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Envisaging ‘five emerging key strategic changes’ in the Indian Pharmaceutical Industry

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In India, the domestic pharmaceutical market has clocked a CAGR of around 13% to 14% since the last five years. Currently, the market is dominated by the drugs for mass ailments. However, such trend has already started showing a shift towards ailments related to the life-style of patients. This emerging trend is expected to fast accelerate in future.All such factors put together, driven by the following key drivers for growth backed by strong logistics support and hopefully improving healthcare delivery system are expected to contribute significantly towards faster growth of the Indian pharmaceutical industry, as we move on.Key growth drivers:

The growth drivers may primarily be divided into two categories:

- Local and
- Global

Local:

• Rapidly growing more prosperous middle class population of the country.

• High quality, cost effective, domestic generic drug manufacturers who will have increasing penetration in both local and emerging markets.

• Rising per capita income of the population and in-efficiency of the public healthcare system will encourage private healthcare systems of various types and scales to flourish.

• Expected emergence of a robust healthcare financing/insurance model for all strata of society.

• Fast growth in Medical Tourism.

• Evolving combo-business model of global pharmaceutical companies with both patented and generic drugs boosting local outsourcing opportunities.

Global:

Global pharmaceutical industry is going through a rapid process of transformation. Cost containment pressures due to various factors are further accelerating this process. Some of the critical effects of this transformation process like Contract Research and Manufacturing Services (CRAMS) will drive growth of many Indian domestic pharmaceutical players.

Expecting the need for ‘New Strategic Changes’ of radically different in nature:

The impact of many of these evolutionary changes is being felt in India already. However, some more radically different types of changes, which the industry has not experienced, as yet, are expected to be felt as the country moves on to satisfy the desired healthcare needs of its population while fully encashing the future growth opportunities of the Indian pharmaceutical industry.

Five ‘New Strategic Changes’ envisaged:

Five new key strategic changes, in my view, will be as follows:

1. As the country will move towards an integrated and robust healthcare financing system:

• Doctors will no longer remain the sole decision makers for the drugs that they will prescribe to the patients and the way they will treat the common diseases. Healthcare providers/ medical insurance companies will start playing a key role in these areas by providing to the doctors well thought out treatment guidelines.

• For a significant proportion of the products that the pharmaceutical companies will sell, tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable.

• Health Technology Assessment (HTA) or outcome based pricing will play an important role in pricing a healthcare product.

2. An integrated approach towards disease prevention will emerge as equally important as treatment of diseases.

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

4. Patents will be granted on truly innovative medicines and incremental innovation to be protected within the patent life of the original product only or separately for a much lesser period.

5. Over the counter medicines, especially originated from natural products for common and less serious illness, will curve out a larger share as the appropriate regulations will be put in place.

Conclusion:

With the above changes in the ball game of the Indian pharmaceutical industry, it may not be easy for the local players to adapt to such changes sooner and compete with the global players on equal footing. Those Indian Pharmaceutical companies who are already global players on their own rights, will be well versed with the nuances of this new game, within the country. These domestic companies, in my view, will offer a tough competition to the global players, especially, in the generic space.

However, so far as other domestic players are concerned, the new environment could prove to be a real tough time for them, further accelerating the process of consolidation within the Indian pharmaceutical industry. So the ‘writing on the wall’ appears to be ‘prepare now’ or ‘perish’.

By Tapan Ray

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

Recent Bayer Case Judgment: Patent Linkage: Encouraging Innovation in India

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Delhi High Court turned down the request of Bayer Corporation in August 18, 2009 to link patent status of its kidney cancer drug Nexavar (sorefenib tosylate) with the marketing approval of the generic equivalent of the same patented molecule manufactured by Cipla, during the patent life of Nexavar in India.Bayer received an Indian patent for Nexavar in March 2008, which is one of the potential blockbuster drugs of Bayer Corporation and is expected to clock an annual global sales turnover of around U.S $1 billion soon.In this particular case, Bayer argued that an approval for its generic equivalent from Cipla would infringe on their patent.

The interim and the final judgment of the Delhi High Court:

Honorable Delhi High Court granted an interim injunction in response to the petition filed by Bayer Corporation and refrained the Drug Controller General of India (DCGI) from granting marketing approval of the generic version of sorefenib tosylate of Cipla, until the final order is passed by the Court.

In its final judgment, the Delhi High Court ruled that Bayer should not have brought this case to the honorable court as the drug regulation is not linked to patent rights in India.

Further, the court could not, “conclude that unpatented drugs are spurious drugs” and said, “this court is constrained to observe that the present litigation was what may be categorized as speculative foray, and attempt to ‘tweak” public policies through court mandated regimes.”

Besides, the honorable Court has asked the Bayer Corporation to pay Rs 6.75 lakh to the Government and Cipla as legal costs.

Will this High Court ruling encourage more such incidence in India?

