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What A New Microbe Can Man Can’t?

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Our world is indeed so fascinating, where mankind is in possession of a predictable lethal power to annihilate fellow citizens of any country or countries – just in minutes or hours or days, as it would decide. Whereas, any sudden attack of an unpredictable crippling power of unknown microbes, can make the same mankind feel helpless – grappling to save lives of the citizens – along with its socioeconomic fabric.

Because of the sudden nature of such crippling attacks, mankind is put to fight against time to build a new arsenal of medicines and vaccines – while defending itself under an umbrella of preventive measures. It’s not that such a situation was never envisaged. On the contrary, as we shall see below, the warning from the same came from several credible sources. Even Bill Gates during a TED Talk five years ago had warned: “If anything kills over 10 million people in the next few decades, it’s most likely to be a highly infectious virus rather than a war – not missiles, but microbes.”

A few years later, the 2018 publication of the World Health Organization (WHO) – ‘Managing epidemics,’ articulated a similar cautionary note, which I am quoting in verbatim: “We are continuously learning about the unpredictable powers of nature. This is nowhere more true than in the continuous evolution of new infectious threats to human health that emerge – often without warning – from the natural environment.” Elaborating the point, it further cautioned: “Given the effects of globalization, the intense mobility of human populations, and the relentless urbanization, it is likely that the next emerging virus will also spread fast and far. It is impossible to predict the nature of this virus or its source, or where it will start spreading.”

Ironically, in about a year’s time, by end 2019, a new Coronavirus broke out in Wuhan of China. From January to March 22, 2020, 13,569 people, reportedly, died globally due to Coronavirus (Covid 19) infection. In India, as I write as I write during 14 hours long public curfew, 341 confirmed cases and 6 deaths have been reported. This outbreak has now shaken, almost the entire world – more than even before. The reverberation of the life-shattering impact of the disease, is now being felt and heard across all the facets of human life, including social, economic and political. Thus, the broad point to ponder in this article: Why the mankind can’t do what a new microbe can?

Various elements to it:

There are various elements of the above broad issue. A comprehensive response to which would involve, at least, two critical sub-questions:

  • Was it avoidable? If so, to what extent?
  • Or, at least, could its overall impact have been blunted?

Moving in that direction, let me try to explore some important facts that may help taking an unknown microbe bull by the horn, if such calamity strikes again – unannounced, in future.

None of these facts were unknown:

As we have seen above, the possibility of emergence and a sudden crippling strike of a new microbe was not unknown, including the warning of a global crisis from the W.H.O.  Besides, ‘nearly 50,000 men, women and children are dying every day from infectious diseases; many of these diseases could be prevented or cured for as little as a single dollar per head.’

Another interesting report: ‘Global rise in human infectious disease outbreaks,’ published in the Journal of the Royal Society interface on December 06, 2014, presents more facts. It says: Since 1980, over the last 30 years till 2014, outbreaks of infectious disease mostly caused by bacteria and viruses are steadily increasing with different health impact in different countries.

Several reasons for the high death rate related to infectious disease:

Several reasons could be attributed to high death rates for infectious disease, despite the availability of a large number of powerful antibiotics in the world, which include the following:

  • Developing nations with lesser access to drugs.
  • Fast development of Antimicrobial Resistance (AMR) owing to misuse and abuse of antibiotics.
  • Emergence of new bacteria and viruses, such as, Covid19 catching the population off-guard, as is being warned by top experts, from time to time.

Several times in the past, I wrote on the subjects of access to medicine, Antimicrobial Resistance (AMR), as well as the recent Coronavirus outbreak. Nevertheless, for this specific discussion, I shall focus only on the second and the third points, in the reverse order, with a different perspective.

Fresh threats of new infections are ongoing:

As the 2018 paper of ‘Managing epidemics’, published by the World Health Organization (WHO) had articulated – besides new microbial pandemics, the history of previous viral outbreaks can also possibly repeat themselves. That means: ‘A new HIV, a new Ebola, a new plague, a new influenza pandemic are not mere probabilities. Whether transmitted by mosquitoes, other insects, contact with animals or person-to-person, the only major uncertainty is when they, or something equally lethal, will arrive.’

