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Drug Pricing: Why Justify On R&D Cost Rather Than Precise ‘Customer Value’?

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While looking around, it won’t be difficult to spot many types of steep-priced highly innovative products, where high costs aren’t justified by high R&D expenditure, but for unique ‘customer value’ offerings. Many consumers evaluate those and decide to settle for one, instead of opting for cheaper variants – delivering the basic customer requirements in that product class or category. Although, both pharma and electronic goods belong to high tech-based knowledge industries, similar examples are in plenty of the latter, but hardly any in pharma.

Agreed that pharma is a highly regulated industry, unlike electronic goods. But so are banks, financial services, airlines, telecommunication, among many others. Interestingly, all these industries are building great brands without talking about their investment costs in R&D, while doing so.

In this article, I shall focus on – despite facing a formidable headwind, mostly for the same, pharma industry, in general, continue to lack in two critical areas of brand building. But, before doing that let me quote from some recent research papers wondering, how is this situation continuing unchanged, despite all concerned being aware of it.

Two opposing views:

Just to recap, let me put below, two diametrically opposing views that continue to clash with each one, since long:

  • New and innovative drug costs being excessive, globally, lowering their prices will not harm the progress of innovation.
  • Drug industry argues, any restriction of free pricing of innovative drugs, will seriously jeopardize innovation of newer medicines and treatments.

So much of divergence in the views of two key partners within the industry, can’t just continue any longer, without a serious intervention of governments across the world, including the United States.

Pharma does want to talk about ‘Cost & Value of Medicines’. But…

It’s not that pharma doesn’t want to talk about ‘Value of Medicines,’ but not, apparently, to create an ‘emotional connect’ with its stakeholders, including the patients. It appears, more as a general justification for the high cost of new drugs. For example, a pharma trade association’s communication, after acknowledging ‘that many are struggling to access the medicine they need,’ says upfront: ‘Discussions about costs are important.’ It follows a series of much-repeated common justifications, which are no- brainer, such as:

  • Medicines Help Patients Avoid Expensive Hospital Services,
  • Developing New Treatments and Cures is a Complex and Risky Undertaking,
  • Medicines are Transforming the Treatment of Devastating Diseases.

But, the reality is, these justifications are not working on the ground, as these are not quite in sync with ‘customers’ value’ expectations, both from the company as well from the brand. Moreover, instead of establishing an ‘emotional connect’, this approach probably is further alienating many stakeholders, as several governments are now broaching the issue of price control, or some other mechanism to set drug prices.

Pharma marketers need to be eclectic:

Instead of keep following the age-old marketing and communication models, young pharma marketers need to be empowered to be eclectic. They should look around and try to fathom how is ‘marketing,’ as a business domain, changing in other fast-growing industries, and act accordingly. As pharma is a high-tech knowledge industry, let me draw examples from other similar industries, such one that innovates and manufactures electronic products.

Unlike any high-priced, high-tech electronic product companies, such as Google, Apple or Microsoft – pharma marketing communications are more like ‘justification’ centric, for charging high prices for medicines. This approach, apparently, is not just a bit defensive, but virtually negative. Whereas, unlike drug manufacturers, the above tech companies are constantly focusing on the following two areas, for creating a robust ‘corporate brand’ that infuses consumer-trust in each of their products:

  • Establishing ‘emotional connects’ with customers
  • Focusing on the total value of unique value offerings, rather than the high cost of innovation to justify high prices

Let me deliberate briefly on each of the above two.

The importance of establishing ‘emotional connects’ with customers:

With the penetration of technology, almost in every household, with a varying degree, though, access to a gamut of information becomes increasingly easy, so are the options available to customers. This is impacting almost every industry, including pharma and healthcare.

Thus, for corporate performance excellence, customers are now creating a space for themselves at the core of the pharma business strategy. Consequently, a need arises for the pharma marketers to enhance end-to-end customer experience. Besides, brand value offerings, this includes both short and long-term customer service offerings to ensure an ongoing emotional connect with customers, for more intense and longer-lasting engagement with trust, both on the ‘corporate brand’ and also on individual products.

Therefore, creating effective ‘emotional connects’ with customers are assuming a cutting-edge strategic importance – in multiple facets of pharma business. More ‘emotionally connected’ customers also act as a force-multiplier to enhance corporate reputation. Although, it mostly happens through word of mouth, in recent days, value added omnichannel communication by respective companies, is playing a crucial role for success in this area.

In the good old days, reaching patients or patient groups directly, would have been a challenging proposition. Most communications on products, diseases and treatments, used to be through healthcare providers. But, this is no longer so, especially in the digital world, that opened a new spectacle of opportunities for crafting patient-centric strategies – as patients become more digital-savvy, too.

Focus on brand value offerings, not on cost of innovation to justify high prices:

To dwell in this area, a series of questions that one may possibly encounter, such as: ‘How do you define value? can you measure it? What are your products and services actually worth to customers?’ Way back, these points were deliberated in the article – ‘Business Marketing: Understand What Customers Value,’ published in the November-December 1998 issue of the Harvard Business Review (HBR). It said: ‘Value in business markets is the worth in monetary terms of the technical, economic, service, and social benefits a customer company receives in exchange for the price it pays for a market offering.’ From this paper let me pick up just two critical components of value, as follows, for better understanding:

  • Value in monetary terms: Such as, dollars per unit
  • Value for a customer: What the person gets in exchange for the price it pays

Nevertheless, the important point to note: As ‘market offering has two elemental characteristics: its value and its price, raising or lowering the price of a market offering does not change the value that such an offering provides to a customer. Rather, it changes the customer’s incentive to purchase that market offering.’

When applied in the pharma perspective:

When the above concept of value is applied in the pharma industry perspective, it vindicates an important. Which is, tangible value offerings of an exclusive, high-priced patented products, and the same in its off-patent low-priced avatar remains unchanged, regardless of significant change in its monetary value per unit. However, unlike a patent protected drug, options for generic equivalents will be many, with differing prices.

This brings out another important facet of ‘value’. As the above HBR paper states, considerations of value take place within some context. Even when no comparable market offerings exist, there is always a competitive alternative. For example, in the pharma business, one possible competitive alternative for patented products could well be – when the Government decides to issue a Compulsory License (CL) for make the product available at a cheaper price to patients.

The name of the new game:

Thus, for an exclusive new drug, instead of focusing on cost of innovation to justify high prices, a sharp focus on ‘total value offering’ of the brand would possibly be the name of the new game. It will entail persuading the ‘connected customers’ to realize the total value of both the tangible and intangible cost of each benefit that the product offers, rather than simply the cost of a pill. In doing so, a pharma marketer and his entire team, must have an accurate understanding of what its customers value, and also, would value. This calls for a painstaking research, and a mammoth real time data analysis.

Developing a unique ‘Customer Value’ model:

As the above HBR article reiterates, ‘customer value’ models are not easy to develop. Unfortunately, pharma’s ‘value delivery system’ is still tuned to a self-serving mode and not ‘customer value’ centric.Thus, marketers may wish to note some key points in this regard, as below:

  • Many customers understand their own requirements, but do not necessarily know what fulfilling those requirements is worth to them.
  • This leaves an opportunity to demonstrate persuasively, the total ‘customer value’ that the new brand provides, and how it fulfills their requirements.
  • The strategy makers would have to necessarily generate a comprehensive list of ‘customer value’ elements, based on robust data, on an ongoing basis.
  • The acquired insight on – what customers value, and would value, to gain marketplace advantages over competitors, would form the core of the business strategy.

The next stage would be a pilot study to validate the model and understand the variations, if any, in the estimates. It is also vital to note that an improvement in some functionality may appear important, but may not necessarily mean that customers are willing to pay for it. The aim should always be delivering superior value, and get an equitable return for it. Thus, enhancing end-to-end customer experience in this effort, becomes a critical ingredient to brand success.

Conclusion:

After the article – ‘Business Marketing: Understand What Customers Value,’ published in the November-December 1998 issue of the Harvard Business Review (HBR), in June 2000, a similar article was published in the ‘McKinsey Quarterly.’ The paper titled, ‘A business is a value delivery system,’ also emphasized the importance of a clear, well-articulated “value proposition” for each targeted market segment.

