Scandalizing Biosimilar Drugs With Safety Concerns

Posted on August 25, 2014 by Tapan Ray

With the patent expiry of exorbitantly priced biologic medicines, introduction of biosimilar drugs are expected to improve their access to millions of patients across the world, saving billions of dollars in healthcare costs in the subsequent years. According to an article published in Forbes, it is estimated that the potential savings in the United States alone from just 11 biosimilar drugs over a period ranging from 2014 to 2024 could easily be U$250 billion.

However, the flip side of this much awaited development would make commensurate dent on the sales performance of original brand name biologics, now being marketed by the global pharma majors armed with patent monopoly rights.

Innovating hurdles to negate the impact:

Facing this stark reality, global innovators of biotech drugs allegedly want to fast germinate a strong apprehension in the minds of all concerned on the safety and replaceability of biosimilar drugs. Consequently, this would severely restrict the usage of this new class of products, sacrificing patients’ health interest.

To translate this grand plan into reality, garnering additional support from ten medical societies and a physicians’ group, the global players, which mostly hold various patents on biologics, reportedly urged the USFDA to require biosimilars to have distinct names from the original biologics, on the pretext that different names would make it easier for prescribers to distinguish between medicines that “may differ slightly” and also track adverse events and side effect reports that appear in patient records.

However, other stakeholders have negated this move, which is predominantly to make sure that no substitution of high priced original biologics takes place with the cheaper versions of equivalent biosimilars to save on drug costs.

Intense lobbying to push the envelope:

Interestingly, this intense lobbying initiative of big pharma to assign a distinct or different name for biosimilar drugs, if accepted by the USFDA, would provide a clear and cutting-edge commercial advantage to the concerned pharma and biotech majors, even much after their respective biologic drugs go off patent.

Thus, the above allegedly concerted move does not surprise many.

Mounting protests against industry move:

Biosimilar drug makers, on the other hand, have suggested to the USFDA to make biosimilars fall under the same International Non-Proprietary Name (INN) system, like all generic prescription drugs. They believe that new names would create confusion and the physicians and pharmacists may face difficulties in ascertaining whether biosimilar drugs serve the same purpose with similar dosing and regimens.

The protest seems to have a snowballing effect. In July 2014, by a letter to the Commissioner Hamburg of USFDA, different groups representing pharmacy, labor unions, health insurance plans and others, have reportedly urged her not to go for different INNs for the original biologic and a biosimilar drug, for the same reason as cited above. The letter reinforces that the industry move, if accepted by the USFDA could increase the possibility of medication errors, besides adversely affecting the substitution required to bring down overall health care costs for high priced specialized biologics, thereby slowing down the uptake of biosimilars significantly.

Global pharma investors also raising voices in support of biosimilars:

Another similar and major development followed soon. A letter titled, “Investor Statement on Board Oversight of Biosimilar Issues”, written by a group of 19 institutional investors that manages about US$430 billion in assets, to the boards of several big pharma and biotech companies, flagged that some pharma majors have been scandalizing the safety concerns of biosimilar drugs. This is happening despite the fact that this class of drugs already has a well-established track record in Europe.

They emphasize that recent actions taken by some big pharma companies could raise concerns on the overall acceptance of biosimilar drugs, which would forestall any projected savings on that subject. They also reportedly expressed serious concern that shareholder interests could be adversely affected, if the pharma and biotech players pursue those policies that undermine corporate transparency and medical innovation.

The letter underscores, “Companies seeking to downplay the patient safety record of European biosimilars have also challenged the capacity of the FDA to promulgate rules and determine when biosimilars may be substituted for biologics.”

Among other points, the letter reiterates:

Though the important role of biologics in treating cancer, rheumatoid arthritis, anemia, multiple sclerosis and many other conditions is well recognized, the costs of these medicines are on an unsustainable trajectory, with some biologics costing as much 22 times more than other drugs. This critical issue seriously impedes patients’ access to biologics, as well as, acceptance by providers and insurance companies.

Biosimilars hold the promise of lowering costs of treating conditions for which biologics are indicated. At the same time, the recent adoption of a regulatory pathway to approval of biosimilars in the US market and the continued growth of biosimilars in the European Union, Japan, Canada, Australia and South Korea, pose a formidable business challenge for the companies that market patented biologic medicines.

Financial experts project that biosimilars too have the potential for significant market penetration and attractive returns on investments.

Assigning different INN would communicate to providers that the biosimilar is less effective, prompting them not to prescribe this class of medicines and making it difficult for the pharmacists to dispense too. Besides, different names could lead to prescribing errors.

In short, the boards of directors of the pharma and biotech majors were urged by these investors to use the following principles to guide their decision-making related to biosimilars:

- Policy and educational information provided on biosimilars should be balanced, accurate and informed by the patient safety experience of biosimilars in the European Union and other biosimilar drug markets.

- Lobbying expenditures for federal and state activities related to biosimilars should be fully disclosed and the boards should ensure that political activities are aligned with the interests of investors and other stakeholders.

- Key information about any partnership or business deal related to biosimilars should be fully disclosed to investors, including information about the value, terms and duration of the deal.

The WHO proposal:

In this context it is worth recapitulating, the World Health Organization (WHO) that oversees the global INN system has held a number of meetings to resolve this issue. The WHO proposal suggests that the current system for choosing INNs to remain unchanged, but that a four-letter code would be attached at the end of every drug name. However, individual regulatory agencies in each country could choose whether to adopt such coding or not.

Let us wait to see what really pans out of this flexible WHO proposal on the subject.

Biosimilars go through stringent regulatory review:

It is important to note that the drug regulators carefully review biosimilars before giving marketing approval for any market, as these drugs must prove to be highly similar without any clinically meaningful differences from the original biologic molecules. The interchangeability between biosimilars and the original biologics must also be unquestionably demonstrated to be qualified for being substitutable at the pharmacy level without the need for intervention by a physician.

Thus, there does not seem to be any basis for different INN, other than to severely restrict competition from biosimilars.

12-year data exclusivity period for biologics – another hurdle created earlier:

Another barrier to early introduction of cheaper biosimilar drugs in the United States is the 12-year data exclusivity period for biologics.

On this issue GPhA – the generic drug makers’ group in the United States reportedly issued a statement, criticizing a paper of Biotechnology Industry Organization (BIO), saying:

“Market exclusivity acts as an absolute shield to their weak patents. Thus, from a practical perspective, extending market exclusivity beyond the Hatch-Waxman period would block the introduction of generic competition for almost 20 years, derailing any potential cost savings by Americans.”

The market potential of biosimilars:

A new report by Allied Market Research estimates that the global biosimilars market would reach US$35 billion by 2020 from the estimated US$1.3 billion in 2013. During the next four years, over 10 blockbuster biologic drugs clocking aggregated annual sales turnover of US $60 billion would go off patent in the United States and in Europe. Humira – a US$10 billion drug of Abbvie that loses patent protection in 2016 is at the top of list.

In tandem, facilitation of regulatory pathways of marketing approval for this class of drugs in many developed markets is expected to drive its growth momentum through greater market penetration and access.

Asia Pacific region is likely to emerge as the leader in the biosimilar drugs market, primarily due to heightened interest and activity of the local players. Collaboration between Mylan and Biocon to commercialize biosimilar version of trastuzumab of Roche in India and the approval of first biosimilar version of monoclonal antibody drug by Hospira in Europe are the encouraging indications.

High growth oncology and autoimmune disease areas are expected to attract more biosimilars developers, as many such biologics would go off patent during 2014 to 2019 period.

Monoclonal antibodies (mAbs) and erythropoietin would possibly be key to the growth drivers. Similarly, follitropins, interferons, and insulin biosimilars would emerge as high potential product segments over a period of time.

