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AI: The New Elixir for Indian Pharma Brand Success

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India’s pharmaceutical market is a potent brew of complexity and opportunity. For new brands, including those in the branded generics space, success hinges on navigating this labyrinth effectively. Artificial Intelligence (AI) is emerging as the alchemist’s stone, capable of transforming market challenges into competitive advantages. This article outlines how pharma marketers can leverage AI to decode market dynamics, craft compelling brand stories, and deliver personalized experiences that fuel the launch of groundbreaking brands in India:

A. Unlocking Market Potential with AI:

  • Deep Dive into Data: AI’s analytical prowess uncovers hidden market segments, regional nuances, and emerging trends. For instance, by identifying untapped rural opportunities, brands can tailor offerings to resonate deeply with local needs.
  • Precision Patient Profiling: AI creates detailed patient personas, enabling hyper-targeted campaigns across multiple channels. This granularity ensures that every interaction is relevant and impactful.

B. Forging Brand Identity with AI:

  • Brand Alchemy: AI assists in crafting distinct brand personalities that captivate the target audience. By analyzing competitors and consumer sentiment, AI helps position brands effectively. 
  • Visual Brilliance: AI-powered design tools accelerate the creation of visually stunning brand identities, ensuring a cohesive look and feel across all touchpoints.
C. Crafting Compelling Narratives with AI:
  • Content Creation Catalyst: AI can help generate engaging content at scale, optimizing it for different platforms and audiences. This ensures a steady stream of relevant content without compromising quality. 
  • Language Mastery: In a linguistically diverse country like India, AI translates content seamlessly while preserving brand voice, reaching a wider audience.

D. Delivering Personalized Experiences with AI:

  • Predictive Powerhouse: AI anticipates customer needs and behaviors, enabling highly personalized campaigns. By understanding individual preferences, brands can deliver tailored experiences that build loyalty. 
  • Digital Dominance: AI optimizes digital advertising, ensuring maximum ROI. From precise targeting to effective bidding, AI drives results. 
  • Customer Centricity: AI analyzes prescriber data to identify high-value customers, enabling tailored interactions that strengthen relationships. 

E. Measuring and Maximizing Impact with AI:

  • Data-Driven Decisions: AI provides actionable insights into campaign performance, helping marketers optimize strategies in real-time.
  • Attribution Accuracy: By understanding the true impact of marketing channels, AI helps allocate resources effectively. 

Available examples of Global Pharma Giants: Pioneering AI in Marketing:

  • Personalized Precision: AstraZeneca leads the charge with AI-driven campaigns tailored to individual patient needs, delivering highly resonant messages. 
  • Content Creation at Scale: Pfizer’s AI-powered content engine churns out diverse, on-brand materials, boosting efficiency and engagement. 
  • Predictive Powerhouse: Novartis leverages AI to forecast market trends and optimize spending, maximizing ROI with data-driven precision.
  • AI-Driven Customer Care: Johnson & Johnson’s AI-powered chatbots enhance customer satisfaction by providing instant support and freeing up human agents for complex issues. 
  • Influencer Identification: Merck uses AI to discover and engage with key opinion leaders, building strong relationships through social media insights.
  • Market Intelligence Amplified: GSK harnesses AI to analyze vast datasets, uncovering unmet patient needs and informing product development. 
  • Sales Force Optimization: AbbVie employs AI to optimize sales routes and resource allocation, boosting efficiency and productivity. 

These global pharma leaders amply demonstrate the transformative power of AI in marketing. By understanding customers deeply, creating compelling content, and optimizing operations, they are driving sales growth and redefining industry standards. 

India’s Pharma Industry: Early Signs of AI Adoption:

While concrete examples of AI in Indian pharma marketing remain elusive due to competitive sensitivities, the industry’s trajectory suggests significant AI adoption. For instance, 

  • Cipla’s precision marketing efforts likely involve AI-driven targeting of specific patient segments.  
  • Sun Pharma’s pulse on patient sentiment is probably aided by AI-powered social listening.  
  • Dr. Reddy’s might be leveraging AI to predict regional demand patterns.

These are early indications of a broader AI trend in Indian pharma marketing. As the industry matures, more concrete examples are expected to emerge. 

Conclusion:

Against the above backdrop, I reckon, AI is not just a tool; it’s a strategic imperative today for pharma marketers in India. By embracing AI, brands can unlock new growth opportunities, strengthen brand equity, and ultimately, improve patient health outcomes.

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.

 

Unfettered ‘Access To Drug Innovation’ – An Oxymoron?

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The mass paranoia, as it were, over Covid pandemic has now started fading with drug regulators’ ‘emergency approval’ of several Covid -19 vaccines, and its free of cost access to all, generally in most countries. As the endgame of the pandemic, supposedly, depends on the speed of Covid-19 vaccination, the drug industry’s public reputation in the interim period, driven by its rapid response to the crisis, got an unsurprising boost (62%). This was captured by the Harris Poll, released on March 15, 2021.

Interestingly, soon after the high of 62% approval rating, the decline began. It came down to 60% in May and then 56% in June 2021—and now down three more percentage points, according to the Harris Polls that followed. No wonder, why the FiercePharma article of August 24, 2021, carried a caption: ’Pharma’s reputation drops again. Could it foreshadow a return to the bottom?’

Further, in the new normal, especially when customer expectations and requirements from drug companies have significantly changed, MNC Pharma industry still appears to be in the old normal mode in this space. It still, reportedly, ‘believes that the need for innovation must be balanced with the necessity for more accessible medicines, within a robust IP and regulatory environment,’ in India.

The hidden purpose of the same could possibly be, as several industry watchers believe – availing benefits of greater access to one kind innovation, making access to other kind of innovation more difficult. Consequently, two critical points are reemerging, even in the new normal, as follows:

  • Aren’t Indian IP and regulatory ecosystems still conducive enough for MNC pharma players’ access to drug innovation?
  • In the name of greater access to pharma product innovation, are they creating barriers to pharma process innovation, delaying market access to complex generics and Biosimilar drugs – besides systematically eroding consumer confidence on such products?

In this article, under the above backdrop, I shall try to explore why the epithet – ‘access to drug innovation’ is considered an oxymoron – with contemporary examples from around the word, including India.

Aren’t Indian IP and regulatory ecosystems conducive to drug innovation? 

This allegation doesn’t seem to hold much water, as several successful local initiatives in Covid-19 vaccine development will confirm the same. Besides, already marketed Covaxin, developed by Bharat Biotech in collaboration with the Indian Council of Medical Research (ICMR) and Zydus Cadila’s ZyCov-D, there are several others waiting in the wings. These include domestic drug makers like, Hyderabad based Biological-E, Bengaluru-based medical pharma startup’s – Mynvax, and Pune-based Gennova Biopharmaceutical’s m-RNA vaccine candidates. However, only critical difference is – Indian made Covid vaccines are more affordable and accessible to patients, as against those manufactured by MNCs, such as, Pfizer, Moderna and J&J.

If we look back to the old normal, one will also find similar instances of new drug discovery in India, which deliberated in my article of September 02, 2013. Let me give just a couple of examples below:

  • Ranbaxy developed and launched its first homegrown ‘New Drug’ for malaria - Synriam, on April 25, 2012
  • Zydus Cadila announced in June 2013 that the company is ready for launch in India its first New Chemical Entity (NCE) for the treatment of diabetic dyslipidemia –Lipaglyn.

Hence, meager wherewithal for R&D notwithstanding, as compared to the MNCs, Indian pharma players don’t seem to find the country’s IP and regulatory ecosystems not conducive to innovation of affordable new drugs with wider patient access.

Off-patent drugs also involve another type of major innovation:

Discovering an NCE is, unquestionably, a product of drug innovation. Similarly, developing a new – cost-effective, non-infringing manufacturing process to market off-patent drugs, like biosimilars, also involve another type of major innovation. Intriguingly, when the MNC pharma industry talks about ‘access to innovation’, the latter type of innovation isn’t publicly acknowledged and included in their drug innovation spectrum. This practice, reportedly, remains unchanged in their advocacy campaign, even in the new normal.

However, the fact is, the manufacturers of off-patent drugs, such as biosimilars, also need to follow a major innovative process, for which they require access to innovation. This was also captured in an editorial of the newsletter – Biosimilar Development. The deliberation addressed the question - Do biosimilars fit into the innovation paradigm? The editor began by articulating – hardly anyone publicly argues that the development of new manufacturing process of Biosimilar drugs is not an innovation. The industry can’t call them as a copy of an existing innovation, either.

