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‘The Memory Thief’ Still Eludes Grasp Of Pharma R&D

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Over several decades, in fact, since its very inception, pharma R&D has been playing a crucial role in alleviating diseases of various types – from severe acute infections, to a large variety of non-infectious chronic illnesses, including many dreaded diseases, such as, cancer.

In the battle against diseases, pharma research and development initiatives, both by a large number of academia and also the pharma players, have mostly won, decisively. R&D has been consistently coming out with flying colors, both in finding cures and also in effective disease management, to prolong and improve the quality of life of billions of people, the world over.

However, there is still an important disease area, where pharma R&D has not been successful yet. Without any prior warning, this disease stealthily affects the human brain and completely erases the entire lifetime memory of the person, gradually but surely, over a relatively short period of time. This disease is known as Alzheimer’s, following the name of Dr.  Dr. Alois Alzheimer, who first detected it in 1906. Due to its devastating impact on human memory, some, very appropriately, term the Alzheimer’s disease – ‘The memory thief’.

I discussed this subject in one of my previous articles titled, “It Took 90 Years To Accept The Dreaded Disease Discovered In A Mental Asylum”, published in this Blog on December 01, 2014.

A recent alarm for a future epidemic:

A January 6, 2016 paper titled, “Sounding the alarm on a future epidemic: Alzheimer’s disease”, published by the well reputed public research university in the United States, ‘The University of California, Los Angeles (UCLA), made the following noteworthy observation:

“If the aging trend illustrates the success of public health strategies, it also raises the specter of a major public health crisis – a sharp rise in the number of people living with Alzheimer’s disease.”

Causing havoc in many lives and families:

‘Alzheimer’s Disease Education and Referral (ADEAR) Center’ of the United States, currently ranked Alzheimer’s disease as the sixth leading cause of death in the United States, but recent estimates indicate that the disorder may rank third, just behind heart disease and cancer, as a cause of death for older people.

According to Mayo Clinic, the frightful disease – Alzheimer’s, is progressive in nature. At the onset, the afflicted persons may exhibit just mild confusion and some difficulty in remembering.

Tragically, in around five years or a little after, Alzheimer’s would erase the entire lifetime memory of most of the affected persons, when they may even forget the important people in their lives and undergo dramatic personality changes.

The dreaded disease – Alzheimer’s, still without any effective medication in place, has been causing havocs in many lives and families since long, involving many great international personalities too. It is one of those ailments, where the disease process mostly commences almost a decade before the visible appearance of above clinical symptoms.

Worldwide Projections of Alzheimer’s Disease Prevalence:  

The above UCLA report highlights the worldwide projections of Alzheimer’s disease prevalence from 2005 to 2050, which includes both the early and late stage patients.

According to this report, the number of people afflicted by this total memory-erasing disease, would grow from 35.26 million in 2015 to as high as 106.23 million populations in 2050, as follows:

Year Alzheimer’s disease prevalence (in Millions)
2005 25.73
2010 30.12
2015 35.26
2020 41.27
2025 56.55
2040 77.49
2050 106.23 
Similar situation in India: 

The situation in India seems to be no different, though we are living today in the midst of the hype of ‘Demographic Dividend’.

According to the March 2012 report of ‘The Population Reference Bureau’ of Washington DC of the United States, India’s population with ages 60 and older, who are more prone to Alzheimer’s disease, is projected to increase dramatically over the next four decades, from 8 percent in 2010 to 19 percent in 2050. By mid-century, this age group is expected to encompass 323 million people, a number greater than the total US population in 2012.

Currently available treatment:

At present, there are no treatments available that can stop or slow down the progression of Alzheimer’s disease in the brain of the affected persons.

As I wrote earlier, very often the onset of this disease starts decades before the visible manifestation of even preliminary symptoms. Thus, there is a critical need for early medical interventions to arrest the disease progression.

Again, quoting Mayo Clinic, current Alzheimer’s disease medications and management strategies may at best temporarily improve symptoms. These symptomatic treatments can sometimes, help Alzheimer’s patients maximize cognitive and other related functions to the extent possible, and thereby maintain independence for a little while longer.

Primary reasons:

Many earlier research had postulated that plaques and tangles are primarily responsible for the permanent damage and destruction of nerve cells.

While the plaques are abnormal clusters of beta-amyloid protein fragments between nerve cells, tangles are twisted fibers made primarily of a protein called “tau” that accumulates in the brain cells, damaging and killing them.

The appearance of these two in the brain structure makes the affected persons suffer from almost irreversible memory loss, altered thinking pattern and associated behavioral changes, which are usually serious in nature.

However, I shall discuss below about a very recent research that is focusing on a different and novel target.

Key hurdles in Alzheimer’s drug development:

Despite all these, almost at a regular interval, we have been getting to know about various new studies on Alzheimer’s disease, mostly from academic and scientific institutions. It clearly vindicates, at least, the global academia and also some pharma players, are working hard to get an effective key to unlock the pathway of Alzheimer’s disease process.

The hurdles in developing a suitable drug for effective treatment of Alzheimer’s disease are many. A paper titled, “Researching Alzheimer’s Medicines: Setbacks and Stepping Stones Summer 2015”, published by the Pharmaceutical Research and Manufacturers of America (PhRMA) – a trade association of leading biopharmaceutical researchers and biotechnology companies of the United States, cited the following three major reasons as examples:

  • Scientists still do not understand the underlying causes and mechanisms of the disease. It remains unknown whether many of the defining molecular characteristics of the disease are causes, effects, or signs of progression. This scientific knowledge gap makes the identification and selection of viable targets for new medicines difficult. 
  • Current preclinical models of Alzheimer’s disease are limited in the extent to which they can be extrapolated or translated to the human condition. Better models are needed to facilitate preclinical testing of drug candidates and better predict the effects of the drug in humans. 
  • The absence of validated, non-invasive biomarkers to identify disease presence and progression means the diagnosis is delayed until an individual becomes symptomatic. This makes it particularly challenging to evaluate, enroll, retain, and follow up with patients in clinical studies. It also makes it challenging to assess the effects of the drug candidate. Ultimately, this leads to long and very expensive clinical trials. 

The PhRMA publication also states that “researchers believe that no single medicine will be able to defeat Alzheimer’s; rather, several medicines will probably be needed to combat the disease. Thus, researchers need not one, but an array of options to prevent or treat Alzheimer’s disease.”

High rate of R&D failure, with flickers of success:

The above PhRMA publication also indicates, between 1998 and 2014, 123 medicines in clinical development have been halted and have not received regulatory approval.

In this rather gloomy R&D scenario, there are also some flickers of success in this pursuit.

In a recent study, the scientists at the University of Southampton announced that their findings added weight to evidence that inflammation in the brain is what drives the disease. A drug, used to block the production of these microglia cells in the brains of mice, had a positive effect. The study, therefore, concluded that blocking the production of new immune cells in the brain could reduce memory problems seen in Alzheimer’s disease. This finding is expected to pave the way for a new line of treatment for Alzheimer’s disease.

Currently, most drugs used for the treatment of dementia targeted amyloid plaques in the brain, which are considered as a key characteristic of people with the Alzheimer’s disease. According to an article published in Forbes on March 20, 2015, several amyloid-clearing drugs have failed to show statistically significant benefits in large clinical trials. Notable among those are Bapineuzumab – developed by Elan Pharmaceuticals, Pfizer and Johnson & Johnson failed in 2009; Solanezumab of Eli Lilly failed in 2012; and so did Gantenerumab of Roche in 2014.

The latest study, as quoted above, published in the journal ‘Brain’, on January 8, 2016 suggests that targeting inflammation in the brain, caused by a build-up of immune cells called microglia, could halt progression of the disease.

Another flicker of hope is, another drug being developed by Biogen Idec for the treatment of Alzheimer’s disease appeared to slow down the inexorable cognitive decline of patients’, though in a small and a preliminary study.

Lack of research funding is a critical impediment:

Be that as it may, many experts believe that not enough is still being done in Alzheimer’s research, especially in the area of funding.

In an article titled, “Alzheimer’s disease: are we close to finding a cure?” published by ‘Medical News Today (MNT)’ on August 20, 2014, quoted the Alzheimer’s Society, as follows:

“Dementia is the biggest health and social care challenge of our generation, but research into the condition has been hugely underfunded. This lack of funding has hampered progress and also restricted the number of scientists and clinicians working in the dementia field.”

As an illustration, MNT mentioned that in the United States Alzheimer’s research received US$504 million in funding from the National Institutes of Health (NIH) in 2014, while cancer received more than US$5 billion. Breast cancer alone received more funding than Alzheimer’s at US$674 million. 

Quoting an expert in this field the report highlighted, “Other diseases have demonstrated that sustained investment in research can improve lives, reduce death rates and ultimately produce effective treatments and preventions. We have the tools and the talent to achieve breakthroughs in Alzheimer’s disease, but we need the resources to make this a reality.”

Conclusion:

From the published research reports, it appears that the quest to decipher the complicated Alzheimer’s disease process continues, at least by the academic and scientific institutions, with equal zest. 

These scientists remain committed to finding out the ‘magic bullet’, which would be able to effectively address the crippling disease. As a result, the research has also moved from discovery of effective amyloid-clearing drugs to search for new molecules that targets inflammation in the brain, caused by a build-up of immune cells called microglia. 

Undeniably, the challenges ahead are still too many.

Nevertheless, enough confidence is also building up to halt the epidemic of Alzheimer’s by overcoming those hurdles, the world over. Experts are hoping that both a cure and also successful preventive measures for the disease, are not too far anymore.

Though some Global Pharma majors invested significantly to discover effective drugs for Alzheimer’s disease, overall research funding in this area is still far from adequate, according to the Alzheimer’s Society. 

For various reasons, not many pharma players today seem to believe that it would be financially prudent for them to make significant investments in developing new molecules for the treatment of Alzheimer’s – the disease that robs memory of millions of people, completely, and without any prior warning whatsoever.

