Big Pharma Demands Transparency, Keeping their ‘Black-Boxes’ Tight and Safe?

Posted on October 28, 2013 by Tapan Ray

Pharmaceutical Industry across the globe wants absolute transparency in all government laws, policies, guidelines, transactions and overall governance. They also expect the trade environment should be predictable, non-manipulative and business-friendly. These expectations are indeed well justified and deserve whole-hearted support from all concerned.

However, when similar expectations of transparency are voiced by stakeholders in the Big Pharma business operations, that will have direct or indirect impact on public health interests, one would mostly encounter a well guarded, mammoth and impregnable ‘Black Box’, wearing a ‘Top Secret’ label, with all relevant information kept inside.

Such areas of stakeholders’ interests on Big Pharma could well be related to details, like for example:

Actual break-up of R&D expense details,
Transparency in all clinical trials data for experts review,
Patented products’ pricing rationale,
Enormous total costs of lobbying and related expenses at the global level,
Marketing spend on doctors and other decision makers, directly or indirectly, just to name a few.

Mounting curiosity:

Continuation of such opaque practices for a long time, in turn, sparks the curiosity of the intelligentsia to know more in details, especially, about the areas as stated above.

Various research studies are now coming up, with huge revelations and strong findings in these areas. All of these together indicate, it is about time for the global pharma to also demonstrate transparency in their respective business practices and corporate governances, without further delay.

If it does not happen, probably respective governments in various countries will start acting on these areas of opaque self-serving pharma business practices, with the enactment and more importantly, stricter enforcement of requisite laws and policies. President Obama Administration in the United States has already initiated some important actions in these areas with proposals and laws, like for example, the “Physicians Payment Sunshine Act’ .

The ‘Power Game’:

An interesting article of May 3, 2013 highlighted that the global pharmaceutical industry exerts incredible influence over the prescription medicines across the globe. This power, as many will know, flows from robust political contacts and influences over various important government agencies administrating the entire healthcare system, executed immaculately by expensive lobbying and PR campaigns by their globally integrated trade bodies.

Similar powerful influences also get extended to doctors and the people who matter to further their interests. These well crafted plans are reportedly executed through sponsored or paid opinion-modifying articles, ‘advertorials’, DTC advertisements (wherever legally permitted) and well-organized, seemingly third party, speeches to push the envelopes further.

Most probably, keeping such ongoing practices in mind and coming under intense media pressure, the Medical Council of India (MCI) on December 10, 2009 amended the “Indian Medical Council (Professional Conduct, Etiquette and Ethics), Regulations 2002″ for the doctors in India. Unfortunately, its implementation on the ground is rather tardy.

The above article also stated, “In fact, in the United States the industry contributes heavily to the annual budget of the U.S. Food and Drug Administration (FDA), which is charged with regulating drugs and devices made by those same companies.”

Avoidable Expenditures:

The paper indicates that in the United States alone the industry associations:

Have 1,100-plus paid lobbyists on Capitol Hill,
Allocated US$ 188 million annual lobbying budget
Doles out around US$ 14 million to political candidates every year

The report also comments, ‘Drug companies spend substantially more on marketing than they do on research and development.’

Influencing opinion against patients’ interest?

The article in the ‘drugwatch’ also states:

“Doctors are persuaded by the pharma companies to attach their names (ghost writing), against financial considerations, to favorable article on a particular drug ensuring that it is published in a well reputable medical journal.”

The author continues that ‘Ghost writings’ are being used to promote numerous drugs to influence concerned stakeholders.

In 1998, a study of the prestigious New England Journal of Medicine found that ‘out of 75 published articles, nearly half were written by authors with financial conflicts. And, worse than this, only two of the articles disclosed interests.’

Richard Smith, former editor of the British Medical Journal, was quoted saying, “All journals are bought – or at least cleverly used – by the pharmaceutical industry.”

Striking facts:

Following are some striking facts as reported in the article, as mentioned above:

“Advertising instead of research: For every US$ 1 spent on “basic research,” Big Pharma spends US$ 19 on promotions and advertising.

Distribution of free drug samples: The United States has 1 pharmaceutical sales representative for every 5 office-based physicians.

Sponsorship of symposiums and medical conventions: Drug and medical device makers spend lavishly on doctors, including covering meals, travel, seminars and conventions that may look more like vacations.”

Pressure on publications:

The paper highlights that large global pharma majors may even pull its advertisements out, if the concerned medical journal will question the accuracy of an ad. Such types of threats have very serious effects on these journals in running their businesses without getting lucrative advertisement dollars from the drug manufacturers.

Making drugs looking good:

The same article highlights:

“Quite often the academics and scientists are hired hands who supply human subjects and collect data according to the instructions from their corporate employers. Sponsors keep the data, analyze, write the papers and decide whether and when and where to submit them for publication. Drug companies have discovered ways to stage-manage trials to produce predetermined outcomes that will put their products in the best light.”

With this strategy even a bad drug can allegedly be made looking good by doing many things, like for example:

Comparing them to a placebo
Comparing them to a competitor’s medication in the wrong strength
Pairing them with a drug that is known to work well
Shortening a trial before any bad results surface
Testing in groups too small to provide valid evidence

Pay-for-delay deals:

A recent report titled, “Top twenty pay-for-delay drugs: How Industry pay-off delay generics” highlights that ‘Pay-for-delay deals’ have forced patients in the United States to pay an average of 10 times more than necessary for at least 20 blockbuster drugs.

Key findings of the analysis on the impact of pay-for-delay deals are as follows:

This practice has held back generic medicines used by patients with a wide range of serious or chronic conditions, ranging from cancer and heart disease, to depression and bacterial infection.

These payoffs have delayed generic drugs for five years, on average, and as long as nine years.

These brand-name drugs cost 10 times more than their generic equivalents, on average, and as much as 33 times more.

These patented drug companies have made an estimated US$ 98 billion in total sales of these drugs while the generic versions were delayed.

Citing example, the paper says, a pay-for-delay deal kept a generic version of the breast cancer drug Tamoxifen off the US market for nine years, while Pfizer made $7.4 billion in sales of its cholesterol-lowering drug Lipitor (atorvastatin) in 2012 alone.

The point to ponder yet again is, why such practices are being surreptitiously carried out for years sacrificing patients’ interest and without the regulators’ strong interventions, in general?

French Government has initiated a probe:

The French Competition Authority is reportedly expected to publish a report on the findings of its inquiry, initiated in February 2013, into the costs and pricing of medicines in France. The report will also look at whether industry practices are interfering with the market entry of generic drugs, including distribution arrangements between drug manufacturers, wholesalers and pharmacists.

An appreciable initiative in America, but why not in India?

There is still a simmering hope. As indicated above, President Obama’s Affordable Care Act reportedly requires that from September 2013, pharmaceutical companies will need to collect data and openly report information on payments, investment interests, ownership and items of value given to doctors and hospitals. Very unfortunately, the Department of Pharmaceuticals of the Government of India has not taken any such steps, as yet, despite the situation turning grave in the country.

The power of pharma lobby in the US:

According to a recent NYT report, in the United States, government health programs are forbidden from rejecting new drugs on cost grounds.

When the issue of drug prices came up as part of President Obama’s ‘Affordable Care Act’ debate, it was summarily rejected in Congress. Simultaneously, a move toward comparative-effectiveness studies, putting rival drugs or treatments through trials to determine which work better, was also decried.

The report highlights, the mere suggestion of the US government throwing its weight around on drug prices stirs up talk of ‘socialism’. The pharma lobby doesn’t have to look far for support in fighting that idea. In the US, the so-called ‘free market’ is trusted to regulate drug prices, despite the reality that the healthcare market is far from transparent, ‘with byzantine pricing mechanisms and costs that vary wildly region-by-region, pharmacy by pharmacy and even patient-by-patient’.

The usual supply/demand/pricing relationships do not apply to drug prices at the consumer level in the US too, just as it has been proved in India.

A large part of creation of this environment is attributed to pharmaceutical and other health-products firms, who reportedly spent a total of US$ 250 million on lobbying last year.

Big Pharma keeps failing credibility tests:

This happened very recently, when The Guardian in July 2013 reported, the pharmaceutical industry has “mobilized” an army of patient groups to lobby against plans to force companies to publish secret documents on drug trials. This is related to the news that the European Medicines Agency (EMA) could force drug companies to publish all Clinical Trial (CT) results in a public database.

The above report says, while some pharma players agreed to share data, important global pharma industry associations have resisted this plan of the EMA. The report continues, a leaked letter from two large pharma trade associations, the Pharmaceutical Research and Manufacturers of America (PhRMA) of the United States and the European Federation of Pharmaceutical Industries and Associations (EFPIA), have drawn out a strategy to combat calls by drug regulators to force companies to publish all CT results.

The strategy reportedly shows how patient groups, many of which receive some or all of their funding from drugs companies, have been drawn into this battle by these Big Pharma lobby groups.

The e-mail reportedly seen by ‘The Guardian’ was from Richard Bergström, Director General of EFPIA, addressed to directors and legal counsel at Roche, Merck, Pfizer, GSK, AstraZeneca, Eli Lilly, Novartis and many smaller companies.

The e-mail leaked by an employee of a pharma company describes a four-pronged campaign that starts with “mobilizing patient groups to express concern about the risk to public health by non-scientific re-use of data”.

Translated, as ‘The Guardian’ reported, “that means patient groups go into bat for the industry by raising fears that if full results from drug trials are published, the information might be misinterpreted and cause a health scare.”

This appears to be another classic case of vested interests working against patients’ interests.

Global lobbying started taking the center stage in India too:

With the above back-drop and lobbying scandals reportedly being surfaced in many other countries, it is about time that India puts its acts together with India-specific stricter disclosure policies, including R&D, Clinical Trials (CTs), Patented Products Pricing, Marketing Practices and Trade Lobbying.

Interestingly, to influence Government policies India’s top lobbying spenders in 2012 (US$ million) were reported as follows:

1	US Chamber of Commerce	136.3
2	National Association of Realtors	41.5
3	Blue Cross / Blue Shield	22.5
4	General Electric	21.1
5	American Hospital Association	19.2
6	National Cable & Telecom. Association	18.9
7	Pharmaceutical Research & Mfrs. of America (PhRMA)	18.5
8	Google	18.2
9	Northrop Grumman	17.5
10	AT&T	17.4
11	American Medical Association	16.5
12	Boeing	15.6

Source: The Center for Responsive Politics (Economic Times, June 4, 2013)

According to the latest lobbying disclosure reports filed with the US Senate and the House of Representatives, at least two dozen American companies and industry associations are reportedly lobbying hard with the US lawmakers on issues in India, which include:

Intellectual Property (IP)
Patent
Market access

Another recent report comments as follows:

“The US Chamber of Commerce has become a portal for dubious reports that claim India’s intellectual property regime is worse than China’s. Such “research” by paid lobbyists and disseminated through the halls of US Congress…”

Hefty fines for illegal practices, yet Black Box remains tight and safe:

In December 2010, Healthcare advocacy group Public Citizen published a report that, for the first time, documented all major financial settlements and court judgments between pharmaceutical manufacturers and the federal and state governments of the United States since 1991.

It says, almost US$ 20 billion was paid out by the pharmaceutical industry to settle allegations of numerous violations, including illegal, off-label marketing and the deliberate overcharging of taxpayer-funded health programs, such as Medicare and Medicaid.

Three-fourths of the settlements and accompanying financial penalties had occurred in just the five-year period prior to 2010. There has been no indication that this upward trend is subsiding.

