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Drug Price Control And National Health Security

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‘Without Providing Affordable Medicines, There Can’t be Health Security’, said the Union Minister of Chemicals and Fertilizers of India, as reported on September 22, 2017. Although, the Minister made this remark while discussing Government price control on cardiac stents in India, let me dwell on the subject based on the above news headline by asking: Is drug price control improving access to medicines for greater ‘Health Security’ of the country?

It’s no rocket science to understand that making affordable drugs ‘available’ in requisite quantity for all, is essential, basically, for improving ‘access’ to medicines. Nevertheless, the mere availability of drugs is no guarantee for their improving access to all.

If we take a closer look at the well-articulated key objectives of the Ministry of Chemicals and Fertilizers, under which both the Department of Pharmaceutical (DoP) and the National Pharmaceutical Pricing Authority (NPPA) belong, this dichotomy will be easier to fathom.

The key objective of the ‘National Pharmaceutical Pricing Policy: 2012’, which is operational today, reads as: “To put in place a regulatory framework for pricing of drugs so as to ensure availability of required medicines – “essential medicines” – at reasonable prices even while providing sufficient opportunity for innovation and competition to support the growth of the industry, thereby meeting the goals of employment and shared economic well-being for all. The reasons are further elaborated later in the Policy Document.”

Similarly, according to the NPPA, one of the key objectives of drug price control in India is to ensure abundant availability, at reasonable prices of essential and life-saving and prophylactic medicines of good quality. Hence, the current key focus of the DoP and NPPA, on paper, does not go beyond making ‘affordable drugs available for all.”

Thus, the crucial point to ponder: Is ongoing drug price control, improving even availability of medicines for all to attain greater ‘health security’ of the country, as the Union Minister underscores?

A course correction without flagging the new course:

The Draft Pharma Policy 2017 makes an important course correction to address this critical issue. It expresses its objective in this important area slightly differently, by adding the word ‘accessible’, as: “Making essential drugs ‘accessible’ at ‘affordable prices’ to the common masses.”

Intriguingly, the draft remains mute, when it boils down to answering the fundamental question, how would this new policy improve access to affordable drugs for the common masses, without having any jurisdiction to improving access to overall health care? That turf, unquestionably, belongs to the Ministry of Health. Thus, I reckon, achieving this modified goal, in its totality, is no more than a rhetoric.

Would better availability guarantee greater patient access to drugs?

As things stand today, it is quite unlikely to happen. The broad process of improving access to health care in a holistic way, is enshrined in the  National Health Policy 2017, which is already in place. It assures the nation of progressively achieving ‘Universal Health Coverage (UHC)’. It outlines measures to improve the availability, access and affordability for quality secondary and tertiary care services, with significant reduction in ‘out of pocket expenditure’ on health care. The policy also emphasizes that this process would considerably reduce the proportion of households experiencing catastrophic health expenditures, and consequent impoverishment.

The silo mentality won’t work:

Although, the Ministry of Health is primarily responsible for meeting universal access to health care, which includes drugs, the Ministry of Chemicals and Fertilizers too, shoulders a crucial responsibility in this area. Thus, attaining the Health and Pharma policy goals – individually, collectively and meaningfully, both these Ministries need to work closely together, along with the State Governments, in the true spirit of cooperative federalism. The silo mentality has not worked and won’t work, ever, to meet health aspirations of the people.

Access to health care – a prerequisite to improving access to affordable drugs:

As I see it, access to health care for all is a prerequisite to improving access to affordable drugs for country’s ‘health security’. Without providing access to requisite health care, making affordable drugs available for all, does not make much sense, if at all. This is because, patients will buy or get medicines only when a medical or paramedical professional will advise and prescribe them what to buy while treating any particular ailment.

Is the key pharma policy goal anywhere near its target?

Be that as it may, let me now try to gauge whether even the current key goal of the pharma policy to make an increasing quantity of affordable drugs available to more number of the population is anywhere near its target or not.

Capturing the impact of the present pharma policy on the ‘health’ of Indian pharma industry, the Annual Report 2016-17 of the Department of Pharmaceuticals (DoP) acknowledges that owing to the Government’s efforts to make medicines affordable, the domestic Pharma market witnessed a slowdown in the ongoing financial year. The industry registered a decline in growth of 7.4 percent over the corresponding figure for 2014 -15, with a similar aftermath in its financial performance.

Interestingly, a Press Release of Ministry of Chemicals and Fertilizers of September 27, 2016 claims that ‘ceiling prices’ of 464 formulations fixed after announcement of NLEM, 2015 and Revised Schedule-I, resulted in savings of Rs 2288 crore for consumers. Let me also add that a September 22, 2017 tweet of the same Union Minister gives a much higher number in this regard, which includes cardiac stents, though.

Fair enough, in that increasing patient access to affordable drugs ought to get reflected in the reasonable incremental volume growth of the Indian Pharmaceutical Market (IPM), at least, of those products, which feature in the National List of Essential Medicines (NLEM)? Contrary to this expectation, according to an article published by ‘Pharmabiz’ website on the CPhI India Special supplement in December 2016, ‘over the past 3 years (FY 2013 – FY 2016), the IPM has grown at a CAGR of ~ 11%, much lower than its historical average growth rate of 15%.’

Thus, both the private retail audit data, and also the submission of the DoP clearly indicate that this has not happened, as a desired outcome of drug price control.

Drug price regulations aren’t irrelevant either:

My above argument doesn’t also mean that drug price control, or stringent price monitoring, or tough price negotiation – in whatever way one may call it, is of no use; even where Universal Health Care (UHC) is up and running. This is regardless of whether this universal care is insurance driven, as in the United States, or state funded, as in the United Kingdom. As I said before, access to health care for all is a prerequisite to improving access to affordable drugs. I stressed this point briefly in one of my recent articles published in this blog, while focusing on another important development.

Drug price regulation in the UHC countries:

In case of insurance driven UHC, insurance companies or related payers, or even the regulators, mostly enforce stringent control on drug prices, as is currently happening in the United States. This fact is vindicated by a May 29, 2017 report that indicates: “The pharma industry, under the constant glare of the US drug regulator, has to contend now with pricing pressures in the American market.” The report further highlighted: “From Sun Pharma and Lupin to Glenmark, Dr. Reddy’s and the others, price erosion in generic drugs has been a common anguish as they declared their results for the fourth quarter ended March 31. For some of these companies, more than 40 per cent of their revenues come from the US market. The developments came at a time new launches in the US – at least for some of them – have taken a hit because of regulatory action. Pricing pressure in generics is not new, but this has exacerbated in recent times, with experts warning of further deterioration.”

