Tag Archives: IMPACT

The Indian Drug Industry’s Looming Talent Crisis – A Recent Landscape

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India’s pharmaceutical industry, a global generics and drug manufacturing powerhouse, is facing a critical talent deficit. The shortage of skilled professionals is impeding innovation, drug development, and the industry’s overall competitiveness.

This challenge, exacerbated by recent industry dynamics, demands immediate attention to unleash the sector’s full potential. In today’s article, I shall dwell on this area.

Talent challenges and focus areas:

The industry is facing a significant talent crunch. Here’s a breakdown of the key challenges with recent, specific examples:

1. Skill Shortage:

The industry demands expertise in areas like regulatory affairs, data science for clinical trials, biosimilars, and gene therapy. However, the current education system and skill development programs haven’t kept pace with this evolving landscape.

Example: A 2023 report by TeamLease points out a growing demand for professionals with expertise in regulatory affairs, particularly, those adept at navigating international regulations for drug approvals. This is crucial as Indian companies increasingly target overseas markets.

2. The Great Resignation Impact:

Example: A 2024 article in The Economic Times highlighted a recent exodus of mid-level managers from several Indian pharma companies. The report cited factors like stagnant salaries, lack of growth opportunities, and a competitive job market as reasons for the increased job hopping.

3. Competition for Talent:

Example: A recent news piece in BioSpectrum Asia (May 2024) discussed the fierce competition for experienced professionals in the biosimilars space. Companies like Biocon and Reliance Life Sciences are aggressively hiring and offering lucrative packages to attract top talent in this rapidly growing field.

4. Lack of Industry-Academia Collaboration:

Example: A joint report by FICCI (Federation of Indian Chambers of Commerce and Industry) and Ernst & Young (2023) highlighted the growing gap between the skills taught in universities and the practical needs of the pharma industry. The report urged closer collaboration between industry and academia to ensure curriculum updates reflect current industry requirements.

5. Diversity Issues:

Example: A 2024 study by Express Pharma revealed that despite comprising a significant portion of the workforce, women hold only around 15% of leadership positions in the top 20 Indian pharmaceutical companies. This highlights the need for targeted initiatives to promote women into leadership roles.

In such a scenario, some may obviously ask, what is my recommendation or the ways some companies are trying to address this issue. Here below is my prescription:

A prescription – A Multi-Pronged Approach, with Indian examples: 

Re-skilling and Up-skilling:

Example: Dr. Reddy’s Laboratories, reportedly launched targeted training programs to equip existing employees with data science skills for clinical trial design and analysis. This approach empowers the current workforce and addresses the immediate skill gap.

Industry-Academia Collaboration:

Example: Lupin, as reported, partnered with IIT Delhi to establish a joint research center focused on drug delivery systems. This collaboration bridges the gap between academic knowledge and industry applications, better preparing graduates for real-world challenges.

Fostering Diversity and Inclusion:

Example: According to reports, Biocon’s “Women in Biopharma Leadership” program provides mentorship, training, and networking opportunities for aspiring women leaders. This initiative tackles the under-representation of women in leadership roles and unlocks the industry’s full talent potential.

As I discussed in my earlier article, ‘Diversity And Inclusion: A Missing Link For Indian Pharma‘ (June 25, 2018), the Indian pharma industry faces a critical talent shortage.

Building a Strong Employer Brand:

Example: Companies like Cipla can invest in employer branding initiatives to showcase their work culture, growth opportunities, and commitment to diversity. This can attract talent seeking a fulfilling career path and a positive work environment.

Leveraging Technology: Implementing AI-powered talent acquisition platforms can streamline recruitment processes and identify suitable candidates from a wider pool, including those from non-traditional educational backgrounds.

Conclusion:

By addressing these challenges through strategic investments in skill development, nurturing industry-academia partnerships, and fostering a more inclusive work environment, the Indian pharmaceutical industry can build a robust and future-proof talent pool. This will be equipped to drive innovation and ensure its continued success in the global market to maintain its competitive edge, sustainably.

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.

 

Impact of The Cost of Pharma Marketing Failure On Patients

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‘About half of all products launched over the past 15 years have underperformed pre-launch consensus forecasts by more than 20%.’ It’s one of the findings of a recent study by L.E.K. Consulting, going back to 2004. This number is besides the cost of failure while discovering a successful New Molecular Entity.

Adding this to the cost of the product innovation and development, clinical trials and other regulatory expenses, the wasteful expenditure becomes mind boggling – for any unsatisfactory launch performance. In such a situation, the probability of creating newer blockbuster therapies is not getting any easier.

As is believed by many – and vindicated by several studies, new drug marketing cost is more than its R&D cost. Which is why, ensuring success of a new drug launch is critical to fund new drug innovation – on an ongoing basis. Consequently, leadership focus on high ‘launch success’ rate is so important – as the good old saying goes – ‘well begun half done.’

In addition, prudent optimization of the success rate of new products may also help the company avoid irresponsible pricing, while improving the profit margin. In this article, I shall deliberate on the impact of the cost of marketing failure on patients, in general. Alongside, the avoidable ‘soft ground’ that marketers may wish to avoid while delivering unmet value to patients.

Big Pharma’s Sales and Marketing spend is more than R&D:

According to another recent study of October 27, 2021, ‘in most cases, more of the dollars spent by drug manufacturers go toward selling and marketing costs than toward research and development (R&D) for new treatments, cures, or expanded indications and uses of existing drugs.’ For example, as the paper highlights:

  • AbbVie, which manufactures branded drugs like Humira, spent $11 billion in sales and marketing in 2020, compared with $8 billion on R&D.
  • Bayer, which manufactures branded drugs like Xarelto (codeveloped with Johnson & Johnson) and Eylea, spent $18 billion in sales and marketing, compared to $8 billion on R&D.
  • Johnson & Johnson, which manufactures branded drugs like Xarelto (codeveloped with Bayer) and Stelara, spent $22 billion on sales and marketing, compared to $12 billion on research and development.

Therefore, just as R&D expenses have to be made more productive, so are the sales & marketing expenses, where the expenditure towards new product launches is a critical component.

Why a successful new product launch is important:

An analysis by Deloitte in this area, published on March 26, 2020, found that most new drugs continue with the revenue trajectory set at launch. It said, about 70 percent of products that miss expectations at launch continue doing so in subsequent years, and around 80 percent of products that meet or beat expectations continue to do so afterward. Thus, launch success of a new product is very important, both for the organizations and the patients.

A successful new product launch helps both the company and patients:

Correctly assessing and leveraging full commercial potential of a new product through its effective launch helps both the patients and the company. This subject was discussed in a recent article, published in the Fierce Pharma on October 25, 2021, in the context of many drug launch disasters. The areas of benefits, I reckon, include the following:

  • Patients’ unmet needs are met at a reasonable price
  • Manufacturer can recoup its research and development costs.
  • Fund future drug discoveries.
  • Satisfy investors with handsome returns.
  • Creating a sound brand performance base – as a strong launch is arguably the most critical step in a new drug’s lifecycle.

New product launch failure is across the disease areas – from Big Pharma to Startups:

As the above December 18, 2020, study by L.E.K. Consulting points out that new products’ launch failure is taking place across the disease areas. These include,  Oncology, immunology, infectious disease, ophthalmology, blood disorders, brain diseases, and cardiovascular and metabolic disease. Similarly, the companies responsible for such failure span across global pharma majors to biotech startups.

Why many companies are failing in this process:

To help ascertain the depth of this issue, let me start with the key objective of a new product launch, which is effectively delivering the holistic value of the brand which consumers would appreciate. Several papers also acknowledge, to succeed in this area, pharma players need to prepare their data-based launch plan with cerebral power and ensure that the strategy is working and is being executed flawlessly.

A large number of studies find, ‘many companies fail in this process, due to a combination of factors.’ Some of these are uncontrollable, but many of which are very much within a marketer’s control.

Examples of uncontrollable and controllable variables:

Uncontrollable factors include post marketing approval drug safety issues. Reports indicate, ‘One-Third Of New Drugs Had Safety Problems After FDA Approval.’ This is being reported even in recent times, like, ‘new safety signals that cropped up after the approvals of Novartis’ eye drug Beovu  and Sanofi’s dengue vaccine Dengvaxia.’

Whereas, controllable factors include, poor product differentiation and other management missteps, besides ‘limited market access, poor understanding of market needs or misjudgment of competitive threats.’ For example, poor product differentiation and other management missteps were, reportedly, ‘the cause of trouble for Clovis Oncology’s Rubraca in the PARP inhibitor space, and Merck & Co. and Pfizer’s Steglatro in the SGLT2 field.

