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Big Pharma Fails Avoiding Drug Price ‘Control’? Even In The US? Why?

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It ultimately happened – even in the United States, as the US President signed a bill on August 16, 2022 that aims to reduce healthcare costs, alongside fighting climate change, besides raising taxes on the rich. This new law was enacted, despite powerful lobbying and the vehement opposition of big pharma associations and that too in their home turf.

According to the Fierce Pharma report of the same day, since the current US President moved into the White House in 2020, the drug industry left no stone unturned battling to preserve pricing status-quo. It further added, the ‘pharmaceutical industry, including, PhRMA, its allies, and the nation’s largest pharmaceutical firms’ have spent more than $205 million in multi-media ads opposing ‘Medicare price negotiations’ and lobbying against efforts to lower drug prices for consumers.’

No wonder, when the bill was just introduced to the US lawmakers, big pharma’s disappointment on the bill was palpable. This gets well-captured in what the AbbVie CEO pointed out at that time. He said, ‘the legislation would force manufacturers to accept the government’s proposed price or face a harsh tax on their revenues from a given product.’ He also said: “So, it’s not a negotiation,” as stated in the bill. He further opined in his conference call: “We should just call it what it is. It’s price controls,’ which is what the lawmakers are ‘basically putting in place, if the language stays the same,’ the AbbVie chief added.

Capturing this new development in the United States, at least, in the recent past - Fierce Pharma in its August 08, 2022, issue commented: “The seemingly unstoppable pharma lobbying force has lost its charm. With the passage of a new bill, the U.S. Senate is opening the door to major drug pricing reform, leaving the drug industry licking its wounds.”

In the Eldorado of the global drug industry, this is indeed an unprecedented initiative to significantly reduce costs of many important drugs and reduce patients’ out of pocket expenses. Consequently, it has created so much of hullabaloo, across the world, for various reasons. In this article, I shall track this emerging scenario along with the message that it sends across the globe, and its possible impact on new drug innovation to meet unmet needs of patients. In India, one such area could be revisiting the price negotiation proposal for patented drugs, a government initiative that failed to take off earlier.

Would lowering prices stifle new drug innovation?

The apprehension, I reckon, that big pharma will continue to play with - price control will stifle new product innovation – adversely impacting patient interest. Notably, to many industry experts, this argument doesn’t just lack robustness, seems more a conjecture rather than the outcome of any peer- reviewed research study findings. On ewthe contrary, several highly credible and independent studies prove otherwise. Thus, let me put hereunder:

  • One – what big pharma directly and through their powerful industry associations or some financially sponsored studies are saying
  • And – what the top experts concluded from their independent analysis in this regard, as published in the globally acclaimed journals.

I leave it to my readers to evaluate the credibility of each to form their views.

Drug industry arguments supported by recent studies:

The findings of a study conducted recently, with the financial support of the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Innovation Organization (BIO), Amgen, Pfizer, Alexion, AbbVie, Genentech, and Bristol Myers Squibb, were released by PhRMA on November 23, 2021. The study was conducted by Vital Transformation. The key findings of this study highlighted: ‘Every 10% drop in the price of medicines in price-controlled EU markets was associated with a:

  • 14% decrease in total VC funding (10% early stage and 17% late stage)
  • 7% decrease in biotech patents
  • 9% decrease in biotech start-up funding relative to the US
  • An 8% increase in the delay of access to medicines.

It concluded: ‘Drug pricing controls implemented in the US would likely have an even greater impact on Biopharma KPIs given its global leadership in investment and innovation.’

Independent expert studies, published in highly reputed journals:

Around the same time as the above report, an independent study published in the Harvard Business Review (HBR) on October 01, 2021, found exactly the opposite. It categorically stated: ‘The U.S. can lower drug prices without sacrificing innovation.’

The paper summed up: ‘With Congress considering legislation to allow Medicare to use its bargaining power to negotiate lower drug prices, large pharmaceutical companies are once again waging a campaign that contends that doing so would seriously harm the development of breakthrough drugs. This is not true. Smaller companies now account for the lion’s share of such breakthroughs. The key to supporting drug innovation is to increase NIH funding of the efforts that give rise to these new companies, cut the costs, and accelerate the speed of clinical trials, and reform patent law.’

Drug pricing in the Indian context:

Prices of, especially, new drugs and the overall cost of healthcare are two major concerns – more in the developing countries like India. Responding to this need drug price control for pre-defined essential medicines are already in place in the country. More recent studies further vindicate the relevance of such regulation from the perspective of affordability of drugs for the poorer section of the society, and where out of pocket expenses are very high.

Let me quote one such paper, published on June 04, 2022, which received no outside financial support from this study, where the researchers concluded: ‘With induced demand and an inadequate competitive environment, the pharmaceutical industry fails to reduce prices. Supply-chain trade margins are very high. Hence, government intervention through price control of essential and life-saving drugs is a necessity in India.’

In this context, another question that is being raised – are there other alternatives to expand access to high-priced life-saving drugs at an affordable cost to all those who need those most? The most common alternative that floats, encourage more competition for those drugs as soon as they go off patent. Let me examine what’s big pharma players are doing in that area.

Does Big Pharma encourage increasing competition to reduce drug prices?

Another way to reduce the price of an expensive product is encouraging competition to enable market forces bring down the price. An interesting article on breaking the rule of drug pricing by pharma companies was published in the Forbes magazine on June 29, 2022. I also wrote on June 10, 2013: ‘To scale-up access to health care, especially for the marginalized population of any country, greater access to affordable generic drugs will always remain fundamental, besides improving healthcare infrastructure and its delivery mechanism.’

Thus, there should be a robust mechanism, across the world, to facilitate quick entry of cheaper generic equivalents immediately after patent expiry of the original molecule. Increasing attempts of blocking entry of generics surreptitiously by vested interests, leaves no other alternative, but price control. This is imperative, ‘as without the availability of newer generics, unmet medical needs of the most vulnerable section of the society cannot be met effectively by any country, as I wrote there.

Attempts to game the system to minimize competition continue unabated:

Even after my article, this red flag is being raised for quite some time. It will be evident from another Harvard Business Review article titled, ‘How Pharma Companies Game the System to Keep Drugs Expensive,’ published in the on April 06, 2017. Acknowledging: ‘Drug development is risky and expensive, thanks to the long testing and approval process,’ the author concluded from their study – ‘But, increasingly, makers of branded drugs are using a variety of tactics to extend their exclusive rights,’ enabling them to maintain high drug prices for much longer time.

More recently, the above Forbes article of June 10, 2022 also highlighted, ‘even the most generous patent protections come to an end and companies must face the potential for generic competition. That’s when major drug manufacturers shift tactics from influencing policy to crushing the competition.’ There are several legal and semi-legal approaches that big pharma players adapt to game the system and maintain pricing monopoly. Let’s recap it with just three of these examples:

- ‘Patent Thicket: Delaying entry of lower price off-patent molecule through a Patent Thicket. This involves creation of ‘a dense web of overlapping intellectual property rights that a generic pharma company must hack its way through in order to actually commercialize new technology of a drug molecule,’ even after the original patent expires. For example, AbbVie’s Humira, the world’s best-selling drug for a long time. I also discussed this issue in my blog over three years ago – on April 22, 2019.

- ‘Pay-for-delay deals’:  I discussed this issue in this blog on June 19, 2013. Moreover, the above Forbes article of June 29, 2022, also underscored this tactic. It explained that this is a deal in which drug companies agree not to compete for a set amount of time to maintain high prices of their brand-name drugs. The article, published in Bloomberg Law on February 20, 2020, captures it nicely.

- Authorized generics: As many would know, law permits six months of exclusivity to the first generic version of an off-patent new molecule coming into the market. Interestingly, just before patent expiry of an innovative drug, several drug makers roll out their own generics to stifle competition. Although, they keep different names for the generic versions, but pricing remains almost similar. Such a practice obliviously delays the entry of cheaper generics, at least by six months.

In this scenario, the new drug prices continue racing north. Something was to be surely done – for patients’ sake, as many believe, at least, where it all started – the US.

New drug prices are highest in 2022:

As reported by Reuters on August 16, 2022:

  • Eight of 13 drugs launched in 2022 priced over $200,000 per year
  • Median annual price for new U.S. drugs this year is $257,000
  • Some drugmakers disclose less information on pricing

Despite this, as reported on August 15, 2022: ‘The main U.S. drug lobby has said it will push back against the legislation, which includes policies that drug makers have opposed for decades.’

Conclusion:

The significance of the above development in the US healthcare scenario, was aptly summed-up by the US House Speaker, as she said: “If you are sitting at your kitchen table and wonder how you’re going to pay the bills – your health care bills, your prescription drug bills – this bill is for you.” For the first time in the US – the champion of champions of free-drug pricing market, will negotiate the drug price with their manufacturers to become patient -centric.

