Shape of Future Pharma Operations – Emerging A Pragmatic Outlook?

Posted on April 12, 2021 by Tapan Ray

Just as newer reports come almost every day on safety, efficacy, dosage interval or span of immunity of Covid vaccines, similar reports are also reaching us about the possible future shape of pharma sales and marketing operations. Some hardcore optimists, apparently more from India, still believe that current changes in pharma customer behavior are mostly transient. All business processes will eventually fall in their traditional grooves, as the Covid menace disappears from our lives soon.

No doubt, several studies are also bringing out a number of respondent doctors’ preferences on reverting to F2F engagements, programs and events. Nonetheless, most other experts, including several large global pharma majors, believe that the future shape of business operations won’t be quite the same as the past. There are better ways to be more effective, leveraging the changing environment. Accordingly, they have initiated actions, reimagining the pathway of new operational frontiers. In this article, I shall explore the evolving pragmatic outlook in just two of these action areas:

The new and unique role of medical representatives
Digital health care solutions as a new growth opportunity

New role of medical representatives:

A recent survey published by Reuters Events Pharma on December 18, 2020, revealed that 30% of the respondents still expect that Medical Reps’ (MR) face-to-face access to HCPs would return to the status quo ante of Covid pandemic restrictions. However, a majority of 70% felt that the old normal is unlikely return as such. The study also brought out that the size and disposition of sales teams are under review by many of pharma players and smaller field forces look likely, as the industry moves on.

My personal experience with the Indian Pharma Industry sources suggests, when a Covid pandemic wave starts finding its peak, the feeling of the above 70% prevails. However, when the same wave climbs down from its peak to a transient trough, a large number of Indian companies and experts tend to feel somewhat akin to what the above 30% expressed in the Reuters Events Pharma survey. The process gets repeated with the emergence of the next wave.

Alongside, as the above survey also finds out, most physicians are no longer expecting – brand-driven high sales pitches, during any MR-Doctor interaction or the engagement process. Instead, they are increasingly looking for insights – in an integrated, personalized and value-driven interactions with the Reps.

Considering this as a trend of over last one year or so, it is likely that MR-doctor interactions will now need to be on digital and omnichannel platforms to deliver a personalized and value driven an experience to the customers. In this environment, the field force may be smaller in size than what it used to be in early 2020 but will have a unique new role to play. This process will come with a new challenge, especially to those inbred companies, who are still undecided about the road ahead for business excellence, in the new normal.

Three new pharma leadership challenges:

Apparently, a large number of domestic drug companies, irrespective of size and scale of operations still feel comfortable to be in the old comfort zone that had propelled the business in a growth trajectory. Most pharma sales and marketing staff members, at several levels, have grown within the industry, consistently delivering high performance.

This situation by itself, as the above research paper revealed, poses three fresh challenges for many companies to make their field-staff ready to play a unique and fresh role in e-marketing. Thus, the three new knots to untie in the virtual world, are the following:

Currently, most MRs are not proficient in selling in virtually,
They are being led by people who have also never sold virtually,
They are being trained by people who also have never sold virtually.

MRs will continue to have a role to play even in the digital world:

To overcome the above challenges, today’s reality prompts new L&D needs of pharma’s new e-environment. And from this perspective, I think, they would need professional domain experts’ hand-holding, at least, in the transition phase of digital marketing. Some companies have initiated this process for greater sales force effectiveness, since 2019. A recent example in this area may be quoted from a report on October 01, 2019.

The article highlights, ‘AstraZeneca sales reps have some new help in the coaching department, resulting improved interactions and better development of sales reps’ strengths. While leaders still manage reps, artificial intelligence—in the form of data generated from thousands of field-coaching forms—now adds machine-learned analysis and advice.’

Thus, it is worth noting that MRs will continue to play an important role, alongside remote digital marketing using omnichannel or multi-channel engagement platforms. The same also came out clearly in the latest study from healthcare consultancy ZoomRx, reported on April 08, 2021, where its findings raised an important question - ‘Did pharma overshoot digital sales rep calls?’ This dilemma was prompted by the study charts reflecting a decline in its effectiveness, during this specific survey period.

Thus, in my opinion, a hybrid business model for better performance will be more effective in the new normal. However, ascertaining the right mix of digital and MR’s in-person interactions, may pose a challenge for many pharma marketers.

Entry into digital health solutions – an opportunity for growth:

Before Covid pandemic, digital therapeutics or digital health solutions were not an unknown area for several pharma companies, as a growth booster in the modern world. But, it wasn’t explored so intensively as it is being discussed today, for the same. A recent paper titled, ‘Digital health during COVID-19: lessons from operationalizing new models of care in ophthalmology,’ published in The Lancet on February 01, 2021, vindicates this point.

The paper emphasized, due to Covid pandemic ‘the traditional face-to-face patient–physician care model has had to be re-examined in many countries, with digital technology and new models of care being rapidly deployed to meet the various challenges of the pandemic.’ It further highlighted, these new models incorporate digital health solutions such as telehealth, AI based decision support for triaging, besides clinical care, and home monitoring.

Global pharma majors, such as Novartis, have publicly acknowledged on January 21, 202 that ‘digital innovation looks set to dominate the 2021 healthcare agenda.’ The statement said, COVID-19 was a catalyst for change in healthcare during 2020 and an accelerator for digital health. Similarly, 2021 looks set to continue the revolution – exploiting ‘an explosion of interest, traction and scale’ in the potential for digital solutions. These would not only support remote working, but also keep the very fabric of business, healthcare, education, and essential services in operation.

Other important and recent examples of digital health care solutions:

Witnessing the COVID-19 pandemic pushing more people toward virtual doctor visits over the last one year, AstraZeneca, as reported on April 06, 2021, is preparing for it in the new normal, through a novel project with Massachusetts General Hospital. The Company is now in the process of establishing and validating its ‘recently launched digital health platform, designed to help patients with chronic illnesses manage their conditions without stepping foot into the academic medical center’s clinic.’

Similarly, several other companies, are also investing to be early entrants with user friendly state of the art technology in this space. Interestingly, many of these ventures were reported during March and April 2021.

Conclusion:

Arthur Miller’s play ‘Death of a Salesman,’ broadly addressed the loss of identity and a man’s inability to accept change within himself and society. Although, the book depicts a larger philosophical perspective of life – many pointed out similar issues in the drug industry perspective, as well.

Nonetheless, many studies have established, pharma MRs have been effectively delivering, since long, the endpoint deliverables, as expected of them – sales. However, the question that still haunts many – can this core process be re-imagined for greater efficiency and effectiveness at a lesser cost, harnessing modern technology. An article, published in the Pharmaphorum on March 11, 2011, has also suggested – ‘in the wake of the COVID-19 pandemic, there is an even greater need to re-examine the rep’s role. How can a field force evolve to deal with current challenges and be future-fit for the way we will be working in the post-pandemic world?’

There is no confusion today that MRs’ will have a key role to play in pharma’s digital endeavor. However, the key purpose of having them has evolved during the pandemic. Such as, from being an efficient way to achieve personal communication objectives – to be an orchestrator for physicians to navigate the difficult landscape, providing them a differentiated service. For this purpose, I reckon, a hybrid business model for better performance, will be more effective in the new normal, while quickly adapting to digital transformation. However, arriving at the right mix of digital and MR’s in-person interactions, may pose a challenge for many pharma marketers, as it will be a company-specific need.

Similarly, the criticality of leveraging opportunities to provide remote delivery of digital health care solutions to patients, has also come onto the radar of many pharma players, during this difficult time. Several players have already added this area as a lucrative business expansion platform – many more are expected to follow. Thus, in my view, the fast-evolving data-based trends are now giving a pragmatic shape to future pharma operations – especially on the new and unique role of medical representatives and the relevance of digital health care solutions, as a growth opportunity.