Key success ingredients to focus on:

Since long, various research, including one by Bain & Co dated October 2017, has highlighted that over 50% of new product launches are underperforming. This situation can’t, in any way, be accepted as a ‘thumb rule’ by pharma marketers, any longer.  Mainly because: ‘When a drug misses its launch projections, there’s a high likelihood that it will never recover that revenue,’ as their study findings underscore. From this perspective, listed below are some of the basic areas to focus on for greater launch success, as I have experienced:

  • Early launch planning – well before the regulatory approval for new products.
  • Data-based and well-tested target-audience identification, the target markets’ selection and key opinion leaders need to be selected for greater focus in effective stakeholder engagement.
  • Creating differentiated value-propositions that addresses targeted patients’ unmet needs, and, in tandem, offers scope for commensurate premium pricing, are vital.
  • Product pricing should be based on quality of value delivery to patients that they can perceive and would acknowledge. Misvaluing a brand, and just focusing on those who can pay, may attract negative publicity, creating a key barrier to success.
  • Current competition, their ongoing counter strategy, new market competitors and other launch challenges need to be carefully mapped, for strategic fine tuning or course correction, in time, wherever and whenever needed.
  • Execution of the launch plan must be accomplished with military precision, as it were.

Conclusion:

As the above Bain & Co paper articulated, ‘The most consistently undervalued factor contributing to a successful launch is the way leadership teams organize and the manage the launch process.’

It’s again not too difficult to understand that the net accountability of the cost of marketing failure, which is a major contributing factor to stifle the R&D funding, in many cases, squarely falls on pharma leadership.

Instead of taking corrective action in this critical area, most of them choose the easy path – increase new product pricing to achieve targeted revenue from a smaller unit sale of the brand. The net impact of which is on patients due to access barrier caused by high prices.

Such products, without clearly differentiated value propositions that patients would recognize, would further increase sales and marketing costs, and could even result in marketing malpractices. Under this backdrop, serious and thoughtful attempt in making all new product launches successful money spinners, as respective brands will merit, may help the pharma leadership to create a win-win situation for both the company and patients.

By: Tapan J. Ray  

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

 

Impact of Covid Vaccines’ Possible IP Waiver In India

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Just when Covid 2.0 rages in India with almost 4,000 people died in just 24 hours, scientists warn that Covid 3.0, and further waves are now ‘inevitable, reported Reuters on May 06, 2021. With hospitals running short of beds and oxygen during the onslaught of Covid 2.0, the World Health Organization (WHO) highlighted, ‘India accounted for nearly half the coronavirus cases reported worldwide last week, and a quarter of the deaths.’

The report revealed some more heartrending details: ‘Many people have died in ambulances and car parks waiting for a bed or oxygen, while morgues and crematoriums struggle to deal with a seemingly unstoppable flow of bodies.’

No visible overall improvements with ‘here and now decisions’ or maybe the lack of it, of the National Covid Management Team, is perceptible, just yet. It’s also a matter of further concern that unlike what happened during Covid 1.0, the second wave of the virus, reportedly, ‘started hitting even young adults hard – leaving countless children to fend for themselves.’

Ironically, alongside a rapid surge in infections, India witnesses a sharp decline in Covid vaccination numbers though more people are eligible. The key reasons being supply chain related problems, despite India being one of the largest vaccine producers, globally. In my last article  published in this blog, I broached on finding a possible exit to this covid 2.0 maze in India. However, this article will explore some unprecedented developments of the last week in this area. To give a perspective, let me start by exploring whether the people responsible for Covid Governance in India, grossly misjudged the situation, claiming the ‘endgame’ of Covid-19, too soon.

‘India announced its triumph over Covid-19 early’:

A third Covid-19 wave is inevitable, but the timing could not be predicted, said India’s principal scientific advisor on May 05, 2021. Intriguingly, less than two months back, the national Government announced its triumph over Covid-19. On March 08, 2021, as Covid vaccination process for senior citizens and people above 45 years with comorbidities had just commenced, the Union Health Minister claimed, ‘India is in the endgame of the novel coronavirus pandemic.’ Just about a couple of months later, it sounded akin to a note of hubris for many, which prevailed, by and large, across the nation.

Acknowledging the same, on May 04, 2021, even Uday Kotak, MD&CEO Kotak Mahindra Bank and President CII commented, ‘India announced triumph over Covid-19 early’. He further urged: “We have to do whatever it takes to save lives first, even as we battle for livelihoods. And if our healthcare capacity is currently going through its challenges, we must be ready to curtail non-essential economic activities.” The latest editorial from ‘The Lancet’ also highlighted the same.

India’s Covid 2.0 – “A self-inflicted national catastrophe” – The Lancet 

Yes. The editorial of the latest – May 08, 2021 issue of The Lancet, also reiterated so. It emphasized, ignoring warnings about the risks of super spreader events, the government allowed congregations of millions of people from across India in religious festivals, along with huge political rallies with utter disregard to Covid appropriate behavior. ‘The message that COVID-19 was essentially over also slowed the start of India’s COVID-19 vaccination campaign, which has vaccinated less than 2% of the population.’ India’s national vaccination plan soon fell apart with the government abruptly expanded vaccination to all 18 years, draining supplies, ‘and creating mass confusion and a market for vaccine doses in which states and hospital systems competed.’

The IHME estimates a staggering 1 million deaths from COVID-19 in India by Aug 01, 2021. ‘If that outcome were to happen, Modi’s Government would be responsible for presiding over a self-inflicted national catastrophe. India squandered its early successes in controlling COVID-19. Until April, the government’s COVID-19 task force had not met in months,’ The Lancet editorial revealed.

Besides, India also misjudged the complexities involved in procurement, distribution and for speedy inoculation of affordable Covid vaccines, at least, to its entire adult population. But, before delving into that area, let me highlight an interesting mismatch.

India’s vaccine shortage when Pfizer logs a record vaccine turnover during pandemic:

Two contrasting scenario surfaces – as the world is reeling under unprecedented disruptions caused by successive waves of Covid-19. Witnessing India’s unparalleled healthcare tragedy in Covid 2.0, the W.H.O director general said: “The situation in India is beyond heartbreaking.” Outlining the reason for the same a separate report commented: A ‘complete collapse’ of preventive health: How India’s 2nd COVID wave exploded.

Concomitantly, one reads news items, which bring out, ‘Pfizer eyes $26B in COVID-19 vaccine sales for the year, with $3.5B already in the bag.’ Notably, most vaccine companies received huge public funding much before Covid vaccines were rolled out. For example, ‘The New York Times’ article of July 22, 2020 came with a headline: ‘Pfizer Gets $1.95 Billion to Produce Coronavirus Vaccine by Year’s End.’

The Scientific American also reported on November 18, 2020, ‘For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork.’ It added: ‘Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits.’ That’s exactly, I reckon, is the reality today.

Similarly, Moderna’s COVID-19 vaccine generated $1.73 billion in revenue during the first quarter, as compared to $3.5 billion of Pfizer’s Covid vaccine in the same quarter. Moderna now predicts its vaccine will generate $19.2 billion by year’s end. Interestingly, through its COVID-19 vaccine partnership with the U.S. government, Moderna also received nearly $1 billion in research aid. The Company is now joining a list of other vaccine players to take a supply order from the federal government.

By the same token, Serum Institute of India (SII) – the contract manufacturer of Covishield, developed and owned by Oxford University and AstraZeneca has also received initial advance funding from the governments, prior to its manufacturing.

Was India’s ‘Vaccine Maitri’ a pragmatic step?

Today, India is one such country facing the brunt of Covid vaccine shortage alongside arriving at an affordable price per dose of the same – a part of which is due to ‘unrealistic’ planning, as many experts believe.

For example, on January 20, the Indian government launched Vaccine Maitri – an ambitious program to export the two Indian-made shots – Covishield and Covaxin – to the world. On that exact date, India counted 14,112 fresh cases of Covid-19. Going by a report of May 01, 2021: ‘According to the government’s own submission before the Parliament, more shots were sent out of the country than administered to Indians as of mid-March.’ Many, therefore, wonder, whether this was a pragmatic decision that helped save lives of Indians during Covid pandemic.

An unprecedented development on vaccine IP waiver:

This is regarding IP waivers for Covid vaccines. In my last article, I wrote about it, stating, on October 02, 2021, India and South Africa had proposed at the WTO about an IP waiver for Covid-19 drugs and vaccines to resolve the issues of access and affordability for these products. It was also widely reported: ‘Richer members of the World Trade Organization (WTO) blocked a push by over 80 developing countries to waive patent rights in an effort to boost production of COVID-19 vaccines for poor nations.’

However, on May 05, 2021, a statement of the U.S. Trade Representative said, ‘as the extraordinary circumstances of the pandemic call for extraordinary measures, in its service of ending this pandemic the US also supports the IP waiver for Covid-19 vaccines, although the US administration supports IP protections generally. As expected, Big Pharma lobby groups, including PhRMA, reportedly, have strongly criticized the move.

Let me hasten to add, there is, at least, one exception in this area. Months ago, on October 8, 2020, Moderna said, ‘it won’t enforce its vaccine patents against other companies during the pandemic.’ Without specifying any names, the Company revealed, ‘other Covid-19 vaccines in development might already be using Moderna-patented technology.

The WTO process is expected to begin now, but how long will it take?

As the Reuters report dated May 06, 2021 indicated – with the U.S. backing a proposed waiver of Covid-19 vaccine IP rights, the next stop is for the World Trade Organization to hammer out a deal – a process that could take months. “At a minimum, it’s going to be a month or two,” said a former Trump White House trade official who previously worked at the U.S. trade mission to the WTO in Geneva. The waiver, if happens, could also be significantly narrower in scope and shorter in duration than the one initially proposed by India and South Africa.

