Tag Archives: Malpractices

India’s Pharma Marketing Code (UCPMP): Is It Crafted Well Enough To Deliver The Deliverables?

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On December 12, 2014, the Department of Pharmaceuticals (DoP) of the Government of India announced details of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, which would be effective across the country from January 1, 2015.

Just to recapitulate, the DoP came out with a draft UCPMP on March 19, 2012, inviting stakeholders’ comments. Immediately thereafter, the officials at the highest level of the department held several discussions on that draft with the constituents of the pharmaceutical industry, Ministry of Health, Medical Council of India (MCI), besides other stakeholders. Unfortunately, no decision on the subject was taken for nearly three years since then, probably due to intense lobbying by interested constituents.

It is heartening to witness now that the new government, within six months of coming into the office, has ensured that the long awaited UCPMP sees the light of the day. The Dos and Don’ts of the Code for the pharma industry appear to be a replica of the same that the Medical Council of India (MCI) had announced for the doctors, several years ago.

Though UCPMP is not a panacea for all malpractices in the pharma industry, with this announcement, the government at least has sent a clear signal to errant pharma players to shape up, soon. The Government’s action on the subject is also laudable from the good governance perspective, as the codes are quite appropriate to uphold public health interest.

Having acknowledged that unambiguously, I would deliberate in this article why, in my opinion, not much thought has gone to ensure effective implementation of the UCPMP, where subjectivity and vagueness prevail. Moreover, the absence of strong deterrent measures in the document may seriously impede its impact. I shall also briefly touch upon whether self-regulation in pharma marketing practices has worked or not on the ground, globally.

Before I do that, a quick recapitulation of the relevant background, I reckon, would be meaningful.

What necessitated regulation in pharma marketing?

Pro-active role of the pharmaceutical industry in the fight against diseases of all kinds and severity is absolutely critical for any nation.

As happens in most other industries, the ultimate economic performance of a pharma player too predominantly depends on how productive are its sales and marketing activities. In a situation like this, the current ‘free for all model’ of pharma sales and marketing, where end results dominate the means adopted, usually places the profit earning objectives much ahead of public health interest. As result, higher priced medicines are prescribed more, even where their lower price equivalents of similar quality standards are available, besides over or unnecessary prescribing of drugs.

Dubious models are springing up at regular intervals, aiming at achieving all-important objective of generation of more and more prescriptions, which differentiate men from the boys in the pharma marketing warfare.

It is widely alleged that public perceptions are also craftily created on the quality of medicines. All branded generic drugs, including those manufactured by little known companies, are made to perceive better than their cheaper non-branded equivalents, even if coming from better-known and reputed manufacturers. Such industry created perceptions, cleverly channelized through some doctors with vested interests, enhance the drug treatment costs for the patients, significantly.

Other modes of gratifications under different guises also put significant number of doctors in a dilemma between cost effective prescription requirements of the patients and commercial expectations of the pharma players.

To meet with this challenge, the World Health Organization (WHO) in its publication, ‘Pharmaceutical Legislation and Regulation’, clearly articulated that realistic and effective laws and regulations are needed for the pharmaceutical sector, where informal controls are insufficient. This is mainly because of the following two factors:

  • Medicines concern the whole population
  • The consumer has no way to choose the drug and its price

The new government acts:

Irrespective of whatever had happened in the past, no government with a reasonable agenda of ‘Good Governance’ can afford to ignore the conflict of interests of such kind and magnitude between the doctors and patients.

Hence, comes the importance of uniform codes of pharma marketing practices that can be carefully monitored, thoroughly implementable and measured with transparent yardsticks.

As the World Medical Association states, the key ethical basis for any such code is the understanding that the values of clinical care, of the welfare of society and of science should prevail over commercial imperatives and monetary concerns.

In one of my earlier blog posts of July 07, 2014 titled,“Kickbacks And Bribes Oil Every Part of India’s healthcare Machinery” – A National Shame, I deliberated on similar issues.

Vagueness in measuring delivery of the deliverables:

Let me now get back to the UCPMP. As mentioned in the draft proposal of 2012, after six months from the date of its coming into effect, the government would review the quality of implementation of the UCPMP by the pharma players and their trade associations. If the same is found unsatisfactory, the DoP may consider a statutory code, thereafter.

Interestingly, nothing has been mentioned in the UCPMP document about the process that would be followed by the government to assess the quality of implementation of the Code after six months prompting the DoP to take a very crucial decision, either way.

Vagueness in monitoring UCPMP:

The UCPMP of the DoP states, the Managing Director/CEO of the company is ultimately responsible for ensuring the adherence to the code and the executive head of the company should submit a self-declaration within two months from the date of issue of UCPMP. Thereafter, within two months of the end of every financial year, the declaration needs to be submitted to the respective industry associations for uploading those on the Associations’ websites. These declarations must also be uploaded on the website of the respective companies.

As we know, there are several thousands of pharma marketing players in India. Many of these players, especially those in the micro and small-scale sectors, including their trade associations, do not maintain websites either. Thus, it would be interesting to know how does the DoP monitor such declarations bi-monthly in the six months’ time, to start with.

Lack of strong deterrents and cumbersome process:

There are no strong deterrent measures in the UCPMP to minimize flouting of the code, nor would the complaint filing process encourage any victim with relevant details, such as patients, to lodge a complaint after paying non-refundable Rs.1, 000. It is beyond an iota of doubt that patients are the ultimate victims of most of sales and marketing malpractices by the pharma players.

Moreover, this non-refundable money would ultimately go to whom and how would it be used are still unclear.

Self-regulation in pharma marketing has hardly worked anywhere:

Many international pharmaceutical trade associations, which are primarily the lobbying bodies, are the strong votaries of self-regulations by the industry. They have also created many documents in this regard, which are also displayed in their respective websites.

However, despite all these show pieces, the ground reality is that, the well-hyped self-regulation by the industry to stop the menace of pharma marketing malpractices is not working, anywhere.

As I indicated earlier, the following are a few recent examples of just the last two years to help fathom the enormity of the problem and also to vindicate the point made above:

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing of overseas doctors and other health officials to prescribe medicines.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.

A survey on UCPMP:

A survey report of Ernst and Young titled, “Pharmaceutical marketing: ethical and responsible conduct”, carried out in September 2011 on the UCMP and MCI guidelines, highlighted some of the following points:

  • More than 50 percent of the respondents are of the opinion that the UCPMP may lead to manipulation in recording of actual sampling activity.
  • Over 50 percent of the respondents indicated that the effectiveness of the code would be very low in the absence of legislative support provided to the UCPMP committee.
  • 90 percent of the respondents felt that pharma companies in India should focus on building a robust internal controls system to ensure compliance with the UCPMP.
  • 72 percent of the respondents felt that the MCI was not stringently enforcing its medical ethics guidelines.
  • Just 36 percent of the respondents felt that the MCI’s guidelines would have an impact on the overall sales of pharma companies.

Disclosure norms necessary:

It is interesting to note that many countries have started acting in this area enforcing various regulatory disclosure norms. Some examples are as follows:

USA:

The justice department of the U.S has reportedly wrung huge settlements from many large companies over allegedly unholy nexus between the doctors and the pharmaceutical players.

To address this issue, on February 1, 2013 the Department of Health and Human Services (HHS) of the United States released the final rules of implementation of the ‘Patient Protection and Affordable Care Act (PPACA)’, which is commonly known as the “Physician Payment Sunshine Act” or just the “Sunshine Act”.

This Act has been a part of President Obama’s healthcare reform requiring transparency in direct or indirect financial transactions between the American pharmaceutical industry and the doctors and was passed in 2010 by the US Congress as part of the PPACA.

The Sunshine Act requires public disclosure of all financial transactions and transfers of value between manufacturers of pharmaceutical / biologic products or medical devices and physicians, hospitals and covered recipients. The Act also requires disclosure on research fees and doctors’ investment interests.

These disclosure reports are available on a public database effective September 30th, 2014.

France:

In December 2011, France adopted legislation, which is quite similar to the ‘Sunshine Act’. This Act requires the health product companies like, pharmaceutical, medical device and medical supply manufacturers, among others to mandatorily disclose any contract entered with entities like, health care professionals, hospitals, patient associations, medical students, nonprofit associations, companies with media services or companies providing advice regarding health products.

Netherlands:

On January 1, 2012, Netherlands enforced the ‘Code of Conduct on Transparency of Financial Relations’. This requires the pharmaceutical companies to disclose specified payments made to health care professionals or institutions in excess of € 500 in total through a centralized “transparency register” within three months after the end of every calendar year.

UK:

Pharmaceutical companies in the UK are planning voluntary disclosures of such payments. One can expect enforcement of such laws in the entire European Union, soon.

Australia and Slovakia:

Similar requirements also exist in Australia and Slovakia.

Japan:

In Japan, the Japan Pharmaceutical Manufacturers Association (JPMA) reportedly requires their member companies to disclose certain payments to health care professionals and medical institutions on their websites, starting from 2013.

So, why not enforce such disclosure norms in India too?

Conclusion:

December 12, 2014 announcement of the UCPMP in its self-regulatory mode sends a message of good intent of the government to curb pharma marketing malpractices in India, which are threats to the society.

However, I reckon, the document is rather weak in its effective implementation potential. Meaningful and transparent deterrent measures to uphold public health interest are also lacking. The entire process also deserves a well-structured monitoring mechanism and digital implementation tools that can be operated with military precision.

It also raises a key question – Is this UCPMP good enough, especially after witnessing that self-regulation in pharma marketing practices is not working in most countries of the world?

In that sense, would the UCPMP, in its current avatar, with weak enforcement potential, shorn of enough deterrent against violations and commensurate sanctions, be able to deliver the requisite deliverables?

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.

Pharma And Healthcare: Mounting ‘Trust Deficit’ In Post Halcyon Days

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Although a radical transformation in the field of medicine and path breaking advances of medical sciences are in progress, the healthcare system as whole, including the pharma industry, as voiced by many, is fast losing its human touch and values. This is mainly because a large number of patients feel that they are being financially exploited in the entire medical treatment chain, as their ailments become primary means of making money…more money by many others .

A new and interesting book, authored by a practicing cardiologist, titled “Doctored: The Disillusionment of an American Physician”, which has just been released in August 2014, also unfolds with self-example a dysfunctional healthcare system and stark realities of practicing medicine even in the ‘Mecca’ of medicine – the United states.

The author eloquently highlights the malaise and cronyism affecting a sizeable number within the medical profession, being hand in gloves with a large constituents of the pharma industry. Medical practice seems to have now become just as any other ‘make-money’ endeavor; not quite different from what the pharma business has metamorphosed into, over a period of time.

A heartless game played by shrewd minds:

In a situation like this, a heartless game is being played by shrewd business savvy minds, at the cost of patients, making healthcare frightfully expensive to many.

As the above new book narrates, many pharmaceutical companies are coming to the fore to exploit the situation for commercial gain. In the book the author confesses, to make extra cash, he too accepts speaking fees from a pharmaceutical company that makes a cardiac drug he prescribes. He candidly admits enjoying the paid speeches on that specific pharma company’s drugs to influence other doctors, usually arranged at exotic places over fancy dinners. The author does not fail in his part to admit that the drug he touts on behalf of the pharma company turns out to be no better than other cheaper alternatives.