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.

Combating Covid Pandemic: When ‘Something Is Better Than Nothing’

Posted on November 30, 2020 by Tapan Ray

As the new Coronavirus overwhelms the world, since its global outbreak, up until November 29, 2020, over 1,458,305 people have died from this pandemic. Understandably, the Governments in all countries are frantically searching for some robust remedial measures to prevent these unfortunate deaths, besides protecting livelihoods of a vast majority of people.

For this purpose, experts considered effective preventive measures, such as vaccines could help taming this menace, alongside existing personal prevention measures. Accordingly, scientists around the world, have are hard to accelerate development and manufacturing of safe and effective Covod-19 vaccines, within the prescribed guidelines. Equally important is the fact these vaccines must be safe with predictable effectiveness- for all age groups.

The good news is, vaccines are now a distinct possibility in the near future, with the positive interim Phase III clinical trial reports pouring in. It gets reflected in the remark of the Director General of the World Health Organization (WHO), on November 23, 2020, at the media briefing on Covid-19. He said: There is now real hope that vaccines – in combination with other tried and tested public health measures – will help to end the pandemic.

Interestingly, amid these reports, a lurking fear of many experts also surfaces – on the impact of possible side effects, that Covid vaccine may cause, besides their medium to long term efficacy in human subjects. But, with the mounting number of deaths, near collapse of the global economy, including India, there isn’t any more time to watch and wait.

Apparently, all governments now want some scientifically relevant vaccines, instead of nothing. This article will deliberate on the one hand – an unprecedented achievement, alongside some critical concerns – voiced even by the Indian Prime Minister. Let me begin with the apprehensions, as expressed by some domain experts on some rough edges, as it were, in the process of its development.

Queries on vaccine dosing, efficacy, safety and testing:

On November 23, 2020, AstraZeneca and Oxford reported interim results of their vaccine with the average efficacy of 70% prevention. This sounded good to many, as it falls within the expectations of above a 50% standard that the FDA had set for Covid vaccines. However, the puzzling part in this result was – bigger (standard) doses of the vaccines were less efficacious. The vaccine was only 62% effective in a group that got two full doses spaced about a month apart. But among about 2,700 people who got a half-dose followed by a full, the number rose to 90%, the report highlighted. This incident prompted several questions about the most effective dose of AstraZeneca and Oxford vaccine, including its safety record and the approach to testing. Consequently, apprehensions surfaced whether the Drug regulators will clear it, based on the currently available data.

It now appears, AstraZeneca ‘s Covid-19 vaccine is ‘headed for an additional global trial as the drug maker tries to clear up the uncertainty and confusion surrounding favorable results in its current study.’ Incidentally, in India - AstraZeneca and Oxford vaccine will be manufactured by Pune-based Serum Institute of India (SII) under a collaborative arrangement. Let me now dwell on a broader as aspect in this space.

Could current Covid vaccines become useless in the future?

There isn’t an iota of doubt that developing Covid vaccine in ten months, which otherwise takes around ten years – is an unprecedented achievement. However, there are several other important areas in this space, where pundits have expressed uneasiness through various articles.

One such paper is titled, ‘Don’t rush to deploy COVID-19 vaccines and drugs without sufficient safety guarantees,’ published in the Nature on March 16, 2020. According to the author, a critical point in this regard is to consider ‘the potential for emerging and re-emerging Coronaviruses to cause future outbreaks.’

This is because, ‘the virus behind COVID-19 might mutate in ways that would make previously effective vaccines and antivirals useless.’ Testing vaccines and medicines without taking the time to fully understand safety risks, could bring unwarranted setbacks during the current pandemic, and into the future. ‘Despite the genuine need for urgency, the old saying holds – ‘measure twice, cut once’, the author commented.

The article concluded by suggesting, ‘any regulatory agency considering ways to accelerate treatments into testing should also weigh up how likely these drugs are to work beyond this particular Coronavirus.’ Moreover, according to the WHO, it’s too early to know if COVID-19 vaccines will provide long-term protection.

Possible side-effects of COVID-19 vaccines:

As people’s hopes swell, expecting Covid vaccines to ultimately end the deadly global pandemic, experts caution about their reported – annoying and unpleasant side effects. The November 12, 2020 paper – ‘Time to Discuss Potentially Unpleasant Side Effects of COVID Shots? Scientists Say Yes,’ published by the Kaiser Health News (KHN), also articulated similar apprehension.

It said, most Covid vaccines, including much publicized ones from Pfizer and Moderna, will require two doses to work, injections that must be given weeks apart, as company protocols show. Scientists anticipate the shots will cause enervating flu-like side effects — including sore arms, muscle aches and fever — that could last days and temporarily sideline some people from work or school.

Even with the Pfizer vaccine, which is touted to be over 90% effective, 1 in 10 recipients would still be vulnerable. There could also be a possibility that a vaccine may not suit everyone due to side-effects, especially the most vulnerable elderly population. That means, at least in the short term, as population-level immunity grows, people can’t stop social distancing and throw away their masks, the report emphasized. Even Prime Minister Modi has informed the nation about possible side effects of Covid vaccines.

PM Modi also warns of possible vaccine side-effects:

Being adequately briefed on the above perspectives related to Covid vaccines, the PM has also warned the nation about the possible side-effects. This is probably to ensure that the unpleasant experience of side-effects, after being administered the first dose, do not catch the population off-guard. Mostly because, no one should miss the second dose of vaccine for the same.

He said, during a recent video conference with the state chief ministers, ‘like many other popular medicines, any COVID-19 vaccine could lead to side-effects in some people.’ Emphasizing that both speed and safety are equally important in launching a vaccine, he assured that ‘the government would only go by science in finalizing a vaccine for the country.’

Is something better than nothing?

In the current situation, it appears so, as there is no other alternatives, except maintenance of social distancing, frequent hand sanitizing and wearing masks while outdoors. The Prime Minister also articulated sans any ambiguity: ‘Whatever vaccine makes it through the world’s certified processes, we will have to accept them and move ahead.’

In the meantime, he urged the states to keep distribution infrastructure, such as cold storages ready, the report said. Interestingly, according to Serum Institute CEO Adar Poonawalla, India could approve the emergency use of the Oxford-AstraZeneca COVID-19 vaccine by December 2020.

That said, for mass vaccination of the population across India, another factor that is extremely important to decide which vaccine to go for – is the required storage temperature of various Covid Vaccines under development.

Required cold chain storage temperature of various Covid vaccines:

Required cold chain storage temperatures of various Covid vaccines are as follows:

Company	Type	Doses	Effectiveness*	Storage
Oxford-AstraZeneca	Viral Vector (genetically modified virus)	Two	62-90%**	Regular fridge temp.
Moderna	RNA (part of virus genetic code)	Two	95%	-20C up to six months
Pfizer-BioNTech	RNA	Two	95%	-70C
Gamaleya (Sputnik V)	Viral Vector	Two	92%	Regular fridge temp.

Source: Respective Companies, WHO – BBC News. *Preliminary Phase III results. **Two full doses: 62%, A half dose followed by a full dose: 90%, Average: 70%

From the above table, it appears, from the perspective of continuous cold chain storage facility of vaccines – till these are administered to each person, Oxford-AstraZeneca and Russian Sputnik vaccines will be more practical, despite issues with them. Viewing from this perspective, as well, it appears ‘something is better than nothing’ term can be applied in this area, as well.