The reverberations of this difficult decision, especially on new drug prices, are expected to prompt the need for price negotiation or price control, primarily for expanding access to new drugs for a larger number of patients. This deserves to be a focus area for the Government, including India. Moreover, the August 18, 2022, media report also suggests that the top court of India may now encourage the Government to investigate, report and take remedial action on drug industry malpractices.

Finally, it’s worth noting that over a decade ago, international media widely reported -  ‘India considering price controls for patented drugs.’ Its objective was to address the aggressive new drug pricing trend in the country. Accordingly, the price negotiation proposal for patented drugs was notified by the Department of Pharmaceuticals (DoP) in 2007. The constituted Committee submitted a report, as well, on February 21, 2013. But it did not take off as on date. Many apprehend, this is due to intensive and ongoing lobbying by big pharma, just as what happened in the US. Nevertheless, the question that surfaces – will the above new drug law in the largest pharma market in the world encourage the DoP to revisit price negotiation for patented drugs - to make modern drugs affordable to a larger patient population in India – now?

By: Tapan J. Ray

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

‘Indian Drug Control World’s Weakest: Pharma Trade Bodies Working At Cross Purposes’

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“In the entire world, I think our drug control system probably is the weakest today. It needs to be strengthened,” said the Secretary of the Department of Pharmaceuticals (DoP) – V K Subburaj at an event in New-Delhi on April 19, 2016. 

In his speech, the Secretary also singled out the pharma industry associations for working in opposite directions, adding that “if we take one decision, it is appreciated by one but the other one criticizes us”.

This is indeed an irony. Such scathing comments from an important and a top Government official indeed stand out. This is primarily because, in the midst of the prevailing scenario, where a large section of the Government is saying ‘we are the best’ or ‘best among the worst’ or, at least, ‘fast improving’, a seemingly helpless key decision maker for the pharma industry was constrained to publicly say, what he had said, as above.

Nonetheless, public expressions, such as these, coming from a top Government official well-captures the sad and pathetic scenario of the systemic failure of pharma industry regulators to bring order in the midst of continuing chaos. Virtually free-for-all business practices, blatantly ignoring the patients’ health and safety interest in the country, continue to thrive in a self-created divisive environment.

Unsparing remarks in two critical areas:

As reported by the ‘Press Trust of India (PTI)’, the DoP Secretary, with his unsparing remarks, publicly expressed his anguish for the delay in taking remedial measures, at least in the two critical areas of the pharma industry in India, as follows:

  • Questionable quality of drugs
  • Questionable pharma marketing practices 

He also highlighted, how just not some Government Departments, but the pharma trade associations, which are formed and fully funded by the pharma players, both global and local, are working at cross-purposes to perpetuate the inordinate delay in setting a number of things right, to satisfy the healthcare needs of most patients.

I briefly dwelled on this critical conflict in my article in this blog of March 28, 2016 titled, “Ease of Doing Pharma Business in India: A Kaleidoscopic View”

A. Questionable quality of drugs:

There wasn’t enough debate in the country on the questionable drug quality in India. It began when the US-FDA started banning imports of a number of medicines in the United States from several drug manufacturing facilities in India. These pharma plants are of all sizes and scales of operations – large, medium, small and micro.

Almost on a regular basis, we now get to know, both from the national and international media, one or the other pharma manufacturing facility in the country, has received the ‘warning letter’ from the US-FDA on its ‘import ban’.

Dual drug manufacturing quality standards?                                            

The spate of ‘Warning Letters’ from the US-FDA have brought to the fore the existence of two different quality standards of drug manufacturing in India:

  • High quality plants dedicated to exports in the well-regulated markets of the world, such as, the United States, following the US-FDA regulations.
  • Other plants, with not so stringent quality standards of the Drug Controller General of India (DCGI), cater to the needs of the Indian population and other developing non-regulated markets. 

In this situation, when many Indian manufacturers are repeatedly faltering to meet the USFDA quality standards, the following two critical questions come up:

  • Are the US-FDA manufacturing requirements so stringent that requires a different compliance mindset, high-technology support, greater domain expertise and more financial resources to comply with, basically for protection of health and safety of the American patients?
  • If so, do the Indian and other patients from not so regulated markets of the world, also deserve to consume drugs conforming to the same quality standards and for the same reason? 

Answers to these questions are absolutely vital for all of us.

Pharma associations working at cross-purposes? 

Considering this from the patients’ perspective, there lies a huge scope for the pharma associations, though with different kind of primary business priorities, to help the Government unitedly in resolving this issue.

It appears from the deliberation of the DoP Secretary that the health ministry is already seized of the matter. The concerned departments are also apparently batting for quality, and trying to strengthen some specific capacity building areas, such as, increasing the number of inspectors and other drug control staff.

Reports also keep coming on the poor quality clinical trial data in India, including data fudging, as was recently detected by the foreign drug regulators. Intriguingly, nothing seems to be changing on the ground. In these areas too, the industry can unitedly try to protect the innocent patients from the wrongdoers, demonstrating enough credible and publicly visible real action.

From the anguish of the DoP Secretary on the critical quality related issue, it appears, there is a huge task cut out for the Indian drug regulators to ensure uniform and high drug quality standards for health and safety of all Indian patients’, just as their counterparts in America.

It is unfortunate to note from his observation that pharma industry associations are not visibly working in unison on many such issues in India.

B. The UCPMP:

The Edmund J. Safra Center for Ethics of Harvard University, while deliberating on “The Pharmaceutical Industry, Institutional Corruption, and Public Health” dwelled on the legal, financial, and organizational arrangements within which the pharmaceutical industry operates. It said, this situation sometimes creates incentives for drug firms and their employees, that conflict with the development of knowledge, drug safety, the promotion of public health, and innovation. More importantly, they also make the public depend inappropriately on pharmaceutical firms to perform certain activities and this leads to institutional corruption.

Illustrating from Professor Marc Rodwin’s project, the article said pharma players provide substantial discretionary funding for important medical activities, such as, continuing medical education, medical research, medical journals, and professional medical societies, which can encourage unwanted and undesirable compromise and bias in favor of their interests.

The same sentiment was also well-captured in an editorial of the well-reputed international medical journal BMJ of June 25, 2014. It unambiguously articulated, “Patients everywhere are harmed when money is diverted to the doctors’ pockets and away from priority services. Yet this complex challenge is one that medical professionals have failed to deal with, either by choosing to enrich themselves, turning a blind eye, or considering it too difficult.”

The editorial underscored the point that success in tackling corruption in healthcare is possible, even if it is initially limited, as anti-corruption bodies in the United Kingdom and US have shown to a great extent. With this, BMJ planned to launch a campaign against ‘Corruption in Medicine’, with a focus on India.

The DoP initiative:

Initiating a step in this direction, on December 12, 2014, the DoP announced details of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, which became effective across the country from January 1, 2015. The communique also said that the code would be voluntarily adopted and complied with by the pharma industry in India for a period of six months from the effective date, and its compliance would be reviewed thereafter on the basis of the inputs received.

Not a panacea:

It is worth noting, since the last three and a half decades, ‘Code of Pharmaceutical Marketing Practices’, prepared by various global pharma trade associations and most of the large global pharma companies individually, have come into existence purported for strictest voluntary adherence. These are being relentlessly propagated by them and their trade associations, as panacea for all marketing malpractices in the drug industry. Squeaky clean ‘pharma marketing codes’ for voluntary practices can be seen well placed in the websites of almost all large global pharma players and their trade associations.

The concept of a pharma marketing code and its intent are both commendable. However, the key question that follows: are all those working in practice? If the answer is yes, why then mind boggling sums in billions of dollars are being paid as settlement fees by a large number of global pharma companies for alleged colossal marketing malpractices in different countries of the world?

Mandatory UCPMP:

As happens with any other voluntary pharma marketing code of a global drug company or their trade associations, however mighty they are, similar non-compliance was detected by the DoP with voluntary UCPMP.  This gross disregard on the code, apparently prompted the DoP making the UCPMP mandatory, with legal implications for non-compliance, which could possibly lead to revocation of marketing licenses. 

A move in this direction, obviously necessitated meaningful discussion of the DoP with all stakeholders, especially the pharma trade associations. According to the Secretary, the discussions got unduly protracted, crippling his decision making process to put the mandatory UCPMP in place, soon.

Divergent views of pharma associations?

Thus, it is now quite clear that one of the reasons for the delay in making the UCPMP mandatory is the divergent views of various pharma trade associations.

In the Secretary’s own words, “To take an example of uniform marketing code, we thought we could arrive at a common solution. But even after 7-8 meetings, we failed to come to a conclusion. It’s only now that we have arrived at a code.” 

However, the bottom-line is, as on date, we don’t know when would the mandatory UCPMP come into force in India.

Conclusion:

The reverberation of virtual helplessness in the recent utterances of the Secretary of the DoP, has naturally become a cause of great concern, especially for the patients. There is still no sign of early resolution of the critical issue of dubious quality, both in the drug manufacturing and clinical trials in India.

The concerned ministries would require to demonstrate unwavering will and unflagging zeal for good governance with accountability, to set things right, without any further delay. When US-FDA can, why can’t the DCGI succeed in doing so? The Government is expected to ensure that justice prevails in this area, for the patients’ sake, soon enough.