As these being ‘newer’ types – just as Covid19 is so different from commonly occurring Flu - in all probability would be unique viruses with unique characteristics. For example, as the W.H.O describes, while Seasonal Flu cannot be stopped, countries still have the chance to limit cases of Covid19, through stringent implementation of scientific protocols. More, importantly, Covid-19 seems to lead to much more severe disease than Seasonal Flu strains.

Effective solution of both – the new and the new forms of known viruses, would require successfully navigating through tough challenges, involving multiple areas, such as, medical, technological, social, economic and political. No doubt, the world has progressed a lot in this area. But, effective ‘capacity building’ to combat the sudden onslaught of any deadly microbial pandemic, still remains an unfinished agenda.

The world has moved a lot, but still needs to accelerate capacity building:

Just in 2018, the world remembered the devastating Great Flu pandemic of 1918 on its 100th anniversary. Although, it lasted only a few months, claimed 50 million to 100 million lives worldwide. The book - ‘Influenza: The Hundred Year Hunt to Cure the Deadliest Disease in History,’ provided a glimpse of that scenario. Interestingly, Flu still kills about 1 percent of those infected by this virus. Whereas, about 3.4 percent of Covid-19 cases have been fatal, as on date, according to the W.H.O.

A comparison of these two pandemics will include both the similarities and the differences. The most striking similarity being – in both the global pandemics, most people are just not afraid, but are also getting panicked.

Whereas, the key differences between the two episodes are – the quality health care infrastructure in today’s globalized world, speed of diagnosis and the versatility of available drugs – even for ‘repurposing’, as being done in the present situation. Now, many people understand the need of putting the exposed persons in isolation – or under quarantine, besides co-operating with various infection control measures, as prescribed by the health authorities. In the midst of this crisis, an ongoing and very related critical issue remains virtually ignored - fast developing AMR, as I mentioned above.

Fast developing AMR continues taking many lives:

In this article, instead of dwelling on the cause of AMR and how to address it, I would rather focus on the current threats that AMR poses and will pose in the future, if not addressed on a war footing, collectively.

The latest details in this area are available from the paper – ‘The Antimicrobial Resistance Benchmark 2020’, published by the Access to Medicine Foundation. It emphasized that infectious diseases are still the cause of “more than 500,000 deaths each year, including more than 200,000 infant deaths. In India, for example, resistance exceeds 70 percent for many widespread bacteria.” As I mentioned in one of my previous articles that the 2017 Review Article, titled ‘Antimicrobial resistance: the next BIG pandemic,’ has termed India as ‘the AMR capital of the world.’ Even a 2020 news report says: Two million deaths are projected to occur in India due to AMR by the year 2050.

The current status:

The following two reports of WHO, published in January 2020, unfolded some interesting facts:

The analysis demonstrated, although, many drug companies are making enough investments to discover and develop innovative medicines, anti-infective therapy area does not feature there for most companies. As the reports unraveled:

  • Not just a declining trend of investment, even the current clinical pipeline remains insufficient to tackle the challenge of AMR.
  • With large drug companies continuing to exit the field, primarily due to commercial considerations, small and medium-sized enterprises (SMEs) are entering this space, but not with as much resources and other wherewithal.
  • All the eight new antibacterial agents, approved since July 01, 2017, offer limited clinical benefits.
  • One new anti-TB agent, pretomanid, developed by a not-for-profit organization, has been approved for use within a set drug-combination treatment for MDR TB.
  • The current clinical pipeline contains 50 antibiotics and combinations and 10 biologicals. Six of these agents fulfil at least one of the innovation criteria; only two of these are active against the critical MDR Gram-negative bacteria, with a major gap in activity against metallo-β- lactamase (MBL) producers.

