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Self-made Barriers To Business Transparency Impacting Drug Access

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A recently published book on pharma industry tried to expose the deceit behind many generic-drug manufacturing—and the consequent risks to global health. This publication is described as an ‘explosive narrative investigation of the generic drug boom that reveals fraud and life-threatening dangers on a global scale.’ However, I reckon, this is just a part of the story, and its huge adverse impact on public health flows generally from the following facts:

  • Greater use of generic drugs is hailed as one of the most important public-health developments of the twenty-first century.
  • Today, almost 90 percent of global pharma market, in volume terms, is comprised of generics.
  • These are mostly manufactured in China and India.
  • The drug regulators continuously assure patients and doctors that generic drugs are identical to their brand-name counterparts, just less expensive.

No question, such deceit, blatant fraud and data manipulation – seriously affecting drug quality of generic medicines, shake the very purpose of making affordable drugs accessible to many. But, simultaneously, lack of transparency – right across the various functions of a pharma business, is also making a host of modern life-saving drugs unaffordable and inaccessible to even more patients. Although, both are despicable acts, but the latter one is not discussed as much.

Thus, in this article, I shall dwell on the second one – how attempts for pharma business ‘transparency’ for expanded drug access to patients, getting repeatedly foiled, especially in light of what happened on May 28, 2019, in the 72nd World Health Assembly (WHA).

Does pharma want low business transparency to continue?

Despite so many encouraging initiatives being taken in the pharma industry over a period of time, gross lack of transparency in its business continues, since long, despite this is being a raging issue. The obvious question, therefore, remains: Does pharma want low business transparency to continue? Thus, to give a perspective to this pertinent point, I shall quote two important observations, appeared in ‘MIMS Today’ – the first one on April 17, 2017, and the other came a year before that, on November 20, 2016, as follows:

  • “A market cannot function when purchasers have limited information and, in the case of prescription drugs, pricing is a black box. Prices for drugs are clearly rising at rates that far exceed inflation and the level of any rebates or discounts offered by manufacturers,” experts opined. They further said, to hold the industry accountable, Access to Medicine Foundation (AMF)’ regularly compiles an index to rank the progress made by each large drug maker in the area of business transparency. Curiously, they concluded, ‘the number and quality of evaluations for the effectiveness of these programs are lacking.’
  • “Lack of transparency of drug makers was also identified. Their policy positions, political contributions, marketing activities and memberships in associations and the associated financial support provided and board seats held were all analyzed. And only then, the ‘AMF’ reached a consensus that transparency remains low in all areas. The analysts further added, ‘there is a lack of transparency and rigor in monitoring and evaluating the access-to-medicines initiatives as well as the link between prices and development costs. Thus, ‘greater transparency from manufacturers to disclose R&D costs for drugs and evaluation of the initiatives’ is imperative.

Despite key policy makers’ favoring transparency, it remains elusive:

To illustrate this point, let me draw a recent example from the United States.

Alex M. Azar II, who is currently the Secretary of Health and Human Services of the United States, also served as president of Eli Lilly USA. LLC from 2012 to 2017 supports the need of business transparency in the pharma industry. Last year, he also emphasized:

“Putting patients in charge of this information is a key priority. But if we’re talking about trying to drive not just better outcomes, but lower costs, we also have to do a better job of informing patients about those costs. That is where our emphasis on price transparency comes in.” By naming the key health care product and service providers, Azar added, “So this administration is calling on not just doctors and hospitals, but also drug companies and pharmacies, to become more transparent about pricing and outcomes of their services and products.”

Like Secretary Azar, policy makers in several other countries, including India, are also talking and seemingly in favor of transparency in health care business systems, but it remains elusive, as we shall see below.

Do vested interests create over-powering pressure to maintain status-quo?

The above examples give some idea about the pressure created by vested interested to maintain a status-quo in this important area. Although, business transparency is a must, pharma influence on policy makers is so powerful that even a recent global resolution on the subject, had to dilute its original version in its final avatar, significantly, which I shall now focus on, as yet another vindication on this issue.

The final version of the 2019 WHA resolution made weaker in transparency:

On May 28, 2019, by a News Release in Geneva, the World Health Organization (W.H.O) announced, to help expand access to medicines for all, the72nd World Health Assembly (WHA) adopted a significant resolution on improving the transparency of markets for medicines, vaccines and other health products, globally. I repeat, this was a global effort to expand access. The assembly brought together delegates from 194 Member States of the W.H.O, including India – from 20 to 28 May 2019, in Geneva, Switzerland.