This means a simple statement of benefits that the company intends to provide to each segment, along with the approximate price the company will charge for each of those. The paper also underlined, the strength of the buying proposition for any customer is a function of the product value minus the price. In other words, the ‘surplus value’ that the customer will enjoy, once that product is paid for.

Over a period of time, high prices of new and innovative drugs are attracting negative headlines, like - ‘High cost of hepatitis drug reflects a broken pricing system.’ This continues, despite high decibel justification of the ‘exorbitant’ cost of innovation. Undaunted, Big Pharma and its large trade associations remain reluctant to jettison their old advocacy toolkit.

They seem to be still on a – ‘Listen and believe what we are saying’ mode. This is vindicated by the December 14, 2019 report that revealed: ‘The Pharmaceutical Research and Manufacturers of America, the drug industry’s top lobbying group, filed a lawsuit this week against the state of Oregon, claiming two laws it passed requiring greater transparency of drug prices are unconstitutional.’

Continuation of such approaches, on the contrary, is further alienating many stakeholders, especially the patients and the governments. Thus, time appears more than ripe today to focus more on delivering measurable ‘surplus value’ of new products, to well engaged and connected patients, both globally and locally.

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.

 

 

 

 

The Game is Changing: Ensure Better Treatment Outcomes: Leverage Technology

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Today, several pharma players, mostly ‘encouraged’ by many non-pharma tech companies, are trying to gain, at least, a toehold in the digital health care space. It is visible even within the generic drug industry. Such initiatives, as they gain a critical mass, will remold the process of doing – almost everything in the pharma business, catapulting the concerned drug companies to a much higher growth trajectory, as many believe.

This is quite evident from an interview of Fierce Pharma with the senior management of Sandoz – the generic drug arm of Novartis, that was published on May 14, 2019. The honchos said: “We’re looking across the whole value chain to make sure we’re embracing digital and technology wherever we can. So that means from the way that we innovate, to the way that we sell and the way that we operate and do day-to-day business.” The process covers “a whole range of activities from how you use AI and automation, all the way through to prescription digital therapies.”

I discussed about leveraging technology in the pharma space to address many burning issues – both for patients and the pharma industry. One such article, “Focus on Patient Compliance To Boost Sales…And More…”, was published in this blog on May 20, 2019. It establishes that even world-class sales and marketing programs can, at best, ensure higher prescription generations, but can’t prevent over 50 percent revenue loss from those prescriptions, due to patient non-compliance.

Interestingly, the issue of ‘nonadherence to treatment’ is being debated, since several decades. Various conventional measures were suggested and also taken. But the problem still persists in a huge scale, with probably an increasing trend. Thus, fresh measures, preferably by leveraging modern technology, are of high relevance in this area.

In this article, I shall illustrate the above point, with one of the most exciting areas in the digital space – the digital therapeutics. This is a reality today and marching ahead at a much faster pace than many would have anticipated.

Unfolding another disruptive innovation in healthcare:

One of the articles that I wrote on this subject is ‘Unfolding A Disruptive Innovation in Healthcare,’ which highlights a different facet of the same subject. Thus, let me begin today’s discussion with a recapitulation of some important aspects of a drug, particularly the following ones:

  • A large number of patients don’t find many drugs accessible and affordable during the entire course of treatment.
  • Drugs have to be administered orally, systemically or through any other route
  • Alongside effective disease prevention or treatment, many drugs may bother patients with long and short-term side-effects, including serious ones.
  • Treatment outcomes can’t often be easily measured by patients.

These are, of course, known to many, but several questions come up in this area, which also deserve serious answers, such as:

  • Are drugs indispensable for the treatment of all types of disease?
  • Can a holistic disease treatment be made more accessible and affordable with radically different measures?
  • Can the same effectiveness of a drug, if not more, be achieved with no side-effects with a non-drug therapy?
  • Can outcomes be significantly improved following this process, as compared to drugs?

In search of answers to these questions – arrive digital therapeutics:

In search of answers to the above questions, a number of tech savvy whiz kids. dared to chart an uncharted frontier by asking themselves: Is it possible to treat a disease with a software – having no side-effects, but providing better cost effectiveness and treatment outcomes to patients?

Today, with the signs of healthy growth of the seed – sown with the above thoughts, ushers in – yet another game changing pathway for disease treatment. The quest for success of these pathfinders can benefit both – the drug innovators and also the generic players, in equal measure, besides patients. Digital therapeutics is an upshot of this pursuit.

Its ‘purpose’ outlines – why it’s one of the most exciting areas in digital space: 

The Digital Therapeutics Alliance well captures the purpose of digital therapeutics, as, “Improving healthcare quality, outcomes, and value through optimizing the use and integration of digital therapeutics.”

What do digital therapeutics actually do?

There are several, but quite similar descriptions of digital therapeutics. For example, Deloitte described digital therapeutics as software products used in the treatment of medical conditions, enabling patients to take greater control over their care and are focused on delivering clinical outcomes. It also highlights, ‘digital therapeutics are poised to shift medicine’s emphasis from physically dosed treatment regimens to end-to-end disease management based on behavioral change.’

Digital therapeutics offers all positives of a drug and more:

In indications where digital therapy is approved and available, the new approach offers all positive attributes of an equivalent drug, with no side-effect. There isn’t any need of its physical administration to patients, either. Deloitte elucidated this point very aptly: “As software and health care converge to create digital therapeutics, this new breed of life sciences technology is helping to transform patient care and deliver better clinical outcomes.” More importantly, all this can be made available for better compliance and at a cheaper cost in many cases.

For example, according to the article published in the MIT Technology Review on April 07, 2017, carrying the title ‘Can Digital Therapeutics Be as Good as Drugs?’: “Some digital therapeutics are already much cheaper than average drug. At Big Health, people are charged $ 400 a year, or about $ 33 a month to use the insomnia software. The sleeping pill Ambien, by contrast, costs $ 73 for six tablets of shut-eye.”

Two basic types of digital therapeutics:

The Digital Therapeutics Alliance also underscores: “Digital therapeutics rely on high quality software to deliver evidence-based interventions to patients to prevent, manage, or treat disease.” It further elaborates: “They are used independently or in concert with medications, devices, or other therapies to optimize patient care and health outcomes.” In line with this description, the above MIT Technology Review article, as well, classifies digital therapy into two basic categories:

  • For medication replacement
  • For medication augmentation

It also says that the digital therapy for sleep (sleep.io), belongs to the first category, making sleeping pill most often unnecessary and with outcomes better than those of tablets. Whereas, the second category includes various disease specific software apps that improve patient compliance with better self-monitoring, just as co-prescription of drugs.

Nonetheless, the same MIT article gave a nice example of ‘medication augmentation’ with digital therapy. The paper mentioned, Propeller Health – a digital company, has inked a deal with GlaxoSmithKline for a ‘digitally guided therapy’ platform. The technology combines GSK’s asthma medications with Propeller Health made sensors that patients attach with their inhalers to monitor when these are used. Patients who get feedback from the app, end up using medication less often, the study reported.

The first USFDA approved digital therapy:

Let me give one example each of the launch of ‘medication replacement’ and ‘medication augmentation’ digital therapy, although there were other similar announcements.

  • On November 20, 2018, by a media release, Sandoz (Novartis) and Pear Therapeutics announced the commercial availability of reSET – a substance use disorder treatment that was the first software-only digital therapeutic cleared by the US-FDA, for medical prescriptions.
  • Closely followed by the above, on December 21, 2019, Teva Pharmaceutical announced US-FDA approval for its ProAir Digihaler for treatment and prevention of bronchospasm. Scheduled for launch in 2019, it is the first and only digital inhaler with built-in sensors that connects and transmit inhaler usage data to a companion mobile application, providing insights on inhaler use to asthma and COPD patients – for prevention and better treatment of the disease.

Many other projects on digital therapeutics are fast progressing.

