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

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

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

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

‘Cutting Corners’:

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

‘Cutting Corners’ going North:

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

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

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

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix. 

Pharma reputation dives South:

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

Top 5:

Industry Total Positive % Neutral % Total Negative % *Net positive or negative %
Computer

75

15

8

+67
Restaurant

72

21

7

+65
Farming and agriculture

70

17

12

+58
Grocery

60

23

17

+43
Internet

59

21

18

+41

The bottom 5, including the federal government:

Industry Total Positive % Neutral % Total Negative % *Net positive or negative %
Airline

41

20

35

+6
Oil and gas

38

21

40

-2
Healthcare

38

18

45

-7
Pharmaceutical

33

16

50

-17
Federal Govt.

29

19

52

-23

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

Image rejuvenation campaign not yielding results:

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

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

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

Where is this campaign going off the mark?

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

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

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

Is Indian pharma out of this loop?

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

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

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

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

Today’s patients are more informed:

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

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

Conclusion:

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

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

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

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

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

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

By: Tapan J. Ray 

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 Price Control in India: A Fresh Advocacy With Blunt Edges

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It is no-brainer that the advocacy initiatives to influence the new Government doing away with the ‘Drug Price Control’ in India has re-started by flooring the gas pedal. A fresh invigorating effort, apparently a pretty expensive one, has been initiated in July 2015 with an interesting study conducted on the subject by an international market research organization, sponsored by a multi-national pharma trade association in India.

Having gone through the report, it appears to me, as if the whole purpose of the study was to rationalize an ‘advance’ conclusion in mind, weaving plethora of data around it for justification.

The report presents an abundance of selective data, apparently to rubbish the very concept of ‘Drug Price Control’ in India. In that process, it reinforced the existence of a deep seated malady in the overall sales and marketing strategic framework of most of the pharma players, rather than failure of ‘Drug Price Control’ in India, meant for the essential drugs.

In this article, I shall dwell on this issue adding my own perspective. Although my views are different, I totally respect the findings and suggestions made in this report.

Drug price control in India:

From 1970, Drug Price Control Orders (DPCO) are being issued in India under the Essential Commodities Act, without any break, so far. The key intent of the DPCO is to provide quality essential medicines at a reasonably affordable price to the consumer. The DPCO has been amended four times since then, the latest one being DPCO 2013.

Unlike the previous ones, the span of price control of DPCO 2013 is restricted to essential medicines, as featured in the National List of Essential Medicines 2011 (NLEM 2011). The methodology of price control has also now changed to ‘marked-based’ pricing from earlier ‘cost-based’ pricing.

However, for the first time in July 2013, the National Pharmaceutical Pricing Authority (NPPA) extended ‘Drug Price Control’ beyond the Schedule Drugs, when by a notification it announced price fixation of ‘anti-diabetic and cardiovascular drugs in respect of 108 non-scheduled formulation packs under Paragraph 19 of DPCO, 2013’,

Paragraph 19 of DPCO, 2013, authorizes the NPPA in extraordinary circumstances, if it considers it necessary to do so in public interest, to fix the ceiling price or retail price of any drug for such period as it deems fit.

Although the pharma industry initially had supported the switch from ‘cost based’ price control to ‘market based’ price control and only for NLEM 2011 drugs, it took a tougher stand after the above notification. Some trade association reverted to the same good old genre, yet again, trying to establish that ‘Drug Price Control’ does not help at all. The brand new market research report under discussion in this article, appears to be a step in that direction.

‘Market failure in pharma’ where competition does not work:

In its price notification dated July 10, 2014, as mentioned above, the NPPA justified its action by underscoring ‘market failure’ for those anti-diabetic and cardiovascular drugs, where competition does not work. NPPA considered ‘market failure’ as one of the ‘extraordinary circumstances’ and explained the situation as follows:

  • There exist huge inter-brand price differences in branded-generics, which is indicative of a severe market failure, as different brands of the same drug formulation, which are identical to each other in terms of active ingredient(s), strength, dosage, route of administration, quality, product characteristics, and intended use, vary disproportionately in terms of price
  • It is observed that, the different brands of the drug formulation may sometimes differ in terms of binders, fillers, dyes, preservatives, coating agents, and dissolution agents, but these differences are not significant in terms of therapeutic value.
  • In India the market failure for pharmaceuticals can be attributed to several factors, but the main reason is that the demand for medicines is largely prescription driven and the patient has very little choice in this regard.
  • Market failure alone may not constitute sufficient grounds for government intervention, but when such failure is considered in the context of the essential role of pharmaceuticals play in the area of public health, which is a social right, such intervention becomes necessary, especially when exploitative pricing makes medicines unaffordable and beyond the reach of most and also puts huge financial burden in terms of out-of-pocket expenditure on healthcare.