Intriguingly, as several reports highlighted, ‘the final resolution is considerably weaker than the original draft.’ Nevertheless, it still provides, at least, some measures, which have potential to make an impact on market access, globally.

What exactly was the 2019 WHA original resolution?

The original WHA draft resolution, titled ‘Roadmap for access 2019-2023 – Comprehensive support for access to medicines and vaccines’, urged the Member states the following:

  • To enhance public sharing of information on actual prices paid by governments and other buyers for health products,
  • Greater transparency on pharmaceutical patents, clinical trial results and other determinants of pricing along the value chain from laboratory to patient.
  • Requests the WHO secretariat to support efforts towards transparency and monitor the impact of transparency on affordability and availability of health products, including the effect of differential pricing.

Highlighting that access to medicines is the key to advancing the Universal Health Coverage (UHC), the resolution aims to help the Member States:

  • To make more informed decisions when purchasing health products,
  • Negotiate more affordable prices
  • And ultimately expand access to health products for the populations.

Palpable discomfort of large pharma associations:

The May 30, 2019 article of the Pharm Exec Magazine on this resolution, carried a headline with a query: Is it ‘A Watershed on Transparency and International Collaboration in Drug Pricing?’ The paper brought out some important points that may help explain why the 2019 original WHA resolution, could not be adopted as such. Apparent discomfort in this regard of some top industry associations, which were created and fully funded by large global drug companies, was palpable, according to this report.

For example, “the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), warned governments ‘to carefully consider potential risks to patients, particularly in less developed countries, of sharing outcomes of confidential price negotiations across countries.’ The implication is that prices in less-affluent countries could rise if the wealthier nations used international transparency to demand lower prices for their markets.”

Why couldn’t the original resolution on business transparency be adopted?

To instantiate the level of discomfort of vested interests, let me highlight some critical changes made in the 2019 in final WHA resolution at the international level, as I get from the above paper. A few of which are as follows:

In the original draft Changes in the final resolution
1. “Undertake measures to publicly share information on prices and reimbursement cost of medicines, vaccines, cell and gene-based therapies and other health technologies.” Refers to publicly sharing of information only on net prices.
2. “Require the dissemination of results and costs from human subject clinical trials, regardless of outcome or whether the results will support an application for marketing approval.” “Take the necessary steps, as appropriate, to support dissemination of and enhanced availability of and access to aggregated results data and, if already publicly-available or voluntarily-provided, costs from human subject clinical trials regardless of outcomes or whether the results will support an application for marketing approval.”
3. “Require the publication of annual reports on sales revenue, prices, units sold, and marketing costs for individual products, as well as details of the costs of each trial used to support a marketing authorization application and information on financial support from public sources used in the development of a drug.” Calls on the member states to “work collaboratively to improve the reporting of information by suppliers on registered health products, such as reports on sales revenues, prices, units sold, marketing costs, and subsidies and incentives.”
4. Wanted the WHO Director-General to “propose a model/concept for the possible creation of a web-based tool for national governments to share information, where appropriate, on medicines prices, revenues, units sold, patent landscapes, R&D costs, the public sector investments and subsidies for R&D, marketing costs, and other related information, on a voluntary basis.” Diluted only to “assessing the feasibility and potential value of establishing a web-based tool to share information relevant to the transparency of markets for health products, including investments, incentives, and subsidies.”
5. Proposed the creation of a forum to “develop suitable options for alternative incentive frameworks to patent or regulatory monopolies for new medicines and vaccines” that would both promote universal health coverage and adequately reward innovation. This point doesn’t find any place in the final resolution.

It appears, the final 2019 WHA resolution has been able to remove the key points of discomfort for the drug industry – caused by greater business transparency. It is largely due to the fact that the final pledges ‘consist largely of recommendations for voluntary action rather than the requirements for comprehensive disclosure proposed in the original draft.’

Conclusion:

To arrive at a consensus, especially over promoting transparency in costs incurred towards R&D of drugs and health-related technologies, appeared challenging for the W.H.O Member States, inthe 72nd World Health Assemblythat concluded on May 28, 2019.Overall resolution changed the narrative from a mandatory process to a voluntary initiative. As I said before, it still prescribes several measures, which can help expand access to medicines for all, across the world.