As the AMR situation is getting worse, globally, unlike any possible repetition of a new microbial attack in the future, AMR isn’t a future problem. It needs to be addressed here and now. Fixing the problem does not require a scientific miracle. It demands a very human solution, spearheaded by the R&D based drug companies, the academia and the Governments, collectively. The reasons of why it is not happening - is known to many, but how to chart an effective pathway for its meaningful resolution – possibly isn’t. The signal today is loud and clear that infectious diseases are reemerging and threatening human lives – be it due to AMR or a sudden attack by a new microbe such as Covid19.

Conclusion:

It is loud and clear that infectious diseases will continue to reemerge in various shapes, forms and virulence – having the incredible power of shaking the world, including the most powerful and developed nations, as we all are experiencing today. As and when Covid19 pandemic gets over, and it will, learning from the past situation and picking up the global best practices to combat and decisively win over any such future crisis, will be critical. But, this is easier said than done – going by the past.

All concerned can feel it today, without any shade of doubt. There is no room for complacency in this regard, for anyone, regardless of having the best of health care infrastructure, diagnosing facilities, state of the art treatments of all types, including vaccines, for a wide range of number of life-threatening conditions.

As the W.H.O said, ‘The microbes didn’t go away. They just went out of sight. Instead, the focus turned to chronic, noncommunicable diseases, which came to receive much more attention. But nature was by no means in retreat. In fact, it seemed to return and took many health institutions and decision makers by surprise.’

It’s, therefore, high time for all to read the writing on the wall. A time to accept and realize that, when it comes to an unpredictable, crippling power of bringing the entire world to virtually a grinding halt – making even the most powerful nations feel helpless and highly vulnerable – what a new lethal microbe can do in one go, even the most developed and the powerful nation can’t. An all-time preparedness against biological threats, therefore, has emerged as a new normal.

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.

Awaiting The Two To Tango: Pharma Innovation And Public Health Interest

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“The rewards for the breakthrough drug discovery must be substantial, but if prices are the only mechanism through which returns on research flow, affordability will be compromised,” articulated an article titled, ‘Pharmaceutical Policy Reform – Balancing Affordability with Incentives for Innovation’, published in The New England Journal of Medicine (NEJM) on February 25, 2016.

The article arrived at this conclusion, on the backdrop of the high prices of prescription drugs becoming an issue of paramount concern, not just in the United States, but across the world. This concern is so acute that it found its way into policy proposals from both the prime candidates, in the American Presidential election held on November 8, 2016.

Through last several decades, healthcare sector in general and particularly the pharmaceutical industry, witnessed many innovations that cure and effectively manage ailments to improve the general quality of life. It enormously impacted the lives of many in the developed countries, and a few others which offer high quality Universal Health Care in a comprehensive format, for all.

A trickle-down impact:

Nevertheless, even no more than its just a trickle-down impact, helped increase overall life expectancy of the population in many developing and poor countries, mostly driven by the expanding number of cheaper generic drugs, fueled by more treatment and disease management options.

The paper titled, ‘World Population Prospects – The 2015 Revision’ of the Department of Economic and Social Affairs, Population Division of the United Nations’ reported that the life expectancy at birth rose by 3 years between 2000-2005 and 2010-2015, that is from 67 to 70 years. All major areas shared in the life expectancy gains over this period, but the greatest increases were in Africa, where life expectancy rose by 6 years in the 2000s, after rising by only 2 years in the previous decade.

Similarly, the global life expectancy at birth is projected to rise from 70 years in 2010-2015 to 77 years in 2045- 2050 and to 83 years in 2095-2100. Africa is projected to gain about 19 years of life expectancy by the end of the century, reaching 70 years in 2045-2050 and 78 years in 2095-2100. Such increases are contingent on further reductions in the spread of HIV, and combating successfully other infectious as well as non-communicable diseases.

The availability of cheaper generics gave some respite:

Out of a total population of 7.3 billion, as the above report says, the World Bank estimated that in 2013, 767 million people still lived on less than US$ 1.90 a day. Unfortunately, despite the greater availability of a large variety of cheaper generic drugs, the basic health care remains elusive to hundreds of millions of people in the world.