10 Largest Settlements and Judgments on Big Pharma mis governance:
(Period: Nov. 2, 1010 – July 18, 2012)

	Company	Amount US$ Million	Year	Reasons
1.	GlaxoSmithKline	3, 000	2012	Unlawful promotion, kickbacks, concealing study data, overcharging government health programs
2.	Abbott	1,500	2012	Unlawful promotion, kickbacks
3.	Johnson & Johnson	1,200	2012	Unlawful promotion
4.	Merck	950	2011	Unlawful promotion
5.	Ranbaxy	500	2012	Poor manufacturing practices, falsifying data on FDA applications.
6.	Johnson & Johnson	327	2011	Unlawful promotion
7.	Boehringer Ingelheim	280	2011	Overcharging government health programs
8.	Mylan’s Dey Pharma unit	280	2010	Overcharging government health programs
9.	Elan	203	2010	Unlawful promotion, kickbacks
10.	Johnson & Johnson	158	2012	Unlawful promotion

Conclusion:

All such expenditures, including expensive lobbying and court settlement charges for illegal business practices, as mentioned above, I reckon, are wasteful and avoidable. These are mostly outcomes of self serving measures, shorn of public health interest,

If all these costs are eliminated and actual R&D expenses are reflected, in a transparent manner, there could be significant reduction in the costs of newer innovative drugs, extending their access to billions of patients, across the world.

Thus to help evaluating the innovative drugs with greater transparency, there is an urgent need for the Big Pharma to set examples by voluntarily disclosing the secrets hidden within the ‘Black Boxes’, as deliberated above. These disclosures should be made to the independent experts and the respective Governments under appropriate statutes.

Expectations of transparency in Governance should not, therefore, be restricted just to Government laws, policies and decisions, the industry should reciprocate it too, in equal measures.

To be patient-centric, transparency in governance needs to be a two-way traffic, where pharma industry should volunteer to be an integral part, sooner than later. Otherwise it may be too late for them to avoid harsh interventions of the respective regulators, as the intense pressure from intelligentsia, civil society and media, keep mounting.

That said, the question lingers:

When the ‘Big Pharma is rightly demanding transparency in all areas of public discourse, why are they so reluctant in making their intriguing ‘Black Boxes’ transparent, that too only in areas of public health interest, for fair experts review?

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.

Supreme Court Suspends New Drug Trials in India…Time to Shape Up?

Posted on October 14, 2013 by Tapan Ray

On September 30, 2013, with a damning stricture to the Drug Regulator, the Supreme Court, in response to a Public Interest Litigation (PIL) filed by the NGO Swasthya Adhikar Manch, stayed approvals for 162 applications for local Clinical Trials (CTs) of new drugs approved by the Drugs Controller General of India (DCGI) earlier.

The apex court of the country granted the DCGI two weeks time to furnish evidence to the court that adequate patients’ safety and other related mechanisms have been put in place for CTs of all New Chemical Entities (NCEs) and New Molecular Entities (NMEs) in the country.

According to reports, during July and August 2013, the DCGI received 1,122 CT applications, out of which, 331 related to approval of global CTs. The New Drug Advisory Committee (NDAC) approved 285 drugs in AIDS, oncology, cardiology, neurology, psychiatry, metabolism and endocrinology therapy areas. Finally, 162 drugs received the green signal from the DCGI. Now all these trials have come to a halt.

At the same time, the court also directed the Ministry of Health to come out with a plan within 10 weeks to strengthen the regulatory framework for CTs in India based on various suggestions received from the state governments, other stakeholders and experts groups.

A casual approach?

Just to recapitulate, prior to this, on January 3, 2013, against the PIL, the bench of Honorable Justices R.M Lodha and A.R Dave of the Supreme Court reportedly observed that uncontrolled Clinical Trials (CT) are creating ‘havoc’ to human lives causing even deaths to many subjects in India.

In an interim order, the bench directed the Government that CTs could be conducted only under the supervision of the Health Secretary of India. Holding the Government responsible, the bench further observed, “You (Government) have to protect health of citizens of the country. It is your obligation. Deaths must be arrested and illegal trials must be stayed.”

Thereafter, though the Health Secretary of India approved the above 162 CTs, presumably following the above Supreme Court directive, it is an irony that when asked by the Apex Court, the government could not immediately explain precisely what systems and mechanisms have been put in place for proper conduct of these 162 CTs. It sought 2 weeks’ time to justify the action taken by the drug regulator in this regards.

Compromise on patients’ safety continues unabated:

During another hearing early in October 2013 on a petition filed by the NGO ‘Swasthya Adhikar Manch regarding violations of norms during CTs, the Supreme Court reportedly sought details from the Union Government on the irregularities during the drug trial using Human Papilloma Virus (HPV) vaccines by the Seattle (USA) based organization PATH in Andhra Pradesh and Gujarat states of India.

This intervening application by the NGO was based on the 72nd Parliamentary Standing Committee (PSC) on Health and Family Welfare report dated August 30, 2013, where it was recommended that action should be taken against PATH, state governments of Andhra Pradesh, Gujarat, Indian Council of Medical Research (ICMR) and other government officials including Drug Controller General of India (DCGI) for alleged violations on the subject.

The report highlights, HPV vaccines were given to 14,091 girls in Khammam district of Andhra Pradesh and 10,686 girls in Vadodra, Gujarat. These girls were between age group of 10 and 14, of which seven girls died due to such illegal vaccine trials.

Eventually, these trials were stopped, but only after the matter received media attention.

As per reports, the vaccines were provided by two pharma MNCs – Merck and GlaxoSmithKline through PATH. It also stated as follows:

“Vaccines were given to children irrespective of age in the case of Merck’s Gardasil vaccine. While permission was given to use GSK’s Cervarix vaccine in children of 10 to 14 years, CTs had been conducted on subjects in the age group of 18 to 35 years. Thus the safety and well being of subjects were completely jeopardized.”

No options but to shape-up:

It is worth mentioning, the above PIL had alleged that large scale drug trials being conducted across the country, mainly by the pharma MNC, are using Indian patients as ‘guinea pigs’, as it were. The NGO also told the Supreme Court that several pharmaceutical companies continue to conduct CTs quite indiscriminately, in various states of India, endangering lives of poorly/un-informed trial subjects.

In an affidavit to the Court, the Government admitted that between 2005 and 2012, 2,644 people died during CTs of 475 NCEs/NMEs with serious adverse events related deaths taking 80 lives.

Thus, coming under immense pressure from the civil society and now the scrutiny of the Supreme Court for so many CT related deaths and consequential patients’ compensation issues, the Government does not seem to have any other options left now but to bring US$ 500 million CT segment of the country, which is expected to cross a turnover of US$ 1 Billion by 2016, under stringent regulations.

Experts believe that the growth of the CT segment in India is driven mainly by the MNCs for easy availability of a large treatment naive patient population with varying disease pattern and demographic profile at a very low cost, as compared to many other countries across the world.

CT related deaths in India:

As per the Ministry of Health following are the details of deaths related to CTs registered in India from 2008 to August 2012:

Year	Total no of deaths	CT related deaths	Compensation paid to patients:
2012 (up to August)	272	12	NA
2011	438	16	16
2010	668	22	22
2009	737	NA	NA
2008	288	NA	NA

It is estimated that over the last four years, on an average, 10 persons have died every week in India related to CT.

DCGI hauled-up 9 MNCs on patients’ compensation:

It is worth noting, absolutely unacceptable level of compensation, by any standard, are being paid by the concerned companies, including large MNCs, for the lives lost during CTs.

According to another report quoting the Drug Controller General of India (DCGI), 25 people died in clinical trials conducted by 9 pharma MNCs, in 2010. Unfortunately, families of just five of these victims received” compensation for trial related deaths, which ranged from an abysmal Rs 1.5 lakh (US$ 2,500) to Rs 3 lakh (US$ 5,000) to the families of the diseased.

This report also highlighted that arising out of this critical negligence, for the first time ever, the then DCGI was compelled to summon the concerned nine pharma MNCs on June 6, 2011 to question them on this issue and give a clear directive to pay up the mandatory compensation for deaths related to CTs by June 20, 2011, or else all CTs of these nine MNCs, which were ongoing at that time or yet to start, will not be allowed.

The 9 pharma MNCs summoned by the DCGI to pay up the mandatory compensation for deaths related to CTs were reported as Wyeth, Quintiles, Eli Lilly, Amgen, Bayer, Bristol-Myers Squibb (BMS), Sanofi, PPD and Pfizer.

The report also indicated that after this ultimatum, all the 9 MNCs had paid compensation to the concerned families of the patients, who died related to the CTs.

Prior indictment by Indian Parliamentary Committee:

On May 8, 2012, the department related ‘Parliamentary Standing Committee (PSC)’ on Health and Family Welfare presented its 59th Report on the functioning of the Indian Drug Regulator – the Central Drugs Standard Control Organization (CDSCO) in both the houses of the Parliament.

The report made the following scathing remarks on CDSCO under its point 2.2:

“The Committee is of the firm opinion that most of the ills besetting the system of drugs regulation in India are mainly due to the skewed priorities and perceptions of CDSCO. For decades together it has been according primacy to the propagation and facilitation of the drugs industry, due to which, unfortunately, the interest of the biggest stakeholder i.e. the consumer has never been ensured.”

Action just not enough yet:

Acting on the damning stricture by the Supreme Court, the Ministry of Health by a gazette notification of January 30, 2013 made the norms of compensation to patients participating in CTs more stringent. ‘Patient Compensation’ was proposed to include injury or death, even if those are not related to the drugs being tested in the CTs.

Understandably, reacting to this notification, some pharma companies, industry lobby groups and also Clinical Research Organizations (CROs) expressed concerns in areas like:

Lack of distinction between study-related injuries and non-study related injuries.

Use of placebos in placebo-controlled trials.

Lack of any arbitration mechanism in case of disagreement on causality/quantum of compensation and also lack of clarity on who constitutes the Expert Committee and its composition.

In addition, the DCGI requested the stakeholders’ to share their inputs to the independent experts advisory committee chaired by Prof. Ranjit Roy Chaudhury along with six other distinguished members namely, Dr V. P. Kamboj, Dr BT Kaul, Dr Vasantha Muthuswamy, Dr Mira Shiva  and Dr Uma Tekur, to help formulating policy, guidelines and SOPs for approval of NCEs/NMEs and procedures for CTs, including the conduct of ethics committees, the accreditation of trials sites, inspections of trials sites, the ongoing monitoring of trials and banning of drugs. The Government on February 6, 2013 constituted this Committee.

This decision of the regulator, though under pressure, was praiseworthy. Unfortunately nothing substantially changed on the ground for CTs in India even thereafter, as no substantive action has yet been taken on the above expert committee recommendations.

The report of the experts committee:

Prof. Ranjit Roy Chaudhury experts committee in its 99-page report has reportedly recommended some radical changes in the CT space of India. Among others, the report includes the following:

Setting up of a Central Accreditation Council (CAC) to oversee the accreditation of institutes, clinical investigators and ethics committees for CTs in the country.

Only those trials, which will be conducted at centers meeting these requirements, be considered for approval by the DCGI.

For speedy clearance of applications, a broad expertise based Technical Review Committee (TRC) will replace 12 New Drug Advisory Committees (NDACs), which are currently functioning for NCE/NME approvals.

The TRC would be assisted, as required, by appropriate subject experts selected from the ‘Roster of Experts’.

For any Adverse Effects (AEs) or Serious Adverse Effects (SAEs) during a CT, the sponsor investigator will be responsible for providing medical treatment and care to the patient at its/their cost till the resolution of the AEs/SAEs.

This is to be provided irrespective of whether the patient is in the control group, placebo group, standard drug treatment group or the test drug administered group.

A Special Expert Committee should be set up independent of the Drug Technical Advisory Board (DTAB) to review all drug formulations in the market and identify drugs, which are potentially hazardous and/or of doubtful therapeutic efficacy.

A mechanism should be put in place to remove these drugs from the market by the CDSCO at the earliest.

Though some of the above provisions were vigorously objected by the industry during stakeholders’ consultations, the committee in its final report has upheld those recommendations.