As we know, among the developed markets, Europe was the first to draft guidelines for approval of biosimilars in 2006. Consequently, the first biosimilars version of Granulocyte colony-stimulating factor (G-CSF) was introduced in the European Union under the regulatory guidance of European Medical Agency (EMA) in 2008. At present, there are three biosimilar versions of G-CSF available in the European market. Insulin biosimilars also show a good potential for the future.

India:

India is now well poised to encash on this opportunity, which I had deliberated in one of my earlier blog post titled, “Moving Up The Generic Pharma Value Chain”.

Current global usage of biosimilars:

Though regulatory pathways for biosimilar drugs are now in place in the United States, no biosimilar has yet been approved there. However, the US drug regulator has for the first time accepted an application for the approval of a biosimilar version of Neupogen (Filgrastim) of Amgen, which treats patients with low white blood cell counts. Sandoz has already been selling the biosimilar version of this drug in more than 40 countries outside the US.

According to the research organization ‘Pharmaceutical Product Development’, as on March 2013, at least 11 countries and the European Union (EU) approve, regulate and allow clinical trials of biosimilars. As of February 2012, the EU has approved at least 14 biosimilar medicines. The following table shows these countries by region:

Region	Countries
North America	Canada
Europe	E.U. (including U.K.)
Asia and Pacific	China, India, Singapore, South Korea, Taiwan
Central and South America	Argentina, Brazil, Mexico
Eastern Europe	Russia, Turkey

Source: Pharmaceutical Product Development

Conclusion:

With the opening up of the United States for biosimilar drugs, the entire product class is expected to be catapulted to a high growth trajectory, provided of course no more allegedly concerted attempts are made to create regulatory hurdles on its path, as we move on. This is mainly because around 46 percent of the world biologic market as on 2010 was in the United States.

However, intense lobbying and power play against biosimilar or interchangeable biologics, allegedly sponsored by the big pharma, are acting as a barrier to this much awaited development solely to benefit the patients. Such activities also undermine attractiveness of investing in safer and more affordable interchangeable biologics.

It is indeed intriguing that all these are happening, despite the fact that the regulatory approval standards for biosimilars are very stringent, as each of these drugs:

Must be highly similar to the reference product
Cannot have clinically meaningful differences from the original ones
Must perform the same in any given patient
Would have the same risk associated with switching as the reference product

Thus, scandalizing biosimilar drugs by raising self-serving ‘safety concerns’ in an orchestrated manner, just to extend product life cycles of original biologics even beyond patent expiries, is indeed a very unfortunate development. In this process, the vested interests are creating a great commercial uncertainty for this new class of medicines in the global scenario.

Be that as it may, all these seemingly well synchronized moves against biosimilars, solely to protect business interest, pooh-poohing patients’ health interests, have once again caste a dark shadow on not so enviable image of the big pharma…without even an iota of doubt.

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.

New ‘Modi Government’: Would Restoring Cordial Relationship with America Be As Vital As Calling Its Bluff On IP?

Posted on May 26, 2014 by Tapan Ray

Newspaper reports are now abuzz with various industry groups’ hustle to lobby before the ‘Modi Government’ on their expectations from the new regime. This includes the pharmaceutical industry too. The reports mention that the industry groups, including some individual companies, have started getting their presentations ready for the ministers and the Prime Minister’s Office as soon as a new government takes charge on May 26, 2014.

Conflicting interests on IP:

While the domestic pharma industry reportedly wants the new Government to take a tough stand on the Intellectual Property (IP) related issues with the United States (US), the MNC lobbyists are raising the same old facade of so called ‘need to encourage innovation’ in India, which actually means, among others, for India to:

Amend its well-crafted IP regime

Change patentability criteria allowing product patents for even ‘frivolous innovation’ by scrapping Section 3(d) of the Indian Patents Act

Introduce Data Exclusivity

Implement patent linkages

Re-write the Compulsory Licensing (CL) provisions and not bother at all, even if patented drugs are priced astronomically high, denying access to majority of Indian population.

Interestingly MNC Lobby Groups, probably considering rest of the stakeholders too naive, continue to attempt packaging all these impractical demands on IP with unwavering straight face ‘story telling’ exercises, without specificity, on how well they are taking care of the needs of the poor in this country for patented medicines.

This approach though appears hilarious to many, MNC lobbyists with their single minded purpose on IP in India, keep repeating the same old story, blowing both hot and cold, nurturing a remote hope that it may work someday.

Recent views:

On this score, along with a large number of independent experts from across the world, very recently, even the former Chairman of Microsoft India reportedly advised the new ‘Modi Regime’ as follows:

“While the new government must work hard to make India more business friendly, it must not cave in to pressure on other vital matters. For instance, on intellectual property protection, there is enormous pressure from global pharmaceutical companies for India to provide stronger patent protection and end compulsory licensing. These are difficult constraints for a country where 800 million people earn less than US$ 2 per day.”

The Chairman of the Indian pharma major – Wockhardt also echoes the above sentiment by articulating, “I think Indian government should stay firm on the Patents Act, which we have agreed.”

Other domestic pharma trade bodies and stakeholder groups in India reportedly expect similar action from the ‘Modi Government’.

Strong India matters:

India is the largest foreign supplier of generic medicines to America, having over 40 percent share in its US$ 30-billion generic drug and Over-The-Counter (OTC) product market.

Thus, expecting that Indian Government would wilt under pressure, the 2014 ‘Special 301 Report’ of the US Trade Representative (USTR) on Intellectual Property Rights (IPR) has retained India on its ‘Priority Watch List’, terming the country as violators of the US Patents Law. It has also raised serious concern on the overall ‘innovation climate’ in India urging the Government to address the American concerns in all the IP related areas, as mentioned above.

My earlier submission in this regard:

In my blog post of February 5, 2014, I argued that patentability is related mainly to Section 3(d) of the Patents Act. and India has time and again reiterated that this provision and all the sections for invoking CL in India are TRIPS compliant. If there are still strong disagreements in the developed world in this regards, the Dispute Settlement Body of the ‘World Trade Organization (WTO)’can be approached for a resolution, as the WTO has clearly articulated that:

“WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgments. A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligations.”

Thus, it is quite intriguing to fathom, why are all these countries, including the United States, instead of creating so much of hullabaloo, not following the above approach in the WTO for alleged non-compliance of TRIPS by India?

How should the new Government respond? – The view of a renowned pro-Modi Economist:

Subsequent to my blog post of February 5, 2014, as mentioned above, a recent article dated March 4, 2014 titled “India Must Call The US’ Bluff On Patents” penned by Arvind Panagariya, Professor of Economics at Columbia University, USA, who is also known as a close confidant of Prime Minister Narendra Modi, stated as follows, probably taking my earlier argument forward:

“Critics of the Indian patent law chastise it for flouting its international obligations under the TRIPS Agreement. When confronted with these critics, my (Arvind Panagariya) response has been to advise them:

To urge the US to challenge India in the WTO dispute settlement body and test whether they are indeed right.

But nine years have elapsed since the Indian law came into force; and, while bitterly complaining about its flaws, the USTR has not dared challenge it in the WTO. Nor would it do so now.

Why?

There is, at best, a minuscule chance that the USTR will win the case.

Against this, it must weigh the near certainty of losing the case and the cost associated with such a loss.

Once the Indian law officially passes muster with the WTO, the USTR and pharmaceutical lobbies will no longer be able to maintain the fiction that India violates its WTO obligations.

Even more importantly, it will open the floodgates to the adoption of the flexibility provisions of the Indian law by other countries.

Activists may begin to demand similar flexibilities even within the US laws.

On possible actions against India under the ‘Special 301’ provision of the US trade law, Professor Arvind Panagariya argues:

“Ironically, this provision itself was ruled inconsistent with the WTO rules in 1999 and the US is forbidden from taking any action under it in violation of its WTO obligations.