This is also vindicated in the Amgen paper, published on February 11, 2018. It acknowledges, “Unlike small molecule generic drugs, biosimilars are not identical to the reference biologic or to other approved biosimilars of the same reference biologic, because they are developed using different cell lines and undergo different manufacturing and purification processes.” Moreover, biosimilars also carry a different International Nonproprietary Name (INN), because of their molecular differences from the reference drug. This has been specified in the nonproprietary naming Guidance document of the US-FDA of January 2017.

From this perspective, the next question that logically follows: Is process innovation as important as product innovation?

Is process innovation as critical a capability as product innovation?

This question was unambiguously answered by a pharma industry-centric Harvard Business Review(HBR) article – ‘The New Logic of High-Tech R&D’, published in its September–October 1995, issue. The paper emphasized, for the commercial success of a product ‘manufacturing-process innovation is becoming an increasingly critical capability for product innovation.’

When to meet patient-needs ‘access to innovation’ an oxymoron: 

‘Access to innovation’ is an interesting epithet that is often used by many drug companies for meeting unmet needs of patients. However, the same is also often used to create barriers to meeting unmet needs of more patients with cheaper biologic drugs, like Biosimilars, immediately after their basic patent expiry. This is mostly practiced by creating a patent thicket. Hence, drug companies’ advocacy for greater access to innovation is an oxymoron to many.

The same was echoed in another article – ‘How originator companies delay generic medicines,’ published by GaBI. It wrote, such practices delay generic entry and lead to healthcare systems and consumers paying more than they would otherwise have done for medicines. These include the following:

  • Strategic patenting
  • Patent litigation
  • Patent settlements
  • Interventions before national regulatory authorities
  • Lifecycle strategies for follow-on products.

A very recent piece on the subject, published by Fierce Pharma on August 31, 2021, vindicates that the patent life extension through the patent thicket is happening on the ground – denying patients access to cheaper equivalent, especially of off-patent biologic drugs within a reasonable time period. It highlighted:

  • The exclusivity of AbbVie’s Humira, which hit the market in 2002 and generated nearly $20 billion in sales last year was extended by 130 patents.
  • The same company has applied for 165 patents for its another blockbuster Imbruvica. Launched in 2013, Imbruvica has already generated sales of $5.3 billion for AbbVie.

No wonder, why in February 2021, during a Senate Finance Committee hearing, Sen. John Cornyn blasted the company saying:

“I support drug companies recovering a profit based on their research and development of innovative drugs,” Cornyn said. “But at some point, that patent has to end, that the exclusivity has to end, to be able to get it at a much cheaper cost.”

More reports are also available on attempts to erode consumer confidence in Biosimilar drugs, as compared to the originals.

Work for innovation sans eroding consumer confidence in Biosimilars: 

Making affordable new drugs and vaccines available to patients with ‘access to innovation’, deserves inspiration from all concerned. Curiously, even in the new normal, some big companies continue trying to erode consumer confidence in off-patent drugs, especially Biosimilars and complex generics.

For example, an article on Biosimilars moving to the center stage, published in the Pharmaceutical Executive on August 12, 2021, quoted an interesting development in this space. The article highlighted that US legislators are now ‘eyeing measures to deter innovator promotional messages that disparage follow-on competitors.’ This initiative was spurred by US-FDA criticism of an Amgen promotional communication for undermining consumer confidence in Biosimilars to its Neulasta (pegfilgrastim) injection.

On July 14, 2021, US-FDA’s Office of Prescription Drug Promotion (OPDP) sent a letter to Amgen carrying a caption ‘FDA notifies Amgen of misbranding of its biological product, Neulasta, due to false or  misleading promotional communication about its product’s benefit.

The letter, as reported in the above article, criticized the company for making a false claim of greater adverse events with the injection system used by Biosimilars compared to the Amgen product. OPDP advised Amgen and other firms to “carefully evaluate the information presented in promotional materials for reference products, or Biosimilar products” to ensure correct product identification and avoid consumer confusion.

Conclusion:

When the point is, creating a conducive ecosystem to promote access to innovation, it should be patient-centric – always, and, more so in the new normal, considering changing needs and expectations of health care customers.

The innovation of usually pricey new molecular entities, no doubt, meets unmet needs of those who can afford these. Whereas, manufacturing process innovation expands access to the same molecule, particularly when they go off-patent, by making them affordable to a vast majority of the population.

But powerful industry lobby groups continue pressing harder for unfettered ‘access to innovation’ with greater relaxation of the IP and regulatory framework of countries, like India. The situation prompts striking a right balance between encouraging more profit by helping to extend patent exclusivity and encouraging greater access to off-patent cheaper Biosimilars as soon as the basic patent expires.

The bottom-line is, both need to be actively encouraged, even if it requires new laws to discourage practices like, creating patent thickets or undermining the use of generics or Biosimilars, and the likes. The good news is lawmakers have started deliberating on this issue – along with increasing public awareness, which gets reflected in the pharma industry’s current reputation ratings.

Left unresolved soon, such piggyback ride on ‘access to drug innovation’ bandwagon to serve self-serving interests, would continue denying speedy entry of cheaper Biosimilars. From this perspective, it isn’t difficult to fathom, why unfettered access to drug innovation is considered an oxymoron, by many.

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.

Would ‘Complex Generics’ Attract More ‘Authorized Generics’?

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Despite increasing numbers of alleged scams involving generic drugs, both in the United States and also in India, even involving many large generic drug manufacturers, the traditional generic drug market, keeps growing globally. Although, the current growth is in mid-single digit, the market can’t be ignored, either.

That apart, enormous pricing pressure, squeezing bottom line and cutthroat competition, are prompting many companies, including Big Pharma, to craft different strategies to excel in this market. One such involves a shift in business focus from relatively low priced traditional generic drugs to comparatively higher priced complex or specialty generic medicines with a few competitors.

In this emerging situation, a lurking apprehension does surface for many. If the margin is good and the prices of these complex or specialty generics, are much higher than traditional ones, won’t it prompt more ‘Authorized Generics’ coming into the market? Won’t that jeopardize the interest of other generic drug makers? In this article, I shall explore this area, along with its possible consequences. Before doing that, it will be worthwhile to give an overview of the generic market, before recapitulating what are ‘Authorized’ and ‘Complex’ generics.

How lucrative is the generic drugs market now?

According to the latest report by IMARC Group, the global generic drug market size reached US$ 340 Billion in 2018 and is expected to be at US$ 475 Billion by 2024, growing at a CAGR of 5.3 percent during 2019-2024 period.

The key market growth drivers remain, increasing number of product patent expiration, higher prevalence of chronic diseases and different government initiatives to encourage faster generic launch, including the United States. The pace of increase is faster in the emerging markets, like India. However, unlike India, non-branded generic drugs, rather than branded generics, are dominating most the markets.

Although, Central Nervous System (CNS), cardiovascular, dermatology, oncology and respiratory are among the dominant segments in the market, CNS and Cardiovascular segments are the two largest ones in this market. North America holds the largest market share, with more than 88 percent of total prescriptions being written for generic drugs in the U.S., as the report highlights. Despite this scenario, to mitigate huge pricing pressure, cutthroat competition and low margin, many drug players are preparing to move into specialty or complex generics.

The size and growth of complex or specialty generics market: 

The April 2019 report by Research and Markets- “Specialty Generics Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024″ states, the global specialty generics market reached a value of US$ 44.8 Billion in 2018. By 2014, its value is expected to reach US$ 88.9 Billion with a much higher CAGR of 11.9 percent, in 2019-2024 period.

Which drugs would belong to this market?

According to the ‘White Paper’ titled, ‘Complex Generics: Maximizing FDA Approval Prospects’ of Parexel, the following are some examples of complex generics; the list continues to grow as more products are being added in this category every day:

  • Complex Active Pharmaceutical Ingredients (APIs), examples being Enoxaparin, Low Molecular Weight Heparin, Glatiramoids, Iron Carbohydrate Complexes etc.
  • Complex Formulations, examples being Liposomes, abuse-deterrent generics, parenteral microspheres.
  • Complex Route of Delivery, such as topical ointments and locally acting GI drugs.
  • Complex Drug-Device Combinations, such as DPI, MDI, nasal sprays, and transdermal systems.