What causes more concern is the fact that 6 percent of people in low and middle-income countries are tipped into or pushed further into extreme poverty because of health spending, as the June 12, 2015 report of the World Health Organization (W.H.O) and the World Bank highlights. W.H.O has estimated that over a billion population of the world still suffer from neglected tropical diseases.

How many people benefitted from pricey patented drugs?

Nevertheless, despite so much innovation in the pharma industry, access to these new drugs remains elusive to a large section of even some the most developed nations, such as the United States, as they can’t afford these high-priced drugs. The overall situation, in this regard, is going from bad to worse. For example, the March 16, 2015 study published in the Mayo Clinic Proceedings reveals that the average annual cost of cancer drugs increased from roughly US$ 10,000 prior to 2000 to an astounding over US$  100,000 by 2012.

Further, an August 31, 2015 article published in the ‘Health Affairs’ also gave examples of Biogen Idec’s multiple sclerosis drug, Tecfidera, which costs US$ 54,900 per patient per year; hepatitis C cures from Gilead Sciences, with a sticker price of $84,000 per patient; and Orkambi, a cystic fibrosis drug from Vertex Pharmaceuticals approved this month, priced at a whopping US$ 259,000 per year. A Kaiser Health Tracking Poll last July 2015 found that 73 percent of Americans find the cost of drugs to be unreasonable, and most blamed drug manufacturers for setting prices too high, the article stated.

The health care scenario in India is no better:

A study conducted by the ‘National Sample Survey Organization (NSSO)’ from January to June 2014, which was the 71st round of the ‘National Sample Survey’, and published in the ‘Health in India’ report, narrates a very gloomy picture for India, especially for a clear majority of those who incur ‘out of pocket’ expenses on medicines. The report states, out of all health expenditure, 72 percent in rural and 68 percent in urban areas was for buying medicines for non-hospitalized treatment.

Thus, many patients cannot afford health services, even when these are needed the most. As many as 68 percent of patients in urban India and 57 percent in rural areas attributed “financial constraints” as the main reason to take treatment without any medical advice, the report adds.

In this situation, the challenges that the Governments and the civil society are facing in many developing, and to some extent even in some developed countries, though for different reasons, are multi-factorial. It has been well established that the humongous global health care challenges are mostly of economic origin.

Pharma innovation benefitted the developed countries more:

A study  titled, ‘Pharmaceutical innovation and the burden of disease in developing and developed countries’ of Columbia University and National Bureau of Economic Research, to ascertain the relationship across diseases between pharmaceutical innovation and the burden of disease both in the developed and developing countries, reported that pharmaceutical innovation is positively related to the burden of disease in the developed countries but not so in the developing countries.

Making the two to tango:

These facts prompt the need to make the pharma innovation and public health interest to tango. Several suggestions have been made and initiatives taken in this direction. Some of which are as follows:

  • Responding to this need, in 2006 W.H.O created the ‘Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG)’. The primary focus of IGWG is on promoting sustainable, needs-driven pharmaceutical R&D for the diseases that disproportionately affect developing countries. One positive effect of this global debate is that some global pharmaceutical companies have initiated their R&D activities for neglected tropical diseases, such as, Malaria and Tuberculosis. Many charitable organizations like, Bill & Melinda Gates Foundation and Clinton Foundation, are allocating significant funds for this purpose.
  • A paper  titled, “Optional reward for new drugs for developing countries” published by the Department of Economics, University of Calgary, Institute of Health Economics, proposed an optional reward fund for pharmaceutical innovation aimed at the developing world to the pharmaceutical companies, which would develop new drugs while ensuring their adequate access to the poor. The paper suggests that innovations with very high market value will use the existing patent system, as usual. However, the medicines with high therapeutic value but low market potential would be encouraged to opt for the optional reward system. It was proposed that the optional reward fund should be created by the governments of the developed countries and charitable institutions to ensure a novel way for access to innovative medicines by the poor.
  • ‘Open Innovation’ or the ‘Open Source Drug Discovery (OSDD)’ is another model of discovering a New Chemical Entity (NCE) or a New Molecular Entity (NME). Imbibing ‘Open Innovation’ for commercial results in pharmaceuticals, just has what has happened to android smartphones, would encourage drug discovery initiatives, especially for the dreaded disease like cancer, to make these drugs affordable for a very large section of people across the globe. In this model, all data generated related to the discovery research will be available in the open for collaborative inputs. In ‘Open Innovation’, the key component is the supportive pathway of its information network, which is driven by three key parameters of open development, open access and open source. This concept was successfully used in the ‘Human Genome Project’ where many scientists, and microbiologists participated from across the world to sequence and understand the human genes. Currently, pharmaceutical R&D is a well-protected in-house initiative of innovator global companies to maximize commercial benefits. For this reason, only a limited number of scientists working for the respective innovator companies will have access to these projects. In India, the Council of Scientific and Industrial Research (CSIR) is the champion of the OSDD movement, locally. CSIR believes that for a developing country like India, OSDD will help the common man to meet his or her unmet medical needs in the areas of mainly neglected tropical diseases.