Similarly, where the UHC is funded by the State, such as in the United Kingdom, prices of branded pharmaceuticals supplied to the National Health Service (NHS), are controlled either by the ‘Pharmaceutical Price Regulation Scheme (PPRS)’ or by the ‘Health Service Branded Medicines Regulations 2008’. The situation is no different virtually in the entire Europe.

Moreover, in Japan, where UHC functions so immaculately, the regulatory officials of the country announced in December, as reported on 7th March 2017, the Government plans to review drug prices more frequently –  annually for all therapies and quarterly for the newest, and most expensive ones that are used widely. Over recent months, the price of Opdivo, a blockbuster cancer drug from Bristol-Myers Squibb Co. and Japan’s Ono Pharmaceutical Co., was halved in Japan following a 32 percent cut in April for Gilead Sciences Inc.’s hepatitis cure Sovaldi, the report said.

In addition, an OECD report dated January 16, 2017 observes: “The proliferation of high-cost medicines and rising drug prices are increasing pressures on public health spending and calling into question the pharmaceutical industry’s pricing strategies. Governments need to work with the industry and regulators to define a new approach to the development and use of new health technologies that encourages innovation while also delivering more affordable and value for money treatments.”

Hence, drug price regulations aren’t irrelevant, either in India or even in countries with a robust UHC system in place, not just yet.

The rationale behind drug price control in UHC countries and India:

The major difference in the rationale of drug price control between the countries with UHC and others, such as India is as follows:

  • UHC countries extend health coverage between 80 to 100 percent of the population, on an average, with a very low percentage of ‘out of pocket expenses’ on drugs. Hence, the Government and other payers want to keep their own cost of drugs within a reasonable limit with drug price control, though its methodology varies from country to country.
  • On the other hand, in countries, such as India, where UHC is not available, over 70 percent of the population incur ‘out of pocket’ expenses on health care – and over 60 percent of which is spent on drugs. Hence, the Government intends to ensure a significant reduction in ‘out of pocket expenditure’ towards medicines, by trying to make more affordable drugs available to many through drug price control.

Conclusion:

All health care related policy measures of the Government are important for the nation. As I know, the related discussion papers are circulated by the Government only after several informal and ongoing discussions on the subject with the stakeholders, and considering other feedbacks received in that process.

Despite this general mechanism, several points of draft proposals, or even the final policy, are often not liked by all, triggering a raging debate and inviting stringent criticisms, including disagreement from other ministries. For example, according to reports: “Even as Prime Minister Narendra Modi announced the government’s intention to ensure access to affordable medicines, the government policy think tank NITI Aayog seems to be pushing for greater deregulation of drug prices and to disempower India’s drug price regulator.” Just as many others, I also often participate in such debates.

That said, improving not just availability, but in tandem with greater access to affordable drugs, would play a key role to foster overall ‘Health Security’ of the country. Drug price control or its equivalent measures, alone, does not improve access to affordable drugs, except shaving off significant revenue and profit of the pharma companies. Whether the appropriate terminology in this case would be ‘profit’ or ‘profiteering’, is part of a separate debate, altogether.

Neither, impeccable sets of pharma and health policies, implemented in-silo by the two different ministries, will help achieve this goal. As is well researched, an excellent policy with shoddy or improper implementation, fetches far worse outcome than an average policy when implemented well, and in close coordination with other policies having common goals. This holds good even while striving for a robust ‘Health Security’ for the country.

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.

 

Prescriptions in Generic Names Be Made A Must in India?

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Would prescriptions in generic names be made a must in India?

Yes, that’s what Prime Minister Modi distinctly hinted at on April 17, 2017, during the inauguration function of a charitable hospital in Surat. To facilitate this process, his government may bring in a legal framework under which doctors will have to prescribe generic medicines, the PM assured without any ambiguity whatsoever.

“In our country doctors are less, hospitals are less and medicines are expensive. If one person falls ill in a middle-class family, then the financial health of the family gets wrecked. He cannot buy a house, cannot conduct the marriage of a daughter,” he reiterated.

“It is the government’s responsibility that everybody should get health services at a minimal price,” the Prime Minister further reinforced, as he referred to the National Health Policy 2017. His clear assurance on this much-debated issue is indeed music to many ears.

Some eyebrows have already been raised on this decision of the Prime Minister, which primarily include the pharma industry, and its traditional torch bearers. Understandably, a distinct echo of the same one can also be sensed in some English business dailies. Keeping aside these expected naysayers, in this article, after giving a brief backdrop on the subject, I shall argue for the relevance of this critical issue, in today’s perspective.

Anything wrong with generic drugs sans brand names?

At the very outset, let me submit, there aren’t enough credible data to claim so. On the contrary, there are enough reports vindicating that generic drugs without brand names are generally as good as their branded equivalents. For example, a 2017 study on this subject and also in the Indian context reported, ‘93 percent of generic and 87 percent branded drug users believed that their drugs were effective in controlling their ailments.’

Thus, in my view, all generic medicines without any brand names, approved by the drug regulatory authorities can’t be inferred as inferior to equivalent branded generics – formulated with the same molecules, in the same strength and in the same dosage form; and vice versa. Both these varieties have undergone similar efficacy, safety and quality checks, if either of these are not spurious. There isn’t enough evidence either that more of generic drugs sans brand names are spurious.

However, turning the point that generic drugs without brand name cost much less to patients than their branded generic equivalents on its head, an ongoing concerted effort of vested interests is systematically trying to malign the minds of many, projecting that those cheaper drugs are inferior in quality. Many medical practitioners are also not excluded from nurturing this possible spoon-fed and make-believe perception, including a section of the media. This reminds me of the famous quote of Joseph Goebbels – the German politician and Minister of Propaganda of Nazi Germany till 1945: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”

The lower prices of generic drugs without brand names are primarily because their manufacturers don’t need to incur huge expenditure towards marketing and sales promotion, including contentious activities, such as, so called ‘Continuing Medical Education (CME)’ for the doctors in exotic locales, and several others of its ilk.

Thus, Prime Minister Modi’s concern, I reckon, is genuine to the core. If any doctor prescribes an expensive branded generic medicine, the concerned patient should have the legal option available to ask the retailer for its substitution with a less expensive generic or even any other branded generic equivalent, which is supposed to work just as well as the prescribed branded generic. For this drug prescriptions in INN is critical.

Provide Unique Identification Code to all drug manufacturers:

When in India, we can have a digitally coded unique identification number, issued by the Government for every individual resident, in the form of ‘Aadhaar’, why can’t each drug manufacturer be also provided with a similar digitally coded number for their easy traceability and also to decipher the trail of manufacturing and sales transactions. If it’s not possible, any other effective digital ‘track and trace’ mechanism for all drugs would help bringing the wrongdoers, including those manufacturing and selling spurious and substandard drugs to justice, sooner. In case a GST system can help ferret out these details, then nothing else in this regard may probably be necessary.