In this beautifully written memoir, the author Dr. Sundeep Jauhar tries to bring to light many complex problems of the healthcare system and alleged involvement of global pharma companies to drive the medical treatment costs up at a galloping pace. All these are being driven by various malpractices in pursuit of making quick bucks.

There are some compelling health policy, public spending on health and infrastructure related issues too, specifically for India, which are not the subject of my today’s discussion.

In this article, I shall neither dwell on the above book any further, but briefly deliberate on how all these, much too often repeated instances, are giving rise to mounting ‘Trust Deficit’ of the stakeholders, involving both the pharma industry and the medical profession at large and yet, quite intriguingly, they seem to remain unbothered.

The Halcyon days and after:

When we take a glimpse into the recent history of pharma and healthcare industry, it would be quite possible to convince ourselves that the overall situation, focus and mindset of the drug industry honchos and members of the medical profession were quite different, even a few decades ago. Those were the ‘Halcyon Days’.

At that time, pharmaceutical industry used to be one of the most admired industries of the world and people used to place the doctors almost in the pedestal of God.

Unlike today, when the drugs meant for the treatment of even widely prevalent dreaded diseases, such as, Cancer, Hepatitis C and HIV are not spared from maximum stretch pricing, the grand vision of the Global Chief Executives, in general, used to extend much beyond of just making profits. So were the doctors christened by the Hippocratic Oath. Yes, I repeat, those were the ‘Halcyon Days’.

Just to cite an example, in 1952, George Wilhelm Herman Emanuel Merck, the then President of Merck & Co was quoted on the front cover of the ‘Time Magazine’, epitomizing his following vision for the company:

“Medicine is for people, not for the profits”.

Having articulated this vision with so much of passion and clarity, Merck did not just walk the talk, in tandem, he steered an up swing in the company’s valuation over 50 times, proving beyond an iota of doubt that it is possible to give shape to his vision, if there is a will.

Today, in post ‘Halcyon Days’, for many of those who follow the history and development of the knowledge driven pharma and healthcare industry, this grand vision is no more than a sweet memory. Though the bedrock of pharma industry is innovation, is it inclusive? Is it benefitting the majority of the global population? No one believes now that “Medicine is for people, not for the profits”.

Thus, it was no surprise to many, when in 2012 while vocalizing its anguish on specific pharma mega malpractices ‘The Guardian’ came out with a lashing headline that reads as follows:

‘Pharma Overtakes Arms Industry To Top The League Of Misbehavior.’

Ignoring the reality:

Many people believe that all these are happening, as the global pharma industry refuses to come out of its nearly absurd arrogance created by spectacular business successes, over a very long period of time, with a large number of blockbuster drugs and the massive wealth thus created.

It appears, the pharma industry, by and large, cannot fathom just yet that its business model of 1950 to perhaps 1990, has lost much of relevance at the turn of the new millennium with changing aspirations and values of people, governments and the civil society at large.

Key reasons of distrust:

If we make a list from the global and local reports, the following are some of the key examples:

  • Media reports on pharmaceutical companies directly paying to doctors for writing prescriptions of high priced drugs to patients.
  • A growing belief that the pharma industry spends disproportionately more on sales & marketing than on R&D, which eventually increases the drug prices.
  • Unabated reports in the media of various pharma malpractices from across the world, including hefty fines amounting to billions of dollars, paid by many global pharma players.
  • A widespread belief that for commercial gain, the industry often hides negative clinical trial results, which go against patients’ health interest.

A recent survey:

According to a recent ‘Healthcheck Survey’ of the drug business by ‘Eye for Pharma’:

  • 42 percent of the respondents indicated that image of pharma is not getting any better among average people.
  • More than one-third said they are not sure or remained neutral on the subject.
  • 19 percent within the group are optimistic about improving image of pharma.

Though, it was reported that almost half of the respondents believe the industry knows what to do to gain standing and only 24 percent think pharma is clueless about how to regain its reputation, the commentators on the survey results are skeptical that companies are willing to do what it takes. This is predominantly because the pharma players do not know what would be the immediate financial impact, if the corrective measures were taken.

2014 developments in India:

In August 2014, a premier television news channel of India – NDTV exposed some blatant violations of medical guidelines involving both the doctors and the pharmaceutical companies in the country. The crew of NDTV carried out a sting operation (video), pretending to be medical representatives of a Delhi based new pharma company. The video clipping showed three doctors resorting to malpractices for which the pharma companies pay them heavily, though illegally.

This particular sting operation by NDTV could arrest the attention of the new Union Minister of Health Dr. Harsh Vardhan, whose reaction on tweeter was:

“One more sting operation on doctors exposing greed and readiness to shed professional ethics. I again appeal to brother doctors – show spine!”

Based on this public expose, the Medical Council of India (MCI), which is supposed to serve as the watchdog for doctors and overall medical practices, was compelled to conduct an enquiry on professional misconduct against those three doctors through its Ethics Committee. MCI has the power to cancel licenses of the erring medical practitioners.

Soon thereafter, one of the three Delhi doctors, who were caught on camera taking bribes in exchange of prescribing drugs, was reportedly arrested and the other two doctors were summoned by MCI for further investigation.

Just before this incident an article published in the well-reputed British Medical Journal (BMJ) on 08 May 2014 highlighted, “Corruption ruins the doctor-patient relationship in India”. The author David Berger wrote, “Kickbacks and bribes oil every part of the country’s healthcare machinery and if India’s authorities cannot make improvements, international agencies should act.”

I deliberated a part of this issue in one of my earlier blog posts titled “Kickbacks And Bribes Oil Every Part of India’s Healthcare Machinery”.

Interestingly, a couple of months earlier to this BMJ report, the Competition Commission of India (CCI) issued notices for various illegal practices in the pharma industry. These notices were served, among others, to pharma industry associations, chemists associations, including individual chemists & druggists, stockists, wholesalers and even to some local and global pharma majors.

In February 2014, the CCI reportedly issued a warning of severe penalties and prosecution to various bodies in the pharmaceutical industry indulging in anti-competitive practices even after giving undertakings of stopping the illegal practices, for which they were summoned for deposition before the commission earlier.

The CCI has now called upon the public through a public notice to approach it for curbing the malpractices that amount to anti-competitive in nature, adversely impacting interests of the consumer.

I reckon, all these actions are fine, but the bottom-line is, pharma and healthcare malpractices still continue unabated at the cost of patients, despite all these. Unable to garner adequate resources to pay for the high cost of treatment, which is fuelled by virtually out of control systemic malfunctioning, the families of a large number of patients are reportedly embracing abject poverty each year.

Pharma and healthcare continue to remain unbothered:

It is also not surprising that despite global uproar and all these socio-commercial issues, including pressure on drug prices, pharma and healthcare continue to march on the growth path, without any dent in their business performance particularly on this count.

Just to give an example, Moody Investor Services have highlighted just last week that India’s pharmaceutical market is set to experience continuing double-digit growth, faster than most other markets of the industry.

Lack of significant financial impact on the overall business performance on account of the alleged misconducts, barring USFDA imports bans, further reduces the possibility of a sense urgency for a speedy image makeover of the industry by doing the right things, in an organized manner.

The reason behind this inertia is also understandable, as expenditure on healthcare is not discretionary for the patients. To save lives of the near and dear ones, almost everybody, irrespective of financial status, try to garner resources to the maximum possible, whatever it costs.

Urgent remedial measures necessary:

Effective remedial measures to allay public distrust in all the above areas, in tandem with working out well-networked and inclusive innovation models, I reckon, would prove to be more meaningful today. This would facilitate not just in increasing the market access, but also for cost-effective innovation of new products leveraging the complex science of evolving biology. Let me reiterate, all these should be woven around the center piece of patients’ interest, without an exception.

I hasten to add here that some green shoots in this area have already started becoming visible, as some global industry constituents, though small in number, are articulating their new vision and the uncharted path that they intend to follow. Keeping a tab on the speed of spread of these green shoots would be important.

It is really a matter of conjecture now, whether the visible green shoots, as seen today would perish or not over a period of time. Nonetheless, that possibility is always there, if the concerned companies decide afresh that the efforts required for a long haul are not sustainable due to intense short-term performance pressure. Hence, it is not worth the financial risk taking.

In that scenario, they would continue with their existing business model of achieving the financial goals by selling the high priced medicines to the privileged few of the rich countries and to affluent people living in the other parts of the world, depriving millions of patients who desperately need those drugs, but are unable to afford.

Conclusion: 

Alleged malpractices in pharma and healthcare business operations, might not have hit any of the constituents really hard in financial terms just yet. However, the humongous ‘Trust Deficit’ of stakeholders, including the government, is gradually compelling them to face tougher resistance in operating the key business levers. Such resistance is increasingly coming in drug pricing, clinical trial requirements and related disclosure, marketing practices and even in the arena of Intellectual Property Rights (IPR).

On the part of the government, it is important to realize that self-regulations of various business and marketing practices have miserably failed in India for the pharmaceutical industry, just as it has failed in many other parts of the world, self-serving hypes often created by the global pharma associations in this regard notwithstanding. Besides the China saga and other reported scandals, billions of dollars of fines levied to the global pharma players, since last so many years, for a large number of malpractices would vindicate this point. It is worth noting that even these hefty fines are pittance, as compared to mind-boggling profits that these companies make on patented drugs with the adopted means. Hence, many of them would possibly feel that this risk is worth taking.  Similarly, lackadaisical implementation of MCI guidelines for the medical profession brings shame to the country, as evidenced by the article in the BMJ.

As self-regulation by the industry has proved to be nothing more than an utopia, it is about time for the new government to come out with strict, yet transparent and fair regulation, ensuring its effective implementation, to kill all these malpractices, once and for all, writing an apt epitaph to draw the final curtain to this chronicle.

That said, conscious efforts towards a mindset-changing approach for inclusive progress and growth by majority of pharma players and a sizeable number within the medical profession, would surely help reducing the ‘Trust Deficit’ of the stakeholders.

This much desirable transformation, if materializes, would enable both the pharma and healthcare industry to retrieve, at least, a part of the past glory. The constituents of the industry undoubtedly deserve it, just for the very nature of business they are engaged in.

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.

 

Is Credibility Erosion of Pharma Accelerating?

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‘Big Pharma’ now seems to be desperately trying to gain the long lost high moral ground by pushing  hard its gigantic image makeover juggernaut, maintaining a strong pitch on the relevance of stringent Intellectual Property Rights (IPR) in the lives of the patients. However, even more alert media, by reporting a number of unethical and fraudulent activities of some of its constituents on the ground, is taking much of the steam out of it. As a result, the pace of erosion of all important pharma credibility is fast accelerating.

Innovation – A critical need for any science-based business:

Innovation, which eventually leads to the issue of IPR, is generally regarded as extremely important to meet the unmet needs of patients in the battle against diseases of all types, especially the dreaded ones. Thus, it has always been considered as the bedrock of the global pharmaceutical industry. As we all know, even the cheaper generic drugs originate from off-patent innovative medicines.