I discussed this subject in my bog post of April 27, 2015 titled, “Does ‘Free-Market Economy’ Work For Branded Generic Drugs In India?”

Are medicines cheapest in India, really?

It is quite often quoted that medicines are cheapest in India. In my view, it would be too simplistic, if we compare the prevailing Indian drug prices in Rupee, against prices of similar drugs in other countries, just by simple conversion of the foreign currencies, such as, US$ and Euro converted into Rupee. To make the comparison realistic and credible, Indian drug prices should be compared against the same in other countries only after applying the following two critical parameters:

  • Purchasing Power Parity and Per Capita Income
  • Quantum of per capita ‘Out of Pocket Expenditure’ on drugs

The Department of Pharmaceuticals (DoP) with the help of academia and other experts had earlier deliberated on this issue in one of its reports on patented drugs pricing. The report established that post application of the above two parameters, medicines in India are virtually as expensive as in the developed world, causing great inconvenience to majority of patients in the country.

Hence, common patients expectedly look for some kind of critical intervention by the Government, at least, on the prices of essential drugs in India.

A new study on drug price control:

Recently, I came across a ‘brand new’ research report that tries to justify the fresh stance allegedly taken by the pharma industry on the abolition of ‘Drug Price Control’ in India.

This new study of IMS Health released on July 2015, sponsored by a pharma MNC trade association in India, titled “Assessing the Impact of Price Control Measures on Access to Medicines in India”, categorically highlights ‘price control is neither an effective nor sustainable strategy for improving access to medicines for Indian patients’.

The key findings:

The following are the key findings of the report:

  • High income patient populations, rather than the low-income targets are the primary beneficiaries of the DPCO 2013.
  • The consumption of price-controlled drugs in rural areas has decreased by 7 percent over the past two years, while that of non-price controlled products has risen by 5 percent.
  • The DPCO 2013 has resulted in an increase in market concentration and a decrease in competitive intensity.
  • Price control has increased margin pressures for small and mid-sized companies, limiting both employment and investment opportunities in the sector.
  • Price controls negatively impact internal capability-building and expertise-building initiatives, discourage local talent and undermine the government’s ’Make in India’ initiative.

The suggestions made:

In my view, the report almost repeats the same old suggestions being made by the pharma industry over decades. However, while making recommendations, this new report selectively quotes, without clearly naming them, from the draft National Health Policy 2015 and ‘Jan Aushadhi’ initiative of the DoP. It also attempts to ride on the shoulder of Prime Minister Modi’s ‘Make in India’ campaign. The key recommendations of the study are, as follows:

  • Strengthen healthcare financing and extend universal health coverage across population segments with focus on providing cover for medicines
  • Invest in healthcare infrastructure and capability building
  • Promote joint and bulk procurement mechanisms, e.g. Tamil Nadu Medical Services Corporation
  • Levy a cess on the tobacco and liquor industries to fund the healthcare sector and subsidize essential medicines from taxes
  • Introduce mechanisms to ensure availability of generics at lower prices, to improve affordability for patients i.e. set up dedicated generic medicine stores.

An official of IMS Health was also quoted by the media that sounds to me almost like pontification:

“Price control has limited impact on improving patient access and, furthermore is not aligned with the requirements of a vibrant economy like India” and the “Government’s priority should be on strengthening India’s healthcare infrastructure and extending universal insurance coverage.”

The blunt edges in the report raise more questions than answers:

I wonder, whether another apparently expensive research, such as this, was at all necessary to reinvent the same old advocacy narratives on ‘Drug Price Control’ in India.

As I note, the report highlights, “The consumption of price-controlled drugs in rural areas has decreased by 7 percent over the past two years, while that of non-price controlled products has risen by 5 percent.” If this is true, one should try to fathom:

  • What does it really mean and what are its implications?
  • Can it happen, if it has happened, just because of ‘Drug Price Control’?