Past initiatives:

In India, ‘Out of Pocket (OoP) expenditure’ as a percentage of total health care expenses being around 70 percent, is one of the highest in the world. A study by the World Bank conducted in May 2001 titled, “India – Raising the Sights: Better Health Systems for India’s Poor” indicates that out-of-pocket medical costs alone may push 2.2 percent of the population below the poverty line in one year. This situation hasn’t improved much even today, as the Prime Minister said.

Although, ‘prescribe drugs by generic names’ initiative was reported in July 2015, in the current context, I shall focus only on the recent past. Just in the last year, several initiatives were taken by the current Government to help patients reduce the OoP expenses on medicines, which constitute over 60 percent of around 70 percent of the total treatment cost. Regrettably, none of these steps have been working effectively. I shall cite hereunder, just three examples:

  • On February 29, 2016, during the Union Budget presentation for the financial year 2016-17 before the Parliament, the Finance Minister announced the launch of ‘Pradhan Mantri Jan-Aushadhi Yojana (PMJAY)’ to open 3,000 Stores under PMJAY during 2016-17.
  • On August 04, 2016, it was widely reported that a new digital initiative of the National Pharmaceutical Pricing Authority (NPPA), named, “Search Medicine Price”, would be launched on August 29, 2016. According to NPPA, “Consumers can use the app before paying for a medicine to ensure that they get the right price.”
  • In October 2016, a circular of the Medical Council of India (MCI), clearly directed the medical practitioners that: “Every physician should prescribe drugs with generic names legibly and preferably in capital letters and he/she shall ensure that there is a rational prescription and use of drugs”

A critical hurdle to overcome:

Besides, stark inefficiency of the MCI to implement its own directive for generic prescriptions, there is a key legal hurdle too, as I see it.

For example, in the current situation, the only way the JAS can sell more of essential generic drugs for greater patient access, is by allowing the store pharmacists substituting high price branded generics with their exact generic equivalents available in the JAS. However, such substitution would be grossly illegal in India, because the section 65 (11) (c) in the Drugs and Cosmetics Rules, 1945 states as follows:

“At the time of dispensing there must be noted on the prescription above the signature of the prescriber the name and address of the seller and the date on which the prescription is dispensed. 20 [(11A) No person dispensing a prescription containing substances specified in 21 [Schedule H or X] may supply any other preparation, whether containing the same substances or not in lieu thereof.]”

A move that faltered:

To address this legal issue, the Ministry of Health reportedly had submitted a proposal to the Drug Technical Advisory Board (DTAB) to the Drug Controller General of India (DCGI), for consideration. In the proposal, the Health Ministry reportedly suggested an amendment of Rule 65 of the Drugs and Cosmetics Rules, 1945 to enable the retail chemists substituting a branded drug formulation with its cheaper equivalent, containing the same generic ingredient, in the same strength and the dosage form, with or without a brand name.

However, in the 71st meeting of the DTAB held on May 13, 2016, its members reportedly turned down that proposal of the ministry. DTAB apparently felt that given the structure of the Indian retail pharmaceutical market, the practical impact of this recommendation may be limited.

The focus should now move beyond affordability:

In my view, the Government focus now should move beyond just drug affordability, because affordability is a highly relative yardstick. What is affordable to an average middle class population may not be affordable to the rest of the population above the poverty line. Similarly, below the poverty line population may not be able to afford perhaps any cost towards medicines or health care, in general.

Moreover, affordability will have no meaning, if one does not have even easy access to medicines. Thus, in my view, there are five key factors, which could ensure smooth access to medicines to the common man, across the country; affordable price being one of these factors:

1. A robust healthcare infrastructure
2. Affordable health care costs, including, doctors’ fees, drugs and diagnostics
3. Rational selection and usage of drugs by all concerned
4. Availability of health care financing system like, health insurance
5. Efficient logistics and supply chain support throughout the country

In this scenario, just putting in place a legal framework for drug prescription in generic names, as the Prime Minister has articulated, may bring some temporary relief, but won’t be a long-term solution for public health care needs. There arises a crying need to put in place an appropriate Universal Health Care (UHC) model in India, soon, as detailed in the National Health Policy 2017.

Brand names aren’t going to disappear:

Prime Minister Modi’s assertion to bring in a legal framework under which doctors will have to prescribe generic medicines, probably will also legally empower the retailers for substitution of high priced branded generics with low priced generic or branded generic equivalents.

This promise of the Prime Minister, when fulfilled, will facilitate making a larger quantum of lower price and high quality generic drugs available to patients, improving overall access to essential medicines. Hopefully, similar substitution will be authorized not just for the JAS outlets, but by all retail drug stores, as well.

Brand names for generic drugs will continue to exist, but with much lesser relevance. the Drugs & Cosmetic Rules of India has already made it mandatory to mention the ‘generic names or INN’ of Drugs on all packing labels in a more conspicuous manner than the trade (brand) name, if any. Hence, if a doctor prescribes in generic names, it will be easier for all retail pharmacists and even the patients, to choose cheaper alternatives from different available price-bands.

Possible changes in the sales and marketing strategies:

If it really happens, the strategic marketing focus should shift – from primarily product-brand marketing and stakeholders’ engagement for the same, to intensive corporate-brand marketing with more intense stakeholder engagement strategies, for better top of mind recall as a patient friendly and caring corporation.

Similarly, the sales promotion strategy for branded generics would possibly shift from – primarily the doctors to also the top retailers. It won’t be unlikely to know that the major retailers are participating in pharma company sponsored ‘Continuing Pharmacy Education (CPE)’ in similar or even more exotic places than the doctor!

There are many more.

International examples:

There are enough international examples on what Prime Minister Modi has since proposed in his speech on this issue. All these are working quite well. To illustrate the point with a few examples, I shall underscore that prescribing in generic name or in other words “International Nonproprietary Name (INN)’ is permitted in two-thirds of OECD countries like the United States, and is mandatory in several other nations, such as, France, Spain, Portugal and Estonia. Similarly, pharmacists can legally substitute brand-name drugs with generic equivalents in most OECD countries, while such substitution has been mandatory in countries, such as, Denmark, Finland, Spain, Sweden, Italy. Further, in several different countries, pharmacists have also the obligation to inform patients about the availability of a cheaper alternative.

However, the naysayers would continue saying: ‘But India is different.’