These types of complex and high-cost generics, besides some off-patent biologic products and even Biosimilar drugs, are often used to treat complex and life-threatening diseases, such as, cancer, Hepatitis C, and many others. Complex generics are expected to eventually own a significant percentage of the total generic drugs market, as a number of big-ticket specialty drug molecules will go off patent in the ensuing years.

The major advantages of complex generics:

Some of the major advantages of the complex generics market over traditional generics are as follows:

  • Complex manufacturing requirements with higher capital costs – thus, higher price, better margin, fewer players, lesser competition.
  • Increasing prevalence of life-threatening diseases, besides, cost containment measures from the government and healthcare providers, are pushing the demand of these drugs.

Indian companies are also entering the fray: 

As the share of specialty medicines in global spending in 2017 increased to 32 percent from 19 percent in 2007, Indian drug players also could sniff the opportunity in this space. Just as Sun Pharma, reportedly shifted its focus from once lucrative traditional generics medicines to specialty drugs, amid continued price erosion in its biggest market – the US, many others are also joining the fray.  The Indian players who are, reportedly, investing in complex generics include, Aurobindo Pharma, Dr. Reddy’s Labs, Cipla, Lupin, Glenmark and Cadila.

More specifically, with the contribution of specialty medicines to overall pharmaceutical spend in the US, Germany, France, Italy, UK, and Spain – almost doubling over the last 10 years, this trend is likely to gather momentum, as the above report indicated. Accordingly, commensurate strategic actions aimed at this segment by many companies, both global and local, are clearly now visible.

Some strategic initiatives:

In preparation of a major shift in the strategic focus on complex generics, key examples of some of the important initiatives of different companies will include the following:

  • Big generic players wanted to be bigger in the global market through M&A, such as Teva acquired Allergan’s generic business, Mylan bought Abbott Laboratories’ generics businessAbbott Laboratories’ non-U.S. developed markets specialty and branded generics business. Similarly, Endo International acquired Par Pharmaceuticals. In India the mega deal of Sun Pharma acquiring Ranbaxy in 2015. In the same year, Lupin acquired New Jersey-based generic drugs firm GAVIS to boost its presence in the US.
  • Novartis sold its 300 ‘troubled’ U.S. generics to India’s Aurobindo for US$ 1B, as the entire generics industry faced unrelenting pricing pressure in the U.S.’ Whereas, Novartis’ wants to focus higher-margin assets like Biosimilars and complex generics.
  • Pfizer is set to combine its off-patent drug unit Upjohn with Mylan, to create a new business with its own off-patent branded and generic drug lines. The merger will bring together Pfizer medications such as Lipitor and Viagra with Mylan’s EpiPen, used to halt life-threatening allergic reactions.
  • Owing to margin pressure and other reasons, some of the Indian drug players also decided to enter into higher margin complex generics space, pursuing both organic and inorganic routes. There are several such examples, such as: In January 2017, Zydus Cadila announced acquisition of Sentynl Therapeutics Inc., a US based specialty pharma company specialized in marketing of products in the pain management segment. And in October 2017, Lupin acquired US-based Symbiomix Therapeutics LLC to expand Lupin’s US women’s health specialty business in the highly complementary gynecological infection sector.

Any flip side of complex generics business for the Indian players? 

Although, driven by mainly higher profit margins and tough entry barriers, many generic players with the requisite wherewithal, find complex generics business more attractive to focus on, there’s a flip side to it, as well. This is, post patent expiry, innovator companies may be encouraged to introduce more ‘Authorized Generics’, creating a tough competitive environment for other generic players to compete with them. This brings us to the question of what are ‘Authorized Generics?’

Authorized Generics:

According to the USFDA, the term ‘Authorized generic’ is used to describe an approved brand name drug that is marketed without any brand name on its label. It is exactly the same product as the branded one, and may also be marketed by another company with the innovator company’s permission. Generally, an ‘Authorized Generic’ is launched at a lower price than the brand name drug.

Moreover, ‘Authorized Generics’, despite being the generic version of patented molecule, are mostly marketed by the patent holders themselves, both pre and post patent expiry. While a separate NDA is not required for marketing an ‘Authorized Generic’, USFDA requires that the NDA holder notify the FDA, if it markets an ‘Authorized Generic. The NDA holder may market both the ‘Authorized Generic’ and the brand-name product at the same time. Interestingly, the USFDA has approved around 1215 ‘Authorized Generics’ as of September 30, 2019.

Advantages of ‘Authorized Generics’ over ‘Traditional Generics’:

The key advantage of ‘Authorized Generics’ over traditional generic drugs is, while traditional generic drugs can be marketed only after patent expiry of the innovator drug, ‘Authorized Generics’ can be marketed even before patent expiry. In other words, innovator companies or their authorized collaborators can make lower priced ‘Authorized Generic’ versions available on their behalf, under their own new drug application (NDA). ‘Authorized Generics’ may be made available to patients even before patent expiry to out-maneuver the conventional generic drug makers, in advance, on price, quality and doctors’ confidence in the original drug.

According to several reports, over the past years, ‘many innovator drugs companies have been launching Authorized Generics, simultaneously with the first Abbreviated New Drug Applications (ANDA) filer’s launch of its generic drug product.’ However, the question remains how do the stakeholders perceive the ‘Authorized Generics’?

Perception of ‘Authorized Generics’:

Studies are available analyzing the impact of ‘Authorized Generics’ on the pharma market and also on the stakeholders. In this article, I shall refer to a comprehensive research study, titled ‘Authorized Generics: Effect on Pharmaceutical Market,’ published in the International Journal of Novel Trends in Pharmaceutical Sciences (IJNPTS), on February 29, 2012, which came out with the some notable findings.

Generally, there isn’t any doubt, either on the fact that ‘Authorized Generics’ provide the identical experience that the patient receives from the brand drug but at a lower price. Nor is there any question over greater confidence of doctors while prescribing these drugs. However, the researchers wrapped up the discussion by stating: It is difficult to conclude that the ‘Authorized Generics’ practice should be continued or banned. Though Indian pharmaceutical companies are dealing with generic drugs – 42 percent of the respondents were in favor of ‘Authorized Generics’ practice, whereas 58 percent opposed it. Thus, the overall perception of ‘Authorized Generics’, appears to be a mixed bag.

Conclusion:

There are free flowing arguments both in favor and against the ‘Authorized Generics.’ The article titled, ‘Drugmakers Master Rolling Out Their Own Generics to Stifle Competition,’ published in the Kaiser Health News (KHN) on August 05, 2019, captures it well.

It quoted the spokeswoman for the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful pharma lobby group saying, an Authorized Generic drug “reduces prices and results in significant cost savings.” Whereas the critics say, “Authorized Generics hurt long-term competition and often perversely increase costs, even in the short term.”

The detractors further expressed, ‘Authorized Generics’ don’t just steal sales from existing generic rivals, they erode incentives to make generic drugs. A professor at the University of California, Hastings College of the Law, who studies pharma was also quoted in this article saying, this practice can “stave off generic competition and make sure that generics can’t get much of a foothold when they do get to market.” Adding further he said: “That’s the game. And drug companies have become masters at this.”

As the Kaiser Health News highlighted, Eli Lilly announced launch of the ‘Authorized Generic’ version of Humalog insulin in March 2019 for US$137 a vial, at half the price of its brand name version costing US$237. This was reasoned by the company as a considerate move to address the need of those patients who can’t afford the price of the brand – Humalog. Curiously, even some analysts believe that ‘Authorized Generics’ may help explain why relatively few true generics are reaching the market despite a surge in approvals, especially in the United States.

Against the above backdrop, the drug policy makers need to ponder, would ‘complex generics’ of different companies face greater challenges from ‘Authorized Generics,’ playing a spoilsport for the rest in this ball game?

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.

 

 

Protect Generic Drug Margin Moving Up The Value Chain

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As an innovative drug molecule goes off-patent, it paves the way for market-entry of cheaper generic equivalents of the same. It benefits not just the patients, but all generic drug players awaiting this opportunity. But, in case of even those generic drugs enjoying 180-day exclusivity in the United States, the price erosion would still be significant, at least, 20 percent to 30 percent. Post 180-day exclusivity, intense competition between different formulations of the same molecule can bring the price down by even 85 percent or more, as compared to the original one.

