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Counterfeit Drugs In India: A Malady Much Deeper

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Many debates and discussions continue being lined up in India almost regularly, generally by the pharma trade associations, besides a few others, on the issue of counterfeit drugs. A good number of these events are sponsored by the global and local anti-counterfeit product manufacturers and the related service providers, presumably to get a captive pharma audience. By and large, these gatherings are well publicized, and very rightly so, to focus for a while on this growing menace in the country.

One of the key objectives of such proceedings, I reckon, besides recommending the immediate action steps for the government in saddle, is to encourage the manufacturers of high quality drugs to protect their brands from the onslaught of counterfeiters through anti-counterfeit measures. Several of these involve a state of the art non-cloning technology. The core message that gets filtered-through, in most of these occasions is, if the suggested steps are followed by the drug companies with the related products and services, these won’t just help protect the patients’ health interest, but also provide a boost to the top and bottom lines in the pharma business, significantly.

There are no qualms about this initiative, not at all. Nonetheless, can this be considered a holistic approach to tackle the menace of counterfeit drugs, especially by the pharma players in India, and considering various other different ways the menace keep striking the patients, so surreptitiously?

Thus, in this article, my point of focus will be on a critical question, which is not asked with the same vigor always in many of the above events: Hasn’t the malady of counterfeit drugs in India spread much wider, and taken its root considerably deeper?

Counterfeit drugs and what it includes?

According to the World Health Organization (W.H.O), there is currently no universally agreed definition among its member states in what is widely known as ‘Counterfeit medicines’. Nevertheless, W.H.O does indicate that the term ‘counterfeit’ is widely used to include falsified, unlicensed, falsely packaged, stolen and substandard medical products. Jurisdictions across the world define counterfeit medicines in many different ways.

It’s worth noting here, according to W.H.O, substandard medical products also belong to this category. In 2009, W.H.O defined ‘substandard’ drugs as “genuine medicines produced by the manufacturers authorized by the NMRA (national medicines regulatory authority) which do not meet quality specifications set for them by national standards”.

Hence, notwithstanding whatever will be accepted as the general consensus of the W.H.O members on the definition of counterfeit drugs, from the patients’ perspective, any drug failing to meet with the claimed efficacy, safety and quality standards, should come under the same ‘category definition’, including substandard drugs.

Controversy over the term ‘Counterfeit’:

Many W.H.O member countries believe that the term counterfeit is closely associated and legally defined within the Intellectual Property (IP) legislation, and concentrates on trademark protection. Consequently, usage of this terminology has been perceived to have reduced the focus from what is first and foremost a public health issue. Thus, it has become quite important for W.H.O to separate the different categories of what is widely used as ‘counterfeit drug’, for the purpose of analysis and identifying strategies, to effectively address the issue of the public health menace that such activities give rise to.

Types of counterfeit drugs:

A Review Article titled “Anti-counterfeit Packaging in Pharma Industry” dated February 17, 2011, published in the “International Journal of Pharmacy and Pharmaceutical Sciences”, divided the types of counterfeit mechanisms into five categories, in which drugs are manufactured or distributed without proper regulatory clearance, and do not meet the determined standards of safety, quality, and efficacy:

  • No active ingredient (43 percent)
  • Low levels of active ingredient (21 percent)
  • Poor quality drugs (24 percent)
  • Wrong ingredients (2 percent)
  • Wrong packaging or source (7 percent)

This particular article will dwell mainly on a very important segment in this category – the substandard or poor quality drugs.

The magnitude of the problem:

On May 17, 2016, a Research Article titled, “Public Awareness and Identification of Counterfeit Drugs in Tanzania: A View on Antimalarial Drugs”, published in ‘Advances in Public Health’ – a peer-reviewed, open access journal that publishes original research articles, highlighted something that should cause a great concern not just for the Indian drug regulators, but also the Indian pharma manufacturers, in general.

The research paper, besides other points, underscored the following:

“Currently, it is estimated that 10–15 percent of the global drugs supplied are counterfeit. The prevalence is higher in developing countries in Africa and in parts of Asia and Latin America where up to 30–60 percent of drugs on the market are counterfeit. India is a major supplier of poor quality drugs whereby 35–75 percent of fake/counterfeit drugs globally originate from India.”

Another report of ‘Pharmexcil’ dated October 04, 2010 also states: “According to the Organization for Economic Cooperation and Development (OECD), 75 percent of fake drugs supplied world over have origins in India, followed by 7 percent from Egypt and 6 percent from China. India is also a leading source of high quality generic and patent drugs in the legitimate commerce worldwide. Since drugs made in India are sold around the world, the country’s substandard drug trade represents a grave public health threat that extends far beyond the subcontinent.”

Substandard drugs: a potential crisis in public health:

An article with the above title, published in the British Journal of Clinical Pharmacology on November 29, 2013 cautioned on the potential crisis in public health with substandard drugs, as follows:

“Poor-quality medicines present a serious public health problem, particularly in emerging economies and developing countries, and may have a significant impact on the national clinical and economic burden. Attention has largely focused on the increasing availability of deliberately falsified drugs, but substandard medicines are also reaching patients because of poor manufacturing and quality-control practices in the production of genuine drugs (either branded or generic). Substandard medicines are widespread and represent a threat to health because they can inadvertently lead to health care failures, such as antibiotic resistance and the spread of disease within a community, as well as death or additional illness in individuals.”

Hence, the potential of health crisis with various substandard drugs is quite similar to other types of counterfeit drugs.

Substandard drugs and small pharma players:

As I said before, the malady of counterfeit, fake and substandard drugs are spreading much wider and deeper in India. What’s happening around today in this area prompts us to believe, it may no longer be proper to keep all the large pharma manufacturers away from the ambit of discussion on substandard or counterfeit drugs. This apprehension is raising its head, as it is generally believed that only small, unknown, or fly-by-night type of drug manufacturers, are responsible for substandard, fake or counterfeit drugs. Whereas, the reality seems to be different. There are now ample reasons to believe that even some large drug manufacturers, both local and global, who have been caught by the regulator for the same wrongdoing, are also equally responsible for causing similar adverse health impact on patients.

Substandard drugs and large pharma players:

That the issue of substandard drugs is quite widespread in India, involving both global and local pharma players – small and large, is also quite evident from the following report, published in the May 14, 2016 edition of the well-reputed national daily – Hindustan Times:

“A day after French major Sanofi announced a recall of some batches of its popular painkiller Combiflam, India’s drug regulator said over 102 medicines have been highlighted for quality concerns and withdrawal in the last five months. The list includes several popular painkillers.”

The report also indicated that these are generic medicines, both with and without brand names, such as, CIP-ZOX of Cipla, Orcerin of MacLeod Pharma, Zerodol-SP of Ipca Laboratories, Pantoprazole of Indian Drugs and Pharmaceuticals Ltd and Norfloxacin of Karnataka Antibiotics & Pharmaceutical Ltd. According to the public notices of the Central Drugs Standard Control Organization (CDSCO), these batches were manufactured in June 2015 and July 2015, and carried expiry dates of May 2018 and June 2018.

The CDSCO also reportedly said that in notices posted on its website in February and April, 2015, it found some batches of Combiflam to be “not of standard quality” as they failed disintegration tests. The point to note is, according to the US-FDA, disintegration test is used to assess the time it takes for tablets and capsules to break down inside the body and are used as a quality-assurance measure.

“All drugs listed under the drug alert list should be recalled with immediate effect. We have found some serious problems with the making of the drug because of which we have highlighted quality concerns. Hence, recall is necessary for all companies,” GN Singh, the Drug Controller General of India (DCGI), reportedly told the above newspaper.

Should the ‘intent behind’ be considered as the key differentiating factor?

This takes me to another question: What’s the ‘intent behind’ manufacturing substandard drugs? It is not difficult to make out that the only ‘intent behind’ manufacturing substandard drugs by illegal, some small or fly-by-night type of drug operators would be to make quick money, by cutting corners, and criminally falsifying the entire process.

Until recently, I used to strongly believe that those large manufacturers who are getting caught for releasing substandard drugs to the market, have made sheer mistakes, and these are no more than minor aberrations. However, recent findings by the US-FDA, after rigorous manufacturing quality audit of several production facilities of large and small generic drug producers of India, make me wonder whether this thin differentiating line of ‘intent behind’ manufacturing substandard drugs, though still exists, has started getting blurred. The foreign regulators have imposed import ban on drugs produced in those facilities on the ground of willingly compromising drug quality, and grossly falsifying data.

I am not going into those much discussed details here, once again, as the drugs involved in the above cases are meant for exports and the import bans, by the foreign regulators were aimed at protecting the health and safety of citizens of those countries. In this article my focus is on India, and health interest of the local Indian population.

Thus fathoming a different ‘intent behind’ manufacturing substandard drugs, especially by the large and well-known manufacturers, is the real challenge. What sort of anti-counterfeit events will be able to possibly address this perturbing issue, that is now getting revealed much faster than even before?

Who in India ensures that all drugs are safe?

Possibly none, not even the drug regulators and the enforcers of the drug laws, as a number of national and international media reports reveal. General public doesn’t get any assurance from any authorities that the medicines sold by the drug retail outlets, pan India, are all standard quality and genuine.

At the same time, it is equally challenging for anyone to ascertain, with absolute certainty, that it’s a counterfeit, substandard or a fake drug, in whatever name we call it, is responsible for avoidable suffering or even death of an individual. In such a sad eventuality, one has no other choice but to accept that the causative factor was either a wrong diagnosis of the disease, or delayed onset of treatment.

Is CDSCO still in a denial mode?

It’s an irony that the government sources often highlight that the incidence of substandard, spurious or fake drugs in India has declined from around 9 percent in the 1990s, to around 5 percent in 2014-15, quoting the CDSCO sample survey findings.