Some experts feel that the Delhi High Court ruling may encourage generic pharmaceutical companies to launch generic versions of patented drugs in India despite the risk of paying damages, if patent infringement is proved in a court of law.

Keeping all these in view, let us now discuss the relevance of Patent Linkage in India.

What really is a patent linkage?

The process of Patent Linkage establishes a desirable communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents granted in India.

It also ensures that one Government Department / Ministry does not impair the efforts of another Government Department / Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement.

However, the generic companies argue that the role of the DCGI is restricted to regulating safety and efficacy of the drugs, whereas ascertaining patent status of products fall within the ambit of Indian Patent Offices. Thus these two cannot be linked.

The argument in favour of a robust Patent Linkage system:

1. WTO TRIPS Article 28.1a says that the member countries agree to ensure exclusive rights to patent holder for a specific time period. In case of India, like most other countries, this time period is for 20 years.

2. During this period the member countries agree to prevent third parties from making, using, offering for sale the patented product without the owner’s consent.

3. In India there is no known strong deterrent for patent infringement. In absence of which, the opportunity to make significant commercial gain through patent infringement, on the pretext of extending benefits to patients could indeed be, many a times, difficult to resist.

4. Media reports that the National Pharmaceutical Pricing Authority (NPPA) has raised huge demand in crores of rupees for overcharging the common man, flouting the drug pricing norms, by some of these large companies involved in patent infringement litigations, vindicates the point of their basic overall intention of significant commercial gain over extending pricing benefits to the common man.

Who is responsible to ensure the sanctity of the product patent system in India?

1. The prevailing situation warrants a strong regulatory system, which could prohibit marketing approval of generic equivalents of patented molecules during their patent period.

2. The question that is often raised in this context is who exactly be held responsible for implementation of such a system in our country? While addressing this question one should realize that it is the Government in its entirety and not just the Patent offices or any particular ministry or ministries of the Governments is bound by the WTO TRIPS Agreement. Therefore, it is justifiably the responsibility of all Government departments/ministries to ensure that TRIPS obligations of the Government on proper enforcement of patent are properly met.

3. The process of granting marketing approval for patented molecules, in general, rests on the Ministry of Health (MoH) of WTO member states. Thus for WTO member states to meet TRIPS obligations effective communication between the MoH and the Patent offices of the country is absolutely essential. Such a system will help prevent approval of generic versions of patented molecules before expiration of the product patents.

4. Establishing this communication process will ensure that one department/ministry of the Government (say DCGI) does not impair the efforts of another Government department/ministry (say IPOs) to provide effective intellectual property protection as articulated in Article 28.1 of the WTO TRIPS Agreement.

5. This system will ensure that Health Regulatory Authorities do not, even unintentionally, undermine the commitment of the Government to conform to the TRIPS Agreement.

Will India be the unique country if such a system of “Patent Linkage” is put in place?

The answer is obviously ‘no’. The system of Patent Linkage exists around the world.

Following are some examples:

Australia – Health Authorities do not provide marketing approval for a generic copy which would infringe an existing patent.

Brazil – As of 2006, no copies of products still under patent have been launched in the market place. However, the Brazilian Health Agency (ANVISA), grants registration to copy products, based only on the merits of the case from the regulatory point of view, whether or not a patent has been granted for the same.

Canada – Health Regulatory Authorities do not provide marketing approval for pharmaceutical products protected by patents listed in the equivalent of the US FDA Orange Book.

China – The State Food & Drugs Administration (SFDA) must be satisfied that no patent is being infringed before it will issue marketing approval. If there has been litigation over a patent, SFDA will wait until the appeals process has been exhausted before acting.

Jordan – Marketing approval for a pharmaceutical product is not permitted during the period of patent protection.

Mexico – Applicants seeking marketing approval for generic pharmaceutical products in Mexico must certify that their patent rights are not infringed. The Health Regulatory Authorities then check with the Patent Office, which must respond within ten days to confirm whether a patent is involved. While Health Authorities will accept an application of marketing approval during the patent period, grant of marketing approval will be delayed until the patent expires.

Singapore – Applicants seeking marketing approval for generic pharmaceutical products in Singapore must declare that the application does not infringe any patent.

U.A.E – The Health Regulatory Authorities do not provide marketing approval for pharmaceutical products that remain under patent protection in the country.

U.S.A – U.S. FDA maintains a listing of pharmaceutical products known as the Orange Book. The Electronic Orange Book is also available via the internet at: http://ww.fda.gov/cder/ob The U.S. FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book.

Europe – Instead of Patent Linkage, the period of data exclusivity is for 10/11 years.

The Patent Linkage System is in progress in countries like Bahrain, Chile, Dominican Republic – Central America FTA (DR-CAFTA), Morocco and Oman.