The relevance of IP waiver:

Currently, only drug companies which own patents or their authorized manufacturers like SII can produce Covid vaccines. A global decision on patent waiver may encourage the patentees to share the formula and manufacturing technology, instead of reverse engineering, as is done for off-patent small molecules and some biotech drugs.  All companies with requisite resources may legally manufacture Covid vaccines, in that situation, leading to cheaper, and significantly more quantity of generic versions of Covid vaccines. This may help overcoming vaccine shortages, making the vaccines affordable, as well.

Some counter arguments and response:

As I wrote in my last article, the following three critical questions may arise in that scenario:

  • Will IP waiver help solve the immediate issues of vaccine shortages?
  • Can Covid vaccines be reverse engineered by domestic pharma industry without inventors sharing ‘Know-How’?
  • If yes, how long can it take?

The answer to the first question is – it may not help resolve the immediate crisis. But, for a medium to long term solution, there will be an emphatic yes, as Covid-19 fight is expected to be a long-haul one, as experts caution about subsequent waves of rapidly mutating new Coronavirus.

Moreover, Pfizer – BioNTech vaccine took less than a year from ‘mind to market,’ with support from all concerned. This is evident from Pfizer’s Press Release for the launch of Covid vaccine in the United States last year, on December 11, 2020. Thus, an efficient reverse engineering may also take that much time to respond to medium and long-term issues with Covid vaccines, especially in India.

Subsequent Covid-19 waves could be triggered by unpredictable compliance to Covid appropriate behavior of people. W.H.O has also warned: “When personal protective measures are being relaxed, when there are mass gatherings, when there are more contagious variants and the vaccination coverage is still low this can create a perfect storm in any country,”

Conclusion:

‘The pandemic is not a competition between companies and will not end without more-equal distribution of coronavirus vaccines,’ wrote Nature on March 30, 2021. It suggested: ‘It’s time to consider a patent reprieve for COVID vaccines.’

The world needs around 11 billion doses of Coronavirus vaccines to immunize 70% of the global population – assuming two doses per person. Interestingly, around 6 billion doses are meant for high- and upper-middle-income countries, against advance orders. Poorer nations, accounting for 80% of the global population, so far, have access to less than one-third of the available vaccines. ‘Unless manufacturing and supply can be distributed more evenly, researchers forecast that it will be at least another two years before a significant proportion of people in the lowest-income countries are vaccinated’, the paper concluded.

In this situation, I reckon, a temporary IP waiver would help in accelerating the end of the pandemic. It may not help immediately, but certainly in the foreseeable future, as discussed above. It may also call for an efficient and well thought out ‘Hub and Spoke’ distribution model. Simultaneously, of course, similar systems for raw and ancillary materials for vaccine production need to put in place to avoid intermittent shortages. 

As reported on May 08, 2021, India registered a record 4,187 Covid death with 4.01 Lakh new cases, in 24 hours. Capturing the depth of the Indian crisis, ‘India Today’ is coming out with a cover page article in its May 17 issue, with the headline – ‘Covid 2.0 – The Failed State.’ Another article terms India as the ‘Flailing state in Covid storm.’

As I reasoned above, if this unprecedented step of IP waiver for Covid vaccines is finally taken by the WTO, it will significantly help India – along with the world – may not be immediately, but certainly in the foreseeable future. Only adverse impact that the decision could possibly make, is curbing Big Pharma’s unprecedented profit on Covid vaccines, and that too, during a deadly global pandemic.

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.

 

Neutralize Covid-19 Impact on Drug Prices And Market Access For Faster Recovery

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Covid-19 pandemic that has not spared any facet of human lives and livelihoods, has also reignited several ongoing debates related to the drug industry. The need to urgently resolve these issues grows manifold, as the real magnitude of this health crisis doesn’t seem to be clear even to the key Government decision makers.

This is vindicated by the research paper, written by government scientists and other experts, published on September 10, 2020 in the Indian Journal of Medical Research. It reveals, India had nearly 6.5 million cases as early as May 2020. Whereas, according to the health ministry, the total number cases stood at around 180,000 in late May. This happened because, ‘large numbers of cases could have gone under the radar earlier this year, because testing was limited to symptomatic patients or states had varying testing rates,’ the paper highlighted.

From the pharma industry perspective, a pandemic of such magnitude is also causing indefinite delay in pre-planned market access of several important drugs and vaccines. Some are due to technical reasons. However, many others are related to their value-based cost-effectiveness in the new normal, when the pandemic has put enormous strain on health expenditure, across the world.

In this situation, past mechanisms of new drug pricing, are required to undergo significant changes. The new yardsticks, I reckon, will be based on two critical factors. The first – the disease treatment priorities, as will be decided jointly by both doctors and patients. And the second – the paying capacity of both payers and individual patients, based on the value that each treatment will offer – again, as perceived by patients.

As it appears, the impact of Covid-19 on the pharma industry will continue till the medium term, if not beyond. Consequently, the concept of new drug pricing – based on well-documented, differential value offerings of treatments, would need to be revisited and recalibrated. This has to be realigned with evolving patient needs. Considering the emerging scenario, this article will focus on the exigency to neutralize Covid-19 impact on new drug prices and pre-planned ‘market access’ – for faster business recovery.

Covid-19 has increased the drug price sensitivity:

The challenge of increasing drug price sensitivity – triggered by the new Coronavirus pandemic, has now assumed a global dimension. A June 18, 2020 study, flags: ‘Nine in 10 Concerned About Rising Drug Costs Due to COVID-19.’ Although, this particular study (Gallup Poll) was conducted in the United States, general public apprehension is no different in other parts of the world, including India, for various reasons.

Even in America, which is considered Eldorado for pharma business, primarily for unregulated drug pricing, is also changing with the impact of Covid-19. The reason being, reported instances of drug prices are rapidly rising, amid the pandemic. As the above Gallup Poll highlights, today ‘a large majority of Americans support direct negotiations by the federal government with the drug manufacturer on the price of a treatment for the disease itself.” Interestingly, ‘significant support exists across all major demographic groups.’

Other specialists on pharmaceutical pricing and market access, also envisage that pharmaceutical companies will be faced with increased price sensitivity, and are quite concerned with the long-term impact of the pandemic on health care systems.

Covid-19 pandemic would seriously impact pharma spending:

As quoted above, several other specialists for pharmaceutical pricing and market access have also pointed out some critical Covid-19 impact areas, including:

  • Tremendous increase in pandemic related public expenditure, could prompt further austerity measures in already strained health care budgets, besides job losses or pay cuts of scores of people for different reasons.
  • The pandemic is likely to result in a redistribution of health care funding towards infectious diseases (e.g. prioritization of antivirals and vaccines) and chronic diseases associated with worsening COVID-19 outcomes.
  • This may result in more drug pricing pressure in other disease areas, besides push for increasing use of similar cheaper generics and biosimilars, unless absolutely necessary.
  • Stricter monitoring of usage of medicines, especially in private hospitals, to ensure their use within the regulatory label and/or within the reimbursed population.
  • Possibility of mandatory price cuts either across the board or for drugs which have been on the market for a specific duration.

The report also envisages, pharmaceutical companies will be faced with increased price sensitivity and decrease in willingness to pay by authorities. Consequently, the key question in this area becomes: What impact will COVID-19 have on the future of pricing and market access? And how to address this issue, effectively? 

Need for an appropriate drug pricing models in the new normal:

Overall scenario for drug pricing model has not changed much, till Convid-19 pandemic overwhelmed the world. The age-old concept of drug pricing, being treated as almost given, is changing fast. As I wrote earlier, it started in the developed world, with newer concepts, such as, Health Technology Assessment (HTA), besides a few others. However, to illustrate the point, I shall focus only on the HTA model. It includes a multi-faceted assessment of the clinical, economic, ethical, legal, and societal perspectives that may be impacted by a new technology, procedure, drug, or process.

Application of HTA in Medicine Pricing:

The ‘Working Paper 6’ of June 2013, on ‘The Role of Health Technology Assessment in Medicine Pricing and Reimbursement,’ published jointly by the World Health Organization (WHO) and the Health Action International (HAI), is worth referring to.

The paper aims to identify and describe the role of HTA in price-setting and reimbursement of pharmaceuticals, with a focus on its use in low and middle-income countries (LMICs). However, as Covid-19 is now fueling the drug price sensitivity across the globe, and not just in the LMIC, this reference will help drive home the point, as one faces today.

While combating health care resource crunch in the face of the Coronavirus quagmire, many countries are contemplating a variety of approaches to maintain affordable access to healthcare for patients. The concept of HTA is one such common approach. It includes pharmaceuticals, vaccines, medical devices, medical and surgical procedures, besides the systems within which health is protected and maintained.

Relevance of a recalibrated HTA in the new normal:

For a new drug, as the Institute For Clinical And Economic Review (ICER) puts it, a final HTA report would attempt to answer the following questions, besides a few others:

  • Is it safe and effective?
  • Which patients benefit the most?
  • Is there a meaningful improvement in health status?
  • Can all people afford to pay who might need it?
  • Will it offer a good value in the long run?
  • What other considerations make it important?