‘The Memory Thief’ continues to prowl, undeterred, still eluding otherwise brilliant Pharma R&D, across the world.

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 R&D: Chasing A Rainbow To Replicate The Past

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Would future be always a replica of the past?

If the response is yes, the efforts of many global pharma players to replicate the successful Research and Development (R&D) models of long gone by days, would continue to be a grand success. The new drug pipeline would remain rich and sustainable. R&D costs would be increasingly more productive, with the rapid and more frequent churning out of blockbuster drugs, in various therapy areas.

However, an affirmative response to this question, if any, has to be necessarily supported by relevant credible data from independent sources.

Additionally, yet another equally critical query would surface. Why then the prices of newer innovative drugs have started going through the roof, with the rapid escalation of R&D expenses?

Thus, there is a need to ponder whether the continued hard effort by many large innovator companies in this direction is yielding the desired results or not.

In this article, I shall try to dwell on this issue with the most recent data available with us.

A new research report:                

A new research report of the Deloitte Center for Health Solutions titled, “Measuring the return from pharmaceutical innovation 2015: Transforming R&D returns in uncertain times” states that the R&D returns of major life sciences industry groups have fallen to their lowest point in 2015, since 2010. The report tracked and reviewed the estimated returns of 12 leading global life sciences companies.

Some of the data presented in this report would give an idea about the magnitude of current challenges in this space. Nevertheless, there could be a few rare and sporadic green shoots, which can also be cited to claim a revival in this area.

I am quoting below some key pharma R&D trends, for the period starting from 2010 to 2015, as illustrated in the Deloitte report:                      

A. Declining R&D productivity: 

Year R&D return (%)
2010 10.1
2011 7.6
2012 7.3
2013 4.8
2014 5.5
2015 4.2

B. Increasing drug development cost with decreasing estimated sales:

During 2010 to 2015 period, the average peak sales estimate per drug has fallen by 50 percent from US$ 816 million to US$416 million per year, while the development costs per drug, during the same period increased by 33 percent, from US$ 1.188 billion to US$ 1.576 billion.

C.  Smaller Companies showing better R&D productivity:

Between 2013-2015, relatively smaller companies showed better R&D productivity as follows:

  • Big companies: 5 percent
  • Mid to large cap companies: 17 percent

D. External innovation becoming increasingly more important:             

Again, mid to large cap companies opting for more external innovation are showing a higher proportion of late stage pipeline value, as below:

  • Big companies: 54 percent
  • Mid to large cap companies: 79 percent
A fear of failure?

The Deloitte report throws some light on the general stakeholders’ concerns about the exorbitantly high price fixation for innovative new drugs by the concerned companies, together with consequential macroeconomic pressures.

One of the key suggestions made in this report, is to increase the focus on reduction of R&D costs, while accelerating the new drug development timelines. I shall broach upon this point briefly just in a short while.

However, the stark reality today, the hard efforts still being made by many large global drug companies to almost replicate the old paradigm of highly productive pharma R&D, though with some tweaking here or there, are not yielding expected results. The return on R&D investments is sharply going south, as the new drug prices rocketing towards north.

Is it happening due to a paralyzing fear of failure, that moving out of the known and the traditional sphere of the new drug discovery models could impact the stock markets adversely, making the concerned CEOs operational environment too hot to bear?

Be that as it may, without venturing into the uncharted frontiers of the new drug discovery models, would it at all be possible to bring out such drugs at a reasonable affordable price to the patients, ever?

I have deliberated before, in this blog, some of the possible eclectic ways in this area, including in one of my very recent articles on January 4, 2016 titled, “2015: Pharma Industry Achieved Some, Could Achieve Some More”.

New innovative drugs evaluated over priced: 

Here, I would not quote the prices of Sovaldi and its ilk, which are known to many. I intend to give examples of just two other new drugs that have triggered significant interest as potential advances for the care of patients in two common disease areas, namely, asthma and diabetes. These two drugs are GlaxoSmithKline’s Nucala® (Mepolizumab) for Asthma and Novo Nordisk’s Tresiba® (Insulin Degludec) for Diabetes.

According a December 21, 2015 report of the ‘Institute for Clinical and Economic Review (ICER)’ of the United States:

“The annual price of mepolizumab would need to be discounted 63-76% to be better aligned with value to patients and the health system, while insulin degludec would need to be discounted less than 10% to do so.”

Thus, there has been a growing mismatch between the value that new innovative drugs, in general, offers to the patients and the price that the innovator companies fix for such drugs. This trend, if continues, would significantly limit patients’ access to new drugs, as the pharma players keep chasing disproportionately high profitability to increase their shareholder value.

External sourcing of R&D may not make new drugs affordable:

Taking a cue from the highly successful strategy of Gilead, especially what it has done with Sovaldi and Harvoni, if other major global pharma players’ also try to enrich their late stage new drug molecule pipeline from external sources, would that effectively resolve the core issue? 

In my view, this could possibly be one of the ways to contain R&D expenses and with much lesser risk, as suggested in the Deloitte report. However, I doubt, whether the same would effectively help bringing down the prices of newer innovative drugs, in tandem.

This is primarily because of the following contemporary example, that we now have with us.

Although the active compound that is used to manufacture Sovaldi, or for that matter even Harvoni, is not Gilead’s in-house discovery, the prices of these drugs have already gone through the roof. 

It is altogether a different matter that robust patent laws along with the Government vigilance on obnoxious drug pricing is gradually increasing in various countries. Some developed and developing markets of the world, including the Unites States and the United Kingdom, either already have or are now mulling for an effective counter check to irresponsible drug pricing, primarily by putting the ‘innovation’ bogey right at the very front.

In India, prompted by its robust patent law and to avoid any possibility of Compulsory Licensing (CL), Gilead ultimately decided to give Voluntary Licenses (CL) for Sovaldi to several Indian drug companies. These pharma players will manufacture the drug in India and market it in the country at a much lesser price.

A new cooperative effort for cancer drugs:

On January 11 2016, ‘The New York Times’ reported the formation of ‘National Immunotherapy Coalition (NIC)’. This is a cooperative effort by some leading global pharma companies to speed up the testing of new types of cancer drugs that harness the body’s immune system to battle tumors. The NIC will try to rapidly test various combinations of such drugs.

This is important, as many researchers believe that combinations of two or more drugs that engage different parts of the immune system might be effective for more patients than a single drug.

On the face of it, this initiative appears to be a step in the right direction and could make the cancer drugs more affordable to patients. However, only future will tell us whether it happens that way or not.

Conclusion:

Nevertheless, the bottom line is, to make the new innovative drugs available at an affordable price to patients, along with strict vigilance by the government bodies, the old and a traditional ball game of drug discovery has to change.

This would necessarily require fresh eyes, inquiring minds and high IQ brains that can bring forth at least significant eclectic changes, if not a disruptive innovation, in the new drug discovery and development process, across the world.

Otherwise, and especially when the low-hanging fruits of drug discovery have already been plucked, if the major global pharma players continue striving to replicate the grand old path of new drug discovery, the efforts could very likely be, and quite akin to, chasing a rainbow.

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.

3D Printing: An Emerging Game Changer in Pharma Business

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On August 3, 2015, Aprecia Pharmaceuticals in the United States took a game changing step towards a new paradigm of the global pharma business. The Company  announced that for the first time ever, the U.S. Food and Drug Administration (US FDA) approved a ‘Three-Dimensional (3D)’ – printed prescription drug for the oral use of epilepsy patients. Although, 3DP has already been used to manufacture medical devices and prosthetics, in the pharma world, this disruptive innovation was never practiced on the ground, till that magic moment came.

The drug is Spritam® (levetiracetam) used as a prescription adjunctive therapy in the treatment of partial onset seizures, myoclonic seizures and primary generalized tonic-clonic seizures in adults and children with epilepsy.

According to this announcement, Spritam® utilizes Aprecia’s proprietary ZipDose® Technology platform, that uses 3D Printing (3DP) to produce a porous formulation that rapidly disintegrates with a sip of liquid.

The 3DP technology:

3DP technology is broadly defined as a process for making a physical object from a three-dimensional digital model, typically by laying down many successive thin layers of a material.

The originator of this game changing development is the renowned academic institution – ‘The Massachusetts Institute of Technology (MIT)’in the United States. 

Later on, the MIT licensed out the patented 3DP technology for its use in many different other fields. Among pharma companies Aprecia Pharmaceuticals obtained the exclusive rights to 3D-printing technology for pharmaceutical purposes in 2007.

A high potential game changer:

In pharma, 3DP could possibly emerge as a game changing and disruptive innovation, sooner than later. It could radically change the traditional and well-established strategic and operational models of pharma business, especially the drug discovery process, manufacturing strategy and even the disease treatment process, paving a faster pathway for the much awaited ‘Personalized Medicines’, in a large scale. 

Lee Cronin, a Professor of Chemistry, Nanoscience and Chemical Complexity at the Glasgow University, says that the 3DP technology could potentially be used to print medicines of many types – cheaply and wherever it is needed. As Professor Cronin says: “What Apple did for music, I’d like to do for the discovery and distribution of prescription drugs.”

3D Printers would also throw open an opportunity of getting any drug tailor made for the individual patient’s needs, such as, exact dosage requirements, size, shape, color and flavor of the pill and also in the most appropriate delivery systems, just as what Aprecia Pharmaceuticals did with Spritam® by using this technology. 

In this article, I shall highlight the game changing impact of 3DP only in the following three areas of pharma business: 

  • The drug discovery process
  • Drug manufacturing strategy
  • Supply Chain effectiveness
A. Impact on drug discovery process:

A December 29, 2015 article titled, “Click chemistry, 3D-printing, and omics: the future of drug development”, published in ‘Oncotarget, Advance Publications 2015’ deliberates on the potential of 3DP in the drug discovery process.