Conclusions:

I therefore submit the following recommendations to ensure proper enforcement of products patent in India:

 The status of the grant of patent should be reviewed, through appropriate drug regulatory mechanism, before granting marketing permission to generic formulations and if the concerned innovative product is already patented in India, marketing permission for the generic formulation should be withheld.

 Appropriate mechanism/system should soon be worked out in co-ordination with other Ministries to avoid cases of infringement of product patents in India.

 The procedure (Patent Linkage) of checking the patent status of a product before granting marketing approval already exists in the Form 44. This procedure needs to be effectively implemented soon to encourage innovation in India.

By Tapan Ray

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

‘Prevention is better than cure’: Such a healthcare policy focus could effectively reduce the disease burden in India

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First National Health Policy was passed by the Parliament of India in 1983 and was last updated in 2002. How much of the policy intent has seen the light of the day is anybody’s guess.
Healthcare issues are not being effectively addressed:
Even after six decades of independence only one in three Indians has access to basic sanitation facility like toilets, exposing a large number of population to various types of ailments. World Health Organization (WHO) reports that around 9 lakh Indians die every year breathing polluted air and drinking contaminated water. Maternal mortality rate is the highest in India. Almost half of the children in our country are grossly underweight and this phenomenon is growing at a rate which is nearly double the rate of even Sub-Saharan Africa. One third of the world’s tuberculosis patients live in India. It is indeed an irony that even today India belongs to one of those four countries of the world where polio has not been successfully eradicated, as yet.

Increasing incidences of chronic ailments are exerting further pressure on the disease burden:

Along with diseases originating due to poor hygienic conditions and life style, new challenges are coming up with rapid emergence of non-infectious chronic diseases like, diabetic, cardiovascular and psychosomatic disorders.

Chronic diseases could soon become the most critical issue in the Indian healthcare system, if these are not prevented and successfully managed. It has been reported that population suffering from, for example, diabetes could generate health care costs which are almost double of those without this ailment.

All these factors together are leading to an abnormally high disease burden in the country where very unfortunately over 65% of the population are not having access to modern medicines, either due to lack of infrastructural facilities or the people just cannot afford the basic costs of healthcare.

Most of the diseases are preventable:

Many of these chronic ailments ascribe to common preventable risk factors. Poor hygienic conditions, unhealthy nutrition, lack of proper physical activity, alcohol and tobacco abuse are the major risk factors for these diseases. An integrated approach towards disease prevention, though challenging for the nation, is the need of the hour. It is a pity that our healthcare systems do not support this process. India as a whole carries an abysmally poor track record for a well thought out and structured healthcare promotion and disease prevention policies and strategies.

Indian healthcare system is highly skewed towards disease treatment rather than disease prevention:

Current healthcare systems of India, which offer access to modern medicines just to 35% of the population, are aimed mostly towards responding to urgent needs of patients.

Relieving symptoms of the disease with an expectation of curing the ailment are the basic pattern of healthcare in our country, wherever it is available and in whatever scales and proportion. Preventive health care is quite different from the above approach.

Australia has shown a way:

Australian National Health and Hospitals Reforms Commission report titled, “A healthier future for all Australians”, published in July 2009 recommends the establishment of an independent National Health Promotion and Prevention Agency, with a significant budget for creating a robust evidence base to find out what exactly works in prevention of a disease. Like for example , the report highlights “comparison of the relative efficacy of a medical intervention (gastric bypass), a pharmaceutical intervention (an anti-obesity drug), an allied health intervention (an exercise and diet program) and a population health intervention ( a community walking program) in reducing obesity.”

The report clearly articulates that just collecting evidence on prevention will not be enough; disease prevention should be put on the same footing as the treatment of the disease.

Are we listening?

The way forward in India:

As many diseases are preventable, every interaction with a healthcare professional should include advice and follow-up on the preventive measures. When with an integrated and systematic approach, patients will be provided with information and practices to reduce health risks, it is quite likely that they will then try to maintain a healthy and hygienic life style with regular exercise, drinking safe water, eating healthy food which they can afford, practicing safe sex, avoiding tobacco and alcohol abuse.

Such integrated and systematic preventive healthcare measures can significantly help reducing the disease burden of individuals and families, besides improving vastly the quality of life. To promote prevention in healthcare, the very basic requirement is the change in mindset of both the policy makers and the civil society. A collaborative or partnership approach involving all concerned to create mass awareness is absolutely essential to ensure commitment of the common man towards such an important healthcare initiative.

Important areas for action:

• Effective use of persuasive communication tools to establish that preventive health care can help avoiding expensive disease burden and improve quality of life

• Mass awareness and demonstration program to help creating a positive attitude and required skill sets in disease prevention activities within the community

• Motivate healthcare professionals to make prevention an integral part of every interaction with the patients

• Medical insurance and healthcare policies to offer adequate incentives for preventive healthcare through innovative means

What the government of India is doing towards preventive healthcare:

The Planning Commission of India reports as follows:

• Health education for primary and secondary prevention of Non Communicable Diseases (NCDs) through mobilization of community action

• Development of treatment protocols for education and training of physicians in the prevention and management of NCDs

• Research support for: Multi-sectoral population-based interventions to reduce risk factors

• Explanation of the role of nutrition and lifestyle-related factors

• The development of cost effective interventions at each level of care.

