Not even after witnessing a barrage of drug quality related ‘import bans’ by the US-FDA that involves Indian manufacturers of all sizes and scale. Instead, CDSCO turns its focus on setting-right ‘others’ manufacturing houses with its reportedly meagre manpower resources. Curiously, these initiatives include even those countries, which are globally acclaimed for having stringent regulatory frameworks well in place, such as the United States (US) and the European Union (EU).

Where a justifiable reason exists:

On Chinese API import by different countries, the article titled “Imports To Fuel India’s Active Pharmaceutical Ingredients’ Requirements,” published by Bloomberg | Quint on November 15, 2017 brings out a nice comparison. It says: ‘Among the top emerging and developing economies, India is a major importer of bulk drugs from China at 54 percent, followed by Indonesia at 24 percent, Brazil at 12 percent and South Africa at 8 percent.’ It also writes, in comparison, most of the developed markets of the world import in the range of just 2-3 percent from China.’

Going by this fact, Indian drug regulator’s inspection of some of the Chinese API plants is, by all means, understandable – mainly for two reasons. One, India is largely dependent on Chinese bulk drugs for formulations manufacturing and consumption in the country, besides exports. And the second, some incidents of compromised Chinese drug ingredients have already been reported. For example, citing quality issues, the Drug Controller General of India (DCGI) has recently, reportedly banned import of such questionable drug constituents from six major Chinese pharma companies. This is not a solitary instance. Similar incidents involving Chinese drugs were reported in the past, as well.

An irony:

When international media agencies flash headlines, such as “U.S. and EU regulators urge Indian drug companies to step up standards,” Indian drug regulators decide to inspect overseas manufacturing plants, as well. Such a decision becomes intriguing, especially when it includes those countries, where from imports are meager, besides their stringent drug quality standards being globally acclaimed.

This is an irony, as the recent local media headlines like, “India among countries where 10% of drugs are substandard: WHO” or “… 27 medicines sold by top firms ‘fail’ quality tests in seven states”, unfold the veracity of drug regulatory laxity within the country.

The basis of the recent proposal becomes more incomprehensible, when the DCGI himself reportedly admits, even today that: “Substandard medicines are a major issue in India and we are looking out for ways to tackle the problem. As quality regulator, we are developing proper mechanisms to stop manufacturing and sale of counterfeit drugs so that they don’t reach the patients.”

The reasons cited for overseas plant inspection:

According to media reports, the reasons cited in the CDSCO proposal for Indian Drug Inspectors’ (DI) inspecting other overseas manufacturers, including those in the US and Europe, are broadly as follows:

Most of over 28 manufacturing sites registered in India from the US, manufacture critical formulations or critical new therapies, which are not available in other countries, as they fall into high-risk categories.

Inspections will not only result in compliance to the Drugs and Cosmetics Act and Rules, but also give exposure to Indian drugs inspectors to new technology adopted in the manufacturing and state-of-the-art facilities.

The sites will be inspected if they have made substandard drugs, received quality complaints, or faced action by other regulatory authorities.

Companies shortlisted for the proposed inspections include those making biologic and anti-cancer medicines.

Let me hasten to add, there is nothing wrong with this intent as such, but the moot point is: what’s the core issue that we are talking about? While addressing this point, let’s first have a quick look at India’s import of pharmaceutical product around the last two decades.

India’s import of pharmaceutical products – 1996 – 2018:

According to ‘Trading Economics’ (last updated in January of 2018), India’s import of pharmaceutical products decreased to USD 254.57 Million in 2016 from USD 795.34 Million in 2015. Average drug imports are shown as USD 645.06 USD Million from 1996 until 2016, reaching an all-time high of USD 1747.65 Million in 2012, and a record low of USD 64.32 Million in 1996.

Nonetheless, the micro- picture of India’s bulk drugs or API import isn’t quite the same. On December 19, 2017 in a written reply to the Lok Sabha, the Minister of State, Chemicals and Fertilizers gave details of India’s bulk drug imports from top five countries, as follows:

Country	Import value Rs Crore	Import value $ Million (Approx.)
China	12,254.97	1915 (66%)
United States	820.18	128 (4.5%)
Italy	701.85	110 (3.8%)
Germany	485.11	76 (2.6%)
Singapore	422.01	66 (2.3%)
Total	18,372.54	2871

It’s worth noting, although the overall value of API import has declined, including from China, its volume share still remains too high in India. More importantly, Indian drug import from the United States and the European countries, are not only very small, there doesn’t seem to be enough instances of substandard drugs imported from these countries to India, either.

The core issue:

Taking a serious note of the reported incidences of widespread substandard drugs by various reports, including the WHO, the core issue becomes rather obvious. What else could possibly be the core issue other than taking effective remedial regulatory measures to contain the menace of substandard drugs circulating within the country?

