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Using Selling Simulator For New Drug Launch In The New Normal

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The reverberation of unparalleled business disruptions in healthcare caused by Covid pandemic, extends across its value chain – from patients and families to clinicians and pharmaceutical companies. Consequently, even many diehards or staunchly tradition-bound pharma marketers were being prompted to reimagine their marketing model, to keep the business going.

Some of these areas include, customer preferred engagement channels, platforms and associated remote or virtual training inputs – necessary for effective execution of new strategic marketing models for the evolving new normal. A few of them are also moving in this direction – garnering requisite wherewithal.

“But it has also left some of them paralyzed by uncertainty. Should they invest now in transforming their commercial model or wait to see how things play out?” This palpable dilemma of many pharma marketers, was well captured in a recent McKinsey & Company article - ‘Reshaping pharma’s strategy in the next normal,’ published on December 15, 2020.

In a situation like this, one of the critical challenges is the successful launch of new pharma products amid changing customer behavior, product expectations and other associated uncertainties. ‘As pharmaceutical companies reshape their commercial models to prepare for the uncertainties ahead, personalization and digital enablement will be crucial to launch success in the new environment,’ underscored the above article.

As many of us will know, quality training and development inputs for the same, remain a vital prerequisite before the sales force hits the marketing battle ground. Isn’t that also a challenge in the prevailing market situation? Could digitalization of the company provide a solution to this critical sales force training issue for the same, in the new normal? This article will delve into this area.

Digitalization is a basic step – the challenge is much beyond that:

As I wrote in my article dated October 07, 2019, disruptive digital transformation in pharma sales and marketing is indeed a necessary basic step. It will also help to leapfrog in the field staff training and development process by imbibing leading-edge technologies, such as AI, for giant leaps to higher growth trajectories. But, ‘Digitalization’ isn’t a panacea, either.

This was also echoed in another recent article on ‘Pharmaceutical Marketing in The New Normal’, published in the Forbes magazine on August 11, 2021. It wrote, ‘even the best, most advanced digital tools won’t help if reps are not properly trained.’ This is due to multiple factors. Let me elaborate the point from a new product launch perspective.

New normal brings unprecedented changes – no footsteps to follow:

The extent and depth of personalization required in any effective customer engagement process for successful outcomes, has undergone a fundamental shift. Today, personalization of content, channels and platforms is a necessity and no longer an option. In the new normal one size doesn’t fit all. Consequently, sales force training process, particularly for a new drug launch, has also become personalized, with simulation of new expectations and requirements of each market becoming a key ingredient, more than ever before.

Simulated sales training still not too common in pharma:

That personalized and simulated sales force training is still not too common in the pharma industry, was also captured in the February 2020 ‘The Voice of the Sales Rep study’ of the sales research firm – SalesFuel. It reported, just 30% of sales reps in the pharma industry are now getting personalized sales training based on individual needs. This study was done in the United States, and the same percentage is expected to be much less in India.

In this context, the above Forbes article also noted that at an elementary level, reps should be proficient in video conferencing and virtual CME basics, such as, screen sharing, lighting, cameras, and the likes. There could also be occasions when they may need to teach even some of the physicians for whom, as well, this type of engagement is new. Thus, simulation training may possibly play a critical role to make the sales force future ready, always.

Besides, gaining deeper insights of customers, market dynamics, and tailoring the content of personalized engagement, accordingly, will be a critical part of personalized training through simulation, especially for new product launch in the new normal.  

Doctors availing product and treatment related online services: 

While navigating through acute disruption of life during Covid pandemic, several doctors have learnt to use digital channels and platforms to avail product or new therapy related information directly, instead of through sales reps. And that too, as they want, when they want and the way they want, gaining a discretionary choice. Several surveys, such as,  2020 Accenture research, also reported many doctors want either virtual or a mix of virtual and in-person meetings with pharmaceutical reps, even after the pandemic ends.

Available studies also give a sense that the future overall trend in pharma is unlikely to be a replication of pre-Covid time, prompting the players to reimagine their customer engagement format. For example, a contemporary ‘Real Time Covid-19 Barometer Survey of physicians,’ by Sermo, found that ‘67% believe pharmaceutical companies could improve communications with HCPs and could do more to help physicians make prescribing decisions.’

Hence, even with the much-reduced threat from Covid infection, as and when it will happen, the same trend is likely to change the scope and traditional toolkit for future new brand launch, as well. Hence, pharma companies would, need to change their sales training architecture, accordingly – like simulation training – always keeping one ear on the ground.

Proven edge of simulation training in healthcare during Covid-19:

There are several studies in this area in different parts of the world. To illustrate the point, let me quote a Canadian study, published by ResearchGate in December 2020. It made several important points, which I summarized, as below.

The study elucidates, healthcare resources were strained to previously unforeseeable limits because of COVID-19 pandemic, in most countries. The unprecedented nature of disruption in health systems prompted the emergence of rapid simulation training for critical just-in-time COVID-19 education. The aim was to improve preparedness for giving high quality care to rapidly increasing number of Covid infected patients, including caregivers, across all healthcare sectors.

The researchers found that simulation training was pivotal for healthcare provider learning, alongside new systems integration, development of new processes, workflows, checklists, protocols, and in the delivery of quality clinical care to all concerned.

To cope with the new reality, triggered by the Covid pandemic, as also demonstrated by several other studies, simulation training has the potential to deliver the best learning outcomes. Some may obviously would seek a little more clarity in understanding what exactly is a simulation training that I am referring to.

What exactly is simulation training?

It won’t be terribly difficult for pharma marketers to understand what exactly simulation training in pharma sales and marketing is. As the name suggests, simulation is a replication of what happens or may happen in a real-life situation. In this particular case, it involves the simulation of changing pharma customers and market behavior and expectations, in the new normal.

Thus, a simulation training process, say for a new brand launch, would create virtual market scenarios by replicating all recent changes in customer behavior/expectations and the market dynamics – of a specific territory. This is usually done with AI based computer software, designed to help sales force learning of a real-life situation, without being in the thick of it on the ground. In simulated training, the selected trainees interact with technology, rather than reading notes or listening through the lectures of persons having similar insights.

The selling simulators are cost-effective and provides better outcomes:

Besides being cost-effective, simulation training is also considered a 24-carat way of developing new skills, and also assessing how well the trainees are translating the new learnings into practice. No wonder why even the US National Library of Medicine, after evaluation and review of several research studies, has acknowledged that simulation training imparts learning ‘just like a real thing.’

How will it work on the new product launch?

In pharma sales and marketing area, the simulation of customers’ post-pandemic new needs and expectations, can be simulated by developing a ‘selling simulator’ for new product launch, in the new normal. These simulators will integrate AI-based software with game dynamics or gamification, creating a virtual field situation for sales reps to continuously learn and hone their new-product launch skills. The required contemporary skills may often be unique in nature, beyond the traditional pathways, even where there are no footsteps to follow.

Why simulation training for a new drug launch will add greater value?

This  query is also well deliberated in the McKinsey & Company article - ‘Reshaping pharma’s strategy in the next normal,’ published on December 15, 2020, with the Covid pandemic as the backdrop. It underscores, ‘it is clear that major shifts in the way that healthcare professionals (HCPs) interact with pharma companies will present a challenge for the traditional launch model, with its reliance on face-to-face meetings with physicians and its “one size fits all” approach to engagement.’

The study further points out that “the traditional pharma commercial model will likely struggle to adapt to a different world. When reps venture back into the field, they will need to address the plurality and access challenges of the new interaction landscape. To do that, they will need to consider a new approach to launches: one that is digital, local, and personalized.”

This changing need will call for a new genre of training, and I think, simulation training for pharma reps will prove to be more productive in this area.

Conclusion:

Many uncertainties in the pharma business continue, even after the second wave of Covid pandemic, with the Damocles sword of its third wave hanging over the head, including the Indian population. In the current volatile pharma business environment, as an article on the subject, published by the Pharmaceutical Executive on July 30, 2021, articulates – the challenges of remote work mean that training approaches must be adaptable and engaging.

Simulation training, with its power to engage learners, and developed for strategically minded, and data-literate sales teams, would become a key component of the future pharmaceutical sales training landscape. This is destined to happen regardless of whether delivered on site or in remote training formats. From this perspective, I reckon, with a well thought-out – AI-driven selling simulator, especially for new product launch, to start with, could be a potential game changer in yet mostly untried 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.