Similarly, wrong doings in pharma marketing practices also need to be addressed by the DoP, initially making the UCPMP mandatory having strong legal teeth, to start with, notwithstanding the fact that the trade associations mostly work at cross-purposes, in this area too.

As I hear from the grapevine, especially the MNC trade associations, both inside and outside the country, are trying hard to take, especially, the owners of the large Indian pharma companies on board, in several ways, basically to further their crusade on various self serving issues, such as dilution of Indian Patents Act.

That said, taking serious note of the observation of the DoP Secretary that the Indian drug control is the “weakest in the world”, together with the challenges that he is facing in containing pharma marketing malpractices, I hope, the honorable Prime Minister’s Office (PMO) may wish to intervene soon, in order to promptly contain these snowballing public health menace.

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.

Voluntary Practice Alone of Pharma Marketing Code, Has Never Worked…Anywhere

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Since the last three and a half decades, ‘Code of Pharmaceutical Marketing Practices’, prepared by various global pharma trade associations and most of the large global pharma companies individually, have come into existence for strictest voluntary adherence. These are being relentlessly propagated as panacea for all marketing malpractices in the drug industry.

Squeaky clean ‘pharma marketing codes for voluntary practices’ can be seen well placed in the websites of almost all large global pharma players and their trade associations.

Though its concept and intent are both commendable, following the regular flow of media reports on this topic, a relevant question surfaces: Do the votaries, sponsors and creators of these codes “walk the talk”?

If yes, why then mind boggling sums in billions of dollars are being paid as settlement fees by large number of global pharma companies for alleged colossal marketing malpractices in different countries of the world.

This scenario prompts a large number of stakeholders believe, though over-hyped by the global pharma industry, ‘Voluntary Practices’ alone of Pharma Marketing Code’, has never worked anywhere in the world.

In this article, I shall discuss this very point in the Indian context, following the recent decisions and developments related to ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’.

No more proof required:

Although no further proof is required to vindicate the point, just to put this particular deliberation into perspective, I would cite below no more than a couple of recent examples of comments and arguments on this subject, out of so many, as are being frequently reported by the international media:

A February 24, 2014 article highlights that in the last few years alone pharmaceutical companies have agreed to pay over US$13 billion to resolve only U.S. Department of Justice allegations of fraudulent marketing practices.

On November 6, 2014, BBC News deliberated and commented, “Imagine an industry that generates higher profit margins than any other and is no stranger to multi-billion dollar fines for malpractice.”

It is worth noting, all those pharma players paying hefty fines due to alleged humongous marketing misadventures, also prominently display their well-crafted codes of pharma marketing practices for strict voluntary adherence in their respective websites.

Why are such wrongdoers not brought to book in India?

Instances of serious marketing malpractices by several pharma companies in India are also being widely reported from time to time by both the international and national media, including television channels. Even a Standing Committee of Indian Parliament had expressed its grave concern on the subject and urged the Government to place stringent deterrent measures in this area, soon.

Concernedly, instances of levying massive fines or for that matter any other punitive measures taken by any competent authority for similar delinquency in the local drug industry have not been reported from India, just yet. This is only because, India doesn’t have in place any specific regulatory and legal framework as deterrent that would detect, investigate and decide on punitive measures against the erring pharma companies for such misconducts, wherever justifiable.

Government decided to implement a globally failed model:

Personally I have high regards on a large number of astute bureaucrats in India, whom I had occasions to interact with both one-on-one and in groups. Most of their minds are razor sharp and the analytical ability is of the highest order. I am reasonably confident that they know quite well what would work and what would not, to get the expected results in India. The chronicle of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ in that sense is intriguing.

Be that as it may, the bottom-line is, totally ignoring the reality in this regard, the Department of Pharmaceutical (DoP) wanted to make a beginning with the failed model of ‘Voluntary Practices’ of the UCPMP in India.

Accordingly, on December 12, 2014, by a circular to Pharma Industry Associations, namely, IPA, OPPI, IDMA, CIPI, FOPE and SPIC, the DoP announced ‘The Uniform Code of Pharmaceuticals Marketing Practices (UCPMP)’. The communique said that the code would be voluntarily adopted and complied with by the Pharma Industry in India for a period of six months effective January 1, 2015.

The DoP also stated that the compliance to this code would be reviewed thereafter on the basis of the inputs received.

I discussed the key issues related to this DoP circular on voluntary implementation of UCPMP in my blog post of December 29, 2014 titled, “India’s Pharma Marketing Code (UCPMP): Is It Crafted Well Enough To Deliver The Deliverables?”

The time for review:

Thereafter, the clock started ticking to catch the 6-month deadline. As June 2015 took its place in the pages of history, it was about time to ascertain the quality, depth, breadth and seriousness level of implementation of the UCPMP during the past six-month period.

Meanwhile a media report of August 4, 2015 speculated that the Government is planning to make the UCPMP mandatory on the drug and medical devices industry, making it tighter and providing teeth to it.

Has voluntary implementation of UCPMP made any difference?

Stakeholders are now curious to know, what difference has the voluntary UCPMP made during January – June 2015, period?

The mechanism as enunciated by the DoP in its above circular prescribes a virtually unimplementable review process, making the whole exercise subjective and creating a ‘your perception versus my perception’ sort of situation.

This gets vindicated when a leading news daily of India quoting an industry person reported, “There are (only) 15-20% black sheep who are bringing bad name to the entire industry”. Come on…this is a totally subjective, baseless and no more than just an off the cuff comment.

Voluntary implementation requirements of UCPMP grossly impractical:

The ‘Mode of Operation’ of voluntary UCPMP was listed by the DoP under point 8 of its above circular, as follows:

  • All the Indian Pharmaceutical Manufacturer associations will have UCMP uploaded on their website.
  • All the associations will upload on their website the detail procedure (as stated in Para 10) of lodging complaints.
  • All the associations will also have a provision on their website for uploading the details of complaints received i.e. the nature of complaint, the company against whom the complaint has been made, the action taken by the committees under the association including the present status in the complaint and such details of a complaint should remain uploaded in the website for three years. The details of proceedings in a complaint and decisions thereafter will be sent by the concerned Association on Quarterly basis, to National Pharmaceutical Pricing Authority, on following address: Member Secretary, NPPA, 3rd Floor, YMCA Cultural Centre Building, 1 Jai Singh Road, New Delhi.

The above UCPMP circular finally says:

“The Managing Director/CEO of the company is ultimately responsible for ensuring the adherence to the code and a self declaration, in the format given in annexure shall be submitted by the executive head of the company within two months of date of issue of UCPMP and thereafter within two months of end of every financial year to the Association for uploading the same on the website of the Association. The same must be uploaded on the website of the company also.”

Unrealistic review process:

I have two fundamental questions in this regard, as follows:

1. Do all pharma Trade Associations have websites?

It appeared from my Internet search that just one pharma trade association in India has a website. However, I could not gather the required details even from that particular association’s website.

The readers may also try to locate the very existence of other Indian pharma trade associations’ websites, if I have made any mistakes during my trip to the cyberspace, and attempt to get the relevant details on UCPMP as stated in the DoP circular.

2. Are all ‘voluntary compliance letters’ from the Managing Directors in place?

Are voluntary compliance letters on UCPMP from all Managing Directors of  all the pharma companies are with the Department of Pharmaceuticals by now? If not, based on which information the above news item reported that only 15-20 percent of the pharma companies did not comply with the voluntary UCPMP?

Relying only on ‘Voluntary Practice of Code’ is a globally failed model:

A healthy ecosystem for ethical marketing practices should be created and propagated within the pharma organizations of all size and scale of operation. In that sense, voluntary code of pharmaceutical marketing practices prepared by individual pharma organizations or their trade associations such as IFPMA play a commendable role. However, only those are not just enough anywhere in the world, as enumerated above.

Encouragement for voluntary practice of pharma marketing codes by the stakeholders is desirable in India too, predominantly to catalyze a change in the decades old and overall fragile ‘Jugaad’ mindset in this important area of pharma business.

In that sense, just as a starter, DoP’s initial push with voluntary practice of UCPMP is conceptually understandable, though the Department appeared to have messed up totally in its critical operationalization area for the purpose of a diligent review after 6-months.

Many countries initially relied on ‘voluntary practice’ of Pharma Marketing Codes crafted by the pharma players and their global trade associations, mostly in line with the Gold Standard of IFPMA Code of Pharmaceutical Marketing Practices. However, later on, all these countries had to put in place other regulatory and legal checks and balances for the interest of patients.

Why ‘voluntary practice’ concept alone, is not enough?

Strong internal and external performance pressures, while navigating through turbulent business environment facing strong head winds, could temporarily unnerve even the seasoned persons with nerves made of steel, as it were. It has been happening all the time, now more frequently, for different reasons.

Thus, all-weather ‘voluntary practice of marketing code model’ in isolation, has globally failed in the pharma industry, almost everywhere.