The main worry – costs of CTs will go up:

CTs, as we know, are of critical importance for obtaining marketing approval of any new drug and at the same time forms a major cost component in the new drug development process, across the world.

Any savings in this area, both in terms of time and money, will add significantly to the profit margin of the product. In that context, the above suggestions, if implemented to create a safety net for the patients participating in CTs, will make these trials more expensive for the concerned companies with increased liability.

Hence, we hear a hue and cry, especially from the pharma MNCs. This is mainly because, India was, thus far, a low cost CT destination for them with virtually no liability for the drug trial patients. This is because, the poor and ill-informed subjects are left in the lurch by many companies exploiting the gaping holes existing in the fragile CT system of the country. After the intervention of the Supreme Court in this regard, some foreign players have reportedly suspended their CTs in India for reasons best known to them.

Exploitation of CT regulations:

The system of CT in India has created a huge ruckus, as it has long been tainted with widespread malpractices, abuses and misuses by many players, both global and local. The issue is not just of GCP or other CT related standards but more of an ethical mind-set and well-reported rampant exploitation of uninformed patients, especially in case of trial-related injuries or even death.

The Bulletin of the World Health Organization (WHO) in an article titled, “Clinical trials in India: ethical concerns” reported as follows:

“Drug companies are drawn to India for several reasons, including a technically competent workforce, patient availability, low costs and a friendly drug-control system. While good news for India’s economy, the booming clinical trial industry is raising concerns because of a lack of regulation of private trials and the uneven application of requirements for informed consent and proper ethics review.”

Industry reactions:

Very interestingly, there have been a divergent sets of reactions from the industry on this issue.

An influential section in the CT space of the country has reacted, with gross indiscretion, to the most recent SC order banning CTs for NCEs/NMEs till a robust mechanism in India is put in place.

Commenting on the verdict, an industry leader has reportedly said:

“A black day for Indian science and a sad reflection on our judiciary”.

Such comments probably vindicate much talked about crony capitalistic mindset of this class. They do not hesitate a bit to display their scant respect even to the highest judiciary of the country, leave alone their glaring indifference to the important public health interest related issue. All such actions possibly emanate from the intense greed to protect and further the vested interests, not withstanding the gross injustice being meted out to the drug trial subjects as a consequence.

On the other hand, supporting the Supreme Court’s view, The Indian Society for Clinical Research (ISCR) reportedly has said:

“As a professional organization representing clinical research professionals across the stakeholder spectrum, ISCR is fully supportive of the need for a more robust and regulated environment for the conduct of clinical trials in India which ensures the practice of the highest standards of ethics and quality and where patient rights and safety are protected”.  

ISCR further said, “As in every profession and industry, there will always be players who operate at both ends of the spectrum. While we do not condone any irregularities, we must acknowledge, there are several hundreds of clinical trials taking place in the country in compliance with international and local guidelines. There have been over 40 US FDA clinical trial audits done in India with no critical findings reported. There have also been several European regulatory audits of Indian clinical trial sites, again with no critical findings.”

That said, Indian Parliamentary Standing Committee, had commented on a ‘nexus between the industry and the drug regulator’ for continuation of such sorry state of affairs, since long.

‘Industry-pharma nexus’ in the USA too?

Recently, similar tricky relationship between the regulator and the pharma companies was unearthed again with the later paying hefty fees to attend meetings of a panel that advises the US FDA.

The article highlighted, an investigative report in the ‘Washington Post’ found that pharma companies paid as much as US$ 25,000 to attend sessions convened by a scientific panel on painkillers, and has led to claims that the industry was being given an opportunity to influence federal policy in this area.

Expected Government action:

The Supreme Court is expected to hear the matter on October 24, 2013.

Meanwhile, the Ministry of Health reportedly held meetings with concerned officials to chalk out the strategy before the Court, when this case would come up for hearing after two weeks.

The report says, the Government is planning to place before the court a comprehensive plan with details of the existing mechanism and ongoing efforts like, bringing the the new Drugs and Cosmetic (Amendment) Bill 2013 and incorporation of Prof. Ranjit Roy Chaudhury expert committee recommendations, to plug the loopholes in the new drug trial mechanism of the country.

Conclusion:

While the importance of CTs to ensure better and more effective treatment for millions of patients in India is immense, it should not be allowed at the cost of patients’ safety, under any garb. If the regulator overlooks this critical factor and some pharmaceutical players keep exploiting the system, judiciary has no option but to effectively intervene in response to PILs, as happened in this particular case too.

Thus, I reckon, appropriate safety of human subjects participating in CTs and a fairplay in compensation, whenever justified, should be non-negotiable for the indian drug regulator. Despite reactions with indiscretion from a section of the industry, the Supreme Court is absolutely right to direct the DCGI to stop CTs for all NCEs/NMEs until the apex judiciary is satisfied that a robust system is in place for such trials in India. This will ensure, the scientific objectives of the CTs are properly achieved without any compromise on patients’ safety.

Breaking the nexus decisively between a section of the powerful pharmaceutical lobby group and the drug regulator, as highlighted even in the above Parliamentary Committee report, the Ministry of Health should, without any further delay, put in place a robust and transparent CT mechanism in India, come what may.

This well thought-out new system, besides ensuring patients’ safety and fairplay for all, will have the potential to help reaping a rich economic harvest through creation of a meaningful and vibrant CT industry in India, simultaneously benefitting millions of patients, as we move on.

That said, the moot question still remains: Will the drug regulator be able to satisfy the Supreme Court, as the two weeks expire, that appropriate mechanisms are in place to resume smooth conduct of CTs for the new drugs in India?

By: Tapan J. Ray

Pharma FDI: Damning Report of Parliamentary Panel, PM Vetoes…and Avoids Ruffling Feathers?

Posted on August 19, 2013 by Tapan Ray

An interesting situation emerged last week. The Parliamentary Standing Committee (PSC) on Commerce proposed a blanket ban on all FDI in brownfield pharma sector. Just two days after that, the Prime Minister of India vetoed the joint opposition of the Department of Industrial Policy and Promotion (DIPP) and the Ministry of Health to clear the way for all pending pharma FDIs under the current policy.

On August 13, 2013, Department related Parliamentary Standing Committee on Commerce laid on the Table of both the Houses of the Indian Parliament its 154 pages Report on ‘FDI in Pharmaceutical Sector.’

The damning report of the Parliamentary Standing Committee flags several serious concerns over FDI in brownfield pharma sector, which include, among others, the following:

1. Out of 67 FDI investments till September 2011, only one has been in green field, while all the remaining FDI has come in the brown field projects. Moreover, FDI in brown field investments have of late been predominantly used to acquire the domestic pharma companies.

2. Shift of ownership of Indian generic companies to the MNCs also results in significant change of the business model, including the marketing strategy of the acquired entity, which are quite in sync with the same of the acquirer company. In this situation, the acquired entity will not be allowed to use flexibilities such as patent challenges or compulsory license to introduce new affordable generic medicines.

The withdrawal of all patent challenges by Ranbaxy on Pfizer’s blockbuster medicine Lipitor filed in more than eight countries immediately after its acquisition by Daiichi-Sankyo is a case in point.

3. Serial acquisitions of the Indian generic companies by the MNCs will have significant impact on competition, price level and availability. The price difference between Indian ‘generics’ and MNCs’ ‘branded generic’ drugs could sometimes be as high as 80 to 85 times. A few more larger scale brownfield takeovers may even destroy all the benefits of India’s generics revolution.

4. FDI inflow into Research & Development of the Pharma Industry has been totally unsatisfactory.

5. FDI flow into brown field projects has not added any significant fresh capacity in manufacturing, distribution network or asset creation. Over last 15 years, MNCs have contributed only 5 per cent of the gross fixed assets creation, that is Rs 3,022 crore against Rs 54,010 crore by the domestic companies. Further, through brownfield acquisitions significant strides have not been made by the MNCs, as yet, for new job creation and technology transfer in the country.

6. Once a foreign company takes over an Indian company, it gets the marketing network of the major Indian companies and, through that network, it changes the product mix and pushes the products, which are more profitable and expensive. There is no legal provision in India to stop any MNC from changing the product mix.

7. Though the drug prices may not have increased significantly after such acquisitions yet, there is still a lurking threat that once India’s highly cost efficient domestic capacity is crushed under the weight of the dominant force of MNCs, the supply of low priced medicines to the people will get circumvented.

8. The ‘decimation’ of the strength of local pharma companies runs contrary to achieving the drug security of the country under any situation, since there would be few or no Indian companies left having necessary wherewithal to manufacture affordable generics once a drug goes off patent or comply with a Compulsory License (CL).

9. Current FIPB approval mechanism for brownfield pharma acquisitions is inadequate and would not be able to measure up to the challenges as mentioned above.

The Committee is also of the opinion that foreign investments per se are not bad. The purpose of liberalizing FDI in pharma was not intended to be just about takeovers or acquisitions of domestic pharma units, but to promote more investments into the pharma industry for greater focus on R&D and high tech manufacturing, ensuring improved availability of affordable essential drugs and greater access to newer medicines, in tandem with creating more competition.

Based on all these, The Committee felt that FDI in brown field pharma sector has encroached upon the generics base of India and adversely affected Indian pharma industry. Therefore, the considered opinion of the Parliamentary Committee is that the Government must impose a blanket ban on all FDI in brownfield pharma projects.

PM clears pending pharma FDI proposals:

Unmoved by the above report of the Parliamentary Committee, just two days later, on August 16, 2013, the Prime Minister of India, in a meeting of an inter-ministerial group chaired by him, reportedly ruled that the existing FDI policy will apply for approval of all pharmaceutical FDI proposals pending before the Foreign Investments Promotion Board (FIPB). Media reported this decision as, “PM vetoes to clear the way for pharma FDI.”

This veto of the PM includes US $1.6-billion buyout of the injectable facility of Agila Specialties, by US pharma major Mylan, which has already been cleared by the Competition Commission of India (CCI).

This decision was deferred earlier, as the DIPP supported by the Ministry of Health had expressed concerns stating, if MNCs are allowed to acquire existing Indian units, especially those engaged in specialized affordable life-saving drugs, it could possibly lead to lower production of those essential drugs, vaccines and injectibles with consequent price increases. They also expressed the need to protect oncology facilities, manufacturing essential cancer drugs, with assured supply at an affordable price, to protect patients’ interest of the country.

Interestingly, according to Reserve Bank of India, over 96 per cent of FDI in the pharma sector in the last fiscal year came into brownfield projects. FDI in the brownfield projects was US$ 2.02 billion against just US$ 87 million in the green field ventures.

Fresh curb mooted in the PM’s meeting:

In the same August 16, 2013 inter-ministerial group meeting chaired by the Prime Minister, it was also reportedly decided that DIPP will soon float a discussion paper regarding curbs that could be imposed on foreign takeovers or stake purchases in existing Indian drug companies, after consultations with the ministries concerned.

Arguments allaying apprehensions:

The arguments allaying fears underlying some of the key apprehensions, as raised by the Parliamentary Standing Committee on Commerce, are as follows:

1. FDI in pharma brownfield will reduce competition creating an oligopolistic market:

Indian Pharmaceutical Market (IPM) has over 23,000 players and around 60,000 brands. Even after, all the recent acquisitions, the top ranked pharmaceutical company of India – Abbott enjoys a market share of just 6.6%. The Top 10 groups of companies (each belonging to the same promoter groups and not the individual companies) contribute just over 40% of the IPM (Source: AIOCD/AWACS – Apr. 2013). Thus, IPM is highly fragmented. No company or group of companies enjoys any clear market domination.

In a scenario like this, the apprehension of oligopolistic market being created through brownfield acquisitions by the MNCs, which could compromise with country’s drug security, needs more informed deliberation.

2. Will limit the power of government to grant Compulsory Licensing (CL):

With more than 20,000 registered pharmaceutical producers in India, there is expected to be enough skilled manufacturers available to make needed medicines during any emergency e.g. during H1N1 influenza pandemic, several local companies stepped forward to supply the required medicine for the patients.