An article titled, “Correcting India’s Chronic Shortage of Drug Inspectors to Ensure the Production and Distribution of Safe, High-Quality of Medicines,” published by the International Journal of Health Policy and Management (IJHPM) on April 27, 2017, made an important observation in this regard.

It reiterated: Good drug regulation requires an effective system for monitoring and inspection of manufacturing and sales units. In India, despite widespread agreement on this principle, ongoing shortages of drug inspectors have been identified as a major hindrance to this effort by the national committees, since 1975. Rapid growth of India’s pharmaceutical industry and its large export market makes the problem more acute.

Thus, the major remedial measure that CDSCO needs to take on priority to effectively address this core issue, is the chronic shortage of competent drug inspectors in the country.

An assessment of the current situation:

On the ground, the above situation continues to prevail almost in every state of the country, with a varying degree, though. However, at this point, I shall quote just three such instances – only to illustrate the gravity of the situation.

Example 1 – Delhi:

The article titled, “Delhi’s pharmacy woes: Only 21 inspectors for city’s 25,000 chemists,” published by ‘India Today’ on November 25, 2017, well-captured the latest scenario in this regard, of India’s national capital – New Delhi.

It wrote, there’s no guarantee that the medicine you are buying from a pharmacy is safe. The drug regulatory body does not have enough manpower to conduct regular inspections of the city’s mushrooming chemist shops and wholesale units.

Against the sanctioned posts of 31 drug inspectors, the department has only 21 DI for keeping an eye on Delhi’s 25,000 medical stores, and blood banks. Quoting Government officials the report reiterated, while the number of DI has declined – or at best remained constant – over the past 40 years, the number of pharmacies has increased from 5,000 to 25,000.

Whereas, going by the Centre’s recommendation, Dr. Mashelkar Committee report and the Task Force Committee’s observation, there should be one drug inspector for every 50 manufacturing units. Considering the magnitude of the problem, the Drugs Technical Advisory Board (DTAB), in a recent meeting, reportedly suggested, there should be one official for every 200 sales outlets, and one official for every 50 manufacturing units.

Example 2 – Kerala:

Another report of July 08, 2017, with a similar headline – “Remedial action needed in medicine market”, focused on one more important state – Kerala. It wrote that the Kerala has just 47 drug inspectors to monitor the entire State drug market that has over 20,000 drug stores, excluding those located in the hospitals. “In Kerala – the consumer of about 15 to 20 percent of drugs manufactured in the country, there are no quality checks taking place owing to the manpower shortage” – the article cautioned.

Example 3 – Maharashtra:

Yet another national media report of March 16, 2017 carried a headline ‘FDA faces staff shortage again.’ It discussed the same issue for a major State where the financial capital of India is located – Maharashtra. Giving details, the article pointed out that out of 160 posts of drug inspectors across Maharashtra, only 90 have been filled so far and of the 250 food safety officer posts, just 180 have been filled. More than 50,000 pharmacies, 15,000 wholesalers and over 8,000 manufacturing units, are supposed to be properly governed as per the regulatory rules and godliness, to ensure high quality drug safety standards, by this meager DI staff strength of the State.

Conclusion:

Against the above backdrop, it appears absolutely minimum to expect that CDSCO would make the public know, how does it plan to make the drugs manufactured for domestic consumption of high quality standards, as a safeguard to patients’ health and safety.

This calls for strict quality audits by the DIs of the individual states, at pre-determined periodicity, just as what US-FDA does to ensure exactly the same, for patients in their own country. With dwindling resources of DI, CDSCO seems to be continually failing in achieving this critical goal. There doesn’t seem to be any specific and transparent accountability criteria in place, for the CDSCO to comply with.

In this situation, the plan to audit the overseas manufacturing plants located in the US and EU for drug quality assessment, carving out a slice from the existing DI manpower strength, appears rather foolhardy. Moreover, the safety-risk for those imported medicines is apparently low, not just due to meager quantity of drug import, but also for stringent regulatory environment prevailing in those countries.

In view of all this, the media report on CDSCO’s plan to inspect US and EU pharma facilities, making ‘critical’ drugs to ensure high product-quality, is interesting. If it holds any water, the initiative may be construed by many not merely a case of misplaced priority, but a bizarre one, to say the least.

By: Tapan J. Ray

Blockchain: Pharma Keeps An Eye On The Ball

Posted on January 22, 2018 by Tapan Ray

On April 24, 2017, The Wall Street Journal (WSJ) came out with an interesting headline, “Dubai Aims to Be a City Built on Blockchain.” Some may have taken note of it seriously. However, a vast majority of its readers possibly equated the article with something, which is far from reality – like a distant dream.

However, looking at the rapid transformational phase of digital technology, nothing apparently is a dream – not even ‘a distant one.’ The following recent example, in a similar but not exactly the same context, would vindicate this point.