Conclusion:

The Covid pandemic continues to worry India, immensely. As on November 29, 2020 morning, India recorded a staggering figure of 9,393,039 of Coronavirus cases with 136,733 deaths. The threat of subsequent waves for further spread of Covid infection now looms large in many states.

Unprecedented speed in developing vaccines to effectively combat Covid Pandemic has created some initial issues. Some of these Covid vaccine challenges include, vaccine side effects, its future usefulness, or challenges towards maintaining required stringent cold chain storage requirements, especially in a country like India. Powder version of Covid vaccines, in the future, would possibly resolve this issue for all countries, across the world.

Currently, in tandem with keeping the cold-chain distribution infrastructure ready, at least, for vaccines that require regular fridge temperature, there is a need to make people aware of Covid vaccine side-effects. Otherwise, after getting first shot of a Coronavirus vaccine, many people may get so scared of its side effects that they may not come back for the second dose. If this happens, the very purpose of mass vaccination will get defeated.

However, from the Indian perspective, Covid vaccines that the country, hopefully, will shortly get, may not be the best, out of the available ones, in terms of safety and efficacy. But, for combating Covid Pandemic across India at this juncture, I reckon, the good old dictum still holds good – ‘something is better than nothing.’

By: Tapan J. Ray

Pharma’s Perception Management

Posted on September 23, 2019 by Tapan Ray

An intriguing input-output relationship in the pharma industry has remained baffling, since the last several years, where increasing financial inputs are resulting in diminishing productivity output. More disturbing is, this input-output relationship has now reached a new low, with their individual swings moving in the diametrically opposite directions – as numerous reports of 2019 point out. The deteriorating situation of this magnitude would make many to feel sad, especially those who were or are intimately associated with this industry, for quite a while.

Strikingly, the trend encompasses even the largest – and one of the most influential pharma markets of the world – the United States. Which is why, the subject assumes greater importance. As one can witness today, regardless of the outcome, most American drug companies and their increasingly resourceful trade associations, reportedly, keep unleashing political, non-political and financial capital to influence pharma related policies in different countries. In tandem, they also try to create a favorable public perception in areas of vested interest, in many important markets, including India. These efforts cost money, and tons of it.

This process is not new, though, and was there in the past, as well. It also yielded results at that time, unlike what is happening today. This was mostly because of less public awareness on health-related issues, and a better general perception of the industry. Curiously, despite a sharp diminishing return, the same process is being followed, even today, with a lot more inputs and internal hype. Ironically, the snowballing effect of pharma’s ‘perception challenge’ is now all pervasive. It is visible even in the most market driven and business-friendly countries, like America. They have a requisite talent pool, financial resources and other wherewithal to manage perception – the best possible way. Then why it’s not happening?

To make it happen, I reckon, the core purpose of pharma business should be to delight the patients – more of them – the better. With a similar vision, the drug industry could achieve what it wanted to in the past, also making a good profit, unlike what has been openly expressed in the recent years. This article would, therefore, explore the reasons behind it’s not happening now, through the prism of perception management. However, before examining that, let me give examples of the quantum of financial inputs that the pharma industry constituents are using today to achieve its lobbying goals, vis-a-vis, its declining public perception, as we see in 2019.

Pharma lobbying expenses are shooting north:

According to the Bloomberg report of January 23, 2019, the main trade group of the pharma industry in America – Pharmaceutical Research and Manufacturers of America (PhRMA), spent a record high amount of USD 27.5 on lobbying in a single year – 2018. This was quoted from the public disclosure reports. Although this was the highest for PhRMA to date, ‘the pharmaceutical industry has upped its spending over the last few years, as it faces immense pressure over high drug prices from the public, Congress and the Trump administration,’ – the news highlighted.

Another article, published in The Guardian also indicated: ‘Pharmaceutical companies spend far more than any other industry to influence politicians.’ It further added, hundreds of millions of dollars flow to shape laws and policies that keep drug company profits growing. One more article highlights, the wide reach of pharma industry money can be traced among people and groups who are in a position to influence drug policy – think tank that has received funding from a major pharmaceutical lobby, and doctors who accepted payments from drug companies.

Moreover, Kaiser Health News (KHN) analysis also found that such money reaches even patient groups for supporting the industry whenever required. The analysis detected ‘about half of the groups representing patients have received funding from the pharmaceutical industry.’

Globally, the general interest of the public on the affordability of quality drug treatment package that pharma companies offer, is fast increasing. Recognizing this fact, the entire approach of pharma lobbying appears blatantly self-serving.

Whereas pharma’s lobbying output is diving south:

The governments in many countries can now make it out, even when this is done covertly – keeping the so called ‘patient groups’ and ‘doctors’, as mentioned above, in the forefront. As many can clearly decipher the core purpose behind such stealth approaches of pharma players, the productivity or output of pharma lobbying is going south in a bottomless pit, as it were. Still, to reduce stakeholder pressure on drug pricing, its apparently getting more intensive, across the world and particularly in America.

The Bloomberg report of January 23, 2019, captures how this situation, on the contrary, is bringing public, government and opposition leaders together on the reduction of drug prices. The news underscores: ‘One of the few issues that unites President Donald Trump and the Democrats newly in charge of the U.S. House of Representatives is reducing the price of prescription medicine. Both sides will be looking for accomplishments to tout at a time when the pharmaceutical industry has become a target of public ire.’

Regardless of these developments, the age-old pharma lobbying approach remains unchanged. There doesn’t seem to be much visible interest, either, for a radical and innovative ‘perception management’ approach to salvage the situation.

Pharma’s ultimate goal has to change to delighting customers – the best possible way, where the quantum of profit earned will be a measure of customer satisfaction. This is what the management guru Peter Drucker said, long ago. Since, this is not happening, both patients’ and public perception on the industry, is getting from bad to worse, which has been captured in the 2019 Gallup poll.

2019 Gallup Poll: Big pharma sinks to the bottom of U.S. industry rankings:

The September 03, 2019 issue of Gallup carried the headline - Big pharma sinks to the bottom of U.S. industry rankings while announcing ‘American’s Views of U.S. Business, Industry Sectors, 2019.’ Being more specific, it said, ‘The pharmaceutical industry is now the most poorly regarded industry in Americans’ eyes, ranking last on a list of 25 industries that Gallup tests annually.’

Elaborating it further, the author stressed, Americans’ net ratings for the pharmaceutical industry have never been lower since Gallup first polled on industries in 2001. Over the past 19 years, few industries have been rated lower than the pharmaceutical industry’s current – 31 net rating. These include the federal government and the oil and gas, real estate, and automobile industries.

The age-old process of pharma lobbying is not working anymore:

‘Lobbying’ is the term that is more frequently used in the United States and the Western countries. In India, similar campaigns are called ‘Advocacy’, by pharma trade associations. These activities are carried out by concerned individuals or companies, industry associations, paid employees – hired for this purpose, or by any other interested groups. But, everybody’s common goal is primarily aimed at influencing government policies, or mold top influencers’ opinion in favor of business – overtly or covertly.

That traditional mindset of pharma lobbying is no longer working, came to the fore some time back. The October 28, 2016 articles, published in the CNBC, cautioned with a headline – ‘A warning for Big Pharma: Lobbying won’t work anymore.’

The article candidly suggested to big pharma players: ‘If you try to use the same old lobbying and crony networks to get your way, it won’t work. Not anymore. And here’s a special warning call just for Big Pharma: You need to change your public relations and marketing strategies now, or die. The good news is, unlike so many other industries, the drug companies have a very effective way out of this mess.’ Making no bones about it the author said, ‘no industry seems more clueless right now than Big Pharma.’