Impact on the pharma industry:

The March 2017 report of ‘India Brand Equity Foundation (IBEF)’ states that Indian pharmaceutical sector accounts for about 2.4 per cent of the global pharmaceutical industry in value terms, 10 per cent in volume terms and is expected to expand at a Compound Annual Growth Rate (CAGR) of 15.92 per cent to US$ 55 billion by 2020 from US$ 20 billion in 2015. With 70 per cent market share (in terms of value), generic drugs constitute its largest segment. Over the Counter (OTC) medicines and patented drugs constitute the balance 21 percent and 9 percent, respectively. Branded generics constitute around 90 percent of the generic market. In my view, if the above decision of the Prime Minister is implemented the way I deliberated here in this article, we are likely to witness perceptible changes in the market dynamics and individual company’s performance outlook. A few of my top of mind examples are as follows:

  • No long-term overall adverse market impact is envisaged, as ‘the prices of 700 essential medicines have already been capped by the National Pharmaceutical Pricing Authority (NPPA). However, some short-term market adjustments are possible, because of several other factors.
  • There could be a significant impact on the (brand) market shares of various companies. Some will have greater exposure and some lesser, depending on their current sales and marketing models and business outlook.
  • Valuation of those companies, which had acquired mega branded generics, such as Piramal brands by Abbott Healthcare, or Ranbaxy brands by Sun pharma, may undergo considerable changes, unless timely, innovative and proactive measures are taken forthwith, as I had deliberated before in this blog.
  • Together with much awaited implementation of the mandatory Uniform Code of Pharmaceutical Marketing Practices (UCPMP) sooner than later, the sales and marketing expenditure of the branded generic players could come down significantly, improving the bottom-line.
  • Pharma marketing ballgame in this segment would undergo a metamorphosis, with brighter creative minds scoring higher, aided by the cutting-edge strategies, and digital marketing playing a much greater role than what it does today.
  • A significant reduction in the number of field forces is also possible, as the sales promotion focus gets sharper on the retailers and digitally enabled patient engagement initiatives.

The above examples are just illustrative. I hasten to add that at this stage it should not be considered as any more than an educates guess. We all need to wait, and watch how these promises get translated into reality, of course, without underestimating the quiet lobbying power of the powerful pharma industry. That said, the long-term macro picture of the Indian pharma industry continues to remain as bright, if appropriate and timely strategic interventions are put well in place, as I see it.

In conclusion:

It is an irony that despite being the 4th largest producer of pharmaceuticals, and catering to the needs of 20 percent of the global requirements for generic medicines, India is still unable to ensure access to many modern medicines to a large section of its population.

Despite this situation in India, Prime Minister Modi’s encouraging words on this issue have reportedly attracted the wrath of some section of the pharma industry, which, incidentally, he is aware of it, as evident from his speech.

Some have expressed serious concern that it would shift the decision of choosing a specific generic formulation of the same molecule for the patients from doctors to chemists. My counter question is, so what? The drug regulator of the country ensures, and has also repeatedly affirmed that there is no difference in efficacy, safety and quality profile between any approved branded generic and its generic equivalents. Moreover, by implementing an effective track and trace system for all drugs, such misgiving on spurious generic medicines, both with or without brand names, can be more effectively addressed, if not eliminated. Incidentally, reported incidences of USFDA import bans on drug quality parameters and breach of data integrity, include many large Indian branded generic manufacturers. Thus, can anyone really vouch for high drug quality even from the branded generics in India?

Further, the expensive branding exercise of essential medicines, just for commercial gain, and adversely impacting patients’ access to these drugs, has now been questioned without any ambiguity, none else than the Prime Minster of India. The generic drug manufacturers will need to quickly adapt to ‘low margin – high volume’ business models, leveraging economies of scale, and accepting the stark reality, as was expressed in an article published in Forbes – ‘the age of commodity medicines approaches’. Even otherwise, what’s wrong in the term commodity, either, especially when generic medicines have been officially and legally classified as essential commodities in India?

Overall, the clear signal from Prime Minister Modi that ‘prescriptions in generic names be made a must in India ‘, well supported by appropriate legal and regulatory mechanisms – is indeed a good beginning, while paving the way for a new era of Universal Health Care in India. God willing!

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.

In a Quandary of Drug Quality, Price Control, Innovation and Patient Interest in India

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The patients in India have every reason to apprehend, whether the prescription drugs that they consume are efficacious, safe and conform to the government approved prices, alongside another important question: Do they affordable access to the fruits of innovation?

The regulator responsible for drug quality in India is responsible for ensuring the first two, and the drug price regulator of the country ensures the remaining two.

Apparently, both these esteemed government bodies, are sure that they are doing the best jobs in their respective areas. Moreover, in these days of social media blitzkrieg, it won’t be uncommon to witness some of them, creating hype on some issues that many feel is better avoided, and at times even contradictory in nature.

Amid this seemingly chaotic continuity of the same or a bit deteriorating scenario, patients are often caught in an unenviable footing.

In this article, I shall discuss on these concerns afresh, quoting a few recent examples. My objective is to encourage all concerned to move away from incessant hype creation by accepting the reality, as the patients feel. This is necessary, because anyone, including the regulators can fall victim of such unfettered developments, at any point of time.

Thus, it may be appropriate for all to jettison any residual arrogance or a faint shade of narcissism, before putting the nose to the grindstone to resolve these pressing issues decisively, for patients’ sake.

Are we consuming effective and safe medicines?

I raised this question first in an article titled, “Are We Taking Safe and Effective Medicines?” published in this blog on November 13, 2013. That deliberation was primarily based on US-FDA ‘import bans’ from various drug manufacturing facilities in India, involving even the top Indian pharma players. Based on their own quality and safety audits, the US regulator had concluded that drugs produced in those factories are not safe for consumption by the patients in America.

This apprehension has now almost reached its crescendo, when on February 24, 2017, probably for the first time ever, US-FDA publicly voiced its apprehension about the efficacy of medicines being sold and consumed by patients in India.  The observation came from the India director of the US-FDA in an annual conference of a large pharma trade association of some of the top domestic pharma companies. While commenting, “I do not think any one of us wants to take such drugs which lack efficacy”, the official reportedly revealed, he occasionally gets samples sent from the US embassy health unit in Delhi, and complaints are usually about the medicines not giving the desired results.

It is noteworthy, as earlier, rubbishing claims levelled by media expressing growing concern among overseas regulators over the quality of Indian made drugs, the Drug Controller General of India (DCGI) had reportedly strongly reiterated that there have been no lapse or compromise on quality parameters of the drugs manufactured throughout the country, as the efficacy of the drugs and safety of the patients have always remained the top priority of DCGI.

Yet another news article of August 22, 2016 reported that after a year-long survey involving Government, civil society and pharmacy professionals, and testing nearly 50,000 drug samples across the country during this period, the Ministry of health of India found that medicines produced in India are safe and effective. This study was kicked off in the wake of rising concerns that several medicines made in the country posed risks to patients, the report highlighted.

Should ‘Self-certification’ by industry prevail?

Intriguingly, when questions on drug quality manufactured in India, are regularly being raised by other equally responsible drug authorities, we find ‘self-certification’, in this regard, coming from all those who are expected to resolve this issue beyond an iota of doubt, always prevails.