Appears On Radar New L&D Needs For Pharma’s New e-Environment

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As drug companies were desperately trying to navigate through the operational disruptions due to Covid crisis, the Learning and Development (LD) plans of most organizations, considered so important for employees, got badly impacted. This was ably captured in the article – ‘Adapting workplace learning in the time of Coronavirus’, appeared in the March 2020 issue of McKinsey Accelerate.

It highlighted, as businesses around the world postpone and cancel in-person meetings in response to the COVID-19 pandemic, “workplace learning is emerging as one of the earliest and hardest-hit business activities.” The paper further elucidated: “Based on our observations as of early March, roughly one-half of in-person programs through June 30, 2020, have been postponed or canceled in North America. Whereas “in parts of Asia and Europe, the figure is closer to 100 percent.”

Interestingly, no one is talking much about it as much as the need for quick digitalization in the pharma industry, to respond to the challenge of disruptive changes. A quick return to employee L&D initiatives in the new normal, I reckon, would encourage, particularly the hands-on staff members on e-marketing to come out with more innovative digital solutions to reap a rich harvest from remote engagement with customers, on an ongoing basis.

In this article, I shall explore this area from the perspective of increasing employee productivity in the digital work environment of the new normal.

Why is L&D more relevant to pharma employees, now?

To effectively respond to post-Covid changes in customer behavior – aspirations – expectations – other market dynamics, alongside a different genre of competition, new learnings in the digital space, is critical for all employees. Which is why, it is so important for pharma players to quickly refocus on this process, just as digitalization. Without requisite digital skill development, corporate performance may look lackluster, eventually.

It is important for all to recognize that just digital transformation of business isn’t a panacea. For example, e-marketing is certainly a powerful contemporary marketing tool that a company must go for. But, it is no less important to know how making effective use of this versatile technology would appeal to individual customer emotions, with personalized content. Medical Representatives of pre-Covid days may not be generally well-versed in this area, at least, as much as they ought to – now.

Some pace-setting Indian examples in this area:

According to an article, published in leading Indian business daily on June 17, 2020, the Indian pharma major – Lupin, reportedly, used the lockdown as an opportunity to train its sales teams on medical acumen, soft skills, disease knowledge, effective communication etc. They conducted over 200 sessions using Microsoft Teams. In some sessions, the attendance count reached 8000 people.

As the article points out, using digital tools and platforms, the company reps were enabled to record a video of brand detailing and share it with the doctors who can view it as per his or her convenience. It also says, ‘Lupin team reached out to more than 1 lakh doctors through live webinars, ECMEs, e-mailers, webinars to update them with the latest medical and therapeutic advancements.’

The core idea of this initiative is undoubtedly worth imbibing, although, it is still not clear to many, how effective were those digital marketing strategies in the form as it has been described.

The new e-environment needs new sets of L&D models:

From the above perspective, the take home message, I reckon, is - in pharma’s new normal, digitalization isn’t just about a modern and contemporary technology. It is much more profound – signifies the criticality of credible data-based, novel decision-making process, offering high yield solutions to complex sets of disruptive problems in business.  Consequently, now appears on the radar a new set of L&D needs for the new e-environment of the pharma industry.

Ramifications of e-environment changes in pharma business: 

Many studies have pointed out to a number of changes in pharma industry’s e-environment, in the new normal. Just to give a sense of such mega changes, let me quote another recent paper in this regard. The paper on ‘Telehealth’, published by McKinsey & Company on May 29, 2020, writes: “Our claims-based analysis suggests that approximately 20 percent of all emergency room visits could potentially be avoided via virtual urgent care offerings, 24 percent of health care office visits and outpatient volume could be delivered virtually, and an additional 9 percent “near-virtually.”

The paper further adds, ‘up to 35 percent of regular home health attendant services could be virtualized, and 2 percent of all outpatient volume could be shifted to the home setting, with tech-enabled medication administration.’ These changes will overall add up to US$250 billion in healthcare spend in 2020 that could be shifted to virtual or near-virtual care, or 20 percent of all office, outpatient, and home health-spend across all types of health care, the paper highlights.

Although, this article was written against the US pharma industry backdrop, considering the current Indian government’s strong push on telemedicine – as a facilitator, one may envisage similar changes in India too, over a period of time.  

Covid-19 could still be a long-haul battle, pharma should be prepared for it:

Echoing this sentiment, ‘The Washington Post’ flashed a headline in its February 10, 2021: ‘Variants mean the coronavirus is here to stay — but perhaps as a lesser threat.’ Elaborating the point, it said: ‘In early December, the end of the pandemic glimmered on the horizon. Blockbuster vaccine results suggested a clear path forward.’ However, thereafter, ‘the euphoria dissipated,’ as mutation-ridden variants of Covid-19 with concerning new characteristics were detected. ‘The path forward is still hopeful, but longer and more labyrinthine’, the news report added.

It is now becoming increasingly clear that Covid-19 variants can slip past some of the immunity generated by vaccines and prior infections.  Vaccines may have to be updated, perhaps regularly. And the world will have to prepare for the possibility, even the likelihood, that over the long term, the novel coronavirus will become a persistent disease threat.

The World Health Organization (W.H.O) also confirmed this point on January 21, 2021. It said, ‘Yes, this is a very important point that vaccine developers keep in mind. Covid-19 vaccines could possibly be like vaccines against the influenza virus, where ‘scientists have to change the structure of the vaccine every year, based on the circulating strains and WHO coordinates this global network that actually identifies which strain should be used every year.’

Conclusion:

The bottom line, therefore, is, no one can vouch with any degree of certainty, as on date, when exactly Covid crisis will get over completely, despite Covid-19 vaccines being available now. At the same time, even after several disruptive covid related changes in business, the need for rapid adjustment to further changes of similar in nature and scale, may continue to exist.

To properly understand these changes, their implications on business, impact on customers, re-engineering needs of marketing strategies and then thrive, are of fundamental importance. Thus, along with on-the-job learning, contemporary e-learning of employees – is a critical success ingredient for both individual and organizational development, especially in the dynamic digital environment.

It is worth noting that digital initiatives are not confined to modern tech-based apps and platforms. The basic prerequisite of any digital marketing strategy is to understand the versatility of its power and core values. This is essential to effectively influence customer behavior and their expectations, for creating a sustainable ‘doctor-patient- brand or corporate relationship. That’s why L&D remains a critical tool for capacity building, even for e-marketing. It will help ensure, employees are able to deliver expected deliverables by successfully meeting newer challenges in the digital space, in sync with the organizational expectations and goals, in the new normal.

Today, when digitalization has become a buzz word for pharma’ success – occupying virtually everybody’s entire mind space, also appears on the radar today new L&D needs for the new e-environment to make digitalization work, paying rich dividend to the business.

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.

 

Pharma Branding At Tough Times

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“About two-thirds of drug launches don’t meet expectations. Improving that record requires pharmaceutical companies to recognize the world has changed and adjust their marketing accordingly.” This appeared in an article – “The secret of successful drug launches,” published by McKinsey & Company in March 2014. There isn’t any recent evidence, either, that this situation has improved now.

Even innovative drugs no longer guarantee a commercial success, as greater competition is building up there, as well. Today, the number of such drugs per indication has risen by 37 percent since 2006 making the task tougher, according to another article of McKinsey & Company, titled ‘Why innovative products aren’t enough for a successful pharma launch,’ brought out in August 2017.

Top marketers’ intimate involvement in these launches, backed by robust marketing strategies notwithstanding, large scale ‘brand failures’ or rather ‘branding failures,’ still remains unavoidable. Although, its telltale signs are more often visible immediately after launch, but may happen even several years after.

Pundits are just not scratching their heads, but doing extensive research to fathom why it happens. However, with changing times – the market dynamics and the research outcomes/inferences keep changing too. And that will be the focus of my today’s discussion in this article, while I explore various facets of the same.

Is pharma branding just a marketing exercise?

That pharma branding is not just a marketing exercise and its failure at any stage – from launch to even years after, I reckon, isn’t the sole responsibility of the pharma marketer. This is mainly because, doctors would ideally prefer to prescribe specific pharma brands and patients would feel confident to use those, because of successful construction of a positive brand bias. Which in turn creates a higher perceived efficacy and a low anticipated safety concern with the brand.