Acknowledging that: ‘Several reports say the Big Pharma lobbying group known as PhRMA is looking to spend as much as $300 million and pull out lots of other stops in order to defend higher prescription drug costs.’ The paper emphasized: ‘this is a battle the drug giants can’t win.’ This is because: ‘Public and political sentiment against expensive medicines and companies that charge those prices is at a fever pitch.’ This, I reckon, is changing the old paradigm of pharma lobbying.

Managing public perception – the new ballgame to influence policies:

Thus, the bottom line to note, today’s public policies are increasingly driven by public sentiments, their needs, aspirations and demand. Thus, the old, and the virtually counterproductive system of lobbying with lawmakers and some key opinion leaders, often including a few media friends, has to change. Even the covert ways of achieving it, under the guise of some trendy events or seminars, hyped by the best communication and PR professionals, are also not yielding commensurate results.

The first task will, therefore, be to come out of this decade old self-created imbroglio, as the pharma’s topmost head honchos will hopefully realize that the name of today’s game is ‘managing public perception’ of the pharma industry. This would simultaneously necessitate replacing the self-serving goals with the ones that would delight the customers – genuinely – sans façade of any kind.

Pharma’s reputation to be on par with the tobacco industry?

According to ZS: ‘Recent polls and surveys demonstrate that the pharmaceutical industry’s reputation continues to be plagued by negative perceptions.’ It further adds: ‘Many consumers still consider pharma’s reputation to be on par with the tobacco industry, positioning one product category that treats cancer just above a product category that causes it.’ It appeared in the Aug 01, 2017 issue of ZS, titled ‘Reputation Is Paramount, So What’s Holding Pharma Companies Back?’

Is reputation mostly driven by perception?

The reputation or image of a person, an organization or any industry is generally a matter of perception of individuals, formed based on multiple reasons. As Edward de Bono - Physician, author, and originator of the term lateral thinking had put it – ‘Perception is real even when it is not reality.’ Accepting this dictum, even more profound is what he said further - ‘You can analyze the past, but you need to design the future.’

It’s critical to understand the process of ‘perception,’ as out of so much available information, only some are selectively received, organized and interpreted to develop individual perception. More important is the fact that perceptions often become strong inputs to take individual decisions, actions or to express views.

‘Designing the future’ from the pharma industry perspective:

To design an inclusive model of the pharma industry future, the first requirement will be establishing a ‘true connect’ between the industry and the public, based on the latter’s expectations, aspirations, needs and demands, from the industry. This new process being far from self-serving in nature, needs to be steered by ‘perception management’ experts, based on credible data pool – and not by the gut feelings of the hard-core lobbyists or self-styled advocacy experts.

The reformed industry objective – ‘delight the customers while making money’, will form the core of this new ‘perception management’ model. This would entail fleshing out – step by step, the blueprint of its action plan, while pharma should be seen by all to walk the talk.

Creating a positive perception for pharma:

As described in the book ‘Getting Ahead,’ creating a positive perception would prompt taking four basic steps, each of which will help enhance the current view that others have and improve any negative opinion that exists.

Taking a cue from what the author suggests, the first step is to discern how pharma industry is generally perceived by others. Each and every industry practice affecting its stakeholders, particularly patients, is being observed, analyzed and directly affects how others perceive the industry. The author further adds, ‘inaccurate perceptions show you how easy it is for others to incorrectly perceive you.’

The second step is also equally important, as it involves knowing, without any bias, how the industry is ‘actually’ perceived and why – mainly based on consumer feedback, collected and analyzed on a scientific platform.

The third step may involve an intensive internal brainstorming of scale, to zero-in to how the pharma industry would ‘want’ it to be perceived and capture the same in an easy to understand format for all, after pilot testing it.

And the fourth step is most challenging that will help determine how to replace the current perception with the most desirable one.

Conclusion:

As rising drug prices increasingly becoming a major political and public talking point, pharmaceutical groups in America are, reportedly, splurging heavily to influence public opinion and policy. With a spending of roughly USD 280 million, it featured at the top spot among lobbying spenders in 2018 – - with no other industry coming close. However, when one looks at the outcome of such spending either in the American political sphere or within the government, one can find what even President Trump is saying - ‘One of my greatest priorities is to reduce the price of prescription drugs.’ Similarly, when it comes to the public – the Gallup Poll 2019 points out:‘The pharmaceutical industry is now the most poorly regarded industry in Americans’ eyes, ranking last on a list of 25 industries that Gallup tests annually.’

The old industry practices - “from generating the highest drug costs in the world to spending massive amounts on lobbying politicians to the industry’s role in the U.S. Opioid crisis,” are no longer yielding results, due to a radical change in public perception of the drug industry. Even the most powerful current political personality and one of the most business-friendly politician – President Trump, can’t risk ignoring it.

If at all, the drug industry and its trade associations are trying to mold a favorable public opinion with such heavy spending, those efforts are also not working at all. Pharma’s public image crash comes, as the general population strongly dislike, disapprove or remain indifferent on various drug-related issues or methods and processes that the industry follows to earn huge money – even at the cost of patients’ health interests. As a result, a strong negative perception of pharma is created that often indirectly impacts many policy decisions.

So far, pharma hasn’t succeeded in achieving one of its key lobbying goals by managing public perception, effectively. To make it happen, its predominating self-serving interest, that is progressively alienating the public, must be jettisoned, forthwith. The time is ripe to create a new, strong and sustainable public perception for the industry, even in India, by managing customer perception, while making them feel genuinely delighted with company’s products and service offerings. With these contemporary inputs, conducive government policies facilitating a strong business performance, will surely be the most cherished output.

By: Tapan J. Ray

Would ‘Empowered Patients’ Hold The Key For Rapid Progress of Healthcare In India?

Posted on April 28, 2014 by Tapan Ray

Empowered patients would eventually hold the key of rapid progress of healthcare all over world. It has to happen in India too and is just a matter of time.

One such approach has recently been initiated in America. ‘The Patient-Centered Outcomes Research Institute (PCORI)’, established through 2010 Patient Protection and Affordable Care Act of the United States, helps its people in making informed healthcare decisions to significantly improve healthcare delivery and outcomes. Active promotion of high integrity, evidence-based information that comes from intensive research, ably guided by patients, caregivers and the broader healthcare community, forms the bedrock of this Institute.

PCORI ensures that, patients and the public at large have information that they can use to make decisions that reflect their desired health outcomes.

This initiative can be termed as one of the key steps towards ‘Patients Empowerment’ in the United States, setting a good example for many other countries to follow, across the world.

Come May 2014, the new Union Government of India, with its much touted focus on healthcare, would probably find this Act worth emulating.

Changing doctor-patient relationship:

In good old days, well before the accelerated use of Internet became a way of life for many, patients used to have hardly any access to their various health related information. As a result doctors used to be the sole decision makers to address any health related problem of patients, sitting on a pedestal, as it were.

Any patient willing to discuss and participate in the decision making process of his/her ailments with the doctors, would in all probability be frowned upon with a condescending question – “Are you a doctor?” Clearly indicating – ‘Keep off! I am the decision maker for you, when you are sick”. This situation, though changing now even in India, rather slowly though, needs a radical transformation with clearly established individual ‘patient empowerment’ mechanism in the country.

Individual ‘Patient Empowerment’:

Just as PCORI in the US, Government of India too needs to encourage individual ‘Patient Empowerment’ by making him/her understand:

How is the healthcare system currently working on the ground?

What are the key drivers and barriers in getting reasonably decent healthcare support and solution in the country?

What should be done individually or collectively by the patient groups to overcome the obstacles that come on the way, even in rural India?