Appropriate regulations and robust laws promising justice to all, would always demonstrate a commendable role as a tough deterrent in those trying situations, unless any person or a legal entity is a hardcore manipulator focusing just on profiteering.

Related laws and regulation in other countries:

Most developed nations, such as Europe, United States, Canada, Australia, Japan, to name a few, have robust laws and regulations in this area, which act as serious deterrents to pharma marketing malpractices.

These deterrents fall primarily into the following three areas:

Specific anti-corruption regulatory and legal agencies:

Many Governments, such as, the United States and the member countries of the European Union (EU), are strictly enforcing appropriate legal and regulatory measures through dedicated enforcement agencies constituted specially for this purpose. These agencies can investigate any wrongdoings in the pharma marketing area and initiate judicial proceedings.

Specific anti-bribery Acts covering even overseas activities:

Current anti-bribery and anti-corruption laws in many countries, such as, the United States Foreign Corrupt Practices Act or the Bribery Act of the United Kingdom have impacted several global pharma players pretty hard, as these laws affect them even beyond the shores of their respective countries for indulging in marketing malpractices.

Public disclosures:

One such example is ‘The Physician Payment Sunshine Act’ of the United States. This was a part of its healthcare reform bill that was adopted in March 2010 and was finally released in March 2013.

Under the Sunshine Act, data on payments and gifts made to physicians and teaching hospitals by medical device and pharmaceutical companies must be publicly available on a searchable federal database, starting in September 2014.

What may happen, if UCPMP is made mandatory:

If UCPMP is made mandatory, I would suggest at least the following three actions:

  • Appropriate transparent rules, regulations and laws with adequate teeth to address this specific purpose either to be framed afresh or the existing anti-corruption and anti-bribery laws to be amended as required, besides others.
  •  A competent fully empowered authority within the Department of Pharmaceuticals (DoP) should be accountable for administration and implementation of the UCPMP effectively. The DoP may wish to revive its own idea of appointing an Ombudsman with quasi-judicial power for this purpose.
  • State FDAs should play an important role as detecting, investigating and prosecuting agency also for pharma marketing malpractices.
  • DoP website should provide comprehensive details of all punitive action taken against each erring company for this purpose.
  • A compliance certificate from the Managing Directors of the respective companies to the Central Board of Direct Taxes (CBDT) stating that the all sales and marketing expenditures computed for Corporate tax payments are in total conformity with the the UCPMP. Any false declaration should attract serious and exemplary penal consequences.

What would the pharma companies gain?

I would expect at least the following to happen:

  • From the sales and marketing perspective, this new ball game would help establish a level playing field for all the pharma players, to a great extent.
  • Expenditure on sales and marketing would obviously come down sharply, improving product margins significantly, even if a part of this saving is passed on to patients in form of price reductions.
  • Without the allurement of freebies, competitive and innovative brand marketing acumen of the pharma companies would get honed, which would ultimately emerge as the key differentiating factor for the balance of performance to tilt either towards success or failure.
  • Consequently, quality, depth and dimension of marketing inputs for a decisive competitive edge would me more cerebral and distinct in nature, unlike the marketing cacophony in today’s era of freebies.
  • With greater available resources, it would help the pharma players focusing more on talent, skill and technology development to attain sustainable business excellence.
  • The key focus would necessarily shift from ‘buying prescriptions’ to ‘creating prescriptions’ with value based innovative communication of bundled products and services.

Conclusion:

Relying solely on voluntary compliance of ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, in my view, would not work in India, just as it has not worked even in the developed countries of the world.

This is primarily because, India does not currently have any serious deterrents in this area, including specific legal and regulatory systems, to limit pharma marketing malpractices, unlike many other developed nations of the world.

If the media speculation of DoP’s making the UCPMP mandatory is right, I would reckon, despite its intriguing circular of December 12, 2014, it is a courageous step in the right direction.

Although coming in form of a bitter pill, it would help the Indian pharma players embracing a long awaited and mandatory course correction for not just doing things right, but more importantly doing right things.

I would expect its longer term effect to be ‘win-win’ for all – pharmaceutical industry in India, the Government and above all the patients…well…of course, barring the regular recipients of freebies of all types, forms, kinds, nature and value.

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.

 

“Kickbacks And Bribes Oil Every Part of India’s Healthcare Machinery” – A National Shame?

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“Corruption ruins the doctor-patient relationship in India” - highlights an article published in the well-reputed British Medical Journal (BMJ) on 08 May 2014. The author David Berger wrote, “Kickbacks and bribes oil every part of the country’s healthcare machinery and if India’s authorities cannot make improvements, international agencies should act.”

The author reiterated the much known facts that the latest in technological medicine is available only to those people who can pay for its high price. However, the vast majority of the population has little or no access to healthcare, and whatever access they have is mostly limited to substandard government care or to quacks, which seem to operate with near impunity. He further points out that “Corruption is rife at all levels, from the richest to the poorest”. It is a common complaint both from the poor and the middle class that they don’t trust their doctors from the core of hearts. They don’t trust them to be competent or to be honest, and live in fear of having to consult them, which results in high levels of doctor shopping.

Dr. Berger also deliberated on the widespread corruption in the pharmaceutical industry, with doctors bribed to prescribe particular drugs. Common stories usually doing the rounds that the decision makers in the hospitals are being given top of the range cars and other inducements when their hospitals sign contracts to prescribe particular expensive drugs preferentially.

The article does not fail to mention that many Indian doctors do have huge expertise, are honorable and treat their patients well. However, as a group, doctors generally have a poor reputation.

Until the profession along with the pharma industry is prepared to tackle this malady head-on and acknowledge the corrosive effects of medical corruption, the doctor-patient relationship will continue to lie in tatters, the paper says.

The saga continues through decades – unabated:

The above worrying situation in the space of medical treatment in India refuses to die down and continues since decades.

The article published in the British Medical Journal (BMJ) over a decade ago, on January 04, 2003 vindicates this point, when it brings to the fore, “Health care is among the most corrupt services in India”.

This article was based on a survey released by the India office of the international non-governmental organization ‘Transparency International’. At that time, it ranked India as one of the 30 most corrupt countries in the world. The study covered 10 sectors with a direct bearing on people’s lives, where the respondents rated the police as the most corrupt sector, closely followed by healthcare.

Medical Council of India (MCI) is responsible for enforcing the regulations on medical profession. Unfortunately, the MCI itself is riddled with corruption, fueled by the vested interests. As the first BMJ article indicates,   Subsequently, there has been controversy over the surprise removal, on the day India was declared polio-free, of the health secretary Keshav Desirajus, possibly in response to his resistance to moves to reappoint Desai to the reconstituted MCI.

Another point to ponder: Quality of Doctor – MR interactions

It is a well-established fact that the ethics, values and belief in pharmaceutical sales and marketing are primarily derived from the ethics, values and belief of the concerned organization.  Field staff systems, compliance, accountability, belief, value and culture also flow from these fundamentals. Thus, considering the comments made in the BMJ on the pharma companies, in general, let me now also deliberate on the desired roles of the Medical Representatives (MR) in this area.

It is well known that MRs of the pharma players exert significant influence on the prescribing practices of the doctors and changing their prescribing patterns too. At the same time, this is also equally true that for a vast majority of, especially, the General Practitioners (GPs), MRs are the key source of information for various drugs. In tandem, several research studies also indicate that doctors, by and large, believe that pharma companies unduly influence them.

Theoretically, MRs should be properly trained to convey to the target doctors the overall profile – the efficacy, safety, utility, precautions and contra-indications of their respective products. Interestingly, the MRs are trained by the respective pharma companies primarily to alter the prescribing habits of the target doctors with information heavily biased in favor of their own drugs.

As a result, range of safety, precautions and contra-indications of the products are seldom discussed, if not totally avoided, putting patients at risks by creating an unwarranted product bias, especially among GPs, who depend mainly on MRs for product information. Thus, the quality of product communication is mainly focused on benefits rather than holistic – covering all intrinsic merits/demerits of the respective brands in a professional manner.

Considering the importance of detailing in delivering the complete product information primarily to the GPs, there is a critical need for the pharma companies to train and equip the MRs with a complete detailing message and yet be successful in winning the doctors’ support.

This issue also needs to be properly addressed for the interest of patients.

“Means” to achieve the goal need to change: 

Globally, including India, many pharma players have not been questioned, as yet, just not on the means of their meeting the financial goals, but also the practices they follow for the doctors. These often include classifying the physicians based on the value of their prescriptions for the specific products. Accordingly, MRs are trained to adopt the respective companies’ prescribed ‘means’ to influence those doctors for creating a desirable prescription demand. These wide array of so-called ‘means’, as many argue, lead to alleged ‘bribery’/’kickbacks’ and other malpractices both at the doctors’ and also at the pharma companies’ end.

To address this issue, after the Chinese episode, GlaxoSmithKline (GSK) has reportedly announced that by the start of 2016 it will stop paying doctors to speak on its behalf or to attend conferences, to end undue influence on prescribers.