This would mean that it couldn’t link the elimination of tariff preferences on imports from India to TRIPS violation by the latter.

The withdrawal of preferences would, therefore, constitute an unprovoked unilateral action, placing India on firm footing for its retaliatory action.”

US power play on IP continuing for a while:

United States, pressurized by its powerful pharma lobby groups, started flexing its muscle against India for a while. You will see now, how this short video clip captures the American ‘Power Play’ in this area.

Conclusion:

It is undeniable that there is moderately strong undercurrent in the current relationship between the United States and India, mostly based on differences over the Intellectual Property Rights (IPRs).

The resourceful MNC pharmaceutical lobby groups with immense influence in the corridors of power within the Capitol Hill, are reportedly creating this difference for unfair commercial gain.

All these are being attempted also to blatantly stymieing India’s efforts to ensure access to affordable medicines for a vast majority of the global population without violating any existing treaty commitments, as reiterated by a large number of experts in this area.

Professor Arvind Panagariya reportedly calls it: “The hijacking of the economic policy dialogue between the U.S. and India by pharmaceutical lobbies in the U.S.”

That said, while cordial relationship with the United States in all economic and other fronts must certainly be rejuvenated and adequately strengthened with utmost sincerity, the newly formed Federal Government at New Delhi with Prime Minister Narendra Modi as its bold and strong face, should not hesitate to call the US bluff on IP… for India’s sake.

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.

Is Sun Pharma Sailing In The Same Boat As Ranbaxy?

Posted on May 21, 2014 by Tapan Ray

A ‘Warning Letter’ of May 7, 2014 from the USFDA to Sun Pharmaceuticals – the no.1 pharma major by market capitalization in India has nailed its Karkhadi, Vadodara, Gujarat based plant in India for similar data deletions as found at Ranbaxy.

Such data manipulation reportedly got Ranbaxy into so much trouble that it last year paid U$ 500 million and agreed to plead guilty to 7 felony charges.

The concerned Gujarat based plant of Sun pharma manufacturers the antibiotic cephalosporin.

This development came to the fore just weeks after Sun Pharmaceutical announced a US$ 3.2 billion deal to buy the much troubled, yet the largest generic drug company of India – Ranbaxy.

My earlier apprehensions on this deal:

At that time in my blog post of April 14, 2014, I expressed my apprehensions on this deal on four key areas, with as many words as follows:

1. Sun Pharma too is under USFDA radar:

As we know that along with Ranbaxy, Wockhardt and some others, Sun Pharma also had come under the USFDA radar for non-compliance of the Current Good Manufacturing Practices (cGMPs).

Under the prevailing circumstances, I apprehended, it would indeed be a major challenge for Sun Pharma to place its own house in order first and simultaneously address the similar issues to get USFDA ‘import bans’ lifted from four manufacturing plants of Ranbaxy in India that export formulations and API to the United States.

This could be quite a task indeed for Sun Pharma.

2. Pending Supreme Court case on Ranbaxy:

Prompted by a series of ‘Import Bans’ from US-FDA on product quality grounds, the Supreme Court of India on March 15, 2014 reportedly issued notices to both the Central Government and Ranbaxy against a Public Interest Litigation (PIL) seeking not just cancellation of the manufacturing licenses of the company, but also a probe by the Central Bureau of Investigation (CBI) on the allegation of supplying adulterated drugs in the country.

Ranbaxy/ Sun pharma would, therefore, require convincing the top court of the country that it manufactures and sells quality medicines for the consumption of patients in India.

3. CCI scrutiny of the deal:

Out of the Top 10 Therapy Areas, the merged company would hold the highest ranking in 4 segments namely, Cardiac, Neuro/CNS, Pain management and Gynec and no. 2 ranking in two other segments namely, Vitamins and Gastrointestinal.

Noting the above scenario and possibly many others, the Competition Commission of India (CCI), after intense scrutiny, would require taking a call whether this acquisition would adversely affect market competition in any of those areas. If so, CCI would suggest appropriate measures to be completed by the two concerned companies before the deal could take effect.

This would also be a task cut out for the CCI in this area.

4. SEBI queries:

Securities and Exchange Board of India (SEBI), has already sought information from Sun Pharmaceutical on stock price movement and the deal structure.

According to reports, it is due to “Ranbaxy shares showing good movement on three occasions: first in December, then in January and subsequently in March 2014, just before the deal was announced.” This has already attracted SEBI’s attention and has prompted it to go into the details.

The matter is now subjudice.

The current scenario:

Out of my four identified areas of challenges, Sun Pharma has already started feeling the heat in the following two areas:

1. Quality issues with FDA:

The issue is extremely important, as to turn around Ranbaxy, this has to be addressed to the complete satisfaction of the USFDA. Otherwise, the game is a non-starter.

2. SEBI queries on stock price movement and the deal structure:

In this area, just today the Supreme Court reportedly refused to stay the Andhra Pradesh High Court order that stalled the US$ 4 billion Sun Pharma merger with Ranbaxy. Daiichi Sankyo and Ranbaxy had approached the Supreme Court seeking vacation of the stay of the status quo order by the High Court, which on April 25, 2014 directed the BSE and NSE not to approve the merger while admitting a petition by retail investors alleging insider trading in the US$ 4 billion deal.

The vacation bench comprising of Justices B S Chouhan and A K Sikri also directed the High Court to decide on Sun Pharma’s application seeking vacation of the status quo order within two days and posted the matter for further hearing on May 29. The judges observed that the Andhra High Court has no territorial jurisdiction over the merger process.

The outcome of this case would indeed be interesting and crucial for Sun Pharma.

Conclusion:

Even if one keeps aside the three issues out of above four as the legal ones, the very first challenge related to USFDA on drug quality, would continue to remain as the ‘make or break’ area, for this deal to be commercially successful for Sun Pharma.

When USFDA reportedly nailed Sun Pharma’s Karkhadi , Vadodara, Gujarat based plant for similar data deletions as found at Ranbaxy, it may give a feeling that the acquirer Sun Pharma possibly is also sailing in the same boat as the acquiree Ranbaxy.

If this apprehension makes any sense, the moot question that comes up:

“Can one blind man show the right direction to another blind man sailing in the same boat in the midst of a storm?”

Let us wait for the eternal time to tell us the answer.

By: Tapan J. Ray

Is The New ‘Market Based Pricing’ Model Fundamentally Flawed?

Posted on April 7, 2014 by Tapan Ray

After a long wait of close to two decades, when the Drug Price Control Order 2013 (DPCO 2013) followed the National Pharmaceutical Pricing Policy 2012 (NPPP 2012) last year, it appeared that the new pharma price control regime is more acceptable to the industry than the previous, resulting in better over all implementation and compliance.

However, just within a year, the reality seems to be quite different. Not only the Ceiling Price (CP) calculation process of the National Pharmaceutical Pricing Authority (NPPA) based on DPCO 2013 appears to be fundamentally flawed, its misuse and abuse by some pharma players have also been the subject of great concern and consumer aghast.

The eternal ‘Cat and Mouse’ game continues:

Probably there would be many instances of pharmaceutical companies dodging the DPCO 2013. However, FDA, Maharashtra, has unearthed the following two instances, so far:

1. Favorable consumer expectations with well-hyped DPCO 2013 received a body blow for the first time, when the general public came to know through media reports, that too after almost a year, that GlaxoSmithKline (GSK) Consumer Healthcare having launched its new ‘Crocin Advance’ 500 mg with a higher price of Rs 30 for a strip of 15 tablets, has planned to gradually withdraw its conventional price controlled Crocin 500 mg brand costing around Rs 14 for a strip of 15 tablets to the patients . GSK Consumer Healthcare claims that Crocin Advance is a new drug and therefore should be outside price control.