How should patients participate in his/her healthcare problem solving process with the doctors and payor?

The essence of ‘Patient Empowerment’:

‘Natural Health Perspective’ highlighted ‘Patient Empowerment’ as follows:

Health, as an attitude, can be defined as being successful in coping with pain, sickness, and death. Successful coping always requires being in control of one’s own life.

Health belongs to the individual and the individuals have the prime responsibility for his/her own health.

The individual’s capacity for growth and self-determination is paramount.

Healthcare professionals cannot empower people; only people can empower themselves.

It started in America:

Much before PCORI, the movement for ‘Patient Empowerment’ started in America in the 70’s, which asserts that for truly healthy living, one should get engaged in transforming the social situation and environment affecting his/her life, demanding a greater say in the treatment process and observing the following tenets:

Others cannot dictate patients’ choice and lifestyle

‘Patient Empowerment’ is necessary even for preventive medicines to be effective

Patients, just like any other consumers, have the right to make their own choices

Thus, an ‘Empowered Patient’ should always play the role of a participating partner in the healthcare decision making or problem solving process.

‘Patient empowerment’ is a precursor to ‘Patient-Centric’ approach:

In today’s world, the distrust of patients on the healthcare system, pharmaceutical companies and even on the drug regulators, is growing all over the world. Thus, to help building mutual trust in this all important area, the situation demands encouraging ‘Empowered Patients’ to actively participate in his/her medical treatment process.

In India, as ‘out-of-pocket’ healthcare expenses are skyrocketing in the absence of a comprehensive, high quality and affordable Universal Health Coverage (UHC) system, the ‘Empowered Patients’ would increasingly demand to know more of not only the available treatment choices, but also about the medicine prescription options.

‘Patient Empowerment’ is the future of healthcare:

Even today, to generate increasing prescription demand and influence prescription decision of the doctors, the pharmaceutical companies provide them with not just product information through their respective sales forces, but also drug samples and a variety of different kinds of gifts, besides many other prescription influencing favors. This approach is working very well, albeit more intensely, in India too.

Being caught in this quagmire, ‘Empowered Patients’ have already started demanding more from the pharma players for themselves. As a result, many global majors are now cutting down on their sales force size to try to move away from just hard selling and to gain more time from the doctors. Some of them have started taking new innovative initiatives to open up a chain of direct web-based communication with patients to know more about the their needs in order to satisfy them better.

In future, with growing ‘Patient Empowerment’ the basic sales and marketing models of the pharmaceutical companies are expected to undergo a paradigm shift. At that time, so called ‘Patient-Centric’ companies of today would have no choice but to walk the talk.

Consequently, most pharma players will have to willy-nilly switch from ‘hard-selling mode’ to a new process of achieving business excellence through continuing endeavor to satisfy both the expressed and the un-expressed or under-expressed needs of the patients, not just with innovative products, but more with innovative and caring services.

In the years ahead, increasing number of ‘Empowered Patients’ are expected to play an important role in their respective healthcare decision making process, initially in the urban India. Before this wave of change effectively hits India, the pharmaceutical players in the country should pull up their socks to be a part of this change, instead of attempting to thwart the process.

‘Empowered Patients’ can influence even the R&D process:

Reinhard Angelmar, the Salmon and Rameau Fellow in Healthcare Management and Professor of Marketing at INSEAD, was quoted saying that ‘Empowered Patients’ can make an impact even before the new drug is available to them.

He cited instances of how the empowered breast cancer patients in the US played a crucial role not only in diverting funds from the Department of Defense to breast cancer research, but also in expediting the market authorization and improving market access of various other drugs.

Angelmar stated that ‘Empowered Patients’ of the UK were instrumental in getting NICE, their watchdog for cost-effectiveness of medicines, to change its position on the Age-related Macular Degeneration (AMD) drug Lucentis of Novartis and approve it for wider use than originally contemplated by them.

Patient groups such as the Cystic Fibrosis Foundation (CFF) reportedly fund directly to develop novel therapies that benefit patients in partnership with industry.

Meeting with the challenge of change:

To effectively respond to the challenge posed by the ‘Empowered Patients’, some pharmaceutical companies, especially in the US, have started developing more direct relationship with them. Creation of ‘Patient Empowered’ social networks may help addressing this issue properly.

Towards this direction, some companies, such as, Novo Nordisk had developed a vibrant patient community named ‘Juvenation’, which is a peer-to-peer social group of individuals suffering from Type 1 diabetes. The company launched this program in November 2008 and now the community has much over 16,000 members, as available in its ‘Facebook’ page.

Another example, Becton, Dickinson and Co. had created a web-based patient-engagement initiative called “Diabetes Learning Center” for the patients, not just to describe the causes of diabetes, but also to explain its symptoms and complications. From the website a patient can also learn how to inject insulin, along with detailed information about blood-glucose monitoring. They can even participate in interactive quizzes, download educational literature and learn through animated demonstrations about diabetes-care skills.

Many more Pharmaceutical Companies, such as Pfizer, Johnson & Johnson, Novartis, Boehringer Ingelheim, AstraZeneca, Bayer, GlaxoSmithKline, Sanofi, Roche and Merck are now directly engaging with the customers through social media like Twitter, Facebook etc.

Technology is helping ‘Patient Empowerment’:

Today, Internet and various computer/ iPad and smart phone based applications have become great enablers for the patients to learn and obtain more information about their health, illnesses, symptoms, various diagnostic test results, including progress in various clinical trials, besides product pricing.

In some countries, patients also participate in the performance reviews of doctors and hospitals.

Conclusion:

Increasing general awareness and rapid access to information on diseases, products and the cost-effective treatment processes through Internet, in addition to fast communication within the patients/groups through social media like, ‘Twitter’ and ‘Facebook’ by more and more patients, I reckon, are expected to show the results of ‘Patient Empowerment’ initiatives, sooner than later, even in India.

Accelerated ‘Patient Empowerment’ initiatives with modern technological support, would help the patient groups to have a firm grip on the control lever of setting truly patient centric direction for the healthcare industry.

Working in unison by all stakeholders towards this direction, would herald the dawn of a new kind of laissez-faire in the healthcare space of India, the sole beneficiary of which would be the mankind at large.

By: Tapan J. Ray

‘e-detailing’: The Future of Pharmaceutical Sales?

Posted on September 30, 2013 by Tapan Ray

Pharmaceutical product detailing to doctors by Medical Representatives (MRs) is believed to fetch the single largest return on marketing investments by the pharmaceutical companies globally, as on date.

At the same time, the pharma players, across the world, are increasingly experiencing that the costs of product detailing by the MRs to the doctors are not now quite commensurate to the desired return in terms of financial results, despite bringing in many new skills and other productivity improvement measures on a regular basis.

Thus, to make such interaction between the MRs and the doctors more productive and cost efficient, increasingly the global pharmaceutical industry has been exploring various models and methods with numerous state-of-art digital Internet based applications. Some pharmaceutical companies, especially, from the western world, have already started putting such innovation into practice.

Waning productivity of traditional detailing:

This is quite apparent now that due to changing market dynamics and increasingly busy schedules of the doctors, the productivity of traditional product detailing is fast waning. As a result, pharmaceutical companies are encountering huge challenges in the process of generating prescription demand for their respective products by taking commensurate share of mind of the Physicians.

This is mainly because, the number of patients is also now fast increasing and the doctors are trying to see these large numbers of patients within their limited available time. As a result each patient is getting lesser doctors’ time, while the doctors are trying to provide optimal patient care in each patient visit. At the same time, other obligations of various kinds also overcrowd physicians’ time.