In tandem, it also comes out clearly that barriers to business transparency to ensure better access to drugs for all, across the world, are not easy to uproot, either. Especially, when it comes to fighting against concerted efforts of powerful pharma lobby groups, other vested interests and some looney fringes.

The process of adoption of the May 2019 WHA final resolution of the world’s most relevant public health issues, is just an example.

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.

Uniting Pharma With Business Ethics: A Bridge Too Far?

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Operating ethically not only is the right thing to do but also is fundamental to success in business. Poor governance and poor ethical business practices can lead to fines, public scrutiny and distrust – overshadowing good performance, destroying reputation, and undermining the morale and engagement of employees. …We must act in ways that build and maintain the trust of patients, healthcare professionals, governments and society. This was articulated in the Novartis Corporate Responsibility Report 2017, highlighting how important it is to unite pharma operations with business ethics for each company. But is it happening in reality?

The same question haunts yet again with the announcement of a new Code of Marketing Practice by the International Federation of Pharmaceutical Manufacturers and Associations’ (IFPMA),effective January 2019. The pronouncement prescribes ‘a global ban on gifts and promotional aids for prescription drugs wherever the association’s member companies operate.’

However, the overall scenario gets more complex to comprehend, when on January 03, 2019  Bloomberg Law reported: ‘The change is causing concern among both U.S.-based and multinational companies like Astra Zeneca, Bristol-Myers Squib, Johnson & Johnson, and Pfizer Inc. about how to balance appropriate business behavior with respect for cultural norms in other countries.’ Interestingly, the IFPMA membership virtually covers all MNC drug companies, operating across the world. Thus, any concern on its implementation, especiallyamong some of the bigger names, raises more questions than answers about its effectiveness. What exactly has been the outcome of all such actions being taken, especially by the multinational pharma industry associations, from time to time. Have the patients been benefited – at all?

Keeping this recent development as the backdrop, I shall try to gauge in this article, is the bridge still too far to mitigate the widening gap between overall pharma operations and the standard of business ethics -voluntary code of practices of pharma associations notwithstanding?

Why pharma ‘business-practices’ and ‘business-ethics’ are so important?

Before charting onto the sensitive areas of ‘business practices’ and ‘business ethics’, let me recapitulate the meaning of these two terminologies to fathom why these are so important in pharma to protect patient health interest.

  • Business practice is defined as a method, procedure, process, or rule employed or followed by a company in pursuit of achieving its objectives. Itmay also refer to these collectively.
  • Similarly, Business ethics is defined as a form of professional ethics that examines the ethical and moral principles and problems that arise in a business environment. It applies to all aspects of business conduct on behalf of both individuals and the entire company.

Thus, ethical business policies and practices for pharma industry, when worked out both by an industry association or an individual company, aims at addressing potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate responsibility and fiduciary responsibilities.

Ironically, despite well-hyped announcements of voluntary codes of practices from time to time, no commensurate changes in patients’ health interest are visible in real life. Thus, the very relevance of such edicts is now being seriously questioned by many.

What do reports reflect on ongoing pharma business practices?

To get an idea in this area, let me quote below from three reports, out of which one is specifically on the Indian scenario, which has not changed much even today:

“The interaction between physicians and medical representatives (MRs) through gift offering is a common cause for conflicts of interest for physicians that negatively influence pre- scribing behaviors of physicians throughout the world.” This was articulated in an article titled, “Gift Acceptance and Its Effect on Prescribing Behavior among Iraqi Specialist Physicians”, published by Scientific Research Publishing (SCIRP) in June 2014.

A couple of years before that, on September 07, 2012, Reuters also published an article with the headline: “In India, gift-giving drives drug makers’ marketing.” Thereafter, many similar articles were published in various newspapers and magazines, possibly to trigger remedial action by the regulators in the country.

Very recently, on January 18, 2019, The New York Times (NYT) came out with a mind boggling headline – “Study Links Drug Maker Gifts for Doctors to More Overdose Deaths.” Elaborating on this JAMA study, the NYT wrote: “Counties where the doctors got more meals, trips and consulting fees from opioid makers had higher overdose deaths involving prescription opioids.”

The point I want to drive home here is that freebies in the form of gifts, travel to exotic places with free meals and stay, fees of various types clubbed under a mysterious nomenclature ‘consulting fees’, purported to influence doctor’s prescribing behavior, are now rampant. These are adversely impacting patients, as they are often compelled to buy high-priced drugs, unnecessary drugs, including antibiotics, sedatives and opioids, to name a few.

