Tag Archives: it

Indian Patent offices (IPOs) have started showing improvement in their functioning; still lot of grounds to cover.

Posted on by
Reply

Indian Patent offices are located, with four clearly specified jurisdictions, at New Delhi, Mumbai, Kolkata and Chennai.

Since last few years enough efforts have been made towards overall capacity building initiatives, training of personnel and digitalizing the huge databank of these offices, with wide scale application of information technology (IT). As a result the patent offices are now having almost a centralized database to provide online services to the users in various areas of their operations. Users are now having the facilities of not only online patent search, but also for online patent applications.

More extensive IT applications are required to achieve greater system efficiency and transparency:

However, to bring in more efficiency and transparency in the system, there is a need to introduce appropriate IT applications in all the transactional interfaces between the patent office personnel and the patent applicants.

Still there are lots of grounds to cover:

Following are the key areas which should be taken care of by the Controller General of Patents, Design and Trade marks (CGPDTM) to make the IPOs more efficient, transparent and effective:

1. The Patent Manual, which provides essential guidelines to the patent examiners to bring in uniformity in the patent application examination process, is long overdue.

2. Many patent applicants feel that there is a need to include the International Non-proprietary Names (INN) in the title of pharmaceutical patent applications by the IPO.

3. Inadequate bandwidth makes the IT system slow, reducing its operational efficiency.

4. Electronic-filing of patent applications has been introduced, but there is no facility of paying the fees online by credit card. This facility should be introduced to make it more convenient for applicants to file patent applications online, adding more speed to the process.

5. Electronic prosecution of patent applications should be introduced to make the patent prosecution virtually paperless and more efficient.

6. Despite new technological measures most patent officers and also the public in general are still following the traditional method of filing the patent applications due to the ease and authenticity of filing records. To encourage applicants to file applications electronically, incentives such as reduced fees may be offered to those who file their applications electronically.

7. The IPOs should digitize all the physical files lying with them, so that file histories of each application are available online.

8. The Patent offices should have designated centres to provide assistance to applicants for filing or prosecuting applications.

9. Clear guidelines to be issued for conducting pre-grant and post grant opposition proceedings. Presently they are being handled in an arbitrary manner.

10. In order to introduce an efficient system of patent prosecution, it is recommended that the IPOs adjust patent term to compensate patentees for any delay in the grant of the patent that reduces the term of the patent, when such delay is caused solely by the IPOs.

11. Decision making and its communication to all concerned to be made faster at the IPOs. A system to be instituted for issuing the operative part of the decision first, followed by details of the decision taken. These should be advertised immediately in the technical journal to close proceedings at the earliest. Delays are leading to increase in the waiting period for the grant of patents, even if the proceedings have been concluded (opposition or otherwise) attracting serial and frivolous pre-grant oppositions. Such delays are also preventing the patent applicants to get their grants. As a result they are unable to initiate infringement proceedings against infringers quickly, defeating the very purpose of the patent system.

12. The timeline for an application, which will be taken up for examination, needs to be clearly defined. Currently, there is no time-line defined for taking up the applications for examination.

Conclusion:

All concerned will feel happy, if the DIPP in general and the CGPDTM in particular take note of these suggestions and formalize a process within the IPOs to address these important issues.

Growing discontentment of the past, in several areas of operation within the IPOs, is now being effectively addressed. However, the system still warrants more capacity building to enable the IPOs provide world class services to the patent applicants. This process needs to be expedited to further enhance the credibility of the new IPR regime in India.

By Tapan Ray

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

Contract Research – a rapidly evolving business opportunity in India: Is the Pharmaceutical Industry making the best use of it?

Posted on by
Reply
A quick perspective of the ‘new-era’ pharmaceutical R&D in India:
Since 1970 up until 2005, Indian pharmaceutical industry used to be considered as the industry of ‘reverse engineering’ and that too with an underlying disparaging tone… and also as the industry of ‘copycat’ medicines’.

However, it will be absolutely unfair on my part to comment that only domestic Indian pharmaceutical companies launched ‘copycat’ versions of patented products in India and no multinational companies (MNCs) resorted to this practice, during this period.

Long before Indian Product Patent regime was put in place, in January 1, 2005, around 1998/99 Dr. Reddy’s Laboratories (DRL) entered into a bilateral agreement with Novo Nordisk and Ranbaxy with Bayer of Germany to out-license two New Chemical Entities (NCEs) and a New Drug Delivery System (NDDS), respectively for further development.

Opened the new vistas of opportunities:

These research initiatives opened the new vistas of opportunities for the Indian pharmaceutical industry in terms of R&D, in the pharmaceutical science. The above new developments also brought in a sense of determination within the research oriented domestic pharmaceutical players to enter into the big ticket game of the global pharmaceutical industry called ‘product discovery research’.

The jubilation of the industry having demonstrated its initial capability of taking a leap into forthcoming new paradigm of that time, received a set back momentarily when Novo Nordisk terminated the development of both the NCEs of DRL, after a couple of years, because of scientific reasons. However, DRL continued to move on to its chosen path, undeterred by the initial set back.