Although, it will be right to assume that good pharma marketers are solely responsible for the creation of this intangible brand asset, but the tangible intrinsic brand value should necessarily be ingrained into each dose of the same that patients consume, always.

Thus, tangible brand value creation, its maintenance, if not enhancement, span across many other functional domains of a drug company. Some of these include, unbiased reporting with expected disclosures of all clinical trial results, maintaining a robust and highly efficient supply chain network or high-quality manufacturing facilities, besides a few others. Evidences exist that irrational pricing could also result in a kind of brand failure. Considering these aspects in totality, creating a positive bias during a pharma brand-building process, is a collective responsibility, and not just of the marketers.

Why creating a positive brand bias is a collective responsibility?

There are ample examples to substantiate that creating a positive stakeholder bias during its brand-building process, is a collective responsibility. Let me illustrate this point by drawing a few examples of branded failures prompted by supply-chain network, disclosures on clinical development and of course perceived ‘irrational’ pricing that falls basically in the marketing domain. It is worth noting, similar incidents may also be related to the manufacturing process, even for top selling generic drugs.

Supply-chain: In the beginning of 2008, serious adverse drug events, some even fatal, were reported with Heparin (Baxter), which used to be widely used as an injectable anticoagulant. Around 80 people died from contaminated Heparin products in the U.S. The US FDA reported that such contaminated Heparin was detected from at least 12 other countries. The primary reason of the same was a serious breach in the supply-chain integrity.

Disclosures on clinical trial results: On 30 September 2004, Vioox (rofecoxib), a non-steroidal anti-inflammatory drug (NSAID) that had been on the market since 1999, was suddenly withdrawn by its manufacturer MSD, owing to concerns about its effect on cardiovascular health.

‘Irrational’ pricing: Like a lot of new cancer drugs, Zaltrap (aflibercept) wasn’t cheap carrying a price tag of USD 9,600 a month. But its price was quickly taken down. This followed some serious public flak, such as, doctors from Memorial Sloan-Kettering (MSK) wrote a blistering review for The New York Times in November 2012. They declared that MSK was taking the drug off the institution’s formulary, because less expensive and just as good alternative angiogenesis inhibitors were available. Although, Sanofi initially defended the price, it subsequently backed down, cutting down the price by half.

Manufacturing process: On September 13, 2019, the FDA announced that preliminary tests found low levels of N-nitrosodimethylamine (NDMA) in ranitidine (Zantac), a heartburn medication. Consequently, almost all companies, including Novartis (through its generic division, Sandoz), GSK, Apotex and many others announced its withdrawal from a large number of markets. Interestingly, these announcements came after a Connecticut-based online pharmacy informed the FDA that it had detected NDMA in multiple ranitidine products under certain test conditions. The NDMA impurity was believed to have been introduced by changes in the manufacturing process. There are several other well-reported examples, as well.

These examples vindicate that creating a positive brand bias remains a collective responsibility throughout the product lifecycle. And it involves several functional areas of drug companies. That said, let me now focus on the creation of a positive bias for pharma brands.

Creating a positive brand bias:

Skillful creation of a positive brand-bias, supported by high quality – tangible and intangible value offerings, is the net outcome of any successful branding process. It augments stakeholder confidence, leading to an increased prescription generation, alongside a favorable patient experience.

More often than not, a positive brand-bias successfully brings into being greater perceived brand-efficacy and higher perceived brand-quality, with lesser anticipated safety concerns. Consequently, the process invigorates an emotional bonding with customers for a long-term brand-loyalty. A positive brand-bias also creates a strong brand equity that often helps in working out a good pricing strategy for the company.

An interesting strategy prescribed – recently:

The October 8, 2019 issue of Fierce Pharma featured an article on creating a positive brand-bias with “Prime and prompt” marketing strategies, outlined by CMI/Compas.

According to Changing Minds: ‘Priming works by providing people with information that is easily brought to mind. The prompt that brings the information to mind can be an implanted and specific trigger or can be an associated term that will naturally bring back the primed information.’ Illustrating the point, it adds: ‘Prime-and-prompt can be a bit like firing a gun, where priming cocks and prompting pulls the trigger.’

Putting this concept in the pharma industry perspective, the CMI/Compas officials explained in the above article, ‘pharma marketers can create primes with product messages that condition people to recall their product when they need medicine or are diagnosed with a condition.’

Hence, a pharma marketer’s adroitness in the ‘priming’ strategy helps ‘prompt’ the desirable action, such as, going to a doctor to ask about a product. Hence, the persuasion technique is termed – ‘prime and prompt’, the paper explained. Naturally, the question that follows: what are the key principles behind this strategy?

Key principles behind ‘prime and prompt’ strategy:

As elucidated by the Changing Minds, when thinking and deciding, we are influenced by related information from the past. At that time, our memories would supply that information, which helps us understand, make sense, decide and act on the subject at hand. Thus, those things that come at the top of mind will have a more immediate and disproportionate influential effect, while those things which are long forgotten may have little or no effect.

It further adds: ‘Priming is driven by implicit memory, where recall is entirely unconscious as the person ‘just knows’ without having to think hard or otherwise put effort into remembering or working things out.’

How to apply the ‘prime and prompt’ strategy in pharma?

It’s no-brainer that to use ‘priming’ in the persuasion process, say for increasing prescription support, the marketers need to provide stakeholders with relevant information beforehand, and more importantly, in a different setting. And only thereafter, they need to focus on a normal brand persuasion strategy. One may most appropriately comment, this is easier said than done in the drug industry.

Taking a cue from the above interview with the CMI/Compas officials, some of the broad steps of the ‘prime and prompt’ strategy, I reckon, may be summarized as follows:

  • Consistent messaging through omnichannel media achieving target reach and frequency, as I had explained before.
  • For intended top of mind recall, a combination of print, digital, social, search, display at appropriate places and in TV, especially for OTC drugs, should consistently surround the target audience for ‘priming.’
  • According to a recent research, the most highly rated ‘priming’ spots for pharma ads for physicians are medical journals, conferences and the likes. Similarly, for patients, appropriate displays at doctors’ clinics and similar places also appeared to be one of the top-rated ‘priming’ spots.

Consequently, a well thought-out ‘priming’ strategy, skillfully executed – based on research findings, is expected to be effective. It will then help trigger desirable ‘prompts’ for the target-audience, augmenting a successful branding process. However, it comes with a caveat that the tangible intrinsic value of the brand, especially those which originate in other functional areas, don’t get compromised or changed in any way.

Conclusion:

Branding exercise in the pharma industry has never been more challenging, as it is today – both for innovative and generic drugs. As stated above, the number of innovative drugs per indication has risen by 37 percent since 2006, making the market competition tougher. Likewise, product proliferation with cut-throat pricing for branded generics, is also making the generic drug marketers grasping at straws, as it were.

In this challenging situation, creating a positive stakeholder bias for brands, as the net outcome of the pharma branding process, is a collective responsibility. Any non-marketing misstep in the tangible brand value offering, could sweep a brand away to oblivion – not just during launch, but at any stage of its life-cycle. Pharma marketers will of course be solely responsible to create the critical intangible brand assets, such as a positive stakeholder bias for brands.

At this tough time for pharma branding, several fresh marketing concepts like, ‘prime and prompt’ are now being seriously evaluated. Thus, I reckon, its also a time for astute marketers in the pharma industry to test the water, in pursuit of excellence.

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.

 

Pharma Stakeholder Sentiment: Back to Square One?

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Is it fair to push out the core purpose of an important process, or rather a mission, unfairly? Whether we like it or not, it happened that way, over a period of time.

Way back on December 01, 1950, George W. Merck (President and Chairman Merck & Co., Inc.1925-1957), epitomized the core purpose of the drug innovation process. This is something, which apparently was possible only for him to articulate exactly the way he did.

On that day, while addressing the students and the faculty at the Medical College of Virginia, Richmond, George Merck said: “We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”

To many of us, it may sound more as an altruistic statement, and not really coming from a businessman who wants to excel in the financial performance of the organization. Interestingly, that was not the case, either. Merck removed any possible ambiguity in his statement by stating categorically: “In doing this, it will be as a business­ man associated with that area of the chemical industry which serves chiefly the worlds of medicine and pharmacy.”