These points need to be looked at keeping in view that Covid-19 pandemic has seriously impacted the health care spending. Thus, the process needs to be recalibrated in the new normal. In any case, HTA has the potential to play a critical role in new drug pricing, by assessing the intrinsic value of medicines that can significantly expand patient-access to care. In tandem, it could maximize the value for money in health expenditure with most efficient allocation of scarce health resources, that most countries are facing today. Nevertheless, there could well be a few company or country specific barriers to capture the value of a drug or treatment, as well. A robust plan for their mitigation needs to be well-thought through, to ensure effective implementation and achieve desirable outcomes.

HTA in India:

At least, on paper HTA exists even in India. The Government of India had created an institutional arrangement called “Health Technology Assessment in India (HTAIn)”, under the Department of Health Research (DHR). It was entrusted with collation and the generation of evidences on cost effectiveness and safety of health care interventions, including medicines and devices.

The key goals are, to reduce the cost of patient care, overall cost of medical treatment, reduction in out of pocket expenditure of patients, besides streamlining the medical reimbursement procedures. Nevertheless, it remains a million dollar question whether India would leverage this system to ensure fair pricing of new drugs in India.

Some pre-requisites to implement HTA – afresh:

In those countries, where HTA for drug pricing and reimbursement doesn’t already exist, there could be several pre-requisites. These may include, as the above paper indicates, establishing a medicines regulatory system, developing and enforcing legislation, employing the appropriate technical expertise, and the allocation of sector-wide financial resources in accordance with the decisions of the organization using the HTA.

That said, the bottom-line is, the quest to arrive at fair pricing for a new drug, could also help ‘market access’, especially in a difficult time, like today’s health care crisis. In that endeavor, let me briefly dwell on the concept of ‘fair pricing a drug’.    

The concept of ‘fair pricing a drug’:

This issue has been well deliberated by many experts around the world. However, let me quote a recent article – ‘Defining the concept of fair pricing for medicines,’ published by The BMJ on January 13, 2020.

The paper articulates, ‘a fair price for a medicine is affordable to the buyer while covering the seller’s costs and providing a reasonable profit margin. Within a fair pricing zone, a specific price may be higher or lower, possibly reflecting differential value.

Interestingly, the authors also noted: ‘Applying the framework to decision making would require access to data on R&D, manufacturing, and distribution costs, which is generally not publicly disclosed. This lack of transparency about costs undermines efforts to assess the fairness of medicines prices.’

The article underscored, lack of transparency in these areas, ‘also exacerbates information asymmetry to the sellers’ advantage.’ It suggested, disclosure can be enforced through legislation, regulation, and judicial action. Or as a condition of receiving public research funds, tax benefits, regulatory approval. Or listing in a formulary for reimbursement. ‘In the absence of disclosure, decision makers may rely on reasonable estimates based on publicly available information,’ the paper concluded.

Conclusion:

As recorded in the morning of September 13, 2020, total Coronavirus cases in India have reached a staggering figure of 4,754,356 with 78,614 deaths, overtaking Brazil. This trend continues going North, as days pass by.

All-pervasive Covid-19 pandemic is fueling severe resource constraints, especially for health care. Amid this complexity, to combat this deadly virus – alongside other non-Covid related illnesses – value added drugs and treatments could help overcome many hurdles in this area. They could help improve cost-effectiveness of treatments to price-sensitive patients, besides other stakeholders.

Recalibrated HTA mechanism, which I have used in this article as an example to effectively overcome prevailing drug price sensitivity, is one among a few others. Importantly, HTA mechanism exists even in India. It can be appropriately used for new drugs and vaccines pricing, if the Government wishes to.

On the other hand, it’s up to individual companies to choose any other price-value model’ that they will deem appropriate, to arrive at a ‘fair value for new drugs’. However, the goal remains common for all - Neutralizing Covid-19 impact on drug prices and market access, to ensure faster recovery of the business.

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.

Covid-19: Perils Of Haste In Scientific Decision-Making Process

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Multifaceted threats posed by Coronavirus to the humanity, are getting increasingly complex, every day. Currently, Covid-19 cases in India are ‘the highest that any country has ever recorded on a single day since the start of the outbreak.’ Alongside, the hopes of billions of people – for its predictable and dependable remedies are also soaring sky high. But, despite full throttle global endeavor of scientists, the world continues waiting for scientific-evidence-based, well-proven, safe, and effective Covid-19 drugs, vaccines and other treatments.

It is expected, each of these cures and antidotes should be duly authorized by drug regulators, according to global norms – without any outside non-scientific interference – not even from the very top. Nevertheless, the reality is, as on date, besides some ‘emergency use authorizations’, all scientific pursuits in this area are Works in Progress (WIP) – some are with great potential, though.

The catastrophic impact of Covid-19 pandemic is all pervasive. So is the competition between media publications to attract maximum eyeballs, with details on many aspects of the disease and related scientific development. These include reports on intense, non-scientific pressure on scientists and regulators to make drugs, vaccines or other Covid-19 treatments immediately available for use. In this article, I shall dwell on the perils of haste in the scientific decision-making processes, while combating Covid-19.

A quick research outcome is important – based on ‘rational’ – but not ‘rash’ decisions: 

In pursuit of a quick disease treatment outcome, a rational and ethical approach in any scientific discovery process, is non-negotiable. It has always been so – while dealing with many different health crises, and should remain that way for Covid-19, as well. In my view, for achieving a prompt and desirable treatment outcome – a quick, but rational decision should always be favored – over highly influenced, contentious, non-scientific and rash decisions.

Many wise men believe, a quick decision is one, made quickly supported by irrefutable inputs of an accepted quality and scale. Whereas, a rash decision is one, made with limited, questionable or even no inputs – just based on gut feel, as it were. This broad concept is applicable to Covid-19 drugs, vaccines and other treatments, including -plasma therapy.

In the space of Covid-19 pandemic, there are several such examples, starting from hydroxychloroquine to the most recent plasma therapy – both in India, and also beyond its shores. Without being judgmental, this article will try to join some critical dots, for the readers draw their own conclusions on this issue. Let me start with two examples of this drug regulatory quagmire – the very first, and the most recent ones.

Perils of haste in the Hydroxychloroquine saga:

As I wrote in this blog that the US President Donald Trump, on March 21, 2020,  proclaimed Chloroquine and Hydroxychloroquine as potential game changers against Covid-19 global pandemic, despite doubts from the US-FDA. Interestingly, on March 28, 2020, the US drug regulator granted the emergency use authorization of these two drugs for treating Covid-19. However, it was subsequently revoked on June 15, 2020. The agency justified this action by saying:

“Based on its ongoing analysis of the EUA and emerging scientific data, the FDA determined that chloroquine and hydroxychloroquine are unlikely to be effective in treating COVID-19 for the authorized uses in the EUA. Additionally, in light of ongoing serious cardiac adverse events and other potential serious side effects, the known and potential benefits of chloroquine and hydroxychloroquine no longer outweigh the known and potential risks for the authorized use.”

The World Health Organization (W.H.O) also announced: “Studies show Hydroxychloroquine does not have clinical benefits in treating COVID-19.” However, as published by JAMA on May 28, 2020,following President Trump’s naming these drugs at a press conference, Hydroxychloroquine prescriptions shot up by over 200 percent, over the previous year. Nonetheless, the prescriptions returned to normal as news highlighting the lack of enough evidence to support its use started spreading, across the globe.

Soon, India followed the same… a strange coincidence?

As stated above, on March 21, 2020, the US President Trump proclaimed Chloroquine and Hydroxychloroquine as potential game changers against Covid-19 global pandemic, despite doubts from the US-FDA. Curiously, on March 23, 2020, Indian media also reported:

‘Amid rising Coronavirus cases in the country, the national task force for COVID-19 constituted by Indian Council for Medical Research (ICMR) has recommended hydroxy-chloroquine as a preventive medication for high-risk population. According to the advisory, it should be given to high risk population — asymptomatic healthcare workers involved in the care of suspected or confirmed cases of COVID-19 and asymptomatic household contacts of laboratory confirmed cases.’

The above protocol, recommended by the National Task Force, has been approved by the Drug Controller General of India (DGCI) for restricted use in emergency situations. This seems to have happened even before the US-FDA granted similar authorization. Intriguingly, US-FDA subsequently revoked it on June 15, 2020, for lack of enough scientific evidence, unlike the Indian drug regulator.

Another report of April 09, 2020 summed it up well. It wrote, the hype of Hydroxychloroquine – pushed by the US President Trump as a COVID-19 treatment, has now been joined by many other countries, despite inconclusive medical evidence on the efficacy and safety of the drug. Is this just a strange coincidence?

Be that as it may, India’s decision on the emergency use of Hydroxychloroquine had its rub-off financial impact in the country, in terms of increase in its export demand, which may not be an intended one, though.

Its rub-off financial impact in India:

As the world’s largest manufacturers of Hydroxychloroquine are located in India, many of these companies reaped a rich harvest in the April-June quarter, mostly, based on media reports on its use in treating Covid-19. For example, Ipca Laboratories Ltd, reportedly, garnered ₹259 Crore in additional sales, with consolidated net profit for the quarter soar threefold to ₹454 Crore, from the drug in that period.