On January 09, 2018, Reuters reported with a headline, “JPMorgan’s Dimon regrets calling bitcoin a fraud.” Interestingly, at a conference held in September 2017, the same Dimon – the Chief Executive of JPMorgan, had commented: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

I cited the example of ‘Bitcoin’ while deliberating on ‘Blockchain’, primarily because ‘Bitcoin’ – an unregulated virtual or cryptocurrency was built on ‘Blockchain’ technology. This technology reportedly facilitates absolutely transparent, smooth, safe and corruption-free transaction of ‘Bitcoin’, without any third-party intervention at any stage.

Currently, moving beyond Bitcoin, many industries – including pharma, have started finding various uses of Blockchain in their respective businesses. Domain experts envisage, this technology has the potential to offer game changing values – revolutionizing various business processes.

In this article, I shall focus on how the healthcare industry, in general, and more specifically some global pharma players are contemplating to leverage the path breaking ‘Blockchain’ technology to add unprecedented value in the business. The technology being rather a complex one, I shall put it across in a way that an ordinary man like me can easily absorb. Which is why, I start with the first basic question that comes to the fore: ‘What exactly is ‘Blockchain’?

‘Blockchain’:

‘Blockchain’ is a technology that was reportedly conceptualized by an anonymous individual or a group known as Satoshi Nakamoto, in 2008. It was implemented in 2009, as a core component of ‘Bitcoin’ transactions – in an altogether different form of Internet. The technology provides in its network access to transparent digital information that no user can corrupt or probably even hack, leave aside taking copies. The December 13, 2017 article, featured in the Computerworld on this ‘Most disruptive tech in decades’, describes Blockchain as:

“Blockchain is a public electronic ledger – similar to a relational database – that can be openly shared among disparate users. It creates an unchangeable record of their transactions, each one time-stamped and linked to the previous one. Each digital record or transaction in the thread is called a block (hence the name), and it allows either an open or controlled set of users to participate in the electronic ledger. Each block is linked to a specific participant.”

“Blockchain can only be updated by consensus between participants in the system, and when new data is entered, it can never be erased. The Blockchain contains a true and verifiable record of each and every transaction ever made in the system.”

“As a peer-to-peer network, combined with a distributed time-stamping server, Blockchain databases can be managed autonomously to exchange information between disparate parties. There’s no need for an administrator. In effect, the Blockchain users are the administrators.”

Blockchain has, therefore, been meticulously designed to reveal any interference with the contents, ensuring a very high level of data security and access for all its users. Thus, many domain experts justifiably believe, what ‘open-source’ software did almost two and half decades ago, ‘Blockchain’ technology is possibly on a similar threshold of changing much of the ball game in Information Technology (IT), globally.

Big corporate houses of several industries, such as Fintech, Healthcare and Shipping envisage that ‘Blockchain’ technology has a great potential, as they start making limited use of it. It is still in its infancy for scalable use in most industries, probably other than ‘Bitcoin’ transactions.

Use of ‘Blockchain’ in pharma and healthcare:

Let me now explore the potential of ‘Blockchain’ in healthcare and pharma. A paper titled, “Healthcare rallies for Blockchains: Keeping patients at the center” by IBM Institute for Business Value, provides some important insight on its application in healthcare sector. This study is based on a survey of 200 healthcare executives in 16 countries, conducted by The Economist Intelligence Unit. The key highlights are as follows:

16 percent of pharma and healthcare respondents expected to have a commercial Blockchain solution at scale in 2017, as compared to 15 percent of the Banks and 14 percent of Financial enterprises. Thus, it appears, the adoption of Blockchain by healthcare entities are taking place at a faster pace than the other two.

6 in 10 anticipate Blockchains will help them access new markets, and new and trusted information they can keep secure.

7 in 10 of them expect the greatest Blockchain benefits to be in clinical trial records, regulatory compliance and medical/ health records.

Accordingly, the authors posed a few questions: How valuable would it be to have the full history of an individual’s health? What if every vital sign that has been recorded, of all the medicines taken, information associated with every doctor’s visit, illness, operation and more, could be efficiently and accurately captured – and securely stored?

If and when all this is put to scalable use, the designated users will get access to the historic and real-time patient data of various types, of high credibility. In turn, it is expected to significantly reduce many other costs, including the cost towards data reconciliation. Consequently, the quality and coordination of care would rise manifold, with lesser risk, if at all. I shall give below just a couple of examples to drive home the point:

I. Adds credibility and value to Clinical Trials:

The issue of not reporting around half of all clinical trial data, conducted by pharma players while obtaining marketing approval for innovative products, has become a topic of raging debates, across the world. The reason for the same is apparently the intent for the deliberate creation of an information-gap, by cherry picking more favorable trial data. This could eventually lead to compromising patient safety, seriously.