Need to focus on R&D and create world class ‘Intellectual Properties’:

In a letter addressed to the shareholders of DRL in one of its recent annual reports, the founder and the chairman of the company Dr. Anji Reddy expressed his following vision:

“Excelling in the basic business operations will be necessary, but not sufficient. To maintain a long-term presence in the global pharmaceuticals markets and to grow profitably will require companies to be even more focused on R&D and creation of successful IPR’s [intellectual property rights].”

After India signed the World Trade Organization (WTO) agreement, Indian pharmaceutical companies were quick to make out that the ball game of doing pharmaceutical business in the new IPR regime will be quite different. Having pharmaceutical product patents will indeed be important in future, for the domestic R&D based pharmaceutical companies.

The Past versus Present R&D models in India:

Domestic research based pharmaceutical companies did realize in the early days that a radical shift in their focus from ‘process research’ to ‘product discovery research’ may not be prudent or practical either.

Some of these companies initiated step-wise approach from mid 90’s to meet the challenge of change, come year 2005. During the transition period of 10 years as given by the WTO to India from 1995 to 2005, some domestic companies wanted to make full use of their past R&D model.

The past model:

Before the product patent regime, Indian pharmaceutical companies used to manufacture and market generic equivalents of the patented drugs at a fraction of the price of the originators, with non-infringing process technology in the Indian domestic market and also for export to the other non-regulated markets. During the WTO transition period of 10 years, they increased the pace of utilization of this model and launched as many ‘copycat’ versions of the new products as possible to boost up their sales and profit.

The present model for regulated markets:

Following two strategies are followed:

1. Indian companies doing generic business in the regulated markets like the USA submit
“Abbreviated New Drug Application” (ANDA) to the drug regulator for approvals of drugs,
which will go off patent within the next few years, so that the generic products could be launched
immediately after patent expiry.

2. Many other companies follow the second avenue, simultaneously, which is though risky but very
remunerative. In this case, the generic market entry takes place by challenging the patents of the
innovators.

It is believed that this model is being used by the Indian pharmaceutical companies, primarily to raise financial resources to get more engaged in their drug discovery initiatives or to generate wherewithal for collaborative or contract research initiatives.

For short term business growth and to raise fund for discovery research, their non-infringing process research initiatives have been proved to be quite useful. These R&D based Indian pharmaceutical companies; seem to understand very well that discovery of NCEs/NMEs or getting involved in this process will ultimately be ‘the name of the game’ to fuel longer term business growth of their respective organizations.

Contract Research (CR) in India:

Contract research is another business model within the overall R&D space, where a significant part of the investments come from the collaborators. CR business model currently explore the following two key options:

Intellectual Property Rights (IPR) for the discovery will go to the global collabolator and the
Indian CR organization will get an upfront or milestone payments.

 Along with funding support to the CR organization, IPR is shared by both the companies
depending on the terms of agreement.

There could be many other terms/clauses in such CR agreements, which are not within the scope of this discussion.

Types of Contract Research (CR):

Frost & Sullivan in one of their studies on Indian R&D opportunities indicated following three models of contract research:

1. Joint research: Here two or more collaborators will work jointly

2. Collaborative research: In this type of research, scientists of different disciplines work together on a project e.g. Ranbaxy has recently entered into a collaborative research program with GlaxoSmithKline (GSK) or collaboration of Ranbaxy to develop an anti-malarial NCE Rbx 11160 with Medicines for Malaria Venture (MMV), Geneva.

3. Complete outsourcing: When an altogether different research organization is assigned a research project by another organization. Some Indian research based pharmaceutical companies have already got engaged in these types contract research activities. The market of contract research is expected to grow much faster in the near future.

India – an attractive contract research destination:

A global survey done by the Economist Intelligence Unit (EIU) couple of years ago on the preferred centres for overseas contract research, published as follows:

• 39% preference for China

• 28% preference for India

Attractiveness as preferred contract research center was based on the following criteria:

• A place where companies can tap into existing networks of scientific and technical expertise

• Has good links to academic research facilities

• Provides an environment where innovation is supported and easy to commercialize.

Many global pharmaceutical companies believe that China scores over India on the third point, as mentioned above.

Indian pharmaceutical companies have commenced targeting contract research opportunities:

Research based Indian pharmaceutical companies companies like, Piramal Healthcare, Ranbaxy, DRL, Zydus Cadilla, Glenmark etc are now actively targeting international companies for contract research in custom synthesis, medicinal chemistry and clinical studies.

A medium-sized pharma company Shasun Chemicals and Drugs has been reported to have defined its business as an “integrated research and manufacturing solutions provider”. Similarly Divi’s Laboratories, a pharmaceutical company of similar size has collaborated with global multinational companies for both custom synthesis and contract research projects.

Some international CROs, like Quintiles have its establishments in Ahmedabad, Bangalore and Mumbai with great expectations and a robust business model.

New contract research opportunities in Biopharmaceuticals:

Besides pure pharmaceutical companies, an emerging opportunity is seen within the biotech companies in India, which are mostly engaged in a contract model. Novartis has inked a three year deal with Synergene (Biocon) for various research projects primarily in the early stages of development in cardiovascular and oncology therapy areas.