Apparently, not just the drug regulator and the Union Ministry of Health are in a sustained denial mode, many large pharma companies also seem to be in the same mode. On March 01, 2017, the media reported, “Close on the heels of US FDA India office raising concerns over the quality of medicines marketed in India, pharma leaders came together to defend the quality of their products. There is no question of compromising quality of Indian products meant for domestic market and export, they pointed out.” This rebuttal was expected. Nevertheless, the apprehension lingers: Should such self-certification by pharma players prevail?

That said, one may try to justify this quandary by saying that effectively regulating over 20,000 domestic pharmaceutical companies, including third party and loan license manufacturers, poses a serious challenge to the DCGI and the State Drug Controllers. However, the moot point is, who has been encouraging such over-proliferation of drug manufacturing facilities over a long period of time, in any case? In that sense, whose prime responsibility is it to ensure that drugs consumed by patients in India are efficacious and safe?

The answer to these vexing questions continues to remain unanswered.

Did patients benefit from drug price control orders?

Let me first draw a brief sketch on the global perspective of price increases in generic drugs. It appears that in all those countries where there is no drug price control in place, the entire pharma industry is being adversely impacted by huge generic drug price inflation. This finding has been well captured in a study by Elsevier. It shows, between November 2013 and November 2014, out of its research sample of 4421 generic drug groups, there were price increases in 222 drug groups by 100 percent or more. In 17 drug groups price increases were taken even over 1000 percent, which include even tetracycline. With this trend sharply moving north, many patients, across the world, are struggling hard to find ways to survive in this situation. With this backdrop, I now get back to its India perspective.

I have read some media editorials questioning, just as the pharma industry, whether it is the right approach to make essential medicines affordable through drug price control in India? Nevertheless, there isn’t an iota of doubt in my mind that yes, it is, in the prevailing health care scenario of the country sans universal health care, with out of pocket expenses on medicines being the highest in the world and when market competition doesn’t bring down the price of medicines, for obvious reasons. My questions, on the contrary, will be, is drug price control being enforced in India the way it should? Are the patients getting commensurate benefits out of it? If not, why?

However, on the face of it, the answer to the question above “Did patients benefit from drug price control orders”, may appear to be an affirmative one. This is mainly because, on July 28, 2017, no less than the Union minister for Chemicals and Fertilizers, in a written reply to the Rajya Sabha reportedly conveyed that the Indian consumers have saved nearly Rs 5,000 crore due to the Government fixing the prices of essential medicines under the Drugs Price Control Order (DPCO) 2013.

The ground reality of drug price control:

Let me try to explore a bit in this area with some recent examples.

According to the data from India’s drug pricing watchdog – the National Pharmaceutical Pricing Authority (NPPA), compliance to various Drug Price Control Orders (DPCO) is far from satisfactory. Outstanding dues for non-compliance to notified ceiling prices, including penalty, from scores of pharma companies, have now reportedly piled up over the past two decades exceeding Rs. 4,551 crore (around USD 700 million). Thus, the same question haunts: Has drug price control benefitted the patients in India, as was intended to?

The situation is no different, even with DPCO 2013. On February 23, 2017, NPPA notified the ‘Suspected cases of Noncompliance of Ceiling Price by Pharmaceutical Companies,’ of 634 drugs, along with a ‘Public Notice’ for the same. This listed included the products marketed by some leading pharma companies in India, such as, Cipla, Abbott India, Alkem Labs, AstraZeneca, Dr Reddys Lab and Cadila, among many others.

Yet another fresh allegation related to drug pricing has just come to light. Interestingly, it relates to an anti-diabetic drug that falls outside DPCO 2013. On March 01, 2017, a news articled reported, “India’s drug regulator will look into allegations that four leading pharmaceutical companies are colluding to set the price of anti-diabetic drug Vildagliptin, a move that may rattle the almost Rs. 10,000 Crore (around USD 1540 million) market in the country.” Vildagliptin is a proprietary drug of Novartis, which has licensed it to three other companies. All of them sell Vildagliptin in India under their own brand names. Abbott sells it as Zomelis, USV as Jalra and Emcure as Vysov. The combined sales of these brands stood at Rs. 822 Crore (around USD 125 million) last year, the report states.

Be that as it may, the bottom line, as many believe, continues to remain unchanged, as it has always been – the patients don’t derive intended benefits due to lackluster and apparently ineffective enforcement of the drug price control in India.

Another crucial player:

Besides the two important and powerful Government authorities – DCGI and NPPA, there is another very critical player in this game – the Indian drug industry. Without whole-hearted cooperation and result-oriented action by all the three players, in tandem, nothing can possibly change this agonizing status quo, in this area.

The industry too is in a denial mode:

Quite like the other two critical constituents, who always deny any serious allegation on their actions, not being good enough to fetch the intended benefits for the patients, the drug industry too doesn’t seem to be any different. It always appears to be in a pre-programmed denial mode against all such allegations, irrespective of whether these are on drug quality, price, or on frequent misuse of the term innovation. They always try to justify their action, playing the victim card, as it were, and expecting other stakeholders to believe that they are doing right, always.

Let me now explore each of these areas separately, basically from the pharma industry perspective:

Drug quality: Pharma players, just as the Indian drug regulator, do not seem to accept that many drugs in India do not provide desirable benefits to patients, as alleged even by the US-FDA after studying some test results, following complaints from their local establishments. Many of us, at an individual level, may also have experienced just the same, and nurture the same doubt on the efficacy and safety profile of some branded generics that we consume, but have no wherewithal to prove the same. Doctors just change the brands, when any patient comes with such complaints, as Pharmacovigilance has not taken-off in the country with full steam, just yet. Thus, both the government regulators and the industry are in sync with each other, on this issue.

Drug price control: In this specific area, unlike the issue of drug quality, the respective stands of the government and the industry are poles apart. The former believes that it is working well, and the latter says, it isn’t.

The industry, as I see it, wants to project an impression that drug price control is the root cause of all evils, including compromises on drug quality, and some drugs going out of the market. The industry further highlights that drug price control offers a crippling blow to innovation, as they can’t garner enough financial resources through increased drug prices. It is another matter that they can’t possibly claim, drug price control offers a telling blow on their profit, as despite price control pharma is one of the highest profit making industry in India and globally too.

What innovation means to patients:

Interestingly, both the domestic and multinational pharma players often use the term of innovation, mostly construed as a façade, as it were, in their different advocacy initiatives, and during media outreach, as well. For global players, it primarily means innovation of new products, which offers monopolistic marketing and pricing advantage. Whereas, for generic players, it is generally process innovation, and different generic or biosimilar product development.

This is fine, but why should patients pay high drug prices, only because pharma players want to spend more on innovation, either for a new drug or a new process? I reckon, almost none will be willing to pay just for the heck of it.