In this article, I shall deliberate on whether or not the core purpose of drug innovation, as articulated by George Merck in 1950 has been pushed out of the mind of the stakeholders for good.

Management Guru – Peter Drucker’s similar observation:

It is worthwhile to recapitulate at this stage that around the same time, the Management Guru – Peter Drucker also made a similar observation, which is relevant even today. He said: “Because the purpose of business is to create a customer, the business enterprise has two – and only two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

Interestingly, when the word ‘customer’ is replaced with ‘patients’, George W. Merck’s iconic statement fits so well even in the realm of business management, including drugs and pharmaceuticals.

Signs of the core purpose of new drug discovery getting pushed out:

The core purpose of new drug innovation in pharma business, as articulated by a top industry pioneer – ‘Medicine is for the patient and not for the profits’, was pushed out eventually, regardless of its reasons. Today’s core purpose of the same process has seemingly become just the opposite of that – ‘Medicine is only for the patient who can afford it – to maximize profit.’

This change in the core purpose was visible in a large number of instances. For example, when the then Bayer CEO Marijn Dekkers reportedly said: ‘Our cancer drug is for rich westerners, not poor Indians.’  However, his exact wordings were “we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly.” If so,the question that comes up: why then Bayer fought so hard and spent so much of money, efforts and time to keep selling this specific product in India – exclusively?

In any case, this statement from the highest echelon of one of the top global pharma players is a contentious one, especially against George Merck’s articulation, or even Peter Drucker’s for that matter, on the same. By the way, Dekkers made this commentat the Financial Times Global Pharmaceutical & Biotech Conference in December in December 2013.

A wind of change?

The hope for a wind of change flickered when in an interview, Andrew Witty,the erstwhile global CEO of GlaxoSmithKline (GSK), signaled a totally contrasting view of his company. Witty said: “GSK is committed to offering all its new drugs in India at affordable prices.”

Much prior to this, on March 14, 2013 he told a conference on healthcare in London that: “It’s not unrealistic to expect that new innovation ought to be priced at or below, in some cases, the prices that have pre-existed them.” He further expressed: “The pharmaceutical industry should be able to charge less for new drugs in future by passing on efficiencies in research and development to its customers.”

Witty era is also over now. He retired from GSK at the age of around 53 on March 31, 2017. Perhaps his refreshing patient-centric thoughts would also not find any takers within the industry. Nonetheless, in March 2018, the same issue resurfaced in an interesting article, followed by a few other related developments.

Call for socializing drug development?

The issue, which is not just limited to high prices for new patented drugs, is much broader. An interesting article titled, “Developing drugs wasn’t always about profit, and it shouldn’t be now”, was published in Quartz- a news website owned by Atlantic Media, brings to the fore the same key point, yet again. It makes some profound observations, such as socializing drug development. The word ‘socializing’ may not be quite acceptable to many, though. Nevertheless, it raises some critical issues worth pondering over, such as:

  • Faith in the power of money pervades our modern medical system. Pharmaceutical companies aren’t evil (usually). They just choose to make the most profitable drugs, not the drugs of greatest value to society.
  • For example, despite antimicrobial resistance being a global threat, pharma companies have largely abandoned new antibiotic development on the eminently sensible principle that they are money-losers. Promising narrow-spectrum antibiotics – agents that precisely target pathogens and spare “good” bacteria - languish in development limbo because there is no hope that they might churn as much profit as several other drugs.

It’s high time, I reckon, to adequately address the dire need for a reliable supply of the medicines that make a vibrant modern society possible. All stakeholders, including the pharma industry, globally, would require putting their heads together in charting out a clear and time bound pathway for its effective resolution, soon. Otherwise, sheer gravity and the complexity of the situation may prompt the policy makers to move towards ‘socializing drug development,’ much to the dismay of many of us.

Hospitals creating nonprofit generic drug company:

On January 18, 2018, The New York Times (NYT), published an article titled “Fed Up With Drug Companies, Hospitals Decide to Start Their Own,” highlighted a novel initiative to address the prevailing situation, in their own way, without depending on others.

It reported, for many years, several hospital administrations have been expressing frustration when essential drugs like heart medicines have become scarce, or when prices have skyrocketed because investors manipulated the market. Now, about 300 of the country’s largest hospital systems are taking an aggressive step to combat the problem. They plan to go into the drug business themselves, in a move that appears to be the first on this scale.

‘The idea is to directly challenge the host of industry players who have capitalized on certain markets, buying up monopolies of old, off-patent drugs and then sharply raising prices, stoking public outrage’, the article elaborates.

‘Price of medications has soared, so have pharma profits’:

‘Big Pharma is jacking up prices for one reason – because it can,’ says a CNN Article, published on April 04, 2018. The article further emphasizes: “As the price of medications has soared, so have pharmaceutical company profits. Total sales revenue for top brand-name drugs jumped by almost $8.5 billion over the last five years. The Government Accountability Office (GAO) reported that 67% of drug manufacturers boosted their annual profit margins between 2006 and 2015 – with profit margins up to 20% for some companies in certain years.”

It further writes, “Not only have pharmaceutical companies reaped outsized profits from these price hikes, so have their CEOs. According to a USA Today analysis, the median compensation package for biotech and pharmaceutical CEOs in the Standard & Poor’s 500 was 71% higher than the median compensation for S&P 500 executives in all industries in 2015.”

Conclusion:

This is happening the world over. But its degree varies. In those countries where there are drug price regulators, only a small percentage of the total pharma market by value comes under price regulation, the rest of the products enjoy virtually free pricing freedom.

Would this ground situation change on its own any time soon? There is no specific answer to this question, yet. Moreover, there doesn’t seem to be none around in the pharma industry today with the stature and articulated vision like George Merck. He started from the very basic. Drawing the ‘square one’, he clearly defined the core purpose of discovery, manufacturing and marketing of medicines. Today’s pharma industry, by and large, seems to be charting in other newly drawn squares. Maximizing profit is now considered a key objective of achieving the core purpose – and not an outcome of achieving the core purpose of pharma business.

However, there are some very early signs of several stakeholders’ sentiment changing in this regard. Are they moving back to the basic – square one?

From the chronicles of the past several years on this issue, pharma industry does not seem to be on the same page with those stakeholders, just yet. If they do, a humongous health worry of a vast majority of the global population could be effectively addressed, as many believe.

The reverberations of this sentiment, though rather faint, can be felt in many countries, including the United States, and not just in the developing world, such as 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.

Health Care in India And ‘Development For All’ Intent

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‘Development for All’ has become a buzzword, especially in the political arena of India, and is being used frequently during all recent elections as no one can deny its crucial importance in a country like ours.

Nonetheless, some do feel that there should be greater clarity on what all it encompasses. There is no scope for assumption, either, that it definitely covers the economic growth of the nation. But, does it include health care for all, as well? This is a relevant question, since health care plays a crucial role in maintaining high growth of Gross Domestic Product (GDP) by any country, over a long period of time.

The ideal answer to this question would, of course, be an emphatic ‘yes’? However, on the ground is it really so? I explored that subject in my article published in this Blog on November 06, 2017 titled, ‘Healthcare in India And Hierarchy of Needs’.

In this article, I shall focus on health care and the ‘Development for All’ agenda of the Government, as witnessed by many in recent elections. Let me illustrate the point using one of the most recent state assembly elections as an example – Gujarat Assembly election of December 2017. I am citing this example, because it generated so much excitement among many, across the country, for different reasons, though.

Who is responsible for public health care in India?

A recent submission made on the floor of Parliament by the Government, explains the point unambiguously. It goes, as hereunder:

“Public health is a state subject. Under the National Health Mission, support is being provided to States/UTs to strengthen their health care systems to provide accessible, affordable and quality health care to all the citizens. Moving towards Universal Health Coverage wherein people are able to use quality health services that they need without suffering financial hardship is a key goal of 12th Plan.” This is what the Minister of State, Health and Family Welfare, reiterated in the Lok Sabha, just about a year ago, on November 25, 2016.

Since, public health is predominantly a state subject, and so important for each individual, besides being one of the key indicators for long-term socioeconomic progress of a country and, one expects health care to be a key issue during the state Assembly elections. This is necessary to maintain the pace of development in this area, be it a state or the country.