At the same time, it is equally important to realize that just as the pharmaceutical or life-science businesses, innovation is critical for any other science based businesses too, such as IT, Automobile, Aviation, besides many others. Since many centuries, even when there were no ‘Patents Act’ anywhere in the world, leave aside robust ones, pharmaceutical industry has been predominantly growing through innovation and will keep becoming larger and larger through the same process, acrimonious debate over stringent IPR regime not withstanding.

India has also amply demonstrated its belief that innovation needs to be encouraged and protected with a well-balanced Intellectual Property regime in the country, when it became a member of the World Trade Organization and a part of the TRIPS Agreement, as I had discussed in my earlier blog post.

Simultaneously, a recent research report is worth noting, as well. The study reveals, though the pharmaceutical companies in the United States, since mid 2000, have spent around US$ 50 billion every year to discover new drugs, they have very rarely been able to invent something, which can be called significant improvement over already existing ones. This is indeed a matter of great concern, just as a very ‘stringent IP regime’ prompts ‘evergreening’ of patents, adversely impacting the patients’ health interest.

Though innovation is much needed, obscene pricing of many patented drugs is limiting their access to majority of the world population. On top of that, business malpractices net of fines, wherever caught, are adding to the cost of medicines significantly.

Key reasons for acceleration of credibility erosion:

I reckon, following are the three main factors accelerating credibility erosion of pharma in general and Big Pharma in particular:

  1. Large scale reported business malpractices affecting patients’ health interest
  2. Very high prices of patented medicines in general, adversely impacting patients’ access and cost of treatment
  3. Attempts to influence IP laws of many countries for vested interests

1. Accelerating credibility erosion due to business malpractices:

In the pharmaceutical sector across the world, including India, the Marketing and Clinical Trial (CT) practices have still remained very contentious issues, despite many attempts of so called ‘self-regulation’ by the industry associations. Incessant complaints as reported by the media, judicial fines and settlements for fraudulent practices of some important pharma players leave no breather to anyone.

To illustrate the point, let me quote below a few recent examples:

Global:

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder. According to the Italian regulator Avastin costs up to 81 euros, against around 900 euros for Lucentis. Out of the total amount, Novartis would require to pay 92 million euros and Roche 90.5 million euros. Roche’s Genentech unit and Novartis had developed Lucentis. Roche markets the drug in the United States, while Novartis sells it in the rest of the world. Quoting the Italian regulator, the report says that the said practices cost Italy’s health system more than 45 million euros in 2012 alone, with possible future costs of more than 600 million euros a year.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges. An investigation of those former employees of Sanofi unearthed that they had made illicit payments to get more orders from pharma dealer.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines.
  • In July 2012, GlaxoSmithKline was reportedly fined US$ 3 bn in the United States after admitting to bribing doctors and encouraging the prescription of unsuitable antidepressants to children. According to the report, the company encouraged sales reps in the US to ‘mis-sell’ three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.
  • Not so long ago, after regulatory authorities in China cracked down on GlaxoSmithKline for allegedly bribing of US$490 million to Chinese doctors through travel agencies, whistleblower accusations reverberated spanning across several pharma MNCs, including Sanofi. The company reportedly paid ¥1.7 million (US$277,000) in bribes to 503 doctors around the country, forking over ¥80 to doctors each time a patient bought its products.

All these are not new phenomena. For example, In the area of Clinical Trial, an investigation by the German magazine Der Spiegel reportedly uncovered in May, 2013 that erstwhile international conglomerates such as Bayer, Hoechst (now belongs to Sanofi), Roche, Schering (now belongs to Bayer) and Sandoz (now belongs to Novartis) carried out more than 600 tests on over 50,000 patients, mostly without their knowledge, at hospitals and clinics in the former Communist state. The companies were said to have paid the regime the equivalent of €400,000 per test.

India:

Compared to the actions now being taken by the law enforcers overseas, India has shown a rather lackadaisical attitude in these areas, as on date. It is astonishing that unlike even China, no pharmaceutical company has been investigated thoroughly and hauled up by the government for alleged bribery and other serious allegations of corrupt practices.

However, frequent reporting by Indian media has now triggered a debate in the country on the subject. It has been reported that a related Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing in the near future. It is worth noting that in 2010, ‘The Parliamentary Standing Committee on Health’ also had expressed its deep concern by stating that the “evil practice” of inducement of doctors by the pharma companies is continuing unabated as the revised guidelines of the Medical Council of India (MCI) have no jurisdiction over the pharma industry. The Government, so far, has shown no active interest in this area, either.

In an article titled, “Healthcare industry is a rip-off”, published in a leading business daily of India, states as follows:

“Unethical drug promotion is an emerging threat for society. The Government provides few checks and balances on drug promotion.”

In the drug manufacturing quality area, USFDA and MHRA (UK) has recently announced a number of ‘Import Bans’ for drugs manufactured in some facilities of Ranbaxy and Wockhardt, as those medicines could compromise with the drug safety concerns of the patients in the US and UK. Even as recent as in late March 2014, the USFDA has reportedly issued a warning letter to another domestic drug maker USV Ltd on data integrity-related violations in good manufacturing practices occurred at the company’s Mumbai facility. This is indeed a cause of added concern.

Similarly, in the Clinical Trial area of India, responding to a PIL, the Supreme Court of the country and separately the Parliamentary Standing Committee also had indicted the drug regulator. The Committee in its report had even mentioned about a nexus existing between the drug regulator and the industry in this area.

2. Accelerating credibility erosion due to high patented drugs pricing:

On this subject, another March 2014 report brings to the fore the problems associated with access to affordable newer medicines, which goes far beyond India, covering even the wealthiest economies of the world.

The report re-emphasizes that the monthly costs of many cancer drugs now exceed US$ 10,000 to even US$ 30,000. Recently Gilead Sciences fixed the price of a breakthrough drug for hepatitis C at US$ 84,000 for a 12- week treatment, inviting the wrath of many, across the world.

Why is the drug price so important?

The issue of pricing of patented drugs is now a cause of concern even in the developed countries of the world, though the subject is more critical in India. According to a 2012 study of IMS Consulting Group, drugs are the biggest component of expenditure in the total Out Of Pocket (OOP) spend on healthcare, as follows:

Items Outpatient/Outside Hospital (%) Inpatient/Hospitalization (%)
Medicines 63 43
Consultation/Surgery - 23
Diagnostics 17 16
Minor surgeries 01 -
Private Consultation 14 -
Room Charge - 14
Others 05 04

Probably for the same reason, recently German legislators have reportedly voted to continue until the end of 2017 the price freeze on reimbursed drugs, which was introduced in August 2010 and originally set to expire at end of 2013.

However in India, only some sporadic measures, like the Drug Price Control Order (DPCO 2013) for essential drugs featuring in the National List of Essential Medicines (NLEM 2011), that covers just around 18 percent of the total domestic pharmaceutical market, have been taken. On top of this, unlike many other countries, there is no negotiation on price fixation for high cost patented drugs.

If caught, insignificant fine as compared to total profit accrued, has no impact:

Many stakeholders, therefore, question the business practices of especially those players who get exposed, as they are caught and fined by the judiciary and the regulatory authorities.

Do such companies prioritize high profits ahead of patients’ lives, creating a situation for only those with deep pockets or a good health insurance cover to have access to the patented medicines, and the rest of the world goes without?

It is also no surprise that highly secretive and well hyped so called “Patient Access Programs” of many of these companies, are considered by many no more than a sham and a façade to justify the high prices.

3. Accelerating credibility erosion due to unreasonable IP related demands:

Despite some well-justified measures taken by countries like, India in the IP area, the US and to a great extent extent Europe and Japan, continuously pressured by the powerful pharma lobby groups, are still pushing hard to broaden the IP protections around the globe through various Free Trade Agreements (FTAs). At the same time, Big Pharma lobbyists are reportedly trying to compel various governments to enact IP laws, which would suit their business interest at the cost of patients.

Fortunately, many stakeholders, including media, have started raising their voices against such strong-arm tactics, further fueling the credibility erosion of Big Pharma.

Conclusion:

In the midst of all these, patients are indeed caught in a precarious situation, sandwiched between unethical practices of many large pharma players and very high prices of the available life saving patented medicines, beyond the reach of majority of the global population.

That said, accelerating credibility erosion of pharma in general and the Big Pharma in particular could possibly lead to a stage, where it will indeed be challenging for them to win hearts and minds of the stakeholders without vulgar display or surreptitious use of the money power.

To avoid all these, saner voices that are now being heard within the Big Pharma constituents should hopefully prevail, creating a win-win situation for all, not by using fear of sanctions as the key in various interactions, not even raising the so called ‘trump card of innovation’ at the drop of a hat and definitely by jettisoning long nurtured repulsive arrogance together with much reported skulduggery, for patients’ sake.

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.

Pharma Marketing in India: 10 Chain Events to Catalyze a Paradigm Shift

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In the matured markets of the world pharmaceutical marketing is quite different in many respect as compared to India. Besides doctors, different sets of customer groups like, healthcare providers, patient advocacy groups, pharmacy benefit managers, clinical assessment authorities play various critical roles for use and consumption of branded or generic pharmaceutical products and related healthcare services.

Quite in contrast, even today, individual doctors have continued to remain almost the sole target customers for the pharmaceutical players in India. This is mainly because, by and large, they are the only decision makers for usage of medicines and other healthcare facilities for most of the patients in the country.

Heralding a new paradigm:

As indicated above, though the current pharmaceutical marketing strategies continue to revolve mostly around the doctors, a distinct change, albeit slowly though, is now anticipated within the pharmaceutical marketing space in India.

Gradual emergence of healthcare providers with medical insurance and other related products, patient advocacy groups and standard treatment guidelines, just to name a few, are expected to facilitate heralding a new paradigm in the strategy dynamics of the Indian Pharmaceuticals Market (IPM) in the coming years. These changes will not be incremental in any way, but disruptive and radical in nature, as they will fully evolve.

This process of transformation, mainly driven by Government policy reform measures like, ‘Universal Health Coverage (UHC)’, ‘Free distribution of medicines’, mandatory prescriptions in generic names, could make the current pharmaceutical business strategy models of majority of companies irrelevant and obsolete, in not too distant future.

It is worth noting that the Government will spend around Rs.14,000 Crores (US$ 2.60 billion, approximately) from the year 2014 to 2017 just on medicine purchases at highly negotiated/discounted prices for free distribution to all through Government hospitals and dispensaries.

10 Chain events envisaged: 


In the evolving scenario, following chain events, taking place almost in tandem, in my view, will gradually usher in a new pharmaceutical marketing paradigm in India:

1. In addition to ‘Universal Health Coverage’, there will be a rapid increase in the number of other healthcare providers with innovative, tailor-made and value added schemes for various strata of the society.

2. This will trigger emergence of very powerful groups of negotiators for adopting treatment guidelines, pharmaceutical products usage and other healthcare related services.

3. These groups will have the wherewithal to strongly and significantly influence the doctors in their prescription and other treatment choices.