While looking at the world’s largest pharma market, one sees an interesting scenario unfolding in this area. The Generic Access and Savings Report in the United States 2018 released on July 10, 2018 by the Association for Accessible Medicines, captures it well. Some of the key findings of which on generic drugs are as follows:

  • In 2017, generic medicines account for nine out of every 10 prescriptions filled in the United States.
  • Patients fail to fill their prescriptions for brand-name drugs at a rate 2-3 times higher than for generics.
  • 93 percent of generic prescriptions are filled at $20 or less.
  • Average patient copay for a generic prescription is $6.06.
  • Generic medicines generated a total of $265 billion in savings.

That’s a good story for the patients in general, and specifically for those who are in the United States. That said, there is a business aspect of this story, as well. In this article, I shall focus on that, venturing into the way forward. However, before proceeding further, for the understanding of all, let me briefly explain, what is this 180-day exclusivity period as described by the FDA in the United States (USFDA).

180-day exclusivity period for generic drug:

USFDA may grant some exclusivity to Abbreviated New Drug Applications (ANDAs) for generic drugs. For this purpose, under the Drug Price Competition and Patent Term Restoration Act, or the Hatch-Waxman Act, a company can seek approval from the FDA to market a generic drug before the expiration of a patent relating to the brand name drug upon which the generic is based. The first company to submit an ANDA with the FDA has the exclusive right to market the generic drug for 180 days. This is called 180-day exclusivity and:

  • Provides an incentive of 180 days of market exclusivity to the “first” generic applicant who challenges a listed patent by filing a paragraph IV certification and running the risk of having to defend a patent infringement suit.
  • Begins either from the date the sponsor begins commercial marketing of the generic drug product, or from the date of a court decision finding the patent invalid, unenforceable or not infringed, whichever is first.
  • In some circumstances, an applicant who obtains 180-day exclusivity may be the sole marketer of a generic competitor to the innovator product for 180 days
  • FDA does not send letters to the sponsor indicating the grant of exclusivity. The Orange Book is the official vehicle for dissemination of this information.

It is worth noting that some drugs have both patent and exclusivity protections while others have just one or none. Patents and exclusivity may or may not run concurrently and may or may not encompass the same claims.

Increasing pressure on margin:

Nevertheless, after 180-day exclusivity period or as in most other cases, cut-throat price competition starts among product proliferation. On the other hand, even after patent expiry, the prices of original brand name drugs keep attracting a substantial premium. According to another study: “Brand-name drugs have been shown to be priced 20 percent higher than generic drugs in the Netherlands, 30 percent higher in Germany, 50 percent higher in Canada, 50–90 percent higher in the US, and 80 percent higher in the UK.”

In today’s environment, generic drugs are under severe cost pressure also because of direct government interventions in many large markets, such as the United States. A couple of other factors also play a major role in squeezing the generic drug margin in several countries, such as:

  • Large wholesalers while fighting with each other to get the pharmacy business, often exert tough pressure on generic manufacturers to lower the price.
  • Other bulk buyers also do the same making the margin wafer-thin.

Its cumulative impact leads to commoditization of generic drugs.

Commoditization of generic drugs:

As is known to many, for a commodity there are many suppliers mostly without any tangible differentiating features and benefits. The same thing happens to generic medicines of the same molecule without any worthwhile difference in efficacy, quality and safety standards. Thus, the price of a generic formulation generally includes its total cost, plus a margin, and depends market demand and supply for products outside any price control. Intense competition within many players with more supply of the same molecule, often squeezes the margin out to a dangerous level.

This scenario was well captured in an 2018 article published in the Journal of Bioequivalence & Bioavailability (volume 10(3): 48-49 (2018) –48). It reiterated, cutthroat competition and public pressure pose challenges for ethical and generic pharma companies. 7 to 10 percent annual price erosion, increased competition coupled with other pressure push margins lower leading to decreased profitability.

Major costs did not change much:

Moreover, the major fixed costs involving raw materials, packing materials, labor and conversion expenditure did not change commensurately. The manufacturing process and yield improvement measures did help. But up to a certain point and not beyond that, to keep the quality of finished formulations within the accepted regulatory requirements of the respective countries, such as the United States.

The trend prevails in 2018: 

The above trend prevails even in 2018, in continuation with the previous year. One may recall that in August 2017, due to serious price erosion, several billion dollars in market value were wiped out for some top generic companies. These names include India’s homegrown Dr. Reddy’s Lab., besides Teva and Mylan.

The article titled, ‘Opportunities and Obstacles for Generic Drugs,’ published in PharmTechalso emphasized: ‘Continued pressure on generic-drug prices may reduce product development and limit manufacturing in the US. Numerous state officials have filed lawsuits against generic-drug makers for alleged price-fixing, and debate continues over brand vs. generic product labeling to warn consumers about safety issues. All these trends will shape generic-drug production and costs in the coming months.’

In this situation, the ability of the generic companies to find ways to increase their margin will be the key to success in this business, if not for a long-term survival too.

Ways to achieve it:

One of the novel ways to achieve this goal is entry into ‘Complex Generics’ business.

According to Market Realist – an independent investment research organization, ‘Complex Generics’ are attractive due to high margins. Unlike, commoditized generic formulations, ‘complex generics’ are not easy to manufacture and are generally used in specialty care, namely for treating serious chronic diseases or several life-threatening ailments, such as cancer, HIV or hepatitis C. To some extent complex generics create a market entry barrier for many generic players, due to higher manufacturing cost and complex processes involved in developing this genre of drugs.Complex generics may be classified into several categories, such as:

  • Complex Active Ingredients: like, peptides
  • Complex Formulations: like, liposomes, iron colloids
  • Complex Delivery System: like, locally acting drugs
  • Complex Drug-Device Combinations: like respiratory metered dose inhalers, transdermal system or a medicated adhesive patch
  • Biosimilar drugs

On October 09, 2018, a statement from USFDA Commissioner Scott Gottlieb highlighted a new effort to advance the development of generic copies of complex drugs to improve patient access to medicines. Gottlieb said, complex generics “aredrugs that, by nature of their formulation or delivery systems for example, are harder to ‘genericize’ under our traditional approaches. As a result, these drugs often face less competition. Today, we’re announcing a series of guidance documents that will advance the development of generic transdermal and topical delivery systems (TDS).”

This is an interesting development in the world’s largest pharma market.

Lucrative prices of complex generics:

Prices of complex generics are much higher than conventional generic drugs. According to Market Realist a complex generic could cost around US$ 6,000 per month to patients, but would still remain way below the cost of related original brand. Hence, it is a win-win situation – both for patients and also the generic drug manufacturers. Additionally, alongside benefiting patients in terms of cost, complex generics show potential to fetch higher profitability with a reasonable product differentiation.

The ball has started rolling:

It happened in a big way this year, when due to intense price pressure on generics, Sandoz division of Novartis took a major step. On September 6, 2018 - Novartis announced that it has agreed to sell selected portions of its Sandoz US portfolio, specifically the Sandoz US dermatology business and generic US oral solid portfolio, to Aurobindo Pharma USA Inc. It also said, ‘this transaction supports the Sandoz strategy of focusing on complex-generics, value-added medicines and biosimilars to achieve sustainable and profitable growth in the US over the long-term.’

Indian generic drug manufacturers have also sniffed this opportunity. Several Indian players, such as Sun Pharma, Cipla, Lupin, Reliance Life Science, Dr. Reddy’s Laboratories, Glenmark, Biocon and Aurobindo Pharma, to name a few, have made forays into complex generics, including biosimilars. All put together Indian companies have filed around 50 ANDAs in the United States. This number is good, but may not guarantee success for all the applicants. Only the quality of these ANDAs will determine how soon, or how late, or how expensive would be the process of getting marketing approval for complex generics in the United States.

Conclusion:

As ‘The Lancet Oncology’ editorial of June 2015 noted: ‘In recent years, generics manufacturers have increased investment in the development of complex generics.” I reckon, this won’t include a large number of drug exporters from India – not just yet.

The development process of complex generics isn’t everybody’s cup of tea. Thus, venturing into this area by any generic player of all sizes and scale, would call for greater commitment from the company concerned. This path is arduous as compared to conventional generics. If not navigated properly, cost may also be high in certain circumstances. For example, if and when the regulator asks more elaborate trial, or repeat trials, or even the marketing approval process itself could be tough to conform with. That said, complex generics are expected to eventually contribute a significant percentage of the generic market, as their approval challenges are overcome.

Be that as it may, to improve, if not for protecting the profitability of the generic drug business, transacted especially in the developed world, there doesn’t seem to be much option left now, but to move up the value chain.