Intriguingly, it appears to have no more than a ‘me-too’ reference in the election manifestos of political parties.

Does health care scenario in a state matter?

Now, zeroing on to Gujarat election as an example, the media report of March, 2017 highlighted, gradually reducing budget allocation percentage of health care in Gujarat. It elaborated, the State has reduced its budgetary allocation for health care from 5.59 percent of the total budget in 2015-16 to 5.40 percent of the revised budget of 2016-17, and now to 5.06 percent in 2017-18.

Consequently, the health care budget and spending on the proportion to the Gross State Domestic Product (GSDP) is going down year after year. Whereas, globally, the percentage of GSDP spent on health and education is considered a key parameter of human development, the report states.

According to a report of the Observer Research Foundation dated December 06, 2017, Gujarat still has a high dependency to the private sector for both outpatient (84.9 percent cases) and also the inpatient (73.8 percent cases). As a result, the out of pocket spending on health care of the state stands at 63.7 percent. This makes Gujarat climbing up the ladder of per capita income, while slipping down the slope of health and social indicators,” the article states.

Just as what happens in all other Indian states, the recent state assembly elections offered an opportunity for the political leadership, cutting across the party line, for a significant course correction. Making health and nutrition one of the top priority focus areas, would have also ensured sustain economic development for Gujarat, in a more inclusive manner, for a long time to come.

What we are witnessing, instead:

The ‘best’ intent of a political party on any area of governance, if it comes to power, generally gets reflected in the respective election manifestos. From that perspective, let’s take a quick look at the key promises on health care, made in the respective election manifestos of the two principal political parties, on the eve of December 2017Gujarat election. I found these, as follows:

Key highlights on health care in BJP Manifesto:

  • The party promised to open more generic medicine shops
  • Introduce mobile clinics and laboratories
  • Making Gujarat free of vector-borne diseases.

Key highlights on health care in Congress Manifesto:

  • Universal health care card

That’s all?… Yes, that’s it.

India is ‘developing’, but public health care is not:

‘The Lancet’ editorial titled, ‘Health in India, 2017’, published on January 14, 2017, discussed about the current status of public health care in India. It underscored that the government expenditure on health being one of the lowest in the world at 1·4 percent of GDP, is totally inadequate to train staff, buy necessary equipment, or efficiently run public health facilities.

Corruption and an unregulated private sector usually fill this vacuum, and in so doing, fuel irresponsible prescribing, and global export of antimicrobial resistance, besides misery and medical bankruptcy for those within the country, lacking financial protection.

The editor articulated that the solution of this important issue is clear. Publicly financed Universal Health Coverage (UHC) has not only been deliberated in India since the dawn of the nation, but has also been highly recommended by both the domestic and the external stakeholders.

Nevertheless, successive governments seem to be lacking either the spine or the heart to act. As recently as 2011, progressive universalism was included in the government’s 5-year plan, but was never funded – the editorial commented.

Both the States, and also the national election campaigns, offer an opportunity for the politicians who the prospective lawmakers, to steer the States, and in that process the country as a whole, moving towards the UHC.

Conclusion:

As heath is a state subject, the issue of providing access to high quality and affordable health care to all should ideally become one of the core issues for all voters, at least, in the State Assembly elections. More so when the sound bite on ‘development for all’ reaches a feverish pitch. There can’t be any holistic ‘development for all’, sans health care and education.

Nonetheless, the reality is, unlike the United States, Europe or Japan, besides a few other countries, the voters in India are also not expressing their concerns in this area, meaningfully. In all probability, ‘development for all’ slogan of the politicians doesn’t include health care to all Indians.

This is likely to continue, in the same way, till the awareness of the socioeconomic impact on health care carves out a niche for itself in the popular political agenda for the voters. Just as what happens with many other economic, technological necessities and other aspirations of people. The recent assembly elections are important pointers to this long persisting trend.

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.

Healthcare in India And Hierarchy of Needs

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“Russia and India climb World Bank’s Doing Business rankings”, was a headline in the Financial Times on October 31, 2017. India jumped 30 places – from 130 out of 190. Almost instantly, the domestic media flashed it all across the country, as the prime news item of the day. It brought great satisfaction to many, and very rightly so.

The news is also worth cheering as it ignites the hope of a large section of the society that sometime in the future more business will come into the country, more jobs will be created, and in that process India will emerge as a more healthy and wealthy nation, just as many other countries around the world.

This loud cheer, in tandem, also transcends into a hope for a well-oiled public healthcare system functioning efficiently in India, alongside greater wealth creation. This is because, while expecting a healthier nation, one can’t possibly keep the public healthcare system of the country out of it, altogether. Thus, I reckon, it won’t be quite out of place to have a quick look at India’s current ranking on other healthcare related indices too, such as ‘Healthcare Index’ and ‘Human Development Index’ and ‘Hunger Index’:

Healthcare index:

With that perspective, when go through the Global Burden of Disease Study 2016, published in The Lancet on September 16, 2017, it will be difficult to wish away the fact that India ranks 154 among 195 countries in ‘Healthcare Index’. Surprisingly, India ranks much behind Sri Lanka (72.8), Bangladesh (51.7), Bhutan (52.7) and Nepal (50.8) though, of course, above Pakistan (43.1) and Afghanistan (32.5). This is what it is, regardless of the fact that India’s Healthcare Access and Quality (HAQ) index has increased by 14.1 – from 30.7 in 1990 to 44.8 in 2015.

Human Development Index:

The ranking of India in the Human Development Index (HDI) is also not encouraging, either. Many would know, HDI is a composite index of life expectancy, education, and per capita income, which are used to rank countries in human development. As life expectancy also depends on the quality of healthcare, HDI has a significant bearing on this count, as well.

The ‘2016 Human Development Index Report (HDR)’ released by the United Nations Development Program (UNDP) in March 2017 shows that India has slipped by one rank from 130 to 131, among 188 countries. According to UNDP, ‘in the past decades, there has been significant gains in human development levels almost in every country, but millions of people have not benefited from this progress. This report highlights who have been left behind and why?’

I shall dwell on the ‘Global Hunger Index Report’ below at an appropriate context.

Why is this comparison between different indices…and now?

The above question is indeed a very valid one. Nonetheless, it is important to do so. I am quoting these rankings to flag the sharp contrast in our mindset to rejoice the good rankings, and lampooning the adverse ones, citing one reason or the other.

It is obvious from the general euphoria witnessed by many on such good news –  highlighted so well by the print, television and social media, with high decibel discussions by experts and politicians. There is nothing wrong in doing that, in any way. However, similar media discussions were not evident for taking effective corrective measures, soon, when ‘global burden of disease rankings’ or ‘Human Development Index Report (HDR)’ or the ‘Global Hunger Index’ rankings were published in September, March and October 2017, respectively.

Does it therefore mean that effectively addressing issues related to crumbling public healthcare infrastructure in the country attracts much lesser importance than ensuring ease of doing business in the country? Do both the politicians and the voters also consider so? Perhaps the answer is yes, as many would envisage in the largest democracy of the world.

What’s happening elsewhere?

In many developed and also the developing countries of the world, general public or voters’ expectations for having an affordable and robust public healthcare delivery system from the respective Governments seem to be high. Consequently, it also directs the focus of the politicians or lawmakers on the same. This scenario includes even the oldest democracy of the world – America. Such expectations on comprehensive healthcare covers the need for affordable drug prices too.

That voters are greatly concerned about healthcare in those countries is supported by many contemporary surveys. Just before the last year’s American Presidential election, Kaiser Health Tracking Poll: September 2016, substantiated this point. It said, besides considering personal characteristics of the candidates, the voters clearly articulated their priority on patient-friendly healthcare laws and affordable drug prices, as follows:

  • Over 66 percent of voters expressed that healthcare law is very important to their vote
  • 77 percent said prescription drug costs are unreasonable, expressing widespread support for a variety of actions in order to keep healthcare costs down

Accordingly, The New York Times on September 17, 2017 reported: “The public is angry about the skyrocketing cost of prescription drugs. Surveys have shown that high drug prices rank near the top of consumers’ health care concerns, and politicians in both parties - including President Trump — have vowed to do something about it.”