The announcement also indicated that GSK has planned to remove individual sales targets from its sales force. This means that MRs would no longer be paid according to the number of prescriptions they solicited from the doctors met by them.

Instead, GSK introduced a new performance related scheme that will reward the MRs for their technical knowledge, the quality of the service they deliver to support improved care of patients, and the overall performance of GSK’s business. The scheme is expected to start in some countries effective January 2014 and be in place globally by early 2015.

Further, GSK underscored that the latest changes were “designed to bring greater clarity and confidence that whenever we talk to a doctor, nurse, or other prescriber, it is patients’ interests that always come first.”

This is indeed a refreshing development for others to imbibe, even in India.

Capturing an Indian Example:

Just to cite an example, a couple of years ago Reuters in an article titled “In India, gift-giving drives drug makers’ marketing” reported that a coffee maker, cookware and vacuum cleaner, were among the many gifts for doctors listed in an Abbott Healthcare sales-strategy guide for the second quarter of 2011 in India, a copy of which was reviewed by Reuters.

It is interesting to note from the report, even for an antibiotic like Nupod (Cefpodoxime), doctors who pledge to prescribe Abbott’s branded drugs, or who’ve already prescribed certain amounts, can expect some of these items in return, the report mentioned.

Since decades, media reports have highlighted many more of such instances. Unfortunately, the concerned government authorities in India refused to wake-up from the deep slumber, despite the alleged ruckus spreading like a wild fire.

Self-regulation by the industry ineffective:

This menace, though more intense in India, is certainly not confined to the shores of this country. As we all know, many constituents of Big Pharma have already been implicated in the mega pharma bribery scandal in China.

Many international pharmaceutical trade associations, which are primarily the lobbying bodies, are the strong votaries of self-regulations by the industry. They have also created many documents in these regards since quite some time and displayed those in their respective websites. However, despite all these the ground reality is, the charted path of well-hyped self-regulation by the industry to stop this malaise is not working.

The following are just a few recent examples to help fathom the enormity of the problem and also to vindicate the above point:

  • 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 November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing of overseas doctors and other health officials to prescribe medicines.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.

Pricing is also another important area where the issue of both ethics and compliance to drug regulations come in. The key question continues to remain, whether the essential drugs, besides the patented ones, are priced in a manner that they can serve the needs of majority of patients in India. I have deliberated a part of this important issue in my earlier blog post titled “Is The New Market Based Pricing Model Fundamentally Flawed?”

There are many more of such examples.

Stakeholders’ anguish:

Deep anguish of the stakeholders over this issue is now being increasingly reverberated on every passing day in India, as it were. It had also drawn the attention of the patients’ groups, NGOs, media, Government, Planning Commission and even the Parliament.

The Department Related Parliamentary Standing Committee on Health and Family Welfare in its 58th Report strongly indicted the Department of Pharmaceuticals (DoP) on this score. It observed that the DoP should take prompt action in making the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ mandatory so that effective checks and balances could be brought-in on ‘huge promotional costs and the resultant add-on impact on medicine prices’.

Despite deplorable inaction by the erstwhile Government on the subject, frequent reporting by Indian media has triggered a national debate on this issue. A related Public Interest Litigation (PIL) is also now pending before the Supreme Court for hearing in the near future. Its judicial verdict is expected to usher in a breath of fresh air around a rather stifling environment for the patients.

Let us now wait and see what action the new minister of the Modi Government takes on this issue.

A prescription for change:

Very recently, Dr. Samiran Nundy, Chairman of the Department of Surgical Gastroenterology and Organ Transplantation at Sir Ganga Ram Hospital and Editor-in-Chief of the Journal of Current Medicine Research and Practice, has reportedly exposed the widespread (mal) practices of doctors in India taking cuts for referrals and prescribing unnecessary drugs, investigations and procedures for profit.

Dr. Nundy suggested that to begin with, “The Medical Council of India (MCI), currently an exclusive club of doctors, has to be reconstituted. Half the members must be lay people like teachers, social workers and patient groups like the General Medical Council in Britain where, if a doctor is found to be corrupt, he is booted out by the council.”

Conclusion:

Efforts are now being made in India by some stakeholders to declare all malpractices related to pharma industry illegal through enactment of appropriate robust laws and regulations, attracting exemplary punishments to the perpetrators.

However, enforcement of MCI Guidelines for the doctors and initiatives towards enactment of suitable laws/regulations for the pharma industry, like for example, the ‘Physician Payments Sunshine Act’ of the United States, have so far been muted by the vested interests.

If the new Modi government too, does not swing into visible action forthwith, this saga of international disrepute, corruption and collusion in the healthcare space of India would continue in India, albeit with increasing vigor and probably in perpetuity. This would, undoubtedly, sacrifice the interest of patients at the altar of excessive greed and want of the vested interests.

This new government, as most people believe, has both the will and wherewithal to hold this raging mad bull of pharma malpractices by the horn, ensuring a great relief and long awaited justice for all.

By: Tapan J. Ray

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

“Big Pharma’s Satanic Plot is Genocide”: South Africa Roars

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In a recent interview, the Health Minister of South Africa (SA) Mr. Aaron Motsoaledi reportedly made the above comment.

The background:

As reported in the interview and also indicated in an article in this blog, the Trade and Industry Department of SA, on September 4, 2013, published a long-awaited draft national policy on Intellectual Property (IP) in the Government Gazette. In that draft policy, the department recommended, besides others, the following:

  • Provision should be made for the Compulsory Licensing (CL) of crucial drugs.
  • Provision should be made for the parallel importation of drugs.
  • Grant of drug patents should ensure that the drug is new or innovative.
  • “Patent flexibility” for medicine should be made a matter of law.
  • The holders of Intellectual Property Rights (IPR), such as drug companies, should be encouraged to protect their own rights rather than depending on state institutions, such as the police or customs.
  • SA should seek to influence the region, and the world, to move towards its vision of Intellectual Property (IP) protection.

The draft does not have the status of a policy, as yet, and was open for public comment.

Pharma MNC moved surreptitiously: 

Pharma MNCs having local operations being flabbergasted by this development, almost immediately, started working on a plan to change the direction of the policy radically, the report states. Instead of optimal protection for drug patents, they planned to seek stronger protection. 

Having finalized the counter strategy this month, the local MNC pharma association, ‘Innovative Pharmaceutical Association of South Africa (Ipasa)’, reportedly selected a Washington DC-based lobbying firm ‘Public Affairs Engagement (PAE)’, headed by a former US ambassador – Mr. James Glassman, to lead the charge against the policy. PAE, by now, has put forward a proposal on how it would effect radical changes to the policy, the report stated.

The same article mentions, PAE intends to launch a persuasive campaign throughout Africa and in Europe with an aim to convince the South African Government to further strengthen, rather than weaken, patent protection for drugs. The grand plan of PAE contains elements, which could seriously bother many right thinking individuals, as it includes:

  • Setting up a “coalition” with an innocuous name such as “Forward South Africa (FSA)”, which will be directed from Washington DC, while appearing to be locally run in SA.
  • Encouraging other African countries, especially Rwanda and Tanzania, to help convincing SA that it could lose its leadership role in the continent, if it decides to push ahead with the draft policy.
  • Distracting NGOs from their own lobbying by changing the nature of the debate.
  • Commissioning seemingly “independent” research and opinion pieces for broad public dissemination – but vetting all such material before publication to ensure those fit the messages. 

Creation of surrogate public faces:

It is worth noting from the report that the so called coalition ‘FSA’, the proposed public face of the campaign, would be “led by a visible South African, most likely a respected former government official, business leader or academic”. However, at the same time, it would be “directed by staff from PAE and its South African partner”.

Majority funding by an American association in SA:

The report also highlights, nothing in the document suggests that the funding for FSA – estimated at  mind-boggling numbers of U$ 100,000 from IPASA and another US$ 450,000 from an ‘American Association’ of pharmaceutical companies – would be disclosed.

The report concluded by quoting the American lobbyists hired to launch a counter campaign, which states, “Without a vigorous campaign, opponents of strong IP will prevail, not just in South Africa, but eventually in much of the rest of the developing world.”

This is not a solitary example:

The Guardian reported another such incident in July 2013. The article stated that the global pharmaceutical industry has “mobilized” an army of patient groups to lobby against the plan of European Medicines Agency (EMA) to force pharma companies to publish all Clinical Trial (CT) results in a public database for patients’ interest.

While some pharma players agreed to share the CT data as required, important global industry associations strongly resisted to this plan. The report indicated that a leaked letter from two large pharma trade associations, the Pharmaceutical Research and Manufacturers of America (PhRMA) of the United States and the European Federation of Pharmaceutical Industries and Associations (EFPIA), have drawn out a strategy to combat this move.

The strategy reportedly demonstrates, as the article highlights, how have the Big Pharma associations drawn the patient groups, many of which receive funding from drugs companies, into this battle.