4. A significant proportion of the products that the pharmaceutical companies will market, a tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable.

5. Consequently, doctors will no longer be the sole decision makers for prescribing drugs and also the way they will treat the common diseases.

6. Pharmaco-economics or Health Technology Assessment (HTA) or outcome based pricing will gradually play an important role in pricing a healthcare products. Drug Price Control Order (DPCO 2013) has already signaled to this direction for a class of products.

7. An integrated approach towards disease prevention will emerge as equally important as treating diseases.

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

9. More regulatory control measures on pharmaceutical sales and marketing are expected to be put in place by the Government to prevent alleged widespread sales and marketing malpractices in the country.

10. Over the counter (OTC) medicines, especially those originated from natural products to treat common and less serious illnesses, will carve out a sizable share of the market, as appropriate regulations would be put in place, adequately supported by AYUSH. This will be fueled by overall increase in general health awareness of the population.

Trapped in an ‘Archaic Strategy Cocoon’:

Over a long period of time, Indian pharmaceutical industry seems to have trapped itself in a difficult to explain ‘Archaic  Strategy Cocoon’. No holds bar sales promotion activities, with very little of marketing, continue to dominate the ball game of hitting the month-end numbers, even today.

It is high time to come out of this cocoon and confront the ‘writing on the wall’ upfront, if not try to hasten the process of the evolving changes, boldly and squarely. This will require a strategic long term vision to be implemented in an orderly way to effectively convert all these challenges into possible high growth business opportunities.

A differentiated composite value delivery system:

Moreover, in today’s post product patent regime in the country, product pipelines of the domestic Indian companies with new ‘copycat’ versions of patented products have almost dwindled into nothing, making price competition in the market place even more ‘cut throat’.

In such type of changing environment, all pharmaceutical companies will be under tremendous pressure to create and deliver additional, well differentiated and composite value offerings, beyond physical products, to attract more patients, doctors, healthcare providers and others, in and around related disease areas, for business excellence.

Thus, ability to create and effectively deliver well-differentiated composite value offerings, along with the physical products, will separate men from the boys in the high growth pharmaceutical market of India, in the long run.

This could also possibly create an ‘Alibaba Effect’ for the successful ones in search of pots of gold in the pharmaceutical space of India.

New leadership and managerial skill set requirements:

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

New skills:

Leaders and managers with knowledge in just one functional area like, R&D, manufacturing, marketing, regulatory, finance are unlikely to be successful without a broad-based knowledge in the new paradigm. To really understand and handle new types and groups of customers, they will need to break the operational silos and be proficient in other key areas of business too.

These professionals will require ensuring:

• Multi-functional expertise by rotating right people across the key functional areas, as far as possible, even with a stretch.

• Ability to fathom and correctly interpret patients’ clinical benefits against cost incurred to achieve the targeted clinical outcomes, especially in areas of new products.

• Insight into the trend of thought pattern of healthcare providers and other customers or influencers groups.

• Speed in decision-making and delivery…more importantly ability to take ‘first time right’ decisions, which can make or mar an important initiative or a commercial deal.

IPM growing fast, can grow even faster: 

India is now one of fastest growing emerging pharmaceutical markets of the world with 3rd global ranking in the volume of production and 13th in value terms. Domestic turnover of the industry is over US$ 13.1 billion in 2012 (IMS) representing around 1 percent of the global pharmaceutical industry turnover of US$ 956 billion (IMS 2011).

Since 1970, Indian pharmaceutical Industry has rapidly evolved from almost a non-entity to meeting around 20 percent of the global requirements of high quality and low cost generic medicines.

Financial reforms in the health insurance sector and more public investments (2.5% of the GDP) in the healthcare space during the 12th Five Year Plan Period will have significant catalytic effect to further boost the growth of the industry.

Stringent regulations and guidelines of the Government in various areas of pharmaceutical business in India are expected to be in place soon. Ability to ensure system-based rigid organizational compliance to those changing business demands in a sustainable way. will determine the degree of success for the pharma players in India.

One such area, out of many others, is the professional interaction of the Medical Representatives with the doctors and other customer groups.

Require a ‘National Regulatory Standard’ for Medical Representatives in India:

Medical Representatives (MRs) currently form the bedrock of business success, especially for the pharmaceutical industry in India. The Job of MRs is a tough and high voltage one, laced with moments of both elation and frustration, while generating prescription demand for selected products in an assigned business territory.

Though educational qualifications, relevant product and disease knowledge, professional conduct and ethical standards vary widely among them, they are usually friendly, mostly wearing a smile even while working in an environment of long and flexible working hours.

There is a huge challenge in India to strike a right balance between the level and quality of sales pitch generated for a brand by the MRs, at times even without being armed with required scientific knowledge and following professional conduct/ ethical standards, while doing their job.

Straying from the right course:

A recent media report highlighted that ‘Indian subsidiary of a Swiss pharma major has run into trouble with some executives allegedly found to be inflating and presenting fabricated sales data for an anti-diabetic drug.’

The report also indicated that officials from mid-management ranks to sales representatives were allegedly involved in those unethical practices. The company has responded to this incidence by saying that the matter is still under investigation.

It is critical for the MRs not just to understand scientific details of the products, their mode of action in disease conditions, precautions and side effects, but also to have a thorough training on how to ‘walk the line’, in order to be fair to the job and be successful.

As MRs are not just salesmen, they must always be properly educated in their respective fields and given opportunities to constantly hone their knowledge and skills to remain competitive. The role of MRs is expected to remain important even in the changing scenario, though with additional specialized skill sets.

Unfortunately, India still does not have a ‘National Code of Conduct or Regulatory Standards’ applicable to the MRs.

Only the clause 4 of ‘The Magic Remedies (Objectionable Advertisement) Act, 1954’ deals with misleading advertisements. It is about time to formulate not only a ‘National Code on Pharmaceutical Marketing Practices’, but also a mandatory ‘Accreditation program’ and transparent qualifying criteria for the MRs for the entire pharmaceutical industry in India, just like many other countries of the world.

‘Central Drugs Standard Control Organization (CDSCO)’ of the Ministry of Health and Family Welfare of the Government of India in its website lists the “Laws Pertaining to Manufacture and Sale of Drugs in India”. However, it does not specify any regulation for the MRs nor does it recommend any standard of qualification and training for them, which is so critical for all concerned.

There are currently no comprehensive national standards for educational qualification, knowledge, ethics and professional conduct for the MRs. In the absence of all these, it is difficult to fathom, whether they are receiving right and uniform inputs to appropriately interact with the medical profession and others in a manner that will benefit the patients and at the same remain within the boundary of professional ethics and conduct.

Thus, a ‘National Regulatory Standard’ for MRs, I reckon, is absolutely necessary in India… sooner the better.

Global pharmaceutical players:

Facing a huge patent cliff, global pharmaceutical companies are now fast gaining expertise in the ball game of generic pharmaceuticals, especially in the developing markets of the world.

In the emerging markets like India, where branded generic business dominates, global pharmaceutical players seem to be increasingly finding it lucrative enough for a sustainable all round business growth.

However, to outpace competition, they too will need to capture the changing dynamics of the market and strategize accordingly without moaning much about the business environment in the country.

On the other hand, if majority of Indian pharmaceutical companies, who are not yet used to handling such changes, are caught unaware of this evolving scenario, the tsunami of changes, as they will come, could spell a commercial disaster, endangering even very survival of their business.

Managing transition:

During ensuing phase of transition in India, pharmaceutical companies would require to:

• Clearly identify, acquire and continuously hone the new skill sets to effectively manage the evolving challenge of change.

• Get engaged, having clarity in the strategic content and intent, with the existing public/private healthcare providers and health insurance companies like, Mediclaim, ICICI Lombard, large corporate hospital chains, retail chain chemists and others, proactively.

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

• Ensure that appropriate balance is maintained between different types of marketing strategies with innovative ways and means.

Conclusion:

It may not be easy for the local Indian players to adapt to the new paradigm sooner and compete with the global players on equal footing, even in the branded generic space, with strategies not innovative enough and lacking required cutting edges.

In my view, those Indian Pharmaceutical companies, who are already global players in their own rights and relatively well versed with the nuances of this new ball game in other markets, will have a significant competitive edge over most other domestic players.

If it happens, the global-local companies will offer a tough competition to the local-global players, especially, in the branded generic space with greater cost efficiency.

So far as other domestic players are concerned, the fast changing environment could throw a new challenge to many, accelerating the consolidation process further within the Indian pharmaceutical industry.

As the new paradigm will herald, catalyzed by the above 10 chain events, there will be a metamorphosis in the way pharmaceutical marketing is practiced in India. A well-differentiated composite value delivery system would then, in all probability, be the name of the winning game.

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.

 

Pharma Innovation Absolutely Critical: But NOT Shorn from Ethics, Propriety, Compliance and Values

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Significant value added innovation is the bedrock of progress of the pharmaceutical industry and is essential for the patients. This is a hard fact.

However, this current buzzword – ‘innovation’ can in no way be shorn from soft business necessities like, ethics, propriety, compliance and values… not just for longer term sustainability of business, but more in the larger interest of patients and patient groups.

Most importantly, ‘ethics, propriety, compliance and values’ are not meant for mere display  in the corporate websites like, any other business showpieces. These should neither be leveraged to create a false positive impression in the minds of the stakeholders with frequent PR blitzkriegs.

The creators of these soft ‘X factors’ are now being increasingly hauled up for gross violations of the same by the Governments in various parts of the world .These are not just legal issues. The net impact of all such acts goes much beyond.

In this article, I shall deliberate on these continuing and annoying issues both in global and local perspectives, quoting relevant examples at random.

The sole purpose of my argument is to drive home that all such repeated gross violations, as reported in the media, go against patients’ interests, directly or indirectly. None of these incidents, in any way, can be negated with stories of great innovations or with any other make of craftily designed shields.

Under increasing scrutiny in the developed world:

Ethics, propriety and business value standards of big pharma, besides various types of legal compliance, are coming under increasing stakeholders’ scrutiny, especially in the developed markets of the world.

Very frequently media reports from across the world, highlight serous indictments of the Government and even judiciary for bribery, corrupt business practices and other unbecoming conduct, aimed at the the global mascot for healthcare.

It is indeed flabbergasting to note that more and more corporates, with all guns blazing at the same time, publicize with equal zest various initiatives being taken by them to uphold high ethical standards and business practices, if not propriety, as the juggernaut keeps on moving forward, unabated.

The scope of ‘ethics and propriety’:

The scope of ‘ethical business conducts, propriety and value standards’ of a company usually encompasses the following, among many others:

  • The employees, suppliers, customers and other stakeholders
  • Caring for the society and environment
  • Fiduciary responsibilities
  • Business and marketing practices
  • R&D activities, including clinical trials
  • Corporate Governance
  • Corporate espionage

That said, such scope should not be restricted to the top management, but must be allowed to percolate downwards in a structured manner, looking beyond the legal and regulatory boundaries.

Statistics of compliance to ‘codes of business ethics and corporate values’ are important to know, but the qualitative change in the ethics and value standards of an organization should always be the most important goal to drive any corporation and the pharmaceutical sector is no exception.