I haven’t come across such widespread demand from the voters getting captured in any survey, before either any State Assembly or the Parliament elections in India. Hence, public healthcare continues to languish in the country, as various Governments come and go.

What happens post-election in the oldest democracy?

We have enough examples that post-election, the oldest democracy of the world tries to satisfy the well-articulated healthcare needs of the voters, on priority. To illustrate the point, let me help recapitulate what happened in this regard, immediately after the last two Presidential elections in America.

After swearing in on January 20, 2009, then American President Barack Obama, as expected by the voters and promised by him accordingly, enacted the Affordable Care Act (ACA), popularly known as ‘Obamacare’, almost within a year’s time – on March 23, 2010. Similarly, within a few months of swearing in as the American President, Donald Trump administration is mulling to address the voters demand and his electoral promise to make the prescription drugs more affordable.

Public demand and outcry for affordable healthcare, including affordable drugs have led to several serious consequential developments in the United States. Let me illustrate this point with another example of recent lawsuits filed against alleged price fixing of generic drugs – many of these are new, but a few started in the last few years.

Vigil on drug prices continues:

As high drug prices are a burning issue even in America, a lot many steps are being taken there on that issue – just as many other developed and developing countries are taking.

It is rather well known that even after enactment of the Affordable Care Act (ACA) in 2010, the Department of Justice of the country expanded probing into the allegation of price fixing by many generic drug manufacturers operating in America. One such illustration is October 31, 2017 public notice of the State Attorney General (AG) of Connecticut. It states that the AG is leading a coalition of 46-states in new, expanded complaint in Federal Generic Drug Antitrust Lawsuit. It further mentioned: States allege broad, industry-wide understanding among numerous drug manufacturers to restrain competition and raise prices on 15 generic drugs, where some senior executives have been sued.

Interestingly, in this notice the AG said, “The generic drug market was conceived as a way to help bring down the cost of prescription medications. For years, those savings have not been realized, and instead the prices of many generic drugs have skyrocketed.” He alleged that the defendant companies’ collusion was so pervasive that it essentially eliminated competition from the market for the identified 15 drugs in its entirety. ‘Ongoing investigation continues to uncover additional evidence, and we anticipate bringing more claims involving additional companies and drugs at the appropriate time,” the Attorney General further added.

By the way, the expanded complaint of the states reportedly also includes several large Indian companies, such Dr. Reddy’s Laboratories, Emcure, Glenmark, Sun Pharma, and Zydus Pharma. Curiously, the expanded complaint also names two individual defendants, one among them is the promoter, the chief executive officer and managing director of a large Indian pharma manufacturer.

Examples such as this vindicate, even if a robust public healthcare system is put in place, the regulators would still keep a careful vigil on drug prices.

Getting back to the key link between some indices:

Let me now get back to where I started from – the link between ‘ease of doing business’ and ‘becoming a healthy and wealthy’ nation, over a period of time. This would subsequently bring us to the link between healthy nation and the existence of a robust and functioning affordable public healthcare system in the country.

From that angle, I raised a key question. Why the general public, and specifically the voters in India aren’t making effective delivery of an affordable public healthcare as one of the top priority areas while voting for or against a political dispensation? The question assumes greater relevance when one sees it happening in many other countries, as discussed above. Is it, therefore, worth pondering whether this issue can be explained, at least to a great extent, by applying the well-known ‘Maslow’s theory of hierarchy of needs.’

Maslow’s hierarchy of needs and hunger index:

As the literature says, ‘Maslow’s hierarchy of needs’ is a theory of motivation in psychology developed by Abraham Maslow in 1943. He believed people move through different stages of five needs that motivate our behavior. He called these needs physiological, safety, love and belonging (social), esteem, and self-actualization.

As we see, the first two basic needs are physiological and then safety. Maslow explains the ‘physiological needs’ as food, water, sleep, and basic biological functions. When these physiological needs are adequately met, our safety needs would usually dominate individual behavior.

Similarly, Maslow’s ‘safety needs’ in the modern era are generally expressed as the needs of job security, financial security, and health and well-being, among a few others. Thus, the need for healthcare falls under ‘safety needs’, following the most basic ‘physiological needs’.

As Food is one the first basic needs, India’s current ranking in the ‘Global Hunger Index (GHI)’, would suggest this primary need of having at least two square meals of nutritious food a day, has not been adequately met by a large population of Indians, not just yet.

India’s ranking in the Global Hunger Index (GHI):

The Global Hunger Index (GHI) has been defined as a multidimensional statistical tool used to describe the state of countries’ hunger situation. The GHI measures progress and failures in the global fight against hunger. It is now, reportedly, in its 12th year, ranking countries based on four key indicators – undernourishment, child mortality, child wasting and child stunting.

The International Food Policy Research Institute (IFPRI) report, titled ‘2017 global hunger index: The inequalities of hunger ’, indicates that India ranks below many of its neighboring countries, such as China (29th in rank), Nepal (72), Myanmar (77), Sri Lank (84) and Bangladesh (88), but ahead of Pakistan (106) and Afghanistan (107). Just for the sake of interest, North Korea ranks 93rd while Iraq is in 78th position.

The primary basic need of food and nutrition does not seem to have been fully met for a large Indian voter population, as yet. Many of them are still struggling and searching for appropriate means of earning a dignified livelihood. It includes support in agricultural production and the likes. Thus, many voters don’t feel yet, the second level of need that prompts a vocal demand for an affordable and robust public healthcare system in the country. The same situation continues, despite ‘out of pocket’ expenditure on healthcare being one of the highest in India, alongside the cost of drugs too.

Conclusion:

This brings us to the key question – When would the demand for having an affordable and robust public healthcare system in the country, assume priority for the general public in India, and the voters, in particular?

Sans Government’s sharp focus on public healthcare, including the cost of drugs, devices, and education, it will be challenging for a democracy of India’s size to make a decisive move, for a long term – from average to good – and then from good to great, even in the economic parameters.

Applying Maslow’s hierarchy of needs onto various health related global indices, it appears that the primary basic need of food and nutrition has not been fully met for a large Indian voter population, as yet. This possibly makes a large section of Indian voters to move into the second level of need, raising a widespread vocal demand for an affordable and robust public healthcare system in the country.

Rejoicing country’s advancement in the World Bank’s ranking on the ease of doing business by 30 points in a year has its own merits. However, in the same yardstick, doesn’t health care losing the priority focus of the nation also highlight the demerits of misplaced priority in a country’s governance process, and just because the voters are not quite demanding on this issue?

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.

High Innovation-Cost Makes Cancer Drugs Dear: A Fragile Argument?

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Cancer is a major cause of high morbidity and mortality in India, just many other countries, according to a report of the World Health Organization (W.H.O). While deaths from cancer worldwide are projected to continue to rise to over 1.31 million in 2030, the Indian Council of Medical Research (ICMR) estimates that India is likely to have over 1.73 million new cases of cancer and over 8,80,000 deaths due to the disease by 2020 with cancers of breast, lung and cervix topping the list.

 Cancer treatment is beyond the reach of many:

Despite cancer being one of the top five leading causes of death in the country, with a major impact on society, its treatment is still beyond the reach of many. There are, of course, a number of critical issues that need to be addressed in containing the havoc that this dreaded disease causes in many families –  spanning across its entire chain, from preventive measures to early diagnosis and right up to its effective treatment. However, in this article, I shall focus only on the concern related to affordable treatment with appropriate cancer with medicines.

To illustrate this point, I shall quote first from the address of the Chief Minister of Maharashtra during inauguration of Aditya Birla Memorial Hospital Cancer Care Center on November 26, 2016. He said: “Cancer is the dreadful disease of all the time and for Maharashtra it is a big challenge as we are infamously at number two position in cancer cases in the country as after Uttar Pradesh, most cases are found here.” Incidentally, UP is one of the poorest state of India.

Underscoring that the biggest challenge before the technology is to bring down the cost of the cancer treatment and make it affordable and accessible for all, the Chief Minister (CM) further observed, “although, technological innovation has increased in last one decade, the accessibility and affordability still remain a challenge and I think, we need to work on this aspect.”

A new cancer drug launch vindicates the CM’s point:

The Maharashtra CM’s above statement is vindicated by a national media report of September 13, 2017. It said, Merck & Co of the United States have launched its blockbuster cancer drug ‘Keytruda’ (pembrolizumab) in India, around a year after its marketing approval in the country. Keytruda is expected to be 30 percent cheaper, compared to its global prices, costing Rs 3,75,000 – 4,50,000 to patients for each 21-day dose in India.