Nevertheless, while looking at the same CDSCO survey results of the last four years – from 2011-12 to 2014-15, the incidence of spurious and substandard drugs in India appears to be static, if not marginally increased, as follows:

Year Tested Samples Substandard Samples Spurious or Adulterated samples % Failed
2011-12 48,082,00 2,186.00 133.00 4.82
2012-13 58,537.00 2,362.00 70.00 4.15
2013-14 72,712.00 3,028.00 118.00 4.32
2014-15 74,199.00 3,702.00 83.00 5.10

Source: Central Drugs Control Organization (CDSCO)

In my view, these CDSCO results should be taken perhaps with dollops of salt, not merely the sample size for these surveys is too small, but also the complexity involved in the collection of the right kind of samples that will always pass the acid test of independent experts’ scrutiny.  Right representational sample size – state-wise, is so important, primarily considering that India is the world’s third-largest pharmaceutical market by volume, consumes 383 billion medicines per annum, according to a 2015 Government report, and is quite a heterogeneous pharma market.

A September 06, 2016 media report well captured the palpable hubris of the Government on this worrying subject. It quoted the Drug Controller General of India (DCGI) – Dr. G N Singh as saying: “This is an encouraging trend when it comes to comparing Indian made generics with that produced in regulated markets. This will help us dispel the myth that India is a source of substandard drugs as compared to any other regulated market.”

Interestingly, other studies and reports do indicate that this menace could well be, at least, thrice as large.

Be that as it may, according to an October 22, 2016 media report, CDSCO is expected to release the findings of the latest survey on ‘spurious drugs’ in India by end October 2016.

Two recent good intents of CDSCO:

Apparently, as a response to the widespread public criticism on this issue, despite being in a denial mode earlier, CDSCO has recently expressed two good intents to address this issue, as follows:

  • As reported on October 18, 2016, it has sent a recommendation to the Union Ministry of Health to amend the Drugs & Cosmetics Act to facilitate implementation of bar coding and Unique Identification Number (UIN) on every pack of domestic pharma products.
  • To ensure consistency and uniformity in the inspection process, on May 26, 2016, by a Public Notice, it issued a new draft checklist of ‘Risk Based Inspection of the Pharma Manufacturing Facilities’ for verification of GMP compliance as per the provisions stated under Schedule M of Drugs and Cosmetics Rules, 1945, and sought suggestions from the stakeholders. This checklist would be used by drug regulatory enforcement agencies as a science based tool. It also envisaged that the pharma industry would find this checklist useful for self-assessment.

Let’s now wait and watch, to get to know the timeline of translating these good intents into reality on the ground, and the impact that these decisions will make to reverse the current worrying trend of counterfeit and substandard drugs in India.

Conclusion:

The malady of counterfeit or substandard drugs is not just India centric. Various credible sources have estimated that around a million people fall victim to such so called ‘medicines’, each year. However, unlike many other countries, India still doesn’t have any structured and effective regulatory or other mechanisms, not even any spine-chilling deterrent, in place to address this public health menace of humongous implications.

That said, besides serious health hazards, the adverse financial impact of substandard drugs on patients is also significant. Such drugs, even when non-fatal, are much less effective, if not ineffective or trigger other adverse reactions. Thus, a longer course of treatment, or switching over to a different medication altogether, may often be necessary, multiplying the cost of treatment.

In that sense, substandard, spurious, fake or counterfeit drugs, in whatever name one describes these, increase the disease burden manifold, besides being life-threatening. This issue assumes greater significance in India, where 58.2 percent of the total health expenditure is incurred out-of-pocket by a vast majority of the population. Medicines alone, which are mostly purchased from private retail outlets, across India, account for between 70 and 77 per cent of the individual out of pocket health spending, according to a W.H.O report.

High decibel campaigns on various anti-counterfeit technology solutions for fast selling, or expensive brands of large pharma companies, whether sponsored by placing the commercial interest at the top of mind, or even otherwise, are welcome, so are the two recent good intents of the Union Government, in this area.

However, the desirable proactive focus on curbing the menace of substandard medicines in India, which cause similar health risks as any other type of counterfeit drugs, does not seem to be as sharp, not just yet, barring the pharma export sector. Nor does this issue attract similar zest for a meaningful discourse related to patients’ health and safety within the country, as associated with various other anti-counterfeiting technology solution oriented events. The anomaly remains intriguing, especially when the malady spreads, with its root reaching deeper.

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 Criticizing Pharma Now Just A Fad?

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Is criticizing pharma now just a fad of its stakeholders? Fathoming the right answer to this seemingly simple question may not be too easy, either, for some. The task could even be more onerous, especially when the global ‘researched based’ pharma and biotech companies, well chorused by their trade associations, are exerting serious efforts to garner the much required trust of all stakeholders on their ‘patient centric’ focus in the process of transacting business.

This often repeated pledge, as it were, on ‘patient centric’ approach is indeed praiseworthy. There’s no two opinions about it, either. The new found interest of several ‘research-based’ pharma and biologic players to develop less expensive biosimilar drugs, to possibly improve patient access to otherwise expensive biologic medicines, post patent expiry, could well be a reiteration of the same and well publicized vow, of course if not proven otherwise.

A recent example:

In the context of ‘patient-centric’ approach with biosimilar product development by the world’s largest innovative biologic drug makers, let me quote the following recent example.

On September 23, 2016, by a Press Release, the Food and Drug Administration of the United States (US-FDA) announced regulatory approval of Amjevita (adalimumab-atto) as a biosimilar to Humira (adalimumab) for multiple inflammatory diseases. This is the fourth FDA-approved biosimilar, after the new biosimilar pathway became effective in the US. Amjevita has been developed by Amgen Inc. – one of the global pioneers in the development of innovative biologic drugs.

According to US-FDA, a biosimilar is a biological product that is approved based on a showing that it is highly similar to an already-approved biological product and has no clinically meaningful differences in terms of safety, purity and potency (i.e., safety and effectiveness) from the reference product, in addition to meeting other criteria specified by law.

Although, Amjevita is biosimilar to Humira,  it has not been approved as an interchangeable product with Humira. This issue is considered as a major regulatory roadblock in the US for substitution of original biologic brands with their biosimilar equivalents, which can, therefore, be prescribed mostly to the new patients. It’s worth noting here that Humira – the blockbuster arthritis drug of AbbVie Inc. clocked a sale of US$ 14 billion in 2015, and probably will continue to do so in the foreseeable future, even long after patent expiry. I shall touch upon that point below, briefly.

It is estimated that the savings of putting just new patients on much less expensive biosimilar drugs, sans substitution of the expensive original brand, will be billions of dollars. Nonetheless, this will help reduce the cost of treatment with biologic medications, improving their access to many others.

A key barrier:

Interestingly, the barriers to following the biosimilar path are being mostly created none other than the innovative drug companies themselves, even post patent expiry, presumably to extend market exclusivity and monopoly pricing.

Arising out of one such key barrier, in the form of patent litigation, Amgen’s Amjevita, in all probability, may not be available to deserving patients for years. This could involve a protracted process of skillfully navigating through the labyrinth of legalities.

On August 05, 2016, The Wall Street Journal (WSJ) reported that AbbVie Inc. has filed a patent-infringement lawsuit against rival Amgen Inc., seeking to block sales of a lower-priced biosimilar of AbbVie’s top-selling, now generally considered as an off-patent drug – Humira.

When the narrative gets paradoxical:

While all the ‘research-based’ drug companies claim to be ‘patient-centric’ in their business approaches, be it with the development of biosimilars or in other areas, somewhere this narrative gets paradoxical.

On September 02, 2016, Reuters reported that global ‘research-based’ companies are now ‘waging courtroom patent battles against each other over biosimilars, as the line blurs between companies known for their innovative medicines, and those that produce cheaper biotech knockoffs.’

Some of the recent high-profile examples were reported as follows:

  • Sanofi sued Merck in the US federal court over its biosimilar version of Lantus insulin with around US$7 billion in annual sales.
  • Eli Lilly reached a royalties deal with Sanofi to end a similar Lantus-related lawsuit, but their pact means the biosimilar launch was likely delayed.
  • Pfizer and Korea’s Celltrion in August beat back a court challenge from Johnson & Johnson over US$10 billion autoimmune drug Remicade, though J&J’s Janssen unit promised to appeal.
  • In a closely watched case, Novartis wants the US Supreme Court to dump a six-month marketing delay for biosimilars, in what would be the first time the high court took up a biosimilar case.
  • Samsung Bioepis, along with partner and minority shareholder Biogen Inc, filed a lawsuit against AbbVie in Britain in March to stop the US company from blocking the launch of yet another Humira biosimilar.

It is equally noteworthy, while Amgen is keen to launch its own biosimilars, the company’s aggressive legal strategy delayed Novartis’s efforts to introduce the first US biosimilar, Zarxio, before the copy of Amgen’s US $1 billion drug Neupogen finally went on sale last year.

Further, Amgen has also filed a legal suit against a biosimilar version of its Enbrel (etanercept) developed by Novartis (Sandoz), which has already received regulatory approval from the US-FDA on August 30, 2016 for multiple inflammatory diseases.

Taking these into consideration, isn’t, therefore, about time to ponder afresh, whether the innovative drug makers’ general mindset of maintaining drug exclusivity with a very high price, on techno-legal grounds, even after enjoying price monopoly over a long period of the specified time, be termed as ‘patient-centric’?

Indian scenario:

Indian players have already started developing biosimilar drugs in the country. This market offers a lucrative future opportunity considering that original biologic brands with a global turnover of around US$ 70 billion will expire by 2020.

The first biosimilar was approved and marketed in India for a hepatitis B vaccine in 2000 (GaBI Online). By now, around 30 such products have reportedly received the Drug Controller General of India (DCGI)’s approval for marketing in India. Even after the new biosimilar guidelines were framed and implemented locally, since 2012, there has not been any worthwhile legal suits filed by the global innovative biologic manufacturers, against the Indian companies or such products developed and approved in India, till 2014.

Since then, this scenario has changed with Roche suing Biocon and its partner Mylan on their biosimilar versions of Roche’s Herceptin (Trastuzumab) for breast cancer, and also making the DCGI a party to this suit. This litigation is broadly on the following grounds:

  • Non-adherence to the Indian biosimilar guidelines
  • Misrepresentation of drugs as biosimilar and passing off 

Be that as it may, its key impact is on affordable biosimilar drugs that can save more lives of breast cancer patients in India. If it is so, do such litigations demonstrate a patient-centric perspective for so important a drug, which is not even protected by a product patent in India, any longer?