Thus, some argue, the idea of creating a legal barrier by fixing a cap on the FDIs to prevent domestic pharma players from selling their respective companies at a price, which they would consider lucrative otherwise, just from the CL point of view may sound unreasonable, if not protectionist in a globalized economy.

3. Lesser competition will push up drug prices:

Equity holding of a company is believed by some to have no bearing on pricing or access, especially when medicine prices are controlled by the NPPA guidelines and ‘competitive pressure’.

In an environment like this, any threat to ‘public health interest’ due to irresponsible pricing, is unlikely, especially when the medicine prices in India are cheapest in the world, cheaper than even Bangladesh, Pakistan and Sri Lanka (comment: whatever it means).

India still draws lowest FDI within the BRIC countries:

A study of the United Nations has indicated that large global companies still consider India as their third most favored destination for FDI, after China and the United States.

However, with the attraction of FDI of just US$ 32 billion in 2011, against US$ 124 billion of China, US$ 67 billion of Brazil and US$ 53 billion of Russia during the same period, India still draws the lowest FDI among the BRIC countries.

Commerce Minister concerned on value addition with pharma FDI:

Even after paying heed to all the above arguments, the Commerce Minister of India has been expressing his concerns since quite some time, as follows:

“Foreign Direct Investment (FDI) in the pharma sector has neither proved to be an additionality in terms of creation of production facilities nor has it strengthened the R&D in the country. These facts make a compelling case for revisiting the FDI policy on brownfield pharma.”

As a consequence of which, the Department of Industrial Policy and Promotion (DIPP) has reportedly been opposing FDI in pharma brownfield projects on the grounds that it is likely to make generic life-saving drugs expensive, given the surge in acquisitions of domestic pharma firms by the MNCs.

Critical Indian pharma assets going to MNCs:

Further, the DIPP and the Ministry of Health reportedly fear that besides large generic companies like Ranbaxy and Piramal, highly specialized state-of-the-art facilities for oncology drugs and injectibles in India are becoming the targets of MNCs and cite some examples as follows:

Through the big-ticket Mylan-Agila deal, the country would lose yet another critical cancer drug and vaccine plant.

In 2009 Shantha Biotechnics, which was bought over by Sanofi, was the only facility to manufacture the Hepatitis B vaccine in India, which used to supply this vaccine at a fraction of the price as compared to MNCs.

Mylan, just before announcing the Agila deal, bought over Hyderabad based SMS Pharma’s manufacturing plants, including some of its advanced oncology units in late 2012.

In 2008, German pharma company Fresenius Kabi acquired 73 percent stake in India’s largest anti-cancer drug maker Dabur Pharma.

Other major injectable firms acquired by MNCs include taking over of India’s Orchid Chemicals & Pharma by Hospira of the United States.

With the US market facing acute shortage of many injectibles, especially cancer therapies in the past few years, companies manufacturing these drugs in India have become lucrative targets for MNCs.

An alternative FDI policy is being mooted:

DIPP reportedly is also working on an alternate policy suggesting:

“It should be made mandatory to invest average profits of last three years in the R&D for the next five years. Further, the foreign entity should continue investing average profit of the last three years in the listed essential drugs for the next five years and report the development to the government.”

Another report indicated, a special group set up by the Department of Economic Affairs suggested the government to consider allowing up to 49 per cent FDI for pharma brownfield investments under the automatic route.However, investments of more than 49 per cent would be referred to the Foreign Investment Promotion Board (FIPB).

It now appears, a final decision on the subject would be taken by the Prime Minister after a larger inter-mimisterial consultation, as was decided by him on August 14, 2013.

The cut-off date to ascertain price increases after M&A:

Usually, the cut off point to ascertain any price increases post M&A is taken as the date of acquisition. This process could show false positive results, as no MNC will take the risk of increasing drug prices significantly or changing the product-mix, immediately after acquisition.

Significant price increases could well be initiated even a year before conclusion of M&As and progressed in consultation by both the entities, in tandem with the progress of the deal. Thus, it will be virtually impossible to make out any significant price changes or alteration in the product-mix immediately after M&As.

Some positive fallouts of the current policy:

It is argued that M&As, both in ‘Greenfield’ and ‘Brownfield’ areas, and joint ventures contribute not only to the creation of high-value jobs for Indians but also access to high-tech equipment and capital goods. It cannot be refuted that technology transfer by the MNCs not only stimulates growth in manufacturing and R&D spaces of the domestic industry, but also positively impacts patients’ health with increased access to breakthrough medicines and vaccines. However, examples of technology transfer by the MNCs in India are indeed few and far between.

This school of thought cautions, any restriction to FDI in the pharmaceutical industry could make overseas investments even in the R&D sector of India less inviting.

As listed in the United Nation’s World Investment Report, the pharmaceutical industry offers greater prospects for future FDI relative to other industries. Thus, restrictive policies on pharmaceutical FDI, some believe, could promote disinvestments and encourage foreign investors to look elsewhere.

Finally, they highlight, while the Government of India is contemplating modification of pharma FDI policy, other countries have stepped forward to attract FDI in pharmaceuticals. Between October 2010 and January 2011, more than 27 countries and economies have adopted policy measures to attract foreign investment.

Need to attract FDI in pharma:

At a time when the Global Companies are sitting on a huge cash pile and waiting for the Euro Zone crisis to melt away before investing overseas, any hasty step by India related to FDI in its pharmaceutical sector may not augur well for the nation.

While India is publicly debating policies to restructure FDI in the ‘Brownfield’ pharma sector, other countries have stepped forward to attract FDI in their respective countries. Between October 2010 and January 2011, as mentioned earlier, more than 27 countries and economies have adopted policy measures to attract foreign investment.

Thus the moot question is, what type of FDI in the pharma brownfield sector would be good for the country in the longer term and how would the government incentivize such FDIs without jeopardizing the drug security of India in its endeavor to squarely deal with any conceivable eventualities in future?

Conclusion:

In principle, FDI in the pharma sector, like in any other identified sectors, would indeed benefit India immensely. There is no question about it…but with appropriate checks and balances well in place to protect the national interest, unapologetically.

At the same time, the apprehensions expressed by the Government, other stakeholders and now the honorable members of the Parliament, across the political party lines, in their above report, should not just be wished away by anyone.

This issue calls for an urgent need of a time bound, comprehensive, independent and quantitative assessment of all tangible and intangible gains and losses, along with opportunities and threats to the nation arising out of all the past FDIs in the brownfield pharma sector.

After a well informed debate by experts on these findings, a decision needs to be taken by the law and policy makers, whether or not any change is warranted in the structure of the current pharma FDI policy, especially in the brownfield sector. Loose knots, if any, in its implementation process to achieve the desired national outcome, should be tightened appropriately.

I reckon, it is impractical to expect, come what may, the law and policy makers will keep remaining mere spectators, when Indian Pharma Crown Jewels would be tempted with sacks full of dollars for change in ownerships, jeopardizing presumably long term drug security of the country, created painstakingly over decades, besides leveraging immense and fast growing drug export potential across the world.

The Competition Commission of India (CCI) can only assess any possible adverse impact of Mergers & Acquisitions on competition, not all the apprehensions, as expressed by the Parliamentary Standing Committee and so is FIPB.

That said, in absence of a comprehensive impact analysis on pharma FDIs just yet, would the proposal of PSC to ban foreign investments in pharma brownfield sector and the PM’s subsequent one time veto to clear all pending FDI proposals under the current policy, be construed as irreconcilable internal differences…Or a clever attempt to create a win-win situation without ruffling MNC feathers?

By: Tapan J. Ray

FDC Saga: Defiant Manufacturers, Sloppy Regulators and Humongous Inaction

Posted on July 15, 2013 by Tapan Ray

“TO SIN BY SILENCE WHEN THEY SHOULD PROTEST MAKES COWARDS OF MEN” – Abraham Lincoln

The ghost of untested, irrational and even of bizarre kind of Fixed Dose Combination (FDC) drugs, which continue to be launched, promoted, prescribed and sold freely across the length and breadth of India, has started haunting the Ministry of Health of India, yet again, in 2013.

Though the issue originated decades ago, in 1988 appropriate ‘Rule’ of the Drugs and Cosmetics Act of India was amended suitably to have a firm regulatory grip over this situation. Despite this much awaited amendment, the situation almost went astray with incessant market entry of a large number untested FDC medicines of dubious medical rationale.

A free for all situation, as it were, in the FDC arena, continued to be facilitated by blatant laxity on the part of, especially, the state drug regulators by allowing unfettered market entry of such drugs, ignoring the CDSCO directive.

On the other hand, the Central Drugs Standard Control Organization (CDSCO), despite its statutory powers, continued to suffer from humongous inaction untill the issue resurfaced again in 2007 and then of course, now in 2013.

The WHO Model:

The 2005 ʹProcedure to update and disseminate the WHO Model List of Essential Medicines, Criteria for Selection’ includes the following statement regarding Fixed Dose Combination products (FDCs):

ʺMost essential medicines should be formulated as single compounds. Fixed‐dose combination products are selected only when the combination has a proven advantage over single compounds administered separately in therapeutic effect, safety, and adherence or in delaying the development of drug resistance in malaria, tuberculosis and HIV/ AIDS.ʺ

Thus, FDCs:

Need to demonstrate clinical efficacy and safety beyond the individual drugs when given alone.

Need to ‘demonstrate bioequivalence of the single combined dose unit with the components administered in the same doses separately but concomitantly’.

‘Adherence’ aspect of WHO Model for FDCs is also important. Problems with ‘adherence’ could lead to inadequate and inconsistent dosing, which in turn could lead to development of drug resistance.

With robust and unquestionable medical rationale, FDCs are expected to provide superior efficacy and improved compliance without causing any untoward risk to patients.

A major disadvantage:

However, one of the major disadvantages with the FDCs is lack of flexibility in adjusting dose of individual ingredients, even if it is required for some patients. Internationally, most popular example is the FDCs of antiretroviral drugs for HIV infected patients like, Combivir, Trzivir, Kaletra etc.

Interestingly, in India there are FDCs for almost all disease areas from allergic disorders to Wolf-Parkinson-White syndrome (exaggerated), as it were.

Market attractiveness for FDCs in India:

The domestic market for FDCs is very large and growing much faster, in sharp contrast to the western world. The following table will vindicate this point:

% Share
Drug	2008	2009	2010	2011
Plain	55	55	55	54
Combinations	45	45	45	46
Domestic Market: USD 13 Billion; MAT Apr 2013

Source:IMS

Thus, because of growing market demand, pharmaceutical companies in India tend to market FDCs of all different permutations and combination, at times even crossing the line of any ‘sound medical rationale’. For this reason, we find in the website of ‘Central Drugs Standard Control Organization’ (CDSCO), the banned list of so many FDCs.

A messy regulatory situation:

Introduction of new FDCs does not only warrant a ‘sound medical rationale’ but also ‘strict conformance to all prescribed regulatory requirements’ for patients’ interest.

To check unfettered market introduction of potentially harmful FDCs, the Ministry of Health issued a Notification in September 1988, including FDCs in Rule 122 E of the Drugs & Cosmetics Rules (D&CR) 1945.

In effect, it removed the powers of the State FDAs to give manufacturing or marketing approval of FDCs. After the notification was issued, all manufacturers/marketers of all new FDCs are required to apply only to the Drug Controller General of India (DCGI) under Rule 122E of the D&CR 1945 as a new drug, along with the stipulated fees by way of a Treasury Challan.

Since this entire process entails appropriate regulatory data generation, besides time and expenses involved, the above ‘Rule’ was continuously and deliberately broken and manufacturing and marketing approvals for various types of FDCs falling under ‘new drug’ category were regularly sought and granted by the State Drug Controllers.