Conclusion:

Stressing a key importance of digital therapeutics in chronic disease conditions, McKinsey article of February 2018, titled ‘Digital therapeutics: Preparing for takeoff’, also underlines: ‘Digital therapeutics tend to target conditions that are poorly addressed by the healthcare system today, such as chronic diseases or neurological disorders.’

It also, further, emphasized that digital therapeutics can often deliver treatment more cheaply than traditional therapy, by demonstrating their value in clinical terms. It illustrated the point with US-FDA’s approval for a mobile application that helps treat alcohol, marijuana, and cocaine addiction, well-supported by clinical trial data. The results showed 40 percent of patients using the app abstained for a three-month period, compared with 17.6 percent of those who used standard therapy alone.

I now come back to where I started from. The pharma ball game is changing, and that too at a faster pace.Ensuring and demonstrating better treatment outcomes for patients – both for patented drugs and the generic ones, will increasingly be the cutting-edge to gain market share and grow the business. Thus, leveraging technology to its fullest is no longer just an option for pharma companies. The evolution of digital therapeutics as a game changer, vindicates the point.

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.

Will ‘Patent Thicket’ Delay Biosimilar Drug Entry in India?

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Do pharma and biotech investors encourage companies indulging in ‘patent thicket?’ This question recently grabbed media headlines. On April 02, 2019, one such report brought out: AbbVie investors are calling for the Chair-CEO power split, flagging the CEO’s USD 4 million bonus payout, fueled by the company’s Humira ‘patent thicket’ strategy related aggressive price hikes. It prolonged the brand’s market monopoly, blocking entries of its cheaper biosimilar equivalents.

I have discussed some related issues in this blog, previously. As the issue is gaining relevance also in the Indian context, this article will deliberate the ill-effects of ‘patent thicket’ on patient health-interest. The sole beneficiaries for the creation of this self-serving labyrinth are the manufacturers of high-priced patented drugs, as reported above. Before I proceed further, let me recapitulate what exactly is a ‘patent thicket.’

‘Patent Thicket’:

The dictionary definition of patent thicket is: ‘A group of patents in a field of technology which collectively impede a party from commercializing its own patents or products in that field.’In the current context, it means a dense web of overlapping patent rights that restrict a generic or a biosimilar drug maker from commercializing its cheaper equivalents post expiry of the original patent.

This scenario has been well-captured by the above media report, which states: “AbbVie leadership has also been accused of creating a ‘patent thicket’ in its battle to stave off biosimilar competitors to Humira.” Boehringer Ingelheim is among the few still fighting AbbVie’s ‘patent thicket’ hoping to launch its Humira biosimilar - Cyltezo, even after receiving US-FDA approval on August 29, 2017. ‘Top biosimilar makers, including Novartis’ Sandoz unit and Mylan, have settled their own Humira patent fights with deals that put off launches until 2023,’ the report indicated.

In its favor: AbbVie says, Cyltezo infringes about 70 patents the company currently holds for Humira. Whereas, ‘Boehringer’s lawyers say AbbVie’s copious patents overlapped in an attempt to exclude competitors from the market.’ Notably, in March this year, New York’s UFCW Local 1500 Welfare Fund, reportedly, also accused AbbVie of using overlapping patents to exclude biosimilars.

‘Patent thicket’ – a way of ‘evergreening’ beyond 20 years patent term:

Much concern is being raised about various ploys of especially by the drug MNC and their lobby groups – directly or under a façade, to delay entry of cheaper generic drugs for greater patient access. Mostly the following two ways are followed for patent ‘evergreening’ beyond the term of 20 years:

  • ‘Incremental innovation’ of the existing patented drugs through molecular manipulation, with its clinical performance and safety profile remaining similar to the original one. As the cost benefits of such drugs are not shared with patients, cannibalizing the sales of the older molecular version with the newer one highlighting its newness, the sales revenue can be protected. With this approach, coupled with marketing muscle power with deep-pocket the impact of generic entry of the older version can almost be made redundant. For example: Omeprazole was first marketed in 1989 by AstraZeneca, under the brand name Losec (later changed to Prilosec at the behest of the US-FDA). When Prilosec’s US patent expired in April 2001, AstraZeneca introduced esomeprazole (Nexium) as a patented replacement drug. Both are nearly identical in their clinical efficacy and safety.
  • ‘Patent thicket’ is yet another tool for ‘evergreening’, delaying launch of similar drugs, or resorting to ‘pay for delay’ sort of deals. As another recent report reiterates, AbbVie’s ‘patent thicket’ for Humira, has deterred other potential challengers, such as Amgen, Samsung Bioepis and most recently Mylan, each of which struck settlements with AbbVie to delay their biosimilar challenges in the United States.

Goes against patients’ health interest:

On May 09, 2018, the Biosimilars Council reported, just as generic medicines saved Americans USD 1.67 trillion in the last decade, biosimilars are poised to do the same – ‘if they aren’t thwarted by delaying tactics instituted by some pharmaceutical companies.’ Echoing similar concern, the outgoing US-FDA Commissioner Scott Gottlieb also, reportedly said, ‘some drugmakers are using unacceptable tactics such as litigation and rebate schemes to stall the entry of cheaper copies.’

‘Of the nine biosimilars the FDA has approved to date, only three have made it into the hands of patients – an alarmingly small number. Patients can’t access the six others due to barriers thrown in their way by pharmaceutical companies that want to protect their monopolies and keep prices high,’ highlights the Biosimilars Council report. Net sufferer of this self-serving ‘patent thicket’ strategy of pharma and biotech players to extend product patents beyond 20 years, are those patients who need these drugs the most – to save their lives.

Despite law, patent ‘evergreening’ still not uncommon in India:

With section (3d) on the Indian Patents Act 2005 in place, the country is expected to protect itself from patent ‘evergreening’ through ‘incremental innovation.’ This section articulates:“For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

On this ground, Indian Patent Office (IPO) rejected Novartis’ drug Glivec (imatinib mesylate) patent application, which was ultimately upheld by the Supreme Court in 2013. Nevertheless, a study report of April 30, 2018 emphasized: ‘Though the law with regard to anti-evergreening, upheld and clarified by Indian courts, remains on the books, its application by the IPO has been far from satisfactory.’

The esteemed author of the report, after analyzing about 2,300 drug patents, granted between 2009 and 2016 concluded that evergreening practices may be rampant in India. The report pointed out, ‘the IPO could be operating with an error rate as high as 72 percent for secondary patents, despite provisions to keep them in check.’

Are these IPO’s mistakes, or due to external pressure?

As the paper, published in the January 2016 edition of the Journal of Intellectual Property Rights (JIPR) said,‘The multi-national pharma companies (MNCs) and the US-India Business Council (USIBC) have suggested in their report for elimination of Section 3 (d) so that drug patents can be granted in India for incremental improvement and modification. As per US 301 report, India is listed among countries with inadequate IP regime.’ Keeping all these aspects into consideration, the article expressed some key concerns pertaining to the impact of Section 3 (d) with special emphasis on its interpretation. Does it mean any possibility of wilting under such extraneous and high impact pressure?

A fresh pressure from drug MNC on the DCGI:

Since long drug MNCs have been attempting to delay the entry of even those generics, which are fully compliant with the Indian Patent Law 2005. One such effort was their demand for ‘patent linkage’ with the marketing approval of new generic drugs. However, it could not pass through legal scrutiny – first by the Delhi High Court in the Bayer Cipla case in 2010, and then by the Supreme Court – on the same case. The Court, reportedly, ‘noted the Indian patent system was distinct from the drug regulatory system with no linkage between them and so Bayer can’t prevent DCGI from granting marketing approval to generic versions of patented drugs.’

According to another recent media report of April 04, 2019, in a fresh endeavor ‘to delay launch of low priced generic medicine, multinational drug makers have asked the government to create a registry providing information about all drug applications pending manufacturing and marketing approval. The proposal, which is still pending with the Department of Pharmaceuticals (DoP), if accepted, could involve the generic players into expensive and time-consuming litigations, delaying early market entry of the cheaper generic or biosimilar equivalents.