Are biosimilars the only examples?

Lest I am not seen as highlighting only the instances of blocking market entry of biosimilar drugs, as sole examples of ‘patient-centric focus’, or lack of it, of many global innovative drug manufacturers, I would now expand it, just a bit. This is only to fathom the bottom-line – whether it is a ‘patients-centric’ focus, or solely a ‘profit-centric’ outlook.

‘Patients-centric’ or ‘Profit-centric’?

To get a sense on this vexing issue, it would be worthwhile for us to find out by ourselves the most appropriate reason behind each of the following. Of course it’s just an illustration. This reason could be either a ‘patient centric’ focus, or simply a ‘profit centric’ outlook. …And then let’s try to make out which way the overall balance tilts, on the ground:

  • Discovering new drugs, delivery systems, and finding new indications
  • Lack of transparency and widely reported bias towards mainly positive results in clinical trial data, both for publication and regulatory approval of various new drugs, and associated global furor.
  • Exorbitant high prices of many new patented medicines and some generic drugs too
  • Widely reported marketing/other malpractices, and associated fines paid by the respective players
  • Causing entry delay for cheaper small molecule generics and large molecule biosimilar drugs post patent expiry restricting gtreaterr patient access

What’s your relative score now?

Conclusion:

Let me sign off here by raising the following relevant questions in this area, for all of us to think and address, as we deem appropriate:

Is the narrative of ‘patient centric’ approach of the ‘research-based’ global drug companies’ now getting clearer with the widely reported credible examples, as above?

Is there still a paradox between their two different strategic business approaches – one entry into off-patent drug development, such as biosimilars, and the other in blocking or delaying entry of such drugs, whenever possible, even after enjoying a specified period of product pricing monopoly?

Does it then mean, what a large section of pharma industry constituents is now publicly demonstrating, at least in the above areas, more than negates their protracted sound bites on ‘patient centric’ focus?

Despite these facts, would pharma related criticism in this space be termed as just a fad of the stakeholders?

If not, what should be the way forward from here to ensure that remedial measures are taken in so important an area of ‘patient-centric’ outlook, soon enough?

By: Tapan J. Ray 

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

Does Healthcare Feature In Raisina Hill’s To-Do List?

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At the Capitol Hill, while addressing the joint session of the United States Congress, on June 08, 2016, our Prime Minister Mr. Narendra Modi well articulated the following, in his inimitable style:

“My to-do list is long and ambitious. It includes a vibrant rural economy with robust farm sector; a roof over each head and electricity to all households; to skill millions of our youth; build 100 smart cities; have a broadband for a billion, and connect our villages to the digital world; and create a 21st century rail, road and port infrastructure.”

This ambitious list is indeed praiseworthy. However, as the Prime Minister did not mention anything about health care infrastructure, while referring to rapid infrastructure development in India, it is not abundantly clear, just yet, whether this critical area finds a place in his ‘to-do’ list, as well, for ‘We The People of India’.

This apprehension is primarily because, no large scale, visible and concrete reform measures are taking place in this area, even during the last two years. It of course includes, any significant escalation in the public expenditure for health.

Ongoing economic cost of significant loss in productive years:

“The disease burden of non-communicable diseases has increased to 60 per cent. India is estimated to lose US$ 4.8 Trillion between 2012 and 2030 due to non-communicable disorders. It is therefore critical for India to transform its healthcare sector,” – says a 2015 KPMG report titled, ‘Healthcare: The neglected GDP driver.’ 

This significant and ongoing loss in productive years continues even today in India, handicapped by suboptimal health care infrastructure, and its delivery mechanisms. Such a situation can’t possibly be taken for granted for too long. Today’s aspiring general public wants the new political leadership at the helm of affairs in the country to address it, sooner. A larger dosage of hope, and assurances may not cut much ice, any longer.

Transparent, comprehensive, and game changing health reforms, supported by the requisite financial and other resources, should now be translated into reality. A sharp increase in public investments, in the budgetary provision, for healthy lives of a vast majority of Indian population, would send an appropriate signal to all.

As the above KPMG report also suggests: “It is high time that we realize the significance of healthcare as an economic development opportunity for national as well as state level.”

Pump-priming public health investments:

With a meager public expenditure of just around 1.2 percent of the GDP on health even during the last two years, instead of rubbing shoulders with the global big brothers in the health care area too, India would continue to rank at the very bottom.

Consequently, the gaping hole within the healthcare space of the country would stand out, even more visibly, as a sore thumb, escaping the notice, and the agony of possibly none.

With around 68 percent of the country’s population living in the rural areas, having frugal or even no immediate emergency healthcare facilities, India seems to be heading towards a major socioeconomic imbalance, with its possible consequences, despite the country’s natural demographic dividend.

According to published reports, there is still a shortage of 32 and 23 percent of the Community Health Centers (CHC) and the Primary Health Centers (PHC), respectively, in India. To meet the standard of the World Health Organization (WHO), India would need minimum another 500,000 hospital beds, requiring an investment of US$ 50 Billion.

Moreover, to date, mostly the private healthcare institutions, and medical professionals are engaged in the delivery of the secondary and tertiary care, concentrated mostly in metro cities and larger towns. This makes rural healthcare further challenging. Pump-priming public investments, together with transparent incentive provisions for both global and local healthcare investors, would help augmenting the process.

Help propel GDP growth:

As the above KPMG report says, the healthcare sector has the ability to propel GDP growth via multiple spokes, directly and indirectly. It offers a chance to create millions of job opportunities that can not only support the Indian GDP growth, but also support other sectors of the economy by improving both demand and supply of a productive healthy workforce.

Three key areas of healthcare:

Healthcare, irrespective of whether it is primary, secondary or tertiary, has three major components, as follows: 

  • Prevention
  • Diagnosis
  • Treatment 

Leveraging digital technology:

As it appears, leveraging digital technology effectively, would help to bridge the health care gap and inequality considerably, especially in the first two of the above three areas.

A June 06, 2016 paper titled, ‘Promoting Rural Health Care: Role of telemedicine,’ published by the multi-industry trade organization -The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said: “With limited resources and a large rural population telemedicine has the potential to revolutionize the delivery of healthcare in India.”

As the report highlighted, it would help faster diagnosis of ailments, partly address the issues of inadequacy of health care providers in rural areas, and also the huge amount of time that is now being spent in physically reaching the urban health facilities. Maintenance of the status quo, would continue making the rural populace more vulnerable in the health care space, than their urban counterparts.

The study forecasted that India’s telemedicine market, which has been growing at a compounded annual growth rate (CAGR) of over 20 per cent, holds the potential to cross US$32 million mark in turnover by 2020, from the current level of over US$15 million.

According to another report, currently, with around 70 percent overall use of smartphones, it is quite possible to give a major technology enabled thrust for disease prevention, together with emergency care, to a large section of the society.  

However, to demonstrate the real technology leveraged progress in this area, the Government would require to actively help fixing the requisite hardware, software, bandwidth and connectivity related critical issues, effectively. These will also facilitate keeping mobile, and other electronic health records.

Disease treatment with medicines:

To make quality drugs available at affordable prices, the Indian Government announced a new scheme (Yojana) named as ‘Pradhan Mantri Jan Aushadhi Yojana’, effective July 2015, with private participation. This is a renamed scheme of the earlier version, which was launched in 2008. Under the new ‘Pradhan Mantri Jan Aushadhi Yojana’, about 500 generic medicines will be made available at affordable prices. For that purpose, the government is expected to open 3000 ‘Jan Aushadhi’ stores across the country in the next one year i.e. 2016-17.

The question now is what purpose would this much hyped scheme serve?

What purpose would ‘Pradhan Mantri Jan Aushadhi Yojana’ serve?

Since the generic drugs available from ‘Jan Aushadhi’ retail outlets are predominantly prescription medicines, patients would necessarily require a doctor’s physical prescription to buy those products.

In India, as the doctors prescribe mostly branded generics, including those from a large number of the Government hospitals, the only way to make ‘Jan Aushadhi’ drugs available to patients, is to legally allow the retailers substituting the higher priced branded generic molecules with their lower priced equivalents, sans any brand name.

Moving towards this direction, the Ministry of Health had reportedly submitted a proposal to the Drug Technical Advisory Board (DTAB) to the Drug Controller General of India (DCGI), for consideration. Wherein, the Ministry reportedly suggested an amendment of Rule 65 of the Drugs and Cosmetics Rules, 1945 to enable the retail chemists substituting a branded drug formulation with its cheaper equivalent, containing the same generic ingredient, in the same strength and the dosage form, with or without a brand name.

However, in the 71st meeting of the DTAB held on May 13, 2016, its members reportedly turned down that proposal of the ministry. DTAB apparently felt that given the structure of the Indian retail pharmaceutical market, the practical impact of this recommendation may be limited.

For this reason, the ‘Pradhan Mantri Jan Aushadhi Yojana’, appears to be not so well thought out, and a one-off ‘making feel good’ type of a scheme. It is still unclear how would the needy patients derive any benefit from this announcement.

Conclusion:

On June 20, 2016, while maintaining the old policy of 100 per cent FDI in the pharmaceutical sector, Prime Minister Modi announced his Government’s decision to allow foreign investors to pick up to 74 per cent equity in domestic pharma companies through the automatic route.

This announcement, although is intended to brighten the prospects for higher foreign portfolio and overseas company investment in the Indian drug firms, is unlikely to have any significant impact, if at all, on the prevailing abysmal health care environment of the country.

Hopefully, with the development of 100 ‘smart cities’ in India, with 24×7 broadband, Wi-Fi connectivity, telemedicine would be a reality in improving access to affordable healthcare, at least, for the population residing in and around those areas.

Still the fundamental question remains: What happens to the remaining vast majority of the rural population of India? What about their health care? Poorly thought out, and apparently superficial ‘Pradhan Mantri Jan Aushadhi Yojana’ won’t be able to help this population, either. 

With the National Health Policy 2015 draft still to see the light of the day in its final form, the path ahead for healthcare in India is still rather hazy, if not worrying. 