Many believe that the State FDAs were equally responsible for knowingly flouting the Law, as were the pharmaceutical manufacturers.

Patients’ safety – the foremost concern:

Despite serious concerns expressed by a Parliamentary Standing Committee, this complicity resulted in the market being flooded with ‘irrational combinations’ which posed a real threat to patients’ interest and safety. The State FDAs were reminded of the notification by the earlier DCGI.

294 FDCs were banned by the DCGI in 2007. Thereafter, the important issue of patients’ interest and safety got converted into a legal quagmire, as many FDC manufacturers chose to go to the court of law to protect their business interest and also managed to obtain a ‘Stay’ order from the Madras High Court. The matter is still subjudice.

Be that as it may, those 294 FDCs banned by the Ministry of Health of India on health and safety grounds continue to be promoted, prescribed and sold to patients across India without any hindrance, whatsoever.

Untangling the messy knot:

As the issue got entangled into prolonged litigations, the CDSCO took initiative of resolving this contentious issue again in 2009 with the help of an expert committee, involving the manufacturers.

This subcommittee cleared 48 FDCs under ‘similar FDCs already approved’, after discussing the merits and demerits, including pharmacodynamics, pharmacokinetics, side effects, dosage, medical rationale etc. of each ingredient and the combinations. The decision of the Sub Committee was then submitted to the Drug Technical Advisory Board (DTAB).

After formal approval of DTAB, these combinations are construed to be new drugs and any company wishing to market/manufacture the formulation would require submitting its Application in Form 44 to the DCGI to get approval in Form 45.

This decision was expected to send a clear signal to all concerned that resorting to any form of shortcuts to bypass strict adherence to prescribed regulatory requirements, could seriously jeopardize patients’ interest and safety. The same process was subsequently followed for the balance 142 FDCs, as well.

Thereafter, a special committee was again appointed by the CDSCO in 2013 to look into this matter in a holistic way. However, such sporadic knee-jerk reactions have failed to deliver any tangible results in this area – not just yet.

The saga continues:

Even after the above critical decision of the DTAB the saga still continues.

In March 2013, by a written reply, the Minister for Health and Family Welfare reportedly informed the Lok Sabha (the lower House of the Parliament) that in twenty three cases of new FDC, licenses have been granted by the State Licensing Authorities (SLAs) without the mandatory approval of the DCGI and action will be taken in all these cases.

However, no one seems to know, as yet, what action the Government has taken against those errant officials.

Current scenario:

Recently, the Directorate General of Health Services (DGHS) by a notification to State Drug Controllers has reportedly ordered all manufacturers of new FDC products, licensed locally before October 2012 without CDSCO permission, to submit safety and efficacy data prior to 30 August 2013.

This decision of DGHS has created a furore within the concerned FDC manufacturers, yet again, the possible outcome of which is yet to be ascertained.

The State Drug Controllers had issued manufacturing licenses for these FDCs prior to October 2012. At that time concerned manufacturers were given 18 months time period to prove efficacy and safety of these medicines to the DCGI. Regrettably, as per the above report, the DCGI has confirmed that he has received hardly any response from the FDC manufacturers till date on this regulatory requirement.

CDSCO has also stated that manufacturers, who will fail to submit the required data by the deadline run the risk of having their products banned from the market.

Before this, the State Drug Controllers were informed about this requirement on January 15, 2013.

At this point it is worth mentioning, the DCGI in October 2012 had reportedly also barred the State Drug Controllers from granting manufacturing licenses to pharmaceutical companies under brand names of the drugs, directing them to strictly issue licenses under generic name of the molecule. Additionally, he also asked the state licensing authorities not to grant licenses to combination drugs, which are technically ‘new drugs’ and fall within the domain of DCGI only.

Conclusion:

This logjam with FDCs certainly cannot continue in perpetuity, neither should such regulatory sloppiness be acceptable to any right thinking stakeholder.

All blatant violations of Drugs and Cosmetics Act of India must be stopped forthwith and the violators be brought to justice without delay. Patients’ health interest, as required by the drug regulators, is non-negotiable.

The order of DGHS asking all manufacturers of new FDCs, licensed locally before October 2012 without CDSCO permission, to submit safety and efficacy data prior to 30 August 2013, should not follow recently reported Pioglitazone type of volte face, once again, under similar outside pressure.

It is high time now for the Government to bring the unending saga of irrational and harmful FDCs, orchestrated by defiant manufacturers, encouraged by sloppy regulators and catalyzed by humongous systemic inaction, to its logical conclusion, for patients’ sake.

By: Tapan J. Ray

Balancing IPR with Public Health Interest: Brickbats, Power Play and Bouquets

Posted on July 1, 2013 by Tapan Ray

It is now a widely accepted dictum that Intellectual Property Rights (IPR), especially pharma patents, help fostering innovation and is critical in meeting unmet needs of the patients.

However, the moot question still remains, what type pharmaceutical invention, should deserve market exclusivity or monopoly with overall freedom in pricing, keeping larger public health interest in mind.

In line with this thinking, for quite sometime a raging global debate has brought to the fore that there are quite a large number of patents on drug variants that offer not very significant value to the patients over the mother molecules, yet as expensive, if not more than the original ones. In common parlance these types of inventions are considered as ‘trivial incremental innovations’ and described as attempts to ‘evergreening’ the patents.

The terminology ‘evergreening‘ usually ‘refers to a strategy employed by many pharmaceutical companies to extend their market monopoly by slightly changing the existing molecules and obtaining new patents to continue to enjoy market exclusivity and pricing freedom, which otherwise would not have been possible.

Path breaking or jaw-drooping ‘W-O-W’ types of innovations are not so many. Thus most of the patented drugs launched globally over the last several decades are indeed some sort of ‘me-too drugs’ and generally considered as ‘low hanging fruits’ of R&D, not being able to offer significantly greater value to patients than already exiting ones. Many of these drugs have also achieved blockbuster status for the concerned companies, backed by high voltage marketing over a reasonably long period of time. It is understandable, therefore, that from pure business perspective why serious global efforts are being made to push the same contentious system in India too.

Example of some of these molecules (not necessarily in the written order), are as follows:

Cemetidine – Ranitidine – Famotidine – Nizatidine – Roxatidine (to treat Acid-peptic disease)

Simvastatin – Pravastatin – Lovastatin – Pitavastatin – Atorvastatin – Fluvastatin – Rosuvastatin (to treat blood lipid disorder)

Captopril – Enalepril – Lisinopril – Fosinopril – Benzapril – Perindopril – Ramipiril – Quinalapril – Zofenopril (Anti-hypertensives)

However, pharmaceutical companies do argue that such ‘incremental innovations’ are the bedrock for growth of the pharmaceutical industry and are essential to continue to fund pharmaceutical research and development.

An interesting paper:

A paper titled, “Pharmaceutical Innovation, Incremental Patenting and Compulsory Licensing” by Carlos M. Correa argued as follows:

Despite decline in the discovery of New Chemical Entities (NCEs) for pharmaceutical use, there has been significant proliferation of patents on products and processes that cover minor, incremental innovations.

A study conducted in five developing countries – Argentina, Brazil, Colombia, India and South Africa has:

Evidenced a significant proliferation of ‘ever-greening’ pharmaceutical patents that can block generic competition and thereby limit patients’ access to medicines.
Found that both the nature of pharmaceutical learning and innovation and the interest of public health are best served in a framework where rigorous standards of inventive step are used to grant patents.
Suggested that with the application of well-defined patentability standards, governments could avoid spending the political capital necessary to grant and sustain compulsory licenses/government use.
Commented, if patent applications were correctly scrutinized, there would be no need to have recourse to CL measures.

A remarkable similarity with the Indian Patents Act:

The findings of the above study have a striking similarity with the Indian Patents Act. As per this Act, to be eligible for grant of patents in India, the pharmaceutical products must pass the ‘two-step’ acid test of:

Following the inventive step: Defined under Section 2(ja) of the Patents Act as follows:

“Inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.

Passing scrutiny of Section 3(d) of the law: It categorically states, inventions that are a mere “discovery” of a “new form” of a “known substance” and do not result in increased efficacy of that substance are not patentable.

Supreme Court of India clarifies it:

The Honorable Supreme Court of India in page 90 of its its landmark Glivec judgement has clearly pronounced that all ‘incremental innovations’ may not be trivial or frivolous in nature. However, only those ‘incremental innovations’, which will satisfy the requirements of both the above Sections of the Act, wherever applicable, will be eligible for grant of patents in India.

An opposite view:

Another paper presents a different view altogether. It states that incremental improvements on existing drugs have great relevance to overall increases in the quality of healthcare.

With the progress of the pharmaceutical industry, such drugs have helped the physicians to treat diverse group of patients. They also represent advances in safety, efficacy along with newer dosing options significantly increasing patient compliance.

The paper claims that ‘even from an economic standpoint, expanding drug classes represent the possibility of lower drug prices as competition between manufacturers is increased’. It states that any policy aimed at curbing incremental innovation will ultimately lead to a reduction in the overall quality of existing drug classes and may ultimately curb the creation of novel drugs.

Pricing:

Experts, on the other hand, argue, if patents are granted to such ‘incremental innovations’ at all, their prices need to be determined by quantifying ‘Incremental Value’ that patients will derive out of these inventions as compared to the generic versions of respective original molecules.

Use of such drugs may lead to wasteful expenditure:

A large majority of stakeholders also highlight, though many of such drugs will have cheaper or generic alternatives, physicians are persuaded by the pharma players to prescribe higher cost patented medicines with the help of expensive avoidable marketing tools, leading to wasteful expenditure for all. The issue of affordability for these drugs is also being raised, especially, in the Indian context.

The ‘2012 Express Scripts Canada Drug Trend Report’ unfolded that the use of higher-cost medications without offering additional patient benefits resulted in waste of $3.9 billion annually in Canada.

Another recent Geneva-based study concluded as follows:

“Evergreening strategies for follow-on drugs contribute to overall healthcare costs. It also implies that policies that encourage prescription of generic drugs could induce saving on healthcare expenditure. Healthcare providers and policymakers should be aware of the impact of evergreening strategies on overall healthcare costs.”

Some other studies reportedly revealed, “Medicines sold in France are 30 times more expensive than what it costs pharmaceutical companies pay to manufacture them.” Industry observers opine, if that is happening in France what about India? Quoting experts the same report comments, “If pharmaceutical companies are forced to follow moral and human values, it could save the tax payer at least 10 billion euros, an amount which could fill up the deficit of the national health care system.”

Yet another article questioned, “What if a physician is paid speaking or consulting fees by a drug maker and then prescribes its medicine, even if there is no added benefit compared with cheaper alternatives?”

More debate:

According to a paper titled, ‘Patented Drug Extension Strategies on Healthcare Spending: A Cost-Evaluation Analysis’ published by PLOS Medicine, European public health experts estimate that pharmaceutical companies have developed “evergreening” strategies to compete with generic medication after patent termination. These are usually slightly modified versions of the existing drugs.

Following are some brands, which were taken as examples for evergreening:

S.No.	Evergreen	Medical Condition	Original Brand
1.	Levocetirizine (Vozet)	Allergies	Cetirizine (Zyrtec)
2.	Escitalopram (Lexapro)	Depression	Citalopram (Celexa)
3.	Esomeprazole (Nexium)	Acid reflux	Omeprazole (Prilosec)
4.	Desloratadine (Clarinex)	Allergies	Loratadine (Claritan)
5.	Zolpidem Extended Release (Ambien CR)	Insomnia	Zolpidem (Ambien)
6.	Pregabalin (Lyrica)	Seizures	Gabapentin (Neurotonin)

Source: Medical Daily, June 4, 2013

In this study, the researchers calculated that evergreening – where pharmaceutical companies slightly modify a drug molecule to extend its patent, had cost an extra 30 million euros to the healthcare system in Geneva between 2000 and 2008. The authors argue that ‘evergreening’ strategies, “more euphemistically called as ‘life cycle management’ are sometimes questionable benefit to society.”