I am raising these two questions mainly because, price controlled drugs are prescription medicines. Thus, post DPCO 2013, when it happens to ‘prescription only medicines’, other critical questions that come at the top of mind are as follows:

  • Are the doctors now prescribing less of price controlled drugs? If so, why?
  • Price controlled drugs being essential drugs, are the doctors prescribing less of essential drugs? If so, why?
  • Do the doctors prefer prescribing expensive ‘non-schedule’ drugs to patients against their interest? if so, why?

Further, deliberately causing decline in consumption of these drugs, for margin or whatever may be the reasons, without intimating the NPPA as stipulated in the DPCO 2013, is a serious offense, attracting stringent penal action under the Essential Commodities Act.

Therefore, if the above finding of this study is correct and assuming that NPPA is not aware of such shortages or declining consumption of essential drugs in India, yet another critical question that needs to be answered:

  • By deliberately bringing down the consumption of essential medicines, are the concerned pharma players not taking the law in their own hands?

If yes, the Government would need to act forthwith. If not, the above finding of the report is just not correct.

The DoP, NPPA and other stakeholders would, therefore, need to ferret out, which one of the above two is correct.

Thus, I reckon, to wish away ‘Drug Price Control’ in India, the fresh advocacy initiative of the pharma trade association, keeping in the forefront a new study with blunt edges, raises more questions than answers. I have given just an example here, as above.

More marketing push on ‘free-pricing’ drugs is common:

It is not uncommon that the sales of ‘free-pricing’ drugs are usually more, as their margin is unlimited. Pharma players take increasing interest in those drugs and push them harder, almost totally controlling the ‘push-pull’ effect of drug marketing.

Globally, drug companies take increasing interest in such medicines. India is no exception. Here too ‘out of price control’ non-schedule drugs usually show higher growth, as the doctors are influenced to prescribe more of such drugs, though at the cost of consumer.

This practice may not be acceptable to many, but is a stark reality. This process is expected to continue, at least, till Uniform Code of Pharmaceutical Marketing Practices (UCPMP) is made mandatory with strict enforcement and strong punitive provisions for any violations.

Is the growth of price controlled drugs declining?

If the growth of price controlled medicines drastically comes down post DPCO 2013, that should get reflected on the declining overall sales and growth of those drugs. Similar pattern should also be visible in the growth of those types products marketed by most of the major pharma companies in India.

Let me now present the scenario of that space. The following analysis is based on the monthly retail audit data of AIOCD Pharmasofttech AWACS.

When I look at the growth of DPCO 2013 products based on NLEM 2011 and other price controlled drugs under ‘Para 19’ from January to July 2015 period in the following table, the scenario does not look as worrying just yet, as the above report has made it out to be.  

Product group-wise market growth (in Value):

Month (2015) DPCO products (%) DPCO  Para 19 Products (%) Non-DPCO Products (%) Total Market Growth (%)
July 5.1 11.8 14.2 12.9
June 5.6 14.6 16.2 14.8
May 5.3 7.2 12.1 11.0
April 11.1 11.9 18.4 17.2
March 1.6 15.6 21.7 20.9
February 13.9 14.4 20.0 18.9
January 6.9 NA 14.0 12.7

(Source: AIOCD Pharmasofttech AWACS )

Again, in the following table, when I look at the growth of DPCO 2013 products of some the very major pharma players in India, the conclusion still remains the same as above:

DPCO Products Growth (%) by major companies (Jan-July 2015):

Company July June May April March Feb Jan
Ranbaxy 20.5 31.9 29.5 17.3 27.6 20.7 53.7
Pfizer 13.0 17.4 5.7 16.7 25.6 21.1 18.6
Abbott 7.2 11.7 18.5 13.5 15.5 18.3 21.2
GSK -2.1 - 1.8 -1.2 12.2 12.2 NA NA

(Source: AIOCD Pharmasofttech AWACS )

The blunt edges fail to cut ice:

Quite expectedly, even a month after its release in July 2015, the blunt edges in the report seem to have cut no ice, especially at a very important place that matters most to the industry in this area. This observation gets vindicated by a credible media report.

On August 24, 2015 in an interview to a national business daily, V K Subburaj, the Secretary of the Department of Pharmaceuticals commented, “Price control on drugs a shot in the arm for health care” and “the Government cannot do away with it.”