To date, the health ministry has opposed the proposal, as it will be “unfair to local drug manufacturers to disclose their product strategy” and also has “the potential to substantially increase health care costs for the public.” The government further argued, “such information about product applications filed for approval are not disclosed anywhere in the world.”

India encourages new drug innovation, but not at any cost:

Despite shrill and disparaging comments of MNC lobbyists and the strong vested interests, that India’s Patent Law 2005, doesn’t encourage innovation, many independent international experts do praise the same for the following reasons:

  • Does encourage new drug innovation
  • Does extend product exclusivity for twenty years
  • Strikes a right balance with patients’ health interest
  • Indian judicial system deals with patient infringements and disputes, just as any other developed countries
  • Even 14 years after the enactment of patent laws, just one compulsory license has been granted, which is much less than other countries, including the United States.

What India doesn’t legally allow is, unfettered profit making through ‘evergreening of drug patents’ – at the cost of millions of patients-lives. Nonetheless, powered by deep pockets, the pharma and biotech players are unlikely to cease from this practice, anytime soon. Only patient-awareness, and stringent counter-legal measures can contain this unfair game of drug monopoly practices – in the name of ‘encouraging innovation’.

Conclusion:

The article titled, ‘Over patented, overpriced: How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving up Drug Prices’ revealed:“Top grossing drugs have on average 125 patent applications, which are filed with a strategic intent to extend the commercial monopolies far beyond the intended twenty years of protection.” It also quoted American President Donald Trump as saying, “Our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies.”

Coming back to ‘patent thicket’ and the same classic case, another report of March 20, 2019 indicated, a new class action lawsuit filed by New York’s largest grocery union has accused AbbVie of violating antitrust and consumer protection laws, which AbbVie has defended by saying that its patent strategy for Humira has protected the investments that are necessary to “advance healthcare.”

Pharma and biotech companies’ maintaining patent monopolies far beyond twenty years has significant consequences on India’s healthcare system. Only patent lawyers and experts can possibly answer whether or not the Indian Patent Law 2005 can effectively deal with the practice of ‘evergreening’ with patent thicket. Intriguingly, taking a cue from recent developments, it seems many pharma and biotech investors too, deem ‘patent thicket’ rather distracting for longer-term undiluted focus on new product development, and sustainable investors’ return.

That apart, the question also comes, whether just as ‘antitrust and consumer protection laws’ in the US, the Competition Law of India will be able to do contain such unfair practices? Otherwise, with MNC lobbyists’ renewed activities in this area, ‘patent thicket’, especially for expensive biologic drugs, will delay market-entry of their cheaper biosimilar versions in India, as well, just as what is happening in the developed nations.

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.

How Creative Is Pharma Industry?

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“Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business,” said the management guru of all times – Peter Drucker, decades ago. He further added, “The aim of marketing is to know and understand the customer, so well the product or service fits him and sells itself.” What needs to be underscored in this visionary articulation of Drucker is, effective marketing should create such a strong pull for a product or service that renders hard selling less relevant.

The word ‘innovation’ is used frequently within the pharma industry, and more by the multi-national players on a specific context. The purpose is mainly to douse stakeholder concern on high prices of innovative drugs – building a narrative around expensive, complex and time-intensive drug innovation process. That said, just as creativity is necessary to discover new drugs, creative minds also help in effectively reducing the cost of innovation – creating more customers for the company.

Curiously, in this debate the other key business function – ‘marketing’, often takes a back seat, with its usage getting generally restricted to product features and benefits, including ‘freebies’ of various kinds. Neither is there any palpable effort to make the culture of ‘creativity’ and ‘innovation’ prevail across the organization, for overcoming several critical growth barriers that keep looming over all functional areas.

Is it happening because of a hubris, as it were, within the pharma and biotech industry? This article will try to figure out why this has been happening over decades and would also ponder whether the time is ripe for changing the charted path of the business model. For a clear understanding of all, let me start with the difference between creativity and innovation from the business perspective.

Creativity – a fundamental requirement in a business, is different from innovation:  

This was examined in the article titled, ‘The Importance of Creativity in Business,’ published by Northeastern University, Boston, Massachusetts, on November 09, 2017. It emphasized, although “creativity” and “innovation” are often used interchangeably, these are two separate concepts. “Creativity is different because it is a mechanism to being innovative. You can have great ideas, but not be innovative,” the paper underscored. It brought to the fore that ‘creativity’ – being the fundamental ingredient for being ‘innovative’, is essential in the highly competitive business environment. It fuels big ideas, challenges the employees’ way of thinking, and opens the door to new business opportunities.

The IBM study also confirms this fact:

The study titled, ‘‘Capitalizing on Complexity: Insights from the Global Chief Executive Officer Study,’ led by the IBM Institute for Business Value and IBM Strategy & Change, also confirmed the above fact. The study is the fourth edition of IBM’s biennial Global CEO Study series, involving more than 1,500 Chief Executive Officers from 60 countries and 33 industries worldwide.

The study reported, CEOs selected creativity as the most important leadership attribute and the number one factor for future business success. It added: ‘Creative leaders invite disruptive innovation, encourage others to drop outdated approaches and take balanced risks. They are open-minded and inventive in expanding their management and communication styles, particularly to engage with a new generation of employees, partners and customers.’ Importantly, ‘creativity’ ranked higher than rigor, management discipline, integrity or even vision, as each of these will require creativity. According to the study, successfully navigating through an increasing complex world of ‘accelerated industry transformation, growing volumes of data, rapidly evolving customer preferences, can be overcome by instilling ‘creativity’ throughout an organization.

‘Necessity is the mother of invention’ – does it apply to pharma, as well?  

In today’s complex business environment, pharma’s business challenges are spreading rapidly across many areas. Besides innovation of new drugs, following are four broad, but critical areas, where fostering of creativity, innovative thinking and invention of game changing ideas, across the organization, I reckon, can fetch a sustainable return, in a win-win way:

  • Intense ‘pricing pressure’ to make innovative drugs affordable for greater access to patients: Just as innovative ideas are of fundamental importance to develop new drugs; disruptive innovative ideas in this area, can help resolve this issue, effectively – not any incremental measure.
  • Declining corporate image and eroding public trust: Placing patients’ interest at the center of the business model, and then effective marketing of the same, can reverse this trend, with better business outcomes.
  • Lack of business transparency: Make business processes, including pricing, sales and marketing more transparent, by leveraging the power of data with modern technology.
  • Declining per dollar marketing productivity: Move away from the old and traditional business models to find a new pathway for success, using the process of simulation, on an ongoing basis.

While above are some of the pressing needs for steering the course of pharma and biotech industry, the business keeps charting the same patch, with a bit of tweaking, here or there. Thus, the good old saying – ‘necessity is the mother of invention,’ still doesn’t work in pharma.  The question, therefore, is why? We shall discuss it in just a bit. Before that, let me explore how creative the pharma industry, joining some critical dots.

How creative is pharma and biotech industry?

To explore this area, I shall try to touch upon the following two points:

  • Is there any perceptible financial impact on pharma sales revenue, net profit and gross operating margin, for not creatively resolving some critical growth barriers, as stated above?
  • Where does pharma and biotech industry stand in global ‘creativity ranking’?

For this purpose, when I look at the following four major areas, some interesting findings emerge:

  • Top 10 in sales revenue.
  • Top 10 in net profit
  • Average Gross and Operating Margin
  • Creativity ranking of some major pharma and biotech companies

Top 10 in sales revenue:

The overall sales revenue of the pharma/biotech companies remains healthy. On the face of it, there doesn’t seem to be any storm signal.  According to Market Research Reports, Inc. the top 10 companies on 2018 sales revenue, are as follows:

  1. Pfizer Inc.: USD 53.647 Billion
  2. Novartis AG: USD 51.90 Billion
  3. Roche Holding AG: USD 45.5896 Billion
  4. Johnson & Johnson: USD 40.734 Billion
  5. Sanofi S.A: USD 39.288 Billion
  6. Merck & Co., Inc.: USD 37.689 Billion
  7. AbbVie Inc.: USD 32.753 Billion
  8. Amgen: USD 23.7 Billion
  9. GSK: USD 22.968 Billion
  10. Bristol-Myers Squibb: USD 22.600 Billion 

Top 10 in net profit:

There isn’t any storm signal visible in this area, either, as it is seen in isolation. According to Statista, the 2018 ranking of the top 10 biotech and pharmaceutical companies worldwide, based on net income, as appeared in the Financial Times 2018 equity screener database, is as follows:

Rank

Company

Net income ($ Billion)

1.