All these are very appreciable statements of intent. However, how much of these intents are getting translated into reality will be very difficult fathom by the common mortals.

Conclusions:

Most of the serious types of ailments of a vast majority of the population of India can be prevented and the disease related complications can be effectively avoided, if we all have a will to do that. Can we take a leaf out of the formation of “National Health Promotion and Prevention Agency” in Australia?

Healthcare costs of the nation and utilization of its scarce resource can be successfully optimized by properly focusing on disease prevention related activities. In my view, effective measures towards preventive healthcare can quite efficiently address many pressing healthcare issues of the nation.

By Tapan Ray

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

An image makeover is in progress in the global pharmaceutical industry.

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At the beginning of 2009, Andrew Witty, the young head honcho of Glaxo SmithKline (GSK) initiated a one CEO tirade to recognize the global poor as a stakeholder of the global pharmaceutical industry. The industry that has been much maligned over a period of time, despite its yeoman contribution to the mankind, for aiming its drug discovery and delivery more often at the rich patients and not at the sick poor of mostly the developing and underdeveloped nations of the world.
Walking the talk:
Witty perhaps wondered and questioned why the poor population must share disproportionately the disease burden of the world. As the saying goes, ‘the proof of the pudding is in the eating’. Witty walked the talk and announced:

1. GSK medicines will be available in the least developed countries (LDC) of the world at 25% of their price in the United Kingdom (U.K).

2. 20% of profits from these medicines will be re-invested for various projects in those countries.

3. GSK will put 800 potential drug patents in a ‘patent pool’ to find cures of neglected, mainly, tropical diseases.

4. Scientists will be able to share the Research Center of GSK located at Tres Cantos in Spain for this purpose.

Will other global pharmaceutical players join in?

Andrew Witty, it appears, nurtures a very keen and very real desire to change the public image of the global pharmaceutical industry through transformation of its decade long culture and setting some of these path breaking examples, which only bravehearts can follow. However, many still feel, “Improving the greedy and uncaring image of the pharmaceutical industry is indeed a tough call.”

It has been reported in the media, during his announcement for the ‘patent pool’, the GSK CEO, in fact threw a challenge to other global pharmaceutical players to join him. What resulted thereafter was a bit of an anti-climax though with a very lukewarm response from others and Andrew with a sense of perhaps despair commented, “It has caught them a bit by surprise because we didn’t go around talking to people at the time, and they’ve had to come up this curve from zero.”

The Guardian in a very recent article on Andrew Witty, quoted him in the same context of extending access to modern medicines to the poor of LDCs, “he’s encouraging Indian companies to knock off its on-patent meds for sale in poor countries, as long as they make quality products and asks GSK for a license, which it will give royalty-free.”

In the same article, The Gurdian wrote, “He’s calling on every foreign company that makes profits in Uganda to cut its prices there”. “I don’t just mean drug companies,” Witty told the newspaper -”everybody.”

It does not cost much:

The GSK CEO admits that he is not losing much on his price cuts in the least developed countries. Uganda market of GSK is very small with turnover of about £9 million a year. The total profit from the LDCs is less than £5 million. “Those sorts of sums are like the 1p coins people don’t trouble to pick up off the pavement for a company with revenue of £24bn and a stock market valuation of £60bn,” he commented.

Conclusion:

Despite not too many encouraging responses being forthcoming from others, it is indeed admirable that a top global pharma company head honcho is setting such tough goals for himself in particular and the industry in general. The question that flows from here, even reading all these:

Are you kidding Andrew Witty? Do you really mean all these? Or it is another smart global pharma CEO hankering for just cheap publicity?

Seeing you Andrew Witty, though long ago, in flesh and blood, my heart says, you are possibly not made of that stuff to befool the world on this pressing issue of the world, being at your wit’s end.

Tapan Ray

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

Changing pharmaceutical marketing environment demands a change in mindset for a new strategic direction.

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Will the Tsunami of change hit India too?
In the matured markets of the global pharmaceutical industry, individual doctors are no longer the prime target customers. Healthcare providers, patient advocacy groups, pharmacy benefit managers, clinical assessment authorities etc have already emerged as key decision makers for use of various branded or generic medicines and other kind of healthcare facilities/ support for the patients.In India even today individual doctors are the prime target customers for the pharmaceutical companies as, by and large, they are the key decision makers for usage of medicines and other healthcare facilities for the patients.