‘Business Ethics and Values’ in the globalized economy:

Globalization of business makes the process of formulating the ‘codes of ethics and values’ indeed very challenging for many organizations in many ways. This is mainly because, the cultural differences at times create a conflict on ethics and values involving different countries.

For this purpose, many business organizations prefer to interact with the cultural and religious leaders in the foreign countries, mainly to ascertain what really drives culturally diverse people to act in certain ways.

With the wealth of knowledge of the local customs and people, the cultural and religious leaders can help an organization to unify the code of ethics and values of the globalized business.

Such leaders can also help identifying the ‘common meeting ground of minds’ from a specific country perspective, after carefully assessing the cultural differences, which are difficult to resolve in the near term.

The ‘common meeting ground of minds’ within a given society, thus worked out, could form the bedrock to initiate further steps to strengthen global business standards of ethics and values of an organization.

OECD with USA started early enacting ‘Foreign Corrupt Practices Act (FCPA)’: 

To prevent bribery and corrupt practices, especially in a foreign land, in 1997, along with 33 other countries belonging to the ‘Organization for Economic Co-operation and Development (OECD)’, the United States Congress enacted a law against the bribery of foreign officials, which is known as ‘Foreign Corrupt Practices Act (FCPA)’.

This Act marked the early beginnings of ethical compliance program in the United States and disallows the US companies from paying, offering to pay or authorizing to pay money or anything of value either directly or through third parties or middlemen. FCPA currently has significant impact on the way American companies are required to run their business, especially in the foreign land.

A dichotomy exists with ‘Grease Payment’:

OECD classified ‘Grease payment’ as “facilitating one, if it is paid to government employees to speed up an administrative process where the outcome is already pre-determined.”

In the FCPA of the US, ‘Grease Payment’, has been defined as “a payment to a foreign official, political party or party official for ‘routine governmental action,’ such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official’s action, only its timing.”

Many observers opine, ‘Grease Payments’ is an absolute dichotomy to the overall US policy for ethical standards and against corruption.

Currently besides US, only Canada, Australia, New Zealand and South Korea are the countries that permit ‘Grease payments’.

Notwithstanding, the governments of the US and four other countries allow companies to keep doing business without undue delay by making ‘Grease Payments’ to the lower government officials, such payments are considered illegal in most other countries, in which they are paid, including India.

In India such a business practice is viewed as bribery, which is not only perceived as unethical and immoral, but also a criminal offense under the law of the land. Even otherwise, right or wrong, ‘Grease Payments’ are viewed by a vast majority of the population as a morally questionable standard of ‘business conduct’.

Many companies are setting-up the ethical business standards globally:

While visiting the website of especially the large global and local companies, one finds that all these companies, barring a very few exceptions, have already put in place a comprehensive ‘code of business ethics and values’. Some of these companies have also put in place dedicated code compliance officers across the globe.

‘Practice as you preach’:

Despite all these commendable initiatives towards establishing corporate codes of business ethics and values, the moot question that keeps haunting many times and again: “Do all these companies ‘practice what they preach’ in real life?”

Instances are too many for breach in ethics, propriety and value standards:

The media is now increasingly reporting such instances of violations both locally and globally.

Some Indian examples: (At random, not in a chronological order)

Criminal drug regulatory manipulation:

One of India’s top pharma players reportedly will pay a record fine of US$ 500 million in the US for lying to officials and selling badly made generic drugs.

The company has pleaded guilty to improper manufacturing, storing and testing of drugs, closing a year long civil and criminal investigation into the matter.

Compensation for deaths related to Clinical Trials not paid:

In 2011 the Drug Controller General of India (DCGI) reportedly summoned nine pharma companies on June 6 to question them on the amount of compensation they have decided to pay the ‘victims of their clinical trials’, which is a mandatory part of any clinical trial, or else all other trials of these nine companies going on at that time or yet to start, will not be allowed.

Clinical Trial is another area of pharmaceutical business, especially in the Indian context, where more often than not, issues related to ethics and values are being raised. In an article titled, ‘Clinical trials in India: ethical concerns’ published by the World Health Organization (WHO) following observations have been made:

“The latest developments in India reflect a concerted effort on the part of the global public health community to push clinical trials issues to the fore in the wake of several high-profile cases in which pharmaceutical companies were shown to be withholding information from regulators.”

Alleged marketing malpractices:

In 2010, the Parliamentary Standing committee on Health reportedly expressed concern that the “evil practice” of inducement of doctors by the pharma players continues.

Congress MP Jyoti Mirdha sent a bunch of photocopies of air tickets to Prime Minister Manmohan Singh to claim that doctors and their families were ‘beating the scorching Indian summer’ with a trip to England and Scotland, courtesy a pharmaceutical company.

30 family members of 11 doctors from all over the country reportedly enjoyed the hospitality of the concerned company.

Department of Pharmaceuticals reportedly roped in the Revenue Department under Finance Ministry to work out methods to link the money trail to offending companies.

Some global examples: (At random, not in a chronological order)

United States Government sues a Swiss pharma major for alleged multi-million dollar kickbacks:

The United States Government very recently reportedly announced its second civil fraud lawsuit against a Swiss drug major accusing the company of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs.

Fraud fines: 

Two largest drug makers of the world reportedly paid US$ 8 billion in fraud fines for repeatedly defrauding Medicare and Medicaid in the USA over the past decade.

Denigrating generics:

Another global pharma major reportedly has been recently fined US$ 52.8 million for denigrating generic copies.

Drug overcharging: 

Another global drug major reportedly stirred an ethics scandal and paid US$ 499 million towards overcharging the US government for medicines.

Bribing doctors:

  • A top global pharma player reportedly paid total US$ 60.2 million to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines. 
  • Another European pharma group reportedly was fined US$ 3bn after admitting bribing doctors and encouraging the prescription of unsuitable antidepressants to children.

 Concealment of important facts:

A judge in USA reportedly ordered a large pharma company to pay more than $1.2 billion in fines after a jury found that the company had minimized or concealed the dangers associated with an antipsychotic drug.

Off-label marketing:

  • A Swiss pharma major reportedly agreed to pay US$ 422.5 million to resolve an investigation into alleged off-label promotion of a drug, as well as civil allegations relating to five other products.
  • The U.S. Justice Department reportedly hit an American drug major with a US$ 322 million penalty for illegally promoting a drug before it received approval by the Food and Drug Administration for that condition.

Other illegal marketing practices:

Yet another European pharma group was reportedly fined USD 34 million by a court in the United States for illegal marketing practices for its medicine.

‘Illegal’ Clinical Trials: 

It was revealed on May 17, 2013 that global pharmaceutical companies reportedly paid millions of pounds to former communist East Germany to use more that 50,000 patients in state-run hospitals as unwitting guinea pigs for drug tests in which several people died.

All these are some random examples of alleged malpractices associated with ‘ethics, propriety, compliance and values’ in the pharma world, both local and global.

Middle and lower management becomes the ‘fall guy’: 

It is interesting to note that whenever, such incidents take place, the fingers are usually pointed towards the middle or lower management cadre of the corporations concerned for violations and non-compliance.

Corporate or top management ownership of such seemingly deplorable incidents still remains confined within a ‘black box’ and probably a distant reality.

Public perception is not encouraging:

In the pharmaceutical sector all over the world, many business practices have still remained very contentious, despite many well-publicized attempts of self-regulation by the industry. The flow of complaints for alleged unethical business practices have not slowed down either, across the world, even after so many years of self-regulation, penalty and severe indictments.

Government apathy in India:

Nearer home, the Government apathy, despite being pressured by the respective Parliamentary Committees and sometimes including judiciary in repose to Public Interest Litigations (PIL), has indeed been appalling, thus far.

The Department of Pharmaceuticals of the Government of India has already circulated a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for stakeholders to comment on it. The final UCPMP, when it comes into force, if not implemented by the pharmaceutical players in its ‘letter and spirit’, may attract government’s ire in form of strong doses of regulatory measures. However, the moot question remains, will the UCPMP come at all?

Similar issues are there in drug regulatory areas falling under the Ministry of Health, especially in the clinical trial area. In this matter, very fortunately Supreme Court has intervened against a Public Interest Litigation (PIL). Thus, one can expect to witness some tangible steps being taken in this area, sooner than later.

Walking the talk:

The need to formulate and more importantly effectively implement ‘Codes of Business Ethics & Values’ should gain increasing relevance in the globalized business environment, including in India.

It appears from the media reports, many companies across the world are increasingly resorting to ‘unethical behavior, impropriety and business malpractices’ due to intense pressure for business performance, as demanded primarily by the stock markets.

There is no global consensus, as yet, on what is ethically and morally acceptable ‘Business Ethics and Values’ across the world. However, even if these are implemented in a country-specific way, the most challenging obstacle to overcome by the corporates would still remain ‘walking the talk’ and owning responsibility at the top.

Conclusion:

Pharmaceutical innovation will continue to remain the launch pad for the industry growth in the battle against diseases of all types, forms and severity. However, that alone should in no way deserve to receive encouragement from any corner shorn from Ethics, Propriety, Compliance and Values.

Balancing pharmaceutical innovation with Ethics, Propriety, Compliance and Values, I reckon, will in turn help striking a right balance, to a considerable extent, between pharmaceutical innovation and public health interest for everyones’ satisfaction, mostly the patients.

Being equipped with the wherewithal to bring new drugs for the global population and being the fundamental source of growth momentum for the generic drug industry of the world, the innovator companies are expected to lead by setting examples in this area too. After all, as the saying goes:

“Caesar’s wife ought to be above suspicion. ‥Caesar himself ought to be so too”.

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.

 

 

To Curb Pharma Marketing Malpractices in India Who Bells the Cat?

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Bribing doctors by the pharmaceutical companies directly or indirectly, as reported frequently by the media all over the world, including India, to prescribe their respective brand of drugs has now reached an alarming proportion, jeopardizing patients’ interest, seriously more than ever before.

In this context July 4, 2012, edition of  The Guardian reported an astonishing story. Since quite some time many pharmaceutical giants are being reportedly investigated and fined, including out of court settlements, for bribery charges related to the physicians.

In another very recent article titled “Dollars for Docs Mints a Millionaire” the author stated as follows:

“The companies in Dollars for Docs accounted for about 47 percent of U.S. prescription drug sales in 2011. It’s unclear what percentage of total industry spending on doctors they represent, because dozens of companies do not publicize what they pay individual doctors. Most companies in Dollars for Docs are required to report under legal settlements with the federal government.”

In India, deep anguish of the stakeholders over this issue is also being increasingly reverberated day by day. It has also drawn the attention of the patients’ groups, NGOs, media, Government and even the Parliament. An article titled, “Healthcare industry is a rip-off” published in a leading business daily of India states as follows:

“Unethical drug promotion is an emerging threat for society. The Government provides few checks and balances on drug promotion.”

Unfortunately, nothing substantive has been done in India just yet to address such malpractices across the industry in a comprehensive way, despite indictment by the Parliament, to effectively protect patients’ interest in the country.