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.

 

Why MNC Pharma Still Moans Over Indian IP Ecosystem?

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Improving patient access to expensive drugs, paving the way for entry of their cheaper generic equivalents, post patent expiry, and avoiding evergreening, is assuming priority a priority focus area in many countries. The United States is no exception, in this area. The Keynote Address of Scott Gottlieb, Commissioner of Food and Drug at the 2018 Food and Drug Law Institute Annual Conference inWashington, DC by, on May 3, 2018, confirms this. Where, in sharp contrast with what the MNC Pharma players and their trade associations propagated, the US-FDA commissioner himself admitted by saying, “Let’s face it. Right now, we don’t have a truly free market when it comes to drug pricing, and in too many cases, that’s driving prices to unaffordable levels for some patients.”

Does US talk differently outside the country?

At least, it appears so to many. For example, in April 2018, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report. In this exercise, the USPTO names the country’s trading partners for not adequately protecting and enforcing Intellectual Property (IP) rights or otherwise deny market access to U.S. innovators that rely on the protection of their IP rights.’ Accordingly, U.S. trading partners are asked to address IP-related challenges, with a special focus on the countries identified on the Watch List (WL) and Priority Watch List (PWL).

In 2018, just as the past years, India continues to feature, along with 11 other countries, on the PWL, for the so called longstanding challenges in its IP framework and lack of sufficient measurable improvements that have negatively affected U.S. right holders over the past year.

From Patient access to affordable drugs to Market access for Expensive Drugs: 

Curiously, the USTR Report highlights its concerns not just related to IP, but also on market access barriers for patented drugs and medical devices, irrespective of a country’s socioeconomic compulsion. Nevertheless, comparing it to what the US-FDA Commissioner articulated above, one gets an impression, while the US priority is improving patient access to affordable drugs for Americans, it changes to supporting MNC pharma to improve market access for expensive patented drugs, outside its shores.

Insisting others to improve global IP Index while the same for the US slides:

In the context of the 2018 report, the U.S. Trade Representative, reportedly said, “the ideas and creativity of American entrepreneurs’ fuel economic growth and employ millions of hardworking Americans.” However, on a closer look at the U.S. Chamber of Commerce’s annual Global IP Index for 2018, a contrasting fact surfaces, quite clearly. It shows, America, which once was at the very top of the overall IP Index score, is no longer so – in 2018, the world rank of the US in offering patent protection to innovators, dropped to 12thposition from its 10thglobal ranking in 2017. Does it mean, what the US is asking its trading partners to follow, it is unable to hold its own ground against similar parameters, any longer.

Should IP laws ignore country’s socioeconomic reality? 

MNC Pharma often articulated, it doesn’t generally fall within its areas of concern, and is the Government responsibility. However, an affirmative answer, echoes from many independent sources on this issue. No wonder, some astute and credible voices, such as an article titled “U.S. IP Policy Spins Out of Control in the 2018 Special 301 Report”, published by the Electronic Frontier Foundation on May 01, 2018, termed 2018 Special 301 Report – ‘A Tired, Repetitive Report.’ It reiterates in no ambiguous term: ‘The report maintains the line that there is only one adequate and effective level of IP protection and enforcement that every country should adhere to, regardless of its social and economic circumstances or its international legal obligations.

The ever-expanding MNC Pharma list of concerns on Indian IP laws:

The areas of MNC Pharma concern, related to Indian IP laws, continues to grow even in 2018. The letter dated February 8, 2018 of the Intellectual Property Owners Association, Washington, DC to the USTR, makes these areas rather clear. I shall quote below some major pharma related ones, from this ever-expanding list:

  • Additional Patentability Criteria – section 3 (d): The law makes it difficult for them to secure patent protection for certain types of pharma inventions.
  • TADF (Technology Acquisition and Development Fund)is empowered to request Compulsory Licensing (CL) from the Government:Section 4.4 of India’s National Manufacturing Policy discusses the use of CL to help domestic companies access the latest patented green technology.This helps in situations when a patent holder is unwilling to license, either at all or “at reasonable rates,” or when an invention is not being “worked” within India.
  • India’s National Competition Policyrequires IP owners to grant access to “essential facilities” on “agreed and nondiscriminatory terms” without reservation. They are not comfortable with it.
  • Regulatory Data Protection: The Indian Regulatory Authority relies on test data submitted by originators to another country when granting marketing approval to follow-on pharma products. It discourages them to develop new medicines that could meet unmet medical needs.
  • Requirement of local working of patents: The Controller of Patents is empowered to require patent holders and any licensees to provide details on how the invention is being worked in India. Statements of the Working, (Form 27),must be provided annually.Failure to provide the requested information is punishable by fine or imprisonment. It makes pharma patent holders facing the risk of CL, if they fail to “work” their inventions in India within three years of the respective patent grant.
  • Disclosure of Foreign Filings: Section 8 of India’s Patent Act requires disclosure and regular updates on foreign applications that are substantially “the same or substantially the same invention.” They feel it is irrelevant today.

Pharma MNCs’ self-serving tirade is insensitive to Indian patient interest:

Continuing its tirade against some developed and developing countries, such as India, the US drug manufacturers lobby group – Pharmaceutical Research and Manufacturers of America (PhRMA) has urged the office of the US Trade Representative (USTR) to take immediate action to address serious market access and intellectual property (IP) barriers in 19 overseas markets, including India, reports reported The Pharma Letter on February 28, 2018. It will be interesting to watch and note the level active and passive participation of India based stakeholders of this powerful US lobby group, as well.

Government of India holds its ground… but the saga continues:

India Government’s stand in this regard, including 2018 Special 301 Report, has been well articulated in its report released on January 24, 2018, titled “Intellectual Property Rights Regime in India – An Overview”, released by the Department of Industrial Policy and Promotion Ministry of Commerce and Industry (DIPP). The paper also includes asummary of some of the main recommendations, as captured in the September 2016 Report of the High-Level Panel on Access to Medicines, constituted by the Secretary-General Ban Ki-Moon of the United Nations in November 2015.  Some of these observations are as follows:

  • WTO members must make full use of the TRIPS flexibilities as confirmed by the Doha Declaration to promote access to health technologies when necessary.
  • WTO members should make full use of the policy space available in Article 27 of the TRIPS agreement by adopting and applying rigorous definitions of invention and patentability that are in the interests of public health of the country and its inhabitants. This includes amending laws to curtail the evergreening of patents and awarding patents only when genuine innovation has occurred.
  • Governments should adopt and implement legislation that facilitates the issuance of Compulsory Licenses (CL). The use of CL should be based on the provisions found in the Doha Declaration and the grounds for the issuance left to the discretion of the governments.
  • WTO members should revise the paragraph 6 decision in order to find a solution that enables a swift and expedient export of pharmaceutical products produced under compulsory license.
  • Governments and the private sector must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO Members to use TRIPS flexibilities.
  • Governments engaged in bilateral and regional trade and investment treaties should ensure that these agreements do not include provisions that interfere with their obligations to fulfill the rights to health.

The DIPP report includes two important quotes, among several others, as follows:

Joseph Stiglitz, Nobel Prize for Economics (2001) – an American Citizen:

-       “If patent rights are too strong and maintained for too long, they prevent access to knowledge, the most important input in the innovation process. In the US, there is growing recognition that the balance has been too far tilted towards patent protection in general (not just in medicine).”

-       “Greater IP protection for medicines would, we fear, limit access to life-saving drugs and seriously undermine the very capable indigenous generics industry that has been critical for people’s well-being in not only India but other developing countries as well”.

Bernie Sanders, an American Citizen and Senior U.S. Senator:

-      “Access to health care is a human right, and that includes access to safe and affordable prescription drugs. It is time to enact prescription drug policies that work for everyone, not just the CEOs of the pharmaceutical industry.”

-      “Healthcare must be recognized as a right, not a privilege. Every man, woman and child in our country should be able to access the health care they need regardless of their income.”

Conclusion:

Why is then this orchestrated moaning and accompanying pressure for making Indian IP laws more stringent, which apparently continues under the façade of ‘innovation at risk’, which isn’t so – in any case. But, cleverly marketed high priced ‘me too’ drugs with molecular tweaking do impact patient access. So is the practice of delaying off-patent generic drugs entry, surreptitiously. Instead, why not encourage Voluntary Licensing (VL) of patented drugs against a mutually agreed fee, for achieving greater market access to the developing countries, like India?