Johnson & Johnson (USA)

15

2.

Novartis (Switzerland)

13.8

3.

Pfizer (USA)

11.9

4.

Roche (Switzerland)

10.5

5.

Amgen (USA)

8.5

6.

Gilead (USA)

7.7

7.

AbbVie USA)

6.8

8.

Novo Nordisk (Denmark)

6.0

9.

Bayer (Germany)

4.3

10.

Biogen (USA)

4.1

Let’s now look at the average gross and operating margin in the pharma and biotech industry.

Average Gross and operating Margin – still the best:  

This also looks healthy, as compared to others. According to the January 2018 study by New York University’s Stern School of Business, average gross margin of 481 biotech and 237 pharma and biotech companies was reported at 70.71 percent and 68.60 percent, respectively. And their operating margins were at 25.45 percent and 24.89 percent, severally – against 12.32 percent of all the 7209 companies surveyed.

Creativity ranking of some commonly known pharma and biotech companies:

Here there seems to be an issue. When I look at the 2018 Forbes list of ‘The World’s Most Innovative Companies,’ it will be challenging to find any of the above top names of the pharma and biotech companies within the Top 100 ranking. Just to illustrate the point, let me reproduce below some commonly known names of our industry:

Rank Company Country 12-month sales growth% Innovation Premium%
#7. Incyte USA 38.93 70.59
#14. Celltrion S. Korea 45.25 62.3
#16. Regeneron Pharmaceuticals USA 20.82 61.11
#17. Vertex Pharmaceuticals USA 46.2 60.93
#22. Alexion Pharmaceuticals USA 17.32 58.04
#82. Allergan Ireland 9.4 37.59

Some interesting possibilities:

The above data, points towards some interesting possibilities:

  • Because of its sales and profit margin remaining generally lucrative, the focus on innovation of most pharma and biotech companies, get restricted to new drug discovery and development processes.
  • Top management’s encouragement of creativity across all functions of the organization appears inadequate, to successfully navigate through the key growth barriers, to maintain future business sustainability.

But, some critical signals do indicate: ‘shape up or ship out’:

But the real picture isn’t as rosy. Analysis of some key trends does capture several critical storm signals for the industry According to the July 09, 2018 study of EY (Ernst and Young): ‘Margins of pharmaceutical companies are continuing to decline – the future lies in new ecosystems.’ It further indicated: Although the margins of the 21 largest pharmaceutical companies in the world are declining, the businesses ‘are still growing, thanks to blockbuster drugs and new active ingredients against cancer. 40 per cent of the active ingredients that are currently being developed worldwide are cancer drugs.’

The paper concluded, the future lies in designing completely new types of ecosystems and business models. With the aim of providing comprehensive support for healthcare customers, including patients. “Data-driven business models will permanently change the pharmaceutical industry,” the paper articulated. The study forecasted, ‘life Science startups will take over between 30 and 45 per cent of the market by 2030.’ Isn’t this a clear signal, especially for large and longtime pharma players to ‘shape up or ship out?’

Conclusion: 

Let me now revert to what Peter Drucker said on two basic functions of a business – Innovation and Marking. None can question pharma on its consistently bringing to market innovative drugs to effectively tackle many diseases, including complex and life-threatening ones. Given, that ongoing new drug development is the lifeblood of growth of pharma business. Nevertheless, that aspect of innovation is mostly perceived as an exclusive internal business value for most companies. The majority of stakeholders perceives the value of drug innovation as inclusive, when it is made accessible to a large population of patients at an affordable price, along with a decent Return on Investment (ROI) for the corporation. This expectation cannot be wished away. Instead, its core concept should drive the other basic function of business – marketing

This stage can be attained by building an innovative organization, fostering the culture and process of ‘creativity’ – across its functions. It is now a fundamental requirement for pharma and biotech companies. Beyond new product development, innovation immensely helps organizations navigating through strong headwinds to achieve its financial goals and objectives, in an inclusive manner. When IT – another knowledge industry, can reduce the cost of innovation through creative processes, across all functions, making its product and services affordable to a large population, e.g. Reliance Jio, why not Pharma? In that sense, I reckon, pharma and biotech companies are yet to become creative – in a holistic way.

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.

Are Cancer Patients Victims of Pharma’s Payment to Doctors – For Prescriptions?

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In pharma industry, people of all socioeconomic backgrounds have no other choice but to visit doctors, to seek their expert advice for medical treatment. Patients expect them to prescribe the right and most affordable medicines for desired relief. Ironically, it appears to be the general industry practice to favorably influence the prescribing decision of doctors of all kinds of drugs, irrespective of any tangible product superiority, and price. This practice has been a decade old general concern of many that still continues unabated, especially in India.

There is nothing wrong, though, in pharma companies’ influencing doctors with unique product and associated service offerings over others, intended to benefit patients. However, when any marketing activity goes against the general patient interest, or may be construed independently as short-changing patients, must not be condoned, the least by any government.

This article will discuss how this menace is not sparing even those cancer patients who can’t afford expensive drugs but want to survive. I shall start with an overall perspective and sign off with the prevailing situation in India.

Are such practices transparent?

Obviously not, as these take place under several benign names and guise, and is an open secret to almost all stakeholders, including many patients. In several countries, India excluded, the government or the legal systems have intervened to make the drug marketing process more transparent, often with strong punitive measures. Curiously, adequate space is constantly being created by some players to hoodwink all these.

Today, one can, at best put two and two together to get a feel of what could possibly be the reality. It still remains a challenge to exactly quantify as to what extent it is going on, and with what impact on common patients, who mostly pay out of pocket to purchase medicines. But the good news is, studies on this particular subject has commenced, a few examples of which I shall in this article.

Some common influencing tools:

Pharma companies’ influencing tools for favorable doctors’ prescriptions are, apparently, directly proportional to a doctor’s prescription generating capacity. Once a doctor is influenced by such mechanism, high product price becomes irrelevant, even for those who find the drug difficult to afford.

The form of influence varies from gifts carrying different price tags, advertising in specific souvenirs or journals, sponsoring medical symposia of doctors’ choice, to arranging company’s own ‘Continuing Medical Education (CME)’ programs in exotic places, with travel, boarding and lodging expenses paid by the company, sometimes including their spouses. Hefty speaking, consulting fees and research grants may also be among these influencing tools. All are commonly done through a third party to avoid easy detection.

Some evidences of drug companies’ payment to doctors:

May 02, 2017 edition of the Journal of American Medical Association, published a couple of survey findings that can be summarized, as follows:

  • About half of U.S. doctors received payments from the pharmaceutical and medical device industries in 2015, amounting to USD 2.4 billion
  • Such payments and gifts very likely encourage doctors to prescribe pricey brand-name drugs and devices pushed by sales representatives.
  • Chances of receiving a general payment depended on the doctor’s specialty — 61 percent of surgeons got a payment, compared with 48 percent of primary care doctors.
  • Pharma companies earned more than USD 60 billion in 2010 for brand-name drugs included in the study. Generic drugs are 80 to 85 percent less expensive, which means hospitals can save lots of money, if doctors start prescribing generics instead of brand-name drugs.
  • Doctors at academic medical centers were more likely to prescribe cheaper generic drugs than expensive brand-name drugs after their hospitals adopted rules that restricted pharmaceutical sales visits, the researchers said.
  • “Many doctors would say they can’t be bought for the low amounts we’re talking about, but the amounts actually aren’t that low. Many, many doctors are getting thousands of dollars. It’s hard to imagine that is not influential,” the article underscored.