According to IMS Health data, ‘Crocin Advance’ is currently the fifth largest brand among top Paracetamol branded generics, clocking a sales turnover of Rs 10.3 Crore during the last 12 months ending in February 2014.

2. The second instance of evading DPCO 2013 has also been reported by the media. In this case some other pharmaceutical companies have reportedly started selling the anti-lipid drug Atorvastatin in dosage forms of 20 mg and 40 mg, which are outside price control, instead of its price controlled 10 mg dosage form. Quoting the Maharashtra FDA, the report states: “Atorvastatin may face a similar kind of action from the state FDA as other overpriced brands of drugs as this drug has been overpriced five to 10 times more than the DPCO price. This kind of overcharging is a subject for investigation. Atorvastatin of 40 mg dosage is generally recommended for senior citizens.”

Tip of an Iceberg?

All these seem to be just the tip of an iceberg related to evasion of DPCO 2013 by some pharma black ships, raising costs of essential medicines for the patients. Ironically, what is happening now is an exact replica of the same old strategy that many pharma players got involved into to avoid price control under earlier DPCO 1995. Continuation of the same act of deceit with DPCO 2013 confirms that the ‘cat and mouse game’ to avoid price control is eternal in India, in the absence of any strong and exemplary deterrent.

Better late than never:

When Maharashtra FDA brought it to the notice of National Pharmaceutical Pricing Authority (NPPA), the later asked GSK to immediately reduce the market price of ‘Crocin Advance’, as there is no proven additional therapeutic efficacy for the product. The price regulator also sought confirmation of the action taken by the company in this regard. Additionally, GSK Consumer Healthcare now faces consequential punitive measures from the NPPA for price overcharging. This action on the part of NPPA, in all probability, would get lost in the quagmire of litigation, as usually happens in India.

Be that as it may, I expect NPPA taking similar action for Atorvastatin too and increasing its vigil for such scant respect on patient-centric laws and policies of the country.

A brief recapitulation:

Just to recapitulate, DPCO 2013 has been fundamentally different from its ‘predecessor’ DPCO 1995, mainly on the following two counts:

1. Methodology of Price Control:

This has changed from earlier ‘Cost Based Pricing (CBP)’ to ‘Market Based Pricing (MBP)’ based on simple average of all products having 1 percent or more market share.

2. Span of Price Control:

In DPCO 1995, all formulations of 74 bulk drugs, selected based on specified criteria, were under cost based price control, covering over 1700 formulations. Whereas, in DPCO 2013 all essential drugs as mentioned in the National List of Essential Medicines 2011 (NLEM 2011) come under price control applying the above new methodology of MBP. DPCO 2013 brings around 652 formulations of 348 drugs under 27 therapeutic segments of the NLEM 2011, under price control.

Significant benefits of DPCO 2013 to the industry:

DPCO 2013 offers following three key advantages to the industry, both in the short and longer term:

MBP methodology in DPCO 2013 is considered by the industry as more transparent and less ‘intrusive’ than CBP methodology.

Span of price control with DPCO 2013 came down to 18 percent of the total pharmaceutical market covering around 610 formulations, as against 20 percent in DPCO 1995 covering over 1700 formulations.

Opportunity for automatic annual price increase for controlled formulations based on WPI, which was not there in DPCO 1995, is now available to the industry. Thus, in keeping with the relevant provision of DPCO 2013, NPPA has recently allowed the drug companies to increase the Maximum Retail Price (MRP) of the price controlled medicines, contributing 18 percent of the total market, by 6.32 percent effective April 1, 2014, while prices of balance 82 percent of drugs, that are outside price control, can go up by 10 percent every year.

Check on essential drugs going out of market:

Interestingly, DPCO 2013 has tried to prevent any possibility of an essential drug going out of the market without the knowledge of NPPA by incorporating the following provision in the order:

“Any manufacturer of scheduled formulation, intending to discontinue any scheduled formulation from the market shall issue a public notice and also intimate the Government in Form-IV of schedule-II of this order in this regard at least six month prior to the intended date of discontinuation and the Government may, in public interest, direct the manufacturer of the scheduled formulation to continue with required level of production or import for a period not exceeding one year, from the intended date of such discontinuation within a period of sixty days of receipt of such intimation.”

However, it is still not clear, whether or not GSK Consumer Healthcare had followed this stipulated provision for price controlled conventional Crocin formulations. At least, I do not remember having come across any such public notice, as yet.

Key concerns expressed with DPCO 2013:

The MBP methodology seems to be unique to India as CBP is more common in countries that follow drug price control. Hence the following concerns were expressed with DPCO 2013.

Reduction in drug prices with market-based pricing methodology is significantly less than the cost based ones. Hence, consumers will be much less benefitted with the new system.

Earlier cost based pricing system was not more transparent only because a large section from the industry reportedly did not co-operate with the NPPA in providing cost details, as required by them.

Serious apprehensions have been expressed about the quality of outsourced market data lacking adequate confidence level across the board, which now forms the basis of CP calculations.

Additionally, outsourced data would provide details only of around 480 out of 652 NLEM formulations. How will the data for remaining products be obtained and with what level of accuracy?

It is, therefore, believed now by many that DPCO 2013 is more of an outcome of a successful lobbying efforts of the pharmaceutical industry in India, rather than a robust pricing policy supported by a flawless methodology for CP calculations.

DPCO 2013 faces challenge in the Supreme Court:

As a result of the above apprehensions, a Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing challenging DPCO 2013.

Ground Zero of the quality of outsourced market data:

While assessing from the ‘Ground Zero’, keeping aside instances of hoodwinking DPCO 2013 with tweaked formulations, the core issue of the quality of outsourced market data forming the bedrock of CP calculation by the NPPA, undoubtedly becomes more fundamental, creating huge discomfort for many pharma players .

Unlike DPCO 1995, where NPPA used to calculate the CP based on its own audits, data provided by the concerned companies and from many other reliable market sources, the calculations to arrive at the CP for DPCO 2013 products are based predominantly on data outsourced from IMS Health, if not solely.

IMS data does not always capture correct brand prices:

As stated above, many leading pharmaceutical companies are now reportedly pointing out repeatedly that the CP fixation by the NPPA is not accurate, as the IMS Health data does not represent the real prices in many cases.

This is not a new issue either. I have been hearing similar complaints since ages in different forum, wearing different hats and also from various other reliable industry sources. Moreover, NPPA and the Department of Pharmaceuticals (DoP) have indicated several times in the past that IMS data do not capture the requisite details as needed for over 100 products featured in NLEM 2011.

According to Pharmabiz of April 2, 2014, some of the companies expressing the above apprehensions are Sun Pharma, Unichem Labs, Panacea Biotec, Win-Medicare, Albert David, Baxter (India), Indi Pharma and Gland Pharma.

Responding to such widespread complaints, the DoP has directed NPPA to revalidate the IMS data, now being used for CP calculations, for all notified medicines. Accordingly, NPPA has sought the relevant details from respective companies. However, till such data validation takes place, pharma players must comply with all CPs, as notified by the NPPA from time to time.

Difficulty in data validation:

In my view, it would not be easy for the NPPA to revalidate the IMS data due to the following reasons:

Those companies, whose prices are showing higher than the current ones in the IMS Health data, may not report to NPPA, as that could ultimately affect them adversely.

Pharma companies’ response, in general, to requests from NPPA for furnishing cost and price related information has traditionally been much less than encouraging.

The logjam to continue:

With this evolving scenario, I reckon, till the Supreme Court intervenes responding to the PIL on DPCO 2013 related issues, the dissatisfaction of the industry and the constraints of the NPPA would continue, patients being the primary sufferers.