Allegations continue for not just mostly favorable trial data being presented to drug regulators and policymakers to obtain marketing and other approvals, but also for product promotion to doctors. This prompts many believing, “if the clinical trials are supported by Blockchain solution, all results, protocols, and other related information would be time-stamped and immutable, resulting in less data snooping and errors.” Consequently, it would help enhance the dwindling public trust on pharma, especially in this area.

II. Adds unprecedented security and transparency in SCM:

Another example of its effective use is in making a tamper-evident pharma Supply Chain Management (SCM), with unprecedented built-in security features to prevent drug counterfeiting and circulation of substandard drugs. Moreover, ‘Blockchain’ would ensure supply chain tracking even at the individual Stock Keeping Unit (SKU) level by establishing proof of ownership for specific sources of any product. This is especially important in the backdrop of the WHO report, highlighting that 30 percent of such drugs are sold primarily in developing countries.

Global pharma keeping an eye on the ball:

An article titled, ‘Big Pharma Seeks DLT Solution for Drug Costs’, published on January 09, 2018 by the CoinDesk – a digital media and information services company, discussed on this fascinating subject.

It reported, at least, three global pharma heavyweights – Pfizer, Amgen and Sanofi, are pondering, whether ‘Blockchain could be used to actually save lives?’ To achieve this goal with combined efforts, they are now exploring a Blockchain framework to streamline the process of developing and testing new drugs. These early initiators believe, as areas such as this, are of industry-wide importance, there is a need to create a growing momentum for collaboration on foundational issues. And, Blockchain framework that can address the current issues in drug development and clinical trials, will fetch a win-win outcome, both for the innovators and patients, besides other stakeholders.

To reduce the time and cost of bringing new drugs from research labs to patients, improved data management and movement is critical. Blockchain technology could hasten this process, by automating communication between pharma companies, researchers and patients. At the same time, it will ensure a very high level of data integrity, which is so important for health and safety interest of patients.

This area has assumed greater relevance in the recent years, when pharma innovators are facing different challenges to bring new, more personalized drugs to market – faster and at affordable prices, the paper highlights.

Areas of initial use by Indian pharma:

In my article “SCM: Embracing Technology For Patients’ Safety”, published in this Blog on December 18, 2017, I discussed a similar point, not in context of ‘Blockchain’, though. I wrote that by a notification dated January 05, 2016, the Directorate General of Foreign Trade (DGFT) has made encoding and printing of unique numbers and bar codes as per GSI Global Standard mandatory. This would cover tertiary, secondary and primary packaging for all pharmaceuticals manufactured in India and exported out of the country to facilitate tracking and tracing.

Although, the ‘Track and Trace’ system in India for drugs is currently applicable only to pharma exports, will ultimately cover drugs in the domestic market, as well. This is evident from a draft proposal of the Government to the stakeholders in June 2015, in this regard.

Blockchain-based public electronic ledgers that can be openly shared among disparate users, creating an unchangeable record of their transactions, with each one time-stamped and linked to the previous one, would be of immense importance for all concerned towards the reliability of medicines in India.

Similarly, as Indian players venture into more complex clinical trials, such as with biosimilars, Blockchain could catapult the narrative on reliability of Indian clinical data to a much higher level of trust.

Blockchain has come to stay:

As I said in the beginning, ‘Blockchain’ technology has started coming to the fore of many discussions and debates, mainly for its critical role in transparent transaction and distribution process of the cryptocurrency – Bitcoin.

December 16, 2017 issue of the Gulf News reported that UAE’s central bank is working on a joint cryptocurrency, based on Blockchain, with its counterpart in Saudi Arabia. Just prior to that, in August 31, 2017 issue of the Financial Times also reported: “Six of the world’s biggest banks have joined a project to create a new form of digital cash that they hope to launch next year for clearing and settling financial transactions over Blockchain, the technology underpinning bitcoin.”

And just this month, we got to know about the combined efforts of Pfizer, Amgen and Sanofi, to use a Blockchain framework for streamlining the process of developing and testing new drugs.

Besides many other industries, even several Governments are envisaging to unleash the transformative potential of Blockchain in various Governance processes. It may include the confidential data procured and used by Governments to confirm the identity or identification of individuals for different purpose, or even to ensure that the country’s election process is transparent and beyond corruption.

An expression of interest on the use of Blockchain by some State Governments in India, gets reflected in what the Chief Minister (CM) of Maharashtra said while inaugurating the Maharashtra Technology Summit (MTECH), jointly organized by FICCI and Govt. of Maharashtra in Mumbai on January 17, 2018.

The CM clearly indicated, as Blockchain can transform the e-governance, the State Governments must start interacting with technology providers to make Public delivery of goods and services transparent. This will reduce the trust deficit between businesses, and citizens with government departments. He admitted, in the space of technology, ‘Blockchain is one level up and it’s not just Internet of Thing, but it is Internet of trust, Internet of values, that can change the entire space of governance’.