Commensurate incremental price for incremental value:

Many patients, on the other hand, will be willing to pay more for any commensurate incremental value that a drug or a process will offer for a speedy recovery from illness, or to live a better quality of life, or for a lesser net treatment cost. Thus, the price of any brand is considered by stakeholders as a function of the value that it promises to offer. Consequently, brand marketing is deemed a value delivery system. For medicines, this value must be easily perceptible, quantifiable and scientific research based. Accordingly, the outcome of any such innovation should convince the regulators, doctors, hospitals and ultimately the patients – what value delivery – path breaking or incremental, for which patients need to pay commensurate incremental prices.

Various ways of ensuring it:

There are several different ways of addressing it, even for branded generics in India. For example, when branded generics of the same drug or similar FDCs of different drugs, are marketed by different companies with a huge price difference, the pharma players should necessarily submit before appropriate authorities, prior to marketing approval, all data regarding incremental and quantifiable value offerings, especially for those branded generics falling at the top of the price band. This is necessary, as an increasing number of brands in the market of the same generic molecules or the same FDCs, may not necessarily lead to greater competition with any significant impact on price. I shall argue on this point below.

What happens, generally:

For any drug falling outside price control in India, branded generic drug makers, usually set prices based on whatever each of them considers the market will accept. This consideration is highly elastic in nature, varying from a very low to a very high price, for any specific molecule and its FDCs. As I said before, it has been well-established by now that competition doesn’t play any significant role to bring down the branded generic drug prices, unlike many other consumables in different industries.

Why market competition doesn’t work for medicines?

This is primarily because, the purchasing decision for medicines does not depend on individual patients, unlike many other consumables. This decision is taken by the doctors while writing prescriptions for them. It is widely alleged, all over the world, that many important doctors are heavily influenced by the drug companies, often through dubious and highly cost intensive means, to prescribe their respective brands or branded generics in the process of treatment of a wide variety of medical conditions. In this rat race of generation of more and more prescriptions, pharma companies require to have a deep pocket to achieve their financial goals. Thus, many brands attract high prices to generate more profit and keep moving this vicious circle. Value based brand differentiation for many leading branded generics or even me-too patented products, aren’t mostly robust enough to stand any scientific or peer scrutiny. Consequently, the prescription demand of a most branded generics or me-too patented products do not have any linear relationship with the nature of market completion, and therefore, on their prices. In this perspective, setting a price for a pharma brand doesn’t depend on quantifiable value offerings for patients, as someone said before, “It is not a science. It is a feel.”

In conclusion:

The overall concern spans across several important public health and safety related issues, which also involve general quality standards of medicines, the effectiveness of drug price control, the core intent of so frequent use of the term ‘innovation’ in various pharma advocacy initiatives, including media outreach.

In this scenario, is the pharma industry, together with the drug quality and pricing watchdogs, failing to fathom the grave residual impact of continuity of this situation? In my view, this specific assumption appears too simplistic, naïve, and unrealistic. Or else, could it be that they are actually in a quandary, not being able to decide what would be the most effective actionable blueprint to resolve these issues?

I reckon, this is high time now for all concerned to accept the reality, seriously introspect on these critical issues, opt for a dip-stick expert analysis to assess the real status, and then work out a time-bound action plan with assigned accountability on the ground.

Together they may wish to address the following queries, among several others:

  • Why are they still running on a treadmill, as it were, over the last four decades, to come nearer these issues for better understanding, without moving an inch on the ground, despite public outcry?
  • Are they really in a quandary?
  • Are these concerns not an outcome of basically governance related failures?
  • Why hypes are being created all around on significant savings over out of pocket expenses on medicines because of ‘good enforcement’ of DPCOs, when it doesn’t seem so?
  • What prompts all the key players to be in a consistent denial mode on dubious drug quality standards in India, when foreign drug regulators are pointing it out in public?
  • Isn’t the term ‘innovation’ being rampantly misused, more as a major tool for advocacy to gain free pricing advantage?
  • Shouldn’t ‘Que Sera, Sera’ days change now?

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.

Drug Price Control in India: When A Local Media Goes Against, A Global CEO Doesn’t

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‘Variety is the spice of life’, as the good old saying goes. The week, just gone by, was indeed packed with a wide variety of surprises, well encompassing various important areas, some of which are as follows:

  • Effective November 08, 2016 midnight, Indian currency notes of ₹500 and ₹1000 denominations ceased to remain legal tenders. This demonetization followed extensive media coverage, both national and international, on unprecedented administrative and public chaos around this otherwise bold and good intent.
  • The same day witnessed much unexpected triumph of Trump as the 45th President-Elect and the Commander-in-Chief of the United States of America. It is entirely a different matter though, that post-election, millions of Americans reportedly took to streets across the United states to vent their fury over the billionaire’s election victory.
  • On November 07, 2016, a well-known Indian business daily, ‘The Economic Times’, in its editorial, apparently expressed its solidarity with the pharma industry, in general, to do away with drug price control in India. The key reason for this advocacy, as I could sense, is to encourage the drug players to grow by making more profits. I respect this view of the editor will all humility. However, the point that I am unable to ferret out though, what happens to especially the poor patients in such an eventuality. With hands-on experience in the pharma industry over several decades, it appears to me that the editorial suggestions, as well, grossly lack in requisite depth of understanding of the core issue.
  • On November 09, 2016, quite opposite to what the above editorial of ‘The Economic Times’, the current global CEO of GlaxoSmithKline – Sir Andrew Witty, in an interview, strongly argued in favor of the necessity of drug price control in India, that improves access to medicines for a vast majority of the country’s population. To substantiate this point Sir Andrew said in another interview on the same day, “We’ve seen demand of products jump 45 percent after the price is cut by 20 percent. The problem arises when we don’t have supply to cater to the demand, leaving patients frustrated. A bit more predictability (on the part of government) will help.”
  • As if this diametrically opposite views are not enough, on November 10, 2016, the well-known civil society organization – ‘All India Drug Action Network (AIDAN)’, reportedly sent legal notices to the CEO of Niti Aayog CEO and secretaries to the Health Ministry, Department of Pharmaceuticals and Department of Industrial Policy and Promotion over their talks to cut the powers of the National Pharmaceutical Pricing Authority (NPPA). AIDAN has termed this Government move “anti-national” and “anti-people”, further adding that it affects an ongoing case at the Supreme Court over various aspects of the drug price control.

In this article, I shall restrict myself to the pharma related issue of the past week, especially on the interesting advocacy through editorial, against the drug price control in India. Simultaneously, I shall also underscore its relevance in the country, primarily to improve access to medicines for millions of Indians, as articulated by one of the leading voices from the global pharma industry.

Is the yardstick of judging pharma industry different?