The paper states, Genomics has unambiguously revealed that different types of cancers are just not highly complex, they also differ from patient to patient. Thus, conventional treatment approaches for such diseases fit poorly with genomic reality. It is also very likely that similar type of complexity will eventually be identified in many other life-threatening ailments.

Currently, a large number of patients are taking medications that may not help them, on the contrary could harm some of them. The top ten best-selling drugs in the United States are only effective in between 4 percent and 25 percent of the individuals for whom they are prescribed, the paper observes.

However, developing new drugs and tailoring such therapy to each patient’s complicated problem has still remained a major challenge.

One possible solution to this challenge could be to match patients to existing compounds with the help of an equally complicated modelling technique. Nonetheless, optimization of a complex therapy will eventually require designing compounds for patients using computer modeling and just-in-time production. 3DP shows a very high potential to effectively address this complex issue.

This is primarily because, 3DP is potentially transformative by virtue of its ability to rapidly generate almost limitless numbers of objects that previously required manufacturing facilities. 

It is also now becoming clearer that with 3DP, scientists will be able to print even the biologic materials, such as, tissues, and eventually organs. Thus, in the near future, it is plausible that high-throughput computing may be deployed to design customized drugs, which will reshape medicine, the article highlights.

In his short ‘Ted Talk Video Clip’ (please click on this link), Professor Lee Cronin explains his working on a 3D printer that, instead of objects, is able to print molecules for a new drug. It could throw open an exciting potential of a long-term application of 3DP for printing, our own customized new medicine by using chemical inks.

In a nutshell,  Professor Lee Cronin elucidates in his ‘Ted Talk’, how could the immense potential of 3D printers be leveraged to catalyze the chemical reactions in order to print real drugs, as and when required, according to the requirements of individual patients.

B. Impact on drug manufacturing strategy:

Not just in drug discovery, 3DP would equally be a game changer in pharma manufacturing, the way it is operated today, including the state of the art production facilities.

This could very much happen in tandem with the 3DP drug discovery research, moving towards personalized medicine, and simultaneously making the same 3DP an integral part of the new drug production line.

Moreover, besides the opportunity of getting any drug tailor made for individual patient needs, such as, exact dosage requirements, size, shape, color and flavor of the tablet and also the delivery system, 3DP technology can be most productively used to manufacture high priced low volume and patient-specific orphan drugs for the treatment of critical illnesses.

Even for Active Pharmaceutical Ingredients (API), the power and potential of 3DP technology can be well leveraged. On March 12, 2015 the ‘Howard Hughes Medical Institute (HHMI)’ of the United States announced that HHMI scientists have designed a revolutionary “3D printer” for small molecules that could open the power of customized chemistry to many. 

It further stated, small molecules hold tremendous potential in medicine and technology, but they are difficult to synthesize without proper expertise. The automated “3D printer” designed for small molecules is a way to get around this bottleneck. The new technology has the potential to unlock access to customized molecules in a way that will drive science forward, on many levels. Moreover, the potential for cost-savings with 3DP is huge, improving the drug profitability significantly.

C. Impact on 'supply chain' effectiveness: 

Currently, the traditional pharma ‘Supply Chain models’ are primarily based on the following:

  • Efficiency largely with high volume operation
  • Need to drive the cost as low as possible
  • Relatively higher-number of workers
  • The inventory cost
  • The real estate cost, owned directly or indirectly, for the entire ‘Supply Chain’ cycle

3DP technology would enable manufacturers shifting the ‘just in time production and distribution’ processes very close to consumers. Such well spread out and ‘just in time’ drug manufacturing activities catering to varying requirements, from very small to very high, would help reduce the cost of logistics, substantially.

This disruptive innovation will enable even the hospitals to print the required drugs at their own locations with, authorized 3DP file downloads, eliminating the need to keep huge inventory and also protecting patients from counterfeit medicines in the ‘Supply Chain’.

Thus, the bottom-line is, the drug companies will be able to print drugs with 3DP technology on real time demand at a large number of selected locations. This will significantly bring down the finished product inventory, starting from companies’ warehouses and distributors to retail and hospital shelves, to almost zero, making pharma supply chain significantly lean and highly effective.

Additionally, it will enable the pharma companies to manufacture drugs also in all developing countries, resulting in improved access to medicine, at a much lesser cost.

Conclusion:

I believe, this technology has already reached a critical juncture, where it is no longer a matter of conjecture that 3DP would ‘soon’ become a game changer, especially for the drug discovery process, manufacturing strategy and supply chain effectiveness of the pharma business, across the world, including India. Getting a prime mover advantage is vital. 

However, the question still remains: how soon will this ‘soon’ be? 

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.

2015: Pharma Industry Achieved Some, Could Achieve Some More

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Wish You And All Your Near And Dear Ones Peace, Happiness, Good Health And Prosperity in The Brand New Year 2016 

The year 2015 witnessed several noteworthy developments in the pharma industry, just as many other years before. That said, in my view, a few of these happenings were much more impactful, and probably took place for the first time ever, in the year just gone by.

Obviously, one such major development is the overall serious adverse impact on the image of the pharma industry, in general. 

During 2015, the image of the pharma industry got further tarnished by reports of high-profile alleged drug price manipulations. This avoidable saga culminated with the arrest of a pharma Chief Executive Officer (CEO) in the United States, amid a federal investigation, in December 2015.

However, I am not going to dwell on this issue in this article. Instead, I shall select some key strategic pharma business areas, which contribute to the largest chunk of the total overall cost, incurred by the global pharma industry, every year. These areas, as I see, are:

  • Drug discovery research
  • Sales and Marketing
  • Supply Chain
  • Development of new drug delivery systems
  • Patients care and engagements

I have put all these points in the above order, just for the convenience of my discussion in this article. 

With a few examples, I shall give my perspective on these areas of the global pharma industry, dividing them broadly into the following two sub-categories: 

  • Areas where the industry could have done a lot better
  • Areas where the industry made significant progress
The Pharma industry strategy continues to remain broadly traditional:

Pharma sector is globally considered as an industry, which appears to be more comfortable in maintaining and harnessing its traditional approaches, in almost all its field of activities. Although, some tweaking has certainly been taking place, which are primarily to automate or digitalize the same process, aimed at adding more speed together with virtually real time monitoring of operations.

Let me hasten to add here that, some major and newer types of modern tech based collaborative initiatives with large companies outside the pure pharma space, have also been reported, during the year.

I shall deliberate on both these areas, one after another, hereunder. 

A. Areas where the industry could have done a lot better:

Drug discovery research:

With the increasing impact of patent cliff and low productivity in drug discovery research, coming alongside big ticket generic threats, many pharma players seem to be still tweaking with its traditional blockbuster drug discovery model, in 2015.

Slightly changing from this traditional strategic focus, many of them have now started focusing more on ‘Orphan Drug’ research, though with indication of a life threatening disease with low prevalence, intending to go whole hog for very high pricing of these drugs.

By gradually adding more indications, these innovator companies plan to make the ‘Orphan drug’ molecule a money churning blockbuster drug. As a result, the number of venture capitalists, who invest in the early stages of such drug development, has increased significantly in 2015.

According to reports, over 40 percent of all approved orphan drugs are meant for high risk cancer sub-categories with low prevalence rate. Although these drugs are for lifetime treatment, the medicines are frightfully expensive, costing between US$200,000 and US$300,000 per year, for each patient. 

Intriguingly, still a very few drug companies are externalizing drug discovery research or even considering on a large scale, the use of the ‘Open Source’ drug discovery model, which is currently widely used in the Information Technology (IT) industry, as one of the main platforms to get new products.

Sales and Marketing:

Similarly, in the pharma sales and marketing space, there has been no game changing developments, during the last year.

Although, some initiatives that can at best be termed as tweaking on the traditional pharma methods, were visible, especially in the fields of digital marketing and e-detailing. The good old and much tried traditional tools, such as, Medical Representatives’ (MR) product detailing to individual doctors or a large number of ‘medical seminars’/ ‘continuing medical education’ events, of varying scale and dimensions, arranged for the medical practitioners, still ranked at the very top of this domain. 

Here, again, no signs of a paradigm shift were visible to me during the year, nor do I reckon, any game changer is likely to surface, any time soon.

Supply chain:

The immense importance of ‘Supply Chain’ in the overall pharma business does not appear to have been properly understood by the drug companies up until 2015. This has been well vindicated by various credible studies. I would refer below just two of those: 

The Chief Supply Chain Officer Report of September 2014, highlighted that just 39 percent of pharmaceutical respondents see the ‘Supply Chain’ as an equally important part of business success as R&D or sales and marketing. Whereas, 68 percent of consumer packaged goods’ respondents believe that leveraging the true potential of this domain, is one of the key requirements for business excellence.

This is noteworthy, as even ‘The McKinsey report’ of September 2013 stated that supply chains now account for around 25 percent of pharmaceutical costs. The annual spending on it is so staggering of around US$230 billion that even minor efficiency gains in this area could free up billions of dollars for investments elsewhere.

Instead of following its traditional approaches, if the pharma sector adopts even straightforward advances, well established in other industries, the total costs could fall by US$130 billion, ‘The McKinsey report’ estimates. 

Ideally, pharma ‘Supply Chain’ should be considered not just a means of getting the products at the right place, at the right time and in the right quantities, but also as a means of delivering additional value to the customers. This can be achieved with radical strategic intervention in this space with the application of the state of art technology, which was still broadly lacking in 2015. 

B. Areas where the industry made significant progress: 

In this section, by citing examples on two other important strategic business areas of the pharma industry, where significant progress has been reported during 2015, I would try to drive home my point. These two areas are new drug delivery systems and patient care/engagement.