Conclusion:

Blockchain may be just a technological component, but, nonetheless, a game changing one. Thus, the good news is, several pharma players are also taking great interest to step into this never ever experienced – and a new kind of digital paradigm.

It is heartening to note that a number of global pharma head honchos, such as of Novartis, Takeda, and several others, are creating a new global position of chief digital officer. GSK, reportedly, is the latest one to initiate similar step.

Indian pharma players, I reckon, can also reap a rich harvest, both tangible and intangible, by putting ‘Blockchain’ technology in place. It may start with building a transparent, incorruptible ‘Track and Trace’ system for medicines, in addition to achieving high degree of international reliability in its clinical trials, especially on biologic drugs.

The benefits built into the Blockchain technology for pharma, apparently, are far too many than perceived constraints to leverage it effectively. Encouragingly, global pharma seems to be keeping an eye on the ball – but what about Indian pharma?

By: Tapan J. Ray

With ‘Cutting Corners’ Going North, Pharma Reputation Dives South

Posted on January 15, 2018 by Tapan Ray

Just a few months ago, on October 24, 2017, ‘New Jersey Law Journal’ came out with an eye-catching headline – “Sanofi Set to Pay $ 61M Settlement in Antitrust Suit Over Vaccine Bundling.” The suit says: “Sanofi-Pasteur allegedly suppressed competition for its pediatric meningococcal vaccine, Menactra, by charging physicians and hospitals up to 35 percent more for its product, unless they agreed to buy Sanofi’s pediatric vaccines exclusively. Sanofi-Pasteur is the vaccines division of French drug manufacturer Sanofi.”

Nevertheless, a statement from the company said: “Despite Sanofi’s strong defenses, Sanofi recognizes that continued litigation is likely to be extraordinarily expensive and time-consuming and thus has agreed to enter into this Settlement Agreement to avoid the further expense, inconvenience, risk and distraction of burdensome and protracted litigation. Sanofi is finally putting to rest this case by obtaining complete dismissal of the action and a release by settlement class members of all released claims.”

When such incidences – of various scales and dimensions, continue being reported by both the global and local media, over a long period of time, one can fathom the potential of their cumulative impact on public and other stakeholders. Severely dented image and reputation of pharma, in general, before the eyes of so many, across the world, is a testimony to this phenomenon. Considering these as ‘cutting corners’ syndromes, I shall discuss in this article, how fast is pharma reputation diving South, with incidences of ‘cutting corners’ keep going North.

‘Cutting Corners’:

The Oxford dictionary defines ‘cutting corners’ as: ‘Doing something perfunctorily so as to save time or money’. Putting it in the context, I reckon, legally or ethically questionable actions with a deliberate intent of making quick profits, if not profiteering, can be termed as ‘cutting corners’ or business malpractices.

‘Cutting Corners’ going North:

This is no way a recent phenomenon. Gradually increasing number of new reports on pharma’s alleged malpractices are not uncommon, either. On the contrary, these keep coming rather too frequently – baffling many industry watchers and its well-wishers, for different reasons.

The details of 20 largest settlements in this area reached between the United States Department of Justice and various pharmaceutical companies from 1991 to 2012, as available from Wikipedia, provide a glimpse to its magnitude and dimension. The settlement amount reportedly includes both the civil (False Claims Act) settlement and criminal fine. Glaxo’s US$ 3 billion settlement is apparently one of the largest civil, False Claims Act settlement on the record, and Pfizer’s US$ 2.3 billion settlement includes a record-breaking US$ 1.3 billion criminal fine. A federal court also recognized all off-label promotion as a violation of the False Claims Act, leading to a US$ 430 million settlement during that period, as this report highlights.

In one of my articles, titled ‘Big Pharma Receives Another Body Blow: Would Indian Slumber End Now?’, published in this blog on May 19, 2014, I quoted a few more examples from 2013 and 2014, as well. A few of these are as follows:

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.

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.

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.

Pharma reputation dives South:

That pharma reputation is diving south, is well captured in the ‘Business and Industry Sector Ratings’ by Gallup, dated August 2-7, 2017. According to this public rating, the top 5 and bottom 5 industries came up as follows:

Top 5:

Industry	Total Positive %	Neutral %	Total Negative %	*Net positive or negative %
Computer	75	15	8	+67
Restaurant	72	21	7	+65
Farming and agriculture	70	17	12	+58
Grocery	60	23	17	+43
Internet	59	21	18	+41

The bottom 5, including the federal government:

Industry	Total Positive %	Neutral %	Total Negative %	*Net positive or negative %
Airline	41	20	35	+6
Oil and gas	38	21	40	-2
Healthcare	38	18	45	-7
Pharmaceutical	33	16	50	-17
Federal Govt.	29	19	52	-23

*Net Positive is % Positive minus % negative (in percentage points)

Image rejuvenation campaign not yielding results:

Arguably, the richest and the most powerful pharma industry lobby group in the largest pharmaceutical market of the world, is incurring a mind-boggling sum of expenditure to mend the severely dented collective reputation and image of its members.