This particular question floats in my mind because of several reasons. One such is, almost regularly sponsoring fully paid trips for doctors, especially in an exotic foreign land, by many pharma companies. Such practices of the drug companies are generally inferred, more often than not spearheaded by a large section of the media, as dubious means of the organization to entice, or influence prescribing decisions of physicians in favor of their respective high priced brands, ignoring the health and economic interest of patients.

In similar context, just after having a quick glance over a not so important article, written on various operations at the headquarter of a global drug company situated in a beautiful locale of the world, when one focuses the fine print at the end as a disclaimer, which reads: “This reporter was in (name of the country) on an invitation by (name of the global company)…, do the readers arrive at the same conclusion on ‘gratification’, as above, and its consequent possible outcome on pharma related writings of these reporters?

Can the concerned members of the ‘Fourth Estate’ possibly claim desired intellectual independence in their analysis of a situation involving such companies or their trade associations, even after the above disclaimer? Or for that matter, related publications too, which allow acceptance of such avoidable ‘gratis’ by its reporters? Shouldn’t such incidences, whenever these happen, irrespective of who availed these, be perceived in the same light?

In the current scenario, this issue is something for us to seriously ponder. This is mainly because, for following similar practices, why should there be two different yardsticks to gauge the quality of professional independence of two different otherwise highly respectable professions?

This reminds me of a great pharma reporter, writing for an internationally acclaimed business daily, mainly on the drug industry and healthcare. I met him in India a few years back on his invitation. Although, I shall not take either his or his paper’s name. This is to show respect to our free and frank interaction. He flew down to India with his employer paying all the pharma reporting work related expenses. He met with all those in the Indian drug industry that he wanted to, primarily to capture the nuances of the thought pattern of large and small Indian pharma players. I was so impressed with his intellect, and independent professional outlook, like all those who met him during his that specific visit to India. Even now, I can feel his independent perspective, as I read his articles. It would be great to experience similar feelings, while reading pharma related articles and editorials, in various publications of my own country. At the same time, I shall be delighted to be proved wrong regarding any such possibilities in this area.

That said, I shall now move on to the relevance of drug price control in India.

Any relevance of drug price control in a ‘Free Market Economy’?

No doubt, this is a very pertinent question. Equally pertinent answers are also available in a 2014 paper titled, “Competition Issues in the Indian Pharmaceuticals Sector” of Delhi School Economics (DSE). The paper deals with issues related to failure of ‘Free Market Economy’, despite intense competition, especially for branded generic drugs in India.

Quoting a practicing surgeon, the DSE article states: “Sometimes it could be just plain ignorance about the availability of a cheaper alternative that makes doctors continue to prescribe costlier brands. But one cannot ignore the role of what is euphemistically called marketing “incentive”, which basically mean the inappropriate influence pharmaceutical companies exert on doctors. This runs deep. Hospitals choose to stock only certain drugs in their in-house pharmacies and insist that hospitalized patients buy drugs only from the hospital pharmacy. Drug companies sell drugs to hospitals at a price much lower than what the patient is charged, further incentivizing the hospital to stock their products. The cheaper brands often get left out in this game.”

Further, in an ideal free-market economic model, for all approved branded generics with exactly the same formulation, having the same claimable efficacy, safety and quality standards, though marketed by different pharma companies, competitive forces should prompt some parity in their pricing.

Any generic brand with exactly the same formulation as others and offering the same therapeutic value, but costing significantly more, should ideally attract a lesser number of customers, if and where purchase decisions are taken by the consumers directly. However, for prescription medicines it’s not so. The well proven process of consumers exercising their own choice to select a brand, mostly influenced by advertising or word of mouth, does not happen at all.

The Government attributes ‘Market Failure’ for pharmaceuticals:

In its price notification dated July 10, 2014, the NPPA has categorically stated the following:

  • There exist huge inter-brand price differences in branded-generics, which is indicative of a severe market failure, as different brands of the same drug formulation, which are identical to each other in terms of active ingredient(s), strength, dosage, route of administration, quality, product characteristics, and intended use, vary disproportionately in terms of price.
  • It is observed that, the different brands of the drug formulation may sometimes differ in terms of binders, fillers, dyes, preservatives, coating agents, and dissolution agents, but these differences are not significant in terms of therapeutic value.
  • In India the market failure for pharmaceuticals can be attributed to several factors, but the main reason is that the demand for medicines is largely prescription driven and the patient has very little choice in this regard.
  • Market failure alone may not constitute sufficient grounds for government intervention, but when such failure is considered in the context of the essential role of pharmaceuticals play in the area of public health, which is a social right, such intervention becomes necessary, especially when exploitative pricing makes medicines generally unaffordable and beyond the reach of most and also puts the huge financial burden in terms of out-of-pocket expenditure on health care.

Civil Society echoed the same sentiment:

In this context, it is important to note that seven large Civil Society Organizations in a letter of August 20, 2014 addressed to Mr. Ananth Kumar, the present Minister of Chemicals and Fertilizers with a copy to Prime Minister Modi, articulated similar views, as follows:

“Limiting all price regulation only to a list of 348 medicines and specified dosages and strengths in the DPCO 2013 goes against the policy objective of making medicines affordable to the public. The National List of Essential Medicines, a list of 348 rational and cost-effective medicines, is not the basis for production, promotion and prescription in India. In reality the most frequently prescribed and consumed medicines are not listed in the NLEM.”

Last week, AIDAN has also indicated that the reported Government move to curtail the power vested on the NPPA for drug price, affects an ongoing case at the Supreme Court over various aspects of the drug price control.

Are medicines cheapest in India…really?

It is often highlighted that medicines cost much cheaper, if not the cheapest, in India. This is too simplistic a view on this subject. It compares the prevailing Indian drug prices in Rupee, against the prices of similar drugs in other countries, just by simple conversion of the foreign currencies, such as, US$ and Euro into Rupee. To make the comparison realistic and credible, Indian drug prices should be compared against the same in other countries, only after applying the following two critical parameters:

  • Purchasing Power Parity and Per Capita Income
  • Quantum of per capita ‘Out of Pocket Expenditure’ on drugs

The Department of Pharmaceuticals (DoP) with the help of academia and other experts had earlier deliberated on this issue in one of its reports on patented drug pricing. The report established that post application of the above two parameters, medicines in India are virtually as expensive as in the developed world, causing great inconvenience to the majority of patients in the country.

Hence, common patients expectedly look for some kind of critical intervention by the Government, at least, on the prices of essential drugs in India.

‘Cannot do away with Drug Price Control’ – said the New Government:

On August 24, 2015 in an interview with a national business daily, V K Subburaj, the Secretary of the Department of Pharmaceuticals commented, “Price control on drugs a shot in the arm for health care” and “the Government cannot do away with it.”