Conclusion:

Despite the reported concern expressed in the 2014 National Trade Estimate (NTE) Report on Foreign Trade Barriers over the Indian drug price control mechanisms as a deterrent to foreign investments, government price control for essential medicines in India is here to stay for a long haul, to uphold the patients’ health interest.

That said, the final verdict of the Supreme Court related to the PIL on the NPPP 2012, based on which DPCO 2013 has been worked out, is yet to come. Any unfavorable decision of the Honorable Court on the subject may push both the NPPP 2012 and DPCO 2013 back to square one, yet again.

In this backdrop, considering the key fundamental flaw in the CP calculation process of DPCO 2013 with associated loud hiccups as evidenced by the GSK Consumer Healthcare episode and others, would a well-considered verdict of the Supreme Court on the subject be more desirable for greater access to more affordable essential drugs by the patients in India?

By: Tapan J. Ray

Access to Medicine: Losing Track in Cacophony

Posted on December 30, 2013 by Tapan Ray

Indian Healthcare space is by and large an arena, where perceptions prevail over the changing reality in many important areas. Consequently, fierce discourse in those areas mostly gives rise to a cacophony of ‘Your Perceptions Against Mine’.

It is intriguing, why even in some well-hyped research studies of recent times, multiple interpretations are made not based on specific analytics-based numbers, but around critical data gaps and then the vital ‘conclusion’ is craftily packaged in a particular way to reinforce a set of perceptions and view points.

Serious discourse on ‘Access to Medicine’ in India often falls in these data crevasses, resulting nothing more than abject cynicism and expert sermons sans accountability from all quarters. Suggestions for precise quantification of magnitude of the problem, so far as ‘Access to Medicine’ is concerned, and then measuring the same periodically for sustainable corrective measures, obviously fade away in the din of multiple shrill voices, heavily loaded with self-perceptions attempting to score favorable brownie points.

A quantifiable number on overall ‘access to medicines’ remains illusive:

A quantifiable recent number on overall ‘Access to Modern Medicines’ in India, which could well form the base to measure progress of the country in this critical area subsequently, still remains illusive.

It is an irony, no one seems to know today what is the current ‘Access to Modern Medicines’ in India, in real term.

A recent study too goes around it, but NOT into it:

A 2012 industry sponsored study carried out by IMS Consulting, instead of giving just one number for overall ‘Access to Modern Medicines’ in India, went around it by reiterating the obvious that ‘access’ has 4 dimensions such as, Physical Reach, Availability/Capacity, Quality/Functionality and Affordability.

That is fine. No issue. However, the much sought after number of overall ‘Access to Modern Medicines’ still remained illusory in this study too. Interestingly, there are no numbers available to public for each of the above 4 important dimensions either. Thus the cacophony got shriller.

Clutching on to ‘Dinosaurian data’ in modern times:

Against the above backdrop, like many others, both local and global, even the honorable President of India on January 16, 2013, while addressing the ASSOCHAM 10th Knowledge Millennium Summit, quoted the ‘World Medicines Situation of 2004 report’, the base year of which is reportedly 1999. This study indicated, ‘only 35% of the population of India, against 53% in Africa and 85% in China has access to modern medicines’.

Thus in the absence of any recently updated number, the ‘Dinosaurian data’ of 1999 (published in 2004) is being considered relevant by many even in 2013, including the esteemed industry body that probably provided those irrelevant data to the president of India’s office for his speech, at the beginning of this year.

Importance of capturing today’s ‘Access’ data to provide ‘Healthcare to all’:

There should not be even an iota of doubt that the above reported scenario has changed quite significantly, at least, during the last decade in India, making the 1999 (published in 2004) ‘Access to Medicines’ numbers irrelevant, having no sense whatsoever in 2013.

To drive home this point, I shall now focus on just three sets of parameters, besides many others, to vindicate my comment on ‘dinosaurian data’. These parameters are as follows:

Compounded Annual Growth Rate (CAGR) in per-capita expenditure on healthcare from 2006-11
Compounded Annual Growth Rate (CAGR) of the domestic pharmaceutical industry in this period
Quantum of increase in use of public healthcare facilities

1. Per capita Healthcare expenditure from 2006-11:

Year	US $
1999	18.2
2004	28.7
2006	33.0
2007	39.9
2008	42.7
2009	43.6
2010	51.4
2011	59.1

(Source WHO Data)

The above table vey clearly highlights that in 1999, the base year of the above study, per capita healthcare expenditure in India was just US$ 18.2. The figure rose to US$ 28.7 in year 2004, when that study was published. The number reached to US $ 59.1 in 2011. This reflects a double digit Compounded Annual Growth Rate (CAGR) in per capita healthcare expenditure of the country from the 2004 study to 2011.

No doubt, this number is still much less than many other countries. Nevertheless, in 2013, per capita healthcare expenditure in India will be even more, indicating significant increase in ‘Access’ as compared to 2004.

2. Growth of domestic pharmaceutical market:

According to the PwC – CII report titled “India Pharma Inc.: Gearing up for the next level of growth”, the domestic drug market has been clocking a CAGR of more than 15 percent over the last five years. Thus, high growth of the Indian Pharmaceutical Market (IPM) since the last decade, both from the urban and the rural areas, would certainly signal towards significant increase in the domestic consumption of medicines. Moreover, fast growing rural and semi-urban markets would also clearly support the argument in favor of increasing ‘Access to Modern Medicines’ in India.

A back of the envelope calculation:

Improvement in access as compared to what ‘World Medicines Situation of 2004 report’ had highlighted, may not have a linear relationship to the volume growth of the industry during this period. However, a large part of this growth could indeed be attributed to increase in overall consumption of drugs, leading to improvement in access to medicines in India.

For example, out of the reported 15 percent CAGR of the IPM, if one attributes just 8 percent volume growth/year to increased access to drugs, a back of the envelope calculation would indicate that during last nine years over the base year of 2004, the access to medicines has improved at least to 70 percent of the population, if not more, and has NOT remained just at 35 percent, as many tend to establish a point or two by quoting the above dated report.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend, as evidenced in the honorable President of India’s speech in 2013, as quoted above. Official communications of the government also keep quoting the outdated statistics stating that 65 percent of the population of India does not have ‘Access to Modern Medicines’ even today.

Be that as it may, around 30 percent of Indian population would still perhaps not have ‘Access to Medicines’ in India. This issue needs immediate attention of the policy makers and can possibly be achieved through effective implementation of a holistic public health policy model like, ‘Universal Health Care (UHC)’.

3. Increase in use of public healthcare facilities:

According to a study done by the IMS Consulting Group in 2012, in rural India, which constitutes around 70 percent of the total 1.2 billion populations of India, usage of Government facilities for Out Patient (OP) care has increased from 22 percent in 2004 to 29 percent in 2012, mainly due to the impact of National Rural Health Mission (NRHM). This increase will have significant impact in reducing ‘Out of pocket (OoP)’ healthcare expenses of the rural poor.

Overall impact on some key health indicators:

The same 2012 study of IMS Consulting highlights that an objective and comprehensive assessment of healthcare access in India was last undertaken in 2004, through a survey performed by the National Survey Sample Organization (NSSO).  The survey reported on multiple parameters related to healthcare, including morbidity in broad age groups, immunization status, episodes of outpatient/ inpatient treatment across geography/ income segments together with expenditure on treatment. These measures, the study indicates, were taken collectively to indicate the status of healthcare access.

According to this report, the Government of India had undertaken multiple programs to improve healthcare access. These programs have addressed numerous issues, in varying proportion, that are linked to healthcare access, including lack of infrastructure, high cost of treatment, and the quality and availability of treatment. Some of these programs have been enormously successful: for example, India is a polio-free country today, the study reinforces.