As a result, increasing number of MRs, which has almost double in the past decade, is now fiercely competing to get a share of lesser and lesser available time of the doctors. Added to this, increasing inflow of new doctors not being in line with the increasing inflow of patients is making the situation even worse.

As stated earlier, significant expenditure that the pharma companies have been incurring towards product detailing, many of them feel, is not resulting into desired top and bottom line growth for the organization, any more. Even good numbers of important specialist doctors do not seem to value this traditional MR product detailing process any longer, mainly due to immense time pressure on them and also due to their easy access to other modern product information gathering tools.

What is happening today:

Today, keeping the core concept of traditional detailing unchanged a few, especially large pharmaceutical companies in India, have introduced a number of digital interventions to eliminate some important manual processes that MRs used to follow earlier like, call planning, access to other relevant information electronically, instant reporting etc.

Such incremental improvements in the traditional detailing model, though helpful to the MRs, do not seem to be just good enough to produce desired business results in today’s highly competitive environment. The time calls for radical technological interventions.

A new report on the trend:

According to a new study of CMI Communication Media research report, about half of physicians restrict visits from MRs in one way or another.

It reported, just half of cancer specialists (oncologists) saying that they would interact about new products with MRs, while 47% of them indicated email as a preference.

Surveys found the oncologists being the most restrictive specialists, with only 19% allowing MRs without restrictions. On the other hand, 20% of them would not see MRs at all, with the 40% in the middle either requiring appointments or limiting visits to particular hours of the day or week.

‘e-Detailing’:

The well known consulting company Mckinsey & Company in a paper titled, ‘Making sense of e-detailing in Japan’s pharmaceutical sector’ has defined e-detailing as follows:

“e-detailing or electronic detailing refers to interacting with physicians virtually rather than physically. It often takes place through a company’s own website or through a physician portal coupled with email- driven promotions and attached explanatory videos offering up-to-date pharmaceutical product information.”

Thus, in ‘e-detailing’ Internet-based communications applications are used to provide customized services to the doctors, in many times to complement the activities of MRs.

‘e-detailing’ is now evolving as a modern technological innovation in the field of communication between MRs and doctors. It is intended to be highly customized, very interactive, more effective, quite flexible and at the same cost-efficient too. Live analytics that ‘e-detailing’ would provide instantly could be of immense use in the strategizing process of pharmaceutical marketing.

Cost effectiveness of ‘e-detailing’:

In the same paper, as mentioned above, to highlight the cost advantages of ‘e-detailing’, McKinsey & company, from its Japan experience, has reported as follows:

“While accurate, apples-to-apples data is hard to come by, we estimate each e-detail costs between 500 and 750 Yen, depending on the scope  of audience and the sophistication  of content. An MR costs 7,000 Yen  to 12,000 Yen, depending on sector, region, and hospital vs clinic The ROI (return on investment) for MR detail is in the range up to ~20x, versus ~4-6x for e-detail. In other words, the cost structure allows for sustained ROI  for e-detailing—even when extending reach beyond the top prescribing quintiles of physicians.”

In the Japanese context, Mckinsey & Consulting further states:

“Right now, e-detailing in Japan is more often used at the beginning of a product’s lifecycle (i.e. to win attention during product launches) or at the end (i.e. to sell established products). These are what we call ‘stay in the race’ practices; necessary, but not sufficient.”

Perceived advantages of ‘e-detailing’:

The traditional way of detailing through ‘Visual Aids’ may not be good enough today when the available time with the doctor has come down drastically. Just providing, by and large, the usual ‘one size fits all’ types of data/information to the doctors is gradually proving to be not effective and efficient enough to generate expected outcome. There is a dire need for helping these busy doctors to get access to drug information they value and trust at a time of their need and convenience.

Thus, the process of medical detailing should be made highly flexible depending on whatever time is chosen by each doctor to satisfy his/her specific needs.

In such an environment ‘e-detailing’, as discussed above, would help creating customized, more impressive, self-guided by doctors and more focused presentations with significant reduction in the detailing cost/ product with improved productivity.

Moreover, ‘e-detailing’ would:

Make expensive printed promotional aids redundant
Eliminate time required and cost involved to deliver such material
Have the flexibility of change at any time
Ordering of just required samples online, eliminating wastage

Fast increasingly number of doctors using computers and the Internet for professional purposes, especially in the urban areas, would facilitate this process.

Key success factor:

Experts believe, besides developing an effective and user-friendly tool for e-detailing, the important success factor for such initiative by a pharmaceutical company would well depend on:

Well planned integration of ‘e-detailing’ into the Customer Relationship Management (CRM) strategy
Deep understanding of physician segments
Efficient application of ‘e-detailing’ to support marketing goals.

The challenges:

Though there are many benefits for ‘e-detailing’, it throws some challenges too, as follows:

Still many doctors continue to prefer the personal touch of the MRs in traditional detailing

Some doctors do give prescription support to a company based on their good relationship with the concerned MRs

Despite hectic schedule, many busy doctors continue to take time out to interact with such MRs.

Though such relationships do not develop with all MRs, this challenge needs to be effectively overcome to make ‘e-detailing’ successful wherever possible, probably by creating an optimal mix of traditional and ‘e-detailing’.

A recent initiative:

Recent media reports highlight one such innovation, among many others. Pfizer has reportedly come out with an interesting innovation in the field of medical detailing to the primary care doctors. This new service of the company ‘Ask Pfizer’ claims that it can provide promotional product information to the doctors at a time convenient to them. Thus the ‘digital medical representatives’ of Pfizer leave the decision as to whether they want to see them and if so, when.

‘Ask Pfizer’, featuring in the website called ‘Pfizerline’ of the company says that the system is:

Simple
Flexible
Convenient
Calls can be arranged to suit the doctors’ busy practice schedule
Online meeting room provides a rich multi-media interaction where the doctor can see trained country-specific’ digital representative making product presentations and also discuss the relevant subjects with them.

Pfizer is advertising this new service called ‘digital detailing’ on the British Medical Journal (BMJ) website aiming, reportedly, at the UK doctors.

This initiative is indeed innovative, as it creates an environment of direct marketing in an indirect way with the help of simple Internet applications like Skype.

Conclusion:

Like many other industries, in the pharmaceutical industry too, across the world, communication of relevant information in an interesting way is of utmost importance. Here also. Indian pharmaceutical industry is no exception.

Since ages, the pharma players in India, in general, have been continuing to follow the traditional model of product detailing, hoping to generate more and more prescriptions from the doctors by deploying a larger and larger contingent of MRs, who highlight superiority of their respective products over competition.

Some may argue, there is nothing wrong in this model, but question would arise, is it still as productive as it used to be? This is mainly because, the doctors are now giving lesser and lesser time to the MRs.

Those pharmaceutical companies of the country who sincerely believe that innovative use of technology in the digital world of today may considerably help addressing this issue, at least in the urban areas, would possibly get a head start, as they delve into the future for business excellence in this area.

With e-detailing they will be able to provide an interesting communication option to the top-prescribers having a very busy schedule for top of mind recalls of their respective brands, leading hopefully to increase in prescription generation.

It is worth noting, though ‘e-detailing’ is emerging as an important innovation in the field of product detailing, there are still some questions that need to be answered. Some of these questions could be as follows:

Would many doctors prefer to schedule time for this purpose after a busy day’s schedule?

Would the information overload from other sources not keep them away from seeking more information through such a process?

Taking all these into consideration, the question that we need to answer: Is ‘e-detailing’ the future of pharmaceutical sales, also in India?