Whatever intense advocacy is done by the vested interests to change Indian patent laws in favor of MNC pharma, the intense efforts so far, I reckon, have been akin to running on a treadmill – without moving an inch from where they were, since and even prior to 2005. The moaning of MNC Pharma on the Indian IP ecosystem, as I see it, will continue, as no Indian Government will wish to take any risk in this area. It appears irreversible and is likely to remain so, for a long time to come. The time demands from all concerned to be part of the solution, and not continue to be a part of the problem, especially by trying to tamper with the IP ecosystem of the country.

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.

Why Branded Generics Promise High Quality For Patients?

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Why most branded generic drugs don’t carry any stigma of quality, even when these are manufactured by small companies? The corollary to it is, why non-branded generics always carry a general stigma of inferior quality, even when produced by large Indian pharma companies?

While pondering over the answers to these questions, several other related facts also float at the top of mind, simultaneously, such as:

1. Just as many non-branded generics don’t go through the regular drug quality scrutiny of the regulators, branded generics are no different in this regard.

2. A large number of both branded and non-branded generics gets manufacturing approval by various State Drug Authorities.

3. The process of regulatory approval is exactly the same for both branded and non-branded generics. Even for branded generics regulatory approvals come only in the generic names and not with the brand names.

4. One can find hundreds of varieties of both branded and non-branded generics of the same molecules or of similar fixed dose combinations in the market.

5. Reports of substandard drugs of both non-branded and branded generics are also not significantly different.

6. Legal measures of reasonably stringent punishment in the country are no different between branded and non-branded generics.

This list is not exhaustive. Nevertheless, in this scenario, it is intriguing to fathom the reason of so much of contempt for non-branded generics within the industry, supported by a section of the media. This disgust gets invariably well-displayed as and when any serious discussion revolves around non-branded cheaper generic drug prescriptions in India.

Is it just a perception or based on solid facts?

This is a million-dollar question, but the optics is interesting. This also gets reflected in the recent media report on February 26, 2018. It writes, ‘The central government’s National Health Protection Scheme (NHPS) is going to put all of its focus on quality generic medicines, and not just the branded generic medicines, said Union Chemical and Fertilizer Minister Ananth Kumar while addressing a closed-door session with chief executives (CEOs) of pharmaceutical companies in Bengaluru on February 15.”

Curiously, in his statement the Minister also used the term ‘Quality’ only against non-branded generics and not against branded generics. Does it mean anything? If it does, is that just a perception or based on solid facts?

In this article, I shall try to assess why is this generally negative perception against cheaper non-branded generics gaining strength among many of us?

A general impression:  

An often-repeated fascinating argument is, branding of a generic drug is important as it will ensure high product quality. This reasoning persists, regardless of the fact that the Drug Controller General of India (DCGI) often makes public announcements to the contrary, as happened even recently.

Risks of NSQ drugs don’t lie solely on non-branded generics:

According to the ‘National Drug Survey, 2014-16’, conducted in association with the National Institute of Biologicals, out of the 47,012 samples tested from the country, 13 samples (0.0245 percent) were ‘Spurious’ and 1,850 samples (3.16 percent) were found ‘Not of Standard Quality (NSQ)’.

The data on 1,850 NSQ samples showed that these were from 569 manufacturing units. Of these, 10 percent of manufacturing units were responsible for about 50 percent of NSQ samples. Further, one third of total NSQ samples were from 22 manufacturing units.

Further, quoting the survey carried out through the National Institute of Biologicals, a September 04, 2017 media report also articulated: ‘During its recent survey, the drug regulator found well-known drug manufacturers failing quality tests. In the survey, samples tested from top drug companies were found not to be of standard quality.’

The names of some of these large drug manufacturers in India, including the multinationals, along with their smaller counterparts, appeared in the Public Notice of July 21, 2017 of the Central Drugs Standard Control Organization (CDSCO) of India. Thus, the risks of NSQ medicines can’t possibly be attributed solely to the small time non-branded generic drug manufacturers. This public notice is expected to draw attention of many stakeholders.

More facts:

On April 22, 2017, the Central Drugs Standard Control Organization (CDSCO) reported that popular branded drugs like D-Cold Total, Cetrizine, Combiflam, Panza-40 tablets, Ibuprofen, and antibiotics with ciprofloxacin, ofloxacin, Amoxycillin, Ciprofloxacin have tested sub-standard. Before this, media reports of July 8, 2016 highlighted, “The DCGI has again found Sanofi’s popular painkiller drug, Combiflam, of sub-standard quality, in its latest test last month. It had found the same defect in the medicine in February and April, too.’

Conclusion:

Considering these facts, it is difficult to comprehend why branded generic drugs, irrespective of who manufacturers, will be of high quality perceptually – always. Conversely, non-branded generic drugs, even when manufactured by a reputed manufacturer, say for example – Cipla, are perceptually no good for patients, in terms of quality standard.

Nevertheless, the hard facts indicate, quality is a general issue both for branded and non-branded generic drugs in India, and not particularly for the later one.

This brings me back to where I started from: Do Branded Generics Promise High Quality for Patients? To find the right answer to this question, one should look at the scientific data on the same – sans any perception. Otherwise, it becomes ‘your view’ versus ‘my view’ sort of a mindless, though a highly passionate debate.

I shall refrain from being judgmental in this area. The readers may wish to ponder over it, seriously, and arrive at a well-considered inference on the very basis of this discourse – from the patients’ perspective.

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.

Marketing Practices: Why Pharma Does What It Does?

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It started way back – spanning across many developed countries of the world. However, probably for the first time in the last five years, an international media group focused on this issue thriving in India, with so much detail.

Reuters reported it with a headline “In India, gift-giving drives drug makers’ marketing.” The report was supported by a detailed description of the relevant events, with ‘naming and shaming’. It drew the attention of some, apparently including the Department of Pharmaceuticals (DoP), but escaped the attention of many, and finally – got faded away with time, without any reported official investigation.

In this article, I shall revisit this subject against the backdrop of draft pharma policy 2017. My focus will be on the current marketing practices, with the moot question ‘why pharma does what it does’ occupying the center stage of this piece.

Bothering many across the world:

Pharma marketing practices wear different hues and shades. Many of these are contentious, and often perceived as gross ‘malpractices’. Nevertheless, across the world, these have mostly become an integral part of pharma business. Many law-enforcing authorities, including in the US, Europe, Japan and even China, have started taking tough penal action against those transgressions. Interestingly, the draft pharma policy 2017 intends to take this raging bull by its horn, with a multi-pronged approach, as I see it.

It’s a different debate, though, whether the policy makers should bring the mandatory Uniform Code of Pharmaceutical Marketing Practices (UCPMP) under the Essential Commodities Act, or the Drugs and Cosmetics Act of India. Let’s wait and see what exactly transpires in scripting the final version of the new National Pharma Policy to address this issue, comprehensively.

The net impact of the fast evolving ‘newer norms’ of pharma ‘marketing’ practices, has been bothering a large section of the society, including the Governments, for quite some time. Consequently, many top-quality research studies are now being carried out to ascertain the magnitude of this problem. The top ranked pharma market in the world – the United States (US) are leading the way with such analysis. However, I haven’t come across similar India-specific analytical reports, just yet, probably due to lack of enough credible data sources.

Four recent studies:

Several interesting studies supported by a robust database have been carried out in the US during 2016 and 2017 to ascertain whether any direct relationship exists between payments in various forms made to the doctors by the pharmaceutical companies and physicians’ prescribing various drugs in brand names. For better understanding of this issue, I am quoting below, as examples, the gist of just four of such studies:

One of these studies conducted by ProPublica was published in March 2016. It found that physicians in five common medical specialties who accepted, at least one industry payment were more likely to prescribe higher rates of brand-name drugs than physicians who did not receive any payments. More interestingly, the doctors receiving larger payments had a higher brand-name prescribing rate, on an average. Additionally, the type of payment also made a difference: those who received meals alone from companies had a higher rate of brand-name prescribing than physicians receiving no payments, and those who accepted speaking payments had a higher rate of the same than those drawing other types of payments.

The details of the second study published in PLOS on May 16, 2016 states, “While distribution and amount of payments differed widely across medical specialties, for each of the 12 specialties examined the receipt of payments was associated with greater prescribing costs per patient, and greater proportion of branded medication prescribing. We cannot infer a causal relationship, but interventions aimed at those physicians receiving the most payments may present an opportunity to address prescribing costs in the US.”