However, a distinct change, albeit slowly though, is now noticeable within healthcare financing system in India. Slow but gradual emergence of healthcare providers with medical insurance and other related products, patient advocacy groups, standard treatment guidelines etc, are expected to bring in a radical change the way current pharmaceutical marketing strategy is formulated, which continue to revolve round the doctors, mainly. The small ripples of change, blessed by adequate dose of the Government’s financial policy reform measures, may soon get converted into a Tsunami of change, destroying the current pharmaceutical business strategy directions of majority of the companies. Rapid increase in the number of healthcare providers and other related stakeholders with attractive schemes for various strata of the civil society, will herald the emergence of very powerful groups of negotiators for products’ price and other healthcare related services. These groups will be capable to very strongly and significantly influence doctors’ products and other treatment choices.

Marketing will be a ‘composite value delivery system’:

In addition, during the coming years of post product patent regime in the country, pipelines of the domestic Indian companies for new ‘copycat’ versions of patented products are expected to completely dry up, making the price competition in the market place even more ‘cut throat’. In such type of environment Indian pharmaceutical companies will be under tremendous pressure to provide additional composite value, not just the physical products, as differential offerings to the patients, doctors, healthcare providers and other stakeholders, in and around the related disease areas. Ability to deliver such composite differential value along with the product will enable a company to acquire the competitive cutting edge.

Required leadership and managerial skill sets will be quite different:

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

Skill requirements:

Leaders and managers with only individual functional expertise like, R&D, manufacturing, marketing, regulatory, finance etc will no longer be successful in the new paradigm. To handle new types and groups of customers, the leaders and managers will need to ensure:

• Multi-functional expertise by rotating right people across the key functional areas

• Knowledge of ‘Pharmaco-economics’ and/or ‘health technology assessment’ (HTA)

• Ability to interpret patients’ clinical benefits against cost incurred by the payors to achieve the targeted clinical outcome, especially in the areas of new products

• Insight about the thought pattern of the healthcare providers and other customers or influencers groups

• Speed in decision making and more importantly ability to take ‘first time right’ on the spot decision, which can make or mar a commercial deal.

Managing the phase of transition:

During the ensuing phase of transition in India, pharmaceutical companies should:

• Clearly identify, acquire and hone the new skill sets, which would drive the changing scenario

• Get strategically engaged with the existing public/private healthcare providers and health insurance companies like, Mediclaim, ICICI Lombard, large corporate hospital chains, retail chain chemists and others, proactively

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

• Ensure that appropriate balance is maintained in both types of marketing strategies, in innovative ways.

Conclusion:

Indian pharmaceutical industry has been trapped in a difficult to explain ‘strategic inertia’, as it were, since long. It is high time now to come out of it and face the change upfront boldly and squarely to translate this challenge into a possible growth opportunity. Global pharmaceutical companies are now gaining expertise in the new ball game in the developed markets of the world. If majority of the Indian pharmaceutical companies, who are not yet used to handling such change, are caught unaware of this possible future trend, the tsunami of change could spell a commercial disaster to them. However, I strongly hope that this new and yet another challenge of change will be met with a clear and well thought out strategic initiatives to give a further boost to the growth engine of the industry.

By Tapan Ray

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

Dire need of quality ‘Cold Chain’ infrastructure for pharmaceuticals in India and its efficient management through Public Private Partnership initiatives.

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Why Cold Chain for pharmaceuticals?Drugs are complex entities and many of these are temperature sensitive in nature. This entails them requiring precise and continuous temperature conditions in transit in order to retain their potency and resultant efficacy.Many life saving drugs including biotech products and vaccines fall under such category. Any break in the cold chain process for such drugs can lead to immediate denaturing or deterioration in their quality parameters. It is imperative that a careful consideration is given by all concerned including government agencies mainly at the seaports and airports while providing storage space at their warehouses for such drugs.

Current bottlenecks and lack of proper cold chain infrastructure:

Currently in India there are bottlenecks at the Airports and Seaports that include authorities not being able to assure cold room space despite getting advance notices from the pharmaceutical companies about the possible unloading of large consignments of temperature sensitive products.

Some of the other gaps include improper training and refresher courses for the handling staff who handle such products at the ports. Storage of Pharmaceutical products along with meat and food products is against the GMP norms.

Cold Chain medicines require different and special temperature control:

Cold Chain Medicines require special temperature controlled Cold storage. There are two commonly recommended temperatures specified on labels of cold chain products:

1. Products requiring temperature between 2 to 8 degree centigrade

2. Products requiring temperature around -10 to -20 degree centigrade

Cold Chain should be an uninterrupted series of storage and distribution activities which will maintain required temperature range of 2 to 8 degree centigrade or -10 to -20 degree centigrade as per products requirements.

Proper Cold Chain Management system is essential to ensure right product quality:

Proper Cold Chain Management of pharmaceuticals will ensure that the right quality of such products is maintained not only during storage but during transportation also to meet regulatory specifications. There is a greater focus and stringent regulatory guidelines/standards are in place today in the developed markets around the world for strict adherence to right storage and transportation process for cold chain sensitive pharmaceuticals.