The study also highlights significant progress in some basic healthcare indicators. The examples cited are as follows:

Maternal mortality rate has decreased by ~50 percent, and was reported at 200 deaths per 100,000 live births in the year 2010 as compared to 390 a decade ago. A few states such as Tamil Nadu, Maharashtra, and Kerala have already achieved the Millennium Development Goal (MDG) of a maternal mortality ratio less than 109 maternal death per 100,000 live births, with multiple other states close to achieving this target.

Infant mortality rate has decreased by greater than 25 percent over the period 2000–2009, and was reported at 50 deaths per 1,000 live births. Correspondingly, the under-5 child mortality rate (U5MR) has decreased by similar percentage levels, and was reported at 64 deaths per 1,000 live births. While U5MR for urban India has achieved the MDG target of 42 the same for rural of 71 is significantly lagging the target level.

Immunization coverage has increased significantly, for example diphtheria-tetanus-pertussis immunization among 1 year olds has increased from 60% to 70%, and the Hepatitis B coverage has increased from 68% in 2005 to 91% in 2010.

National programs have successfully improved detection and cure rates for tuberculosis and leprosy.

No direct relationship established between healthcare spend and outcomes:

Though India’s per-capita healthcare spend has been lowest among the usually compared BRIC countries, the following quick example would clearly establish that the healthcare outcomes do not have a linear relationship with the per-capita healthcare spend either:

Per capita Healthcare expenditure in 2011: Country Comparison

Country	US $	World Rank	Physician/1000 people	Hospital/1000 people	Life expectancy at birth (years)
Brazil	1120.56	41	1.76	2.3	73.4
Russia	806.7	55	4.31	9.6	69.0
India	59.1	152	0.65	0.9	67.08
China	278.02	99	1.82	3.8	73.5

(Source: WHO data)

Thus, taking a cue from these numbers, India should decide at what percapita spend the country would possibly be able to ensure quality ‘access’ to healthcare for 100 percent of its population. Mere, comparison of percapita spend of each country, I reckon, may thus not mean much.

Conclusion:

The moot point, I reckon, is that, to measure progress in any sphere of activity, one will need to have a robust well-derived base point. Thereafter, progress needs to be monitored and quantified periodically from one point to the next.

So far as the access to healthcare in general and medicines in particular are concerned, it becomes difficult to fathom why is this basic approach still not being considered to measure progress in ‘Access’ and its rate in India.

As a result, discussions among the stakeholders do not take place around those updated numbers, either. Instead, what we hear is a high decibel cacophony of perceptions, at times groping around various dimensions of ‘Access’ and that too without quantification of each, as stated above. This makes the task all the more complicated in pursuit of providing ‘Healthcare to All’ in India.

That said, the question to ponder now:

Does any one know what is the current ‘Access to Modern Medicines’ number in India and at what rate the progress is being made in that direction to achieve ‘Health for All’ objective of the country?

By: Tapan J. Ray

USFDA ‘Import Bans’: The Malady Calls For Strong Bitter Pills

Posted on November 11, 2013 by Tapan Ray

It is a matter of pride that Indian pharmaceutical industry is the second largest exporter of drugs and pharmaceuticals globally, generating revenue of around US$ 13 billion in 2012 with a growth of 30 percent (Source: Pharmexcil).

Though sounds awkward, it is a reality that India is a country where ‘export quality’ attracts a premium. Unintentionally though, with this attitude, we indirectly accept that Indian product quality for domestic consumption is not as good.

‘Export quality’ being questioned seriously:

Unfortunately today, increasing number of even ‘export quality’ drug manufacturing units in India are being seriously questioned by the regulators of mainly United States (US) and the United Kingdom (UK) on the current Good Manufacturing Practices (cGMP) being followed by these companies. In many instances their inspections are culminating into ‘Import Bans’ by the respective countries to ensure dug safety for the patients.

Are drugs for domestic consumption safe?

Despite intense local and global furore on this subject, Indian drug regulators at the Central Drugs Standard Control Organization (CDSCO), very strangely, do not seem to be much concerned on this critical issue, at least, not just yet. Our drug regulators seem to act only when they are specifically directed by the Supreme Court of the country.

A recent major incident is yet another example to vindicate the point. In this case, according to media reports of November 2013, the Drug Controller General of India (DCGI) has ordered the Indian pharma major Sun Pharmaceuticals to suspend clinical research activities at its Mumbai based bio-analytical laboratory, after discovering that the company does not have the requisite approval from the central government for operating the laboratory. The DCGI has decided not to accept future applications and will not process existing new drug filings that Sun Pharma has made from the Mumbai laboratory until the company gets an approval.

Considering the blatant violations of cGMP standards that are increasingly coming to the fore related to ‘export quality’ of drugs in India, after inspections by the foreign drug regulators, one perhaps would shudder to think, what could possibly be the level of conformance to cGMP for the drugs manufactured in India solely for the local patients.

This question comes up as the record of scrutiny on adherence to cGMP by the Indian drug regulators is rather lackadaisical. The fact that no such warnings, as are being issued by the foreign regulators, came from their local counterpart, reinforces this doubt.

USFDA ‘Import Bans’:

Be that as it may, in this article let me deliberate on this particular drug regulatory issue as is being raised by the USFDA and others.

It is important to note that in 2013 till date, USFDA issued ‘Import Alerts/Bans’ against 20 manufacturing facilities of the Indian pharmaceutical exporters, sowing seeds of serious doubts about the overall drug manufacturing standards in India.

The sequence of events post USFDA inspection:

Let us now very briefly deliberate on the different steps that are usually followed by the USFDA before the outcomes of the inspections culminate into ‘Import Alerts’ or bans.

After inspections, depending on the nature of findings, following steps are usually taken by the USFDA:

Issue of ‘Form 483’
The ‘Warning letter’
‘Import Alert’

Revisiting the steps:

Let me now quickly re-visit each of the above action steps of the USFDA.

‘Form 483’:

At the conclusion of any USFDA inspection, if the inspecting team observes any conditions that in their judgment may constitute violations of the Food, Drug and Cosmetic (FD&C) and other related Acts, a Form 483 is issued to the concerned company, notifying the firm management of objectionable conditions found during inspection.

Companies are encouraged to respond to the Form 483 in writing with their corrective action plan and then implement those corrective measures expeditiously. USFDA considers all these information appropriately and then determines what further action, if any, is appropriate to protect public health in their country.

The ‘Warning Letter’:

The ‘Warning Letter’ is a document usually originating from the Form 483 observations and results from multiple lacking responses to Form 483 requiring quick attention and action. It may be noted that higher-level USFDA agency officials and not the investigator issue the ‘Warning Letters’.

‘Import Alert/ Ban’:

‘Import Alerts’ are issued whenever USFDA determines that it already has sufficient evidence to conclude that concerned products appear to be adulterated, misbranded, or unapproved. As a result, USFDA automatically detains these products at the border, costing the related companies a lot of money. The concerned company’s manufacturing unit remains on the import alert till it complies with USFDA cGMP.

What happens normally?

Most of the USFDA plant inspections are restricted to issue of Form 483 observations and the concerned company’s taking appropriate measures accordingly. However, at times, ‘Warning Letters’ are issued, which are also mostly addressed by companies to the regulator’s satisfaction.

Import Bans are avoidable:

Considering the above steps, it is worth noting that there is a significant window of opportunity available to any manufacturing facility to conform to the USFDA requirements by taking appropriate steps, as necessary, unless otherwise the practices are basically fraudulent in nature.

The concern:

Currently, there is a great concern in the country due to increasing frequency of ‘Import Alerts’. As per USFDA data, in 2013 to date, about 20 drug manufacturing facilities across India attracted ‘Import Alerts’ as against seven from China, two each from Australian, Canadian and Japanese units and one each from South African and German facilities.