Are big pharma companies following the codes – both in letter and spirit?

The doubt that surfaces, are these changes just for displaying to the stakeholders how well and with stringent measures, drug companies are self-regulating themselves, on an ongoing basis? Before jumping to any conclusion, let us try to make out whether, at least the big pharma players are following these codes in both letter and spirit.

To establish the point, instead of providing a long list of large pharma settlements with governments for various malpractices, I shall cite just the following two relatively recent ‘novel’ examples related two top global pharma companies, for you to have your own inferences.

  • The first one is related to reports that flashed across the world in May 2018 related to Novartis. One such article described, “Congress demands info from Novartis about its USD 1.2m in outflows to Michael Cohen, just as it was negotiating payments for its cancer drug.” The report further elaborated, Novartis’ USD 1.2 million payment was made in the shell company of Michael Cohen, President Donald Trump’s personal lawyer and so-called ‘fixer’.
  • The second one is the September 13, 2018 report of The New York Times. It revealed: ‘Dr. José Baselga, the chief medical officer of Memorial Sloan Kettering Cancer Center, resigned on Thursday amid reports that he had failed to disclose millions of dollars in payments from health care companies in dozens of research articles.”

The report also stated: “Dr. Baselga, a prominent figure in the world of cancer research, omitted his financial ties to companies like the Swiss drugmaker Roche and several small biotech startups in prestigious medical publications like The New England Journal of Medicine and The Lancet. He also failed to disclose any company affiliations in articles he published in the journal Cancer Discovery, for which he serves as one of two editors in chief.”

Indian companies aren’t trailing far behind, either:

Many Indian companies are, apparently, sailing on the same boat. Let me illustrate this point by citing an example related to India’s top ranked domestic pharma player.

What it said: Way back on November 13, 2010, Sun Pharmain a communication expressed its concern by saying: ‘Over four decades since Independence, the government nurtured a largely self-sufficient pharma industry. But the entry of MNCs is putting most drugs beyond the reach of millions.’

The communique further added: ‘Even as the domestic industry begins to feel the heat of an unprotected market, public health experts are examining why drug prices in India are higher than in Sri Lanka, which imports most of its drugs. The MNC takeover raises the specter of an MNC-dominated pharma sector selling drugs at un-affordable prices, a throw ‘back to the scenario just after Independence, which the government painstakingly changed over four decades. Are we setting the clock back on the country’s health security?’

The reality thereafter: It’s a different story that today, the same Sun Pharma, despite alleged ‘high price drugs of MNCs’, occupies the top ranking in the Indian pharmaceutical market. Be that as it may, the point to note that the same company is now facing similar charges from other countries, almost a decade after. On March 2017, a media report came with a headline: ‘Sun Pharma, Mylan face price fixing probe in US.’

Incidentally,the company is mired with allegation on governance related issues, as well. A media report dated November 20, 2018 carried a headline: ‘Governance cloud over Sun Pharma, stock at 6-month low.’ This example is quite relevant to this discussion, as well, for its link with ethical business practices, as discussed earlier.

Additionally, class-action lawsuits in the United States for alleged business malpractices, including ‘pay for delay conspiracies’, against Indian pharma companies are also on the rise – Sun Pharma and Dr. Reddy’s top the list in terms of those who face most class-action litigation, reported a leading Indian business daily on September 02, 2017.

Pharma malpractices continue, DOP is still to make UCPMP mandatory: 

In this quagmire, where self-regulation doesn’t work, the government usually steps in, as happened in the United States and Europe. Whereas, in India, no decisive government action is yet visible to curb this menace, especially for protection of patients’ health interest. Let me try to illustrate this point with the following chronology of four key events:

  • On May 08, 2012, the Parliamentary Standing in its 58th Report, strongly indicted the DoP for not taking any tangible action in this regard to contain ‘huge promotional costs and the resultant add-on impact on medicine prices’.
  • Ultimately, effective January 01, 2015, the Department of Pharmaceuticals (DOP) put in place the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) for voluntary implementation, despite knowing it has not worked anywhere in that format.
  • When voluntary UCPMP did not work, on September 20, 2016, the then secretary of the DoP reportedly said, the mandatory “UCPMP is in the last leg of clearance with the government. The draft guidance has incorporated suggestions of the pharma industry and other stakeholders.”
  • After another year passed by, on April 16, 2018, a news report reconfirmed: ‘4 years on, code to punish pharma firms for bribing doctors still in works.’ Its status remains unchanged till date.