As the paper highlights, in this scenario the companies concerned rely on brand equity of the original molecule with newer and more innovative marketing campaigns to generate more prescriptions and incurring in that process expenses nearly twice as much on marketing than on research and development.

Brickbats:

In this context, recently a lawmaker rom America reportedly almost lambasted India as follows:

“I’m very concerned with the deterioration in the environment for protection of US intellectual property rights and innovation in India. The government of India continues to take actions that make it very difficult for US innovative pharmaceutical companies to secure and enforce their patents in India.“

On this, the Indian experts comment, if the situation is so bad in India, why doesn’t America get this dispute sorted out by lodging a formal complaint against India in the WTO, just as what India contemplated to do, when consignments of generic drugs of Indian manufacturers were confiscated at the European ports, alleging those are counterfeit medicines.

Yet another recent news item highlighted a “concerted effort, which involves letters from US corporations and business groups to the president, testimony by Obama administration officials before Congress, and lawmakers’ own critiques, came ahead of US secretary of state John Kerry’s trip to India later this month (has already taken place by now) for the annual strategic dialogue, which will precede Prime Minister Manmohan Singh’s visit to Washington DC in September.”

The report stated, the above letter complained that over the last year, “courts and policymakers in India have engaged in a persistent pattern of discrimination designed to benefit India’s business community at the expense of American jobs … Administrative and court rulings have repeatedly ignored internationally recognized rights — imposing arbitrary marketing restrictions on medical devices and denying, breaking, or revoking patents for nearly a dozen lifesaving medications.”  

At a recent Congressional hearing of the United States, a Congressman reportedly expressed his anger and called for taking actions against India by saying,  “Like all of you, my blood boils, when I hear that India is revoking and denying patents and granting compulsory licenses for cancer treatments or adopting local content requirements.”

Indian experts respond to these allegations by saying, patent disputes, patent challenges, revocation of patents, compulsory licensing etc. are all following a well-articulated judicial process of the country, where Indian government has hardly any role to play or intervene. American government and lawmakers are also expected to respect the rule of law in all such cases instead of trying to denigrate the Indian system.

The Power Play:

This short video clipping captures the Power Play in America on this matter.

The Government of India responds:

Ministry of Commerce and Industries of India reportedly countered the allegations of the United States over patents to the US Trade Representive arguing that the Indian IPR regime is fully TRIPS-compliant and Indian Patents Act “encourages genuine innovation by discouraging trivial, frivolous innovation, which leads to evergreening”.

Countries adopting the Indian model:

The above report also highlighted as follows:

Argentina has issued guidelines to reject ‘frivolous’ patents.
Peru, Columbia, other South American countries have placed curbs.
Philippines has similar provisions.
Australia is contemplating making the law tougher.

Revised report of Dr. R. A. Mashelkar Committee:

Even the revised (March 2009) ‘Report of the Technical Expert Group (TEG) on Patent Law Issues’, the TEG, chaired by the well-known scientist Dr. R.A. Mashelkar, in point number 5.30 of their report recommended as follows:

“Every effort must be made to prevent the practice of ‘evergreening’ often used by some of the pharma companies to unreasonably extend the life of the patent by making claims based sometimes on ‘trivial’ changes to the original patented product. The Indian patent office has the full authority under law and practice to determine what is patentable and what would constitute only a trivial change with no significant additional improvements or inventive steps involving benefits. Such authority should be used to prevent ‘evergreening’, rather than to introduce an arguable concept of ‘statutory exclusion’ of incremental innovations from the scope of patentability.”

Bouquets:

As stated above, many experts across the world believe, the criticism that Section 3 (d) is not TRIPS Agreement compliant is unfounded, as no such complaint has been lodged with the World Trade Organization (WTO) in this matter, thus far. The safeguards provided in the patent law of India will help the country to avoid similar issues now being faced by many countries. Importantly, neither does the section 3(d) stop all ‘incremental innovations’ in India.

Quoting a special adviser for health and development at South Centre, a think tank based in Geneva, Switzerland, a recent report indicated, “Many developing countries will follow India’s example to protect the rights of their populations to have access to essential medicines”.

Yet another report quoting an expert articulates, “India’s top court’s decision affirms India’s position and policy on defining how it defines inventions from a patenting point of view for its development needs. It challenges the patenting standards and practices of the developed countries which are the ones really in much need of reform.”

The Honorable Supreme Court in its Glivec judgment has also confirmed that such safeguard provisions in the statute are expected to withstand the test of time to protect public health interest in India and do not introduce any form of unreasonable restrictions on patentability of drug inventions.

Conclusion:

Not withstanding the report of the US-India Business Council (USIBC) titled ‘The Value of Incremental Innovation: Benefits for Indian Patients and Indian Business’, arguing for abolition of section 3(d) of the Indian Patents Act to pave the way for patentability for all types of incremental innovations in pharmaceuticals, realistically it appears extremely challenging.

As the paper quoted first in this article suggests, denial of patents for inventions of dubious value extending effective patent period through additional patents, is a significant safeguard to protect public health interest. This statutory provision will also pave the way for quick introduction of generics on expiry of the original patent.

Taking all these developments into active consideration, keen industry watchers do believe, for every effort towards balancing IPR with Public Health Interest, both brickbats and bouquets will continue to be showered in varying proportion together with the mounting pressure of power play, especially from the developed world and still for some more time.

However, in India this critical balancing factor seems to have taken its root not just deep and strong, but in all probabilities - both politically and realistically, the law is now virtually irreversible, come what may.

By: Tapan J. Ray

Beyond ‘The Magic Moment’ of New Drug Marketing Approval

Posted on June 24, 2013 by Tapan Ray

“Uncontrolled clinical trials are causing havoc to human life. There are so many legal and ethical issues involved with clinical trials and the government has not done anything so far.”

This is exactly what the Supreme Court of India observed while responding to a Public Interest Litigation (PIL) on the subject in January 2013.

While Indian regulators with the active intervention of the Supreme Court are trying to grapple with, besides others, the basic ‘human rights’ aspect of the Clinical Trial (CT), many countries in different parts of the world are moving much ahead at a brisker pace. They have started thinking and putting in place more patient centric newer drug approval systems and also, in tandem, hastening the process of bringing new drugs to the market.

Current general scenario in CT:

Currently, after pre-clinical studies and before applying for regulatory approval, a new drug has to be tested on volunteers in randomized studies to prove its efficacy and safety on patients. Relatively short duration of new drug trials can hardly establish long-term safety and efficacy, which are now arrived at through extrapolation of data collected during CT period.

It is worth noting, the overall situation changes dramatically after launch of these products, as their usage expands from a relatively smaller number of CT volunteers to millions of real-world patients.

In a situation like this, unrealistic expectation of patients’ safety in perpetuity based primarily on extrapolation of very limited CT data is being increasingly questioned today.

That is why, on going post-marketing surveillance, which is also known as a Phase IV CT, is considered as a much more effective process to gauge relative superiority of the drug against the existing ones in terms of both efficacy and safety on a longer term.

That said, today one reads and hears umpteen number of accusations for almost lack of any meaningful response on the part of the pharmaceutical companies, in general, towards revelations of post-marketing surveillance data. This could, in turn, expose the patients to various types of risks, including wasteful healthcare expenditure.

The ‘Magic Moment’ in the present regulatory process:

A recent paper highlights a single “Magic Moment” between pre and post-licensing processes in the current drug-approval model in many countries. In this system, the use of a drug is tightly controlled in a narrowly defined pre-licensing population. Thus, CTs are also conducted on such pre-defined and relatively homogeneous volunteers, who are generally free from complicating conditions.

However, after ‘The Magic Moment’ of marketing approval, a large number of heterogeneous patient population, with many of them on multiple therapy, also use these new products in uncontrolled settings. Situations as these had led to post-marketing major drug withdrawals like, Vioxx and Avandia due to patients’ safety.

These grave concerns have led to a strategic shift in the drug regulatory approval scenario throwing open new ideas in the drug approval process.

Adaptive Licensing:

To find the right answer to this vexing issue the drug regulators in many countries are reportedly seriously contemplating to imbibe a process that will continuously help analyzing information through ongoing post-marketing surveillance data. Continuous medical data analysis like this will enable the regulators to modify their earlier decisions on marketing approval and also medical reimbursements related to pricing reasons.

This new process is called ‘Adaptive Licensing (AL)’, which is expected to benefit the overall healthcare system, by not allowing medical reimbursement of treatments with those drugs, which will provide negligible benefit over existing low cost therapies.

Difference between current mechanism and AL:

According to a ‘Health Canada’ paper titled, “The Path to Adaptive Drug Regulation”, the difference between the two is as follows:

Current system:

As explained above, post-licensing i.e. after ‘The Magic Moment’ of regulatory approval, treatment population grows rapidly and treatment experiences do not contribute to evidence generation.

Adaptive Licensing:

After initial license, treated patients grow more slowly due to regulatory restrictions. Patient experience is captured to contribute to real-world information. The marketing license is also modified accordingly from time to time.

Most desirable for many drugs:

Experts in this field opine that AL will help bringing in alignment of all required processes so important for a new drug seen from patients’ perspective like, R&D, regulatory approval and market access with the active involvement of all stakeholders like, the pharmaceutical companies, the drug regulator, payors/insurance companies and also the researchers.

In the AL system, a transparent drug development process will provide enough data on risk-benefit profile of the concerned drug to satisfy the drug regulator for its quick marketing authorization on pre-determined types of patients.

Such approval will follow real-life monitoring of efficacy and safety for modification of the drug license accordingly, wherever and whenever required.

Thus, AL is expected to strike a right balance balance between timely access to new drugs for the patients and the need to evaluate real time evolving information on safety and efficacy leading to a well-informed patient centric decisions by the drug regulators.

A continuous regulatory evaluation and decision-making process:

AL intends to evaluate a drug through its entire life span. It has been reported that during this long period, clinical and other data will “Continue to be generated on the product through various modalities, including active surveillance and additional studies after initial and full licensing. The artificial dichotomy of pre vs. post licensing stages (‘The Magic Moment’) will be replaced by graded, more tightly managed, but more timely and potentially more cost-effective market entry and market stability.”

Not necessary for all drugs in the near term:

It is worth noting that AL system may not perhaps be required for all pharmaceutical or biologic products and will not totally replace the current system of drug licensing process, at least in the near term.

AL process may immediately be followed only for those products with a favorable risk-benefit drug profile as demonstrated in the initial data and there is a robust reason for early market entry of this drug to meet unmet needs, simultaneously with ongoing studies.

The ‘Magic Moment’ freezes in India…in perpetuity:

As per the Drugs and Cosmetics Act of India, after obtaining drug marketing approval from the regulators, concerned pharmaceutical companies are required to follow the pharmacovigilance system in the country to own the responsibility and liability of the drugs as enunciated in the Schedule Y of the Act. Unfortunately, this is hardly being followed in India, ignoring patients’ safety blatantly.

With the plea that most products launched in India are already being marketed in many developed markets of the world, the concerned companies prefer to depend on clinical experiences in those markets. This attitude totally bypasses the regulatory requirement to follow a robust pharmacovigilance system in India. Indian drug regulators also do not seem to be much concerned about this important patients’ safety related requirements, very surprisingly not even for biosimilar drugs.

However, the current ground realities are quite different. As we witness today, there does not seem to be much difference in time between international and India launch of innovative products. Thus, the argument of gaining medium to long-term experience on safety and efficacy from international data related to these drugs, does not seem to hold any water at all.

On the contrary, some drugs withdrawn from the international markets on safety grounds are still available in India, despite ire and severe indictment even from the Indian Parliamentary Standing Committee.