The matter assumes greater significance, as India is the second-largest supplier of pharmaceuticals to the United States. In 2012, pharmaceutical exports from India to the US reportedly rose 32 percent to US$ 4.2 billion. Today, India accounts for about 40 percent of generic and Over-The-Counter (OTC) drugs and 10 percent of finished dosages used in the US.

Ranbaxy cases: ‘Lying’ and ‘fraud’ allegations:

In September 2013, after the latest USFDA action on the Mohali manufacturing facility of Ranbaxy, all three plants in India of the company that are dedicated to the US market have been barred from shipping drugs to the United States. The magnitude of this import ban reportedly impacts more than 40 percent of the company’s sales. However, Ranbaxy has a total of eight production facilities across India.

This ‘Import Alert’ was prompted by the inspection findings of the USFDA that the Mohali factory of Ranbaxy had not met with the cGMP.

Other two plants of Ranbaxy’s located at Dewas and Paonta Sahib faced the same import alerts in 2008, and are still barred from making drug shipments to the US.

The import ban on he Mohali manufacturing facility of Ranbaxy comes after the company pleaded guilty in May 2013 to the felony (criminal) charges in the US related to drug safety and agreed to pay a record US$ 500 million in fines.

In addition, the company also faced federal criminal charges that it sold batches of drugs that were improperly manufactured, stored and tested. Ranbaxy also admitted to lying to the USFDA about how it tested drugs at the above two Indian manufacturing facilities.

Heavy consequential damages with delayed launch of generic Diovan:

The ‘Import Alert’ of the USFDA against Mohali plant of Ranbaxy, has resulted in delayed introduction of a cheaper generic version of Diovan, the blockbuster antihypertensive drug of Novartis AG, after it went off patent.

It is worth noting that Ranbaxy had the exclusive right to sell a generic version of Diovan from September 21, 2012.

Gain of Novartis:

This delay will help Novartis AG to generate an extra one-year’s sales for Diovan. This is expected to be around US$ 1 billion, only in the US. This development prompted Novartis in July this year to raise its profit and sales forecasts accordingly.

Wockhardt cases: Non-compliance of cGMP

Following Ranbaxy saga, USFDA inspection of Chikalthana plant of Wockhardt in Maharashtra detected major quality violations. Second time this year USFDA noted 16 violations of cGMP in the company’s facility. Earlier, in July 2013, the Agency issued a ‘Warning Letter’ and ‘Import Alert’ banning the products manufactured at the company’s Waluj pharmaceutical production facility.

Moreover, in September 2013, Medicines and Healthcare Products Regulatory Agency (MHRA) had pulled the GMP certificate of the company’s unit based in Nani Daman, after an inspection conducted by the UK regulator showed poor manufacturing standards.

Again, in October 2013, the MHRA withdrew its cGMP certificate for the Chikalthana plant of Wockhardt. This move would ban import of drugs into the UK, manufactured in this particular plant of the company.

However, MHRA has now decided to issue a restricted certificate, meaning Wockhardt will be able to supply only “critical” products from these facilities. This was reportedly done, as the UK health regulator wants to avert shortage of certain drugs essential for maintaining public health. The impact of the withdrawal of cGMP certificate on existing business of the company can only be ascertained once Wockhardt receives further communications from the MHRA.

Earlier in July 2013, MHRA had reportedly also imposed an import alert on the company’s plant at Waluj in Maharashtra and issued a precautionary recall for sixteen medicines made in this unit.

RPG Life Sciences cases: allegedly ‘Adulterated’ products:

In June 2013, USFDA reportedly issued a ‘Warning Letter’ to RPG Life Sciences for serious violation of cGMP in their manufacturing plants located at Ankleshwar and Navi Mumbai.

USFDA investigators had mentioned that “These violations cause your Active Pharmaceutical Ingredients (APIs) and drug products to be adulterated …the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with cGMP.”

Strides Arcolab case: Non Compliance of cGMP

In September 2013, Strides Arcolab announced that its sterile injectable drug unit – Agila Specialties (now with Mylan) had received a warning letter from the USFDA after its inspection by the regulator in June 2013. However, Strides Arcolab management said, “the company was committed to work collaboratively and expeditiously with the USFDA to resolve concerns cited in the warning letter in the shortest possible time.”

USV case: allegation of ‘data fudging’:

Recently, USFDA reportedly accused Mumbai-based drug major USV of fudging the data.

After an inspection of USV’s Mumbai laboratory in June 2013, the US drug regulator said the company’s “drug product test method validation data is falsified”. The USFDA has also reprimanded USV for not training its staff in cGMP.

Probable consequences:

USFDA import bans and a similar measure by the UKMHRA would lead to the following consequences:

Significant revenue losses by the companies involved, till the concerned regulators accept their remedial actions related to cGMP.
Increasing global apprehensions about the quality of Indian drugs.
Possibility of other foreign drug regulators tightening their belts to be absolutely sure about cGMP followed by the Indian drug manufacturers, making drug exports from India more difficult.
Huge opportunity cost for not being able to take advantage from ‘first to launch’ generic versions of off patent blockbuster drugs, such as from Diovan of Novartis AG.
Indian patients, including doctors and hospitals, may also become apprehensive about the general quality of drugs made by Indian Pharma Industry, as has already happened in a smaller dimension in the past.
Opposition groups of Indian Pharma may use this opportunity to further their vested interests and try to marginalize the Indian drug exporters.
MNCs operating in India could indirectly campaign on such drug quality issues to reap a rich harvest out of the prevailing situation.
Unfounded ‘foreign conspiracy theory’ may start gaining ground, prompting the Indian companies moaning much, rather than taking tangible remedial measures on the ground to effectively come out of this self created mess.

Conclusion:

Repeated cGMP violations made by the Indian drug exporters, as enunciated by the USFDA, have now become a malady, as it were. This can be corrected, only if the reality is accepted without attempting for justifications and then swallowing strong bitter pills, sooner.

Thereafter, the domestic pharma industry, which has globally demonstrated its proven capability of manufacturing quality medicines at affordable prices for a large number of patients around the world and for a long time, will require to tighten belts for strict conformance to cGMP norms, as prescribed by the regulators. This will require great tenacity and unrelenting mindset of the Indian Pharma to tide over the crisis.

Any attempt to trivialize the situation, as indicated above, could meet with grave consequences, jeopardizing the thriving pharma exports business of India.

That said, any fraud or negligence in the drug quality standards, for whatever reasons or wherever these may take place, should be considered as fraud on patients and the perpetrators must be brought to justice forthwith by the DCGI, with exemplary punitive measures.

By: Tapan J. Ray

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

Posted on August 5, 2013 by Tapan Ray

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

Beyond ‘The Magic Moment’ of New Drug Marketing Approval

Posted on June 24, 2013 by Tapan Ray

“Uncontrolled clinical trials are causing havoc to human life. There are so many legal and ethical issues involved with clinical trials and the government has not done anything so far.”

This is exactly what the Supreme Court of India observed while responding to a Public Interest Litigation (PIL) on the subject in January 2013.

While Indian regulators with the active intervention of the Supreme Court are trying to grapple with, besides others, the basic ‘human rights’ aspect of the Clinical Trial (CT), many countries in different parts of the world are moving much ahead at a brisker pace. They have started thinking and putting in place more patient centric newer drug approval systems and also, in tandem, hastening the process of bringing new drugs to the market.

Current general scenario in CT:

Currently, after pre-clinical studies and before applying for regulatory approval, a new drug has to be tested on volunteers in randomized studies to prove its efficacy and safety on patients. Relatively short duration of new drug trials can hardly establish long-term safety and efficacy, which are now arrived at through extrapolation of data collected during CT period.

It is worth noting, the overall situation changes dramatically after launch of these products, as their usage expands from a relatively smaller number of CT volunteers to millions of real-world patients.