Likewise, Reliance Life Sciences are involved in chemistry, biology and contract clinical research activities.

Another research process outsourcing company, Avesthagen is engaged in collaborative research in metabolics, proteomics, genomics and sequencing. The company shares the IPR with the collaborators.

Jubilant Biosys of India, which has already partnered in a drug development deal with Eli Lilly has recently entered into another research and development deal with AstraZeneca, estimated to be worth up to US$220 million. This research collaboration will be funded by AstraZeneca for five years and they will own the patent of any neuroscience molecule that will come out of this collaborative agreement.

Contract research – a lucrative business model:

A UBS Warburg study indicated that around 20% to 25% of R&D investments in the US go towards contract research. This percentage is expected to increase as the pressure to contain R&D expenses keeps mounting, especially in the US and EU.

Currently the cost of bringing an NCE/NME to market from its R&D stage is estimated to be around US$ 1.7 billion. Across the world efforts are being generated to bring down these mounting expenses towards R&D.

Many experts believe that cost of innovation in India will be almost half of what it will be in the US and EU. A report from Zinnov Management Consulting forecasts that towards outsourcing by the global pharmaceutical companies, India has the potential to earn about US$2.5 billion by 2012.

Conclusion:

Currently, within CR space India is globally considered as a more mature venue for chemistry related drug-discovery activities than China. However, in biotech space China is ahead of India. Probably, because of this reason, companies like, Divi’s Laboratories, Avesthagen, Ranbaxy, Synergene, Jubilant Biosys, Reliance Life Science, DRL, Zydus Cadilla, Glenmark and Piramal Healthcare could enter into long-term collaborative arrangements with Multinational Companies (MNC)to discover and develop New Chemical Entities (NCEs).

As I said earlier quoting Korn/Ferry that in the CR space China’s infrastructure is better than India, primarily due to firm commitment of the Chinese government to derive maximum benefits of the globalization process in the country.

Prudent policy reforms and other measures as expected from the new UPA Government will hopefully help bridging the gap between the Chinese and Indian pharmaceutical industry in the space of overall CR business including biotechnology, as Indian R&D based pharmaceutical companies will start realizing and encashing the potential of this important business model.

By Tapan Ray

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

Leverage Information Technology (IT), Health Insurance and ‘Jan Aushadhi’ initiatives to address the burning issue of ‘Access to Affordable Integrated Healthcare to all’ in India.

Posted on by
Reply
Despite so much of general focus, stringent Government control, debate and activism on the affordability of modern medicines in India, a vast majority of Indian population still do not have access to basic healthcare facilities.The degree of poor access to healthcare in general may vary from state to state depending on economic resources and the quality of governance. However, despite the success of the Government to make medicines available in India cheaper than even Pakistan, Bangladesh and Sri Lanka, it has been reported that about 65% of Indian population still do not have access to affordable modern medicines compared to 15% in China and 22% in Africa.Lack of adequate healthcare infrastructure:

One of the key reasons of such poor access is lack of adequate healthcare infrastructure. As per the Government’s own estimate of 2006, India records a shortage of:

1. 4803 Primary Health Centres (PHC)
2. 2653 Community Health Centres (CHS)
3. Almost no large Public Hospitals in rural areas where over 70% of the populations live
4. Density of doctors in India is just 0.6 per 1000 population against 1.4 and 0.8 per 1000 population in China and Pakistan respectively , as reported by WHO.

Moreover, doctors themselves do not want work in rural areas, probably because of lack of basic infrastructural facilities. We have witnessed public agitation of the doctors on this issue, in not so distant past.

National Health Policy and Healthcare Expenditure:

Two key primary focus areas of the Government, everybody agrees, should be education and health of its citizens. Current National Health Policy also planned an overall increase in health spending as 6% of GDP by 2010. However India spent, both public and private sectors put together, an estimated 5% of GDP on healthcare, in 2008.

If we look at only the spending by the Government of India towards healthcare, it is just 1.2% of GDP, against 2% of GDP by China and 1.6% of GDP by Sri Lanka, as reported in the World Health Report 2006 by WHO.

During the current phase of global and local financial meltdown, as the government will require to allocate additional resources towards various economic stimulus measures for the industrial and banking sectors, public healthcare expenditure is destined to decline even further.

The silver lining:

However we have seen the United Progressive Alliance (UPA) Government allocating around US$2.3 billion for the National Rural Health Mission (NRHS). The Government announced that NRHS aims to bring about uniformity in quality of preventive and curative healthcare in rural areas across the country.

Inefficient healthcare delivery system:

Despite above silver lining of additional resource allocation, the net outcome does not appear to be so encouraging even to an eternal optimist, because of prevailing inadequacy within the system.

The reasons for such inadequacies do not get restricted to just rampant corruption, bureaucratic delay and sheer inefficiency. The way Government statistics mask inadequate infrastructural facilities is indeed equally difficult to apprehend. A recent report from ‘The Economist’, which reads as follows, will vindicate this point:

‘…around 20% of the 600,000 inhabited villages in India still have no electricity at all. This official estimate understates the extent of the problem, as it defines an electrified village—very generously—as one in which at least 10% of households have electricity’.