Conclusion: 

As I had articulated several times in the past, newer innovative drugs are extremely important in the fight against diseases and this flow must continue, actively supported by a well-balanced Patents Act of the country, as India has already implemented.

That said, the moot question continues to remain, who are these innovations and innovative medicines for? Are these to save precious lives of only a small minority of affluent nations, their populations and other wealthy people elsewhere, depriving a vast majority, across the world, of the fruits of innovation? Would repeated harping on the much hyped phrase, “meeting unmet needs of patients”, negate such gross indifference?

If that is the case, it becomes the responsibility of a Government, keeping the civil society on board, to formulate effective remedial legal measures. The draft national policy on ‘Intellectual Property’ of SA is one such initiative that needs to be applauded.

Surreptitious reported attempts of pharma MNCs, repeatedly, through their respective associations, backed by bagful of ‘resources’ of all kinds to thwart such patient centric moves of Governments, should be deplored with contempt that they deserve.

As Indian scenario is no different, it would perhaps be good to fathom, whether similar surreptitious and high resource-intensives moves are in progress in this country as well.

By: Tapan J. Ray

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

 

No More Payment for Prescriptions: Pharma at A Crossroads?

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  • “ARE there different and more effective ways of operating than perhaps the ways we as an industry have been operating over the last 30, 40 years?”
  • “TRY and make sure we stay in step with how the world is changing.”

Those are some introspective outlooks of Sir Andrew Witty – the Chief Executive of GlaxoSmithKline (GSK) related to much contentious pharmaceutical prescription generation processes now being practiced by the drug industry in general, across the world.

The ‘Grand Strategy’ to effectively address these issues, in all probability, was still on the drawing board, when Sir Andrew reportedly announced on December 16, 2013 that GSK:

  • Will no longer pay healthcare professionals to speak on its behalf about its products or the diseases they treat to audiences who can prescribe or influence prescribing.
  • Will stop tying compensation of sales representatives to number of prescriptions the doctors write.
  • Will stop providing financial support to doctors to attend medical conferences.

These iconoclastic intents, apparently moulded in the cast of ethics and values and quite possibly an outcome of various unpleasant experiences, including in China, is expected to take shape worldwide by 2016, as the report indicates.

Acknowledgment of unbefitting global practices:

Reacting to this announcement, some renowned experts, as quoted in the above report, said, “It’s a modest acknowledgment of the fact that learning from a doctor who is paid by a drug company to give a talk about its products isn’t the best way for doctors to learn about those products.”

The world envisages a refreshing change:

A December 11 article in the Journal of American Medical Association (JAMA) stated that there exists a serious financial ‘Conflict of Interest (COI)’ in the relationship between many Academic Medical Centers (AMCs) and the drug and medical device industries spanning across a wide range of activities, including:

  • Promotional speakers
  • Industry-funded ‘Continuing Medical Education (CME)’ programs
  • Free access of sales representatives to its faculty, trainees and staff
  • The composition of purchasing and formulary committees

Such types of relationships between doctors and the pharmaceutical companies across the world, including in India, as studies revealed, have been custom crafted with the sole purpose of influencing prescription behavior of doctors towards more profitable costlier drugs, many of which offer no superior value as compared to already available cheaper generic alternatives.

Cracking the nexus is imperative:

Yet another report says, “Ghost-writing scandals, retracted journal papers, off-label marketing settlements, and a few high-profile faculty dust-ups triggered new restrictions at some schools.”

To address this pressing issue of COI, cracking the Doctor-Industry alleged nexus, which is adversely impacting the patients’ health interest, is absolutely imperative. An expert task force convened by the ‘Pew Charitable Trusts’ in 2012, made recommendations in 15 areas to protect the integrity of medical education/training and the practice of medicine within AMCs.

Some of those key recommendations involving relationships of medical profession with pharmaceutical companies are as follows:

  • No gifts or meals of any value
  • Disclosure of all industry relationships to institutions
  • No industry funded speaking engagement
  • No industry supported Continuing Medical Education (CME)
  • No participation at industry-sponsored lectures and promotional or educational events
  • No meeting with pharmaceutical sales representative
  • No industry-supported clinical fellowships
  • No ghostwriting and honorary authorship
  • No ‘Consulting Relationship’ for product marketing purpose

The above report also comments, “if medical schools follow new advice from a Pew Charitable Trusts task force, ‘No Reps Allowed’ signs will soon be on the door of every academic medical center in the United States.”

MNC pharma associations showcase voluntary ‘Codes of Marketing Practices’: 

Most of the global pharma associations have and showcase self-regulating ‘Codes of Pharmaceutical Marketing Practices’. However, the above GSK decision and hefty fines that are being levied to many large global companies almost regularly in different countries for marketing ‘malpractices’, prompt a specific question: Do these well-hyped ‘Codes’ really work on the ground or are merely expressions of good intent captured in attractive templates and released in the cyberspace for image building?

Global status overview:

In this context an updated article of December 11, 2013 states that Medical Faculty, Department Chairs and Deans continue to sit on the Board of Directors of many drug companies. At the same time, many pharma players support programs of various medical schools and teaching hospitals through financial grants.  Company sales representatives also enjoy free access to hospital doctors to promote their products.

In most states of the United States, doctors are required to take accredited CMEs. The pharmaceutical industry provides a substantial part of billions of dollars that are spent on the CME annually, using this support as marketing tools. This practice is rampant even in India.

The above article also highlights incidences of lawsuits related to ‘monetary persuasion’ offered to doctors. In one such incidence, two patients reportedly fitted with faulty hips manufactured by Stryker Orthopedics discovered that the manufacturer paid their surgeon between US$ 225,000 and US$ 250,000 for “consultation services,” and between US$ 25,000 and US$ 50,000 for other services.

However, since August 2013, ‘Physician Payment Sunshine Act’ of the United States demands full disclosure of gifts and payments made to doctors by the pharma players and allied businesses. Effective March 31, 2014, all companies must report these details to the Centers for Medicare & Medicaid Services (CMS), or else would face punitive fines as high as US$1 million per year. CMS would publish records of these payments to a public website by September 31, 2014. India needs to take a lesson from this Act to help upholding ethics and values in the healthcare system of the country.

Overview of status in India:

As reported by both International and National media, similar situation prevails in India too.

Keeping such ongoing practices in mind and coming under intense media pressure, the Medical Council of India (MCI) on December 10, 2009 amended the “Indian Medical Council (Professional Conduct, Etiquette and Ethics), Regulations 2002″ for the medical profession of India. The notification specified stricter regulations for doctors in areas, among others, gifts, travel facilities/ hospitality, including Continuing Medical Education (CME), cash or monetary grants, medical research, maintaining professional Autonomy, affiliation and endorsement in their relationship with the ‘pharmaceutical and allied health sector industry’.

However, inability of the Indian regulator to get these guidelines effectively implemented and monitored, has drawn sharp flak from other stakeholders, as many third party private vendors are reportedly coming up as buffers between the industry and the physicians to facilitate the ongoing illegal financial transactions, hoodwinking the entire purpose, blatantly.

Moreover, it is difficult to fathom, why even four years down the line, the Department of Pharmaceuticals of the Government of India is yet to implement its much hyped ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for the entire pharmaceutical industry in India. 

Learning from other self-regulatory ‘Codes of Pharma Marketing Practices’, in my view, a law like, ‘Physician Payment Sunshine Act’ of the United States, demanding public disclosure of gifts and all other payments made to doctors by the pharma players and allied businesses, would be much desirable and more meaningful in India.

Conclusion:

Research studies do highlight that young medical graduates passing out from institutions enforcing gift bans and following other practices, as mentioned above, are less likely to prescribe expensive brands having effective cheaper alternatives.

The decision of GSK of not making payments to any doctor, either for participating or speaking in seminars/conferences, to influence prescription decision in favor of its brands is indeed bold and laudable. This enunciation, if implemented in letter and spirit, could trigger a paradigm shift in the the prescription demand generation process for pharmaceuticals brands.

However, this pragmatic vow may fall short of stemming the rot in other critical areas of pharma business. One such recent example is reported clinical data fabrication in a large Japanese study for Diovan (Valsatran) of Novartis AG. Had patient records been used in their entirety, the Kyoto Heart Study paper, as the report indicates, would have had a different conclusion.

That said, if all in the drug industry, at least, ‘walk the line’ as is being demarcated   by GSK, a fascinating cerebral marketing warfare to gain top of mind brand recall of the target doctors through well strategized value delivery systems would ultimately prevail, separating men from the boys.

Thus, the moot point to ponder now:

Would other pharma players too jettison the decades old unethical practices of ‘paying to doctors for prescriptions’, directly or indirectly, just for the heck of maintaing ethics, values and upholding patients’ interest?

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, Patent and Hype: Quo Vadis Pharma Innovation?

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A recent research report reveals, though the pharmaceutical companies in the United States since mid 2000 have spent over US$ 50 billion every year to discover new drugs, they have very rarely been able to invent something, which can be called significant improvement over already existing ones.