It should be kept in mind always that Cold Chain products are mostly sensitive biological substances that can become less effective or lose potency if not properly stored.

Some examples:

Products requiring 2 to 8 degree storage will not be effective if:

i. They are frozen or stored below 2 degree centigrade
ii. Exposed to temperatures above 8 degree centigrade
iii. Exposed to direct sunlight or fluorescent light

The loss of potency is cumulative and irreversible. If products are exposed to conditions outside the established range, the quality may be adversely affected, reducing their assigned shelf life, diminishing their effectiveness or making them ineffective. The exposed product may look just as the same – the loss of potency may not be visible.

World class SOPs for Cold Chain storage and handling facilities are essential :

Quality of storage and handling of Cold Chain Pharmaceutical products at Airports and Seaports in the course of export from or import into India requires special care and attention. Since multiple products are stored and handled at Seaports/ Airports, personnel may not be able to appreciate the special need for Cold Chain pharmaceuticals’ storage & handling. Thus, there should be Standard Operating Procedures (SOPs) for storage and handling of pharmaceuticals laid down by the Port Management authorities, so that the personnel handling pharmaceuticals strictly adhere to the pre-set norms.

Pharmaceutical products requiring cold chain facilities are rapidly growing in numbers:

Pharmaceutical Products for which efficient Cold Chain facilities are required are rapidly growing in numbers. In their movement across the supply chain from the manufacturers to the patients, the medicines are handled and stored by various stakeholders like transporters, Airports, Seaports, Distributors, Stockists, Retailers etc. Since the storage and handling of Cold Chain Pharmaceuticals Products are unique, an uninterrupted Cold Chain is to be maintained in the entire supply chain network without any discontinuity, even for a short while. This will ensure that medicinal products of high quality reach the patients, always. it is, therefore, very important for all concerned stakeholders to ensure maintenance of proper Cold Chain facilities.

Government plan of “Pharma Zones” in India:

The Drugs Controller General of India (DCGI) has planned a separate dedicated controlled environment – ‘Pharma Zone’, within the cargo premises at Airports and Seaports for proper storage of Pharmaceutical products in line with Good Manufacturing Practices and Good Distribution Practices so as to assure right quality, safety and efficacy of Pharmaceutical products, which are to be either imported or exported.

Currently no ‘Pharma Zones’ in India:

At present there are no ‘Pharma Zones’ in India. However, Mumbai International Airport Private Limited (MIAL) has created 4 new cold rooms for pharmaceuticals. It has been reported that the new Cargo Terminal of Delhi International Airports Limited (DIAL), which is expected to be commissioned later in the year, will have around 4000 square metres of additional cold room capacity compared to the current cold room capacity of 400 square metres. Similarly, MIAL is also planning for a dedicated Cold Room facility for Pharmaceutical Products in their new set–up.

Need for outsourcing Cold Chain services:

In the developed markets of the world there are private cold chain storage and third party logistics providers to offer contract logistics and storage services especially to cater to the growing demands of the Biopharmaceutical segment, which is now the fastest growing manufacturing sector within global pharmaceutical industry.

It is expected that spend of the Biopharmaceutical companies towards outsourcing of cold chain facilities will grow by over 10% to 15% for the next three to five years in the developed markets. India being the second largest producers of Biopharmaceuticals after China, similar opportunities exist in the country.

In India some renowned international courier companies like DHL and World Courier have been reported to have developed an efficient cold-chain management process, especially for the pharmaceutical companies to properly maintain the cold chain in their logistics network.

Conclusion:

A world class cold chain infrastructure and its efficient management within the country will help immensely to Indian domestic pharmaceutical companies, as well, as they are exploring more and more opportunities to export Biopharmaceuticals in the global market. To achieve this objective modern cold chain warehouses and their efficient management as per regulatory guidelines will play a key role in ensuring right product quality standard that India will export.

Over a period of time cold-chain management practices of global standards will be required to achieve this goal. Currently for both import and export of cold-chain sensitive pharmaceuticals, as indicated above, the available infrastructural facilities pose to be one of the key challenges encountered by the industry to maintain high product quality during shipment and warehousing at the ports. Individual pharmaceutical companies like Eli Lilly, India have their own vehicles equipped with cold-chain management systems for transportation of their cold chain sensitive products.

Greater initiative by the DCGI in particular in this area, in collaboration with the Indian pharmaceutical industry, sooner, is absolutely essential. For the patients’ sake.

By Tapan Ray

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

Patent Linkage: an important step yet to be taken by the Government of India for proper enforcement of product patents granted in the country

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The process of Patent Linkage establishes a desirable communication process between the Health Ministry and the Patent Offices to prevent marketing approval of generic drugs before expiration of patents granted in India. It also ensures that one Government Department / Ministry does not impair the efforts of another Government Department / Ministry to provide effective intellectual property protection as required by Article 28 of the WTO TRIPS Agreement.
The system of Patent Linkage exists around the world:Following are some examples:

Australia – Health Authorities do not provide marketing approval for a generic copy which would infringe an existing patent.