New drug delivery systems:

On the development of new drug delivery systems, some interesting collaborative arrangements have been reported in 2015. As illustrative examples, I would cite just the following two: 

A. “Smart Inhaler”

I have picked up this important area of a new drug delivery system, out of many, as it fascinates me immensely. Here again, I would illustrate my point with just two examples – out of several others, as hereunder:

1. On December 2, 2015, the British drug major GlaxoSmithKline (GSK) reportedly entered into a technology deal with Wisconsin-based Propeller Health. Under this collaboration, Propeller will create a custom sensor for GSK’s Ellipta inhaler. The Propeller platform combines sensors, software, and care team services to improve patient outcomes by providing more insightful and efficient care. GSK is the second largest pharmaceutical company to partner with Propeller Health, which in December 2013 announced a deal with Boehringer Ingelheim to develop a custom sensor for BI’s Respimat device.

2. In September, 2015, Teva Pharmaceuticals reportedly acquired Cambridge, Massachusetts-based Gecko Health Innovations, a smart inhaler company.

Gecko’s main product is a platform for chronic respiratory disease management that also combines a sensor device that connects to most inhalers, a data analytics platform, an accessible user interface, and behavioral triggers to help asthma and COPD patients manage their condition, more effectively.

B. Sanofi and Medtronic strategic alliance in diabetes to improve patient experience and outcomes

Although not many large scale commercial ‘drug discovery’ initiatives based on the ‘Open Source’ model is still not known to me, in the ‘new drug delivery system’ area, a major global strategic alliance, between Sanofi and Medtronic in the diabetes therapy area, has been reported based on this model. This alliance is aimed at improving patient experience and outcomes for persons with diabetes, around the world. 

As I mentioned, the alliance structured as an ‘Open Innovation’ model, will initially focus on the following key priorities:

  • Development of drug-device combinations
  • Delivery of care management services to improve adherence and simplify insulin treatment
  • Help people with diabetes better manage their condition

Patient engagement and care:

Quite encouragingly, in the ‘patient engagement and care’ area too, some of the global pharma majors have taken notable tech-based strides during 2015. Some of these laudable ventures are as follows:

A. Novo Nordisk and IBM partner to build diabetes care solutions on the Watson Health Cloud

According to a Dec. 10, 2015 ‘Press Release’, Novo Nordisk and IBM Watson Health agreed to work together to create diabetes solutions, built on the Watson Health Cloud.

Under this agreement, by harnessing the potential of the Watson Health Cloud, Novo Nordisk aims to further advance its offerings to people living with diabetes and also their health care professionals.

B. Sanofi collaborates with Google to Improve diabetes health outcomes

Less than a couple of months before the Novo Nordisk – IBM partnership agreement, by a Press Release of August 31 2015, Sanofi and Google announced their collaboration to improve care and outcomes for people with type 1 and type 2 diabetes.

According to the release, this collaboration will explore how to improve diabetes care by developing new tools that bring together many of the previously siloed pieces of diabetes management and enable new kinds of interventions. This includes health indicators such as blood glucose and hemoglobin A1c levels, patient-reported information, medication regimens and sensor devices. 

Is the word “Innovation” also being used as a façade?

This important, though contentious issue, is being raised by many today, globally.

In my view, global pharma even in 2015, continued making the mistake of repeatedly highlighting, with high decibel sound bytes that the stakeholders do not understand the value, importance and necessity of innovation, which in any case is far from the truth. Nevertheless, It kept using, rather more misusing, this important word too often to cover up any action of theirs that faced government, general public or media scrutiny.

Additionally, many pharma players seemingly continued to remain contented with a very narrow definition of the word ‘innovation’, limiting its application mostly in the traditional space of drug discovery. While at the same time, many other smarter and more astute innovators, especially in the IT world, besides Google, IBM and Apple, started stepping into the vast healthcare arena, which otherwise could possibly have become pharma’s expanded market.

A am quoting below the names of just five of these amazing innovators, from the published data, just to give you a feel of this interesting area of ‘innovation’ in the health care arena:

  • Medivation: For finding the value of treatments that others ignored
  • Beijing Genomics Institute: For making DNA sequencing a mass-market
  • Medisafe: For using wireless and cloud technology to improve drug adherence
  • Ginger.IO: For harnessing behavioral data to save lives
  • Setpoint Medical: For creating a built-in pain-relief platform 
Epilogue:

Overall, the year 2015 was a mixed bag for pharma. Many pharma players, I reckon, displayed their self serving intent in a more glaring manner. Several captains of this industry generally talked all right things, which are music to many ears, but mostly acted quite differently, going against the public health interest, as reported by the global media.

Many pharma companies continued trying to woo the media cleverly during the year. Some of them, reportedly, even sponsored trips of a few Indian journalists to their respective overseas headquarters. As I understand, many newspaper readers too, had noticed the small print disclosures in this regard, at the bottom of their stories on those companies, written on the return.  I have no intention to be judgmental on such trips. Nevertheless, the global media, including the Indian media, by and large, reported all such deeds, with as much detail as possible, without slightest hesitation.

Encouragingly, a few global pharma majors, such as, Sanofi, Novo Nordisk, GlaxoSmithKline and AstraZeneca challenged this contusing status quo in 2015. They seem to dare to chart into the much uncharted frontier to squarely face the challenge of the changing demands of the changing world order. Probably not so much by trying to change others, but mostly by changing themselves. 

It appears, at least, the likes of the above global players have started accepting the new expectations of the aspiring customers and their fast transforming mindsets, including, the tougher governments enacting contemporary laws and regulations in many countries. In tandem, the exorbitantly high cost and usually low profile advocacy initiatives of drug companies seem to becoming lesser and lesser productive, as evident by the increasing number of avoidable issues that the pharma industry is now facing. Added to all this, a modern and major force-multiplier, in the form of social media, has now started unleashing its unfathomable power of shaping laws, regulations and even public opinion.

I wish this wind of change gaining more speed in 2016, and in that process, ushers in the long awaited dawn of a new paradigm. A paradigm of justice and equity in health care for all, across the world, and especially to my own country – 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.

Digital Therapeutics: Unfolding A Disruptive Innovation In Healthcare

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On November 9, 2015, ‘The Wall Street Journal (WSJ)’ in an interesting article reported, “Your doctor may soon prescribe you a smartphone app in addition to drugs and physical therapy.”

The hospitals in the United States (US) are developing new mobile apps to help patients manage serious medical conditions, record symptoms and communicate back to their doctors between visits, often in real time, besides helping patients adhere to their therapy, WSJ highlighted. The real beauty in these apps is, in addition to sending messages, reminders and instructions, the apps can alert providers to developing clinical problems before they become a crisis.

For example, “a new app from the University of Michigan called ‘Breast Cancer Ally’ is offered to patients to help them manage the onslaught of information and instructions they get throughout their diagnosis and treatment. It allows patients to look up and record their symptoms and provides guidance on when to consult the doctor about complications or concerns.”

Quoting experts, the article states, “this is a technology that is in everyone’s pocket and makes patients feel engaged in their own care.”

The implication of this development is profound. It appears, there could be a near term possibility of the same, for better, comprehensive health monitoring, leading to better quality of life and undergoing lesser hassles, if not hassle-free, as compared to what it is today in doing so.

Immense value in management of chronic diseases:

Besides serious ailments, these customized digital apps for smartphone, could be used to derive therapeutic impact in the early stages of chronic diseases, such as diabetes and hypertension.

As is well-known, in the early onset of most of the non-infectious chronic diseases, self-management plays a critical role to prevent the progression of the disease, saving significant treatment costs, besides other serious and expensive physiological complications in the future.

To achieve this goal, there is a critical need to appropriately educate the patients through doctors, along with the active role of pharmaceutical players. This could well be a win-win situation for the manufacturers of these products to productively engage the patients, not just for disease management, but for the commercial success of their respective brands too, with a well crafted integrated business strategy.

Digital Therapeutics:

Thus, these health apps serve the role of ‘Digital Therapies (DT)’, as well, for patients, especially at the onset of chronic ailments and to prevent any sudden crisis in serious disease conditions.

DT has, therefore, been defined as web, mobile, wearable and other digital technologies combined into an intervention to support healthy behaviors and provide therapeutic impact.

As stated earlier, DT has the potential to offer immense opportunity for patient engagement and to bring in substantial change in their health behavior with remarkable both short and long term cost-effectiveness.

The opportunities:

Offering DT to patients in India may not be very challenging either, on the contrary, it is an area of opportunity for all the interested players, especially when we go by the following facts: 

  • According to the latest report from the Telecom Regulatory Authority of India (TRAI) mobile phone subscriber base in India recorded 6.71 percent YoY growth to 980.81 million users in Q2 2015.
  • There were approximately 82 million 3G subscribers in India by the end of 2014 and the number is projected to reach 284 million by end of year 2017.
  • SMS, email, messaging and social networking apps are the most popular ones.
  • The Indian Government has expressed its commitment to setting up a robust digital infrastructure and to promote adoption of mobile Internet and related products and services.
  • In 2014-15, the Government budgeted INR 500 crore for building infrastructure as per the National Rural Internet and Technology Mission.

Currently, as the smartphones enable individuals to access various types of information, suggestions and advice from anywhere 24×7, in the above emerging scenario, an increasing number of patients are likely to opt for digital therapeutic tools for self-management of health more effectively. 

This is a win-win situation for all, including the pharma companies, though with a contemporary and honed strategic business model.

In the foreseeable future:

An October 2013 paper of IMS Institute, titled “Patient Apps for Improved Healthcare” expects that over a period of time, the health app maturity model will see apps’ progress from being recommended on an ad hoc basis by individual physicians, to systematic use in healthcare, and ultimately to an end goal of being a fully integrated component of healthcare management.

The study makes the following important observations:

  • The patients are unlike to ever have the tools to replace the roles of the physician
  • Health apps may encourage patients to take a more active interest in their overall well being and understand the consequences of poor health in later life.
  • By having the patients aligned with the importance of wellness programs and sickness prevention, health systems can hope to realize savings, especially from a lower burden of multiple chronic conditions. 
  • The Governments may consider making patients aware of the need to take increasing responsibility for their own healthcare, by providing incentives to stay healthy, where health apps could play a major role.