Conclusion:

Even after Prime Minister Modi’s comment on April 2018 regarding the alleged nexus between doctors and pharmaceutical firms and doctors attending conferences abroad to promote these companies, decision paralysis of DOP continues on this important issue.

Pharma companies continue practicing what they deem necessary to further their business interest, alongside, of course, announcing their new and newer voluntary codes of practices. But, patients keep suffering, apparently for the apathy of the DOP to curb such malpractices forthwith.

Coming back to where I started from, when the malice is so deeply rooted, would any global ban ‘brand-reminders’, such as gifts, even if implemented religiously, work? Thus, the doubt lingers, for uniting pharma operations with corporate business ethics is the bridge still too far?

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.

Voluntary Practice Alone of Pharma Marketing Code, Has Never Worked…Anywhere

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Since the last three and a half decades, ‘Code of Pharmaceutical Marketing Practices’, prepared by various global pharma trade associations and most of the large global pharma companies individually, have come into existence for strictest voluntary adherence. These are being relentlessly propagated as panacea for all marketing malpractices in the drug industry.

Squeaky clean ‘pharma marketing codes for voluntary practices’ can be seen well placed in the websites of almost all large global pharma players and their trade associations.

Though its concept and intent are both commendable, following the regular flow of media reports on this topic, a relevant question surfaces: Do the votaries, sponsors and creators of these codes “walk the talk”?

If yes, why then mind boggling sums in billions of dollars are being paid as settlement fees by large number of global pharma companies for alleged colossal marketing malpractices in different countries of the world.

This scenario prompts a large number of stakeholders believe, though over-hyped by the global pharma industry, ‘Voluntary Practices’ alone of Pharma Marketing Code’, has never worked anywhere in the world.

In this article, I shall discuss this very point in the Indian context, following the recent decisions and developments related to ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’.

No more proof required:

Although no further proof is required to vindicate the point, just to put this particular deliberation into perspective, I would cite below no more than a couple of recent examples of comments and arguments on this subject, out of so many, as are being frequently reported by the international media:

A February 24, 2014 article highlights that in the last few years alone pharmaceutical companies have agreed to pay over US$13 billion to resolve only U.S. Department of Justice allegations of fraudulent marketing practices.

On November 6, 2014, BBC News deliberated and commented, “Imagine an industry that generates higher profit margins than any other and is no stranger to multi-billion dollar fines for malpractice.”

It is worth noting, all those pharma players paying hefty fines due to alleged humongous marketing misadventures, also prominently display their well-crafted codes of pharma marketing practices for strict voluntary adherence in their respective websites.

Why are such wrongdoers not brought to book in India?

Instances of serious marketing malpractices by several pharma companies in India are also being widely reported from time to time by both the international and national media, including television channels. Even a Standing Committee of Indian Parliament had expressed its grave concern on the subject and urged the Government to place stringent deterrent measures in this area, soon.

Concernedly, instances of levying massive fines or for that matter any other punitive measures taken by any competent authority for similar delinquency in the local drug industry have not been reported from India, just yet. This is only because, India doesn’t have in place any specific regulatory and legal framework as deterrent that would detect, investigate and decide on punitive measures against the erring pharma companies for such misconducts, wherever justifiable.

Government decided to implement a globally failed model:

Personally I have high regards on a large number of astute bureaucrats in India, whom I had occasions to interact with both one-on-one and in groups. Most of their minds are razor sharp and the analytical ability is of the highest order. I am reasonably confident that they know quite well what would work and what would not, to get the expected results in India. The chronicle of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ in that sense is intriguing.

Be that as it may, the bottom-line is, totally ignoring the reality in this regard, the Department of Pharmaceutical (DoP) wanted to make a beginning with the failed model of ‘Voluntary Practices’ of the UCPMP in India.

Accordingly, on December 12, 2014, by a circular to Pharma Industry Associations, namely, IPA, OPPI, IDMA, CIPI, FOPE and SPIC, the DoP announced ‘The Uniform Code of Pharmaceuticals Marketing Practices (UCPMP)’. The communique said that the code would be voluntarily adopted and complied with by the Pharma Industry in India for a period of six months effective January 1, 2015.

The DoP also stated that the compliance to this code would be reviewed thereafter on the basis of the inputs received.