As stated before, in the Prime Minister’s recent speech delivered at the ‘Capitol Hill’ of the United States earlier this month, development of a robust healthcare infrastructure in the country did not find any mention in his ‘to-do’ list.

Leaving aside the ‘Capitol Hill’ for now, considering the grave impact of health care on the economic progress of India, shouldn’t the ‘Raisina Hill’ start pushing the envelope, placing it in one of the top positions of the national ‘to-do’ list, only to protect the health interest of ‘We The People of India’?

By: Tapan J. Ray

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

PE Investment In Pharma: The Changing Need Of Due Diligence

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From an international perspective, a Bain & Company report of April 2016 highlighted setting a new healthcare M&A record in the year 2015. During this year the total deal value was over 2.5 times higher than the average annual deal value of the previous decade. The report also mentioned that the Asia-Pacific Region grew in the same year by about 40 percent, fuelled by a number of activities in India and China. 

Commenting on India, the Bain report specifically mentioned that during the year, the Private Equity (PE) investors prioritized their investments in the country, not just targeting the global demand for pharmaceuticals, but also based on rapid domestic demand growth.

More popular targets in India were tertiary care, specialty care and laboratories. This is vindicated by TPG’s investment of US$146 million for a minority stake in Manipal Health, which operates multi-specialty and teaching hospitals in the country. Similarly, The Carlyle Group made a minority investment in the pathology lab chain – Metropolis Healthcare. This trend is expected to continue in the coming years and would in all probability include pharma companies of various sizes, with high performance or with high future potential.

In this article, I shall focus only on generic pharma companies in India.

A changing need of due diligence:

Despite some major uncertainties in the generally thriving domestic generic pharma market, this sector has the potential and possibility to come under the radar of many PE investors during the coming years.

However, in this scenario, to embrace success with lucrative returns, I reckon, there is a changing need of due diligence to follow, before suitable pharma companies are appropriately targeted. Conventional pharma due diligence, however stringent it is, may not capture appropriately the high-impact, up and down sides of long term business sustainability for the desired return on investments.

The rationale:

Consideration of significant cost savings in the pharma value chain won’t be just enough, any longer, to tide over any unforeseen rapid downturn in many pharma company’s business performances in the country.

This is largely because, many pharma companies in India have been thriving, so far, taking full advantage of some major loopholes in the regulatory area, including clinical trial; ethical marketing strategy and practices; overall generic product portfolio selection; new generic product developments; besides many others.

The need of a changing format of pharma due diligence in India is largely prompted by this prevailing scenario, even in the midst of stellar success of some companies, and plenty of lush green shoots, as they appear to many. 

The process of tightening the loose knots has commenced:

All these loose knots are expected to be tightened by the governments, sooner or later. In fact, while watching the intent of the Government and from some of its recent actions, it appears that the process has just commenced. Public and judicial pressure in these areas would also increasingly mount, with several related and major Public Interest Litigations (PIL) still remaining pending before the Supreme Court of India.

A few examples in this critical area: 

Thus, for any successful PE investments, especially for relatively long term, alongside conventional areas of due diligence, several non-conventional, but high business impact areas, need to be effectively covered for the Indian generic pharma companies, in general. Following are just a few examples in this critical area:

  • Business practices that the promoters personally believe in and practice
  • Belief and practices of key company personnel
  • Quality of regulatory approval
  • Product portfolio scrutiny
  • Marketing demand generation process and its long-term sustainability
  • Ability to introduce high-tech formulations with differentiated value offerings
  • Ability to come out with cost-effective manufacturing processes
  • Are Independent Directors, if any, really ‘Independent’?

I shall now very briefly try to illustrate each of the above points.

I. Business practices that the promoters personally believe in:

A large number of successful generic pharma companies are directly or indirectly driven, or in all practical purposes managed, and in several cases even micromanaged by the company promoters. Many experts have opined, though a craftily worded handbook of ‘corporate governance’ may exist in many of these companies, on the ground, promoters’ thoughts, belief, ethical standards, business practices and work priorities may easily supersede all those. 

The practice of good governance on the ground, rigid compliance with all rules, laws and regulations may quite often go for a toss. The employees implementing promoter’s decisions, may try their level best to record everything perfectly and as required. Nevertheless, sometimes regulators do succeed to ferret out the fact, which leaves an adverse impact on the business, in multiple ways.

Recent reports of the US-FDA on ‘data fudging’ in the drug manufacturing process, product quality standards and also in Clinical Trials, would illustrate this point. According to a 2015 EY Report on data integrity, ‘Import Alerts issued against Indian plants in 2013 accounted for 49 percent of the total 43 imports alerts issued by the US FDA worldwide.’

In some successful generic pharma company’s repetition of such incidences has also been reported. In my view, for recurrence of ‘data fudging’, no promoter of the concerned companies can possibly wash his/her hands off, putting all the blame on concerned employees, and the system.

A situation like this necessitates personal due diligence for promoters. It will help ascertain the persons’ business integrity, alongside the company performance as a whole. Accordingly, the PE investors would be able to flag those critical soft areas, which are key determinants for long-term sustainability of any pharma generic business in the country. 

II. Belief and practices of key company personnel:

The findings of the above EY Report also suggest, while most of the generic pharma company professionals are aware of the current Good Manufacturing Practices (cGMP) guidelines, more than 30 percent had still received ‘Inspectional Observations’ from the regulators in the last three years.

This fact calls for due diligence on another critical issue, and that is on the belief and practices of the key company personnel in the new product development, manufacturing, drug quality, marketing, supply chain management, and also covering their interaction with key regulatory and other Government personnel. These are soft issues, but with potential to make the whole business topsy-turvy, virtually overnight.

Conventional due diligence based on the company records may not always reflect the real situation within the organization.

III. Quality of regulatory approval: 

To illustrate this point, let me give the example of a launch of a ‘new drug’ in India. 

A ‘new drug’ has been defined in the Drugs and Cosmetics Acts in India, as any new drug substance which is being introduced for the first time in India, including any off-patent generic molecule, with the permission of only the Drug Controller General of India (DCGI). A ‘new drug’ shall continue to be considered as ‘new drug’ for a period of four years from the date of its first approval or its inclusion in the Indian Pharmacopoeia, whichever is earlier.

Thus, for even for any generic pharma product, be it a single ingredient or a ‘Fixed Dose Combination (FDC)’, if a marketing license is granted by any State Drug Controller, whatever may be the reason, despite the product being a licensed one, it will deem to be unauthorized as the DCGI’s approval was not obtained during the valid period of the 4 years, as per the Act.

Hence, a proper due diligence on the ‘quality of regulatory approval’ to detect presence of any such successful products in the product portfolio, would enable the PE investors in India to flag a possible risk of a future ban, inviting adverse business impact.

IV. Product portfolio scrutiny:

This scrutiny may not be restricted to some conventional areas, such as, to find out the ratio between the price control and decontrol products, leaving future scope to improve the margin. It may also focus on many other important India-specific areas.

One such area could even be the non-standard FDCs in the product portfolio. Some of these FDCs could also be approved by the state drug controllers earlier, scrupulously following the drug laws and rules. However, if the medical rationale of any of these successful products can’t be credibly established, following the global standards, the risk of a future ban of such products would loom large.

Another area could be the percentage of those products in the product portfolio, where the medical claims are anecdotal, and not based on scientific data, generated through credible clinical trials. 

One may draw a relevant example from the Nutraceutical product category. Although, these products are high margin and currently do not come under price control, the stringent regulatory demands for this category of products have already started coming. Strict conformance to the emerging regulatory requirements of both the DCGI of FSSAI may be cost intensive, squeeze the margin, could also pose a great challenge in the conventional demand generating process. I hasten to add that such decision would possibly be dictated by the time scale of PE investment, and the risk-appetite of the investors.                                                            

Yet another example prompts the need to check the quality of generic brands in the product portfolio. According to the Drugs and Cosmetics Act of India, some of these brands would merit to be categorized as drugs. In practice, the company concerned could well be surreptitiously classifying those as nutritional supplements, or Nutraceuticals, with the support of some State Drug Controllers and promoted accordingly, simultaneously avoiding any risk of drug price control. 

V. Marketing demand generation process and long-term sustainability:

This assumes critical importance in the pharma industry, especially when the Government is mulling to give the current voluntary ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ legal teeth, by making it mandatory for all. As I understand, besides other penal action, in serious cases of gross violations of the code, even the marketing license of the offender may get suspended, or cancelled. Thus, compliance to UCPMP would be critical to business performance. Thus, the level of compliance of a company in this regard could well be a part of the due diligence process of the PE investors.

It is also important to understand, whether the pharma generic target asset is predominantly buying doctors’ prescriptions through various dubious means to increase its brand off-takes, or the prescription demand generation process primarily stands on robust pillars of a differentiated value delivery system. The latter is believed to be more desirable for sustainable long term business success.

It is also important to understand, whether the strategic marketing process adopted by the company can withstand robust ethical, legal and regulatory scrutiny, or it is just an outward impressive looking structure, unknowingly built as ‘House of Cards, waiting to be collapsed anytime, sooner or later.

I would now give just a couple of other examples in this area, out of so many – say, a health product, which has been categorized as a drug by the drug authority, is freely advertised in the media, at times even with top celebrity endorsements. This strategy is short term, may eventually not fly, and is certainly not sustainable in the longer term, avoiding regulatory scrutiny. Another example, big brands of Nutraceuticals are being promoted with off-label strong therapeutic claims, and have become immensely successful because of that reason.

VI. Ability to introduce formulations with high-tech value offerings:

India is basically a branded generic market with huge brand proliferations of each molecule, or their FDCs. Just like any other brand, for business success and to overcome the pricing barrier, differentiated value offerings are essential for long term success of any branded generic too. This differentiation may be both tangible and intangible. However, if such differentiation is based on high-technology platforms, it could provide a cutting edge to effectively fight any cut throat competition. Thus, appropriate due diligence to ascertain the robustness of the ability to introduce high-tech formulations with differentiated value offerings, would be an added advantage.