The paper also underscores the following four key steps to move through on this process:

  • Recognition by payers and providers of the important role that apps can play in healthcare 
  • Security and privacy guidelines and assurances must be in place between providers, patients and app developers
  • Systematic curation and evaluation of apps that can provide both physicians and patients with useful summarized content about apps that can aid decision-making regarding their appropriate use 
  • Integration of apps with other aspects of patient care

“Underpinning all of this will be the generation of credible evidence of value derived from the use of apps that will demonstrate the nature and magnitude of behavioral changes or improved health outcomes,” the paper comments.

According to available information, currently in the United States, around 100 advanced health apps have been approved by the FDA. However, all these are not for the use of patients. Some of these are for the use of doctors. Other sets of apps are available to patients only against doctors’ prescriptions. The rest is mainly for fitness and general life style related, and are affordable only to a limited number of people.

Key benefits of ‘Digital Therapeutics’:

To summarize, the key benefits of digital therapeutics are as follows:

  • More cost-efficient, as compared to conventional alternatives.
  • Help doctors managing disease conditions through constant monitoring with digital technology 
  • Make patients more aware and even proactive with real time information in preventing many diseases, avoiding disease aggravation and improving quality of life.
  • Make sharing of information between doctors and patients easier and effective.

Some concerns:

In many countries, including India, many health apps do not have appropriate health regulatory approval. Hence, a number of key concerns, in general, have been raised in this area for speedy resolution, some of which are as follows:

  • Product and data quality
  • Reliability in treatment decisions
  • Privacy and security for patients

Not many pharma companies are engaged in ‘Digital Therapeutics’:

In my view, there is a solid reason why many global pharma companies are still not adequately engaged with digital therapeutics.

They are generally actively involved in the high voltage advocacy by encouraging innovation, which usually does not go beyond drug discovery. This championing does not talk much either, about charting the broader area of comprehensive disease prevention, treatment and management with the application of disruptive innovation, involving other non drug related digital technologies, which are cost effective to patients.

With the low hanging fruits of drug innovation, resulting into money-churning blockbuster drugs with huge margin and almost in no time, made most of these innovator drug companies comfortable with their current business model of only drug discovery.

This business model is now exhibiting enough signs of fatigue with research pipelines gradually drying out.

Nonetheless, there are some indications now of a few pharma players’ exploring this new area of digital therapeutics, but as an extension of the current business models. It still remains a challenging decision for most of them to shift the gear, moving towards a new horizon of a winning mix of new drugs and path breaking digital therapeutics. 

Conclusion:

These are still early days for the majority of the pharma players looking at commercially leveraging the potential of possible customized offerings of digital health apps as integrated digital therapeutics for patients’ self-care health benefits. What we have seen so far is the drug companies using health apps as a tool to market a drug and not much beyond that.

I discussed this issue in my article in this blog on March 30, 2015, titled, “Quantum Value Addition With Health Apps, Going Beyond Drugs”.

An April 17, 2014 article published in the ‘Forbes/Business’ epitomizes the relevance of digital therapeutics in the modern day healthcare, even in the countries like India, as follows:

“Three out of four Americans will die of a disease that could be avoided—if only they could re-route their unhealthy habits. A new category of medicine, digital therapeutics, wants to change the course of these conditions – and of history.”

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.

 

Universal Health Coverage: The Only Alternative To Drug Price Control in India?

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Aggressive drug pricing is becoming a burning issue in the healthcare space, across the world. The raging debate continues in India too, fueled by many factors.

In this context, it was quite interesting to note, on July 15, 2015, the Supreme Court of India asked the Government to analyze and explain why the controlled price of essential medicines has been fixed at a high level, depriving the poor from getting life-saving drugs at reasonable rates.

Consequently, the Government was compelled to have a relook at the allegedly ‘flawed’ National Pharmaceutical Pricing Policy 2012 (NPPP 2012) and the subsequent Drug Price Control Order 2013 (DPCO 2013) forming an inter-ministerial committee to work out a more robust alternative.

Even thereafter, on November 03, 2015, the editorial column of a business daily concluded by advocating, “excessive price control may lead to a shortage of crucial medicines and a gray market.” The editorial has not elaborated though, what it means by “excessive price control,” despite the fact, the current span of drug price control is just around 20 percent of the domestic Indian Pharmaceutical Market.

The most intriguing part in this editorial is, to make affordable health care in general and drugs in particular available to all, though it broached on some ideas in a patchy way, did not suggest any comprehensive pan-India solution, as a viable alternative. It just wrote against DPCO, which too seems to be off the cuff, as many believe.

Such blatant advocacy against DPCO, without being overarching solution centric, could jeopardize patients’ health interests in India. This is primarily because, ‘Out of Pocket’ expenditure on drugs is one of the highest in India, even as compared to its neighboring countries, with very low per capita income.

I discussed in this Blog similar subject on July 13, 2015 in my article titled, “India: Tops The GDP Growth, Remains At The Bottom On Health Care”.

Would abolition of DPCO be foolhardy? 

Further, the above editorial comment on the above  business daily that “excessive price control may lead to a shortage of crucial medicines and a gray market,” appears hypothetical and not fact based, as many experts in this field have articulated quite in contrary.

Many believe, the bogey that advocates ‘price control causes drug shortages’ is industry sponsored. Whether it is right or wrong, may be a contentious issue. Nevertheless, there is no robust evidence that price control causes drug shortages.

At the same time, this is also true that some price controlled drugs under DPCO 1995 were discontinued by the respective manufacturers. The key reason for the same is product obsolescence, as those drugs were old and newer alternatives were in the market. Those are really product value and prescription demand related issues. To the best of my knowledge, not a single modern drug, has ever faced permanent shortages due to the price control in India. Moreover, there are robust provisions under DPCO 2013 to deal with such artificial drug shortages, as and when happen.

Moreover, after the announcement of Ceiling Prices of DPCO 2013 products, when wholesaler’s margins were initially revised downwards by a number of manufacturers, some wholesalers agitated and refused to buy those drugs causing some shortages. This dispute was mutually resolved since then, jointly by the drug manufacturers and pharma wholesalers. There have been no reported shortages of DPCO 2013 drugs, thereafter.

Be that as it may, I reckon, advocacy by any responsible entity to abolish DPCO in India without suggesting an effective alternative, such as, putting in place a public funded Universal Health Care (UHC) mechanism, would be foolhardy. We have a large number of functioning examples of UHC, across the world, including the OECD and BRICS countries, which makes a policy mechanism like DPCO almost irrelevant.

What happens when ‘no holds barred’ drug pricing is allowed?  

Recent incidences of ‘no holds barred’ drug pricing in the largest free-market economy of the world – the United States, have started attracting ire of even the more affluent and mostly health insured American citizens too.

As reported by the Boston Globe on October 16, 2015, this is happening in both patented and generic medicines. A few examples, out of many, of some recent jaw dropping aggressive drug pricing are as follows:

  • Average price of a new cancer drug costs around US$ 100,000 a year
  • A new hepatitis C drug costs US$84,000 for a course of 12-week treatment
  • A generic tetracycline price was increased by 70 fold just within a year
  • 5000 percent-plus increase on Turing Pharmaceuticals’ generic Daraprim (pyrimethamine) ant-parasitic tablets

Moreover, on November 6, 2015, The Wall Street Journal reported that three US pharma majors – Eli-Lilly, Merck and Valeant have received inquiries about drug pricing from the Justice Department of the US Government.

Giving an example, the report stated that for the nine months ended September 30, sales of the asthma drug Dulera inhalers (containing a combination of formoterol and mometasone) of Merck, rose 17 percent from the year-earlier period to US$383 million.

Is the dictum ‘competition controls prices of generic drugs’ just a myth?

Besides many other examples, the last two of the above four points on 70 fold and 5000 percent price increase for two old generic drugs – tetracycline and pyrimethamine, respectively, in the world’s largest free-market economy, suggests that ‘competition fails to control even generic drug prices’ for various other reasons. The National Pharmaceutical Pricing Authority (NPPA) of India has already termed this phenomenon as ‘market failure’ for medicines. 

Adding to it, Elsevier Clinical Solutions reported recently in a White Paper titled, “The Impact of Rising Generic Drug Prices on the U.S. Drug Supply Chain”, as follows:

“Over the past two years, the pharmacy industry has seen unprecedented increases in the prices of generic drugs, causing unexpected cost increases for payers and consumers, and spurring an investigation by the United States Congress.”

A recent survey:

More recently, in October 2015, ‘Kaiser Health Tracking Poll’ of the ‘Kaiser Family Foundation’ of the United States reported that the affordability of prescription drugs continues to be at the top of the public’s priority list for the President and Congress in America. In this study, 77 percent of Americans identified the increasing prices of prescription drugs as their number one health concern.

The top two priorities by majorities across political parties, were reported as follows:

  • Making sure that high-cost drugs are affordable to those who need them
  • Government action to lower prescription drug prices

Following this report, on November 03, 2015, the ‘Committee on Oversight & Government Reform’ of the U.S. House of Representatives, by a ‘Press Release’, announced that “Top House Democrats Launch Affordable Drug Pricing Task Force.” The members of the newly formed Task Force will suggest meaningful action to combat the skyrocketing costs of pharmaceuticals in the United States, as captured in the survey of the nonpartisan Kaiser Family Foundation.

Does India want to jump into this quagmire? 

If DPCO is abolished India because of intense, both direct and indirect advocacy, would India have no alternative but to jump into this quagmire of allowing free-drug pricing to pharma players?

70 fold and 5000 percent obscene price increase in a year for branded generics may not be possible in India, but for non-schedule drugs, there is no cap on the fixation of the launch price either. Any drug manufacturer can first fix a high launch price and then can go for 10 percent price increase every year, putting public health interest in jeopardy. That’s why inter-brand price difference for the same drug molecule in India varies so much and has attracted the attention of even the NPPA.