Countries started taking steps with disclosure norms:

It is interesting to note that many countries have already started acting, even through implementation of various regulatory disclosure norms, to curb such undesirable activities effectively. Some examples are as follows:

USA

The justice department of the U.S has reportedly wrung huge settlements from many large companies over such nexus between the doctors and the pharmaceutical players.

To address this issue meaningfully, on February 1, 2013 the Department of Health and Human Services (HHS) of the United States of America released the final rules of implementation of the ‘Patient Protection and Affordable Care Act (PPACA)’, which is commonly known as the “Physician Payment Sunshine Act” or just the “Sunshine Act”.

This Act has been a part of President Obama’s healthcare reform requiring transparency in direct or indirect financial transactions between the American pharmaceutical industry and the doctors and was passed in 2010 by the US Congress as part of the PPACA.

The Sunshine Act requires public disclosure of all financial transactions and transfers of value between manufacturers of pharmaceutical / biologic products or medical devices and physicians, hospitals and covered recipients. The Act also requires disclosure on research fees and doctors’ investment interests.

The companies have been directed by the American Government to commence capturing the required data by August 1, 2013, which they will require to submit in their first federal reports by March 31, 2014.The first such disclosure report will be available on a public database effective September 30th, 2014.

France:

On December 2011, France adopted a legislation, which is quite similar to the ‘Sunshine Act’. This Act requires the health product companies like, pharmaceutical, medical device and medical supply manufacturers, among others to mandatorily disclose any contract entered with entities like, health care professionals, hospitals, patient associations, medical students, nonprofit associations, companies with media services or companies providing advice regarding health products.

Netherlands:

On January 1, 2012, Netherlands enforced the ‘Code of Conduct on Transparency of Financial Relations’. This requires the pharmaceutical companies to disclose specified payments made to health care professionals or institutions in excess of € 500 in total through a centralized “transparency register” within three months after the end of every calendar year.

UK:

According to Deloitte Consulting, pharmaceutical companies in the UK are planning voluntary disclosures of such payments. One can expect that such laws will be enforced in the entire European Union, sooner than later.

Australia and Slovakia:

Similar requirements also exist in Australia and Slovakia.

Japan:

In Japan, the Japan Pharmaceutical Manufacturers Association (JPMA) reportedly requires their member companies to disclose certain payments to health care professionals and medical institutions on their websites, starting from 2013.

India still remains far behind:

This issue has no longer remained a global concern. Frequent reports by Indian media have already triggered a raging debate in the country on the subject. It has been reported that a related case is now pending before the Supreme Court against a Public Interest Litigation (PIL) for hearing, in not too distant future.

It is worth noting that in 2010, ‘The Parliamentary Standing Committee on Health’ expressed its deep concern stating, the “evil practice” of inducement of doctors by the pharma companies is continuing unabated as the revised guidelines of the Medical Council of India (MCI) have no jurisdiction over the pharma industry.

It was widely reported that the letter of the Congress Member of Parliament, Dr. Jyoti Mirdha to the Prime Minister Dr. Manmohan Singh, attaching a bunch of photocopies of the air tickets to claim that ‘doctors and their families were beating the scorching Indian summer with a trip to England and Scotland, courtesy a pharmaceutical company’, compelled the Prime Minister’s Office (PMO) to initiate inquiry on the subject.

The letter had claimed that as many as 30 family members of 11 doctors from all over India enjoyed the hospitality of the pharmaceutical company on the pretext of ‘Continuing Medical Education (CME)’.

In addition Dr. Mirdha reportedly reiterated to the PMO, “The malpractice did not come to an end because while medical profession (recipients of incentives) is subjected to a mandatory code, there is no corresponding obligation on the part of the healthcare industry (givers of incentives). Result: Ingenious methods have been found to flout the code.”

The report also indicated at that time that the Department of Pharmaceuticals (DoP) is trying to involve the Department of Revenue under the Ministry of Finance to explore the possibilities in devising methods to link the money trails of offending companies and deny the tax incentives on such expenses.

Incidences of such alleged malpractices are unfolding much faster today and are getting increasingly dragged into the public debate where government can no longer play the role of a mere bystander.

Indian Parliamentary indictment for not having a ‘Marketing Code’:

Thereafter, the Department Related Parliamentary Standing Committee on Health and Family Welfare presented its 58th Report on the action taken by the Government on the recommendations / observations contained in the 45th report to both the Lower and the Upper houses of the Parliament on May 08, 2012.

The committee with a strong indictment to the Department of Pharmaceuticals (DoP), also observed that the DoP should take decisive action, without any further delay, in making the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ mandatory so that effective checks could be ensured on ‘huge promotional costs and the resultant add-on impact on medicine prices’.

Unfortunately nothing substantive has happened on the ground regarding this issue as on date.

Ministry of Finance fires the first salvo:

Firing the first salvo closer to this direction, Central Board of Direct Taxes (CBDT), which is a part of Department of Revenue in the Ministry of Finance, has now decided to disallow expenses on all ‘freebies’ to Doctors by the Pharmaceutical Companies in India.

An internal circular dated August 1, 2012, of the CBDT addressed to its tax assessment officers categorically stated that the any expenses incurred by the pharmaceutical companies on gifts and other ‘freebies’ given to the doctors, which do not conform to the revised MCI guidelines, will no longer be allowed as business expenses.

The High Court upheld the CBDT order:

As expected, the above CBDT circular was challenged in the court of law by an aggrieved party.

However, on December 26, 2012, in a significant judgment on the this CBDT circular related to promotional expenses, the High Court of Himachal Pradesh, ordered as follows:

“Therefore, if the assesse satisfies the assessing authority that the expenditure is not in violation of the regulations framed by the Medical Council of India (MCI), then it may legitimately claim a deduction, but it is for the assesse to satisfy the assessing officer that the expense is not in violation of MCI regulations as mentioned above. We, therefore, find no merit in the in the petition, which is accordingly rejected, No costs.”

Unless this High Court order is challenged in the Supreme Court and reversed subsequently, the CBDT circular related to pharmaceutical promotional expenses has assumed a legal status all the way.

Current situation in America post ‘Sunshine Act’:

After enactment of the ‘Sunshine Act’ one gets a mixed response as follows, though these are still very early days of implementation of this new Law in America.

Low awareness level of the ‘Sunshine Act’:

Though this Act was passed in the U.S in 2010, the awareness level is still very low. More than half of the 1,025 physicians interviewed in a recent survey said, they didn’t know that the law requires pharmaceutical and medical device companies to track any payments or “transfers of value” to physicians and teaching hospitals as of August 1, 2013.

The ground reality:

Despite all such measures, current situation in the United States on this issue is still not very encouraging.

The same 2013 survey highlights that many physicians in the United States continue to have some sort of financial relationship with the industry, as follows:

  • Receiving samples (54%)
  • Receiving food and beverage in their workplace (57%),
  • Participating in an “industry-funded program” (48%),
  • Participating in speakers bureau programs (11%)
  • Advisory board programs (10%).

Spin-off benefits of the Law:

It has been reported that the ‘Sunshine Act’ will also provide enormous data on how much the pharmaceutical companies and each of their competitors spend to make the doctors prescribe their drugs from the public data that will be available from September 2014. This will help these companies tracking which type of marketing tools and processes have a linear relationship to generate increased number of prescriptions.

Thus the above report concludes that pharmaceutical players ‘will not stop wooing doctors. They may simply get better at it’, making their marketing expenditure increasingly productive.

However, despite all these, another recent report indicated that after the ‘Sunshine Act,’ some pharma companies have really started cutting back on their payments to doctors and many others have stepped up their efforts in this direction. This augurs a good beginning, if fructifies on a larger scale.

Such Laws could be more impactful in India:

A law like ‘Sunshine Act’ of America, if implemented well in India is expected to have much greater and positive impact. This is mainly due to existence of an effective pharmaceutical pricing ‘watchdog’ in the country in form of the ‘National Pharmaceutical Pricing Authority (NPPA)’ .

When pharmaceutical-marketing expenditures of individual pharma companies, through such public disclosures, will be found to contributing disproportionately to the total expenses of any player, pressure from the regulators and the civil society will keep mounting to bring down the prices of medicines.

An interesting survey in India:

A survey report of Ernst and Young titled, “Pharmaceutical marketing: ethical and responsible conduct”, carried out in September 2011 on the UCMP and MCI guidelines, highlighted the following:

  • Two-third of the respondents felt that the implementation of the UCPMP would change the manner in which pharma products are currently marketed in India.
  • More than 50% of the respondents are of the opinion that the UCPMP may lead to manipulation in recording of actual sampling activity.
  • Over 50% of the respondents indicated that the effectiveness of the code would be very low in the absence of legislative support provided to the UCPMP committee.
  • 90% of the respondents felt that pharma companies in India should focus on building a robust internal controls system to ensure compliance with the UCPMP.
  • 72% of the respondents felt that the MCI was not stringently enforcing its medical ethics guidelines.
  • 36% of the respondents felt that the MCI’s guidelines would have an impact on the overall sales of pharma companies.

The Planning Commission of India expresses its anguish: 

Recently even the Planning Commission of India has reportedly recommended strong measures against pharmaceutical marketing malpractices as follows:

“Pharmaceutical marketing and aggressive promotion also contributes to irrational use. There is a need for a mandatory code for identifying and penalizing unethical promotion on the part of pharma companies. Mandated disclosure by Pharmaceutical companies of the expenditure incurred on drug promotion, ghost writing in promotion of pharma products to attract disqualification of the author and penalty on the company, and vetting of drug related material in Continuing Medical Education would be considered.”

The Ministry of Health may now intervene: 

It was reported by the media just last week that the Ministry of Health (MoH) strongly feels that unethical practices and aggressive promotion of drugs by the pharmaceutical companies through the doctors in lieu of gifts, hospitality, trips to exotic foreign and domestic destinations are adding up to cost of medicines significantly in India. Thus, the MoH is expected to suggest to the Department of Pharmaceuticals for 
mandatory implementation of the ‘Uniform Code of Pharmaceutical Practices (UCPMP)’ by the industry soon.

Conclusion:

Statistics of compliance to UCPMP are important to know, but demonstrable qualitative changes in the ethics and value standards of an organization in this regard should always be the most important goal to drive any pharmaceutical business corporation in India.

The need to announce and implement the UCPMP by the Department of Pharmaceutical, without further delay, assumes critical importance in today’s allegedly chaotic pharmaceutical marketing scenario.

Very unfortunately, the status quo remains unbroken even today. The juggernaut of marketing malpractices keeps moving on unabated. The ‘Cat and Mouse’ game continues as ever. The moot question still remains, who bells the cat? …For patients sake.

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.

“Pharmaceutical Marketing Malpractices are Barriers to Healthcare Access” – The Relevance of Government Code of Ethical Marketing Practices in India

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Last week (July 19, 2012), most of the leading English business dailies of India reported that much-awaited “Uniform Code of Pharmaceutical Marketing Practices (UCPMP)” authored by the Department of Pharmaceuticals, quite in line with the amended guidelines for the Medical Profession by the Medical Council of India (MCI), is expected to be notified by the government next month for implementation by the entire pharmaceutical industry on a voluntary basis, to start with.