In a situation like this, AL process of Marketing approval for selected newer and innovative drugs may be considered by the Indian Drug Regulators, just not to be more patient centric, but also to help evaluating pricing decisions of innovative drugs failing to demonstrate significantly better treatment outcomes as compared to the existing ones.

A recent example of AL:

One of the latest drugs, which reportedly will undergo such regulatory scrutiny of USFDA is Tacfidera (dimethyl fumarate) used for the treatment of multiple sclerosis, approved in April 2013 and costing US$ 54,900 per patient per year. Interestingly, Tacfidera, before the drug can find itself on a formulary, will need to demonstrate its effectiveness in the real world.

The report indicates, “the first six months after a drug launch are always about educating payers about its benefits, and while most large payers are likely to make a decision to reimburse the drug in the next twelve months, data collection will continue and changes in policies might be made at a later date.”

Thus, in the years ahead, whether a new drug will become a blockbuster or not will very largely be decided by the ongoing real world data. If the promise of a drug diminishes at any point of time through clinical data, it will certainly going to have consequential financial and other adverse impacts.

Another interesting recent development:

Under new pharmacovigilance legislation in Europe, the European Medicines Agency has reportedly announced the list of over 100 drugs that soon will bear the “black triangle” logo. This initiative is directed to encourage both the doctors and patients to report side effects to enable close monitoring of drug safety.

Criteria to include drugs under additional monitoring are:

Medicines authorized after January 1, 2011 that contain a new active substance.

Biologics for which there is limited post-marketing experience.

Medicines with a conditional approval or approved under exceptional circumstances.

Medicines for which the marketing-authorization holder is required to carry out a post-authorization safety study (PASS).

Other medicines can also be placed under additional monitoring, based on a recommendation from the European Medicines Agency’s Pharmacovigilance Risk Assessment Committee (PRAC).

Conclusion:

Global regulatory experts do believe that in the concept of AL, there are still some loose knots to be tightened expeditiously to make it a fully implementable common drug marketing authorization process. Appropriate pilot projects need to be undertaken in this area to establish beyond any doubt that AL will be decisively more preferable to the current regulatory process.

As and when AL will become the preferred drug-licensing pathway across the world, it is expected to offer greater real benefits of new drug development to the patients for their optimal use at an affordable price.

That said, some other experts do opine as follows:

“No matter how fast the authorization process operates, the merits of innovation will not be felt until they reach patients. And the barrier between authorization and patient access remains, in most of Europe, the issue of reimbursement.”

While all these are fast developing in the global CT scenario, in the jangle of Clinical Trials‘ in India, ‘Adaptive Licensing’ has still remained a critical missing ingredient even to encourage a wider debate.

By: Tapan J. Ray

Pharma Marketing in India: 10 Chain Events to Catalyze a Paradigm Shift

Posted on June 17, 2013 by Tapan Ray

In the matured markets of the world pharmaceutical marketing is quite different in many respect as compared to India. Besides doctors, different sets of customer groups like, healthcare providers, patient advocacy groups, pharmacy benefit managers, clinical assessment authorities play various critical roles for use and consumption of branded or generic pharmaceutical products and related healthcare services.

Quite in contrast, even today, individual doctors have continued to remain almost the sole target customers for the pharmaceutical players in India. This is mainly because, by and large, they are the only decision makers for usage of medicines and other healthcare facilities for most of the patients in the country.

Heralding a new paradigm:

As indicated above, though the current pharmaceutical marketing strategies continue to revolve mostly around the doctors, a distinct change, albeit slowly though, is now anticipated within the pharmaceutical marketing space in India.

Gradual emergence of healthcare providers with medical insurance and other related products, patient advocacy groups and standard treatment guidelines, just to name a few, are expected to facilitate heralding a new paradigm in the strategy dynamics of the Indian Pharmaceuticals Market (IPM) in the coming years. These changes will not be incremental in any way, but disruptive and radical in nature, as they will fully evolve.

This process of transformation, mainly driven by Government policy reform measures like, ‘Universal Health Coverage (UHC)’, ‘Free distribution of medicines’, mandatory prescriptions in generic names, could make the current pharmaceutical business strategy models of majority of companies irrelevant and obsolete, in not too distant future.

It is worth noting that the Government will spend around Rs.14,000 Crores (US$ 2.60 billion, approximately) from the year 2014 to 2017 just on medicine purchases at highly negotiated/discounted prices for free distribution to all through Government hospitals and dispensaries.

10 Chain events envisaged:  

In the evolving scenario, following chain events, taking place almost in tandem, in my view, will gradually usher in a new pharmaceutical marketing paradigm in India:

1. In addition to ‘Universal Health Coverage’, there will be a rapid increase in the number of other healthcare providers with innovative, tailor-made and value added schemes for various strata of the society.

2. This will trigger emergence of very powerful groups of negotiators for adopting treatment guidelines, pharmaceutical products usage and other healthcare related services.

3. These groups will have the wherewithal to strongly and significantly influence the doctors in their prescription and other treatment choices.

4. A significant proportion of the products that the pharmaceutical companies will market, a tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable.

5. Consequently, doctors will no longer be the sole decision makers for prescribing drugs and also the way they will treat the common diseases.

6. Pharmaco-economics or Health Technology Assessment (HTA) or outcome based pricing will gradually play an important role in pricing a healthcare products. Drug Price Control Order (DPCO 2013) has already signaled to this direction for a class of products.

7. An integrated approach towards disease prevention will emerge as equally important as treating diseases.

8. A shift from just product marketing to marketing a bundle of value added comprehensive disease management processes along with the product would be the order of the day.

9. More regulatory control measures on pharmaceutical sales and marketing are expected to be put in place by the Government to prevent alleged widespread sales and marketing malpractices in the country.

10. Over the counter (OTC) medicines, especially those originated from natural products to treat common and less serious illnesses, will carve out a sizable share of the market, as appropriate regulations would be put in place, adequately supported by AYUSH. This will be fueled by overall increase in general health awareness of the population.

Trapped in an ‘Archaic Strategy Cocoon’:

Over a long period of time, Indian pharmaceutical industry seems to have trapped itself in a difficult to explain ‘Archaic Strategy Cocoon’. No holds bar sales promotion activities, with very little of marketing, continue to dominate the ball game of hitting the month-end numbers, even today.

It is high time to come out of this cocoon and confront the ‘writing on the wall’ upfront, if not try to hasten the process of the evolving changes, boldly and squarely. This will require a strategic long term vision to be implemented in an orderly way to effectively convert all these challenges into possible high growth business opportunities.

A differentiated composite value delivery system:

Moreover, in today’s post product patent regime in the country, product pipelines of the domestic Indian companies with new ‘copycat’ versions of patented products have almost dwindled into nothing, making price competition in the market place even more ‘cut throat’.

In such type of changing environment, all pharmaceutical companies will be under tremendous pressure to create and deliver additional, well differentiated and composite value offerings, beyond physical products, to attract more patients, doctors, healthcare providers and others, in and around related disease areas, for business excellence.

Thus, ability to create and effectively deliver well-differentiated composite value offerings, along with the physical products, will separate men from the boys in the high growth pharmaceutical market of India, in the long run.

This could also possibly create an ‘Alibaba Effect’ for the successful ones in search of pots of gold in the pharmaceutical space of India.

New leadership and managerial skill set requirements:

In the new environment, required skill sets for both the leaders and the managers of Indian pharmaceutical companies will be quite different from what they are today. This will not happen overnight though, but surely will unfold gradually.

New skills:

Leaders and managers with knowledge in just one functional area like, R&D, manufacturing, marketing, regulatory, finance are unlikely to be successful without a broad-based knowledge in the new paradigm. To really understand and handle new types and groups of customers, they will need to break the operational silos and be proficient in other key areas of business too.

These professionals will require ensuring:

• Multi-functional expertise by rotating right people across the key functional areas, as far as possible, even with a stretch.

• Ability to fathom and correctly interpret patients’ clinical benefits against cost incurred to achieve the targeted clinical outcomes, especially in areas of new products.

• Insight into the trend of thought pattern of healthcare providers and other customers or influencers groups.

• Speed in decision-making and delivery…more importantly ability to take ‘first time right’ decisions, which can make or mar an important initiative or a commercial deal.

IPM growing fast, can grow even faster:

India is now one of fastest growing emerging pharmaceutical markets of the world with 3rd global ranking in the volume of production and 13th in value terms. Domestic turnover of the industry is over US$ 13.1 billion in 2012 (IMS) representing around 1 percent of the global pharmaceutical industry turnover of US$ 956 billion (IMS 2011).

Since 1970, Indian pharmaceutical Industry has rapidly evolved from almost a non-entity to meeting around 20 percent of the global requirements of high quality and low cost generic medicines.

Financial reforms in the health insurance sector and more public investments (2.5% of the GDP) in the healthcare space during the 12th Five Year Plan Period will have significant catalytic effect to further boost the growth of the industry.

Stringent regulations and guidelines of the Government in various areas of pharmaceutical business in India are expected to be in place soon. Ability to ensure system-based rigid organizational compliance to those changing business demands in a sustainable way. will determine the degree of success for the pharma players in India.

One such area, out of many others, is the professional interaction of the Medical Representatives with the doctors and other customer groups.

Require a ‘National Regulatory Standard’ for Medical Representatives in India:

Medical Representatives (MRs) currently form the bedrock of business success, especially for the pharmaceutical industry in India. The Job of MRs is a tough and high voltage one, laced with moments of both elation and frustration, while generating prescription demand for selected products in an assigned business territory.

Though educational qualifications, relevant product and disease knowledge, professional conduct and ethical standards vary widely among them, they are usually friendly, mostly wearing a smile even while working in an environment of long and flexible working hours.

There is a huge challenge in India to strike a right balance between the level and quality of sales pitch generated for a brand by the MRs, at times even without being armed with required scientific knowledge and following professional conduct/ ethical standards, while doing their job.

Straying from the right course:

A recent media report highlighted that ‘Indian subsidiary of a Swiss pharma major has run into trouble with some executives allegedly found to be inflating and presenting fabricated sales data for an anti-diabetic drug.’

The report also indicated that officials from mid-management ranks to sales representatives were allegedly involved in those unethical practices. The company has responded to this incidence by saying that the matter is still under investigation.

It is critical for the MRs not just to understand scientific details of the products, their mode of action in disease conditions, precautions and side effects, but also to have a thorough training on how to ‘walk the line’, in order to be fair to the job and be successful.

As MRs are not just salesmen, they must always be properly educated in their respective fields and given opportunities to constantly hone their knowledge and skills to remain competitive. The role of MRs is expected to remain important even in the changing scenario, though with additional specialized skill sets.

Unfortunately, India still does not have a ‘National Code of Conduct or Regulatory Standards’ applicable to the MRs.

Only the clause 4 of ‘The Magic Remedies (Objectionable Advertisement) Act, 1954’ deals with misleading advertisements. It is about time to formulate not only a ‘National Code on Pharmaceutical Marketing Practices’, but also a mandatory ‘Accreditation program’ and transparent qualifying criteria for the MRs for the entire pharmaceutical industry in India, just like many other countries of the world.

‘Central Drugs Standard Control Organization (CDSCO)’ of the Ministry of Health and Family Welfare of the Government of India in its website lists the “Laws Pertaining to Manufacture and Sale of Drugs in India”. However, it does not specify any regulation for the MRs nor does it recommend any standard of qualification and training for them, which is so critical for all concerned.

There are currently no comprehensive national standards for educational qualification, knowledge, ethics and professional conduct for the MRs. In the absence of all these, it is difficult to fathom, whether they are receiving right and uniform inputs to appropriately interact with the medical profession and others in a manner that will benefit the patients and at the same remain within the boundary of professional ethics and conduct.

Thus, a ‘National Regulatory Standard’ for MRs, I reckon, is absolutely necessary in India… sooner the better.