I discussed the key issues related to this DoP circular on voluntary implementation of UCPMP in my blog post of December 29, 2014 titled, “India’s Pharma Marketing Code (UCPMP): Is It Crafted Well Enough To Deliver The Deliverables?”

The time for review:

Thereafter, the clock started ticking to catch the 6-month deadline. As June 2015 took its place in the pages of history, it was about time to ascertain the quality, depth, breadth and seriousness level of implementation of the UCPMP during the past six-month period.

Meanwhile a media report of August 4, 2015 speculated that the Government is planning to make the UCPMP mandatory on the drug and medical devices industry, making it tighter and providing teeth to it.

Has voluntary implementation of UCPMP made any difference?

Stakeholders are now curious to know, what difference has the voluntary UCPMP made during January – June 2015, period?

The mechanism as enunciated by the DoP in its above circular prescribes a virtually unimplementable review process, making the whole exercise subjective and creating a ‘your perception versus my perception’ sort of situation.

This gets vindicated when a leading news daily of India quoting an industry person reported, “There are (only) 15-20% black sheep who are bringing bad name to the entire industry”. Come on…this is a totally subjective, baseless and no more than just an off the cuff comment.

Voluntary implementation requirements of UCPMP grossly impractical:

The ‘Mode of Operation’ of voluntary UCPMP was listed by the DoP under point 8 of its above circular, as follows:

  • All the Indian Pharmaceutical Manufacturer associations will have UCMP uploaded on their website.
  • All the associations will upload on their website the detail procedure (as stated in Para 10) of lodging complaints.
  • All the associations will also have a provision on their website for uploading the details of complaints received i.e. the nature of complaint, the company against whom the complaint has been made, the action taken by the committees under the association including the present status in the complaint and such details of a complaint should remain uploaded in the website for three years. The details of proceedings in a complaint and decisions thereafter will be sent by the concerned Association on Quarterly basis, to National Pharmaceutical Pricing Authority, on following address: Member Secretary, NPPA, 3rd Floor, YMCA Cultural Centre Building, 1 Jai Singh Road, New Delhi.

The above UCPMP circular finally says:

“The Managing Director/CEO of the company is ultimately responsible for ensuring the adherence to the code and a self declaration, in the format given in annexure shall be submitted by the executive head of the company within two months of date of issue of UCPMP and thereafter within two months of end of every financial year to the Association for uploading the same on the website of the Association. The same must be uploaded on the website of the company also.”

Unrealistic review process:

I have two fundamental questions in this regard, as follows:

1. Do all pharma Trade Associations have websites?

It appeared from my Internet search that just one pharma trade association in India has a website. However, I could not gather the required details even from that particular association’s website.

The readers may also try to locate the very existence of other Indian pharma trade associations’ websites, if I have made any mistakes during my trip to the cyberspace, and attempt to get the relevant details on UCPMP as stated in the DoP circular.

2. Are all ‘voluntary compliance letters’ from the Managing Directors in place?

Are voluntary compliance letters on UCPMP from all Managing Directors of  all the pharma companies are with the Department of Pharmaceuticals by now? If not, based on which information the above news item reported that only 15-20 percent of the pharma companies did not comply with the voluntary UCPMP?

Relying only on ‘Voluntary Practice of Code’ is a globally failed model:

A healthy ecosystem for ethical marketing practices should be created and propagated within the pharma organizations of all size and scale of operation. In that sense, voluntary code of pharmaceutical marketing practices prepared by individual pharma organizations or their trade associations such as IFPMA play a commendable role. However, only those are not just enough anywhere in the world, as enumerated above.

Encouragement for voluntary practice of pharma marketing codes by the stakeholders is desirable in India too, predominantly to catalyze a change in the decades old and overall fragile ‘Jugaad’ mindset in this important area of pharma business.

In that sense, just as a starter, DoP’s initial push with voluntary practice of UCPMP is conceptually understandable, though the Department appeared to have messed up totally in its critical operationalization area for the purpose of a diligent review after 6-months.

Many countries initially relied on ‘voluntary practice’ of Pharma Marketing Codes crafted by the pharma players and their global trade associations, mostly in line with the Gold Standard of IFPMA Code of Pharmaceutical Marketing Practices. However, later on, all these countries had to put in place other regulatory and legal checks and balances for the interest of patients.

Why ‘voluntary practice’ concept alone, is not enough?

Strong internal and external performance pressures, while navigating through turbulent business environment facing strong head winds, could temporarily unnerve even the seasoned persons with nerves made of steel, as it were. It has been happening all the time, now more frequently, for different reasons.