As per available reports, from the year 2000  to 2010, the US-FDA, on an average, approved just 24 new drugs per year. This number is a sharp decline from the same of 1990, when on an average 31 new drugs were approved per year.

These studies throw open some important questions to ponder:

  • What is then the real issue with pharma innovation? 
  • Is it declining quality or quantity (number)?
  • What impacts the patients more?

Quantity vs quality of innovation:

A recent paper explored whether declining numbers of New Molecular Entities (NMEs), approved in the United States (US) each year, is the best measure of pharmaceutical “innovation.”

Thus, studying in detail the NME approvals in the US during 1987 to 2011, the authors proposed the following three distinct subcategories of NMEs:

  • First-in-class
  • Advance-in-class
  • Addition-to-class

This classification was aimed at providing more nuanced and informative insights into underlying trends.

The paper established that trends in NME approvals were largely driven by ‘Addition-to-class’, or “Me too,” drug approvals. However, the good news is that ‘First-in-class’ approvals remained fairly steady over the study period.

Thus I reckon, there should be much greater focus with higher resource deployments for  more of ‘First-in-class’ drugs research and development.

To achieve this objective with requisite wherewithal, there will be a need to drastically cut down massive R&D expenditures on “Me-too” types of so called ‘innovative’ drugs. Such drugs, carrying exorbitant price tags,  creating a financial burden to the payers, could perhaps help increasing the number of innovations, but certainly not the quality of innovations to meet important unmet needs of patients in a cost effective manner.

Some facts: 

In 2010, the healthcare journal Prescire rated 97 new drugs or new indications. Only 4 of these provided any therapeutic advantage over the available existing drugs. Interestingly, 19 others (1 in 5) were approved despite having more harms than benefits.

According to another analysis, “About 1 in 6 new products had more harms than benefits, while more than half of all new products provided no advantages over existing options.”

Further, a different article published in Nature Reviews indicated, “doctors were more likely to rate drugs more than a decade old as transformative.”

Decline in the quality of innovation:

In this context, Dr Mark Olfson of Columbia University and statistician Steven Marcus of the University of Pennsylvania have reportedly established as follows:

“By the 1980s new drugs were less than four times better; by the 1990s, twice as good, and by the 2000s just 36 percent better than a placebo. Since older drugs were much superior to placebo and newer ones only slightly so, that means older drugs were generally more effective than newer ones.”

While even in earlier years, newer patented drugs on an average used to be 4.5 times more effective, as compared to placebo.

The winds of change?

As a result, under the new ‘Affordable Care Act’ of President Obama, “comparative effectiveness research” by an independent research institute could well conclude that older drugs or even cheaper generic equivalents are better than the high priced patented ones, which create fortunes for the innovator pharmaceutical companies at the cost of patients and payers.    

The above initiate in ‘Obamacare’, if and when fructifies, will indeed hit the ‘Me-too’ type of drug innovators, especially in the United States, very hard. Nevertheless, is a music to the ear for the private health insurance companies and the patients at large.

A ray of hope?

‘Comparative drug effectiveness analysis’, as stated above, could eventually lead to replacement of newer high priced ‘me-too’ patented drugs by older relatively low priced generic equivalents, at least, for reimbursements.

This will, no doubt, lead to huge profit erosion of the big pharmaceutical players. Hence, extensive lobbying by industry groups in top gear, against this ‘patient-centric’ proposal, is currently on, .

As the new federal healthcare law will find its roots in America, despite strong opposition  from the powerful and influential pharma lobby groups, a ray of hope is now  faintly seen in otherwise blatantly exploitative and rather cruel drug pricing environment.

Where hype is the key driver:

Despite enormous hype, being created and spearheaded by the Big pharma, on the ‘essentiality’ of most stringent Intellectual Property Rights (IPR) regime in a country with patent laws blatantly in favor of commercial considerations, to enjoy a monopolistic marketing climate with pricing freedom, breakthrough pharma innovations are now indeed rather difficult to come by, as we shall deliberate below.

Reasons for decline:

Many experts believe that the following reasons, among many others, have attributed to the decline in the quality of pharmaceutical R&D output:

  • Most important drug discoveries for mankind have already been made or in other words, the low hanging fruits of pharma R&D have already been plucked. Now not so easy and rather difficult drug targets are remaining.
  • In the last decade, most of pharma R&D efforts were reportedly concentrated mainly in four major disease areas: central nervous system, cancer, cardiovascular and infectious diseases.
  • There is a need now to focus more on poorly understood and more complex therapeutic areas such as, autoimmune diseases or complex diseases related  immune system of the body, to meet greater unmet needs of patients.
  • Clinical trial volunteers are now more difficult to recruit and treat.
  • More stringent regulatory requirements for clinical trials with studies using much larger number of patients, making the clinical drug development process very expensive.

Could it be worse for Big Pharma?

The evolving situation, though very early in the day now, has the potential to turn much worse for the big pharma and good for the patients, if some key changes take place.

Many industry analysts, across the world, feel that ‘liberal’ patent laws are responsible for acceptance of minor advances over the existing products as patentable with 20 years of market exclusivity.

Thereafter, another ‘liberal’ minded drug regulatory framework allows the pharma players to market such ‘not-so-innovative patented medicines’ aggressively, enabling them to amass astronomical profits in no time at the cost of patients’ interests and payors’ financial burden , as happened in the United States and many other countries recently.

To avoid such trivial innovations the law and policy makers in the industrialized countries may well ponder as follows:

1. Align the country’s ‘Patents Act’ with similar to what Indian law makers had formulated in 2005 to avoid minor and ‘evergreening’ types of patents under section 3(d) of the Act.

2. The clinical research data must establish that the new drugs offer significantly more tangible benefits to the patients than the existing ones.

Denial of patentability for ‘me-too’ innovations and their subsequent regulatory approvals would significantly reduce the drug treatment cost with virtually no adverse impacts on patients, across the world.

If such measures are taken by the developed countries of the world and also the emerging markets, the Big Pharma would be compelled to change their respective business models, making ailing patients of varying financial status, color and creed central to their respective strategic ideation processes.

Otherwise, it is highly unlikely that anything will change for the patients from what we are all experiencing today, at least in the near to medium term.

A possible pathway:

Highly conflicting interests of Big pharma and the patients, should get resolved sooner than later and that again for the interest of both. 

Thus, to find a meaningful and generally acceptable solution to this issue, there is a dire need for a much wider global debate. The deliberations, at the same time, should include possibilities of finding ways to avoid huge wasteful expenditures on pharmaceutical R&D for developing new products that offer no significant benefits to the patients over the existing ones. On the contrary, such products burden them with exorbitant incremental drug treatment costs, 

The motions of the debate could well be in the following lines:

1.  ‘Should United States amend its patent laws by categorically stating that a mere “discovery” of a “new form” of a “known substance” that does not have properties resulting in significant improvement in clinical efficacy, will not be patentable?

2. Shouldn’t the clinical research data must always establish that the new drugs offer significantly more tangible benefits to the patients than already available cheaper equivalents?

The positive outcome of this global debate, if fructifies, will indeed be considered as a paradigm shift in the new world order for all, hopefully.

Unfathomable reluctance: 

Despite all these developments, a recent report indicated that the heads of seventeen industry associations of the United States wrote a letter to President Obama complaining, among others, India’s patents regime. This includes the most powerful, yet equally controversial, pharmaceutical lobby group of America.

The letter alleged that the recent policy decisions in India undermine internationally recognized Intellectual Property (IP) standards, which are “jeopardizing domestic jobs” in America and are unacceptable to them.

Though the details of issues were not highlighted in the letter, One concern it specifically expressed that the defeat of Novartis on the Glivec case that challenged Section 3(d) of the Patents Act of India has raised the bar on what can be considered a true innovation for the grant of patent in India.

Though this judgment of the apex court of India was widely acclaimed even globally, American Trade Association Lobby Groups seem to project exactly the opposite, reportedly, driven solely by profit motives of their members and shorn of patients’ interests

Interestingly, an article published in The New England Journal of Medicine, July 17, 2013 also states as follows:

“A patent law that treats incremental innovation and significant innovation in the same way, encourages companies to prioritize less important research over more important research.”

A diametrically opposite viewpoint:

Another school of thought leaders opine, ‘me too’ innovations will continue to remain alive and well. This will happen, even if such new products are starved of oxygen by ‘the tightening purse strings of the eventual customers’. These innovations are sustained by the stronger imperative to avoid clinical failures and to play relatively safe in the space of expensive R&D investments.

They feel that pharma players will continue to focus on to leaner drug discovery and development models to have healthier late-stage product pipelines of such types.  In tandem, by cutting costs even more aggressively, as we witness today, they will find space to keep the level of risk optimal for delivering real innovation, when the time comes.

This type of business model, the experts feel is based on the belief that it is far better to acquire a product with very little innovation ensuring that it can hardly fail to be approved by the regulator. Thereafter, the concerned players may figure out ways of how payors will actually pay for it, rather than focusing primarily on acquiring a genuinely innovative ‘First-in-class’ product and then discover it has ‘feet of clay’.