Conclusion:

Thus, the ongoing heated debate on Innovation, Intellectual Property Rights (IPR) and Public Health Interest is gathering steam all over the globe.

Argumentative Indians are also participating in this raging debate. I reckon rightly so, as India is not only the largest democracy of the world contributing 16.7 percent of the global population, it is also afflicted with 21 percent of the global burden of disease. Considering this, the reason for similar heated debate in our country is indeed no-brainer to anyone.

Many would possibly not disagree, both encouraging innovation and safeguarding the public health interest are equally important to any society, be it in the developed nations or developing countries. Nevertheless, some constituents of ‘Big Pharma’ and their trade association still highlight that ensuring access to high price innovative drugs is the responsibility of the respective Governments. Any other regulatory mechanism to bring down such prices will be construed as a barrier to encouraging, protecting and rewarding innovation.

Be that as it may, most other stakeholders, across the world, especially the patients, are awaiting these two goals to tango. From that point, I reckon, giving a quick shape to commercially well-tested initiatives, such as, ‘Open Innovation’ model could well be an important step to ensure access to innovative new medicines for a larger number of patients of the world, meeting their unmet medical needs with greater care.

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.

Replication of ‘Old Paradigm’ of the developed pharmaceutical markets is unlikely to yield results in the evolving new paradigm of India

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“Health leaps out of science and draws nourishment from the society around it”

- Gunnar Myrdal (Swedish Nobel Laureate Economist)

The success concoction of the global pharmaceutical industry for India, by and large, still remains to be sustained attempts in various forms of replication of the ‘Old Paradigm’ of the developed world, even when a ‘Public Health Interest’ oriented new paradigm has started evolving in the country, faster than ever before.

Very interestingly, efforts to arrest this paradigm change still continue, even when healthcare related government policies are getting more and more ‘Public Health Interest’ oriented under increasingly assertive public opinion, together with healthcare cost containment initiatives of various governments also in the OECD (Organization for Economic Co-operation and Development) countries.

Commercial and public relations strategies for replication or recreation of more or less similar business excellence environment of the developed pharmaceutical markets of the world now in India, though some may say is possible and would work, but in my view is highly improbable, at least in the foreseeable future. To be equally successful in India, creation of India centric robust and differentiated business models, broadly aligning with the new evolving paradigm of the country, could probably make more commercial sense for all concerned.

“See things as they are, not way you want them to be”:

“Maintain and sharpen your intellectual honesty so that you’re always realistic. See things as they are, not way you want them to be”, wrote the Management Guru – Mr. Ram Charan in his book titled, ‘Execution: The Discipline of Getting Things Done’ co-authored by Larry Bossidy. In the same book the authors deliberated on ‘The 10 Greatest CEOs Ever’.

One of these 10 greatest CEOs ever, George Merck of the global pharmaceutical giant Merck & Co articulated his vision for the Company way back in 1952 as follows:

“Medicine is for people, not for the profits.”

George Merck believed, the purpose of a corporation is to do something useful, and to do it well, which also ensures decent profits.