The unfinished agenda:

There is no denying of the fact that even DPCO is not a comprehensive mechanism to offer affordable health care to all. It is meant primarily for the essential drugs in the prevailing environment, when the out of pocket drug expenditure hovers around 70 percent, being one of the highest in the world.

To offer a viable mechanism for affordable health care to all, India expressed its interest towards Universal Health Coverage (UHC) in 2010, when the erstwhile Planning Commission of India convened a High Level Expert Group (HLEG) to work out a road map for UHC under the chairmanship of Dr. K. Srinath Reddy, the physician of international repute. UHC has still remained an unfinished agenda in the health care space of India.

At that time the HLEG made some important recommendations in its report for effective implementation, the key ones being the following: 

  • Increasing public financing from the current 1.2 percent of the Gross Domestic Product (GDP) to at least 2.5 percent.
  • Outlined an essential health care package for provision through tax funding, supplemented by employer-provided insurance
  • Free provision of essential drugs and diagnostics.
  • Emphasized prioritized funding for primary health care, with efficient links to secondary and tertiary care. 
  • Services were to be delivered jointly by strengthened public facilities and contracted private providers. 
  • Reforms were suggested for improving the health care workforce, strengthening of regulatory systems for quality assurance, and improving governance and accountability. 

Change in Government puts UHC back to square one? 

Meanwhile, the change of national Government in May 2014, gave a new perspective to the debate over UHC. The incumbent Government that had already promised and announced a “National Health Assurance,” released a draft National Health Policy (NHP) in January 2015 for public discourse.

The NHP outlines a broad framework for reform of the health care system in India. The new policy, besides others, clearly recommends the following:

  • Enactment of citizens ‘Right to Health’ through parliamentary legislation
  • Allows states to decide the services that would fall under ‘Right to Health’
  • Both public- and private-sector providers would be engaged to deliver the service package, which would be paid for by government-funded health insurance schemes
  • The states will have greater freedom in designing and delivering health programs

As the union government has already agreed to increase the states’ share of central tax revenues from 32 percent to 42 percent and transferred the responsibility for funding and implementing welfare schemes to the states, it should also identify and assign to them specific responsibilities for effective health care systems against measurable parameters.

Although the final version of the NHP has not yet been made public and adopted just yet, it will need firm political and budgetary commitment for resource allocation both by the Union and the State governments.

Current impediment to UHC:

Implementation of UHC calls for increasing public health expenditure significantly, from the current 1.2 percent to around 2.5 percent, may be over a period of five years. However, immediate increases in public financing for UHC may get impeded by the Government priority on fiscal deficit reduction, which is likely to continue in the immediate future too

Possible alternative:

As Dr. Srinath Reddy suggested in a paper titled, “India’s Aspirations for Universal Health Coverage”, published in New England Journal of Medicine, July 2, 2015:

“Health can, however, be positioned prominently in other new, well-funded government schemes such as:

  • The “Clean India” Mission, focused on sanitation and reducing air pollution,
  • The Smart Cities Project, which deploys information technology for urban development and service delivery.

Nevertheless, it may take years for the right mix of political will, financial resources, and health system capacity to deliver on the full promise of Universal Health Care.”

Assuming continuity of this situation in the near term, UHC for India is not visible anywhere near the horizon, not just yet.

Conclusion:

Non availability of affordable health care for all, including drugs, keeps bothering a vast majority of population in the country. Ironically, people feel its absence, mostly when the concerned individual or his/her dependents or any near and dear ones falls sick afflicted by serious ailments such as cancer or any other serious chronic disease.

This serious handicap for the nation has remained a key retarding factor in its attaining much desired sustainable rapid economic growth objectives, primarily for the following reasons:

  • Per capita income is very low compared to the size and other resources of the country
  • Public expenditure for health has still remained one of the lowest in the world
  • Fragile public health care infrastructure and delivery systems
  • No ‘Universal Health Coverage’ in place
  • Just 16% of the Indian population has access to free or partially-free health care
  • Comprehensive private health care is expensive and beyond reach of a vast majority
  • One of the highest ‘Out of Pocket’ expenditure on health, including drugs
  • Market failure for most drugs, where competition does not work
  • In terms of ‘Purchasing Power Parity’ together with ‘Per Capita Income’ drug prices are not low in India, as have been made out to be.

In a situation like this, when in the absence of UHC, total average ‘out of pocket’ expenditure on health is around 65 percent, and around 70 percent of which is on drugs, there does not seem to be any scope to abandon DPCO in India, just yet, for public health interest.

Any possible decision of the Government to abandon DPCO is also unlikely to pass the acid test of intense scrutiny of the Supreme Court either, to uphold public health interest. This makes me believe that a well functioning ‘Universal Health Coverage’ is the only alternative to ‘Drug Price Control’ in India, if at 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.

‘Repurposing’ Older Drugs: Has The Process Started Rolling?

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On October 22, 2015, BBC News reported, “The world’s largest clinical trial to examine whether aspirin can prevent cancers returning has begun in the United Kingdom (UK).”

About 11,000 people, who have had early bowel, breast, prostate, stomach and esophageal cancer will be involved in this study with one tablet a day dosage for five years. This trial is being funded by ‘The Charity Cancer Research, UK’ and ‘The National Institute for Health Research (NIHR).’

The scientists feel, if it works, this ‘repurposing’ of an older and much-known drug would be a “game-changing” one. It would then be able to provide a cheap and effective alternative to prevent recurrence of cancer to a large number of cancer survivals. Interestingly, no global pharma players are involved in this cancer prevention research, as yet. 

Aspirin was developed by Bayer way back in 1897 for pain and inflammation. Thereafter, the scientists found a ‘repurpose’ in its use as an anti-platelet drug for treating and preventing heart attacks and strokes.

Similarly, the anti-inflammatory drug Ibuprofen, which was developed by Boots in the 1960s for the treatment of rheumatoid arthritis, is now showing promises that it can help protect against Parkinson’s disease.

Again, a number of studies claim that statins, a cholesterol-reducing drug, can help prevent Alzheimer’s Disease, resulting in low levels of beta-amyloid. Further research needs to be done in this area, as this finding has not been universally accepted, just yet.

All such commendable initiatives, throw open a relevant question for debate: ‘Can the existing drugs be re-examined in a systematic manner to discover their other possible radically new usages at a much lesser treatment costs to patients?’

In my view, available data emphatically prompts the answer ‘Yes’ and I shall deliberate on on that in this article.

‘Repurposing’ older drugs:

The Oxford Dictionary meaning of ‘repurpose’ is: ‘Adapt for use in a different purpose.’

Accordingly, the process of discovering new usages of older drugs is often called by many scientists as ‘repurposing’.   

Currently, we come across various articles reporting a number of such new initiatives. This process is safer, much less expensive and takes much lesser time.

These laudable R&D initiatives needs encouragement from all stakeholders, especially from the Government. Given proper focus and attractive financial and other incentives, more and more players are expected to get attracted to a different genre of innovation. It is a whole new ball game of discovering new purposes of old and cheaper drugs with known and well-documented long term safety profile.

Some old drugs with ‘new purpose’: 

The following table gives an example of some well known older drugs, for which fresh R&D initiatives discovered their new purpose of treatment, at a much cheaper cost: 

Drug Old Indication New purpose
Amantadine Influenza Parkinson’s Disease
Amphotericin Antifungal Leishmaniasis
Aspirin Inflammation, pain Antiplatelet
Bromocriptine Parkinson’s disease Diabetes mellitus
Bupropion Depression Smoking cessation
Colchicine Gout Recurrent pericarditis
Methotrexate Cancer Psoriasis, rheumatoid arthritis

(Source: Indian Journal of Applied Research, Volume: 4, Issue: 8, August 2014)  

A clarion call to join this movement:

The well-known researcher, Dr. Francis S. Collins, the Director of the National Institutes of Health (NIH) in a TED talk (video) strongly argued in favor of ‘translational research’ to produce better drugs, faster. To make this process to work successfully Francis Collins hopes to encourage global pharmaceutical companies to open up their stashes of drugs that have already passed safety tests, but that failed to successfully treat their targeted disease. 

He wants to study, how drugs approved for one disease could successfully treat another or more ailments and also gave examples of the following drugs, which I am quoting below, as such:

  • Raloxifene: The FDA approved Raloxifene to reduce the risk of invasive breast cancer in postmenopausal women in 2007. It was initially developed to treat osteoporosis.
    .
  • Thalidomide: This drug started out as a sedative in the late fifties, and soon doctors were infamously prescribing it to prevent nausea in pregnant women. It later caused thousands of severe birth defects, most notably phocomelia, which results in malformed arms and legs. In 1998, thalidomide found a new use as a treatment for leprosy and in 2006 it was approved for multiple myeloma, a bone marrow cancer.
    .
  • Tamoxifen: This hormone therapy treats metastatic breast cancers, or those that have spread to other parts of the body, in both women and men, and it was originally approved in 1977. Thirty years later, researchers discovered that it also helps people with bipolar disorder by blocking the enzyme PKC, which goes into overdrive during the manic phase of the disorder.
    .
  • Rapamycin: This antibiotic, also called sirolimus, was first discovered in bacteria-laced soil from Easter Island in the seventies, and the FDA approved it in 1999 to prevent organ transplant rejection. Since then, researchers have found it effective in treating not one but two diseases: Autoimmune Lymphoproliferative Syndrome (ALPS), in which the body produces too many immune cells called lymphocytes, and lymphangioleiomyomatosis, a rare lung disease.
    .
  • Lomitapide: Intended to lower cholesterol and triglycerides, the FDA approved this drug to treat a rare genetic disorder that causes severe cholesterol problems called homozygous familial hypercholesterolemia last December.
    .
  • Pentostatin: This drug was created as a chemotherapy for specific types of leukemia. It was tested first in T-cell-related leukemias, which didn’t respond to the drug. But later NIH’s National Cancer Institute discovered that the drug was successful in treating a rare leukemia that is B-cell related, called Hairy Cell Leukemia.
    .
  • Sodium nitrite: This salt was first developed as an antidote to cyanide poisoning and, unrelated to medicine, it’s also used to cure meat. The National Heart, Lung, and Blood Institute is currently recruiting participants for a sodium nitrite clinical trial, in which the drug will be tested as a treatment for the chronic leg ulcers associated with sickle cell and other blood disorders.
  • Zidovudine (AZT): The first antiviral approved for HIV/AIDS in 1987.
  • Farnesyltransferase inhibitor (FTI): This was used to successfully treat children with the rapid-aging disease Progeria in a 2012 clinical trial.