Vindicating this point, a January 18, 2017 media report articulated that a major pharma industry lobby group – PhRMA, is gearing up for a new image building campaign by spending in the “tens of millions” each year to drum up support for the reputationally challenged pharma industry. Such initiatives by PhRMA, as I understand, are not totally new, but rather ongoing. Be that as it may, as the Gallup survey confirms, pharma reputation keeps diving South, unabated.

Mending pharma’s reputation surfaces as one of the top concerns of the pharma industry. It, therefore, demands commensurate priority in working out a meaningful strategic plan, and its effective implementation on the ground, collectively. More so, when the POTUS – Donald Trump, has also emerged as a vocal pharma critic. He has already proclaimed that drug companies “are getting away with murder,” – as the above media report highlights.

Where is this campaign going off the mark?

On this subject, an article of September 5, 2017, published by Ars Technica – a technology news publication aptly epitomized, what is happening today with these campaigns, against what should have happened, instead. The column carries a headline ‘Big Pharma hopes research spending – not reasonable pricing – will improve image’.

The columnist wrote: “To scrub down their filthy reputations, drug makers could try lowering prices, a public mea culpa, or pledging to make pricing and marketing more responsible and transparent. But they seem to have taken a different strategy.” On this score, a relevant example, out of several others, was of Biogen introducing a drug in 2016, for a rare spine disorder and priced it at an eye-popping US$ 750,000 for the first years’ worth of treatment.

In pharma image revamp campaign, the focus on R&D spending or drug innovation, including blatant self-serving demands, such as strictest product patent and data exclusivity provisions, is rather overwhelming. It is understandable that all this fits in well with various pharma lobby group’s mission and mandate, but is unlikely to deliver what consumers would consider good behavior on the part of drug companies.

Is Indian pharma out of this loop?

The answer to this question is an emphatic – ‘No’. Alleged ‘dubious product quality’ related ongoing saga, is known today by all concerned. This had often culminated into US-FDA import bans of many drugs, manufactured by several Indian drug manufacturers – starting from the very top. Nonetheless, that’s not ‘the all’ or ‘end all’ in the ballgame of ‘cutting corners’ in India, as I explained above.

On September 26, 2017, a media report flashed: ‘The Income Tax (IT) investigation wing claims to have unearthed a nexus between a leading pharmaceutical company and doctors, and the evidence showing payments running into Crores to the latter for prescribing the company’s medicines.’

Close on the heels of ‘compromised drug quality standard’, such malpractices come as a double whammy for patients. But, the saga continues. In my article, titled ‘Healthcare in India And Hierarchy of Needs’, published in this blog on November 06, 2017, I mentioned about the October 31, 2017 public notice of the State Attorney General (AG) of Connecticut. The notice cited several instances of alleged drug price fixing in the United States. Interestingly, this lawsuit includes name of several large Indian companies, such as Dr. Reddy’s Laboratories, Emcure, Glenmark, Sun Pharma, and Zydus Pharma. The expanded complaint also names two individual defendants, one among them is the promoter, the chief executive officer and managing director of a large Indian pharma manufacturer.

Further, as I wrote before, the Maharashtra government’s recent announcement on enactment of a new law called the “Cut practices in Medical Services Act, 2017”, casts a darker shadow, not just on the doctors’ reputation, but also over the health care industry, in general, including pharma.

Today’s patients are more informed:

In today’s world, wider access to the Internet for a large number of global population has a profound implication in every sphere of life. News, discussions, opinions, comments and a plethora of other information on various industries, including pharma, are available from different credible websites, just as anything else.

Additionally, the social media, collectively, have made exchanges and interpretations of such information within various groups and communities, as fast as these could be. Just as many other different things, wrongdoings or malpractices, if any, of various industries, also get quickly captured and shared by the Netizen with ease and élan. These include incidences of ‘cutting corners’ by constituents of the pharma industry too.

Conclusion:

The Public Relationship campaigns of pharma lobby groups, with a hope to bridging the industry’s ‘trust deficit’, have been reported from the United States and other countries. However, any such campaign for the pharma industry in India hasn’t arrested my attention, as yet.

It’s beyond any reasonable doubt or debate that the pharma industry, in general, has saved and is still instrumental in saving more lives, in every nook and corner of the world. Ironically, the same industry, for its own deeds prompted mostly by the self-serving needs, has been suffering a massive collateral damage.