Leveraging the strength of Information Technology (IT) to considerably neutralize the system weaknesses:

One of the ways to address this problem is to utilize the acquired strengths of India wherever we have, to neutralize these weaknesses. Proficiency in ‘Information Technology’ (IT) is one of the well recognized key acquired strengths that India currently possesses. If we can optimally harness the IT strengths of India, this pressing healthcare issue could possibly be addressed to a significant extent.

One such IT enabled technology that we can use to address rural healthcare issues is ‘cyber healthcare delivery’ for distant diagnosis and treatment of ailments. Required medicines for treatment could be made available to the patients through ‘Jan Aushadhi’ initiative of the Department of Pharmaceuticals (DoP), by utilising the Government controlled distribution outlets like, public distribution system (ration shops) and post offices, which are located even in far flung and remote villages of India.

Please use the following links to read more about these subjects:

http://www.tapanray.in/profiles/blogs/healthcare-services-in-india

http://www.tapanray.in/profiles/blogs/jan-aushadhi-medicines-for

Sources of Healthcare financing in India:

Currently the sources of healthcare financing are patchy and sporadic as follows, with over 70% of the population remaining uncovered:

1. Public sector: comprising local, State and Central Governments autonomous public sector bodies for their employees

2. Government health scheme like:

• ‘Rashtriya Swasthya Bima Yojana’: for BPL families to avail free treatment in more than 80 private hospitals and private nursing homes.
• ‘Rajiv Gandhi Shilpi Swasthya Bima Yojana’ by Textile Ministry: for weavers.
• ‘Niramaya’ by Ministry of Social Justice and Empowerment: for BPL families.

3. Private sector: directly or through group health insurance for their employees.

4. ‘Karnataka Yeshavini co-operative farmers’ health insurance scheme: championed by Dr. Devi Shetty without any insurance tie-up.

5. ‘Rajiv Aarogyasri’ by the Government of Andhra Pradesh for BPL families: a Public Private Partnership initiative between Government, Private insurance and Medical community.

6. Individual health insurance policies.

7. External Aid like, Bill & Melinda Gate Foundation, Clinton Foundation etc.

Grossly inadequate health care financing in India, out of pocket expenses being over 70%:

Proportion of healthcare expenditure from financing source in India has been reported as follows:

• Central Government: 6%
• State Government: 13%
• Firms: 5%
• Individual Health Insurance: 3.5%
• Out of pocket by individual household: 72.5%

Need for Health Insurance for all strata of society to address the issue of affordability:

Even after leveraging IT for ‘cyber healthcare diagnosis’ and having low priced quality medicines made available from ‘Jan Aushadhi’ outlets of DoP, healthcare financing to make healthcare delivery affordable to a vast majority of the population will be an essential requirement.

According to a survey done by National Sample Survey Organisation (NSSO), 40% of the people hospitalised in India borrow money or sell assets to cover their medical expenses. A large number of populations cannot afford to required treatment at all.

Hence it is imperative that the health insurance coverage is encouraged in our country by the government through appropriate incentives. Increasing incidence of lifestyle diseases and rising medical costs further emphasise the need for health insurance. Health insurance coverage in India is currently estimated at just around 3.5% of the population with over 70% of the Indian population living without any form of health coverage.

Conclusion:

Therefore, in my view an integrated approach by leveraging IT, appropriately structured Health Insurance schemes for all strata of society, supported by well and evenly distributed ‘Jan Aushadhi’ outlets, deserves consideration by the Government. A detail and comprehensive implementable plan is to be prepared towards this direction to address the pressing issue of improving ‘Access to Affordable Integrated Healthcare’ to a vast majority of population in India, if not to ALL.

By Tapan Ray

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

From ‘Blockbuster Drugs’ to ‘Personalized Medicines’ – will it revolutionize the way the patients will be treated tomorrow?

Posted on by
Reply
Financial Times quoted Jeff Kendler, the CEO of Pfizersaying, “the era of dependence on a single or a couple of blockbuster drugs should be over. Lipitor sells U.S$ 12 billion a year. You can’t build a company predicted on the belief that you are going to find such a drug.”The argument is robust, what then are the alternatives?Rapid strides in pharmacogenomic bring in a promise of radically different way of treating diseases, as major pharmaceutical companies of the world make progress in developing much more effective medicines designed to target smaller populations. These medicines are termed as ‘personalized medicines’ and are expected to be an effective alternative to now quite unwieldy ‘blockbuster drugs’ business model.

In what way ‘Personalized Medicines’ will be different?

With ‘Personalized Medicines’ the health of a patient will be managed based on personal characteristics of the individual, including height, weight, diet, age, sex etc, instead of defined “standards of care”, based on averaging response across a patient group. Pharmacogenomic tests like, sequencing of human genome will determine a patient’s likely response to such drugs.

These are expected to offer more targeted and effective treatment with safer drugs, and presumably at a lesser cost. Such medicines will also help identify individuals prone to serious ailments like, diabetes, cardiovascular diseases and cancer and help physicians to take appropriate preventive measures, simultaneously. ‘Personalized medicines’ in that process will focus on what makes each patient so unique, instead of going by the generalities of a disease.