The third example of such investigative study appeared in the Journal of American Medical Association (JAMA) on August 2016. This cross-sectional analysis, which included 279,669 physicians found that “physicians who received a single meal promoting the drug of interest, with a mean value of less than $20, had significantly higher rates of prescribing rosuvastatin as compared with other statins; nebivolol as compared with other β-blockers; olmesartan as compared with other angiotensin-converting-enzyme inhibitors and angiotensin-receptor blockers; and desvenlafaxine as compared with other selective serotonin and serotonin-norepinephrine reuptake inhibitors.”

This study also concluded that “Receipt of industry-sponsored meals was associated with an increased rate of prescribing the brand-name medication that was being promoted. The findings represent an association, not a cause-and-effect relationship.”

And the fourth analysis on the same subject featuring in the British Medical Journal (BMJ) of 18 August 2016 concluded that “Payments by the manufacturers of pharmaceuticals to physicians were associated with greater regional prescribing of marketed drugs among Medicare Part D beneficiaries. Payments to specialists and payments for speaker and consulting fees were predominantly associated with greater regional prescribing of marketed drugs than payments to non-specialists or payments for food and beverages, gifts, or educational materials.”

Exceptional steps by a few global CEOs – would the rest follow through?

As this juggernaut continues to move unrelenting, a few global CEOs have been taking some exceptional steps in this regard, e.g.:

- In December 2013, Sir Andrew Witty –  erstwhile global CEO of  GlaxoSmithKline tossed out the ‘Big Pharma marketing playbook’. He announced, no longer will his company pay doctors to promote its drugs or shell out bonuses to sales reps based on their ability to boost prescription numbers.

- Around September 2015, Brent Saunders – the Global CEO of Allergan was the first major drug company chief to explicitly renounce egregious price increases. Outlining his company’s “social contract with patients,” he vowed that Allergan would:

  • Limit price increases to single-digit percentages, “slightly above the current annual rate of inflation,” net of rebates and discounts
  • Limit price increases to once per year
  • Forego price increases in the run-up to patent expiration, except in the case of corresponding cost increases.

- In October 2016, Joseph Jimenez – the current global CEO of Novartis said, “We tell people, we don’t want you to deliver at any cost. We want you to deliver, but we want you to deliver in the right way,”

It’s probably a different matter, though, that one of these CEOs has already stepped down, another will do so early 2018, and third iconoclast is still in the saddle. They all are still relatively young, as compared to several of their counterparts.

These are some of the laudable steps taken by a few CEOs for their respective global operations. However, the moot question remains: would rest of the Big Pharma constituents come on board, and successfully follow these initiatives through?

That said, the overall scenario in this area, both in India and abroad, continues to remain mostly unchanged.

Why pharma does what is does?

This may not be akin to a million-dollar question, as its right answer is no-brainer – to generate more, and even more prescription demand for the respective focused brands of the concerned pharma companies. In a scenario, as we have seen above, when money can buy prescriptions with relative ease, and more money buys more prescriptions, how do the prescribers differentiate between different brands of the same molecules or combination of molecules, for greater support?

As evident from various available reports, this kind of intangible product differentiation of dubious nature, doesn’t necessarily have a linear relationship with the quantum of money spent for this purpose. Many believe, it is also intimately related to the nature or kind of various ‘gratis’ extended, some of which are highly contentious. Illustratively, how exotic is the venue of so called ‘Continuing Medical Education (CME)’ event, whether located in India or beyond its shores, bundled with the quality of comfort provided by the event managers, or even whether the spouses can also join the doctors for a few days of a relaxed trip with fabulous sight-seeing arrangements.

Regardless of many pharma players’ terming these events as purely educational in nature, lots of questions in this regard – accompanied by proof, have reportedly been raised on the floor of the Indian Parliament, as well, cutting across virtually all political party lines.

Conclusion:

Should anyone tag the term ‘marketing’ against any such pharma business practices, or even remotely accept these as integral parts of any ‘branding exercise’? For better understanding of my readers, I had explained what this buzzword – ‘branding’ really means in the marketing vocabulary.

Be that as it may, where from the pharma companies recover the huge cost of such vexed business practices? Who ultimately pays for these – and, of course, why? So far, in India, the basic reasoning for the same used to be – branded generics provide significantly better and more predictable drug quality and efficacy than non-branded generics, for patients’ safety.

This logic is anchored mainly on the argument that bioequivalence (BE) and bioavailability (BA) studies are mandatory for all generic drug approvals in India. Interestingly, that loose knot has been tightened in the draft pharma policy proposals 2017. Hope, this commendable policy intent will ultimately see the light of the day, unless another innovative new reason pops-up.

Against this backdrop, many ponder: Are the current pharma ‘marketing’ practices, especially in India, akin to riding a tiger? If the answer is affirmative, the aftermath of the new pharma policy’s coming into force – broadly in its current form and with strict enforcement measures, could well be too tough to handle for those drug players without a Plan B ready.

That said, pharma ‘marketing’ ballgame is getting increasingly more complex, with the involvement of several third-parties, as is often reported. Alongside, it’s equally challenging to fathom ‘why pharma does what it does’ to generate more prescription demand at an incremental cost, which far exceeds commensurate incremental value that branded generics provide to patients in 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.

Draft Pharma Policy 2017 And Branded Generics

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In its first reading, the 18-page draft Pharma Policy, 2017 gives me a sense that the Government has followed the much-desired principle of ‘walk the talk’, especially in some key areas. One such space is what Prime Minister Modi distinctly hinted on April 17, 2017, during the inauguration function of a charitable hospital in Surat. He clearly signaled that prescriptions in generic names be made a must in India, and reiterated without any ambiguity whatsoever that, to facilitate this process, his government may bring in a legal framework under which doctors will have to prescribe generic medicines.

Immediately following its wide coverage by both the national and international media, many eyebrows were raised regarding the feasibility of the intent of the Indian Prime Minister, especially by the pharma industry and its business associates, for the reasons known to many. A somewhat muted echo of the same could be sensed from some business dailies too, a few expressed through editorials, and the rest quoting the views on the likely ‘health disaster’ that may follow, if ‘branded generics’ are not prescribed by the medical profession. Obviously, the main apprehension was centered around the ‘shoddy quality parameters’ of unbranded generic drugs in India. It’s a different matter though, that none can possibly either confirm or pooh-pooh it, backed by irrefutable data with statistical significance.

Be that as it may, making high quality generic drugs accessible to most patients at affordable prices, avoiding any possible nexus between the doctors and pharma companies, which could jeopardize the patients’ economic interest, deserves general appreciation, shrill voices of some vested interests notwithstanding.  Nonetheless, if the related proposals in the new pharma policy come to fruition as such, it would be a watershed decision of the government, leaving a long-lasting impact both on the patients, as well as the industry, though in different ways, altogether.

I raised this issue in my article titled, “Is Department of Pharmaceuticals On The same Page As The Prime Minister?”, published in this blog on May 15, 2017. However, in today’s discussion, I shall focus only on how has the draft pharma policy 2017 proposed to address this issue, taking well into consideration the quality concerns expressed on unbranded generics, deftly.

Before I do that, let me give a brief perspective on ‘brand name drugs’, ‘generic drugs’, ‘branded generics’ and ‘unbranded generic drugs’. This would basically serve as a preamble to arrive at the relevance of ‘branded generic’ prescriptions, along with the genesis of safety concern about the use of un-branded generic drugs.

No definition in Indian drug laws:

Although, Drugs and Cosmetics Act of India 1940 defines a drug under section 3 (b), it does not provide any legal definition of ‘brand name drugs’, ‘generic drugs’, ‘branded generic drugs’ or ‘un-branded generics’.  Hence, a quick landscaping of the same, as follows, I reckon, will be important to understand the pertinence of the ongoing debate on ‘branded generic’ prescriptions in India, from the patients’ health and safety perspectives:

‘Brand name’ drugs:

Globally, ‘brand name drugs’ are known as those, which are covered by a product patent, and are usually innovative New Chemical Entity (NCE) or a New Molecular Entity (NME). Respective innovator pharma companies hold exclusive legal rights to manufacture and market the ‘brand name drugs’, without any competition till the patents expire.