The industry’s long unblemished image and reputation have been severely tarnished, requiring rejuvenation with an inclusive approach. This may call for a mindset, at least, nearer to the same of George W. Merck – the legendary President and Chairman Merck & Co., Inc. He articulated a vision – “Medicine Is For The Patient, Not For The Profits”, and practiced it religiously. In today’s context, this may sound rather utopian in letters, but surely not in its spirit… be that as it may….

Pharma lobby groups hope to reverse the current trend by focusing only on R&D spending, drug innovation and strictest patent protection and data exclusivity ecosystem is apparently a non-starter. That ongoing multi-million-dollar pharma image revamp campaigns haven’t yet captured any tangible positive outcomes – not even in the United States, is possibly a testimony to this fact.

The status quo is expected to continue. More so, when ‘reasonable pricing’ of drugs is one of the top most demands of patients, patient groups and even many governments – and that’s exactly where the buck stops in pharma business.

In my view, pharma reputation restoration process isn’t merely a one-sided communication issue, as it appears today. A strategic blue print of this critical industry need, deserves to be drawn on a much broader canvass with a patient-serving mindset, instead of just a self-serving one. Otherwise, with incidences of ‘cutting corners’ going North, pharma reputation will keep diving South… till it finds its very bottom.

By: Tapan J. Ray

Digitization or Digitalization: What’s Seen More in Indian Pharma?

Posted on January 8, 2018 by Tapan Ray

Just before this New Year, a doctor friend from a large city of India invited me for dinner, as I happened to be there for a couple of days. Dr. Srikanth Kashikar (name changed) is one of my longtime friends, and a super specialist in the field of oncology.

As Srikanth planned to come for dinner straight from his clinic, I was keen to observe a few pharma company representatives making professional calls to him, if possible. Srikanth agreed. as that was one of those days when he meets them, after seeing all his patients. 8 pm was the mutually agreed time.

I was there a little before the scheduled time. However, as Srikanth was still examining a patient, he came out and asked me to wait for a few minutes in his assistant’s room. Right around 8.15 pm I was in his office. He sent a message through his secretary that he won’t be able to see more than two representatives, as he needs to go out.

What I experienced?

Sometime back, I had a similar experience of sitting incognito in the clinic of another doctor friend, practising in another major city. Hence, I had a heightened level of interest in getting a ringside view of changes in the professional discourse, if any, especially involving the science and art of persuasive medical communication of the modern world.

Meanwhile, the first representative – a pleasant personality, and wearing a smile on his face, entered the room. As he greeted, my friend reciprocated with a brief smile. The young man was representing a large global pharma player. He seemed to be a bit nervous, though, probably apprehending the time constraint to do his job effectively.

I was delighted to see him taking out a tablet computer. He commenced detailing a complex oncology product, but apparently was going a bit faster than any normal communication process. Digitally captured impressive visuals, sound and medical references flashed in and out. It reminded me the age-old approach of Medical Representatives’ (MR) detailing from well-designed folders, printed on art cards.

Dr. Kashikar did not ask any question, neither during nor after the presentation. His face was rather expressionless – difficult to fathom what was going in his mind, at that time. Nonetheless, having completed his detailing, the young MR explained the procedure for the patients to get his expensive cancer product at a concessional price. This also did not appear much novel to me, either. Requesting for prescription support, the young man left the clinic, a bit hurriedly, though.

The second MR came in, accompanied by a not so young gentleman, whom he introduced as a manager. They were from a large Indian company. As the MR was about to take his detailing aid out, my doctor friend asked him to make his presentation brief. This apparently unsettled the person. Highlighting just a few points for different products from his folder, he requested the doctor to prescribe a particular oncology brand, and looked at the manager. At that stage, his manager took out a tablet PC demonstrating a product price comparison chart, and also the results of some local clinical trials that his company has conducted on the product. My friend shifted his posture on the chair several times till the manager was done with his presentation.

After they left, I looked at my friend, as he looked at me. He smiled, and said let’s go. I did not enquire anything about the two just concluded calls, either. Thereafter, it was purely laughter and fun between two of us and our wives, as we all were catching up with each other.

My overall impression?

My impression? These will obviously be based on just two interactions, involving some big pharma names, though. It appeared to me, top and busy doctors, such as my friend, continue remaining mostly passive during product detailing. MRs usually switch into a mode of hurry, when asked for making a brief presentation by the specialists, just as what was happening in the past.

The only visible change, I guess, is in a few areas of digitization of detailing tools. I hope, considerable time-gap between my two such experiences, was filled-up by expensive external and internal training inputs of all kinds, including digitization in some areas. Thus, the moot question that surfaces: Are these training programs significantly improving per field staff average productivity on the ground? In case the answer is ‘no’, there arises an urgency to know ‘why’ and what is the way forward?

Zeroing-in:

The answer to the above question of productivity would entail an enormous amount of data to analyze, which I don’t have access to, right now. Nonetheless, as an illustration, let me zero-in on to just one change that I noticed on that day – the use of tablet computer during field staff interaction with the doctors. This brings me to the subject of today’s discussion – ‘Digitization or Digitalization: What’s Seen More in Indian Pharma?’ In this article, I shall deliberate on this fascinating area during the changing phase of pharma business dynamics.