The point to take note of, despite being 30 percent cheaper, how many Indian patients will be able to afford this drug for every 3 weeks therapy? Doesn’t it, therefore, endorse the CM’s above submission? Well, some may argue that this exorbitant drug price is directly linked to high costs for its innovation and clinical development. Let me examine this myth now under the backdrop of credible research studies.

Cancer drugs are least affordable in India – An international study:

On June 6, 2016, by a Press Release, American Society of Clinical Oncology (ASCO) revealed the results of one of the largest analyses of differences in cancer drug prices between countries worldwide. The researchers calculated monthly drug doses for 15 generic and eight patented cancer drugs used to treat a wide range of cancer types and stages. Retail drug prices in Australia, China, India, South Africa, United Kingdom, Israel, and the United States were obtained predominantly from government websites. The study shows that cancer drug prices are the highest in the United States, and the lowest in India and South Africa.

However, adjusting the prices against ‘GDPcapPPP’ – a measure of national wealth that takes into consideration the cost of living, cancer drugs appeared to be least affordable in India and China. The researchers obtained the ‘GDPcapPPP’ data for each country from the International Monetary Fund and used it to estimate the affordability of drugs.

Why are cancer drug prices so high and not affordable to many?

The most common argument of the research based pharma companies is that the cost of research and development to bring an innovative new drug goes in billions of dollars.

The same question was raised in a series of interviews at the J.P. Morgan Healthcare Conference, published by the CNBC with a title “CEOs: What’s missing in the drug pricing debate” on January 11, 2016, where three Global CEOs expressed that the public is getting overly simple arguments in the debate about drug pricing. All three of them reportedly cited three different reasons altogether, as follows:

  • Eli Lilly CEO said, “Some of the noise you hear about drug pricing neglects the fact that we often must pay deep discounts in a market-based environment where we’re competing in many cases against other alternative therapies, including those low-cost generics.”
  • Pfizer CEO took a different approach by saying, “if you look at the market, about a decade ago, 54 percent of the pharmaceutical market was genericized; today 90 percent is genericized.”
  • However, as reported by CNBC, Novartis CEO Joseph Jimenez, focusing on innovation and in context on cancer drugs, argued “innovation has to continue to be rewarded or we’re just not going to be able to see the kind of breakthroughs that we have seen in cancer research, specifically regarding the uses and benefits of the cancer-fighting drug Gleevec. We continued to show that the drug was valuable in other indications in cancer and so we needed to be reared for that innovation and we’re pricing according to that.”

Is drug innovation as expensive and time intensive as claimed to be?

An article titled, “The high cost of drugs is the price we pay for innovation”, published by the World Economic Forum (WEF) on March 28, 2017 reported, “15 spenders in the pharmaceutical industry are investing about US$3 billion in R&D, on average, for each successful new medicine.”

The November 18, 2014 report on the ‘Cost of Developing a New Drug,’ prepared by the Tufts Center for the Study of Drug Development also announced: “The estimated average pre-tax industry cost per new prescription drug approval (inclusive of failures and capital costs) is: US$ 2,558 million.”

Not everybody agrees:

Interestingly, Professor of Medicine of Harvard University – Jerry Avorn questioned the very basis of this study in the article published in the New England Journal of Medicine (NEJM) on May 14, 2015. It’s not just NEJM even the erstwhile Global CEO of GSK – Sir Andrew Witty had questioned such high numbers attributed to R&D cost, around 5 years ago, in 2013. At that time Reuters reported his comments on the subject, as follows:

“The pharmaceutical industry should be able to charge less for new drugs in future by passing on efficiencies in research and development to its customers. It’s not unrealistic to expect that new innovation ought to be priced at or below, in some cases, the prices that have pre-existed them. We haven’t seen that in recent eras of the (pharmaceutical) industry, but it is completely normal in other industries.” Quoting the study of Deloitte and Thomson Reuters on R&D productivity among the world’s 12 top drugmakers that said the average cost of developing a new medicine, including failures, was then US$ 1.1 billion, Witty remarked, “US$ 1 billion price-tag was one of the great myths of the industry.”

A decade after Sir Andrew’s comment, his view was virtually corroborated by yet another research study, published this month. The study reemphasized: “The Tufts analysis lacks transparency and is difficult to judge on its merits. It cannot be properly analyzed without knowing the specific drug products investigated, yet this has been deemed proprietary information and is governed by confidentiality agreements.” I shall discuss this report briefly, in just a bit.

The latest study busts the myth:

The latest study on the subject, titled “Research and Development Spending to Bring a Single Cancer Drug to Market and Revenues After Approval”, has been published in the ‘JAMA Internal Medicine’ on September 11, 2017. It busts the myth that ‘high innovation-cost makes cancer drugs dear,’ providing a transparent estimate of R&D spending on cancer drugs. Interestingly, the analysis included the cost of failures, as well, while working out the total R&D costs of a company.

The report started by saying: “A common justification for high cancer drug prices is the sizable research and development (R&D) outlay necessary to bring a drug to the US market. A recent estimate of R&D spending is US$ 2.7 billion (2017 US dollars). However, this analysis lacks transparency and independent replication.”

The study concludes: “Prior estimates for the cost to develop one new drug span from US$ 320.0 million to US$ 2.7 billion. We analyzed R&D spending for pharmaceutical companies that successfully pursued their first drug approval and estimate that it costs US$ 648.0 million to bring a drug to market. In a short period, development cost is more than recouped, and some companies boast more than a 10-fold higher revenue than R&D spending—a sum not seen in other sectors of the economy. Future work regarding the cost of cancer drugs may be facilitated by more, not less, transparency in the biopharmaceutical industry.” The researchers also established that ‘the median time to develop a drug was 7.3 years (range, 5.8-15.2 years).’

“Policymakers can safely take steps to rein in drug prices without fear of jeopardizing innovation”:

NPR – a multimedia news organization and radio program producer reported: In an invited commentary that accompanies the JAMA Internal Medicine analysis, Merrill Goozner, editor emeritus of the magazine Modern Healthcare, noted that “the industry consistently generates the highest profit margins among all U.S. industries.” Goozner argues that the enormous value of patent protection for drugs far outweighs the inherent riskiness of pharmaceutical research and development, and agrees with the study authors when he writes: “Policymakers can safely take steps to rein in drug prices without fear of jeopardizing innovation,” NPR wrote.

Conclusion:

So, the moot question that surfaces: Is Pharma innovation as expensive and time consuming as claimed to be? If not, it further strengthens the credibility barrier to Big Pharma’s relentless pro-innovation messaging. Is the core intent, then, stretching the product monopoly status as long as possible – with jaw dropping pricing, unrelated to cost of innovation?

Further, incidents such as, shielding patent of a best-selling drug from low priced generic competition, by transferring its patents on to a native American tribe, probably, unveil the core intent of unabated pro-innovation messaging of major global pharma companies. In this particular case, being one among those companies which are seeking to market cheaper generic versions of this blockbuster eye drug, Mylan reportedly has decided to vigorously oppose such delaying tactic of Allergan before the Patent Trial and Appeal Board.

As a cumulative impact of similar developments, lawmakers in the United States are reportedly framing new laws to address the issue of high drug prices. For example, “California’s Senate Bill 17 would require health insurers to disclose the costs of certain drugs and force pharmaceutical manufacturers to detail price hikes to an agency for posting on a government website. The proposal would also make drugmakers liable to pay a civil penalty if they don’t follow its provisions.”

The myth of ‘high innovation-cost makes cancer drugs dear’ will go bust with such revelations, regardless of the blitzkrieg of self-serving pro-innovation fragile messaging.  Alongside, shouldn’t the Indian Policy makers take appropriate measures to rein in cancer drug prices, being free from any apprehension of jeopardizing innovation?

By: Tapan J. Ray 

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

 

Improving Patient Access To Biosimilar Drugs: Two Key Barriers

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Novel biologic medicines have unlocked a new frontier offering more effective treatment for a host of chronic and life-threatening diseases, such as varieties of cancer, rheumatoid arthritis and diabetes, to name just a few. However, these drugs being hugely expensive, many patients do not have any access, or adequate access, to them. According to the Biosimilar Council of GPhA, only 50 percent of severe Rheumatoid Arthritis patients receive biologic medicines, even in the United States, Europe and Japan, leave aside India.