Generic drugs:

Post patent expiry of, any pharma player, located anywhere in the world, is legally permitted, as defined in the Intellectual Property Rights (IPR) regulations, to manufacture, market and sell the generic equivalents of ‘brand name drugs’. However, it’s a global norm that the concerned generic manufacturer will require proving to the competent drug regulatory authorities where these will be marketed, that the generic versions are stable in all parameters, and bioequivalent to the respective original molecules. According to US-FDA, a ‘generic drug’ will require to be the same as the original ‘brand-name drug’ in dosage, safety, strength, quality, purity, the way it works, the way it is taken and the way it should be used.

‘Branded generic’ drugs:

Branded generics are generic molecules marketed and prescribed by their respective brand names. Around 90 percent of generic formulations are branded generics in India, involving heavy sales and marketing expenditure in various forms, which has become a contentious issue today in India. The reason being, although branded generics cost significantly more than unbranded generics, the former variety of generic drugs are most preferred by the medical profession, as a group, in India. Interestingly, there is no difference whatsoever in the marketing approval process between the ‘branded generics’ and other generic varieties without any brand names.

Unbranded generic drugs:

Unbranded generic drugs are those, which are sold only in the generic names, sans any brand name. I reiterate, once again, that there is no difference in the marketing approval process between the ‘branded generics’ and ‘unbranded generic medicines’.

The core issue:

The whole debate or concern related to both efficacy and safety on the use of unbranded generic drugs in India stems from a single regulatory issue, which is widely construed as scientifically improper, and totally avoidable. If this subject is addressed in a holistic way and implemented satisfactorily in the country, by and large, there should not be any worthwhile concern in prescribing or consuming single ingredient unbranded generic drugs in India, which generally cost much less than their branded generic equivalents.

This core issue is primarily related to establishing bioequivalence (BE) with the original molecules for all generic formulations, regardless of whether these are branded or unbranded generic drugs. Thus, positive results in bioequivalence studies, should be a fundamental requirement for the grant of marketing approval of any generics in India, as is required by the regulators of most countries, across the world.

This has been lucidly articulated also in the publication of the National Institute of Health (NIH), USA, underscoring the critical importance of generic drugs in healthcare is unquestionable. The article says: “it is imperative that the pharmaceutical quality and ‘in vivo’ performance of generic drugs be reliably assessed. Because generic drugs would be interchanged with innovator products in the market place, it must be demonstrated that the safety and efficacy of generics are comparable to the safety and efficacy of the corresponding innovator drugs. Assessment of ‘interchangeability’ between the generic and the innovator product is carried out by a study of ‘in vivo’ equivalence or ‘bioequivalence’ (BE).”

The paper further highlights, “the concept of BE has, therefore, been accepted worldwide by the pharmaceutical industry and national regulatory authorities for over 20 years and is applied to new as well as generic products. As a result, thousands of high-quality generic drugs at reduced costs have become available in every corner of the globe.”

Why is BE not mandatory for marketing approval of all generic drugs in India?

It is intriguing, why is this basic scientific and medical requirement of proving BE is not mandatory for granting marketing approval of all generic drugs at all time, without any exception – covering both branded generics and their unbranded equivalents, in India.

As I have already deliberated on this subject in my article titled “Generic Drug Quality: Cacophony Masks An Important Note, Creates A Pariah ”, published in this blog on May 08, 2017, I shall now proceed further to relate this critical issue with the Draft Pharma Policy 2017.

Brand, branding and branded generics:

Nevertheless, before I focus on the draft pharma policy 2017, let me skim through the definitions of a ‘brand’ and the ‘branding process’, in general, for better understanding of the subject.

American Marketing Association defines a brand as: ‘A name, term, design, symbol, or any other feature that identifies one seller’s goods or services as distinct from other sellers.’ Whereas, ‘The Branding Journal’ articulates: ‘A brand provides consumers with a decision-making-shortcut when feeling indecisive about the same product from different companies.’

Business Dictionary describes the ‘branding process’ as: ‘Creating a unique name and image for a product in the consumers’ mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers.’

How does it benefit the branded generic consumers?

One thing that comes out clearly from the above definitions that brands, and for that matter the branding process is directed to the consumers. Applying the branding process for generic drugs, the moot question that surfaces is, how does it benefit the pharma consumers, significantly?

Besides, the branding process being so very expensive, adds significant cost to a generic drug, making its price exorbitant to most patients, quite disproportionate to incremental value, if any, that a branded generic offers over its unbranded equivalents. Thus, the relevance of the branding process for a generic drug, continues to remain a contentious issue for many, especially where the out of pocket expenditure for medicines is so high, as in India.

Marketing experts’ view on the branding process for drugs:

An interesting article titled ‘From Managing Pills to Managing Brands’, authored by the Unilever Chaired Professor of Marketing and a research fellow at INSEAD, published in the Harvard Business Review made the following observations on brands and the branding process for drugs:

“…It takes a huge investment to build a successful brand, consumer goods manufacturers try to make their brands last as long as possible. Some consumer products—notably, Coca-Cola, Nescafé, and Persil (a European laundry detergent) -  have stayed at the top for decades. That’s not to say the products don’t evolve, but the changes are presented as improvements and refinements rather than as breakthroughs.”

“In the pharmaceutical business, by contrast, a new product is always given a new name. Drug companies believe that only by introducing a new name can you signal to the market that the product itself is new. Unfortunately, this approach throws out the company’s previous marketing investment entirely; it has to build a new brand with each new product. That may not have mattered when pharmaceutical companies could rely on a large, high-margin market for each drug they wheeled out. But in a crowded market with tightening margins, the new-product, new-brand strategy is becoming less and less feasible.”

The above observations when applied to expensive ‘branded generics’, which are nothing but exact ‘me too’ varieties among tens other similar formulations of the same generic molecule, do not add any additional value to the patients, in a well-functioning drug regulatory environment.

Hence, to reduce the out of pocket drug cost significantly, Prime Minister Modi hinted at bringing an appropriate legal framework to address this critical issue, which gets well-reflected in the draft pharma policy 2017, as I read it.

Six key features of the draft pharma policy related to ‘branded generics’:

Following are the six key features enshrined in the draft pharma policy 2017 to translate into reality what the Prime Minister spoke about on this subject in Surat on April 17, 2017.

1. Bio-availability and Bio-equivalence tests mandatory for all drug manufacturing permissions:

For quality control of generic drugs, Bio-availability and Bio-equivalence tests (BA/BE Tests) will be made mandatory for all drug manufacturing permissions accorded by the State Drug Regulator or by the Central Drug Regulator. This will be made compulsory even for the future renewals of manufacturing licenses for all.

2. WHO GMP/GLP mandatory for all drug units:

The government shall ensure to get the World Health Organization’s Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP) adopted by all manufacturing units.

3. No branded generics for single ingredient off-patent molecules:

The government will pursue the policy of sale of single ingredient drugs by their pharmacopeial name/salt name. To keep the identity of the manufacturer, the manufacturer would be allowed to stamp its name on the drug package. For patented drugs and Fixed Dose Combination (FDCs) drugs the brand names may be used.

4. ‘One company – one drug – one brand name – one price’:

The principle of ‘one company – one drug – one brand name – one price’ would be implemented for all drugs.

5. Aid and assistance to prescribe in generic names:

To aid and assist the registered medical practitioners in prescribing medicines in the generic names, e-prescription will be put into operation whereby the prescriptions will be computerized and the medicine name will be picked up from a drop-down menu of salt names.

6. UCPMP to be made mandatory:

The marketing practices of several pharmaceutical companies create an unfair advantage. To provide a level playing field, the regulation for marketing practices which is at present voluntary will be made mandatory. Penalty will be levied for violations and an agency for implementation would also be assigned.

Conclusion:

I have focused in this article only on those specific intents of the government, as captured in the draft pharma policy 2017, to reduce the out of pocket expenses on drugs for the Indian patients, which is currently one of the highest in the world. This area assumes greater importance to many, keeping in mind what Prime Minister Modi hinted at in this regard on April 17, 2017. If implemented exactly as detailed in the policy draft, this specific area would have a watershed impact both on the patients, as well as, the pharma companies, including their related business associates, lasting over a long period time.

Far reaching consequential fall outs are expected to loom large on the way pharma players’ strategic business processes generally revolve round ‘branded generics’ in India. I hope, the Plan B of many predominantly branded generic players is also receiving final touches on the drawing board by now, as this aspect of the draft policy proposal can in no way be construed as a bolt from the blue, catching the industry totally off-guard. That said, would the same changes as proposed in the draft pharma policy 2017, if and when implemented, be a ‘wow’ moment for patients?

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.