Notably, Ipca also acknowledged, ‘HCQ sales were a one-time boost for the company. With the hype waning, after various clinical trials showed the drug did not provide any significant benefit, the company now expects sales to ease to earlier levels,’ as the report goes. Let me now move over to the most recent example.

Perils of haste in the plasma therapy saga:

Since, the third week of this month, a series of incidents related to plasma therapy highlighted the ongoing perils of haste in the scientific decision-making process. These were generally prompted by powerful non-scientific external influences, as reported below:

  • On August 23, 2020, the US President announced that the US-FDA has granted emergency approval of blood plasma from recovered Coronavirus patients as a treatment for those battling the disease. President Trump called the development “a historic breakthrough.”
  • According to Reuters, the US-FDA had authorized its use after President Donald Trump blamed the drug agency for impeding the rollout of vaccines and therapeutics for political reasons.
  • The very next day of President Trump’s announcement, on August 24, 2020, the World Health Organization advised caution about endorsing the use of recovered COVID-19 patients’ plasma to treat those who are ill, saying evidence it works remains “low quality.”
  • American scientists, including researchers at the Mayo Clinic also challenged a key statistic cited by U.S. officials as grounds for emergency approval of the treatment.
  • On August 25, 2020, US-FDA Commissioner Stephen Hahn, publicly apologized ‘for overstating the benefits of plasma for treating Covid-19 patients.’ 
  • “The US-FDA’s emergency use authorization for plasma for Covid-19 looks questionable. If this presages an early vaccine nod, we should be very afraid,” reported another article.

Similar controversy was also witnessed in India. Just days after the Drug Controller General of India (DCGI) gave its go-ahead to a proposal of ICMR for the clinical trial of convalescent plasma therapy in COVID-19 patients, the Ministry of Health said, ‘there is not enough evidence to claim plasma therapy can be used for treatment of COVID-19. Interestingly, several states, such as, Delhi, Gujarat, Maharashtra and Uttar Pradesh, have already started clinical trials for plasma-based treatment. Meanwhile, media reports, such as, ‘India sees black market boom for plasma from recovered Covid-19 patients,’ started pouring in.

Conclusion:

As recorded in the morning of August 30, 2020, total Coronavirus cases in India have reached a staggering figure of 3,542,733 with 63,657 deaths, despite all measures taken by the country. No signs of flattening of the curve are visible, just yet. In this situation, many experts believe, the way prescriptions are written for Covid-19 patients, based on anything but robust considerations, needs to be re-looked. The headline of an article, written by Richard L. Kravitz, Professor of Health Policy and Internal Medicine, University of California, Davis on July 09, 2020, vindicates this point. It said:‘When Trump pushed Hydroxychloroquine to treat COVID-19, hundreds of thousands of prescriptions followed, despite little evidence that it worked.’

Another interesting article, tried to ferret out the truth behind such haste. It voiced, ‘the truth is that researchers, academic institutions, medical journals and the media all face powerful incentives to portray the latest research findings as more earthshaking than they actually are’. The authors spotlighted, under normal circumstances, numerous mechanisms exist to blunt some of the worst over-hyping and many sources of medical information do their best to be accurate in what they report.

It is possible that in the midst of a pandemic, the urgency of the moment may overwhelm these good intentions. The above paper also cautioned, ‘Bad science can be spread far and wide by normally credible sources.” However, the bottom-line is, the scientific research community, under no circumstances, be made to comply with the thoughts and beliefs of non-scientific, but powerful decision makers. It happened in the oldest democracy in the world, as it also happened in the largest democracy on the planet earth.

The above two instances are just illustrations to highlight an important point – without becoming judgmental. The discussion spotlights the perils of haste in the scientific decision-making processes, while combating Covid-19. As many experts believe, it could be counterproductive for non-scientific power sources to influence the robust medical value creators for a quick remedy. Mainly because, patients will continue to be at the receiving end for the net outcome, of such unproven, and scientifically fragile hypes.

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.

Coronavirus Outbreak: Drug Shortage, Treatment And Unease – A Review

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The Coronavirus outbreak has reached a “decisive point” and has “pandemic potential”, said the Director General of the World Health Organization (W.H.O), reportedly, on February 27, 2020, urging governments to act swiftly and aggressively to contain the virus. He further added, “We are actually in a very delicate situation in which the outbreak can go in any direction based on how we handle it.” Alerting all, he appealed, “this is not a time for fear. This is a time for taking action to prevent infection and save lives now.”

As on March 08, 2020 – 106,211 coronavirus cases (view by country) were reported globally, with 3,600 deaths and 60,197 patients recovered. Thus, the most relevant question now is the level of preparedness of each country, to prevent a possible epidemic, which may even strike at a humongous scale. This will be relevant for both, the countries already infected with a coronavirus – in a varying degree, as well as, those who are still out of it.

From the drug industry perspective, equally pertinent will be to assess on an ongoing basis its impact on the medical product supply-chain and further intensifying ongoing efforts to find the ‘magic bullet’ – an effective remedy, partly addressing the unease of all, on this score. In this article, I shall try to ferret out the current status on these points, based on available and contemporary data.

The impact assessment has commenced:

While on the current impact assessment, I shall restrict my discussion on the largest pharma and biological market of the world – the United States (US) and of course, our own – India, starting with the former. On February 14, 2020, the US released a statement of the Commissioner of Food and Drugs Administration titled, ‘FDA’s Actions in Response to 2019 Novel Coronavirus at Home and Abroad.’ Highlighting the proactive actions of the regulatory agency, the statement recorded:

“We are keenly aware that the outbreak will likely impact the medical product supply chain, including potential disruptions to supply or shortages of critical medical products in the U.S. We are not waiting for drug and device manufacturers to report shortages to us—we are proactively reaching out to manufacturers as part of our vigilant and forward-leaning approach to identifying potential disruptions or shortages.” Adding further, he revealed that the US-FDA is in touch with regulators globally and has added resources to quickly spot “potential disruptions or shortages.”

Whereas in India, the Chemicals and Fertilizers Ministry has also announced: “The Government of India is closely monitoring the supply of APIs/intermediates/Key starting materials (KSMs) which are imported from China and the effect of the outbreak of a novel coronavirus in China on their supply.”

The current status:

As this is an ongoing emergency exercise, on February 27, 2020, by another statement, the US-FDA reported the first shortage of a drug, without naming it, due to the COVID-19 outbreak. It identified about 20 other Active Pharmaceutical Ingredients (APIs) or finished drug formulations, which they source only from China. Since January 24, the US-FDA has, reportedly, been in touch with more than 180 manufacturers of human drugs to monitor the situation and take appropriate measures wherever necessary. However, the prices of some key ingredients have already started increasing.

Back home, on March 03, 2020, Reuters reported, the Indian Government has asked the Directorate General of Foreign Trade (DGFT) to restrict export of 26 APIs and other formulations, including Paracetamol, amid the recent coronavirus outbreak. Interestingly, these 26 active pharmaceutical ingredients (APIs) and medicines account for 10 percent of all Indian pharmaceutical exports and includes several antibiotics, such as tinidazole and erythromycin, the hormone progesterone and Vitamin B12, among others, as the report indicated.

It is unclear, though, how this restriction would impact the availability of these medicines in the countries that import from India, especially formulations, and also China. For example, in the United States, Indian imports, reportedly accounted for 24 percent of medicines and 31 percent of medicinal ingredients in 2018, according to the U.S. Food and Drug Administration. Be that as it may, it still remains a reality that China accounted for 67.56 per cent of India’s total imports of bulk drugs and drug intermediates at USD 2,405.42 million in 2018-19.

Prior to this import ban, a report of February 17, 2020 had flagged that paracetamol prices have shot up by 40 percent in the country, while the cost of azithromycin, an antibiotic used for treating a variety of bacterial infections, has risen by 70 percent. The Chairman of Zydus Cadila also expects: “The pharma industry could face shortages in finished drug formulations starting April if supplies aren’t restored by the first week of the next month,” as the news item highlighted.

No significant drug shortages reported, just yet:

From the above details, it appears, no significant drug shortages have been reported due to Coronavirus epidemics in China – not just yet. Moreover, the Minister of Chemicals and Fertilizers has also assured: ‘No shortage of drug ingredients for next 3 months.’ He further added: ‘All initiatives are being taken to ensure there is no impact of the disease in India.’

However, on March 03, 2020, W.H.O, reportedly has warned of a global shortage and price gouging for protective equipment to fight the fast-spreading coronavirus and asked companies and governments to increase production by 40 percent as the death toll from the respiratory illness mounted. Moody’s Investors Service also predicted, coronavirus outbreak may increase demand, but poses a risk of supply chain disruptions, especially for APIs and components for medical devices sourced from China.

In view of these cautionary notes, especially the health care and regulatory authorities, should continue keeping the eye on the ball. More importantly, commensurate and prompt interventions of the Government, based on real-time drug supply-chain monitoring, along with the trend of the disease spread, will play a critical role to tide over this crisis.

In search of the ‘Magic Bullet’: 

Encouragingly, on February 16, 2020, the National Medical Products Administration of China has approved the use of Favilavir, an anti-viral drug, for the treatment for coronavirus. The drug has reportedly shown efficacy in treating the disease with minimal side effects in a clinical trial involving 70 patients. The clinical trial is being conducted in Shenzhen, Guangdong province. Formerly known as Fapilavir, Favilavir was developed by Zhejiang Hisun Pharmaceutical of China. A large number of other promising R&D initiatives are being undertaken, in tandem, by brilliant scientific minds and entities to find an effective treatment for this viral disease. To give a feel of it, let me cite just a few examples, both global and local, as below.