VII. Ability to come out with cost-effective manufacturing processes: 

This is not much new. Many PE investors would possibly look at it, in any case. Just like formulations, ascertaining similar ability to come out with cost-effective manufacturing processes to improve margin would also be very useful, especially for long term investments.

VIII. Are Independent Directors, if any, really ‘Independent’?

If the target company has ‘Independent Directors’ in its Board, as a mandatory legal requirement or even otherwise, there is a need to dispassionately evaluate how independent these directors are, and what value they have added to the company or capable of providing in the future, according to their legal status in the Board.

True independence, given to the high caliber ‘Independent Directors’ in the Board of promoter driven pharma companies, could usher in a catalytic change in the overall business environment of the company. It would, consequently, bring in a breath of fresh air in the organization with their independent thoughts, strategic inputs and involvement in the key peoples’ decisions.

As it is much known, that a large number of ‘Independent Directors’ are primarily hand-picked, based on their unqualified support to the Indian promoters. Many board resolutions, in various critical business impact areas, are passed as desired by the powerful promoters, may be for short term interest and fire fighting. In that process, what is right for the organization for sustainability of business performance, and in the long term interest of all the company stakeholders, may get sacrificed.

When this happens in any target company, mainly for short term business success, taking advantage of regulatory loopholes and inherent weaknesses in the system, a flag needs to be raised by the PE investors for further detailed analysis in the concerned areas.

Conclusion:

Going forward, it appears to me that PE investors would continue to look for attractive pharma investment opportunities in India, though with increasing level of competition. These investors would include both global and local PE firms. Some of them may like to stay invested for longer terms with lesser regulatory and other associated risks and a modest return, unlike a few other high risk takers, sniffing for commensurate windfall returns. 

In India – today’s land of seemingly unparalleled economic opportunities, the PE players should also take into consideration the prevailing complexities of the domestic pharma industry seriously and try to analyze the same properly, for appropriate target asset identification. Many successful local generic players may outwardly project sophisticated, and high standard of business practices. However, these need to be ascertained only through a structured format of India-specific due diligence process.

Corporate governance processes, regulatory compliance, marketing practices and financial reporting systems of many of these companies, may not pass the acid test of stringent expert scrutiny, for long term sustainability of business.

This mainly because, a number of generic pharma companies in India have been thriving, taking full advantage of some major loopholes in the regulatory area, marketing practices, overall product portfolio selection and new generic product development areas, besides many others.

These successful domestic drug companies have indeed the potential and overall attractiveness to come under the radar of many PE investors, who, in turn, should also realize that all the loose knots, fully being exploited by many such companies, are expected to be tightened by the governments, sooner or later.

Keeping this possibility in perspective, to embrace success with lucrative returns, I reckon, there is a changing need of due diligence to follow by the PE investors for right valuation, and much before any pharma generic company is identified by them.

That done, the Indian generic pharma market could soon emerge as an Eldorado, especially for those PE investors, who are looking for a relatively long term attractive return on investments.

By: Tapan J. Ray 

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

 

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

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

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

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

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

Unsparing remarks in two critical areas:

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

  • Questionable quality of drugs
  • Questionable pharma marketing practices 

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

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

A. Questionable quality of drugs:

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

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

Dual drug manufacturing quality standards?                                            

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

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

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

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

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

Pharma associations working at cross-purposes? 

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

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

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

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

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

B. The UCPMP:

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

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

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

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

The DoP initiative:

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

Not a panacea:

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

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

Mandatory UCPMP:

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

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

Divergent views of pharma associations?

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

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

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

Conclusion:

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

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

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

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

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

By: Tapan J. Ray 

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

Nutraceuticals: Make The Fragile Regulatory Space Robust, Soon

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In the space between drugs and nutrition, there is an intriguing ‘gray area’ with significant business relevance, especially in India.

In a related publication, A.T. Kearney – a leading global management consulting firm has elaborated it as below:

“At one end of this natural nutrition spectrum, are functional foods and beverages as well as dietary supplements, aimed primarily at maintaining health. On the other – more medical end of the spectrum, are products aimed at people with special nutritional needs. In the middle, is an emerging gray area of products that have a physiological effect to reduce known risk factors, such as high cholesterol, or appear to slow or prevent the progression of common diseases such as diabetes, dementia or age related muscle loss.”

Falling in the middle of the spectrum, a large number of Nutraceuticals clearly blur the line between food and drugs, in many cases. In India, there is no clearly defined legal and regulatory status for such Nutraceuticals, just yet.

Why a robust regulation required for Nutraceuticals? 

The scholarly article of S.H. Zeisel (Professor of Nutrition, University of North Carolina at Chapel Hill Nutrition) titled, “Regulation of Nutraceuticals,” Science 5435, 1853–1855 (1999) highlighted that in many cases when the dosages of food supplements exceed those of a normal diet, there could well be a drug-like bioactivity of a nutrient.

An example of the nutrient tryptophan may suffice to illustrate this point briefly. At higher dosage tryptophan can exhibit drug-like activity, as it is the precursor of serotonin, which is extensively used to treat insomnia. Many of such points are yet to draw the regulators’ attention in India as much as it should, as yet.

Marketing drugs as ‘food supplements’?

Marketing drugs as food supplements to evade Drug Price Control Order (DPCO) by some pharma players, of all sizes and scale of operation, is not an uncommon practice in India. The National Pharmaceutical Pricing Authority (NPPA), reportedly, pointed it out sometime around 2009.

Not just for pricing reason, but more importantly for consumers’ health and safety, the Central Drugs Standard Control Organization (CDSCO) should address this issue now with a greater sense of urgency, as the market for Nutraceuticals and health supplements is reportedly growing at a brisk pace today. According to a Frost & Sullivan report, the total Indian Nutraceuticals market in 2015 was expected around US $ 5 billion. 

In the absence of any clear and robust regulatory guidelines, most Nutraceutical products, with a spectrum of therapeutic claims, are virtually self-categorized as food supplements, which are not covered under the Drugs and Cosmetics Acts in India.

Currently in the country, Nutraceuticals and functional foods are covered under the definition of ‘food’ as per Section 22 of Food Safety & Standards Act (FSSA), 2006. These food products have been categorized as Non-Standardized/Special Food Products. Accordingly, Food Safety and Standards Authority (FSSAI) of India have described Nutraceuticals as:

“Naturally occurring chemical compound having a physiological benefit or provide protection against chronic disease, isolated and purified from food or non-food source.”

Though categorized as nutritional supplement, the product packs of such Nutraceuticals usually do not carry any “FSSAI’ logo, which signifies conformance to the food safety standards of India, for the benefit of consumers.

Recommendations are many, but no comprehensive action yet:  

To give an example, many Nutraceuticals contain vitamins in varying quantity. However, most of these products seem to carefully avoid Schedule V guidelines for vitamin content to avoid being categorized as drugs, and thereby coming under strict regulatory requirements. Self-categorizing these products as ‘food supplement’, helps bypassing this issue, as on date.

Such ongoing practices related to Nutraceuticals need to be viewed keeping in perspective, some of the recent key recommendations made by the Drugs Technical Advisory Board (DTAB) of the CDSCO, on Schedule V related formulations.

The minutes of the 70th. meeting of the Drugs Technical Advisory Board (DTAB) held on August 18, 2015, recorded the acceptance of the report of its sub-committee on vitamins, which recommended, among others, some of the following guidelines:

  • Ingredients which are covered under the range as prescribed under schedule “V” of the Drugs and Cosmetics Rules for Tablets, capsules, granules are 18 classified as a drug, while those powders like Farex, Oats and Cereal fortified vitamins are exempted from the provisions of chapter IV under schedule K of Drugs and Cosmetics Rules.
  • Ingredients which fall below the range as prescribed under schedule “V” shall be classified as food. However, if there is a claim for treatment, mitigation or prevention of any diseases or disorder, then it will be classified as a drug. 
  • Ingredients which are within Recommended Daily Allowance (RDA) levels, but fall under the range as prescribed under schedule V Drugs and Cosmetics Rules shall be classified under drug as it is already mentioned in the rules. 
  • Products containing ingredients which are neither covered under Schedule V nor fall within RDA, these can be classified as unprovable products under Drugs and Cosmetics Rules, unless otherwise specifically permitted by the Licensing Authorities of drugs based on major purpose of the item (like food/drug).
  • Whenever there are additional ingredients than those given in schedule V, including some of herbal ingredients, a separate and conscious view has to be taken about the safety and efficacy of the drug
  • Any product containing herbal ingredients shall be dealt with by the food or drug authority based on the above principles. 

The same subcommittee, on June 12, 2015, after discussing each of some specified products, with a claim of falling in non-drug category, as per directions of the Hon’ble High Court of Patna, recommended categorization of some of the well-known brands brands, such as, Revital (Ranbaxy) and A to Z capsules (Alkem) as drugs. The sub-committee report was then uploaded in the CDSCO website for stakeholders’ comment.

Could there be ‘irrational FDC ban’ like an issue with Nutraceuticals?

The answer to this question is anybody’s guess at this point of time. However, such a possibility can be just wished away either.

This lurking fear stems from the recent notification of FSSAI dated March 30, 2016, which states as follows:

“It has been decided that till the standards of Nutraceuticals, food supplements and health supplements are finally notified, the enforcement activities against such food business operators may be restricted to testing of these products with respect to requirements given in the draft notification on such products of September 9, 2015″.

However, it clarifies that the companies will get an exemption, if such products were available in the market before the Food Safety and Standards Act came into effect in 2011, or if product approval was pending on August 19, 2015.

The key objective of the above September 9, 2015, FSSAI draft notification was to ensure that Nutraceuticals, health and food supplements and other such products are not sold as medicines with therapeutic claims. Thus, asking the industry players to send their suggestions and objections to the proposal, this draft notification indicates, among others, that all such products should: 

  • Adhere to the proposed permissible limits of various minerals, vitamins, plant or botanical-based ingredients, among others.
  • Adhere to the proposed list of food additives used in all these categories of products, besides labelling norms, every package must carry the words “Food” or “Health Supplement” and prominently display “Not for Medicinal Use” on the label. 
  • Give a disclaimer on the package that the food or health supplement should not be used as a substitute for a varied diet.
  • Clearly indicate on the label that “this product is not intended to diagnose, treat, cure or prevent any disease”, besides information on recommended dosages, among others.