He argued, “A large section of the population is poor. Suddenly, your system is disturbed if you have to spend more on drugs. Drugs are an important component of health care expenditure.”

Accepting the fact that in India, big and small companies investing in research would need more money, Mr. Subburaj said, “In India, we can’t afford to remove controls as the burden of disease is high.”

Conclusion:

With all due respect to all concerned, the above report appears to me palpably commercial, sans any worthy academic value or intellectual input that could trigger thinking for a change in the Government policy. The report apparently lacks in the required cutting edge to achieve the intended goal. The blunt edges are glaring, suggesting on the contrary, that the real action actually lies with the industry. Let me hasten to add, if any one has a different view on the subject, I would respect that with all humility.

The drug price control in India has been continuing since 1970, without any gap. The retail audit data clearly indicates that the growth of the Indian pharma industry did not get stunted or stifled during the period for this particular reason, as postulated in the above report of IMS Health. On the contrary, despite price control of drugs with all its ‘ill-effects’, as highlighted in the study, the growth of the Indian pharma industry in the last 4 decades has been nothing less than spectacular. This would consequently mean, increasing consumption of drugs, leading to improving access to medicines in India, including its hinterland, though may still not be good enough. I discussed this subject in my blog post of December 13, 2013, titled “Access to Medicine: Losing Track in Cacophony”.

Coincidentally, at the commencement of drug price control regime in India, almost all, if not all, the players in the ‘Top 10’ pharma league table of the country, were multi-national drug companies. Today the situation has just reversed. Out of ‘Top 10’, about 7 are home grown drug companies. Many of these companies were born post 1970. Without M&As by the pharma MNCs, this number could have been even higher today.

When it comes to profitability, it is worth mentioning, the soft-spoken and well-respected owner of the so called ‘low margin’ generic pharma company – Sun Pharma, is the second-richest person of the country. He created his initial wealth from India, despite ostensible ‘growth stunting’ price control – as elaborated in the above report.

By the way, what is the span of drug price control in India really – just around 18 percent of the total domestic pharma market now? More than 80 percent of the local drug market continue to remain in the ‘free-pricing’ and ‘high-profit’ zone. In that case, is the essence of the report not chanting… ‘yeh dil maange more’?

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.

Booming Sales Of Unapproved Drugs: Do We Need “Safe In India” Campaign For Medicines?

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“To sin by silence when they should protest makes cowards of men”                      - Abraham Lincoln

Not just the Federal Drug Administration of the United States (USFDA), global concerns are being expressed regularly about the laxity of drug regulatory and clinical trial standards in India, exposing patients to health safety related risks.

The problem is significantly more with the Fixed Dose Combination (FDC) Drugs for various reasons. This is worrisome because; the domestic market for FDCs is very large and growing much faster, in sharp contrast to the western world. For example, in 2011-12 FDCs accounted for more than half of all NSAID and oral anti-diabetic drug sales, and one-third and one-fifth of anti-psychotic and anti-depressant/benzodiazepine sales, respectively, according to a recent study.  Both the domestic and multi-national pharma players market FDCs in India

Alarmingly, a plethora of FDCs unapproved by the drug regulators of India on their rationality, efficacy and safety, have flooded the domestic pharma market, in large quantities.

All such drugs are being actively promoted by the respective pharma players, widely prescribed by the doctors, openly sold by the chemists and freely consumed by the patients without any apprehension or having no inkling of the magnitude of the possible health hazards that such drugs might cause, both in short and long term.

Public health safety hazard arising out of this scenario does not seem to have ever been estimated by the Indian drug regulators, despite indictments even by the Parliamentary Standing Committee, nor is there any properly functional system in place to capture such data for meaningful analysis.

As the saying goes ‘better late than never’, a credible report on this menace has just been published on May 12, 2015 by independent experts, which I shall discuss in this article.

Is the situation out of control?

On the ground, the situation seems to be out of control of even the Central Drugs Standard Control Organization (CDSCO).

This is vindicated by a March 2013, written reply of the Minister for Health and Family Welfare, where the Government reportedly informed the Lok Sabha (the lower House of the Parliament) that in twenty three cases of new FDC, licenses have been granted by the State Licensing Authorities (SLAs) without the mandatory approval of the DCGI and action will be taken in all these cases.

However, no one seems to know, as yet, what action the Government has taken against those errant officials.