Pfizer Inc. has announced that it has identified certain antiviral compounds, which were already in development, with potential to treat coronavirus-affected people. The company is currently engaged in screening the compounds. It is planning to initiate clinical studies on these compounds by year-end, following any positive results expected by this month end.

Several large and small pharma/biotech are now engaged in developing a vaccine or a treatment. Gilead has, reportedly, initiated two phase III studies in February 2020, to evaluate its antiviral candidate – remdesivir, as a treatment for Covid -19. Takeda is also exploring the potential to repurpose marketed products and molecules to potentially treat COVID-19, besides developing a plasma-derived therapy for the same. Pipeline candidates of other companies are in earlier stages of development, as reported.

Whereas in India, Serum Institute of India (SIL) is collaborating with Codagenix, a US-based biopharmaceutical company, to develop a coronavirus cure using a vaccine strain similar to the original virus. The vaccine is currently in the pre-clinical testing phase, while human trials are expected to commence in the next six months. SII is expected to launch the vaccine in the market by early 2022.

Zydus Cadila, as well, has launched a fast-tracked program to develop a vaccine for the novel coronavirus, adopting a two-pronged approach, a DNA based vaccine and a live attenuated recombinant measles virus vectored vaccine to combat the virus. These initiatives seem to be a medium to long-term shots – laudable, nonetheless. 

Current off-label drug treatment for coronavirus:

Some of the drugs, reportedly, being used in China to treat coronavirus include, AbbVie’s HIV drug, Kaletra and Roche’s arthritis drug – Tocilizumab (Actemra). However, none of these drug treatments have been authorized yet by drug regulators, to treat patients with coronavirus infection.

According to the Reuters report of March 04, 2020, China’s the National Health Commission, in its latest version of online treatment guidelines, has indicated Roche’s Tocilizumab for coronavirus patients who show serious lung damage and elevated level of a protein called Interleukin 6, which could indicate inflammation or immunological diseases.

However, there is no clinical trial evidence just yet that the drug will be effective on coronavirus patients and it has also not received approval from China’s National Medical Product Administration for use in coronavirus infections. Nonetheless, Chinese researchers recently registered a 3-month clinical trial for Actemra on 188 coronavirus patients. According to China’s clinical trials registration database, the period of trial is shown from February 10 to May 10. 

Is coronavirus becoming a community transmitted infection?

Even while grappling with an increasing number of COVID-19 positive patients, the Indian Government is showing a brave front, as it should. However, it has also confirmed “some cases of community transmission.” This unwelcome trend makes India the part of a small group of countries, including China, Japan, Italy and South Korea, where community transmission of the virus has taken place. This is a cause of an additional concern.

Although, there has been no significant drug shortages reported yet, shortages of  hand sanitizers,recommended for frequent use by the W.H.O and other competent bodies, as they can, reportedly kill Covid-19. Similarly, N95 masks useful to prevent the spread of the disease, have also disappeared, adding more fuel to fire, if not creating a panic-like situation, for many.

Conclusion:

Most global drug players with a business focus on branded – patented drugs, are not expected to fight with the supply disruptions. As reported, ‘Several top drugmakers – including Pfizer, Johnson & Johnson, Bayer, Merck KGaA and Roche—recently confirmed to FiercePharma that they have stock policies in place to minimize the impact.”

But, for the generic drug industry the disruption in the supply chain may have a snowballing effect. For example, as the March 03, 2020 edition of the New York Times (NYT) reported – supply chain disruption in sourcing some APIs from China is being felt most acutely in India, as the Government decided to stop exporting 26 drugs, most of them antibiotics, without explicit government permission. The same article also highlighted the possible multiplier effect of this development with its observation: “That’s a problem for the rest of the world, which relies on India’s drug makers for much of its supply of generic drugs. India exported about $19 billions of drugs last year and accounted for about one-fifth of the world’s exports of generics by volume”, it added.

As on date, there is no known cure for coronavirus infection. The magic-bullet has yet to be found out. However, over 80 clinical trials has, reportedly, been launched to test coronavirus treatments. This includes, repurposing older drugs, as well. Recently, only Favilavir, an anti-viral drug, has been approved for treatment for coronavirus by the National Medical Products Administration of China.

Coming back to the unease of many in India, the country’s perennial shortages of doctors, paramedical staff, hospital beds, adequate quarantine facility for a large number of patients and fragile public healthcare delivery system, still pose a humongous challenge in this crisis. More so, when just in the last week, U.S. intelligence sources, reportedly, told Reuters that ‘India’s available countermeasures and the potential for the virus to spread its dense population was a focus of serious concern.’

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.

On The Flip Side of Pharma Industry: A Saga of Perennial Contradictions

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Awesome contribution in the battle against multiple diseases, is obviously the primary facet of the pharma industry. However, on its flip side, one would witness a saga of numerous contradictions. Some of these exist perennially in well-protected opaque cocoons, regardless of what recent research data reveal. The consequences of which leaves a detrimental impact on the patient’s health interests, eventually turning into highly contentious issues, in the socio-political milieu of recent times.

While there are many such contradictions involving the pharma industry, this article will endeavor to understand just one inherent dispute. This is related to the impact of high R&D expenditure on drug prices. It assumes importance, especially at a time, when the world’s most influential pharma trade organization continues arguing in favor of the dictum – high new drug prices are driven by mind-boggling cost of drug innovation, as R&D spending keep shooting north. Incidentally, many others challenge this assertion backed by robust data, claiming it’s not so, actually.

Thus, the question that comes up, if high R&D cost prompts high drug prices, what happens when this major cost of new drug innovation comes down, as is, apparently, happening now. A proper resolution of this contradiction by ushering in transparency in this area, is important to safeguard a critical health interest of many patients. A recent research report, followed by several other important developments in this area, exposes this contradiction, probably more than ever before.  

Some recent reports revealing the contradictions:

To drive home the point of contradictions, I shall cite a few references below, from a pool of many others. For example, one such report of September 26, 2019 unfolded: ‘The cost to bring a new drug to market has decreased to under US$ 2Billion’. This was announced by Clarivate Analytics plc  while releasing the “2019 Centre for Medicines Research (CMR) International Pharmaceutical R&D Factbook.”

Interestingly, another article had sharply contradicted the above, presenting a different story altogether. Quoting the Tufts University Center for the Study of Drug Development, it highlighted that it costs US$ 2.6 billion growing at 8.5 percent annually. However, adding an estimate of post-approval R&D costs increases, the cost estimate to US$ 2870 million. Many estimated, it would take pharma companies more than 15 years of average sales to reach breakeven.

Curiously, a different research paper, titled ‘Comparison of Sales-Income and Research and Development Costs for FDA-Approved Cancer Drugs Sold by Originator Drug Companies,’ published by the JAMA Network Open on January 04, 2019 concluded quite in line with the ‘2019 CMR International Pharmaceutical R&D Factbook.’ It found, ‘Cancer drugs, through high prices, have generated incomes for the companies far in excess of research and development costs; lowering prices of cancer drugs and facilitating greater competition are essential for improving patient access, health system’s financial sustainability, and future innovation.’

Again, contradicting the above, one more article – ‘The Link Between Drug Prices and Research on the Next Generation of Cures,’ published ITIF (Information Technology & Innovation Foundation) on September 09, 2019, touted to: ‘Put simply, drug companies must make significant profits on their best-selling drugs in one generation in order to reinvest in the next generation.’

The saga of contradiction continues.

A glimpse at the current scenario:

While trying to understand the inherent contradiction in the space of cost of drug innovation by analyzing the available data, let us examine the current scenario, of course with reasons. Going by the oft-repeated justification that high R&D expenses drive the drug prices up, the converse scenario would be – a dip in the R&D expenditure should lead to a reduction in medicine prices, commensurately.

But this is unlikely to happen – drug prices won’t possibly come down due to voluntary measures of the drug manufacturers. As various recent developments indicate, it will be clear in the course of this discussion that the same justification won’t be jettisoned anytime soon.

Pharma CEOs do acknowledge that they have some role to play in helping lower drug prices. However, they continue defending prevailing high new drug prices by highlighting, their multibillion-dollar investments in R&D are responsible for advances in treatments of many serious ailments, such as cancer, hepatitis C, schizophrenia and autoimmune diseases.

This was again contradicted by another BMJ Research Study of October 23, 2019, which concludes: ‘A review of the patents associated with new drugs approved over the past decade indicates that publicly supported research had a major role in the late stage developments of at least one in four new drugs, either through direct funding of late stage research or through spin-off companies created from public sector research institutions. These findings could have implications for policy makers in determining fair prices and revenue flows for these products.’ Nevertheless, in the midst of it, signs of a shift in focus of many pharma companies in this area, is clearly discernible. 