As this notification is expected to cover all products, which are marketed as food supplements, many Nutraceuticals manufacturers, reportedly, fear that it could effectively mean a ban on virtually all those brands, self-categorized as food or nutritional supplement, and launched post 2011.

If it happens, the saga of ban of a large number of irrational Fixed-Dose Combinations (FDCs) of drugs, that includes some top-selling pharma brands and is now sub judice, could get extended to the Nutraceuticals sector too. 

Nonetheless, the bottom-line is that a robust mechanism to effectively regulate and monitor Nutraceuticals in India, is yet to see the light of the day. 

Crazy marketing of Nutraceuticals: 

Despite regulatory and marketing restrictions to the therapeutic claims for this category of drugs, Nutraceuticals are mostly promoted to the doctors, just as any other ethical pharma products in India.

Consequently, these are widely prescribed by the medical profession, not just as nutritional supplements, but also for the treatment of disease conditions, ranging from obesity to arthritis, osteoporosis, cardiovascular conditions, diabetes, anti-lipid, gastrointestinal conditions, dementia, age-related muscle loss, pain management and even for fertility. All these are generally based on off-label therapeutic claims of the respective manufacturers.

Being advertised in the mass media too:

To illustrate this point, I would give an example of a well known brand in India. As I see from the Government records, i.e. from the minutes of the 68th meeting of the DTAB sub-committee held on June 12, 2015 that it had recommended Revital’s (Ranbaxy) categorization under drug.

As we all know that, as per drugs and Cosmetics Act of India, drugs cannot be advertised in the mass media, except Schedule K drugs, such as Aspirin and paracetamol. In that sense, I find it difficult to fathom, how is Revital then, which highlights a naturally occurring substance fortified with vitamins and minerals, advertised even on the Television, along with a top celebrity endorsement?

A recent notification on phytochemicals:

As I mentioned in my article in this Blog on December 21, 2015, titled “Nutraceuticals: A Major regulatory Step That Was Long Overdue”, partly responding to the growing demand for regulatory intervention in this important matter, on November 30, 2015, by a gazette notification, the Government of India included phytopharmaceutical drugs under a separate definition in the Drugs & Cosmetics (Eighth Amendment) Rules, 2015, effective that date.

This regulatory action followed the rapidly growing use of these drugs in India, which includes purified and standardized fraction with defined minimum four bio-active or phytochemical compounds.

On the ground, this significant regulatory measure would require the pharma players to submit the specified data on phytopharmaceutical drugs, along with necessary applications for conduct clinical trial or import or manufacture of these products in the country. 

However, this is no more than half-measure in this direction. Hopefully, this will be followed by final action on the DTAB recommendations on vitamins, and final notification of FSSAI on standards of Nutraceuticals, food and health supplements. A well-integrated action of the CDSCO and FSSAI, would possibly help to contain the unregulated proliferation of various types of Nutraceutical products coming into the Indian market, prescribed by the doctors and consumed by the people, sans any scientific evidence based efficacy, safety and quality standards.

Manufacturers’ business interest also can’t just be ignored:

While there is a pressing need to enforce regulatory discipline for claimed efficacy, safety and high quality standards for the Nutraceuticals to protect consumers’ health interest, commercial interest of such drug manufacturers can’t also just be ignored. If that happens, it will be unfair.

Thus, one of the ways to encourage the manufacturers to expand this market, I reckon, could well be categorizing the Nutraceuticals offering health benefits, under a separate category altogether, which will be kept out of any form of drug price control.

Conclusion:

The manufacturers of Nutraceuticals still keep charting in a very relaxed regulatory space. Currently, there is no robust and transparent process in place to standardize and scientifically evaluate safety and efficacy of these products on an ongoing basis. This scenario should not be allowed to continue, any longer.

Appropriate control of standardized Nutraceutical manufacturing, regular monitoring of the same and scientific evidence-based marketing approval process of all such products, therefore, require to be well-well regulated. The requirement for stringent conformance to the set cGMP standards would ensure desired safety, efficacy and high quality of nutraceutical products for the consumers.

The recent decisions of the Union ministry of Ayush for setting up a structured regulatory framework, within the CDSCO, for all Ayush drugs and to allow marketing of any new Ayurvedic medicine only after successful completion of clinical trials to ensure its safety and efficacy, are indeed encouraging.

Just as Ayurvedic products, all Nutraceuticals, not being essential medicines, should always be kept outside price control in any form. It should happen in tandem with the Government’s taking a bold step to make the prevailing fragile regulatory space for the Nutraceuticals a robust one, creating a win-win situation for all. 

By: Tapan J. Ray

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

The Recent Ban On Irrational FDCs: History Repeats Itself

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The recent regulatory ban on a large number of irrational Fixed Dose Combination (FDC) drugs is not a new incident in India. A similar mega ban was announced even before, about nine years ago. Intriguingly, the saga continues, for various reasons, without any tangible outcome for the patients on the ground.

On March 11, 2016, the latest ban, again on a large number of irrational FDCs, was notified. It caused a flutter and an immediate sharp adrenaline rush to the impacted drug companies and was soon followed by an interim stay order, again by an honorable High Court of the country.

Thus, when I connect the past dots with the latest one, on mega ban of irrational FDCs in India, a similar sequence of events gets unfolded, following each of such ban notifications of the Government.

Looking back, 294 FDCs were banned by the DCGI in 2007. At that time too, the important issue of patients’ health, safety and economical interest, got converted into a legal quagmire. Many adversely affected FDC drug players chose to go to the court of law to protect their business interest, and also successfully managed to obtain a ‘Stay’ order from the Madras High Court.

Consequently, those 294 irrational FDCs, banned by the Union Ministry of Health on health and safety grounds, continued to be promoted, prescribed and sold to patients across India, without any hindrance, whatsoever.

The matter continues to remain sub judice, as we deliberate the issue here. Thus, whether the recent gazette notification on the ban of irrational FDCs would immediately be implemented, unlike the past ban, or the history would repeat itself, is indeed a big question mark, at this juncture.

Would this ban have similar outcome?  

As discussed, close to a decade after the serious legal fall-out of the ban of 294 irrational FDCs in 2007, another mega ban of 344 irrational FDCs has been announced by the Government, through a Gazette Notification dated March 11, 2016. Some well known brands, such as, Corex, Phensedyl, Crocin Cold and Flu, D-Cold Total, Nasivion and Vicks Action 500 Extra, among others, reportedly come under this ban now. Here is the complete list of 344 banned FDCs.

According to the Government, the reason for banning these drugs is that ‘they involve risk to humans and safer alternatives were available.’

Nevertheless, manufacturers of some of these mega brands have again obtained an interim injunction on the ban for their respective products, from the Delhi High Court.

Sometime during the day, i.e. on March 21, 2016, the honorable Delhi High Court is expected to take up this patient-centric issue. It apparently smacks a blatant self-serving interest of the concerned irrational FDC manufacturers, that defeats the core purpose and value of pharma products for their users.

Like most other issues, the Court directive on this issue, as well, would ultimately prevail, without any shade of doubt.

Is it a ‘bolt from the blue’ for the pharma industry? 

Many industry watchers feel that this recent ban has not come as a ‘bolt from the blue’ for the pharma players, at all, as is being claimed by a section of the pharma industry. Even the Union Ministry of Health has, reportedly, clarified the following points on the recent notification:

  • “We have tried to bring objectivity to the issue by roping in the best of scientists to study the effects of these FDCs.”
  • “Show cause notices were also issued to more than 344 companies and they were given time to make further representations after the expert committee gave their recommendations. Some of them did not even care to respond. Everybody was given ample opportunity. After that, the move was initiated. It was done after much examination.”
  • “It is necessary and expedient in the public interest to regulate by way of prohibition of manufacture for sale, sale and distribution for human use, of the said drugs in the country.”

It is worth noting, at least, one of these well known pharma brands was, reportedly, banned in one of our neighboring countries – Sri Lanka, in 2012, for wide-spread drug misuse, long after its marketing approval in the country.

Some key events leading to the recent ban: 

Besides the above articulation by the Union Ministry of Health, it is worth noting, especially, the following key developments to ascertain, whether this ban came suddenly to the irrational FDC manufacturers, and without any prior warning or appropriate communication:

  • The issue of manufacturing licenses being granted by some states for FDCs without prior approval of Central Drugs Standard Control Organization (CDSCO), was first discussed by the Drugs Technical Advisory Board (DTAB) in the year 2000, though without any major tangible outcome till 2007. 
  • In 2007, Government banned 294 FDCs, and the consequent court proceedings had ‘Stayed’ this ban.
  • Expressing huge concern on pharma malpractices related to irrational FDCs, the Parliamentary Standing Committee on Health and Family Welfare in its 59th report (2012) also had flagged this issue. The lawmakers observed in the report that manufacturing licenses for large numbers FDCs were being issued by the State Drug Authorities, without prior approval of the Central Drugs Standard Control Organization (CDSCO), in violation of rules. The committee also noted that multiple FDCs, which are available in India had been rejected by the drug regulators in Europe, North America, and Australia, while for many others never had marketing approval applications submitted outside India (Section 7 of [6]).
  • Subsequently, in June 2013, CDSCO  announced the “Policy Guidelines for Approval of Fixed Dose Combinations (FDCs) In India.”
  • According to CDSCO, just 1193 FDCs were approved by the DCGI, since 1961 till November, 2014. Thus, all drug manufacturers should clearly know, which FDC has been approved by the DCGI, and when, leaving no scope for any ambiguity in this area. Thus, there should be no problem in total conformance to the above ‘FDC Policy Guidelines’ by these drug producers.
  • In the same year – 2013, a public notice was also, reportedly, issued, calling all those drug players manufacturing FDCs to apply with the requisite fee, in the prescribed form to the DCGI office, providing the required details.  
  • In 2014, a six-member committee, chaired by Prof. (Dr.) Chandrakant Kokate, Vice Chancellor, KLE University, Jawaharlal Nehru Medical College, Belgaum, Karnataka, was formed to expedite the review process of the applications. 
  • The Kokate Committee has, reportedly, reviewed about 6,600 FDCs, so far, and classified them under four categories – irrational, require further deliberations, rational and require additional data generation. 
  • According to a report, 963 FDCs were found under the irrational category, providing reasons in detail for each. 
  • In 2016, the Government finalized its action, based on the Report of Kokate Committee and also the response received (or still not received despite requests) from the concerned FDC manufacturers.
  • The March 11, 2016 Gazette Notification banned 344 ‘irrational’ FDCs, ruffling many feathers, but understandably to protect patients’ health interest.
  • On March 14, 2016, in response to an appeal against this ban through a writ petition, first by Pfizer, the Delhi High Court reportedly granted the company a stay, pending the next court hearing on March 21, 2016. Subsequently, several such stay orders by the honorable Delhi High Court have been issued with the same date of hearing. 
Adverse health and economic impact on patients:

Besides serious health risks, the patients also suffer from a huge adverse economical impact, in rupee value terms, by consuming much avoidable irrational FDC formulations, which are generally more expensive than single ingredient drugs, if taken separately at times of necessity or convenience.