The latest investigative report on the criticality of the situation:

The May 12, 2015 issue of “PLOS Medicine” – a Peer-Reviewed Open-Access Journal, published the results of an investigation on CDSCO approval for and availability of oral FDC drugs in India from four therapeutic areas – analgesia (non-steroidal anti-inflammatory drugs (NSAIDs), diabetes (metformin), depression/anxiety (anti-depressants/benzodiazepines), and psychosis (anti-psychotics).

This study was done based on the Department Related Parliamentary Committee on Health and Family Welfare’s 2012 Report, stating that manufacturing licenses for large numbers of FDCs had been issued by state authorities without prior approval of the CDSCO in violation of rules, and considered that some ambiguity until 1 May 2002 about states’ powers might have contributed to this worrying consequences.

I shall also discuss the above Parliamentary Committee report in this article.

Booming sales of unapproved drugs: 

‘PLOS Medicine’ report highlighted the following:

A. They obtained information on FDC formulations approved between1961 and 2013 in each therapeutic area from the CDSCO.

B. FDC sales details were obtained for the period 2007 to 2012 from PharmaTrac database of drug sales in India. Over the five years included in the time-trend analysis, FDCs accounted for an increasing proportion of total sales volumes. By 2011–2012, FDCs accounted for more than half of all NSAID and oral anti-diabetic drug sales, and one-third and one-fifth of anti-psychotic and anti-depressant/benzodiazepine sales, respectively.

C. Of the 175 FDC formulations marketed in India in the therapeutic areas studied, only 60 (34 percent) were approved. 

Out of these, percentages of approved formulations are as follows:

-       80 percent of 25 marketed metformin FDC formulations

-       27 percent of 124 NSAID FDC formulations

-       19 percent of 16 anti-depressant/benzodiazepine FDC formulations

-       30 percent of 10 anti-psychotic FDC formulations

D. In 2011–2012, percentages of FDC sales volumes arising from unapproved formulations was:

-       43 percent for anti-psychotics

-       69 percent for anti-depressants/benzodiazepines

-       28 percent for NSAIDs

-       0.4 percent for metformin

E. Formulations including drugs of which use is banned or restricted internationally accounted for 13.6 percent and 53 percent of NSAID and anti-psychotic FDC sales, respectively.

F. While “ambiguity” in the rules prior to 2002 was advanced as a reason for some FDCs having been marketed without a record of central approval, the researchers identified no ambiguity, and in fact, following an amendment to the rules in May 2002 that extended the requirements on approval applicants, new FDCs continued to be marketed without a record of central approval.

The suggestions:

The ‘PLOS Medicine’ report concluded with the following suggestions:

Unapproved formulations should be banned immediately, prioritizing those withdrawn or banned internationally, and undertaking a review of benefits and risks for patients.

To ensure long-term safety and effectiveness of new medicines marketed in India, as well as transparency of the approval process, amendments in India’s regulatory processes and drug laws are called for. A review should be undertaken of the safety and effectiveness of FDCs currently available in India.

Indian lawmakers too pointed out this embarrassing regulatory laxity:

This saga of drug regulatory laxity in general and for the FDCs in particular, is continuing since quite a while. This is despite the fact that the Department Related Parliamentary Committee on Health and Family Welfare presented its 59th Report of 118 pages in total on the functioning of the Indian Drug Regulator – the Central Drug Standards Control Organization (CDSCO) in both the houses of the Parliament on May 08, 2012.

The report begins with a profound observation:

Medicines apart from their critical role in alleviating human suffering and saving lives have very sensitive and typical dimensions for a variety of reasons. Prescription drugs are the only commodities for which the consumers have no role to play. Nor are they able to make any informed choices, except to buy and consume whatever is prescribed or dispensed to them, because of the following reasons:

  • Drug regulators decide which medicines can be marketed
  • Pharma companies either produce or import drugs that they can profitably sell
  • Doctors decide which drugs and brands to prescribe
  • Consumers are at the mercy of external entities to protect their interests

The ‘Mission Statement’ of CDSCO is ‘Industry Oriented’ and not ‘Patient Focused:

Very interestingly, the lawmakers’ report highlights, citing the following examples, how out of line the ‘Mission Statement’ of CDSCO is, as compared to the same of other countries, by being blatantly industry oriented instead of safeguarding Public Health and Safety interests :

Drug Regulator

The ‘Mission Statement’
1.