Quantification of increased prescription:

Another interesting study analyzed the prescription pattern of cardiologists who were taken out for a meal by sales representatives of Pfizer or AstraZeneca– makers of two expensive branded cholesterol-lowering statins, Lipitor and Crestor. They found that payment to physicians increases prescribing of the focal drug by 73 percent.

It is noteworthy,during the time period examined, which was between 2011 and 2012, there were several equivalent, lower-cost generic statin drugs available in the market. The paper’s findings confirm the general belief that drug companies’ business practices do influence doctors prescribing behavior while treating patients, in favor of the high-cost targeted brands.

Any relationship between soaring cancer drug price and pay for prescriptions?

Dr. Peter Bach at the Memorial Sloan-Kettering in New York City, with the help of a ‘cancer drug price chart from 1965 to 2016 period, established that treatment cost with cancer drugs is soaring. In another article, on the same issue, Dr. Bach commented: ‘Market pricing does not ensure access to new innovation.’ He reiterated:‘Profit maximizing price is not welfare maximizing. This is a policy failure, not a market failure.’

So far so good. However, everybody was surprised when on October 02, 2018, The New York Times reported about the same Memorial Sloan-Kettering that: ‘Dr. Craig B. Thompson, the hospital’s chief executive, resigned in October from the board of Merck. The company, which makes the blockbuster cancer drug Keytruda, had paid him about $300,000 in 2017 for his service.’

The same report further detailed: ‘Dr. Thompson, 65, received $300,000 in compensation from Merck in 2017, according to company financial filings. He was paid $70,000 in cash by Charles River in 2017, plus $215,050 in stock.’ This does not seem to be a solitary example from this hospital, as ‘another article detailed how a hospital vice president held a nearly $1.4 million stake in a newly public company as compensation for representing Memorial Sloan Kettering on its board.’

The question that arises now, how would such behavior of doctors adversely impact cancer patients’ health-interest? This was evaluated in an interesting article, as below.

Evaluation of association between industry payment to doctors and their prescribing practices:

Financial relationships between physicians and the pharmaceutical industry are common. This was analyzed in detail with deft and expertise in yet another very recent research paper titled, ‘Evaluating the Strength of the Association Between Industry Payments and Prescribing Practices in Oncology,’ published in the ‘The Oncologist’ on February 06, 2019. Two critical findings of the study may interest many, which are:

  • The association between industry payments and cancer drug prescribing was greatest among physicians who received payments consistently (within each calendar year).
  • Receipt of payments for compensation purposes, such as for consulting or travel, and higher dollar value of payments were also associated with increased prescribing.

Its implication on cancer patients:

To ascertain its implication on cancer patients by combining records of industry gifts with prescribing records, the study identified:

  • The consistency of payments over time, the dollar value of payments, and payments for compensation as factors.
  • This is very likely to strengthen the association between receiving payments and increased prescribing of that company’s cancer drug.

The outrageous cost of cancer treatment with innovative drugs:

As I said in my previous articles, new cancer drugs are increasingly becoming more innovative with greater efficacy. The fact that the 2018 Nobel Prize in Physiology or Medicine was awarded to James P. Allison and Tasuku Honjo “for their discovery of cancer therapy by inhibition of negative immune regulation,” provides a testimony to the high quality of innovation involved in the discovery and development of cancer therapy.

This progress is excellent, unquestionably! But who is getting benefitted by these innovative cancer medicines? The headline of the article, titled ‘The Nobel Prize is a reminder of the outrageous cost of curing cancer,’ published by the Vox Media Vox Media on October 02, 2018, captures the prevailing reality, succinctly. Articulating, ‘The Nobel Prize is a reminder of the outrageous cost of curing cancer,’ the author further elaborates the point. The paper underscores, for the first time ever, we’re living in a moment when many of our most promising medical advances, such as cancer immunotherapy, are far out of reach for the vast majority of people who could benefit from them.

Innovative cancer drugs are pricey only for the high cost of innovation? 

Let me deliberate this point based on data. Quite expectedly, pharma industry never accepts that prescriptions are bought. But, when get caught, they retort that these are some aberrations, keeping their much-publicized argument unchanged in support of jaw dropping cancer drug prices. They argue, innovative drugs are brought to market after incurring R&D expenditure of over a billion dollars, if not more.

The Vox article quotes the CEO of Novartis, the maker of the immunotherapy drug Kymriah, saying that the R&D costs of the drug were about USD 1 billion. But many experts don’t buy this argument. The article echoed one such expert - Ezekiel Emanuel, a professor of medical ethics and health policy at the University of Pennsylvania’s Perelman School of Medicine.

The professor countered by saying: ‘That’s certainly a big investment, but it is much less astounding when compared with the drug’s anticipated revenue. Based on Kymriah’s list price, treating just 2,700 patients would allow Novartis to recoup its entire investment. Even with significant discounts for many patients, it wouldn’t take many treatments to turn a considerable profit.’

According to researchers at the University of Pennsylvania, the total cost for removing, reprogramming and infusing the cells into each patient is less than USD 60,000—just one-sixth of the USD 373,000 price tag. Production costs do not seem to be driving the stratospheric drug prices, the researchers commented.

Has any remedial action been taken by the industry or the doctors?

Except one report, I reckon, this practice continues virtually unabated, even today.

‘The above conflicts at Memorial Sloan Kettering, unearthed by The New York Times and ProPublica, have had a rippling effect on other leading cancer institutions across the country’, commented ProPublica on January 11, 2019. It reported: ‘The cancer center will now bar top officials from sitting on outside boards of for-profit companies and is conducting a wide-scale review of other policies.’

Further, Dana-Farber Cancer Institute in Boston and Fred Hutchinson Cancer Research Center in Seattle, both of whose executives sit on corporate boards, are among the institutions reconsidering their policies on financial ties, the article said.

Conclusion:

Although, in many countries, at least, some action has been taken by the governments to curb such practices by framing appropriate laws, in India it is virtually free for all types of situation, as prevailing in this area.

A recent news report aptly summarized the Indian situation. It highlighted: “While Prime Minister Narendra Modi recently mocked doctors in a public interaction in London for going on foreign trips sponsored by pharma companies, his government has been unsuccessful in bringing in a law to punish pharma companies that bribe doctors. The Uniform Code of Pharmaceutical Marketing Practices (UCPMP), prepared by the pharmaceuticals department (DoP) to control unethical marketing practices in pharma has been in the work since December 2014, six months after the current government came to power. More than three years later, the code is stuck in the Niti Aayog after the law ministry rejected DoP’s draft.”

With the above global and local perspective, I reckon, even if some changes take place in the developed world, India is unlikely to fall in that category, any time soon. Consequently, a large number of Indian patients may continue to fall victims of common pharma practice – pay to doctors for prescriptions. It doesn’t seem to matter even for cancer drugs.

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.

Exigency of Cybersecurity in Digitalized Pharma

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Digitalization – as it unfolds and imbibed by most drug companies, is presumed to herald a whole new ballgame in the Indian pharma business. Equally significant is the quantum benefit that the process will deliver to pharma stakeholders – right from drug companies to patients. It has already hastened the process of new drug discovery and will also help charting newer ways to meaningfully engage with stakeholders, besides enhancing treatment outcomes for patients, appreciably.

However, the flip side is, more benefits a company accrues from digitalization, greater will be the risks of cyber-attacks. Thus, preventive measures should also be equally robust. Otherwise, hackers can bring a company’s digital system to a standstill, causing not just a temporary loss in revenue and profit, but also valuable data leak, with considerable impact on even long-term business.

Strangely, associated risks of digitalization to pharma companies are seldom outlined in any discussion, leave aside alternatives for salvaging such untoward situation, if or as and when it comes. Unless, it is felt that the scope of such discussion doesn’t cover the implementors and falls totally on cybersecurity experts.

Nonetheless, it is intriguing in the pharma space. The reason being, pharma industry believes, while talking about the efficacy of any drug, its vulnerability in terms of side-effects, contraindications or drug interactions, should also be known to its users. That’s the purpose of a packaging leaflet. It’s a different reason though, that most drug companies in India have virtually jettisoned this practice as a cost saving measure, even for drugs that are not under price control. That apart, in this article, I shall explore the relevance of cybersecurity in the digitalized pharma world.