For example, AstraZeneca reportedly invested a little over US$1 billion in two such products in one month: another LABA combination from Pearl Therapeutics and a prescription ‘Fish Oil’ capsule from Omthera Pharmaceuticals.

Conclusion:

Be that as it may, a large number of experts do opine, especially in the light of the above letter of the American Trade Associations that the verdict of the Honorable Supreme Court of India on the Glivec case, though does not serve the business interests of pharma MNCs, definitely signals the triumph of justice over ruthless patient exploitations. It also vindicates that this particular rule of law, as enacted by the Indian Parliament, is indeed for the best interest of the patients of India at large.

This verdict could well be construed as a huge lesson to learn and implement by other like minded countries, across the world.

Having a glimpse at the pharmaceutical innovations, which are often laced by crafty hypes created by expensive PR Agencies of the pharma lobby groups, the global thought leaders do tend to believe, rather strongly, that Section 3(d) of the Patents Act of India would encourage more ‘First-in-class’ innovations, in the long run, benefiting all.

Such a provision, if implemented by many countries, could also help saving significant wasteful expenditures towards ‘Me-too’ type pharma R&D, favorably impacting billions of lives, across the world.

That said, the question keeps haunting – ‘Sans Hype, Quo Vadis Pharma Innovation?

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.

 

 

 

Transparency in Drug Trial Data: Thwarted by Lobbyists or Embroiled in Controversy?

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Based on a leaked letter from overseas pharma industry bodies, a leading international daily in late July 2013 reported:

“Big pharma mobilizing patients in battle over drugs trials data.”

Some experts consider it as a poignant, if not a bizarre moment in the history of drugs development, keeping patients’ interest in mind. However, the concerned trade bodies could well term it as a business savvy strategy to maintain sanctity of ‘Data Exclusivity’ in real sense.

That said, it is important for the stakeholders to figure out where exactly does this strategy stand between the larger issue of patients’ drug safety and efficacy concerns and the commercial interest of the innovator companies to grow  their business.

Lack of transparency in drug trials data and consequences:

Outside pharmaceutical marketing, some of the biggest scandals in the drug industry have been alleged hiding of data related to negative findings in drug Clinical Trials (CTs) by the innovator companies.

Many stakeholders have already expressed their uneasiness on this wide spread allegation that research based pharmaceutical companies publish just a fraction of their CT data and keep much of the drug safety related information to themselves. Not too distant withdrawals of blockbuster drugs like Vioxx (Merck) and Avandia (GSK) will vindicate this point.

Examples of global withdrawals of drugs, including blockbuster ones, available from various publications, are as follows. 

Brand

Company

Indication

Year of Ban/Withdrawal

Reason

Vioxx

Merck

Anti Inflammatory

2004

Increase cardiovascular risk

Bextra

Pfizer

Anti Inflammatory

2005

Heart attack and stroke

Prexige

Novartis

Anti Inflammatory

2007

Hepatotoxicity

Mylotarg

Wyeth

Acute Myelogenous Leukemia

2010

Increased patient death/No added benefit over conventional cancer therapies

Avandia

GSK

Diabetes

2010

Increased cardiovascular risk

Reductil

Abbott

Exogenous Obesity

2010

Increased cardiovascular risk

Paradex

Eli Lilly

Analgesic, Antitussive and Local Anaesthetic

2010

Fatal overdoses and heart arrhythmias

Xigris

Eli Lilly

Anti-Thrombotic, Anti-Inflammatory, and Profibrinolytic

2011

Questionable efficacy for the treatment of sepsis

A recent example:

A recent report indicates that Japan (Tokyo) based Jikei University School of Medicine plans to withdraw a paper on the hypertension drug Diovan of Novartis from the prestigious British Medical Journal (BMJ) due to “data manipulation,” suggesting the drug could help treating other ailments.

The report also indicates that an investigative panel formed by the university to look into the allegations of ‘rigged data’ for Diovan concluded that the results were cooked.

The decision of the Japanese University to withdraw this paper is expected to hurt the reputation of Novartis Pharma AG and at the same time raise ethical concerns about the company’s behavior concerning its best-selling hypertension drug, the report says.

Drug regulators contemplating remedial measures:

Now being cognizant about this practice, some drug regulators in the developed world have exhibited their keenness to disband such practices. These ‘gatekeepers’ of drug efficacy and safety are now contemplating to get the entire published CT data reanalyzed by the independent experts to have a tight leash on selective claims by the concerned pharma companies.

A review reportedly estimates that only half of all CTs were published in full and that positive results are twice as likely to be published than negative ones.

Recently the European Medicines Agency (EMA) has published a draft report for public consideration on greater openness of CT data. As stated above, this proposal allows independent experts to conduct a detail analysis on the safety and effectiveness of new drugs.

Mobilizing patients to thwart transparency?

Interestingly, as stated in the beginning, it has recently been reported that to thwart the above move of the drug regulator in favor of patients’ interest:

“The pharmaceutical industry has mobilized an army of patient groups to lobby against plans to force companies to publish secret documents on drugs trials.”

The same report highlights that two large overseas trade associations had worked out a grand strategy, which is initially targeted at Europe. This is for the obvious reason that the EMA wants to publish all of the clinical study reports that drug companies have filed, and where negotiations around the CT directive could force drug companies to publish all CT results in a public database.

Embroiled in controversy:

It has also been reported simultaneously, “Some who oppose full disclosure of data fear that publishing the information could reveal trade secrets, put patient privacy at risk, and be distorted by scientists’ own conflicts of interest.”

Pharmaceutical trade associations in the west strongly argue in favor of the need of innovator companies to keep most of CT data proprietary for competitive reasons. They reiterate that companies would never invest so much of time and money for new drug development, if someone could easily copy the innovative work during the patent life of the product.

However, the report also states, “While many of these concerns are valid, critics say they can be addressed, and that openness is far more important for patients’ drug safety reasons.“

Addressing the concerns:

To address the above concerns the EMA has reportedly separated clinical data into three categories:

  • Commercially confidential information.
  • Open-access data that doesn’t contain patients’ personal information.
  • Controlled-access data that will only be granted after the requester has fulfilled a number of requirements, including signing of a data-sharing agreement.

However experts do also reiterate, “Risks regarding data privacy and irresponsible use cannot be totally eliminated, and it will be a challenge to accommodate diverse expectations across the scientific and medical community. However, the opportunity to benefit the health of individuals and the public must outweigh these concerns.”

Some laudable responses:

Amidst mega attempts to thwart the move of EMA towards CT data transparency surreptitiously, there are some refreshingly good examples in this area, quite rare though, as follows:

  • As revealed by media, GlaxoSmithKline (GSK) has recently announced that it would share detailed data from all global clinical trials conducted since 2007, which was later extended to all products since 2000. This means sharing more than 1,000 CTs involving more than 90 drugs. More recently, to further increase transparency in how it reports drug-study results, GSK reportedly has decided to disclose more individual patient data from its CTs. GSK has also announced that qualified researchers can request access to findings on individual patients whose identities are concealed and confidentiality protected.The company would double the number of studies to 400 available by end 2013 to researchers seeking data of approved medicines and of therapies that have been terminated from development.
  • Recently Canada reportedly announced the launch of Canadian Government’s new public database of Health Canada-authorized drug CTs. It is believed that providing access to a central database of clinical trials is an initial step that will help fill an existing information gap as the government works to further increase transparency around CTs.
  • The well-known British Medical Journal (BMJ) in one of its editorials has already announced, “BMJ will require authors to commit to supplying anonymised patient level data on reasonable request from 2013.”

All these are indeed laudable initiatives in terms of ensuring long term drug safety and efficacy for the patients.

Conclusion:

It is quite refreshing to note that a new paradigm is emerging in the arena of CT data transparency, for long-term health interest of patients, despite strong resistance from powerful pharmaceutical trade bodies, as reported in the international media. This paradigm shift is apparently being spearheaded by Europe and Canada among the countries, the global pharma major GSK and the medical Journal BMJ.

A doubt still keeps lingering on whether or not independent expert panels will indeed be given access to relevant CT data for meaningful impartial reviews of new drugs, as the issue, in all probability, would increasingly be made to get embroiled in further controversy.

Moreover, if the innovator companies’ often repeated public stand – “patients’ interest for drug efficacy and safety is supreme” is taken in its face value, the veiled attempt of thwarting transparency of CT Data, with an utterly bizarre strategy, by the lobbyists of the same ‘patient caring’ constituent, can indeed be construed as a poignant moment, now frozen in time, in the history of drug development for mankind.

Be that as it may, to resolve this problem meaningfully and decisively, I reckon, a middle path needs to be carefully charted out between reported thwarting moves by pharma lobbyists and the embroiled controversy on the burning issue.

Thus, the final critical point to ponder:

Would the commerce-driven and cost-intensive pharma innovation also not be in jeopardy, affecting patients’ interest too, if the genuine concerns of the innovator companies over ‘CT Data Protection’ are totally wished away? 

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.