CDSCO, India

 Meeting the aspirations…. demands and requirements of the pharmaceutical industry.
2.

USFDA, USA

 Protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs.
3.

MHRA, UK

 To enhance and safeguard the health of the public by ensuring that medicines and medical devices work, and are acceptably safe.
4.

TGA, Australia

 Safeguarding public health & safety in Australia by regulating Medicines…

Consequently, the Parliamentary Committee took a strong exception for such utter disregard and continued neglect of patients’ interest by the Drug Regulator of India. It recommended immediate amendment of the ‘Mission Statement’ of CDSCO incorporating in very clear terms that the existence of the organization is solely for the purpose of protecting the best interest of patients and their safety. It is needless to say, thereafter it would call for its stringent conformance with high precision.

A scathing remark against CDSCO:

The parliamentary Committee report made the following scathing remarks on CDSCO in its point 2.2:

“The Committee is of the firm opinion that most of the ills besetting the system of drugs regulation in India are mainly due to the skewed priorities and perceptions of CDSCO. For decades together it has been according primacy to the propagation and facilitation of the drugs industry, due to which, unfortunately, the interest of the biggest stakeholder i.e. the consumer has never been ensured.”

Allegation of possible collusion:

The report also deliberates not only on the utter systemic failure of CDSCO along with the DCGI’s office to enforce the drug regulations effectively, but also towards a possible collusion between CDSCO and the pharmaceutical industry to implement a self-serving agenda by hoodwinking the system. This is a very serious allegation, which needs to be thoroughly probed and the findings of which should be made public for everybody’s satisfaction.

The committee, therefore, felt that effective and transparent drug regulation, free from all commercial influences and callous enforcement of rules and laws, are absolutely essential to ensure safety, efficacy and quality of drugs keeping just one objective in mind, i.e., welfare of patients.

Do we need “Safe in India” campaign for drugs?

Do we need a well-hyped “Safe in India” campaign for drugs? Looking around, at least conceptually, the answer is probably ‘yes’…Seriously…I am not joking!

The reason being, despite scathing remarks of the Parliamentary Standing Committee in 2012, apparently no systematic enquiry has been undertaken by the CDSCO to ascertain the reason for continuation and the veracity of this menace, just yet.

A very significant number of unapproved medications still remain undetected by the drug regulators and continue to be abundantly available, frequently prescribed, openly sold and freely consumed by the patients without even an iota of doubt regarding possible health safety hazards that these prescription drugs might cause.

May 2015 ‘PLOS Medicine’ Report helps unraveling the underbelly of the drug regulatory scenario in India, along with its systemic decay, which fails to halt the possible serious health safety hazards that Indian patients are exposed to.

India’s image as an emerging ‘pharmacy of the world’ for cheaper generic drugs has already been dented with a number of ‘import bans’ from the US and UK for flouting the specified drug manufacturing quality standards.

The saga of ‘import bans’ for Indian drugs, together with this critical health safety related menace, probably necessitates an effective launch of a “Safe in India” campaign for medicines, in general, by the Government.

This initiative gains additional importance, as painstakingly developed reputation of the Indian drug exporters, including the largest domestic players, has now been dented. It needs to be revamped, sooner.

I addressed a related issue in my blog post of February 3, 2014, titled “FDA ‘Import Bans: Valuing Drug Supply Chain Security For Patients’ Safety.”

Conclusion:

Effective resolution of this critical issue demands high priority at the highest level of the decision making process of the Government, with commensurate sense of urgency.

Keeping that in mind, would it be a bad idea, if just like “Make in India” campaign of the Prime Minister; “Safe in India” campaign for medicines is also undertaken with equal gusto and monitored by the top echelon of the country’s rejuvenated governance machinery?

This initiative would probably help sending the very contextual ‘shape up or ship out’ signal to the drug regulators, both at the Center and also in the States to erase the prevailing menace for good.

In that process, it would eventually allay the public health safety concern with the ‘Made in India’ drugs, coming out of ‘Make in India’ campaign, not just in the country, but also beyond its shores.

The speed of action in this situation is the essence. Otherwise, the following golden words of wisdom as enunciated by Abraham Lincoln would keep haunting us, till the remedial measures taken by the Government become palpable on the ground:

“To sin by silence when they should protest makes cowards of men”

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.