Signs of a shift in R&D focus are clearly discernible:

This gets well- reflected in the “2019 Centre for Medicines Research (CMR) International Pharmaceutical R&D Factbook.” As the report unfolds, one of the basic shifts is a change in focus on R&D targets. Until recently, the research focus of most companies was on Noncommunicable Diseases (NCD) such as, Parkinson’s disease, autoimmune diseases, strokes, most heart diseases, most cancers, diabetes, chronic kidney disease, osteoarthritis, osteoporosis, Alzheimer’s disease, and others. Whereas, today there has been an increased focus on rare diseases.  

What does it signify?

It obviously signifies, most companies are now trying to launch steeply priced niche products for rare diseases. This includes complex biologic products, gene therapy, personalized medicine and the likes. Which is why, a majority of current new drug approvals, targets smaller patient populations. For example, between 2010 and 2018, the number of addressable patients per drug approval decreased by 15 percent, as the above report revealed.

The bottom-line, therefore, is with the low hanging fruits already been plucked, many pharma players don’t seem to consider targeting innovation of reasonably priced mass market products. It has already happened with antibiotics and would now probably happen with several NCDs.

Two main drivers for this shift:

The two main drivers for this shift, resulting an increase in drug approvals, and significant reduction in cost per new molecular entity (NME), may be summarized as follows:

  • Increased focus on rare diseases. Of the 57 NMEs launched in 2018, 22 had an orphan drug designation, indicating that they targeted rare disease area.
  • Increased activity of smaller pharmaceutical companies. In 2018, as high as 74 percent of drug launches were developed by companies with an R&D spend of US$ 700 million to US$2 billion. Major pharma companies (R&D spend of greater than US$2 billion) accounted for just 26 percent of drug launches.

A good news!

The increase in new drug approvals driven by smaller pharma companies is a good news and also encouraging. This suggests, becoming a big company with deep pocket is no longer a prerequisite to bring an innovative drug to the market. On the contrary, making R&D programs more efficient is the name of the game, today.

Changing pharma investment strategies:

As is evident from the CMR International Factbook, drug manufacturers’’ investment strategies are also undergoing a makeover. In the R&D domain, external innovation, in general, is now playing a more critical role. Perhaps, more than ever before. In the first half of 2019 alone, global spend for pharma M&A and licensing activities was, reportedly, around US$140 billion. Interestingly, it outpaced projected 2019 R&D spend by more than 60 percent.

Do high R&D cost impact drug prices and vice versa?

This brings us to the key question: Does the high cost of R&D impact drug prices and vice versa? Or, it is being over-hyped as a tool to justify high drug prices. There are umpteen instances to believe so – for example, the world’s best-selling drug – Humira of AbbVie. According to the Wall Street Journal (WSJ) of September 28, 2017, the initial U.S. patent for Humira expired in December 2016, but the additional patents expire in the 2020s.

Interestingly, according to other reports, AbbVie has collected more than US$115 billion in global Humira sales since 2010. In 2018 alone its sales amounted to US$ 19.9 billion. The report reiterates, ‘AbbVie has made and will continue to make a lot of money from Humira.’ From these facts, one can presume that AbbVie’s R&D expenditure or the product acquisition cost, has long been recovered, but still doesn’t seem to have any significant impact on the drug price.

Pharma CEOs continue to repeat the same argument:

While testifying at a hearing of the Senate Finance Committee, pharma CEOs had to confront with a Senators’ question - “Prescription drugs did not become outrageously expensive by accident, Drug prices are astronomically high because that’s where pharmaceutical companies and their investors want them.” However, acknowledging that their prices are high for many patients for high R&D expenditure, the company chiefs tried to deflect blame onto the insurance industry, government and middlemen known as pharmacy benefit managers.

The CEOs also highlighted the rebates given on list prices to benefit patients. However, the reality is, under the current system, savings from rebates are not consistently passed through to patients in any form. Interestingly, despite such scenario, pharma CEOs don’t want the government negotiating drug prices directly. It’s apparent that none of their reasonings were found to be the genuine reasons for high drug prices, even by the US Senators.

Thus, pharma’s points of justification for high drug prices have not changed, over a long period of time. On the contrary, shifting greater focus on the R&D of rare diseases, where the number of patients is much less, the CEOs seem to be bolstering their same argument on a different ground, despite reducing R&D costs.

Surfaces a glaring contradiction:

Presenting the current situation from the drug industry perspective, the article titled, ‘Drug Prices and Innovation’, published in the Forbes Magazine on June 20, 2019, emphasized on some interesting points.

It said: ‘In 2018 return on investment in drug discovery/development were 1.9 percent, far below the 10.5 percent cost-of-capital - the rate-of-return the industry must provide to compete for capital with similar investments.’  The article also emphasized: ‘Under the current pricing regime, the expected returns from drug discovery do not justify the investment. They have not done so since 2010 and are expected to turn negative by 2020.’ It further added, big pharma, despite one of the highest rates of R&D spending of any industry, chronically fails to fund research sufficient to support adequate growth and returns to the average drug don’t cover the cost of development.

On the other hand, according to a presentation by CVS Health that cited Macrotrends.net as its source,pharmaceutical manufacturers’ profit margins have reportedly exceeded 26 percent for the last three years and 22 percent for the past 10 years.

This brings out again, the glaring contradiction between what is being highlighted and what is actually happening in the pharma business. Lack of transparency in this area of the drug industry, is believed to be the root cause of this confusion among many.

Conclusion:

As it has been recognized the world over, the high new drugs prices are an issue over the contentious argument of ‘high R&D expenditure’ being the ‘root cause’.  It is, therefore, imperative for the stakeholders to demand transparency in this area. If finding a solution to this health-related issue is considered critical, without further delay, this needs to be expeditiously addressed.

As the saying goes, once the disease is diagnosed accurately, zeroing in on an effective treatment becomes easier. Let me hasten to add, for new, innovative and patented drugs, the situation in India is generally no different. Thus, there is no scope for any contradiction in this area, whatsoever. As the saying goes, once the disease is diagnosed accurately, zeroing in on an effective treatment becomes easier.

Voluntary implementation of ‘responsible’ drug pricing policies, by pharma manufacturers themselves, has been given a long rope. Time is running out now. If this does not happen soon, government control of drug prices will be essential, just as is being contemplated in the United States – the ‘capital’ of the free-pricing world. Moreover, it has been well documented in several studies that price control won’t jeopardize drug innovation, as pharma manufacturers will have to come out with innovative new products and treatments – event for survival of the business.

Saving lives – more lives, alongside making reasonable profits in the business, remain the primary facet of the pharma industry. However, the flip side of it, revealing a perennial saga of contradictions, such as one we discussed above, raises concerns of their being perceived as profiteering with drug prices, by many. Such practices go not only against patients’ health interest, but also negates the core purpose of existence of the industry – surely, endangering long term survival of this business model – as the modern technology unleashes its mesmerizing power for all.

By: Tapan J. Ray   

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

 

Spirit Behind Drug Patent Grant: Secondary Patents: Impact on Drug Access

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For more effective treatment against existing diseases, besides combating new or a more complicated form of existing ailments with precision, drug innovation is absolutely necessary and on an ongoing basis. This makes innovative drugs so important for the population, globally.

Besides academia, the pharma industry has remained in the forefront of the search for new drugs, for so long. What makes this process so crucial is, cheaper generic drugs flow from the innovative drugs, post market exclusivity period, which together form the bedrock of the pharma industry’s business model. Consequently, a robust patent protection for the new molecular entities, not only enable the drug innovators to make a reasonably good profit, but also encourage them to keep this virtuous circle moving, faster.

Although, the drug patents are granted for 20 years, after obtaining marketing approval from the respective drug regulators, a time period - ranging between 7 and 12 years, is available to the company to realize its maximum commercial benefits. Thereafter, the patent expires, paving the way of market entry of cheaper generic equivalents to make the drug accessible to a larger population. This is the playbook, which deserves to be accepted and respected by all, both in the letter and spirit.

Currently, the narrative has started changing, apparently, repudiating the spirit behind the grant of new drug patents, especially with the entry of a number of expensive, large molecule biopharmaceutical drugs. After obtaining a fixed-term market exclusivity, more intricate legal measures are being taken to extend the fixed-term market monopoly for an unknown period, delaying market entry of cheaper biosimilar equivalents, post patent expiry, as long as possible.

In this milieu, India appears to be the only country in the world, where the country’s ‘Patents Act’ provides enough safeguard to blunt those legal tools, effectively, to protect patients’ health interest. Quite expectedly, this new narrative of the drug innovators is yielding the best return in the Eldorado of the pharma world – the Unites States. It is also no secret that US vehemently opposes several provisions of the Indian Patents Act 2005, under pressure from the most powerful pharma lobby group, as many believe.

Using the spirit behind drug patent protection as the backdrop, I shall dwell in this article, how this so precious spirit is gradually losing its basic purpose, especially for blockbuster biopharma drugs. Is the key intent behind sacrificing the spirit behind drug patent grant to keep their brands money spinners and big – even after expiry of original patent – as long as possible – at the cost of patients’ health interest?