By: Tapan J. Ray

Abbott – Piramal deal: the way future is expected to shape up

Posted on May 31, 2010 by Tapan Ray

In my view, these are still very early days for such acquisitions of large domestic Indian pharmaceutical companies by the Global Pharma majors to gain momentum in the country. However, there is no doubt that in the near future, we shall rather witness more strategic collaborations between Indian and Global pharmaceutical companies, especially in the generic space.

Squeezing margin due to cut-throat domestic and international competition may affect future valuation of the domestic companies:

I reckon, the number of such high profile mergers and acquisitions will significantly increase, as and when the valuation of domestic Indian companies appears quite attractive to the global pharma majors. This could happen, as the domestic players face more cut-throat competition both in Indian and international markets, squeezing their profit margin.
Abbott possibly has a well-structured game plan for seemingly high valuation of the deal:
Having said that let me point out, during Ranbaxy-Daiichi Sankyo deal, analysts felt that the valuation of the deal was quite high. US $ 3.7 billion Abbott – Piramal deal has far exceeded even that valuation. Does this deal not make any business sense? I do not think so. Abbott is a financially savvy seasoned player in the M&A space. It is very unlikely that they will enter into any deal, which will not have any strategic and financial business sense.

Big ticket Indian Pharma deals:

So far India has seen four such major deals starting from Ranbaxy – Daiichi Sankyo, Dabur Pharma – Fresenius, Matrix – Myalan and Orchid – Hospira, besides some global collaborative arrangements, such as, Pfizer with Aurobindo/Claris/Strides GSK with DRL, AsraZeneca with Torrent and again Abbott with Zydus Cadila.

Key drivers for these deals:

Such acquisitions and collaborations will be driven by following eight key factors:

1. R&D pipelines of the global innovative companies are drying up
2. Many blockbuster drugs will go off-patent in the near future
3. Cost containment pressure in the western world exerting pressure on the bottom lines
of the global pharma majors
4. Increasing demand of generics in high growth emerging and developing markets
5. The new Healthcare Reform in the US will promote increased usage of generic drugs.
6. The fact that India already produces 20% of the global requirement for generic drugs
increases the attractiveness.
7. The fact of domestic Indian companies account for 35% of ANDAs highlights the future
potential of the respective companies.
8. Highest number of US-FDA approved plants, next to the US, is located in India.

A strategic move by Abbott:

As announced by Abbott from its headquarter in Chicago that Abbott in India will increase its sales four times to around Rs. 11,000 Crores by 2020 with the acquisition of 350 brands of ‘Piramal Healthcare’ business.

Facing the stark reality of a ‘patent Cliff’, cost containment pressures especially in the US and EU, low single digit growth rate of the developed markets and high growth of branded generic dominated emerging markets, Abbott has taken a new global initiative aimed at the emerging markets with the creation of its global ‘Established Products’ Business’. This initiative started with worth US $ 6.2 billion acquisition of branded generic business of Solvay Pharma, which has a sizeable presence in the EU markets.
Recently announced licensing agreement of Abbott with Zydus Cadila to market 24 products initially in 15 emerging markets of the world is another step towards this direction.

Advantage Abbott India:

The asset based acquisition of ‘Piramal Healthcare’ by Abbott will help its Indian arm to increase its domestic market penetration, significantly, both for branded generic and patented products in urban, semi-urban and rural markets spearheaded by around 7000 strong sales force. This strategy perhaps will also help Abbott in India distancing itself from the number 2, in the Indian Pharma league table, probably with a handsome margin.

Global players want a risk-cover with the generic business and minimize tough competition:

Like Abbott, it is quite likely that other major global players are also planning to reduce their business risks by expanding the business from mainly high risk and expensive R&D intensive patented products to a more predictable and rapidly expanding branded generic business.

Will such move have any significant effect on competition?

Such M&A initiatives may seemingly minimize the cut throat competition from large generic players from India. However, I do not envisage any significant impact on over all competition between the generic players for such moves, as their will be mounting competition from more number of new entrants and emerging players, entry barrier in Indian generic pharmaceutical market being quite low.

Conclusion:

In the globalized economy where the ‘world is flat’ such types of business consolidation initiatives are inevitable. The domestic Indian companies across the industry are also in the prowl for suitable global targets, which are at times of world class ‘Crown Jewels’ like Arcelor, Chorus or Jaguar/Land Rover. Pharmaceutical industry is, therefore, no exception.

By Tapan 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.

To avoid “Heparin” like tragedy in future, a robust “supply chain integrity and security” system is of critical importance

Posted on March 29, 2010 by Tapan Ray

Globally the pharmaceutical industry is going through a metamorphosis. The types of changes that are taking place today globally, perhaps has no precedence..

The key drivers of these changes are mainly the following:

1. A large number of patent expiration hugely impacting the top-line growth
2. Research pipeline is drying-up
3. The cost of bringing a new molecule from the ‘mind to market’ has now touched around U.S$ 1.75 billion
4. Regulatory requirement to get the marketing approval is getting more and more stringent, basically for patients’ safety, making clinical development more expensive and time consuming
5. Cost containment measures of various governments around the world is putting an immense pressure on product price, adversely affecting the profit margin

Strategic measures of enormous significance:

All these are triggering other sets of consequential events of enormous significance. Among those following key corporate strategic measures indeed stand out:

1. More mergers and acquisitions of various sizes and scales to achieve both revenue and cost synergy, with new products and newer types of resources
2. Transformation in the fundamental operating models, e.g. R&D focused companies like Pfizer, GSK, sanofi aventis are extending their business interest to the pharmaceutical generics space
3. Increasing globalization and greater focus on the emerging markets of the world like, Brazil, Russia, India, China, Turkey, Mexico
4. Growing emphasis on partnering, as we see in India, like for example, between Pfizer and Aurobindo, Claris, GSK with Dr. Reddy’s Lab (DRL)
5. Global outsourcing in the ‘Contract Research and Manufacturing Services (CRAMs)’’space, mainly to rationalize costs and deliver the bottom lines, when the top line is under immense pressure.

Demand on all round effectiveness of the “Supply Chain”:
The changing requirements of all types, in sales and marketing, manufacturing and research and development have created a challenging, if not a rather volatile operating environment. In this situation supply chain will increasingly play a key role to ensure that the right product is available at the right place, at the right time, at a right price and following the right process…always.

Outsourcing initiative is not just about cost:
There is at the same time, a new trend emerging for increased outsourcing initiative, especially from countries like India and China. This initiative, which in turn is in the process of making these two countries the key global outsourcing hubs, is definitely not all due to just cost advantages. It encompasses increased integrated value proposition for the customers. Cost is just one of the key factors, others being quality, speed and suppliers’ reliability. Nothing in this value chain is mutually exclusive. Supply Chain will need to go through a set of complex algorithms to strike a right balance between all these vital parameters.

Robust “supply chain integrity and security’ will assume critical importance:
In the days to come by one of the greatest challenges in supply chain management will be to improve the supply chain integrity and security.
An appropriate definition of integrity for supply chains is:

“the requirement that the system performs its intended function in an unimpaired manner, free from deliberate or inadvertent manipulation.”
A safe and secure supply chain is definitely not a new requirement. However, in the list of priority of importance, it has now come up significantly compared to what it was just a few years back.

Are the pharmaceutical companies aligned on this issue?
Though the issue of improving the supply chain integrity and security has now assumed global importance, unfortunately, any uniformity in national regulatory requirements for this vital parameter is glaringly missing. Such a lack of regulatory uniformity clearly highlights that the pharmaceutical companies, engaged in manufacturing, are still not aligned with each other on what will be the right way to ensure absolute integrity, safety and security in the supply chain operating process to guarantee patients’ safety.