The ban of 344 FDCs is estimated to cover over 2,500 brands, in different therapy categories, including chronic diseases, where medicines are taken for a long period of time. Thus, a large number of patients were consuming these irrational formulations for a long period of time without any inkling of their necessity and more importantly serious adverse health impact that these irrational FDCs could cause.

To quantify how much have the patients collectively spent on these banned medicines, in the rupee value terms, I shall quote from the estimates of one of the well reputed and much quoted pharma retail audit and market research organization of India – AIOCD Pharmasofttech AWACS Pvt. Ltd.

According to its report of March 13, 2016, Indian Pharmaceutical Industry would lose Rs. 3,838 Crore (MAT), which is 3.1 percent of the turnover of the Indian Pharmaceutical Market (IPM), when calculated based on the retail sales of these FDCs in the last 12-month period.

Paraphrasing the same finding, one can logically conclude that Indian patients withstood an adverse economic impact of Rs. 3,838 Crore in a 12-month period, by spending on these unnecessary and irrational FDCs of dubious value, besides health risks. 

To my surprise, some of the MNC pharma players contribute a major chunk to this avoidable expenditure of the patients, besides associating and avoidable health risks.

Quoting similar credible data, it is also possible to give company-wise break-up in this area, which, in my view, may not be meaningful here.

Two Critical issues to address:

Although, a lot of water has since flown down the bridges, a large number of irrational FDCs are still in the market, exposing patients to possible health hazards and economical hardship.

In this blog, I discussed this core issue in two of my articles, one on July 15, 2013 titled, “FDC Saga: Defiant Manufacturers, Sloppy Regulators and Humongous Inaction”, and the other on May 18, 2015 titled, “Booming Sales Of Unapproved Drugs: Do We Need ‘Safe In India’ Campaign For Medicines?”.

I reckon, the following two would still remain the critical issues, which need to be addressed, expeditiously, once and for all, for patients’ sake: 

  • Stringent compliance with the latest CDSCO requirements by all the manufacturers of FDCs in India must be ensured. Any non-conformance should attract strong punitive measures, through a transparent process.
  • Whether such drugs are being widely misused, creating a grave risk for health and other safety hazards, must be ascertained periodically, based on credible data.
An important example:                         

Just the other day, Reuters reported that one of the largest pharma companies operating in India, was selling a FDC of the antibiotics cefixime and azithromycin, without approval of the DCGI.

Interestingly, this particular FDC has reportedly not received marketing approval in the major global pharma markets, such as, the United States, the United Kingdom, Germany, France or Japan.

After the ban of this irrational FDC, the company was compelled to stop manufacturing and sales of this powerful antibiotic cocktail that poses huge health risk to patients.

This Reuters report also states, the drug ‘had been promoted and administered as a treatment for a broad array of illnesses, including colds, fevers, urinary tract infections, drug-resistant typhoid and sexually transmitted diseases.’ It also found chemists who were selling the drug to prevent post-operative infection and for respiratory problems.

Many doctors and health experts have been saying that the spread and misuse of antibiotic combinations may be contributing to antibiotic resistance in India.

FDC approval must be hard evidence-based:

Since all pharmaceutical products, whether available as a single ingredient, or FDC formulations, are globally considered as ‘Evidence-Based Medicines’. Such evidences are established through robust, stringent and well regulated clinical trials for obtaining marketing approval from the drug regulators, unlike most ‘traditional medicines’.

Following this well-established global norm, and as recommended by even the World Health Organization (WHO), all irrational FDCs must be identified through a transparent and medical science-based process, and banned forthwith by the Government.

Establishing safety and efficacy for all FDCs through clinical trials, just like any other single ingredient drug, introduced for the first time in India, whenever it happens or had happened in the past, inadvertently or otherwise, should be a ‘must happen’ regulatory requirement, for all time to come.

Profit making interest through introduction of a plethora of irrational FDCs, should never be allowed to overshadow patients’ health and economical interest.

The bogey of even ‘25 to 30-year-old FDCs’ now being banned: 

Some section of the industry is also raising this point, vociferously, protesting against the bans of their respective old and top-selling FDC brands, which have now been considered by the Government as irrational, and questioning: ‘why now?’

This point is irrelevant, as not taking action ever, against a wrong doing allowed over a long period time, does not make an irrational FDC formulation a rational one, for all time to come.

Moreover, this recent action of the drug regulator can not be considered as unique either. With the advancement of medical science, in the past years too, the DCGI issued banned notifications, covering many old FDCs, considering those ‘irrational combinations’ at a given point of time, such as, analgin + pitofenone, vitamins B1 + B6 + B12, cyproheptadine + lysine, just to name a few.

Conclusion:

As is known to many, pharmacovigilance is still at a very nascent stage in India. Consequently, ‘Adverse Drug Reactions (ADR)’ or ‘Adverse Drug Events’ reporting are still abysmally poor in the country. No information on ‘Adverse Drug Events’, as claimed by the manufacturers of these irrational FDCs, should, therefore, in no way mean that these drugs are safe and efficacious and beyond any reasonable doubt.

Although the laxity of the drug regulator in this area can’t also be condoned, in any way, the enormity of the risks posed by irrational FDCs to the innocent patients, is indeed mind boggling.

If the manufacturing and sale of all irrational FDCs are not legally stopped, even after a long and rigorous scientific and medical scrutiny by the experts, the patients in the country would, unfairly, continue to remain exposed to huge health and economic risks, without any fault of theirs. This is exactly what happened in 2007 also, when, after the stay order of the ban notification for 294 irrational FDCs by the honorable Madras High Court, all those FDCs continued to be promoted, prescribed and sold to patients across India, unhindered… but at whose cost?

Yet again, the gazette notification of the Government on the recent ban on 344 FDCs, has gone for judicial scrutiny, at least, for some money spinning key brands of the large pharma players.

This time, however, there is one significant difference, the Government seems to be far more assertive and committed to ensure that only safe medicines are available in the market, despite reported intense advocacy by the industry. This commitment on the part of the Government is also evident from the media report that the (DGCI) has again sent a new list of additional 1,200 FDCs for a probe to the panel, which recommended the ban of 344 irrational FDCs in the last week, and that too, after the court stay order on the latest ban.

Further, a senior a senior official in the Health Ministry has, reportedly, reiterated that the Government will stand firm on its decision, and will support the ban with robust data, in the Delhi High Court.

Would history repeat itself, this time now? We, at least, would get a sense of it, as the proceeding of the honorable Delhi High Court commences today, on this issue.

Either way, it will possibly send a clear signal, whether the triumph of commercial profit motive with irrational FDCs would continue, unabated, over patients’ health, safety and economic interests, at least in the foreseeable future. 

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.

 

For Drug Safety Concern: “Whistleblower’s Intention Should Be Nationalistic”

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In the recent weeks, three significant developments related to the Pharmaceutical Industry in India, have triggered rejuvenated concerns in the following critical areas: 

A. Overall drug safety standards in the country

B.  Self serving interest, rather than patients’ interest, dominate the prescribing decisions

C. Government assurance to American Trade Organization on ‘Compulsory License (CL)’ in India. 

These important issues fall under three key regulatory areas of India, as follows:

  • The Central Drugs Standard Control Organization (CDSCO)
  • The Medical Council of India (MCI)
  • The Indian Patent Office

It is worth mentioning here that the Department Related Parliamentary Committee on Health and Family Welfare in its 59th Report, placed before both the houses of the Parliament on May 08, 2012, on the functioning of the Central Drug Standards Control Organization (CDSCO), begins with the following observations:

Medicines apart from their critical role in alleviating human suffering and saving lives have very sensitive and typical dimensions for a variety of reasons. They are the only commodity for which the consumers have neither a role to play nor are they able to make any informed choices except to buy and consume whatever is prescribed or dispensed to them, for the following reasons:

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

Most importantly, all these concerns, if not properly clarified and appropriately addressed by the Government, soon enough, have the potential to create an adverse snowballing impact on the uniform access to affordable quality medicines, for all sections of the society in India.

Under this backdrop, I shall discuss in this article briefly, my perspective on each of these critical areas, as they are today, and not just the drug safety concerns.

The headline of this article is expected capture not only the prevailing mood of some key regulators, but also their inertia to address critical healthcare concerns and above all how the core public health related issues are getting lost, and the trivial ones are gradually occupying the center stage.

A. Overall drug quality and safety  standards in India:

A Public Interest Litigation (PIL) suit, filed against the Drugs Consultative Committee and the Central Drugs Standard Control Organization (CDSCO), was listed on the Supreme Court website for hearing on March 11, 2016.

The PIL has been filed by one Dinesh Thakur, requesting the Supreme Court to lay down guidelines by which manufacturers could be made liable for violating drug standards and also give a direction to the government to set up a ‘Drug Approvals Review Committee’ for examining criminality in the manner in which faulty drug approvals were granted. 