Despite the original patent expiry, biggest biologic drugs remain big:

The fact that original patent expiries have done little to halt sales of some of the industry’s biggest products – mostly biologic drugs, was clearly elucidated in an  Evaluate Pharma article – “Biopharma’s biggest sellers – the oldies that just keep giving,” published on August 14, 2019. This gets vindicated, as we look at the ‘top ten pharma brands with biggest lifetime sales – from launch to 2018’, in the following Table I:

Product Company Launch year USD Billion
1. Lipitor Pfizer 1997 164.43
2 Humira AbbVie 2003 136.55
3. Rituxan Genentech/Biogen 1997 111.50
4. Enbrel Amgen 1998 108.16
5. Epogen Amgen 1988 107.90
6. Advair GSK 1998 104.20
7. Remicade Janssen 1998   98.00
8. Zantac GSK 1981   97.42
9. Plavix Sanofi/BMS 1998   90.63
10. Herceptin Genentech/Roche 1998   87.97

(Adapted from Evaluate Pharma data of August 14, 2019)

The point to take note of:

The point worth noting here, with the exception of Advair, Zantac, Lipitor and Plavix, all others – among the top ten brands, are biologic drugs. Moreover, what is most striking in the Table I, despite the expiry of the original patents, a large number of biologic brands were able to expand their sales, pretty impressively, for well over two decades. As we shall see later, this situation is expected to continue, at least, till 2024.  As the Evaluate Pharma article states, for various reasons, these multibillion dollar brands have been able to avoid the expected post patent expiry ‘onslaught from biosimilars in the key US market’, which is incidentally the most valuable pharma market in the world.

One of the key reasons that helps delaying cheaper biosimilar drug entry expanding patient access, is a crafty strategic measure adopted by these companies through the creation of a Patent Thicket with secondary patents. As I discussed in this Blog on April 22, 2019, this is a crafty way of ‘evergreening’ patent term beyond 20 years, legally. Whether such measures conform to the spirit of granting 20 years product patent, becomes a moral question, or an issue of probity for the concerned companies, at the most. Be that as it may, a concern over this situation has been raised in many countries, including the United States.

Barrier of secondary patents: 

Biosimilar drug developers continue facing multiple non-financial challenges, such as, scientific, regulatory, pricing. I have already discussed some of these barriers in this blog on July 31, 2017. Instead, I shall focus in this article, with greater detail, on the intricate and a well-woven net of secondary patents. However,before delving into this area, it will be worthwhile to have a quick recap on the basic differences between original patents and secondary patents.

According to WIPO, “Patents on active ingredients are referred to as primary patents. In later phases of the drug development, patents are filed on other aspects of active ingredients such as different dosage forms, formulations, production methods etc. These types of patents are referred to as secondary patents.”

Another excellent paper, authored by two distinguished researchers from Columbia University and LSE, makes some important points on this subject. It says, secondary patents have become increasingly important to the pharma industry, especially in the U.S. and Europe over the past three decades. The basic purpose of ‘taking out multiple patents on different aspects of a drug in order to cordon off competitors is now standard practice in the pharmaceutical industry.’ As the authors further said, this is primarily because: ‘Secondary patents can protect market shares by extending periods of exclusivity beyond the dates in which patent protection would otherwise lapse.’

Interestingly. devising patent strategies to extend periods of market exclusivity is generally considered in the industry, as a key component of ‘product life cycle management,’ – not by the marketing whiz kids, but by astute patent attorneys. Nevertheless, as the paper articulates, critics of this practice often use the more pejorative – evergreening, to describe it.

Examples of impact of secondary patents:

Many research papers suggest, besides scientific complexity in biosimilar drug development being a key reason for their delayed market entry, secondary patents are even tougher barriers for the same. This was brought to light a few years ago in a ‘Review Article’ – ‘The Economics of Biosimilars’, published in the September/October 2013 issue of American Health & Drug Benefits.

Some of the key points made on this issue include,AbbVie plan to defend Humira (adalimumab) with more than 200 secondary patents, Merck’s giving up its biosimilar project on Enbrel when Amgen got its expanded patent life. There are many other such instances.

Its effect would last longer: 

Experts believe, the effect of creating a strong secondary patent shield around blockbuster biologic would last much longer. As the above Evaluate Pharma article underscores: ‘This ability to fend off biosimilar competition is one of the reasons Humira is set to snatch Lipitor’s crown next year as the industry’s most successful drug.’

The Table II below that lists ‘top 10 pharma brands from their respective launch date, including estimated forecast till 2024’, vindicates its long-lasting impact:

Product Company Launch year USD Billion
1. Humira AbbVie 2003 240.05
2 Lipitor Pfizer 1997 180.19
3. Enbrel Amgen 1998 139.83
4. Rituxan Genentech/Biogen 1997 136.07
5. Revlimid Celgene 2008 123.64
6. Remicade Janssen 1998 117.20
7. Epogen Amgen 1988 115.87
8. Herceptin Genentech/Roche 1998 114.89
9. Avastin Genentech/Roche 2004 114.27
10. Advair GSK 1998 113.61

(Adapted from Evaluate Pharma data of August 14, 2019)

Although, Zantac and Plavix no longer feature in this table, one drug that leapfrogged much of the competition to become one of the industry’s biggest future bestsellers is Revlimid. The projected sales of the drug over the next six years will actually outstrip its sales to date. However, much of this is dependent on whether generic competition will arrive ahead of Revlimid’s 2022 patent expiry, the paper indicated.

Concern expressed even in the US for the delay in biosimilar market entry:

Many big spending countries on health care, such as the United States expected that timely biosimilar drug entry will help contain health expenditure significantly. However, the article published in the Fierce Pharma on August 29, 2019, raises an alarm, but with a hope for the future. It says: “It’s no secret biosimilars haven’t made a big dent in U.S. drug spending. Some experts have even said it’s time to give up on copycat biologic.”

This hope gets resonated with what, ‘the former US-FDA commissioner Scott Gottlieb argues’. He feels, ‘It’s too soon for that’, while ‘calling on Congress to bolster the budding market.’ However, in my personal view, this will remain a difficult proposition to implement, as biologic drug players will continue using their relatively new, but powerful weapon of filing a number of complex ‘secondary patents.’ These will help extend the market exclusivity period of their respective brands, much beyond the original patent grant period, unless a counter legal measures are taken by the lawmakers of various countries, including the United States. But, India is an exception in this regard.

Indian patent law doesn’t encourage ‘secondary patents’:

The good news is, Indian Patent Act 2005, doesn’t encourage ‘secondary patent.’ This is because, section 3 (d) of the Indian Patent Act 2005 limits grant of ‘secondary pharmaceutical patents.’ An interesting study reported on February 08, 2018, discussed about 1,700 rejections for pharma patents at the IPO spanning over the last decade. But, there is a huge scope for improvement in this area.

Which is why, the not so good news is under-utilization of the same section 3.d by the Indian Patent Office (IPO), as are being voiced in many reports. One such paper of April 25, 2018 highlighted,72 per cent of pharma patent grants are secondary patents. These were granted for marginal improvements over previously known drugs for which primary patents exist. That said, despite such reported lapses, blocking of some crucial secondary patent grant has benefited a large number of patient population of India.

Blocking secondary patent grant has helped India immensely:

While US recognizes secondary patents, blocking secondary patent grant, especially for biologic drugs has helped Indian patients immensely, with expanded access to those medicines. This was also captured in the above study. Besides the classic case of Novartis losing its secondary patent challenge for Glivec in the Supreme Court of India in 2013, several other examples of secondary patent rejection are also available. This includes, among others, Glivec of Novartis and the world’s top selling drug for several years – Humira of AbbVie.Against a month’s therapy cost of ₹1,6o, ooo for Glivec in the US, its Indian biosimilar version costs for the same period ₹11,100. Similarly, while the treatment cost with Humira in the US is ₹85,000, the same with its biosimilar version in India is ₹ 13,500, as the above study finds.

Conclusion:

The core purpose of drug innovation, as widely touted by the R&D-based drug companies, is meeting the unmet needs of patients in the battles against diseases. Thus, drug innovation of this genre must not just be encouraged, but also be adequately protected and rewarded by granting product monopoly for a 20-year period from the date of the original patent grant. Curiously, piggybacking on this basic spirit behind the drug patent grant, pharma lobby groups are now vocal on their demand for giving similar treatment to secondary patents on various molecules. The tone of demand gets shriller when it comes to section 3. d of the Indian Patents Act, which doesn’t allow such ‘evergreening’ through secondary patents.

Thus, the key question that surfaces, while the original patent grant for innovative drugs help meeting unmet needs of some patients, whose unmet needs would a secondary patent grant meet, except making the concerned company richer? Further, for highly expensive biologic drugs, delayed market entry of cheaper biosimilars in that process, would deny their expanded access – failing to meet the unmet needs of scores of others.

Hopefully, India won’t give in to pressure of multinational pharma lobby groups, channeled through various powerful overseas government entities. At the same time, I hope, the government in power at the Eldorado of the pharma industry, will consider giving a fair chance of market entry to cheaper biosimilars, including those from India, to also grow their business globally, but in a win-win way.

The key objective of all stakeholders involved in this process, should be to uphold the basic spirit behind drug patent grant. It may even call for challenging the core intent behind secondary patent applications, the world over, that deny quicker market entry for cheaper biosimilars, sans heavy litigation expenses. This will help expand access to cheaper biologic medicines to all those who can’t afford those, otherwise.

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.