I have personally witnessed the Merck (MSD) employees to start their business presentations quoting the above famous vision, even today. George Merck’s vision, I reckon, is more relevant today than any time in the past.

In the same context, another very senior official of a global pharmaceutical major was quoted in the Harvard Business Review in its April 28, 2010 edition saying:

“As western pharmaceutical companies consider how to be successful in emerging markets, they must address two key questions:

  • How will we bring high-quality health care to patients wherever in the world they may live?
  • How do we effectively manage the transformation of the traditional pharmaceutical business model to one that meets the diverse range of needs of the emerging markets?”

He further said, “Our approach to providing patients with access to our medicines is evolving. We have extended a flexible-pricing strategy for middle-income countries to improve the affordability of our medicines and increase access for patients with lower income levels, while remaining profitable.”

Though some companies have been able to carefully pick up this important signal and strategize accordingly, many others still prefer to follow ‘their own ways’.

Increasing healthcare consumption of India attracting global players:

Along with the economic progress of India, healthcare consumption of the population of the country is also increasing at a reasonably faster pace. According to McKinsey India Report, 2007, the share of average household healthcare consumption has increased from 4 per cent in 1995 to 7 per cent in 2005 and is expected to increase to 13 per cent in 2025 with a CAGR of 9 per cent, as follows:

Share of Average Household Consumption (AHC) (%)

Household Consumption 1995 2005 E 2015 F 2025 F

CAGR %

1.

 Healthcare

4

7

9

13

9

2.

 Education & Recreation

3

5

6

9

9

3.

 Communication

1

2

3

6

12

4.

 Transportation

11

17

19

20

7

5.

 Personal Products and Services

4

8

9

11

8

6.

 Household Products

2

3

3

3

5

7.

 Housing & Utilities

14

12

12

10

5

8.

 Apparel

5

6

5

5

5

9.

 Food, Beverages & Tobacco

56

42

34

25

3

(Source; McKinsey India Report 2007)

From this study, it appears that among all common household consumption, the CAGR of ‘healthcare’ at 9 percent will be the second highest along with ‘education’ and ‘communication’ topping the growth chart at 12 percent.

As per this McKinsey study, in 2025, in terms of AHC for ‘healthcare’ (13 percent) is expected to rank third after ‘Food & Beverages’ (25 percent) and ‘transportation’ (20 percent).

Thus, AHC for ‘healthcare’ shows a significant growth potential in India, over a period of time. Hence, this important area needs to attract as much attention of the policymakers, as it is attracting the pharmaceutical players from all over the world, to help translate the potential into actual performance with requisite policy, fiscal support and incentives.

Such a scenario in the pharmaceutical space is difficult to ignore by any player with an eye for the future.

Sectoral break-up of the Healthcare Industry:

Even while looking at the sectoral break-up of the healthcare industry, the significant share of the pharmaceutical industry should be quite enticing to many global companies.

According to IDFC Securities 2010, the sectoral break-up of the US$ 40 billion healthcare industry is as follows:

Industry

%
Hospitals

50
Pharma

25
Diagnostics

10
Insurance & Medical Equipment

15

(Source: IDFC Securities Hospital Sector, November 2010)

A promising market:

Pharmaceutical market of India holds an immense future promise already being globally recognized as one of the fastest growing healthcare markets of the world. All components in the healthcare space of the country including hospital and allied services are registering sustainable decent growth, riding mainly on private investments and now fueled by various government projects, such as:

  1. National Rural Health Mission (NRHM)
  2. National Urban Health Mission (NUHM)
  3. Rashtriya Swasthya Bima Yojana (RSBY)
  4. Universal Health Coverage (UHC)
  5. Free Medicine from the Government hospitals
  6. Centralized procurement by both the Central and the State Governments

Supported by newer, both public and private initiatives, like:

  • Increase in public spending on healthcare from 1.0 per cent to 2.5 per cent of GDP in the 12th Five Year Plan period
  • Increasing participation of the private players in smaller towns and hinterland of the country
  • Wider coverage of health insurance
  • Micro-financing
  • Greater spread of telemedicine
  • More number of mobile diagnosis and surgical centers

Need to strike a right balance:

The pharmaceutical companies need to strike a right balance between ‘Public Health Interest’ and their expectations for a high margin ‘free market-like’ business policies in India.