Global pharmaceutical players:

Facing a huge patent cliff, global pharmaceutical companies are now fast gaining expertise in the ball game of generic pharmaceuticals, especially in the developing markets of the world.

In the emerging markets like India, where branded generic business dominates, global pharmaceutical players seem to be increasingly finding it lucrative enough for a sustainable all round business growth.

However, to outpace competition, they too will need to capture the changing dynamics of the market and strategize accordingly without moaning much about the business environment in the country.

On the other hand, if majority of Indian pharmaceutical companies, who are not yet used to handling such changes, are caught unaware of this evolving scenario, the tsunami of changes, as they will come, could spell a commercial disaster, endangering even very survival of their business.

Managing transition:

During ensuing phase of transition in India, pharmaceutical companies would require to:

• Clearly identify, acquire and continuously hone the new skill sets to effectively manage the evolving challenge of change.

• Get engaged, having clarity in the strategic content and intent, with the existing public/private healthcare providers and health insurance companies like, Mediclaim, ICICI Lombard, large corporate hospital chains, retail chain chemists and others, proactively.

• Drive the change, instead of waiting for the change to take place.

• Ensure that appropriate balance is maintained between different types of marketing strategies with innovative ways and means.

Conclusion:

It may not be easy for the local Indian players to adapt to the new paradigm sooner and compete with the global players on equal footing, even in the branded generic space, with strategies not innovative enough and lacking required cutting edges.

In my view, those Indian Pharmaceutical companies, who are already global players in their own rights and relatively well versed with the nuances of this new ball game in other markets, will have a significant competitive edge over most other domestic players.

If it happens, the global-local companies will offer a tough competition to the local-global players, especially, in the branded generic space with greater cost efficiency.

So far as other domestic players are concerned, the fast changing environment could throw a new challenge to many, accelerating the consolidation process further within the Indian pharmaceutical industry.

As the new paradigm will herald, catalyzed by the above 10 chain events, there will be a metamorphosis in the way pharmaceutical marketing is practiced in India. A well-differentiated composite value delivery system would then, in all probability, be the name of the winning game.

By: Tapan J. Ray

Two Paintings on the Same Canvas: ‘Truth About Drug Companies’ and ‘Protecting Access to Medicines’

Posted on May 13, 2013 by Tapan Ray

As the saying goes, “Great people think alike”, many thought leaders of very high credibility across the globe, seem to think almost in similar lines when it comes to improving access to medicines for a large section of the global population.

In this article, I shall briefly focus on two such instances, both revolving around the same centerpiece – one from India and the other from the land of ‘pharmaceutical innovation’ – America.

An interesting article written recently by the well-regarded Indian expert of global stature Dr. K. Srinath Reddy, President, Public Health Foundation of India (PHFI), reiterates emphatically, “India must protect access to medicine”.

In a more focused context related to EU-FTA, the author wrote about possible adverse impact of more stringent product patent and regulatory data protection related issues on access to generic medicines in India and other developing countries. Thus, he argued that EU-FTA should be well negotiated by India and cautioned as follows:

“It must be remembered that India needs to protect its vital interests in any trade agreement, just as other nations strive to. Our interest lies in protecting the lives and safeguarding the health of Indians, without permitting unreasonable restrictions on our ability to produce, use and even export, generic versions of drugs the patents of which have lapsed (or where compulsory licensing has been invoked to protect public health).

India needs to tread carefully while negotiating the FTA with the EU, so that the health of the Indian people is not compromised through provisions that shackle our generic drug industry.”

The debate has assumed a global dimension:

Such raging debates on a critical public health issue, like access to medicines, are also taking place in many other countries, as I write, including America, irrespective of the fact whether these are generic or patented drugs.

Marcia Angell, M.D, a faculty of Harvard Medical School and a former Editor in Chief of the world’s leading medical journal ‘The New England Journal of Medicine’ wrote an interesting book.

In this book titled “The Truth About the Drug Companies: ‪How They Deceive Us and What to Do About It”, she makes many interesting comments on the American pharmaceutical industry on access to medicines and the kind of pharmaceutical innovations that they are involved in.

The world noticed it:

This book arrested global attention and was extensively reviewed. Since, the author wrote more specifically about the American pharmaceutical industry, following are some excerpts quoted from her book reviews in the USA:

New York Times: “A scorching indictment of drug companies and their research and business practices…tough, persuasive and troubling.”

Boston Globe: “A sober, clear-eyed attack on the excesses of Drug Company power…a lucid, persuasive, and highly important book.”

Washington Post: “Always authoritative…[this book] delivers the message—that drug-company money and power is corrupting American medicine—in a convincing, no-nonsense manner.”

Some key issues raised in the book:

Like the above article of Dr. Reddy, here also the author raises some interesting issues related to the American drug companies. I am penning below some of those issues exactly as expressed by the author (verbatim):

“The magic words, repeated over and over like an incantation, are research, innovation, and American. Research. Innovation. American. It makes a great story.”

“R&D is a relatively small part of the budgets of the big drug companies—dwarfed by their vast expenditures on marketing and administration, and smaller even than profits.”

“The great majority of ‘new’ drugs are not new at all but merely variations of older drugs already on the market. These are called ‘me-too’ drugs.”

“If I’m a manufacturer and I can change one molecule and get another twenty years of patent rights, and convince physicians to prescribe and consumers to demand the next form of Prilosec, or weekly Prozac instead of daily Prozac, just as my patent expires, then why would I be spending money on a lot less certain endeavor, which is looking for brand-new drugs?”

“Over the past two decades the pharmaceutical industry has moved very far from its original high purpose of discovering and producing useful new drugs. Now primarily a marketing machine to sell drugs of dubious benefit, this industry uses its wealth and power to co-opt every institution that might stand in its way, including the US Congress, the FDA, academic medical centers, and the medical profession itself. (Most of its marketing efforts are focused on influencing doctors, since they must write the prescriptions.)”

“Now universities, where most NIH-sponsored work is carried out, can patent and license their discoveries, and charge royalties. Similar legislation permitted the NIH itself to enter into deals with drug companies that would directly transfer NIH discoveries to industry.”

“Many medical schools and teaching hospitals set up “technology transfer” offices to help in this activity and capitalize on faculty discoveries. As the entrepreneurial spirit grew during the 1990s, medical school faculty entered into other lucrative financial arrangements with drug companies, as did their parent institutions.”

“One of the results has been a growing pro-industry bias in medical research—exactly where such bias doesn’t belong.”

“In the 1990s, Congress enacted other laws that further increased the patent life of brand-name drugs. Drug companies now employ small armies of lawyers to milk these laws for all they’re worth—and they’re worth a lot. The result is that the effective patent life of brand-name drugs increased from about eight years in 1980 to about fourteen years in 2000.”

“The biggest single item in the budget is neither R&D nor even profits but something usually called ‘marketing and administration – a name that varies slightly from company to company.”

“The industry is fighting these efforts—mainly with its legions of lobbyists and lawyers. It fought the state of Maine all the way to the US Supreme Court, which in 2003 upheld Maine’s right to bargain with drug companies for lower prices, while leaving open the details. But that war has just begun, and it promises to go on for years and get very ugly.”

“The fact that Americans pay much more for prescription drugs than Europeans and Canadians is now widely known.”

“There are very few drugs in the pipeline ready to take the place of blockbusters going off patent. In fact, that is the biggest problem facing the industry today, and its darkest secret. All the public relations about innovation is meant to obscure precisely this fact.”

“Of the 78 drugs approved by the FDA in 2002, only 17 contained new active ingredients, and only seven of these were classified by the FDA as improvements over older drugs.”

“While there is no doubt that genetic discoveries will lead to treatments, the fact remains that it will probably be years before the basic research pays off with new drugs. In the meantime, the once-solid foundations of the big pharma colossus are shaking.”

“Clearly, the pharmaceutical industry is due for fundamental reform. Reform will have to extend beyond the industry to the agencies and institutions it has co-opted, including the FDA and the medical profession and its teaching centers.”

“The me-too market would collapse virtually overnight if the FDA made approval of new drugs contingent on their being better in some important way than older drugs already on the market.”

“A second important reform would be to require drug companies to open their books. Drug companies reveal very little about the most crucial aspects of their business.”

“But the one thing legislators need more than campaign contributions is votes. That is why citizens should know what is really going on. Contrary to the industry’s public relations, they don’t get what they pay for. The fact is that this industry is taking us for a ride, and there will be no real reform without an aroused and determined public to make it happen.”

An opposite view:

On this an article in Forbes Magazine commented as follows:

“The problem with Angell’s arguments is that they are rife with inaccuracies and fallacies. Furthermore, she makes no accounting for changes in the industry that have occurred over the last decade.”

“It is time for those in the medical profession to spur a more truthful and factual discussion about the pharmaceutical industry and its role in the discovery and development of new medicines. The pharmaceutical industry is a key player in the evolution of healthcare and this needs to be recognized if the industry is to operate effectively.”

Conclusion:

One of the key counter arguments that very often comes up in this area, including in India is, the protection of Intellectual Property Rights (IPR) is the responsibility of the Government concerned at any cost, even if such protective measures severely restrict access to these drugs to a large population of the society across the globe, due to ‘affordability’ considerations.

It is also claimed that, to come out with innovative medicines, large pharmaceutical companies invest a huge amount of money and time towards R&D related activities.

Thus, the global innovator companies, by and large, with a few exceptions though, believe that stricter enforcement of stringent patent laws by the Governments is the only answer to foster innovation within the industry. Such stringent measures, as they argue, will help them keep investing in R&D to meet the ‘unmet needs’ of patients on a continuous basis.

However, as we have seen above, many experts, like Harvard faculty Marcia Angell and Dr. K. Srinath Reddy have strong and quite different view points. It is certain that the debate on access to affordable medicines is not going to die down, at least any time soon.

Despite all these, it is not difficult, I reckon, to identify an emerging but a clear trend indicating, the priority of the Governments to protect public health interest in the longer term, will ultimately prevail in most parts of the world, including India.

Consequently, the world will probably witness more and more new government policies and legal frameworks in this area striking a right balance between improving access to medicines and fostering innovation, as the countries move on.

That said, taking note of the above two paintings, as it were, painted on the same canvas of ‘improving access to medicines for all’, is it not amazing to note a striking similarity in the thought pattern between two highly credible and independent think tanks, belonging to the oldest and largest democracies of the planet earth, to ensure affordable medicines for all?

By: Tapan J. Ray

PILMAN

A Tapan Ray Website

Tag Archives: Health

Big Pharma Demands Transparency, Keeping their ‘Black-Boxes’ Tight and Safe?

Supreme Court Suspends New Drug Trials in India…Time to Shape Up?

Pharma FDI: Damning Report of Parliamentary Panel, PM Vetoes…and Avoids Ruffling Feathers?

FDC Saga: Defiant Manufacturers, Sloppy Regulators and Humongous Inaction

Balancing IPR with Public Health Interest: Brickbats, Power Play and Bouquets

It is now a widely accepted dictum that Intellectual Property Rights (IPR), especially pharma patents, help fostering innovation and is critical in meeting unmet needs of the patients.

However, the moot question still remains, what type pharmaceutical invention, should deserve market exclusivity or monopoly with overall freedom in pricing, keeping larger public health interest in mind.

However, pharmaceutical companies do argue that such ‘incremental innovations’ are the bedrock for growth of the pharmaceutical industry and are essential to continue to fund pharmaceutical research and development.

Experts, on the other hand, argue, if patents are granted to such ‘incremental innovations’ at all, their prices need to be determined by quantifying ‘Incremental Value’ that patients will derive out of these inventions as compared to the generic versions of respective original molecules.

Beyond ‘The Magic Moment’ of New Drug Marketing Approval

Pharma Marketing in India: 10 Chain Events to Catalyze a Paradigm Shift

Two Paintings on the Same Canvas: ‘Truth About Drug Companies’ and ‘Protecting Access to Medicines’