Many may recall that the same Dinesh Thakur worked for Ranbaxy from 2003 for two years, and is now the Chief Executive of MedAssure Global Compliance based in Florida, US. Thakur’s Company now advises pharma manufacturers on drug safety and quality standards.

As reported by Reuters, Thakur had earlier exposed how the erstwhile largest drug maker of India, Ranbaxy Laboratories, failed to conduct proper safety and quality tests on drugs and lied to regulators about its procedures. Consequently, USFDA fined Ranbaxy US$500 million for violating federal drug safety laws, and making false statements to the US regulator.

This news report further states: “Indian Parliamentary Committee, thereafter, reportedly demanded an investigation and the drugs regulator committed to one in 2013. Thakur received a statement from the health ministry last year, seen by Reuters, showing no inquiry had begun.”

On the last Friday, however, the Supreme Court of India refused to entertain this PIL of Dinesh Thakur, saying it does not have time to adjudicate academic issues, such as, need for guidelines to regulate quality of medicines.                                                  

The core issue:

The core issue here is not at all the above PIL, not at the very least. The issue is the much reported concern being expressed, over a period of time, regarding the drug safety standards in India. The reasons include breach of of data integrity, and gross violation of the ‘Good Manufacturing Practices’ standards. Such instances are being detected, almost regularly, by the foreign drug regulators, in several manufacturing facilities run by many large and small Indian drug producers.

It is well vindicated by the fact that around 45 Indian drug manufacturing plants have been banned by the USFDA alone, from shipping generic drugs to the United States, as these were considered unsafe for consumption of patients in the US. Some other foreign regulators too had taken similar action, citing similar reasons. The USFDA website specifies the details of gross violations made in each of these cases.

Ironically, all such facilities can manufacture and sell their drugs in India, as they conform to the quality requirements of the Indian drug regulator. Consequently, the Indian patients consume even those medicines, which are considered unsafe by the USFDA for American patients, innocently, as and when prescribed by the doctors.

Arising out of these incidents, when asked about the drug safety standards in India, and the public health-safety, instead of giving credible and action oriented answers for public reassurance, some of the apparently brazen replies of the DCGI are quite stunning for many stakeholders, both within and outside the shores of India.

I would now quote below just a few of those replies, just as examples. 

“…Whistleblower’s Intentions Should Be Nationalistic” -  DCGI:

According to Reuters, it has received the following response from the Drug Controller General of India (DCGI), on the above PIL related to the drug safety standards in India:

“We welcome whistleblowers, we have got great respect, but their intentions should be genuine, should be nationalistic… I don’t have any comment on this guy.”

Thus, many industry watchers feel that in a situation like this, the honorable Supreme Court of India would possibly require to intervene, just as what it did on alleged ‘Clinical Trial’ malpractices in the country or for drug price control, solely for public health interest.

The same attitude continues:

Such brazen response of the Central Drug Regulator, and that too on a serious subject, is indeed bizarre. It becomes increasingly intriguing, as the same attitude continues without any perceptible meaningful intervention from the Ministry of Health.

For example, on February 22, 2014, in the midst of a more intense scenario on a similar issue, instead of taking transparent and stringent measures, the DCGI was quoted by the media commenting:

“We don’t recognize and are not bound by what the US is doing and is inspecting. The FDA may regulate its country, but it can’t regulate India on how India has to behave or how to deliver.”

On February 26, 2014, presumably reacting to the above remarks of the DCGI, the American Enterprise Institute reportedly commented, “Indian drug regulator is seen as corrupt and colliding with pharma companies…”

Such apparently irresponsible and loose comments keep continuing, despite the 2012 report of the Parliamentary Committee of India alleging collusion between some pharmaceutical companies and officials of the CDSCO, which oversees the licensing, marketing and trials of new drugs. The report also commented that the agency is both chronically under-staffed and under-qualified.

Some possible remedial measures:

As the saying goes, “better late than never”, considering all these continuing developments, it is about time to reconsider some of the key recommendations of Dr. R. A. Mashelkar Committee on a similar subject and make amendments in the relevant Act accordingly, soon, to facilitate creation of a robust with high accountability ‘Central Drugs Authority (CDA)’. It would introduce a centralized licensing system for drug manufacturing, along with stringent drug safety standards; besides, sale, export and distribution of drugs. Perhaps, the draft bill on CDA is now lying in the heap of archival documents with the change in Government.

Why does India need CDA?

I believe, the formation of a robust CDA with high accountability, besides meeting with drug safety concerns, would provide the following significant benefits, both to the Industry and also to the Government:

  • Achieving uniform interpretation of the provisions of the Drugs & Cosmetics Act & Rules
  • Standardizing procedures and systems for drug control across the country
  • Enabling coordinated nationwide action against spurious and substandard drugs
  • Upholding uniform quality standards with respect to exports to foreign countries from anywhere in India
  • Implementing uniform enforcement action in case of banned and irrational drugs
  • Creating a Pan-Indian approach to drug control and administration
  • Evolving a single-window system for pharmaceutical manufacturing and research undertaken anywhere in the country.

B.  Self serving interest dominates the prescribing decision: 

That the self serving interest, rather than patient interest, dominate the prescribing decision, was vindicated by a key announcement of the Medical Council of India (MCI) last month.

In February 2016, apparently succumbing to continuous and powerful external pressure, the MCI announced an amendment in a clause of its Code of Ethics Regulations 2002, exempting doctors’ associations from the ambit of its ethics code, as applicable to doctors now across the country. Prior to the amendment, this section used to read as: “code of conduct for doctors and professional association of doctors in their relationship with pharmaceutical and allied health sector industry”.                      

In other words, it means that the professional associations of doctors will no longer come under the ambit of ethics regulations, legitimizing their indulgence in the identified unethical and corrupt practices, by receiving gifts in cash or kind from the pharma or healthcare industry.

A large section of the key stakeholders believes that this amendment would help creating an additional large space for the pharmaceutical marketing malpractices to thrive, unabated, at the cost of patients.

The latest report of the Parliamentary Standing Committee on MCI:

In its 92nd Report, the Department-Related Parliamentary Standing Committee on Health and Family Welfare titled, “The Functioning of Medical Council of India”, presented to the Rajya Sabha and laid on the Table of Lok Sabha on 8th March, 2016, the Committee observed on this amendment as “an action that is ethically impermissible for an individual doctor cannot become permissible, if a group of doctors carry out the same action in the name of an association.”

The report also noted the failure of MCI to instill respect for a professional code of ethics in the medical professionals and take disciplinary action against doctors found violating the code of Ethics, etc.

The Committee called for a complete restructuring of the MCI, since it believes that the Council has failed as a regulator of medical education and the profession. Casting serious aspersions on the functioning of the MCI, the house panel of the Parliament recommended that the Act under which the MCI was set up be scrapped and a new legislation be drafted “at the earliest”. 

The report castigated the health ministry:

The lawmakers castigated the Health Ministry in this report saying, “The committee also finds it intriguing that instead of intervening to thwart attempts of MCI at subverting the system, the ministry meekly surrendered to MCI.”

While summing up, the report states, “the Committee exhorts the Ministry of Health and Family Welfare to implement the recommendations made by it in this report immediately and bring a new Comprehensive Bill in Parliament for this purpose at the earliest.”

How will it pan out now?

I reckon, it will now be immensely interesting now for all concerned to follow, how does the Government deal with this report to curb, among others, the strong interference of mighty and powerful vested interests to continue with the rampant pharma marketing malpractices, at the cost of patients in India.

C. Reported Government assurance on ‘Compulsory License’: 

On March 3, 2016, a media report quoted a submission by the US Chamber of Commerce to the office of the US Trade Representative (USTR) as follows:

“While the Government of India has privately reassured (American) industry that it would not use compulsory licenses for commercial purposes, a public commitment to forgo using (this) would enhance legal certainty for innovative industries.”

This is an interesting development, primarily because there are a number of legal provisions for granting Compulsory Licenses (CL) in the Indian Patents Act 2005, including, when a drug is not widely available, extremely expensive and some other situation. In some these provisions, law should follow its own course and there is no legally permissible scope for Government’s administrative interference. Grant of CL for Nexavar of Bayar is one such example, and incidentally, that’s the sole CL that India has granted, so far, from the date of amendment of the country’s Patents Act in 2005. 

Thus, a blanket assurance of not invoking any of the provisions of the CL, as provided in the Indian Patents Act 2005, if true, would possibly require to pass through intense legal scrutiny, as that would adversely impact the access to key medicines in a necessary situation, for the public health interest.

So far, India has amply demonstrated to all, time and again, that the country does not grant a CL at the drop of a hat. That situation should continue to encourage and protect innovation. 

Nevertheless, “a written public commitment to forgo using the CL provisions for enhancing legal certainty for innovative industries,” as demanded by the US Chamber of Commerce, appears to be unreasonable, goes against the spirit of India’s Patents Act, and perhaps is not legally tenable either, unless the IP Act is amended accordingly in the Parliament.

Conclusion:

All these three areas, as discussed above, are critical from the healthcare perspective of the country.

Ironically, while deliberating on the subject, the capability, credibility and competence of some of the key regulators of the country, are being repeatedly questioned. These doubts emanate not just from Tom, Dick and Harry, but from an illustrious spectrum of constitutional institutions of India, spanning across the lawmaking Parliament, through its various committee reports, to the ultimate legal justice provider – the Supreme Court of India, through is various orders and key observations.

Regrettably, in this specific space, which is primarily related to healthcare, nothing seems to be changing on the ground, since long. The same tradition continues, without any visible sense of urgency, even from the Government.

On the contrary, we now read a new genre of comments, even from a key regulator, on the stakeholder concerns. For example, reacting to concern on drug safety standards, instead of articulating tangible actions to usher in a perceptible change, the chief action taker reportedly specified a totally judgmental and an outlandish requirement: “…Whistleblower’s intentions should be Nationalistic.”

Together with these incidents, the key public healthcare concerns of India too, are now apparently getting drowned in the high decibel ‘Nationalistic’ versus ‘Anti-nationalistic’ cacophony. But, the hope still lingers… for a change…for our nation’s sound health!

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.