To give a quick example, genetic differences within individuals determine how their bodies react to drugs such as Warfarin, a blood thinner taken to prevent clotting. It is of utmost importance to get the dosing right, as more of the drug will cause bleeding and less of it will not have any therapeutic effect.

‘Personalized medicines’, therefore, have the potential to bring in a revolutionary change the way patients are offered treatment by the medical profession. Genomic research will enable physicians to use a patient’s genetic code to arrive at how each patient will respond to different types of treatments.

In the field of cancer, genetic tests are currently being done by many oncologists to determine which patients will be benefitted most, say by Herceptin, in the treatment of breast cancer.

What is then the aim of ‘Personalized Medicines’?

The aim of ‘personalized medicines’ is to make a perfect fit between the drug and the patient.
It is worth noting that genotyping is currently not a part of clinically accepted routine. However, it is expected to acquire this status in the western world, by 2010.

Expected benefits from ‘Personalized Medicines’:

1. More Accurate dosing: Instead of dose being decided based on age and body weight of the patients, the physicians may decide and adjust the dose of the medicines based on the genetic profiling of the patients.

2. More Targeted Drugs: It will be possible for the pharmaceutical companies to develop and market drugs for patients with specific genetic profiles. In that process, a drug needs to be tested only on those who are likely to derive benefits from it. This in turn will be able to effectively tailor clinical trials, expediting the process of market launch of these drugs.

3. Improved Health care: ‘Personalized Medicines’ will enable the physicians to prescribe ‘the right dose of the right medicine the first time for everyone’. This would give rise to much better overall healthcare.

Role of Pharmaceutical and Biotech companies:

Many research based pharmaceutical and biotechnology companies have taken a leading role towards development of ‘personalized medicines’ in line with their key role as healthcare enterprises. India is also taking keen interest in this science.

Some important issues:

However, there are some ethical and social issues in the development of ‘personalized medicines’ primarily in the area of genetic testing and consideration of race in the development of such medicines, which need to be effectively addressed, sooner.

Can it replace the‘Blockbuster Drugs’ business model?

Realization of deficiencies in the economics of ‘block buster drugs’ R&D business model, has made ‘personalized medicines’ a reality today.

Improved efficacy and safety of treatment with ‘personalized medicines’ will prove to be cost-effective in healthcare systems. Smaller and exclusive markets for ‘personalized medicines’ are expected to be profitable for the pharmaceutical companies. But such smaller segmentation of the market may not leave enough space for the conventional ‘blockbuster model’, which is the prime mover of the global pharmaceutical industry, today.

Reports indicate that some renowned global pharmaceutical companies like, Roche, AstraZeneca, GlaxoSmithKline are making good progress towards this direction through collaborative initiatives.

Approximate cost of ‘Genome Sequencing’:

When human genome was first sequenced, the reported cost was staggering U.S$ 3 billion. However, with the advancement of technology, it came down to U.S$ 1 million, last year. Currently, the cost has further come down to U.S$ 60,000. With the rapid stride made in the field of biotechnology, combined with the economies of scale, cost of such genetic tests is expected to be around U.S$ 1,000 in near future, making it possible for people to obtain the blue print of their genetic code.

Savings on cost of Clinical trials with ‘Personalized Medicines’:

Genome sequencing will help identifying a patient population, which will be far more likely to respond positively to the new treatment. In that process, if it reduces costs of clinical trial by even 5%, expected net savings for the industry towards clinical trial have been reported to be around U.S$ 5 billion.

With ‘personalized medicines’ the innovator companies will be able to significantly reduce both time, costs and the risks involved in obtaining regulatory approvals and penetrating new markets with simultaneous development of necessary diagnostic tests. Such tests will be able to identify patients group who will not only be most likely to be benefitted from such medicines, but also will be least likely to suffer from adverse drug reactions.

Therefore, considerable cost advantages coupled with much lesser risks of failure and significant reduction in the lead time for clinical trials are expected to make ‘personalized medicines’ much more cost effective, compared to conventional ‘blockbuster drugs’.

Innovative and cost effective way to market ‘Personalized Medicines’:

With ‘personalized medicines’ the ball game of marketing pharmaceuticals is expected to undergo a paradigm shift. Roche’s model of combining necessary diagnostic tests with new drugs will play a very important role in the new paradigm.

Roche is ensuring that with accompanying required diagnostic tests, the new oncology products developed at Genentech can be precisely matched to patients.

Can ‘Personalized Medicines’ be used in ‘Primary Care’ also?

To use ‘personalized medicines’ in a ‘primary care’ situation, currently there is no successful model. However, it has been reported that in states like, Wisconsin in the U.S, initiative to integrate genomic medicines with ‘primary care’ has already been undertaken. Scaling-up operations of such pilot projects will give a big boost to revolutionize the use of ‘personalized medicines’ for precision and targeted treatment of the ailing population.

In my view, there does not seem to be any possibility of looking back now. The robust business model of ‘personalized medicines’, is now the way forward, as much for the industry as for the patients. It is a win-win game.

By Tapan Ray

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

Recent appetite of Global Pharmaceutical Majors for Generic Pharmaceutical Business: can it pose a threat to pure generic players?