Brazil – As of 2006, no copies of products still under patent have been launched in the market place. However, the Brazilian Health Agency (ANVISA), grants registration to copy products, based only on the merits of the case from the regulatory point of view, whether or not a patent has been granted for the same.

Canada – Health Regulatory Authorities do not provide marketing approval for pharmaceutical products protected by patents listed in the equivalent of the US FDA Orange Book.

China – The State Food & Drugs Administration (SFDA) must be satisfied that no patent is being infringed before it will issue marketing approval. If there has been litigation over a patent, SFDA will wait until the appeals process has been exhausted before acting.

Jordan – Marketing approval for a pharmaceutical product is not permitted during the period of patent protection.

Mexico – Applicants seeking marketing approval for generic pharmaceutical products in Mexico must certify that their patent rights are not infringed. The Health Regulatory Authorities then check with the Patent Office, which must respond within ten days to confirm whether a patent is involved. While Health Authorities will accept an application of marketing approval during the patent period, grant of marketing approval will be delayed until the patent expires.

Singapore – Applicants seeking marketing approval for generic pharmaceutical products in Singapore must declare that the application does not infringe any patent.

U.A.E – The Health Regulatory Authorities do not provide marketing approval for pharmaceutical products that remain under patent protection in the country.

U.S.A – U.S. FDA maintains a listing of pharmaceutical products known as the Orange Book. The Electronic Orange Book is also available via the internet at: http://ww.fda.gov/cder/ob The U.S. FDA does not authorize the marketing approval for a generic copy of a pharmaceutical product protected by a patent listed in the Orange Book.

Europe – Instead of Patent Linkage, the period of data exclusivity is for 10/11 years.

The Patent Linkage System is in progress in countries like Bahrain, Chile, Dominican Republic – Central America FTA (DR-CAFTA), Morocco and Oman.

Some people question why should India follow Patent Linkage system in the regulatory approval process?

In India ground realities in the patent enforcement process are quite unique. Thus there is an urgent need for having a Patent Linkage system in place for the following reasons:

1. The Government is granting product patent to encourage, protect and reward innovation in India, it will not be in the best interest of the innovators if the same Government grants marketing approval for a generic equivalent of the patented molecule during the patent life of the product.

2. Unlike many other countries, the Indian Patent Law has provision for both pre-grant and post-grant oppositions. Therefore, if anyone wants to challenge the patent, enough time will be available for the same.

3. After patent is granted for a product in India, if marketing approval is given to a generic equivalent of the same molecule, a dispute or patent infringement may arise. As per the Patents Act 2005, such disputes regarding patent infringement have to be challenged in a High Court. The judicial process is a long drawn one and it is quite possible that the patent life of the concerned molecule would expire during the dispute settlement period, which in turn, would raise doubts about the sanctity of granting a product patent to an innovator in our country.

Conclusions:

I therefore submit the following recommendations to ensure proper enforcement of products patent in India:

 The status of the grant of patent should be reviewed, through appropriate drug regulatory mechanism, before granting marketing permission to generic formulations and if the concerned innovative product is already patented in India, marketing permission for the generic formulation should be withheld.

 Appropriate mechanism/system should soon be worked out in co-ordination with other Ministries to avoid cases of infringement of product patents in India.

 The procedure (Patent Linkage) of checking the patent status of a product before granting marketing approval already exists in the Form 44. This procedure needs to be implemented.

India has instances where marketing permission has been granted by the DCGI for a generic product even when a product patent already exists for the same molecule in India. Such instances put the patent holder in a hardship and avoidable litigation involving huge resources both in terms of time and money. Situation like this can be effectively avoided by ascertaining the patent status before granting marketing permission to a generic manufacturer through an appropriate drug regulatory system, as indicated above.

By Tapan Ray

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

Changing recipe for growth in the new paradigm of Indian Pharmaceutical Industry… for its effective implementation there appears to be more questions than answers:

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India, the world’s largest democracy with its economy on a sustained growth track is creating an overall environment for high performance for all key sectors, including pharmaceuticals. In terms of GDP growth India is second only to China and is expected to become the fifth largest economy by 2017.
Dawn of a New Era:
Over a period of time, India has emerged as a fast growing pharmaceutical industry through various policy measures taken by the government of India (GoI). Such policy measures have been very supportive to the domestic companies. The absence of product patents from 1970 to 2005 enabled the Indian pharmaceutical companies to become world’s leading producers of ‘copycat’ versions of patented drugs. Lower cost base and expertise in ‘reverse engineering’ immensely helped the domestic industry to sustain its competitive edge during this period.