In a situation like this, unrealistic expectation of patients’ safety in perpetuity based primarily on extrapolation of very limited CT data is being increasingly questioned today.

That is why, on going post-marketing surveillance, which is also known as a Phase IV CT, is considered as a much more effective process to gauge relative superiority of the drug against the existing ones in terms of both efficacy and safety on a longer term.

That said, today one reads and hears umpteen number of accusations for almost lack of any meaningful response on the part of the pharmaceutical companies, in general, towards revelations of post-marketing surveillance data. This could, in turn, expose the patients to various types of risks, including wasteful healthcare expenditure.

The ‘Magic Moment’ in the present regulatory process:

A recent paper highlights a single “Magic Moment” between pre and post-licensing processes in the current drug-approval model in many countries. In this system, the use of a drug is tightly controlled in a narrowly defined pre-licensing population. Thus, CTs are also conducted on such pre-defined and relatively homogeneous volunteers, who are generally free from complicating conditions.

However, after ‘The Magic Moment’ of marketing approval, a large number of heterogeneous patient population, with many of them on multiple therapy, also use these new products in uncontrolled settings. Situations as these had led to post-marketing major drug withdrawals like, Vioxx and Avandia due to patients’ safety.

These grave concerns have led to a strategic shift in the drug regulatory approval scenario throwing open new ideas in the drug approval process.

Adaptive Licensing:

To find the right answer to this vexing issue the drug regulators in many countries are reportedly seriously contemplating to imbibe a process that will continuously help analyzing information through ongoing post-marketing surveillance data. Continuous medical data analysis like this will enable the regulators to modify their earlier decisions on marketing approval and also medical reimbursements related to pricing reasons.

This new process is called ‘Adaptive Licensing (AL)’, which is expected to benefit the overall healthcare system, by not allowing medical reimbursement of treatments with those drugs, which will provide negligible benefit over existing low cost therapies.

Difference between current mechanism and AL:

According to a ‘Health Canada’ paper titled, “The Path to Adaptive Drug Regulation”, the difference between the two is as follows:

Current system:

As explained above, post-licensing i.e. after ‘The Magic Moment’ of regulatory approval, treatment population grows rapidly and treatment experiences do not contribute to evidence generation.

Adaptive Licensing:

After initial license, treated patients grow more slowly due to regulatory restrictions. Patient experience is captured to contribute to real-world information. The marketing license is also modified accordingly from time to time.

Most desirable for many drugs:

Experts in this field opine that AL will help bringing in alignment of all required processes so important for a new drug seen from patients’ perspective like, R&D, regulatory approval and market access with the active involvement of all stakeholders like, the pharmaceutical companies, the drug regulator, payors/insurance companies and also the researchers.

In the AL system, a transparent drug development process will provide enough data on risk-benefit profile of the concerned drug to satisfy the drug regulator for its quick marketing authorization on pre-determined types of patients.

Such approval will follow real-life monitoring of efficacy and safety for modification of the drug license accordingly, wherever and whenever required.

Thus, AL is expected to strike a right balance balance between timely access to new drugs for the patients and the need to evaluate real time evolving information on safety and efficacy leading to a well-informed patient centric decisions by the drug regulators.

A continuous regulatory evaluation and decision-making process:

AL intends to evaluate a drug through its entire life span. It has been reported that during this long period, clinical and other data will “Continue to be generated on the product through various modalities, including active surveillance and additional studies after initial and full licensing. The artificial dichotomy of pre vs. post licensing stages (‘The Magic Moment’) will be replaced by graded, more tightly managed, but more timely and potentially more cost-effective market entry and market stability.”

Not necessary for all drugs in the near term:

It is worth noting that AL system may not perhaps be required for all pharmaceutical or biologic products and will not totally replace the current system of drug licensing process, at least in the near term.

AL process may immediately be followed only for those products with a favorable risk-benefit drug profile as demonstrated in the initial data and there is a robust reason for early market entry of this drug to meet unmet needs, simultaneously with ongoing studies.

The ‘Magic Moment’ freezes in India…in perpetuity:

As per the Drugs and Cosmetics Act of India, after obtaining drug marketing approval from the regulators, concerned pharmaceutical companies are required to follow the pharmacovigilance system in the country to own the responsibility and liability of the drugs as enunciated in the Schedule Y of the Act. Unfortunately, this is hardly being followed in India, ignoring patients’ safety blatantly.

With the plea that most products launched in India are already being marketed in many developed markets of the world, the concerned companies prefer to depend on clinical experiences in those markets. This attitude totally bypasses the regulatory requirement to follow a robust pharmacovigilance system in India. Indian drug regulators also do not seem to be much concerned about this important patients’ safety related requirements, very surprisingly not even for biosimilar drugs.

However, the current ground realities are quite different. As we witness today, there does not seem to be much difference in time between international and India launch of innovative products. Thus, the argument of gaining medium to long-term experience on safety and efficacy from international data related to these drugs, does not seem to hold any water at all.

On the contrary, some drugs withdrawn from the international markets on safety grounds are still available in India, despite ire and severe indictment even from the Indian Parliamentary Standing Committee.

In a situation like this, AL process of Marketing approval for selected newer and innovative drugs may be considered by the Indian Drug Regulators, just not to be more patient centric, but also to help evaluating pricing decisions of innovative drugs failing to demonstrate significantly better treatment outcomes as compared to the existing ones.

A recent example of AL:

One of the latest drugs, which reportedly will undergo such regulatory scrutiny of USFDA is Tacfidera (dimethyl fumarate) used for the treatment of multiple sclerosis, approved in April 2013 and costing US$ 54,900 per patient per year. Interestingly, Tacfidera, before the drug can find itself on a formulary, will need to demonstrate its effectiveness in the real world.

The report indicates, “the first six months after a drug launch are always about educating payers about its benefits, and while most large payers are likely to make a decision to reimburse the drug in the next twelve months, data collection will continue and changes in policies might be made at a later date.”

Thus, in the years ahead, whether a new drug will become a blockbuster or not will very largely be decided by the ongoing real world data. If the promise of a drug diminishes at any point of time through clinical data, it will certainly going to have consequential financial and other adverse impacts.

Another interesting recent development:

Under new pharmacovigilance legislation in Europe, the European Medicines Agency has reportedly announced the list of over 100 drugs that soon will bear the “black triangle” logo. This initiative is directed to encourage both the doctors and patients to report side effects to enable close monitoring of drug safety.

Criteria to include drugs under additional monitoring are:

Medicines authorized after January 1, 2011 that contain a new active substance.

Biologics for which there is limited post-marketing experience.

Medicines with a conditional approval or approved under exceptional circumstances.

Medicines for which the marketing-authorization holder is required to carry out a post-authorization safety study (PASS).

Other medicines can also be placed under additional monitoring, based on a recommendation from the European Medicines Agency’s Pharmacovigilance Risk Assessment Committee (PRAC).

Conclusion:

Global regulatory experts do believe that in the concept of AL, there are still some loose knots to be tightened expeditiously to make it a fully implementable common drug marketing authorization process. Appropriate pilot projects need to be undertaken in this area to establish beyond any doubt that AL will be decisively more preferable to the current regulatory process.

As and when AL will become the preferred drug-licensing pathway across the world, it is expected to offer greater real benefits of new drug development to the patients for their optimal use at an affordable price.

That said, some other experts do opine as follows:

“No matter how fast the authorization process operates, the merits of innovation will not be felt until they reach patients. And the barrier between authorization and patient access remains, in most of Europe, the issue of reimbursement.”

While all these are fast developing in the global CT scenario, in the jangle of Clinical Trials‘ in India, ‘Adaptive Licensing’ has still remained a critical missing ingredient even to encourage a wider debate.

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

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