“None of these drugs could have been developed without collaborations between drug developers and researchers with new ideas about applications, based on molecular insights about disease,” Dr. Collins said.

The examples that I have given, so far, on ‘repurposing’ older drugs are not exhaustive, in any way, there are more such examples coming up almost regularly.

The key benefits: 

The key benefits of ‘repurposing’ older drugs may be summarized as follows:

  • Ready availability of the starting compound
  • Previously generated relevant R&D data may be used for submission to drug regulators
  • Makes clinical research more time-efficient and cost-effective
  • Possibility of much quicker market launch

Slowly gaining steam: 

On November 27, 2012, ‘The Guardian’ reported that a number of university-based spin-outs and small biotech companies are being set up in the United States to find new purpose for old drugs. They express interest especially, on those drugs, which were shelved as they did not match the desired efficacy requirements, though showed a good overall safety profile.

Such organizations, take advantage of the declining cost of screening, with some compound libraries, such as, the Johns Hopkins library, which includes 3,500 drugs, available for screening at a small charge, the report highlighted.

Quoting a specialist, the report stated, “Existing drugs have been shown to be safe in patients, so if these drugs could be found to work for other diseases, then this would drastically reduce drug development costs and risks. Of 30,000 drugs in the world, 25,000 are ex-patent – it’s a free-for-all.”

‘Repurposing’ may not attract many pharma players, Government should step in:

Notwithstanding the clarion call of Dr. Francis Collins to global pharma players for their active participation in such projects, I reckon, the positive response may not be too many, because of various reasons.

Although, ‘repurposed’ drugs offer similar or even greater value to patients than any comparable ‘me-too’ New Chemical/Molecular Entity (NCE/NME), there may not possibly be any scope here for ‘Obscene Pricing’, such as ‘Sovaldi’ and many others, as some experts feel. And that’s the reality.

Moreover, new usages of the same old molecule, in all probability, may not get any fresh Intellectual Property (IP) protection in India, either.

Hence, considering the health interest of patients, in general, the Government should assume the role of ‘prime mover’, primarily to set the ball of ‘repurposing of older drugs’ rolling in India. This has already started happening in some of the developed countries of the world, which I shall dwell upon here.

Funding clinical development for ‘repurposing’:

Let me give a couple of examples of funding such admirable initiatives in two different countries.

I have already mentioned above that the clinical development for ‘repurposing’ Aspirin in the prevention of cancer, is being funded by the charity Cancer Research UK and the National Institute for Health Research (NIHR).

In a similar initiative, National Institutes for Health (NIH) of the United States, launched the ‘National Center for Advancing Transnational Sciences (NCATS), in May 2012.

New Therapeutic Uses program of NCATS helps to identify new uses for drugs that have undergone significant research and development by the pharma industry, including safety testing in humans. NIH claims that ‘using drugs that already have cleared several key steps in the development process gives scientists nationwide a strong starting point to contribute their unique expertise and accelerate the pace of therapeutics development.’

By pairing researchers with a selection of specific drugs, NCATS program tests ideas for new therapeutic uses, ultimately identifying promising new treatments for patients. Funding for this purpose is done by NCATS through NIH. For example, In July 2015, NCATS planned a funding of around US$3 million to support four academic research groups to test a selection of drugs for new therapeutic uses, as follows:

  • Type 2 diabetes
  • Glioblastoma (one of the most aggressive brain tumors in adults)
  • Acute myeloid leukemia (an aggressive blood cancer)
  • Chagas disease (a neglected tropical disease that causes heart, digestive and neurological problems)

According to NIH, each award recipient will test a selected drug for its effectiveness against a previously unexplored disease or condition. The industry partners for these projects are AstraZeneca and Sanofi.

Can it be done in India?

Of course yes, provided the Government considers health care as one its priority focus areas with commensurate resource deployment of all kinds for the same.

As things stand today, India still remains beyond any visibility to give a tangible shape to this specific concept of ‘repurposing’ of older drugs. There does not seem to be any other valid reason why similar model of funding can’t be followed locally too, for this purpose.

The nodal agency to spearhead such initiatives, and to create appropriate groundswell to help gain a critical mass, may well be the ‘Council of Scientific & Industrial Research (CSIR)’ or any other body that the Government decides in consultation with domain experts, together with reasonable financial incentives for commercialization of new usages at an affordable cost.

Conclusion:

As we all know, many people, across the world, are currently going through the pain of seeing their loved ones suffer, and even die, from serious ailments, the treatments of which either do not exist or when exist, the therapy costs may be out of reach of a vast majority of patients. In tandem, the R&D pipeline of the global pharma industry is gradually drying up.

In a situation like this, drug ‘repurposing’ that is directed towards meeting unmet medical needs of patients of all types irrespective of financial status, needs to be increasingly encouraged and pursued as a critical solution to this growing problem.

The good news is that some global pharma majors, though very few in number, have now expressed their intention to salvage their failed molecules and are open to help explore whether such drugs may work in other disease conditions.

India seems to be still miles away from this space, and a bit directionless too. That said, the country is scientifically quite capable of making up the lost ground in this area, provided the Government decides so, garnering requisite wherewithal.

Thus, in my view, the process of ‘repurposing’ older drugs has already started rolling in some major countries of the world, in a well structured manner with requisite funding in place. Tangible outcomes are already noticeable today, with some examples quoted in this article.

As Dr. Francis Collins said, collaborations between drug developers and researchers with new ideas about applications, based on molecular insights about disease are critical in the way forward to achieve this cherished goal in a sustainable manner.

By: Tapan J. Ray

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

Is Drug Price Control The Key Growth Barrier For Indian Pharma Industry?

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The corollary of the above headline could well be: “Are drug price hikes the key growth driver for the Indian Pharmaceutical Market (IPM)?”

Whenever the first question, as appears in the headline of this article: “Is drug price control a key barrier to growth of the IPM?”, is asked to the pharma players, irrespective of whether they are domestic companies or multinationals (MNCs), the answer in unison would quite expectedly be a full-throated ‘yes’. Various articles published in the media, including some editorials too, also seem to be on the same page, with this specific view. 

Likewise, if the corollary of the above question: “Are drug price hikes the key growth driver for the IPM?”, is put before this same target audience, most of them, if not all, would expectedly reply that ‘in the drug price control regime, this question does not arise at all, as IPM has been primarily a volume driven growth story.’ This answer gives a feel that the the entire or a major part of the IPM is under Government ‘price control’, which in fact is far from reality

Recently, a pharma industry association sponsored ‘Research Study’, conducted by an international market research organization also became quite vocal with similar conclusion on drug price control in India. This study, released on July 2015, categorically highlights ‘price control is neither an effective nor sustainable strategy for improving access to medicines for Indian patients’. The report also underscores: “The consumption of price-controlled drugs in rural areas has decreased by 7 percent over the past two years, while that of non-price controlled products has risen by 5 percent.”

I argued on the fragility of the above report in this Blog on September 7, 2015, in an article titled, “Drug Price Control in India: A Fresh Advocacy With Blunt Edges”.

Nonetheless, in this article, going beyond the above study, I shall try to put across my own perspective on both the questions raised above, primarily based on the last 12 months retail data of well-respected AIOCD Pharmasofttech AWACS Pvt. Ltd. 

Pharma product categories from ‘Price Control’ perspective:

To put this discussion in right perspective, following AIOCD-AWACS’ monthly pharma retail audit reports, I shall divide the pharma products in India into three broad categories, as follows:

  • Products included under Drug Price Control Order  2013 (DPCO 2013), which are featuring in the National List of Essential Medicines 2011 (NLEM 2011) 
  • Products not featuring in NLEM 2011, but included in Price Control under Para 19 of DPCO 2013
  • Products outside the ambit of any drug price control and can be priced by the respective drug manufacturers, whatever they deem appropriate

The span of price controlled medicines would currently be around 18 percent of the IPM. Consequently, the drugs falling under free-pricing category would be the balance 82 percent of the total market. Hence, the maximum chunk of the IPM constitutes of those drugs for which there is virtually no price control existing in India.

According to the following table, since, at least the last one-year period, the common key growth driver for all category of drugs, irrespective of whether these are under ‘price control’ or ‘outside price control, is price increase in varying percentages: 

Value vs Volume Growth (October 2014 to September 2015):

Month DPCO Product      Gr% Non-DPCO Products Gr% Non-NLEM Para 19 Gr% IPM
2015 Value Volume Value Volume Value Volume Value Volume
September 2.8 1.2 10.9 1.1 11.5 9.0 9.9 1.4
August 3.3 (2.7) 14.5 2.4 15.2 13.7 13.0 1.6
July 5.1 (0.6) 14.2 4.1 11.8 9.9 12.9 3.3
June 5.6 (0.1) 16.2 6.2 14.6 11.7 14.8 5.0
May 5.3 (0.3) 12.1 3.4 7.2 4.3 11.0 2.6
April 11.1 5.3 18.4 9.6 11.9 9.6 17.2 8.7
March 17.6 9.5 21.7 13.0 15.6 13.2 20.9 12.2
Feb 13.9 7.6 20.0 10.1 14.4 9.9 18.9 9.6
Jan 6.9 1.8 14.0 3.7 NA NA 12.7 3.3
2014    
December 8.0 0.7 14.8 3.2 NA NA 13.6 2.7
November 3.1 (3.4) 12.6 0.3 NA NA 10.9 (0.4)
October (2.4) (5.7) 6.8 (1.7) NA NA 5.2 (2.6) 

Source: Monthly Retail Audit of AIOCD Pharmasofttech AWACS Pvt. Ltd 

Does ‘free drug-pricing’ help improving consumption?