Posted on by
Reply
Last year Lehman Brothers estimated that by 2012 over 25% of the global pharmaceutical market will face competition from generics. Higher demand of generics is mainly due to the following reasons:1. Increased number of patented drugs is going off-patent.2. Cost containment and pricing pressure, especially from the Government, in the developed markets of the world.

3. Increasing number of patents is being challenged, especially in the U.S courts, on the ground of “obviousness”.

“Obviousness” is becoming a key reason of patent challenges in the U.S:

In first quarter of the last year we read about the U.S trial court making void the key patent of Yasmin, the contraceptive drug of Bayer for ‘obviousness’. This incident had compelled Bayer to revise its profit forecast downwards, for 2008.

‘Obviousness’ is increasingly becoming one of the key reasons for challenging Patents in many countries of the world, including India. Financial Times reported recently that keeping protection to all patents intact, could eventually pose to be a key challenge for the R&D based global pharmaceutical companies. Many analysts feel that the issue of “obviousness” could indeed be a threat to many U.S pharmaceutical patents, especially those, which will be considered by the court just as a ‘tweaked-up’ version of existing drugs.

As reported by ‘Chemical Weekly’, March 2008, total 338 patent challenges were recorded globally in 2008. India ranks only next to USA with a share of 21% pharmaceutical patent challenges.

Global generic pharmaceutical market is growing at a faster pace:

Prescription market in the U.S grew by just 1.3% last year to U.S$291 billion. Key factors believed to be responsible for slower growth in the U.S market are as follows:

1. Higher prescriptions for less expensive generic medicines.

2. Lower sales of higher priced new products.

3. Economic downturn has made more patients to move to generics and large number of consumers to lose their health insurance.

Similarly in the United Kingdom (U.K) generics industry supplies 64% of medicines dispensed by the National Health Scheme (NHS), though they contribute just around 30% of NHS expenditure towards medicines.

Recent reports indicate that the generic global pharmaceutical market is expected to record a turnover of U.S$ 520 billion by 2012. This market size is too lucrative to ignore by any big global pharmaceutical player.

Based on sales turnover of 2007, Teva tops the list of global generic players with a turnover of U.S$ 9.1 billion, followed by Sandoz with U.S$ 5.8 billion and Mylan/Merck with U.S$ 4.6 billion.

From India, Ranbaxy registered a turnover of U.S$ 1.7 billion, Dr.Reddy’s U.S$ 1.4 billion, Cipla U.S$ 1 billion and Sun Pharma/Taro U.S$ 900 million, during that year.

48% of the total 422.6 million prescriptions written in Canada in 2007 were for generic medicines, which registered an annual growth of 14%, reports IMS Canada. Compared to this performance, branded products in Canada recorded a growth of meager 0.2%, during this period. As a consequence, generic Canadian pharmaceutical companies like Novopharm (Teva) and Apotex recorded impressive growth of 46.8% and 18.5%, respectively, in that period.

Despite such outstanding performance of generic pharmaceuticals, overall growth of prescription drugs in Canada was at just 6.3%, the lowest in the last ten year period.

President Obama’s Healthcare Policy will encourage generics and biosimilar drugs:

It is widely believed that the new U.S administration under President Barak Obama will try to encourage speedy introduction of generics into the U.S market.

So far as ‘Biosimilar’ drugs are concerned, in 2009 Obama administration is expected to work out the road map to facilitate the introduction of ‘Biosimilar dugs’ in the U.S market. Due to inherent characteristics that biological are ‘grown and not just manufactured’, biosimilar drugs are not expected to be replica of the original products.

To find out a solution to the heated debate, an answer has to be found out regarding the extent of clinical trials that the ‘biosimilar’ manufacturers will require to undertake to satisfy the U.S FDA that these drugs are as safe as the original ones. It is believed by some that the answer to this question lies in the approach that gives regulatory authority the flexibility in ‘what it demands that asks for more evidence than is now required for generic drugs, but something less than the kind of full-blown trials required for products new to the market.’

Global pharmaceutical majors are developing appetite for generics business:

Keeping a close vigil on these developments, as it were, even Pfizer, the largest pharmaceutical player of the world, has started curving out a niche for itself in the global market of fast growing generics, following the footsteps of other large global players like Novartis, GlaxoSmithKline, Sanofi-Aventis and Daiichi Sankyo.

Is Pfizer planning to follow the business model of Abbott and Johnson & Johnson (J&J)?

As reported by the Wall Street Journal (WSJ), Mr. Kindler the CEO of Pfizer very recently commented, “We are breaking the company down into smaller units so we aren’t dependent on any single product… I am a great admirer of J&J and Abbott’s business model.”

It appears what Mr. Kindler perhaps meant by this statement is that smaller business units, like Over the Trade Counter (OTC), Vaccines, Nutrition and Animal Health can be more ‘manoeuvrable and innovative’ for faster business growth. Acquisition of Wyeth could actually help Pfizer to implement this business model.

Coming back to generic business, the recent collaborative arrangement of Pfizer with Aurobindo Pharma in India vindicates Pfizer’s recent appetite on generic global pharmaceutical business. The company is already in this business with some of its off patent products. But now like others, Pfizer seems to be strategizing to reap a rich harvest from fast-growing generic pharmaceutical business through most probably its “Established Products” business division.