Thus, all-weather ‘voluntary practice of marketing code model’ in isolation, has globally failed in the pharma industry, almost everywhere.

Appropriate regulations and robust laws promising justice to all, would always demonstrate a commendable role as a tough deterrent in those trying situations, unless any person or a legal entity is a hardcore manipulator focusing just on profiteering.

Related laws and regulation in other countries:

Most developed nations, such as Europe, United States, Canada, Australia, Japan, to name a few, have robust laws and regulations in this area, which act as serious deterrents to pharma marketing malpractices.

These deterrents fall primarily into the following three areas:

Specific anti-corruption regulatory and legal agencies:

Many Governments, such as, the United States and the member countries of the European Union (EU), are strictly enforcing appropriate legal and regulatory measures through dedicated enforcement agencies constituted specially for this purpose. These agencies can investigate any wrongdoings in the pharma marketing area and initiate judicial proceedings.

Specific anti-bribery Acts covering even overseas activities:

Current anti-bribery and anti-corruption laws in many countries, such as, the United States Foreign Corrupt Practices Act or the Bribery Act of the United Kingdom have impacted several global pharma players pretty hard, as these laws affect them even beyond the shores of their respective countries for indulging in marketing malpractices.

Public disclosures:

One such example is ‘The Physician Payment Sunshine Act’ of the United States. This was a part of its healthcare reform bill that was adopted in March 2010 and was finally released in March 2013.

Under the Sunshine Act, data on payments and gifts made to physicians and teaching hospitals by medical device and pharmaceutical companies must be publicly available on a searchable federal database, starting in September 2014.

What may happen, if UCPMP is made mandatory:

If UCPMP is made mandatory, I would suggest at least the following three actions:

  • Appropriate transparent rules, regulations and laws with adequate teeth to address this specific purpose either to be framed afresh or the existing anti-corruption and anti-bribery laws to be amended as required, besides others.
  •  A competent fully empowered authority within the Department of Pharmaceuticals (DoP) should be accountable for administration and implementation of the UCPMP effectively. The DoP may wish to revive its own idea of appointing an Ombudsman with quasi-judicial power for this purpose.
  • State FDAs should play an important role as detecting, investigating and prosecuting agency also for pharma marketing malpractices.
  • DoP website should provide comprehensive details of all punitive action taken against each erring company for this purpose.
  • A compliance certificate from the Managing Directors of the respective companies to the Central Board of Direct Taxes (CBDT) stating that the all sales and marketing expenditures computed for Corporate tax payments are in total conformity with the the UCPMP. Any false declaration should attract serious and exemplary penal consequences.

What would the pharma companies gain?

I would expect at least the following to happen:

  • From the sales and marketing perspective, this new ball game would help establish a level playing field for all the pharma players, to a great extent.
  • Expenditure on sales and marketing would obviously come down sharply, improving product margins significantly, even if a part of this saving is passed on to patients in form of price reductions.
  • Without the allurement of freebies, competitive and innovative brand marketing acumen of the pharma companies would get honed, which would ultimately emerge as the key differentiating factor for the balance of performance to tilt either towards success or failure.
  • Consequently, quality, depth and dimension of marketing inputs for a decisive competitive edge would me more cerebral and distinct in nature, unlike the marketing cacophony in today’s era of freebies.
  • With greater available resources, it would help the pharma players focusing more on talent, skill and technology development to attain sustainable business excellence.
  • The key focus would necessarily shift from ‘buying prescriptions’ to ‘creating prescriptions’ with value based innovative communication of bundled products and services.

Conclusion:

Relying solely on voluntary compliance of ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, in my view, would not work in India, just as it has not worked even in the developed countries of the world.

This is primarily because, India does not currently have any serious deterrents in this area, including specific legal and regulatory systems, to limit pharma marketing malpractices, unlike many other developed nations of the world.

If the media speculation of DoP’s making the UCPMP mandatory is right, I would reckon, despite its intriguing circular of December 12, 2014, it is a courageous step in the right direction.

Although coming in form of a bitter pill, it would help the Indian pharma players embracing a long awaited and mandatory course correction for not just doing things right, but more importantly doing right things.

I would expect its longer term effect to be ‘win-win’ for all – pharmaceutical industry in India, the Government and above all the patients…well…of course, barring the regular recipients of freebies of all types, forms, kinds, nature and value.

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.