Realizing the gravity of this situation, a need to develop high quality, reasonably affordable and similar to original biologic brands, was felt about ten years ago. These were intended to be launched immediately after patent expiry of the original biologic. Such medicines are termed as biosimilar drugs. It is worth noting, even biosimilar drug development involves complex manufacturing processes and handling, while dealing with derivatives of highly sensitive living organisms.

The regulatory approval process of these drugs is also very stringent, which demands robust clinical data, demonstrating high similarity, both in effectiveness and safety profile, to original biologic brands, known as the reference product. The clinical data requirements for all new biosimilars include data on patients switching from the originator’s brand, and also between other biosimilars. Clinical evidences such as these, are expected to provide enough confidence to physicians for use of these products.

An article published in the PharmaTimes magazine in January 2016, reiterated that over the last couple of years, a wealth of supporting data has been published in medical journals and presented at global congresses, including real-world data of patients who have been switched to the new drug from the originator. This has led to a positive change in physician and patient attitudes towards biosimilars.

The good news is, besides many other regulated markets, as of May 2017, five biosimilar drugs have been approved even by the US-FDA, and several others are in the pipeline of its approval process.

That said, in this article I shall mainly focus on the two key barriers for improving patient access to biosimilar drugs, as I see it.

Two major barriers and their impact:

As I see it, there appear to be the following two key barriers for more affordable biosimilar drugs coming into the market, improving patients’ access to these important biologic medicines:

  • The first barrier involves fierce legal resistance from the original biologic manufacturers of the world, on various grounds, resisting entry of biosimilar varieties of their respective brands. This compels the biosimilar drug manufacturers incurring heavy expenditure on litigation, adding avoidable cost. A glimpse of this saga, we are ‘privy’ to witness even in India, while following Roche versus Biocon and Mylan case related to ‘Trastuzumab’. This barrier is one of the most basic types, that delays biosimilar drug entry depriving many new patients to have access to lower priced effective biologic for the treatment of serious diseases.
  • The other major barrier that exists today, involves ‘interchangeability’ of original biologic with biosimilar drugs. It simple means that in addition to being highly similar, a biosimilar drug manufacturer would require producing indisputable clinical evidence that it gives the same result for any given patient just as the original biologic. We shall discuss the reason behind this regulatory requirement later in this article. However, this is an expensive process, and the absence of it creates a barrier, making the physicians hesitant to switch all those existing patients who are on expensive original biologic drugs with less expensive available biosimilar alternatives.

The first or the initial barrier:

The first or the initial barrier predominantly involves patent related legal disputes, that can only be settled in a court of law and after incurring heavy expenditure towards litigation. Provided, of course, the dispute is not mutually resolved, or the law makers do not amend the law.

An interesting case in India:

Interestingly, in India, a similar dispute has knocked the doors of both the high court and the Competition Commission of India (CCI). From a common man’s perspective, it appears to me that the laws under which these two institutions will approach this specific issue are seemingly conflicting in nature. This is because, while the patent law encourages no market competition or a monopoly situation for a patented product, competition law encourages more market competition among all related products. Nonetheless, in this specific case CCI is reportedly investigating on the alleged ‘abuse of the regulatory process’, as it has opined ‘abuse of regulatory process can constitute an abuse of dominance under the (CCI) Act.’                                                                                            

The second barrier:

I am not going to discuss in this article the relevance of this barrier, in detail. Nevertheless, this one is also apparently equally tough to comply with. The very fact that none out of five biosimilar drugs approved in the United States, so far, has been considered ‘interchangeable’ by the US-FDA, vindicates the point.

That this specific regulatory demand is tough to comply with, is quite understandable from the requirements of the US-FDA in this regard, which goes as follows:

“To support a demonstration of interchangeability, the data and information submitted to FDA must show that a proposed interchangeable product is biosimilar to the reference product and that it can be expected to produce the same clinical results as the reference product in any given patient. Also, for products that will be administered more than once, the data and information must show that switching a patient back and forth between the reference product and the proposed interchangeable product presents no greater risk to the patient in terms of safety or diminished efficacy when compared to treating them with the reference product continuously.”

The reasoning of innovative biologic drug makers:

On this subject, the stand taken by different innovative drug makers is the same. To illustrate the point, let me quote just one of them. It basically sates, while biosimilar drugs are highly similar to the original medicine, the patient’s immune system may react differently due to slight differences between the two medicines when they are alternated or switched multiple times. This phenomenon, known as immunogenicity, is not a common occurrence, though. But there have been rare instances when very small differences between biologic medicines have caused immune system reactions that changed the way a medicine was metabolized, or reduced its effectiveness.

It further reiterates, the US-FDA requirements to establish ‘interchangeability’ between a biosimilar drug and the original one, or between biosimilars may seem like nuances, but are important because ‘interchangeability’ allows pharmacists to substitute biosimilars without consulting the doctor or patient first.

It may, therefore, indicate to many that innovative biologic drug manufacturers won’t want substitution of their expensive biologic with more affordable biosimilar drugs, on the ground of patient safety issues related to immunogenicity, though its instances are rather uncommon.

Some key players in biosimilar drug development:

Having deliberated on the core subject of this article, let me now very briefly name the major players in biosimilar drug development, both in the developed world, and also in India.

The first biosimilar drug was approved by the US-FDA in 2006, and the product was Omnitrope (somatropin) of Novartis (Sandoz). It was the same in the European Union (EU), as well. Subsequently, many other companies reportedly expressed interest in this field, across the globe, including Pfizer, Merck, Johnson and Johnson, Amgen, AbbVie, Hospira, AstraZeneca and Teva, among many others.

Similarly, in India, the major players in this field include, Biocon, Sun Pharma, Shantha Biotech, Dr. Reddy’s Lab, Zydus Cadila, Panacea Biotech and Reliance Life Sciences.

As featured on the Amgen website, given the complexity and cost of development and manufacturing, biosimilars are expected to be more affordable therapeutic options, but are not expected to generate the same level of cost savings as generics. This is because, a biosimilar will cost US$100 to US$200 million and take eight to ten years to develop. Whereas, a small molecule generic will cost US$1 to US$5 million and take three to five years to develop.

The market:

According to the 2017 report titled “Biosimilar Market: Global Industry Analysis, Trends, Market Size & Forecasts to 2023” of Research and Markets, the market size of the global biosimilar market was valued over US$ 2.5 billion during 2014, and it surpassed US$ 3.30 billion during 2016. The global biosimilar market is projected to surpass US$ 10.50 billion by 2023, growing with a CAGR between 25.0 percent and 26.0 percent from 2017 to 2023.

According to this report, gradually increasing awareness, doctors’ confidence and the lower drug cost are expected to boost the demand and drive the growth of the global biosimilar market during the forecast period. Segments related to diabetes medicine and oncology are expected to attain faster growth during the forecast period. Patent expiry of several blockbuster drugs is a major basic factor for growth of the global biosimilar market, as it may encourage the smaller manufacturers to consider producing such biologic drugs in those segments.

Conclusion:

Biosimilar drugs are expected to benefit especially many of those patients who can’t afford high cost biologic medicines offering better treatment outcomes than conventional drugs, in the longer term. These drugs are now being used to effectively manage and treat many chronic and life-threatening illnesses, such cardiac conditions, diabetes, rheumatoid arthritis, psoriasis, multiple sclerosis, Crohn’s disease, HIV/AIDS and cancer.

However, improving patient access to high quality biosimilar drugs, at an affordable price, with increasing competition, could be a challenge, as two key barriers are envisaged to attain this goal. Overcoming these meaningfully, I reckon, will involve choosing thoughtfully a middle path, creating a win-win situation, both for the patients, as well as the industry.

Adequate competition in the biologic drug market is essential – not only among high-priced original biologic brands and biosimilars, but also between biosimilar drugs. This is so important to increase patient access to biologic drugs, in general, across the world, including India.

The current situation demands a sense of urgency in searching for a middle path, which may be created either through a legal framework, or any other effective means as would deem fair and appropriate, without compromising with patient safety, at least, from where it is today.

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.