A question that help understand its implication:

During organizational transformation through digitalization in pharma, just like any other business, all crucial documents get transferred from paper to digital formats. The key question that follows in this regard is – what happens to these digital documents post cyber-attacks, if any? Any attempt to answer this question holistically will help people realize its implication – that ‘cybersecurity must be more than an afterthought.’

‘Cybersecurity must be more than an afterthought’:

The article, ‘Cybersecurity in the Age of Digital Transformation,’ published by MIT Technology Review Insights on January 23, 2017, stressed upon this critical point. It highlighted: “As companies embrace technologies such as the Internet of Things, big data, cloud, and mobility, security must be more than an afterthought. But in the digital era, the focus needs to shift from securing network perimeters to safeguarding data spread across systems, devices, and the cloud.”

Thus, while discussing the need to digitally transform a company’s business, cybersecurity must be part of that conversation from the very start – the paper underscored in no uncertain terms. That’s exactly what we are deliberating today - ‘as companies embark on their journeys of digital transformation, they must make cybersecurity a top priority.’

The cybersecurity threat may cripple innovation and slow business:

Cisco explored the concept of Cybersecurity as a Growth Advantage by a thought leadership global study. While assessing the impact of cybersecurity on digitalization, it surveyed more than 1,000 senior finance and line-of-business executives across 10 countries. Some of the key findings, as captured in the Cisco report, may be summarized, as follows:

  • 71 percent of executives said that concerns over cybersecurity are impeding innovation in their organizations.
  • 39 percent stated that they had halted mission-critical initiatives due to cybersecurity issues.

Interestingly, 73 percent of survey respondents admitted that they often embrace new technologies and business processes, despite cybersecurity risk. However, as we shall see below, pharma executives are quite confident of cybersecurity, probably because of inadequate experience in this area, as on date.

Companies are struggling with their capabilities in cyber-risk management:

The paper published in the May 2014 issue of the McKinsey Quarterly journal, titled “The rising strategic risks of cyberattacks”, also flagged this issue. It said: “More and more business value and personal information worldwide are rapidly migrating into digital form on open and globally interconnected technology platforms. As that happens, the risks from cyberattacks become increasingly daunting. Criminals pursue financial gain through fraud and identity theft; competitors steal intellectual property or disrupt business to grab advantage; ‘hacktivists’ pierce online firewalls to make political statements.”

McKinsey’s research study on the subject, conducted in partnership with the World Economic Forum also upheld that companies are struggling with their capabilities in cyber-risk management. As highly visible breaches occur with growing regularity, most technology executives believe that they are losing ground to attackers. Its ongoing cyber-risk-maturity survey research also ferreted out the following important points:

  • Large companies reported cross-sector gaps in their risk-management capabilities.
  • 90 percent had “nascent” or “developing” ones.
  • 5 percent was rated “mature” overall across the practice areas studied.

Interestingly, the research found no correlation between spending levels and risk-management maturity. Some companies spend less, but do a comparatively good job of making risk-management decisions. Others spend vigorously, but without much sophistication. Even the largest firms had substantial room for improvement – McKinsey reiterated.

‘Corporate espionage’– a prime reason behind cyberattack on pharma:

An interesting article appeared in The Pharma Letter on July 18, 2017 on this subject. The paper is titled “Cyber-attacks: How prepared is pharma?” It said:“The pharmaceutical industry is a prime target for hackers. In 2015, a survey of Crown Records Management revealed that nearly, two-thirds of pharma firms had experienced breaches in data, and that one fourth of these same companies had been victims of hacking.”The paper also highlighted ‘corporate espionage’ as one of the prime reasons behind hacking.

In view of this, the author articulated that the need for pharma and healthcare companies to fortify their security systems has become clear in recent years. The best method of protection is to prevent cyber-attacks from happening, or at least reduce the risk of a hack, he advised.

Instances of cyber-attacks in pharma are many:

To drive home the point that when firms and other organizations fail to strengthen IT systems against attacks, they incur high costs -the above paper cited an example from the year 2016. It said: “The average global cost of data breach per stolen record was US$ 355 for healthcare groups, higher than losses in other fields such as education (US$ 246/record), transportation (US$ 129), and research (US$ 112).”

The author further emphasized that besides financial losses, pharma companies and other healthcare groups risk losing the trust of patients and other stakeholders. With the ongoing digitization in pharma, new threats may become even more pervasive and sophisticated. “Thus, investment in cybersecurity must be a priority, if pharma players are to protect their data and the data of their stakeholders”, he added.

Are pharma executives experienced enough on cybersecurity?

As reported by Pharma IQ on July 31, 2018, one of its recent surveys found that around 70 percent of senior pharma decision makers are “confident” or even “very confident” in their company’s IT security. But, digging deeper, the survey uncovered that:

  • 42 percent of respondents’ companies do not routinely follow IT security policies,
  • 49 percent said that the corporate risk profile is not firmly understood across all departments.

The survey concluded that this could potentially lead to gaps in the security process. To me it appears, this could, as well, be due to inadequate experience of pharma executives in this area.

But, investment in pharma IT is increasing:

The good news is, even in the current scenario, many pharmaceutical companieshave started making investments in IT solutions, in general. This is corroborated by the 2018 survey by Global Data. Some of its important findings are, as follows:

  • 79 percent of them are currently making investments in identity and access management (IAM) solutions
  • 72 percent are considering investment in the solutions over the next two years.
  • 75 percent of the respondents are currently deploying some form of backup, archiving, alongside content and web filtering solutions to store, as well as, preserve their online information. 

Conclusion:

In pharma perspective, digitalization of business promotes paperless culture. It radically changes the basic infrastructure of maintaining critical documents in the workplace. Digital document storage systems become the nerve center of information on the company. All data – strategic or related to operations – internally generated or acquired – right across all critical functional areas, such as IP, research, clinical trials, manufacturing, sales and marketing, finance, supply chain legal and even of the CEO’s office, find a space in this digital data sever.

Although, the benefits of digitalization are well known and much discussed, it has a contraposition, as well – related to the vulnerability of the system to cyber-attacks. This flags a demanding need for protection of digitally stored assets from cyber-attacks, or to frustrate even any misdemeanorfrom amateur hackers. Thus, creating an almost impregnable, well-firewalled digital data storage server assumes prime importance. Equally important is formulating and religiously implementing a robust digital policy for the same.

Creating strong awareness among employees and stakeholders regarding cybersecurity and involving them in tandem with a system-approach, sans an iota of complacency, is expected to mitigate such vulnerability, appreciably. Thus, a sense ofexigency for cybersecurity in the digitalized pharma world, I reckon, is very real.

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.

Innovation: Is Big Pharma Talking Differently?

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“Nearly 2 billion people have no access to basic medicines, causing a cascade of preventable misery and suffering. Good health is impossible without access to pharmaceutical products.” The World Health Organization’s (WHO) ‘Access to Medicine’ report on ‘Ten years in public health 2007–2017’ made this observation.

It also reemphasized: “A significant proportion of the world’s population, especially in developing countries, has yet to derive much benefit from innovations that are commonplace elsewhere.” Despite this, continued lobbying of many pharma companies for TRIPS-plus measures and legislation, the breaching of laws or codes relating to corruption and unethical marketing, and several blatant instances of company misconduct continues, even today.

In the midst of this situation, has Big Pharma started thinking differently about the purpose of innovation? I shall try to explore the ground reality in this article.

The argument of Big Pharma:

In response to the above observation or anything akin to that, Big Pharma has counter arguments, which are rather contentious, as many believe. They generally say, it is the responsibility of the different governments to alleviate health misery of the citizens, and not theirs. In tandem, they keep repeating the same old argument, underscoring lower prices of innovative drugs would lead to lower profit generation, significantly slowing down the process of innovation.

Drug innovation follows an arduous path and an expensive process: 

Big Pharma wants people to comprehend about what it entails in the journey of discovering a New Molecular Entity (NME) and converting it to a safe and effective medicine.