I would not reckon so, though the pharma industry association sponsored above study virtually suggests that ‘free pricing’ of drugs would help improve medicine consumption in India, leading to high volume growth.

As stated earlier, the above report of IMS Health highlights, “The consumption of price-controlled drugs in rural areas has decreased by 7 percent over the past two years, while that of non-price controlled products has risen by 5 percent.”

On this finding, very humbly, I would raise a counter question. If only free pricing of drugs could help increasing volume growth through higher consumption, why would then the ‘price-controlled non-NLEM drugs under para 19’, as shown in the above table, have generally recorded higher volume growth than even those drugs, which are outside any ‘price control’? Or in other words, why is the consumption of these types of ‘price controlled’ drugs increasing so significantly, outstripping the same even for drugs with free pricing?

The right answers to these questions lie somewhere else, which I would touch upon now.

Are many NLEM 2011 drugs no longer in supply?

DPCO 2013 came into effect from from May 15, 2013. Much before that, NLEM 2011 was put in place with a promise that all the drugs featuring in that list would come under ‘price control’, as directed earlier by the Supreme Court of India.  Even at that time, it was widely reported by the media that most of the drugs featuring in the NLEM 2011 are either old or may not be in supply when DPCO 2013 would be made effective. The reports also explained its reasons. 

To give an example, a November 6, 2013 media report stated: “While the government is still in the process of fully implementing the new prices fixed for 348 essential medicines, it has realized that most of these are no longer in supply. This is because companies have already started manufacturing many of these drugs with either special delivery mechanism (an improved and fast acting version of the basic formulation) or in combination with other ingredients, circumventing price control.”

Just to give a feel of these changes, the current NLEM 2011 does not cover many Fixed-Dose Combinations (FDC) of drugs. This is important, as close to 60 percent of the total IPM constitutes of FDCs. Currently, FDCs of lots of drugs for tuberculosis, diabetes and hypertension and many other chronic and acute disease conditions, which are not featuring in the NLEM 201, are very frequently being prescribed in the country. Thus, the decision of keeping most of the popular FDCs outside the ambit of NLEM 2011 is rather strange.

Moreover, a 500 mg paracetamol tablet is under price control being in the NLEM 2011, but its 650 mg strength is not. There are many such examples.

These glaring loopholes in the NLEM 2011 pave the way for switching over to non-NLEM formulations of the same molecules, evading DPCO 2013. Many experts articulated, this process began just after the announcement of NLEM 2011 and a lot of ground was covered in this direction before DPCO 2013 was made effective.

Intense sales promotion and marketing of the same molecule/molecules in different Avatars, in a planned manner, have already started making NLEM 2011 much less effective than what was contemplated earlier. 

Some examples:

As I said before, there would be umpteen number of instances of pharmaceutical companies planning to dodge the DPCO 2013 well in advance, commencing immediately after NLEM 2011 was announced. Nevertheless, I would give the following two examples as was reported by media, quoting FDA, Maharashtra:

1. GlaxoSmithKline (GSK) Consumer Healthcare having launched its new ‘Crocin Advance’ 500 mg with a higher price of Rs 30 for a strip of 15 tablets, planned to gradually withdraw its conventional price controlled Crocin 500 mg brand costing around Rs 14 for a strip of 15 tablets to patients. GSK Consumer Healthcare claimed that Crocin Advance is a new drug and therefore should be outside price control.

According to IMS Health data, ‘Crocin Advance’ achieved the fifth largest brand status among top Paracetamol branded generics, clocking a sales turnover of Rs 10.3 Crore during the last 12 months from its launch ending in February 2014. The issue was reportedly resolved at a later date with assertive intervention of National Pharmaceutical Pricing Authority (NPPA).

2. Some pharmaceutical companies reportedly started selling the anti-lipid drug Atorvastatin in dosage forms of 20 mg and 40 mg, which are outside price control, instead of its price controlled 10 mg dosage form.

Why DPCO 2013 drugs showing low volume growth?

From the above examples, if I put two and two together, the reason for DPCO 2013 drugs showing low volume growth becomes much clearer.

Such alleged manipulations are grossly illegal, as specified in the DPCO 2013 itself. Thus, resorting to illegal acts of making similar drugs available to patients at a much higher price by tweaking formulations, should just not attract specified punitive measures, but may also be construed as acting against health interest of Indian patients…findings of the above ‘research report’, notwithstanding, even if it is accepted on its face value.

In my view, because of such alleged manipulations, and many NLEM 2011 drugs being either old or not in supply, we find in the above table that the volume growth of ‘Price Controlled NLEM drugs’ is much less than ‘Price Controlled non-NLEM Para 19’ drugs. Interestingly, even ‘Out of Price Control’ drugs show lesser volume growth than ‘Price Controlled non-NLEM Para 19 drugs’.

Government decides to revise NLEM 2011:

The wave of general concerns expressed on the relevance of NLEM 2011 reached the law makers of the country too. Questions were also asked in the Parliament on this subject.

Driven by the stark reality and the hard facts, the Union Government decided to revise NLEM 2011. 

For this purpose, a ‘Core Committee of Experts’ under the Chairmanship of Dr. V.M Katoch, Secretary, Department of Health Research & Director General, Indian Council of Medical Research (ICMR), was formed in May 2014.

The minutes of the first and second meetings of the ‘Core Committee of Experts’, held on June 24, 2014 and July 2, 2014, respectively, were also made public. 

On May 5, 2015, the Union Minister for Chemicals and Fertilizers Ananth Kumar said in a written reply to the ‘Lok Sabha’ that “The revised NLEM would form the basis of number of medicines which would come under price control.” This revision is taking place in the context of contemporary knowledge of use of therapeutic products, the Minister added.

Would pharma sector grow faster sans ‘price control’?

If ‘drug price control’ is abolished in India, would pharma companies grow at a much faster rate in volume with commensurate increase in consumption, than what they have recorded during ‘limited price control’ regime in the country? This, in my view, is a matter of conjecture and could be a subject of wide speculation. I am saying this primarily due to the fact that India has emerged as one of the fastest growing global pharmaceutical market during uninterrupted ‘drug price control regime’ spanning over the last 45 years.

Nevertheless, going by the retail audit data from the above table, it may not be necessarily so. The data shows that volume growth of ‘out of price control’ drugs is not the highest, by any measure. On the contrary, it is much less than ‘price controlled drugs under para 19 of DPCO 2013′, which are mainly prescribed for non-infectious chronic diseases on a large scale.

I am referring to AIOCD-AWACS data for just the last 12 months, because of space constraint, but have gone through the same for the entire DPCO 2015 period, till September’15. The reason for my zeroing in on DPCO 2015 is for the three simple reasons:

- The span of price control in this regime is the least, even lesser than DPCO 1995, which was 20 percent. 

- It is much more liberal in its methodology of ‘Ceiling Price (CP)’ calculation, over any other previous DPCOs

- It has also a provision, for the first time ever, of automatic price increases every year for price controlled drugs, based on WPI.

A safeguard for patients?

Medicines enjoy the legal status of ‘essential commodities’ in India. Thus, many believe that ‘drug price control’ is a ‘pricing safeguard’ for Indian patients, especially for essential medicines and ‘out of expenses’ for drugs being as high as over 60 percent.

In the prevailing health care environment of India, the situation otherwise could even be possibly nightmarish. The key reason for the same has been attributed to ‘market failure’ by the Government, for most of the pharmaceutical products, where competition does not work. I discussed this issue in my article titled, “Does ‘Free-Market Economy’ Work For Branded Generic Drugs In India?” of April 27, 2015, in this Blog.

In India, ‘drug price control’ has successfully passed the intense scrutiny of the Supreme Court, along with its endorsement and approval. Any attempt of its retraction by any Government, without facing a tough challenge before the Apex Court, seems near impossible.

Conclusion: 

The fundamental reasons for overall low volume growth, or in other words, price-increase driven value growth of the IPM, I reckon, lie somewhere else, which could be a subject matter of a different debate altogether.

As I said in the past, IPM grew at an impressive speed consistently for decades, despite ‘drug price control’, and grumbling of the industry for the same. This high growth came from volume increase, price increase and new product introductions, the volume growth being the highest.

Most of the top 10 Indian pharma players, came into existence and grew so fast during the ‘drug price control’ regime. The  home-grown promoter of the numero-uno of the IPM league table, is now the second richest person of India. These are all generic pharma companies.

Generally speaking, Indian pharma shares even today attract more investors consistently than any other sector for such a long time. Granted that these companies are drug exporters too, but they all gained their critical mass in partly ‘price controlled’ Indian market. The criticality of the need for consistent growth in the domestic market, by the way, still remains absolutely relevant to all the pharma players in India, even today, despite…whatever.

Growth oriented overall Indian pharma scenario remaining quite the same, ‘drug price control’ with a current span of just around 18 percent of the IPM, can’t possibly be a growth barrier. Otherwise, how does one explain the highest volume growth of ‘price controlled non-NLEM drugs’, which is even more than ‘out of price-control drugs’?

Be that as it may, in my view, implementation of public funded ‘Universal Health Care (UHC)’ by the Indian Government, in any form or calling it by any other name, can possibly replace DPCO. Similar measures have been adopted by all the member countries of the ‘Organization for Economic Co-operation and Development (OECD)’ in this area, though following different paths, but nevertheless to attain the same goal.

Lamentably enough, the incumbent Government too has not ‘walked the talk’ on its number of assurances related to this core issue of health care in India.

Still, the hope lingers!

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.