Could such business model of Global Pharmaceutical majors pose a threat to pure generic players in the business?

The entry of the global pharmaceutical majors into generic pharmaceutical business, in my view, could pose a serious threat to current generic players in the business, including those who are operating from India in the ‘regulated markets’ of the world, for the the following reasons:

1. Generic pharmaceutical business is usually a high volume, relatively low margin and highly competitive business. To survive in this business of cut-throat competition will require both financial and innovative marketing expertise, as well as financial and marketing muscle, where large global players are expected to easily score over others.

2. Product price of generics of the same or similar molecules being within a price band, prescribers and payors’ preference are expected to be in favour of large global pharmaceuticals, because of corporate brand image.

3. In future, the pharmaceutical marketing model, in my view, is expected to shift from ‘marketing of only medicines’ to ‘marketing of a bundle of medicines and services’. In the changed scenario global pharmaceutical majors are expected to have a distinct strategic advantage.

4. Global Pharmaceutical majors may also use this business model as a ‘preventive strategy’ to restrict market entry of number of players for an off-patent molecule and thereby effectively contain the extent of price erosion, as the brands will go off-patent.

It will, therefore, be quite interesting to watch, what happens in the global generic pharmaceutical business in the next five to ten years. I expect a significant consolidation taking place in this market, both global and local.

By Tapan Ray

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

‘Jan Aushadhi’ – ‘Medicines for the common man’ project of DoP is a great idea – is it on course?

Posted on by
Reply
In mid 2008 The Government of India created a new department, ‘The Department of Pharmaceuticals’ (DoP), under the Ministry of Chemicals and Fertilisers. The new department came out with its following vision statement:“To enable Indian pharmaceuticals industry to play a leading role in the global market and to ensure abundant availability, at reasonable prices within the country, of good quality pharmaceuticals of mass consumption.”‘Jan Aushadhi’ – ‘Medicines for the common man’:

In this article, I shall submit my point of view on the second part of the above vision statement, which articulated the responsibility of the department to ensure availability of affordable modern medicine for ‘mass consumption’.

When over 70% of Indian population lives in rural areas, one can quite easily assume that such medicines will be available adequately in rural areas of the country, as well. Obviously the question that follows this admirable vision statement is how?

To respond to this question one will try to address the following two basic strategic issues:

1. Create a workable and viable business model, which can be gradually developed over a period
of time to deliver the promise

2. Create a robust supply chain network to ensure easy access of these medicines to the common
man, located even in remote rural areas.

The first part of the strategic issue has been well addressed by the DoP, within a very short period, by creating ‘Jan Aushadhi’, the medicines for the masses. Importantly, the second point, which will determine the success of the project, has not been clearly articulated.

The objectives of the ‘Jan Aushadhi’ were stated as follows:

1. To promote awareness for cost effective quality generic medicines. (However, how exactly this will be done, is yet to be known.)

2. To make available unbranded affordable quality generic medicines through private public partnership (PPP). (I support this objective from procurement perspective. However, so far as the delivery of these medicines to the common man is concerned, I would argue below:why do we reinvent the wheel?)

3. To encourage doctors in the Government Hospitals to prescribe such cost effective quality
generic medicines. (This is again just a statement of intent without considering the critical issue of its implementation in the predominantly branded generic market, like India.)

4. To help patients save significantly towards medicine cost with ‘Jan Aushadhi’ outlets.

5. A national help line is believed to be able to increase awareness level of this initiative.

The statements of intent of the DoP also highlight that the State Governments, NGOs and Charitable bodies will be encouraged to set up such generic medicine shops. It also states that the existing outlets of the Government and NGOs may also be used for this cause.

This particular decision of DoP, as I stated before, appears to be an attempt to ‘re-invent the wheel’, as it were. I shall argue on this subject, very shortly.

An open ended launch plan with inadequate market penetration compared to set objectives:

DoP announced that this scheme will be launched gradually in all the districts of India in four phases. However, for some unknown reasons, besides phase one and two, the other two phases of the launch plan have been kept by the department, as open ended as it could be, despite the Government of India’s having all wherewithals to implement this scheme with a reasonable degree of preciseness.

The four phases were decided as follows:

1. Phase 1: Amritsar Civil Hospital in November 8, 2008

2. Phase 2: Few stores in Delhi, National Capital Region (NCR), district hospitals in Mohali,
Ludhiana, Bhatinda and Jalandhar by February 28, 2009

3. Phase 3: Other districts of Punjab and some other states to be covered during 2009 and
2010

4. Phase 4: Remaining districts of the country by 2010 and 2012

I am not surprised that with such vague launch plan and an open ended timeline, the Government seems to have faltered in Phase 2 itself, when it could not go beyond Amritsar and Shastri Bhavan, Delhi outlets, by February, 28, 2009.

Arguing for the need of a course correction:

Despite being a hardcore optimist, I now get a vague feeling that the ‘Jan Aushadhi’ scheme of the DoP may not ultimately be able to achieve its cherished goals and may remain just as another good intention of the Government of India, if a course correction is not made at this stage.