For example, in its booklet Bayer explained: ‘it takes about ten to twelve years to develop a new drug. during this time, highly qualified scientists from a variety of disciplines work on filtering out a suitable active ingredient from an enormous number of compounds. Between 5,000 and 10,000 compounds are rigorously studied in numerous laboratory tests and the best ones further optimized. out of four or five drug candidates that are then tested on humans in clinical studies often only one substance is approved and becomes available to physicians and patients.”

The entire process reportedly takes around 14 years, and according to a 2016 study by the Tufts Center for the Study of Drug Development - developing a new prescription drug, which gains marketing approval, is estimated to cost drug manufacturers USD 2.6 billion. Besides, a new analysis conducted at Forbes finds that getting a single drug to market may involve an expenditure of USD 350 million before the medicine is available for sale. It concludes, large pharmaceutical companies that are working on dozens of drug projects, spend USD 5 billion per new medicine.

Drug innovation is only for those who can afford:

As is being witnessed by many, Big Pharma always tend to argue that high R&D costs drive new drug prices up in pharma. Moving a step further, that drug innovation is for only those patients who can afford, was justified even by the CEO of a major constituent of Big Pharma. An article published in Forbes Magazine on December 05, 2013 wrote: “At the Financial Times Global Pharmaceutical & Biotech Conference this week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western patients that can afford it.”

How strong is the justification for high new drug cost?   

Instead of believing the pharma argument on its face value, it will be worthwhile to go for a dip-stick analysis. One such analysis, titled “Pharmaceutical industry profits and research and development”, published by the USC-Brookings Schaeffer Initiative for Health Policy on November 17, 2017, presents some interesting facts.

It says, the pharmaceutical industry is a high-fixed-cost and low-marginal-cost industry. This means, as the authors explain, that the cost of bringing a new drug to market is very high and the process is risky, while the cost of producing an extra unit of a product that is on the market is frequently “pennies a pill”. It also, indicates, though there is a disagreement about the exact cost of bringing a new drug to market, there is general recognition that the process costs run a fewhundreds of millions of dollars per new drug. Thus, innovative drugs are supposed to be somewhat more expensive to many patients. But how much – is the question to ponder, I reckon.

An example of a new drug pricing:

Let me choose here, as an example, the pricing of one of the most contentious, but undoubtedly a breakthrough medicine – Sovaldi (Sofosbuvir) of Gilead. Sofosbuvir was discovered in 2007 – not by Gilead Sciences, but by Michael Sofia, a scientist at Pharmasset. The drug was first tested on human successfully in 2010. However, on January 17, 2012 Gilead announced completion of the acquisition of Pharmasset at approximately USD 11.2 billion.

Subsequently, on December 06, 2013, US-FDA approved Gilead’s Sovaldi (Sofosbuvir) for the treatment of Chronic Hepatitis C. Sovaldi was priced at USD 1,000 a day in the U.S., costingUSD 84,000 for a course of treatment. That Gilead can’t justify the price of its hepatitis C therapy – Sovaldi, was highlighted in an article with a similar title, published in the Forbes Magazine on June 17, 2014.

It is worth mentioning that Sovaldi costs around USD 67,000 for a course of therapy, in Germany. Whereas, it costs round USD 55,000 in Canada and the United Kingdom (UK). Gilead has accepted an altogether different pricing strategy for Sovaldi in some other countries, such as India and Egypt.

When the above concept is used to explain Sovaldi pricing:

The above Forbes paper explained its pricing by saying: “Add in other therapies that supplement Sovaldi, and now you’re talking about USD 100,000 or so to treat a single patient. To use Sovaldi to treat each of the 3 million hepatitis C patients in the United States, it would cost around USD 300 billion, or about the same amount we annually spend for all other drugs combined.”

Let me now put a couple of important numbers together to get a sense of the overall pricing scenario of a new drug. The New York Times (NYT) reported on February 03, 2015: “Gilead Sciences sold USD 10.3 billion of its new hepatitis C drug Sovaldi in 2014, a figure that brought it close to being the best-selling drug in the world in only its first year on the market.”

Against its just the first-year sale, let me put the cost of acquisition of Sovaldi at USD 11.2 billion, an expenditure of USD 350 million before the medicine is available for sale as calculated in the Forbes articleand the cost to manufacture a pill of Sovaldi at around USD 130. This reinforces the point, beyond any doubt how ‘outrageous’ its pricing is.Even Gilead’s CEO admitted to failures in setting price of Sovaldi at USD 1,000-A-Pill, said another article on the subject. More important is, the costs to Gilead for Sovaldi acquisition and launch were virtually recovered in just a little over a year, but Sovaldi’s original price tag remains unaltered.

Is the Big Pharma talking differently now?

It appears that some constituents of Big Pharma have now started talking differently in this regard, publicly – at least, in letters, if not in both letter and spirit. Be that as it may, one will possibly be too naïve to accept such sporadic signals coming from pharma, as a shift in their fundamental thought pattern on drug innovation as a profit booster. Being highly optimistic in this area, I would rather say that these are early days to conclude that Big Pharma has really accepted the reality that – drug innovation is only meaningful, if it reaches those patients who need them the most.

Changing…not changing…or early days?

Let me explain this point with examples of changing…not changing…orearly days.

Changing?

On July 24, 2018 during an interview to Pharm Exec the head of the sub-Saharan African region for Roche made some key points, such as:

  • Groundbreaking innovation in medical science is only meaningful, if it reaches the patients who need it.
  • Access to healthcare is a multidimensional challenge and key to addressing the barriers, is really understanding them
  • Need to create a new business model that can sustainably – and this is very important – create access for patients.

Not changing?

When one Big Pharma constituent is showing some change in its approach on the purpose of innovation, another constituent is trying to make the entry of cheaper biosimilar drugs even tougher. This creates yet another doubt – both on safety and efficacy of biosimilars, as compared to much higher priced off-patent original biologic drugs.In August 2018, Pfizer reportedly called for US-FDA guidance on ‘false or misleading information’ about biosimilars, citing some of the following examples from other Big Pharma constituents, such as:

  • Genentech’s “Examine Biosimilars” website, which states that “the FDA requires a biosimilar to be highly similar, but not identical to the existing biologic medicine.” Pfizer argues that Genentech’s omission of the fact that an approved biosimilar must have no clinically meaningful differences from its reference product is a failure to properly communicate the definition of a biosimilar.
  • Janssen Biotech’s patient brochure for brand-name Remicade, which states that a biosimilar works “in a similar way” to a biosimilar without clarifying that the biosimilar must have the same mechanism of action as the originator. Pfizer also takes issue with the brochure’s suggestion that no infliximab biosimilar has been proven to be safe or effective in a switching study.
  • Amgen’s April 13, 2018, tweet that states that patients may react differently to biosimilars than to reference products. Pfizer also points out an Amgen YouTube video that implies that switching to a biosimilar is unsafe for patients who are well controlled on a current therapy.

Interestingly, on July 20, 2018 Pfizer announced that the US-FDA has approved Nivestym (filgrastim-aafi), a biosimilar to Neupogen (filgrastim) of Amgen, for all eligible indications of the reference product. This is the fourth US-FDA approved Pfizer biosimilar drug, the marketing and sales promotion of which expectedly, I reckon, will be no different from other biosimilars.

Early days?

Yes, it appears so. These are early days to draw any definitive conclusion on the subject.

Conclusion:

W.H.O observed in its above report that the ‘overall situation is somewhat improving’. It was also corroborated in the ‘2016 Access to Medicines Index’, which gave high marks to those companies that negotiated licenses for antiretrovirals and hepatitis C medicines through the Medicines Patent Pool (MPP). MPP was set up in 2010 as a public health organization supported by the United Nations to improve access to HIV, hepatitis and tuberculosis treatments in low- and middle- income countries.

It could well be, on the purpose of drug innovation some new realization has dawned, at least, on some few global pharma majors. However, it is still difficult to fathom its depth, at this point of time. There is no conclusive signal to believe that the Big Pharma is now thinking differently on the subject, not just yet.

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.