Pharmaceuticals come under the ‘Essential Commodities Act’ in India, where government administered pricing for all drugs featuring in the ‘National List of Essential Medicines 2011’ is expected and cannot be wished away, at least, for now.

Despite all these concerns, India still remains a promising market for the pharmaceutical players, both global and local. McKinsey & Company in its report titled, “India Pharma 2020: Propelling access and acceptance realizing true potential” estimated that the Indian Pharmaceutical Market (IPM) will grow to US$ 55 billion by 2020 and the market has the potential to record a turnover of US$ 70 billion with a CAGR of 17 per cent during the same period.

Domestic Pharmaceutical Industry has come a long way:

Domestic pharmaceutical companies have positioned themselves as formidable forces to reckon with, not just locally but in the global generics market too.

Currently India:

  • Ranks 3rd in the world in terms of pharmaceutical sales volume.
  • Caters to around a quarter of the global requirements for generic drugs.
  • Meets around 70 per cent of the domestic demand for Active Pharmaceutical Ingredients (API).
  • Has the largest number of US FDA approved plant outside USA
  • Files highest number of ANDAs and DMFs
  • One of most preferred global destinations for contract research and manufacturing services (CRAMS)

Patients are still being exploited:

Unfortunate and deplorable incidences of exploitation of patients, mainly by the private players, are critical impediments to foster growth in quality healthcare consumption within the country.

In this context, ‘The Lancet’, January 11, 2011 highlighted as follows:

“Reported problems (which patients face while getting treated at a private doctor’s clinic) include unnecessary tests and procedures, rewards for referrals, lack of quality standards and irrational use of injection and drugs. Since no national regulations exist for provider standards and treatment protocols for healthcare, over diagnosis, over treatment and maltreatment are common.” 

Prevailing situation like this calls for urgent national regulations for provider-standards and treatment-protocols, at least for the common diseases in India and more importantly their stricter implementation across the country by both the global and local players.

Pharmaceutical key business processes in India are almost a ‘free-for-all’ type:

Despite many challenges and damning reports of the Indian Parliamentary Standing Committees, overall key business processes in India are something like ‘free-for-all’ types, mainly because of the following reasons:

  • No pan-India voluntary or mandatory code exists for ethical Sales and Marketing practices
  • Many regulatory controls and standards are reportedly below par
  • Regulatory control on clinical trials done in India is reportedly sub-standard. In many cases even  adequate compensation towards trial related deaths is reportedly not paid to the victims families by the companies, mostly fixing responsibilities to the ‘Ethics Committees’.

Key factors to take note of in the changing paradigm:

While looking at the big picture, the global pharmaceutical players, I reckon, should take note of the following factors while formulating their India- specific game plan to be successful in the country without moaning much:

  • At least in the short to medium term, it will be unrealistic to expect that India will be a high margin / high volume market for the pharmaceutical sector in general, unlike many other markets, across the world.
  • India will continue to remain within the ‘modest-margin’ range with marketing excellence driven volume turnover.
  • The government focus on ‘reasonably affordable drug prices’ may get extended to patented products, medical devices / equipment and other related areas, as well.
  • Although innovation will continue to be encouraged in the country, the amended Patents Act of India is ‘Public Health Interest’ oriented and different from many other countries. This situation though very challenging for many innovator companies, is unlikely to change in the foreseeable future, even under pressure of various “Free Trade Agreements (FTA)”.

Government no longer accepts that medicine prices are cheapest in India:

Pharmaceutical companies in India will be constrained to live with the continuing focus of the government and also of the civil society on ‘reasonably affordable medicines’ irrespective of the fact whether they are generic or patented.