More of ‘Digitization’ or ‘Digitalization’?

Both ‘Digitization’ and ‘Digitalization’ are important, and often used as interchangeable words. Although, these two are significantly different, it’s not possible to bring in a digital transformation in business sans digitization.

A. Digitization:

Digitization basically means automation of currently followed manual systems, records and processes, from analog to digital formats. These cover different types of paperwork or paper-based information systems, including photos or sound or even movement. The simplest example of this is scanning a paper document or photograph and storing them as soft copies, or even converting a movie from a celluloid format to DVD.

Digitization in context of pharma:

In the pharma industry, it may mean converting a detailing folder into digital format and delivering a similar product message to the medical profession through a tablet computer. It may also include field staff reporting system or customer call planning, replacing the manual ones, among many others.

The changes that digitization may ensure are generally incremental in nature. It can help doing many routines much easier, at a lesser cost and in lesser time, facilitating business activities and operations. However, just as any other industry, digitization is unlikely to fetch any fundamental transformation – or help taking a quantum leap in productivity or overall effectiveness of a pharma business, as well.

B. Digitalization:

Digitalization is defined as the use of digital technologies to change business models and provide new revenue generating opportunities with significant value-creation. It is, therefore, the process of moving a business into the digital world. Similarly, in pharma business ‘Digitalization’ or digital transformation can be achieved by digitalizing everything that can be digitized through integration of digital technologies in different platforms to create and deliver game changing values to patients and other stakeholders.

Interactive question and answer of ‘Siri’ – built into iPhone of Apple Inc. is an important example of digitalization – going way beyond digitization. Another interesting example of digitalizing business, creating path breaking values, can be drawn from the entertainment space – e.g. film and television industry. These businesses offer streaming or downloading facility for movies or TV-serials to viewers, anywhere at any time, at a reasonable price. A few important examples in this area may include, Netflix, Amazon Prime or Hotstar. For digitization, an equivalent example, as I said before, could be DVDs.

In fact, one of the largest vendors of Enterprise Resource Planning (ERP) software and related enterprise applications – SAP made an interesting statement in this regard. It said, having done digitization for many decades, which has immensely increased the efficiency of its processes, SAP is now on its way to digitalization.

Digitalization in context of pharma:

The May 30, 2017 article on ‘Pharma Digitalization’, published in the European Pharmaceutical Review (EPR) says pharma business is undergoing a concurrent transformation on multiple, unrelated areas changing the whole product lifecycle from early drug development to manufacturing and patient care.

Consequently, improving patient outcomes is becoming a key challenge for the pharma companies. Garnering capability to provide real-time information about the disease condition to patients, and collecting patient data for care analytics to improve the treatment process, are emerging as critical ingredients for quantum value addition to pharma business.

Digitalization of business processes with integrated technology can help pharma players to address several major patient care challenges. These may include good compliance to treatment and effective chronic disease management, which can also help them to create hundreds of billions of dollars in value.

Reading the writing on the wall clearly, some pharma giants, like Novartis, GSK and Novo Nordisk have started investing in partnerships and new business models with technology companies, such as Google, IBM and Qualcomm. Even the traditional device manufacturers – Apple, Samsung and Nokia are now researching beyond the wellness products, looking to the patient care market. All this will substantially improve the patient care processes, where the patient care data will become the new source of innovation and competitiveness.

Likewise, digitalization of pharma sales and marketing would entail transformative value creation through integrated digital technologies in all the related functions. As stated above, it should reach right up to the patient and other stakeholder needs, meeting expectations in effective prevention, management and treatment of a a plethora of disease conditions.

Conclusion:

To effectively compete and be winners in the new paradigm, Indian pharma players will necessarily need to step out of the comfort zone. Venturing into the complex world of digital transformative processes will eventually become an essential quality – not just for excellence, but survival too. This is a highly specialized area of qualified experts, both for training and hand-holding.

The clock has started ticking for pharma CEOs to lead from the front. In tandem, they would require empowering a team of the right people with hands-on experience, expertise and passion. The team should ideally consist of individuals, both from within and outside the organization. Their only mandate should be to translate the digital transformation of the organization into reality, with quantum value creation, within a given time-frame.

The choice is, therefore, not between digitization and digitalization, regardless of their often use as interchangeable words. The meaning of each is significantly different, which needs to be properly understood. Although, ‘Digitization’ is more visible in the Indian pharma industry than ‘Digitalization’, as on date, this is also a reality that ushering in digital transformation in any business, such as pharma, is not possible sans digitization – but one should not stop there.

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

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Digitization or Digitalization: What’s Seen More in Indian Pharma?