This is only because the draft UCPMP has already specified the following:

“This is a voluntary code of Marketing Practices for Indian Pharmaceutical Industry, for the present and its implementation will be reviewed after a period of six months from the date of its coming into force and if it is found that it has not been implemented effectively by the Pharma Associations/Companies, the Government would consider making it a statutory code.”

This decision of the government is the culmination of a series of events, covered widely by the various sections of the media, at least, since 2004.

The series of events:

Way back, in its January – March, 2004 issue, ‘Indian Journal of Medical Ethics (IJME)’ in the context of marketing practices for ethical pharmaceutical products in India commented: “If the one who decides, does not pay and the one who pays, does not decide and if the one who decides is ‘paid’, will truth stand any chance?” Three years later in 2007, the situation remained unchanged when IJME (April – June 2007 edition) once again reported: “Misleading information, incentives, unethical trade practices were identified as methods to increase the prescription and sales of drugs. Medical Representatives provide incomplete medical information to influence prescribing practices; they also offer incentives including conference sponsorship. Doctors may also demand incentives, as when doctors’ associations threaten to boycott companies that do not comply with their demands for sponsorship.”

‘The Times of India’ also reported the following in its December 15, 2008 edition:

“1. More drugs a doctor prescribes of a specific company, greater are the chances of his/ her winning a car, a high-end fridge or a TV set. 2. Drug companies dole out free trips with family to exotic destinations like Turkey or Kenya. 3. In the West, unethical marketing practices attract stiff penalties. 4. In India, there are only vague assurances of self-regulation by the drug industry and reliance on doctors’ ethics”.

Thus, it has been quite a while from now, serious concerns are being expressed by the media, government and the civil society at large about the means adopted by the pharmaceutical industry in general to get their respective brands prescribed by the doctors.

The discontentment still growing:

Many within the civil society feel, as a result of fast degradation of ethical standards, moral and the noble values, just in many other areas of public life, in the healthcare space as well, the patients in general have started losing their absolute faith and trust both on the medical profession and the pharmaceutical companies, by and large. However, health related multifaceted compulsions do not allow them, either to avoid such a situation or even raise a strong voice of protest against the vested interests.

Growing discontentment of the patients both in the private and public healthcare space in the country, is being regularly and very rightly highlighted by the media all over the world, including reputed medical journals like, ‘The Lancet’ to help arrest this moral and ethical decay with demonstrable and tangible proactive measures.

The issue:

The entire issue arises out of the key factor that the patients do not have any say on the use/purchase of a medicine brand/brands that a doctor will prescribe.

It is generally believed by the civil society that doctors predominantly prescribe mostly those brands, which are promoted to them by the pharmaceutical companies in various ways.  Thus, in today’s world and particularly in India, the degree of commercialization of the noble healthcare services, as reported quite often by the media, has reached a new high, sacrificing the ethics and etiquette both in medical and pharmaceutical marketing practices at the altar of unlimited greed, want and conspicuous consumption.

A credible international report: Let me now combine this scenario with a relatively recent report on India dated January 11, 2011, published in ‘The Lancet’, which states in a similar (though not the same) context, as follows:

1. “Reported problems (which patients face while getting treated at a private doctor’s clinic) include unnecessary tests and procedures, rewards for referrals, lack of quality standards and irrational use of injection and drugs. Since no national regulations exist for provider standards and treatment protocols for healthcare, over diagnosis, over treatment and maltreatment are common.” 2. “Most people accessed private providers for outpatient care – 78% in rural areas and 81% in urban areas.” 3. “India’s private expenditure of nearly 80% of total expenditure on health was much higher than that in China, Sri Lanka and Thailand.” Considering the above three critical issues of India, as reported in ‘The Lancet’, the need to follow a transparent code of pharmaceutical marketing practices by the entire pharmaceutical industry is of utmost importance.

A global phenomenon:

Since quite some time, this issue has indeed become a global phenomenon. Many countries, including India, are taking note of such examples of socioeconomic decay, that too in the healthcare sector.

Just the other day, the July 4, 2012 edition of ‘The Guardian’, while reporting that GlaxoSmithKline has agreed to pay $3bn (£1.9bn) to settle a series of old criminal and civil investigations by the US authorities into the sales and marketing of some of its best-known products, commented, “GlaxoSmithKline’s bribes are evidence that Big Pharma isn’t working – the inadequacies of relying solely on market forces for our drugs are clearer than ever. This scandal should prompt a rethink.”

The Guardian further commented:

“After all, this has happened before. All the giants – AstraZeneca, Bristol-Myers Squibb, Merck, Eli Lilly, Pfizer – have been investigated for bribery. One of the most notorious episodes of misconduct involved Merck’s anti-inflammatory drug Vioxx, withdrawn in 2004 after the company persistently played down its risk of causing cardiovascular problems.”

The New York Times  (NYT) in its April 12, 2010 edition in an article titled, “Data on Fees to Doctors is Called Hard to Parse”, reported that though some big pharmaceutical companies have started disclosing payments to doctors who act as consultants or speakers, many still find it far too difficult to follow the money trail.

NYT reported in the same article, “Senate researchers have found that some prominent doctors at academic medical centers have failed to disclose millions of dollars in drug company payments, despite university requirements that they do so. Federal prosecutors say some payments are really kickbacks for illegal or excessive prescribing”.

General scenario was not much different even in the US until recently:

‘The New England Journal of Medicine’, April 26, 2007 reported that virtually, all doctors in the US take freebies from drug companies, and a third take money for lecturing, and signing patients up for trials. The study conducted on 3167 physicians in six specialties (anesthesiology, cardiology, family practice, general surgery, internal medicine and pediatrics) reported that 94% of the physicians had ‘some type of relationship with the pharmaceutical industry’, and 83% of these relationships involved receiving food at the workplace and 78% receiving free drug samples. 35% of the physicians received re-reimbursement for cost associated with professional meetings or Continuing Medical Education (CME). And the more influential a doctor was, the greater the likelihood that he or she would be benefiting from a drug company’s largess. As a result of some strict regulatory measures, the situation in the US has presumably started changing now.

However, such issues are not related only to physicians. ‘Scrip’ dated February 6, 2009 published an article titled: “marketing malpractices: an unnecessary burden to bear”. The article commented:

“Marketing practices that seem to be a throwback to a different age continues to haunt the industry. Over the past few months, some truly large sums have been used to resolve allegations in the US of marketing and promotional malpractices by various companies. These were usually involving the promotion of off-label uses for medicines. One can only hope that lessons have been learnt and the industry moves on.”

“As the sums involved in settling these cases of marketing malpractices have become progressively larger, and if companies do not become careful even now, such incidents will not only affect their reputation but financial performance too.”

‘The Physician Payment Sunshine Act’:

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into the public debate, disclosure of all such payments made to the physicians by the pharmaceutical companies has been made mandatory by the Obama administration, as a part of the new US healthcare reform process.

As a result, ‘The Physician Payment Sunshine Act’, originally proposed in 2009 by Iowa Republican Charles Grassley and Wisconsin Democrat Herb Kohl, became a part of the US healthcare law in 2010. This Act came as an integral part of the healthcare reform initiatives of President Obama to reduce healthcare costs and introduce greater transparency in the system.

The Act requires all pharmaceutical and medical device companies of the country to report all payments to doctors above US $10. As stated earlier, the industry’s gifts to physicians in the US, reportedly, can range from expensive hospitality/dinner in exotic locations, pricey golfing vacations in various places of interest to consulting and speaking fees. As the Act came into force with all its rules in place, failure to provide such details will attract commensurate penal provisions.

Australia sets another example: The Australian Competition and Consumer Commission (ACCC) has decided to grant authorization for five years to Medicines Australia’s 16th edition of its Code of Conduct. The Code sets standards for the marketing and promotion of prescription pharmaceutical products in Australia. The Code provides, among other measures, a standard to address potential conflicts of interest from unrestricted relationships between pharmaceutical companies and the doctors, which may harm the consumers through inappropriate prescriptions. The Code also prohibits the pharmaceutical companies from providing entertainment and extravagant hospitality to doctors with the requirement that all benefits provided by companies should be able to successfully withstand public and professional scrutiny. “The requirement for public disclosure was imposed by the ACCC as a condition of authorization of the previous version of Medicines Australia’s Code and was confirmed on appeal by the Australian Competition Tribunal.” Edition 16 of the Code fully incorporates the public reporting requirements.

“Market malpractices are barriers to healthcare access”: The WHO report of 2006:

A 2006 report of the ‘World Health Organization (WHO) and ‘The Ministry of Health and Family Welfare, Government of India’ titled ‘Options for Using Competition Law/Policy Tools in Dealing  with Anti-Competitive Practices in Pharmaceutical Industry and Health Delivery System, states:

“The right to health is recognized in a number of international legal instruments. In India too, there are constitutional commitments to provide access to healthcare. However despite the existence of any number of paper pledges assuring the right to health, access to health remains a problem across the world”.

“There are several factors that are responsible for such deprivation. Market malpractices in general, and in particular, anti-competitive conduct in the pharmaceutical industry and the health delivery system are also among them.”

India Today: 

The current scenario in India though not very much different, in terms of seriousness of the issue, from what is being reported in the US, the evolving regulatory standards in the US in this matter are definitely more robust and far superior to what we see in our country.

In India, over 20, 000 pharmaceutical companies of varying size and scale are currently operating. It has been widely reported in the media that the lack of regulatory scrutiny is prompting many of these companies to adapt to ‘free-for-all’ types of aggressive sales promotion and cut-throat marketing warfare involving significant ‘wasteful’ expenditures. Such practices reportedly involve almost all types of their customer groups, excepting perhaps the ultimate consumer – the patients.

It has been well reported that industry’s gifts to physicians in India can range from expensive cars, dinners in exotic locations, pricey vacations at various places of interest of the world and sometimes with the doctors’ families, to hefty consulting and speaking fees.

Unfortunately in India there is no single government agency, which is accountable to take care of the entire healthcare needs of the patients and their well-being, in a holistic way.

The pharmaceutical industry in India, in general, has already expressed its desire for self-regulation of marketing practices, instead of any regulatory compulsion by the Government.

However, many activists groups and NGOs still feel that the bottom-line in this scenario is the demonstrable transparency by the pharmaceutical companies in their dealings with various customer groups, especially the physicians/doctors.

Ministry of Health blinked first by amending the MCI Guidelines:

Being concerned with the media outcry, MCI, in 2009, amended their guidelines of ‘Professional Conduct, Etiquette and Ethics’ for the doctors, clearly articulating what they can and cannot do during their interaction and transaction with the pharmaceutical and related industries.

MCI, through amendment of the “Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulation 2002” introduced a new code of conduct for doctors and their professional associations in their relationship with the pharmaceutical and allied industry in India. The amended regulations are known as the “Indian Medical Council (Professional Conduct, Etiquette and Ethics) (Amendment) Regulations, 2009 – Part-I”, which prohibit the doctors from accepting, among many others, any travel facility or hospitality, including gifts of any value, from any pharmaceutical companies.