RFID is just one component of supply chain integrity:
Globally many Pharmaceutical Companies are getting engaged in improving supply chain integrity, security and patient safety with the introduction RFID. This, as many may know, is an inventory tracking system for improved product traceability, which in turn extends some protection to its customers with genuine products from the genuine pharmaceutical manufacturers. It is worth noting that RFID is just one component of overall patients’ safety initiative.

Suppliers’ qualification process through stringent ‘supplier audit’ is of critical importance:
Along with high tech measures like RFID, to improve supply chain integrity, I reckon, pharmaceutical companies will need to further enhance their respective supplier qualification process.
The process of supplier audits should include all important and critical areas of manufacturing, testing and quality, related to each individual product. Only a stringent supplier qualification process will be able to guarantee integrity, safety and the quality of products from the suppliers.

Heparin tragedy, where the supply chain integrity was grossly violated:
Before I conclude, I would like reinforce my recommendation with the example of Heparin tragedy where the supply chain integrity was violated and seriously challenged thereafter.

In the beginning of 2008, there were media reports on serious adverse drug events, some even fatal, with Heparin, a highly-sulfated glycosaminoglycan of Baxter International. Heparin is widely used as an injectable anticoagulant. Baxter voluntarily recalled almost all their Heparin products in the U.S. Around 80 people died from contaminated Heparin products in the U.S. The US FDA reported that such contaminated Heparin was detected from at least 12 other countries.

A joint investigation conducted by Baxter and the US FDA ascertained that the Heparin used in batches associated with the serious adverse drug events was contaminated with over sulfated chondroitin sulfate (OSCS). It was reported that his Heparin was supplied to Baxter by Scientific Protein Laboratories, Changzhou, China.

The cost of OSCS is just a fraction of the ingredient used in Heparin. Being driven by the criminal profiteering motive the manufacturers in Changzhou, China had reportedly used OSCS for highly-sulfated glycosaminoglycan as the former could not be detected by the pharmacopeia test in use, until 2008. This is because OSCS mimics Heparin in the pharmacopeia test and thus could not be detected in the case in question.
Post this criminal event, at present, all over the world more specific pharmacopeia test methods have been adopted for Heparin.

Conclusion:
Let us all ensure that such a tragedy does not get repeated in future due to a breach in the supply chain integrity, anywhere in the world…for the patients’ sake.
In today’s deliberations I am sure this issue will be touched upon to ponder over the possible implementable steps to address such future threats effectively.

By Tapan 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.

Emerging markets and a robust oncology portfolio expected to be the future growth engine of the global pharmaceutical industry… but not without associated pricing pressures.

Posted on October 8, 2009 by Tapan Ray

When the growth rate of the developed markets of the global pharmaceutical industry started slowing down along with the declining R&D productivity, the emerging markets were identified as the new ‘El-Dorado’ by the global players. At the same time, new launch of anti-cancer drugs, more in number, started giving additional thrust to the growth engine of the industry, at least in the developed markets and for the ‘creamy layers’ of the emerging markets of the world. As cancer is being considered as one of the terminal illnesses, the cancer patients from all over the world, would like to have their anti-cancer medications, at any cost, even if it means just marginal prolongation of life with a huge debt burden.According to a recent study done by the Cancer Research, UK, despite significant decline in the overall global pharmaceutical R&D productivity over a period of time, in a relative yardstick, newer anti-cancer drugs have started coming up to the global market with a much greater frequency than ever before. ‘Pharmacy Europe’reports that 18 percent, against a previous estimate of 5 percent of 974 anti-cancer drugs will see the light of the day in the global market place, passing through stringent regulatory requirements. This is happening mainly because of sharper understanding of the basic biology of the disease by the research scientists.Another study reports that between 1995 and 2007 such knowledge has helped the scientists to molecularly target ‘kinase inhibitors’, which are much less toxic and offers much better side effect profile. Well known anti-cancer drug Herceptin of Roche is one of the many outcomes of molecularly targeted research.

Price of Anti-cancer drugs:

Although in the battle against the much dreaded disease cancer, the newer drugs which are now coming to the market, are quite expensive. Even in the developed markets the healthcare providers are feeling the heat of the cost pressure of such medications, which would in turn impact the treatment decisions. Probably because of this reason, to help the oncologists to appropriately discuss the treatment cost of anti-cancer drugs with the patients, the American Society of Clinical Oncology recently has formed a task force for the same.

The issue is now being fiercely debated even in the developed markets of the world:

In the developed markets of the world, for expensive cancer medications, the patients are required to bear the high cost of co-payment, which may run equivalent to thousands of U.S dollars. Many patients are finding it difficult to arrange for such high co-payments.

Thus, it has been reported that even the National Institute of Health and Clinical Excellence (NICE), UK considers some anti-cancer drugs not cost-effective enough for inclusion in the NHS formulary, sparking another set of raging debate.

‘The New England Journal of Medicine’ in one of its recent articles with detail analysis, expressed its concern over sharp increase in the price of anti-cancer medications, specifically.

Is the global pharmaceutical industry in a ‘gold rush’ to get into the oncology business?

Recently ‘The New York Times’ reported some interesting details. One such was on the global sales of anti-cancer drugs. The paper reports that in 1998 only 12 anti-cancer drugs featured within the top 200 drugs, ranked in terms of global value turnover of each. In that year Taxol was the only anti-cancer drug to achieve the blockbuster status with a value turnover of U.S$ 1 billion.

However, in 2008, within top 200 top selling drugs, 23 were for cancer with three in the top ten, clocking a global turnover of over U.S$ 1 billion each. 20 out of 126 drugs recording a sales turnover over U.S$ billion each, were for cancer, impressive commercial growth story of which is far from over now.

How to address this issue?

Experts are now deliberating upon to explore the possibility of creating a ‘comparative effectiveness center’ for anti-cancer drugs. This center will be entrusted with the responsibility to find out the most cost effective and best suited anti-cancer drugs that will be suitable for a particular patient, eliminating the possibility of wasteful expenses, if any, with the new drugs, just because of their newness and some additional features, which may not be relevant to a particular patient. If several drugs are found to be working equally well on a patient, most cost effective medication will be recommended to the particular individual.

Some new anti-cancer medications are of ‘me-too’ type:

‘The Journal of National Cancer Institute’ reports that some high price anti-cancer drugs are almost of ‘me too’ type, which can at best prolong the life of a patient by a few months or even weeks. To give an example the journal indicated, ‘Erbitux for instance, prolongs survival in lung cancer patients by 1.2 months… at a cost of U.S$ 80, 000 for an 18 – week course of treatment.’

However, the manufacturer of the drug later told ‘The Wall Street Journal’ (WSJ), ‘U.S.$ 80,000 is like a sticker price, but the street price is closer to U.S$ 10,000 per month” i.e around U.S$ 45,000 for 18 week course of treatment.

Conclusion:

Even in the developed countries, the heated debate on expensive new drugs, especially, in the oncology segment is brewing up and may assume a significant proportion in not too distant future. India being one of the promising emerging markets for the global pharmaceutical industry, willy nilly will get caught in this debate, possibly with a force multiplier effect, sooner than later.

By Tapan 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.

PILMAN

A Tapan Ray Website

Tag Archives: future

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Would ‘Empowered Patients’ Hold The Key For Rapid Progress of Healthcare In India?

‘e-detailing’: The Future of Pharmaceutical Sales?

Abbott – Piramal deal: the way future is expected to shape up

To avoid “Heparin” like tragedy in future, a robust “supply chain integrity and security” system is of critical importance

Emerging markets and a robust oncology portfolio expected to be the future growth engine of the global pharmaceutical industry… but not without associated pricing pressures.