The Department of Pharmaceuticals has reportedly started comparing the Indian drug prices with international equivalents in terms of the ‘purchasing power parity’ and ‘per capita income’ and not just their prevailing prices in various developed markets converted to rupees.With such comparisons the government has already started voicing that prices of medicines in India are not the cheapest but on the contrary one of the costliest in the world.

The above argument though interesting, worth taking note of, by all concerned to successfully chart-out their respective game plans for India.

A recent media report highlighted that an inter-ministerial group constituted for regulating prices of patented medicines in India has recommended using a per capita income-linked reference pricing mechanism for such products.

The above news item also mentions that Tarceva, a Roche lung cancer drug, costs Rs 1.21 lakh in Australia and France while it costs Rs 35,450 in India. But when adjusted for per capita income, which is significantly more in these countries compared with India, the price falls to Rs 10,309 and Rs 11,643, respectively, for both countries as indicated below:

Country India France Australia
Per capita gross national income (PCGNI) (US$) 3260 33940 38510
Ratio of PCGNI of other countries to India 1 10.4 11.8
Eriotnib (Tarceva) 100 mg price in India (Rs.) 35450 121085 121650
Eriotinib (Tarceva) 100 mg Price in terms of weighted PCGNI (Rs) 35450 11643 10309
Sunatinib (Stutent) capsule 50 mg (Rs)       46925 363216 310384
Sunatinib (Stutent) 50 mg price in terms of weighted PCGNI (Rs)              46925 34925 26303

(Source: The Economic Times, August 16, 2012)

Government encouraging R&D Focus on the diseases of the poor:

Many in India, including ‘Council of Scientific & Industrial Research (CSIR)’ feel that the pharmaceutical R&D activities should also focus on the diseases of the poor, which constitute the majority of the global population.

However, global pharmaceutical companies argue that greater focus on the development of new drugs for the diseases of the poor should not be considered as the best way to address and eradicate such diseases in the developing countries. On the contrary, strengthening basic healthcare infrastructure along with education and the means of transportation from one place to the other could improve general health of the population of the developing world quite dramatically.

The counterpoint to the above argument articulates that health infrastructure projects are certainly very essential elements of achieving longer-term health objectives of these countries, but in the near term, millions of unnecessary deaths in the developing countries can be effectively prevented by offering more innovative drugs at affordable prices to this section of the society.

Recognition of India’s healthcare priorities is important:

Despite chaos in many areas, as mentioned above, a paradigm change in the way pharmaceutical business to be conducted in India, is slowly but surely taking place, where replication of any western business model could be counterproductive. The strategy has to be India specific, accepting the priorities of the countries, even with all its ‘warts and moles’

Participative strategies should yield better results:

To achieve excellence in the pharmaceutical market of India, there is a dire need for all stakeholders to join hands with the Government, without further delay, to contribute with their global knowledge, experience and expertise to help resolving the critical issues of the healthcare sector of the nation, like:

  • Creation and modernization of healthcare infrastructure leveraging IT
  • Universal Health Coverage
  • Win-Win regulatory policies
  • Creation of employable skilled manpower
  • Innovation friendly ecosystem
  • Reasonably affordable healthcare services and medicines for the common man through a robust government procurement and delivery system

Right attitude of all stakeholders to find a win-win solution for all such issues, instead of adhering to the age-old blame game in perpetuity, as it were, without conceding each others’ ground even by an inch, is of utmost importance at this hour. 

It is high time for the Government of India, I reckon, to reap a rich harvest from the emerging lucrative opportunities, coming both from within and the outside world in the healthcare space of the country. Effective utilization of this opportunity, in turn, will help India to align itself with the key global healthcare need of providing reasonably affordable healthcare to all.

Conclusion:

Thus in my view, just replication of the ‘Old Paradigm’ of the developed pharmaceutical markets is unlikely to yield results in the new evolving paradigm of India.

In this rapidly changing scenario, the name of the game for all players of the industry, both global and local, I believe, is recognition of the changing market dynamics of India, active engagement in the paradigm changing process of one of the most important emerging pharmaceutical markets of the world and finally adaptation to the countries changing aspirations and priorities to create 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.