The Ministry of Health believes that these guidelines, if strictly enforced, would severely limit what the doctors can receive from the pharmaceutical companies in terms of free gifts of wide ranging financial value, entertainments, free visits to exotic locations under various commercial reasons, lavish lunch and dinner etc. in exchange of prescribing specific pharmaceutical brands of the concerned companies.

‘Draft Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ from the DoP:

In May 2011, the Department of Pharmaceuticals (DoP) released a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for the Pharmaceutical Industry of India for comments by the stakeholders.

Some Key features of the DoP Code are as follows:

  • All promotional material must be consistent with the requirements of this Code.
  • Brand names of products of other companies must not be used for comparison without prior consent of the concerned companies.
  • Paid or arranged publication of promotional material in journals must not resemble editorial matter.
  • The names or photographs of healthcare professionals must not be used in promotional material.
  • Audio-visual material must be accompanied by all appropriate printed material to ensure compliance of the Code.
  • Samples should be provided directly to prescribing authority and be limited to prescribed dosages for three patients and in response to a signed and dated request from the recipient. Each sample pack shall not be larger than the smallest pack presented in the market.
  • Medical and Educational events for doctors should be organized in the appropriate venue in India and all expenses must be incurred only for the events held in India.
  • Outline of a detailed Complaint Lodging and Redressal mechanism (Committee for Code of Pharma Marketing) to ensure compliance of the marketing code.

The quality of UCPMP:

The UCPMP draft document is well written, balanced and by and large fair. The DoP should indeed be commended on the great work that they have done in putting all details of pharmaceutical marketing practices together in this document in a very comprehensive manner.

Draft UCPMP does not seem to pose any major extra restrictions to the pharmaceutical companies as compared to the MCI guidelines. All concerned should welcome this decision of the DoP, as the same ethical standards will now be applicable to all small, mid-sized and large pharma players, equally. The main focus of the DoP should be in ensuring that all companies across the pharmaceutical industry follow these well-defined standards in their marketing practices and interactions with the doctors.

The draft UCPMP also states that companies must maintain a detailed record of expenditures incurred on these events. It is not quite clear though, as to what extent the pharmaceutical companies are expected to keep these detail records and how long?  It is also not clear whether such records have to be maintained on file by the individual companies and supplied to the DoP only on specific requests for the same or all these details are expected to be disclosed on a regular basis to the regulator.

The draft UCPMP indicates that industry associations must upload full details of received complaints on their respective websites. Although this provision could help making the system transparent, the DoP should clearly articulate the details about the specific information that will require to be disclosed in cases of any proven breach of the marketing code.

It is interesting to note that the draft UCPMP states that media reports and published letters alleging that a company has breached the UCPMP will be treated as complaints.

Skepticism with the UCPMP:

Some are quite skeptical about the effectiveness of UCPMP in containing unethical marketing practices within the Indian Pharmaceutical Industry.

This section of people believes, with thousands of pharmaceutical companies operating in India, just self-control with UCPMP without any properly enforceable stringent Government regulation, will simply not work.

Conclusion:

In all countries and India is no exception, pharmaceutical companies, by and large, have been articulating that they try to follow the legal ways and means to maximize turnover of their respective brands. Many of them do follow transparent and admirable stringent self-regulations, stipulated either by themselves or by their industry associations.

‘Self-regulation with pharmaceutical marketing practices’ and ‘voluntary disclosure of payment to the physicians’ by some leading global pharmaceutical companies are laudable steps to address this vexing issue. However, the moot question still remains, are all these good enough for the entire industry in India?

It appears, immediately after the Department Related Parliamentary Standing Committee on Health and Family Welfare presented its 58th Report on the action taken by the DoP on the recommendations / observations contained in the 45th report to both the Lower and the Upper houses of the Parliament on May 08, 2012, the DoP has reportedly taken an extra step forward towards this direction last week. The amended MCI regulations for the doctors coupled with the notified UCPMP for the entire pharmaceutical industry should make the financial transactional relationship between the physicians and the pharmaceutical industry in India clean and transparent.

It was also reported  last week that Government will soon decide whether there will be an independent industry appointed ‘Ombudsman’ for the enforcement of UCPMP across the country or the implementation of the code will strictly be monitored under the Government control.

It is worth reiterating that the draft UCPMP very categorically warns, in case the self-control with UCPMP by the industry appointed independent ‘Ombudsman’ does not work effectively, the Government would seriously consider making it statutory for the entire pharmaceutical industry of India. This is indeed quite a strong signal from the government to the industry for ‘Shaping Up’… sooner the better.

The popular dictum, especially used by the healthcare industry, “patients’ interest come first”, should not be allowed to be misused or abused, any further, by some unscrupulous elements and greedy profiteers, to squeeze out even the last drop of financial resource from the long exploited population of ailing patients of India, as “Pharmaceutical Marketing Malpractices are Proven Barriers to Healthcare Access”.

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.

Does branding of generic drugs offer value to the patients in India?

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It appears that the government has accepted the submission of the ‘Parliamentary Standing Committee for Health and Family Welfare’ made to the ‘Rajya Sabha’ of the Indian Parliament on August 4, 2010, recommending prescription of medicines by their generic names.

It has now been reported that the Drugs Technical Advisory Board (DTAB) has already considered the proposal to amend the rules of the Drugs and Cosmetics Act of India for approval of all drug formulations containing single active ingredient only in the generic names by the State Licensing Authorities. The proposal to publish the draft rules has been forwarded to the Ministry of Health for necessary approval. The Fixed Dose Combinations (FDC) will be kept out of the purview of this amendment.

This recommendation of the  ‘Parliamentary Standing Committee for Health and Family Welfare’  appears to be based on the premises that the ‘Brand Building’ exercise of the generic drugs in India, includes ‘very high sales and marketing expenditure’, which  can easily be eliminated to make medicines available to the common man at much cheaper prices. ‘Jan Aushadhi’ scheme of the Government is often cited as an example to drive home this point.

This recommendation, on the face of it, makes immense sense. However, the moot question remains, “Is it a practical proposition to implement in India?”

The generics and the branded-generic drugs and their value proposition: As we know generic name is the actual chemical name of a drug. The brand name is selected by the producer of a formulation and is built on various differential value parameters for its proper position in the minds of health professionals as well as the patients. Thus, brand names offer a specific identity to a chemical name in their value proposition.

Some other countries are also taking similar steps:

Just to cite an example, as reported by ‘The Guardian” on August 23, 2011, the Spanish government recently enacted a law compelling the doctors of Spain to prescribe generic drugs rather than more expensive patented and branded pharmaceuticals, wherever available. This move is expected to help the Spanish government to save €2.4 billion (£2.1billion) a year, as in Spain the drugs are partly reimbursed by the government.

As a result, the doctors in Spain will now have to prescribe only in the generic or chemical names of the respective drugs. Consequently the pharmacies will be obliged to dispense ‘the cheapest available versions of drugs, which will frequently mean not the better-known brand names sold by the big drugs firms’.

Quality standards of both generic and branded generic drugs are no different:

Drugs and Cosmetics Act of India requires all generic or branded generic drugs to have the same quality and performance. Thus when a generic drug is approved by the drug regulator, one should logically accept that it has met the required standards with respect to identity, strength, quality, purity and potency. It is not uncommon that there could be some variability taking place during manufacturing process for both branded generic and generic drugs and for that matter it is applicable to all drugs. However, all formulations of both types of these drugs manufactured by different manufacturers do not need to contain the same inactive ingredients.

In any case, all formulations of both generic and branded drugs must be shown to be bioequivalent to the reference drugs with similar blood levels to the respective reference products. Regulators even in the USA believe that if blood levels are the same, the therapeutic effect will be the same.

A recent study:

As reported by the US FDA, ‘A recent study evaluated the results of 38 published clinical trials that compared cardiovascular generic drugs to their brand-name counterparts. There was no evidence that brand-name heart drugs worked any better than generic heart drugs. [Kesselheim et al. Clinical equivalence of generic and brand-name drugs used in cardiovascular disease: a systematic review and meta-analysis. JAMA. 2008;300(21)2514-2526]‘.

Prescriptions for generic medicines were a record high in America in 2010:

As per published reports, last year i.e in 2010, generic medicines accounted for more than 78%  of the total prescriptions dispensed by retail chemists and long-term care facilities in the US. This is a record high and is four percentage points more than what it was in 2009 and came up from 63% as recorded in 2006.

Points to ponder and resolve in the current Indian situation:

While the intention of the Government is indeed good, some practical issues must be considered before its implementation, which are as follows:

1. Increased chances of error while dispensing:

Chemical names of medicines are complex. In case of any mistake of dispensing the wrong drug by the chemist inadvertently, the patients could face serious consequences.

2. There could be differences even within single ingredient formulations:

Different brands of even single ingredient medicines may have inherent differences in their formulations like, in the drug delivery systems (controlled/sustained release), kind of coatings allowing dissolution in different parts of alimentary canal, dispersible or non-dispersible tablets, chewable or non-chewable tablets etc. Since doctors are best aware of their patients’ conditions, they may wish to prescribe a specific type of formulation based on specific conditions of the patients, which may not be possible by prescribing only in generic names.

3. Price differences between branded generics and generic generics may not exist:

It is intriguing to fathom, just for a switch over from the brand name to the generic name how will the Maximum Retail Price (MRP) of a single ingredient formulation, bearing only the generic name, come down. Currently, MRPs printed on the product packs of generic formulations without any brand name, as available in the retail outlets, are similar to comparable branded generic formulations. In that case, what benefits that Government will expect a patient to get out of this well hyped change?

4. Manufacturers may switch from single ingredient formulations to FDCs:

There is a theoretical possibility that to retain brand names, the pharmaceutical companies may be encouraged to change their formulations from single ingredient to FDCs. In that situation, single ingredient formulations may not be available and comparable FDCs could cost more to the patients.

5. The key decision will shift from physicians to retail chemists:

The major issue with prescriptions by the chemical/generic names is that retail chemists will then be the sole decision makers to choose the prescribed product from within a whole lot of over 30 to 40 manufacturers for a particular product.

What then will prompt the retailers to buy, store and sell different generic formulations of various companies and what could possibly be the key selection criteria for such drugs by them?

I reckon, there could only be one criterion for the choice of such medicines by a chemist i.e. to select only those which will give them highest margin of profits.

In such a case, the ultimate decision making authority for the prescription medicines shifts from the physicians to the chemists. This could make the situation far worse for the patients.

In interest of the patients, it is, therefore, extremely important that the government, regulators, physicians, chemists and even the patients’ groups are aware of such risks and ensure that patients are not adversely impacted in any way.

Conclusion: Viewing purely from the Indian perspective, while the generic drugs per se are not bad for the patients, weighing all the above issues and possible risk factors against expected benefits, I reckon, without effectively addressing the above issues to start with, if the prescriptions of single ingredient formulations are made mandatory only in generic names, it could seriously jeopardize patients’ safety and interest.

In any case, when single ingredient formulations contribute just around 30% of the total prescriptions in India, how could then prescriptions of all single ingredient formulations only in generic names address the stated concern of the government, in a holistic way?

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.