New product patent regime in 2005 heralded the dawn of a new era triggering a transformation of the industry. Return of large global companies like, MSD, Roche, Eli Lilly and entry of other company’s like Biogen, Genzyme, Allergan, Astellas, Eisai etc together with the emergence of many Indian companies to become research-based multinationals, are making this transformation more interesting.

Generic pharmaceuticals will continue to play a significant role:

Even with all these changes, generic pharmaceutical products will continue to play a significant role towards the growth of the industry. While being major global generic players, some large Indian companies like Dr. Reddy’s laboratories (DRL), Glenmark, Ranbaxy, Piramal Healthcare etc have commenced their journey on the long road of product discovery research with reasonable amount of initial success. There are now several new drug development programs by many of these Indian pharmaceutical companies, which will hopefully result in global product launches in not too distant future. India’s emphasis on research and development and new drug discovery is indeed growing since the country signed WTO agreement for product patent in 1995.

An industry with high success quotient:

Currently India is the world’s fourth largest producer of pharmaceuticals by volume and directly employs about 5 lakh people. The market is crowded with 20,000 pharmaceutical firms, 60,000 distributors and 700,000-800,000 retailers. Although there are around 5,600 licensed generics players, in reality around 3,000 of them are engaged in pharmaceutical production. The domestic pharmaceutical companies now cater to about 70% of the country’s requirements for medicines. The top 10 companies control about 30% and 250 companies control around 70% of the market.

Key determinants of success:

Following in my view are the key determinants, which will decide the extent of success of the Indian pharmaceutical industry as a whole:

• Healthcare delivery and infrastructure

• Access and affordability of modern medicines

• IPR environment

• Domestic R&D success

• Speed of regulatory reform process

• Disease trends and prescription patterns

• Public and private healthcare spending

• Penetration of health insurance

Domestic companies adopting different business model:

In this changing scenario different domestic companies are adopting different business models, as follows:

1. Penetration to the regulated generics markets:

- With partnership agreements with established generic companies

- Setting up own sales and marketing organisations both greenfield and also through acquisitions

- With acquisition of manufacturing facilities

2. Contract Research and Manufacturing Services (CRAMS):

Ballooning costs for research and development and low productivity have prompted the research-based global pharmaceutical companies to outsource part of their research and manufacturing activities to lower-cost, developing nations like, India and China.

India is gradually emerging as a competitive hub for CRAMS. The country is playing a significant role in manufacturing Active Pharmaceutical Ingredients (APIs) and intermediates for the global pharmaceutical industry. We have also seen the global pharmaceutical companies signing-up long-term outsourcing contracts with the Indian manufacturing and contract research organizations.

Generic pharmaceuticals produced in India are increasingly being accepted all over the world, excepting some recent US-FDA related issues. Many Indian companies like Piramal Healthcare, Aurobindo, DRL etc are taking up global generic manufacturing contracts for the global players like, Allergan, Pfizer and GSK, in addition to marketing generic pharmaceuticals themselves. Outsourcing of such business processes to India has undoubtedly been proved to be not only effective in saving costs, but also in saving valuable developmental time for the Multinational companies (MNCs).

Besides all these, India is emerging as the preferred destination for outsourcing clinical trials because of its both high quality and lower cost facilities of global standards.

3. Operating in domestic generic market

4. Investing more in R&D for discovery of NCE/NME

Key growth drivers:

A recent study jointly undertaken by the Organization of Pharmaceutical Producers of India (OPPI) and Yes Bank identified following key growth drivers for the domestic pharmaceutical Industry:

• Consolidation leading to better pricing

• Population growth, changing demographics and urbanization

• Increasing per capita income leading to higher penetration

• Access to quality healthcare through health insurance schemes

• Robust product patent regime, although generics will continue to grow

The questions to ponder:

1. Whether domestic Indian pharmaceutical companies will make large-scale investments in R&D to compete effectively with the global companies across the world?

2. Whether global pharmaceutical companies will be successful in marketing drugs patented in India?

3. Whether the government, physicians and patients keep supporting the generics?

4. How will the new Drug Policy be?

5. How will the government go about improving access to modern medicines from the current level of 35% to 100% of the Indian population?

Conclusion:

It is not quite easy to gauge the rate of progress of the Indian pharmaceutical industry in the new paradigm, at this stage. One of the key growth drivers of the domestic pharmaceutical industry has been the launch of a slew of new products of various types. The pipe line of such products has already started drying up in a comparative yardstick, in post product patent regime. Consequently, as already launched such new products reach the maturity stage from the growth phase of their ‘product life cycle’, a possible slowdown in the rate of growth of the respective companies in the domestic market is well anticipated.

There are other growth drivers though, for the industry, but how will these drivers actually drive the industry growth will, to a large extent, depend on proper answers to the above five questions. Thus, in the new paradigm though the growth recipe is ready, in its effective implementation there are more questions than answers.

By Tapan Ray

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