The key barrier to improve access to affordable quality generic medicine to the common man, in this particular case, is not conceptualization of a project. We all know that our Government is reasonably good at it, with a good number of brilliant minds working to give a shape to it. The main weakness to translate this laudable idea into reality, in my view, falls well within the general weakness of the Government in visualizing the key barriers to the project and at the same time missing out on some of the key drivers for the same.

In this case, there seems to be some flaw in the ‘ideation’ stage of the project, as well. This flaw lies with the plan of its delivery mechanism involving state government, NGOs and various other bodies.

If procurement of cost effective quality generic medicines is not an issue, then the DoP should carefully look within the Government system to ensure easy access of such medicines to the common man.

Two grossly underutilized Government controlled ‘mass delivery systems’:

The Government of India has two very unique product distribution and delivery systems within the country with deep penetration from metro cities to even far off rural areas. These two Government owned supply and delivery chains are as follows:

1. Public Distribution System (PDS) for food grains and other essential commodities (Ration shops).

2. Indian Post Offices

Like food grains, medicines are also essential items. Why then DoP not collaborate with PDS to ensure easy access of such medicines to the common man?

Similarly, when postal department are collaborating with various other agencies to sell and distribute many types of products in rural areas, why not DoP consider this alternative, as well?

In fact, I would strongly recommend usage of both PDS and Post Offices by the DoP for deeper penetration of such medicines especially for the benefit of those 650 million people of India who do not have any access to affordable modern medicines.

I am aware, the question of ‘in-efficiency’ of these systems may be raised by many in India. However, at the end of the day who is responsible to make these systems efficient? People responsible for managing a system or process are usually held accountable for its ‘efficiency’ or ‘inefficiency’.

We have many excellent minds in the DoP, I hope, they may wish to explore the possibility of effectively utilizing these two already available state controlled mass distribution systems to ensure success of the project “Jan Ausadhi” – “Medicines for the common man”.

It is worth noting that this project seems to have already started limping with its vague execution plan and a delivery system, the scaling up of which to ensure access to one billion population of our country could be a serious question mark.

By Tapan Ray

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

National Rural Health Mission (NRHM), a much hyped public healthcare initiative – has it delivered since its inception in 2005?

Posted on by
Reply

National Rural Health Mission (NRHM), a very ambitious and noble initiative for the rural population of India was launched by the Government of India on April 12, 2005. The interim budget allocation of NRHM for the year 2009–10 has been increased to Rs. 12,070 crore. The primary purpose of NRHM, as announced by the Government, was to improve access to quality healthcare for the poor population of 18 states, to start with, of rural India.

Along with such a commendable initiative, the Government declared an increase in its spending towards public health from mere 0.9% to 2–3% of the GDP over a five year period. This decision was in line with the well articulated prime focus of the Government on public health and education.

During the launch of NRHM, the Health Minister of India announced that the nation would see the results of these efforts in three years time.

Three years are over now. Let us, therefore, have a look at the key achievement areas of this ambitious scheme for the budget year 2008-09, as announced by the Finance Minister recently in his interim budget speech for 2009–10.

The performance areas were highlighted as follows:

• 462,000 Associated Social Health Activists were trained
• 177,924 villages have sanitation committees functional
• 323 district hospitals have been taken for up gradation

Against such a soft performance parameters of the Government, let us see some hard facts, which are real indicators of performance of NRHM. A report on the recent study done by Chronic Care Foundation indicates that in India about 86% of highly populated rural districts still do not have provisions for basic diagnostic tests for chronic ailments.

The study also highlights that in rural areas, as a percentage of total expenses, out of pocket healthcare costs are more than the urban areas, with hospitalization expenses contributing the most to the total costs. In many rural areas the healthcare costs have been reported to be as high as around 80% of the total expenses. Such a high out of pocket expenses have mainly been attributed to the lack of facilities in these rural areas, requiring patients to travel to distant areas for medical treatment. It was also reported that even in rural areas due to inefficient and inadequate services at the Government healthcare units, there has been a very high dependence on more expensive private healthcare facilities.

After almost four years from the inception of NRHM, if this is the state of affairs for rural public healthcare, the obvious questions which come to my mind are as follows:

• Where is the huge money allocated for NRHM going?
• Who is or are accountable for such a poor performance of this great scheme?

In my opinion, to make NRHM work satisfactorily the Government should outline, decide and announce the key success parameters for performance evaluation of the scheme. This is to be done disclosing the names and designations of the responsible senior Government officials who will be held accountable for the success or failure to deliver the deliverables. All these details should be uploaded on to the website of the Ministry of Health for public scrutiny, at least half yearly. With tax-payers money being utilised for this important and critical public health arena, no non-performance should escape attention and go unpunished.

Moreover, with the help of experts, the Government should decide, which elements of each identified success parameters the Government will be able to deliver better with its own internal resources and which are those areas where the Government should outsource.

Such an approach when worked out in great details will be able to ensure whether through NHRM the country is making progress to improve access to quality healthcare for a vast majority of its rural population. Otherwise this scheme may well be treated just as one of those which failed to deliver and vanished in the oblivion.

By Tapan Ray

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