He argued, “A large section of the population is poor. Suddenly, your system is disturbed if you have to spend more on drugs. Drugs are an important component of health care expenditure.”

Accepting the fact that in India, big and small companies investing in research would need more money, Mr. Subburaj said, “In India, we can’t afford to remove controls as the burden of disease is high.”

All stakeholders expect that there is some predictability in what the Government says. Can the stand taken by the policymakers change in just a year’s time, probably wilting under industry pressure?

Conclusion:

The drug price control in India is in vogue since 1970, uninterruptedly. The retail audit data continue to indicate that the growth of the Indian pharma industry, over the last four and half decade long price control regime, has been nothing less than spectacular. This would consequently mean, increasing consumption of drugs, leading to improved access to medicines in India, including its hinterland, though may still not be good enough. Sir Andrew Witty of GSK also articulated the same view, just the last week. It’s a different story altogether that some of the industry sponsored expensive market surveys attempt to wish it away.

Coincidentally, at the commencement of drug price control regime in India in 1970, almost all the players in the ‘Top 10’ pharma league table of the country, were multi-national drug companies. Today the situation has just reversed. Out of ‘Top 10’, about seven are home grown drug companies. Many of these companies were born post 1970. Without frequent M&As by the pharma MNCs, this number could have been probably higher today.

By the way, what’s the span of drug price control in India really – just about 18 percent of the total domestic pharma market now? Around 80 percent of the local drug market continues to remain in the ‘free-pricing’ and ‘high-profit’ zone.

When it comes to profitability, it is worth mentioning, the promoter of the so called ‘low margin’ generic pharma company – Sun Pharma, is the second-richest person in India. He created his initial wealth from India, despite ostensible ‘growth stunting’ price control.

Keeping this in perspective, is it not baffling to fathom the reason behind a local business publication’s apparently endorsing the advocacy initiatives of pharma industry against drug price control through an editorial, when a well-regarded global pharma CEO expresses a strong favorable view in this regard?

By: Tapan J. Ray   

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

On Serious Healthcare, Some Bizarre Decisions

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On August 04, 2016, it was widely reported by the media that the Union Minister of Chemicals and Fertilizers – Mr. Anant Kumar, would launch a new digital initiative of the National Pharmaceutical Pricing Authority (NPPA), named, “Search Medicine Price”, on August 29, 2016.

This is an app developed by the National Informatics Centre, for android smartphones ‘that will enable patients to check the prices of essential medicines on-the-go’. It will be an extension of NPPA’s “Pharma Jan Samadhan” web-portal facility. The Indian price regulator believes that wide use of this app would successfully reduce the instances of overcharging the consumers by the pharma companies and retail chemists, especially for lifesaving, and other expensive medicines. 

India’s drug pricing watchdog is planning to introduce this app to enable the patients check the prices of essential medicines on-the-go, and expects that this measure will hold drug companies and medicine retail outlets more accountable to patients.

In the test version of the app, which has since been released for stakeholder feedback, patients can search for the ceiling price of all medicines under the National List of Essential Medicines (NLEM), on the basis of its generic name and the state they’re buying it from.

The Chairman of NPPA, reportedly, further said, “Consumers can use the app before paying for a medicine to ensure that they get the right price. At present, whatever action we take against the companies, including recoveries, the consumer does not get back the overcharged amount he or she has paid.”

Good intent with a basic flaw:

The intent of the Government in this regard is indeed laudable. However, the initiative seems to underscore the blissful ignorance of the prevailing ground realities in India.

The media report highlights that with this app, the patients can search for the ceiling price of all medicines featuring in the NLEM on the basis of their generic names.

Whereas, the ground reality to make any meaningful use of this app is quite different. This is primarily because, in the Indian Pharmaceutical Market (IPM), over 90 percent of drugs are branded generics. An overwhelming majority of the doctors, as well, follow this trend while writing prescriptions for their patients, in general. For any single ingredients or Fixed Dose Combination (FDC) formulation, there are as many as even 30 to 40 brands, if not more. 

In that case, when the prescriptions given to patients are mostly for branded generic drugs, how would that person possibly get to know their generic names, to be able to check their ceiling prices with the help of the new “Search Medicine Price” app?

Not just a solitary example: 

This is just not a solitary instance of ignorance of the Government decision makers on the realities prevailing in the country.

With an admirable intent of making drugs more affordable for increased access, especially, to all those patients incurring out-of-pocket health expenditure, the Government has been taking several such measures, and is also trying to create a hype around these. Unfortunately, most of these efforts, miss the core objective of increasing access to drugs at the right price, by miles. 

Another recent example: 

This particular example, in my view, is even more bizarre.

It happened on February 29, 2016, the day when the Union Budget proposal for the financial year 2016-17 was presented before the Parliament of India.

In this budget proposal, the Union Finance Minister announced the launch of ‘Pradhan Mantri Jan-Aushadhi Yojana (PMJAY)’. 3,000 Stores under PMJAY will be opened during 2016-17.

Many consider this scheme as a repackaged old health care initiative, only adding the new words ‘Pradhan Mantri’ to it.

Just to recapitulate, Jan-Aushadhi is an ongoing campaign launched by the Department of Pharmaceuticals in 2008, in association with Central Pharma Public Sector Undertakings (PSU), to provide quality medicines at affordable prices to the masses.

Under this scheme, Jan Aushadhi Stores (JAS) are being set up to provide generic drugs, which are available at lesser prices, but are equivalent in quality and efficacy as expensive branded drugs.

The Department of Pharmaceuticals had initially proposed to open at least one JAS in each of the 630 districts of the country, so that the benefit of “quality medicines at affordable prices” is available to at least one place in each district of India.

If the initiative becomes successful, based on its inherent merit and the cooperation of all stakeholders, the scheme was to be extended to sub divisional levels as well as major towns and village centers by 2012. However, after 5 years, i.e. up to February, 2013, only 147 JAS were opened, and out of those only 84 JASs are functional. 

More recently, according to a June 02, 2015 report, “under the new business plan approved in August 2013, a target of opening 3,000 Jan Aushadhi stores during the 12th plan period i.e. from 2013-14 to 2016-17 was fixed. As per the Standing Committee on Chemicals and Fertilizers report in March 2015, till date only 170 JAS have been opened, of which only 99 are functional.”

Tardy progress:

The tardy progress of the scheme was largely attributed to:

  • A lackluster approach of State governments
  • Poor adherence to prescription of generic drugs by doctors,
  • Managerial/ implementation failures of CPSU/ BPPI.
  • Only 85 medicines spread across 11 therapeutic categories were supplied to the stores and the mean availability of these drugs was found to be 33.45 percent, with wide variations across therapeutic categories. 

There is no doubt, however, the intent of ‘Pradhan Mantri Jan-Aushadhi Scheme’ of 2016 is as laudable as the earlier “Jan-Aushadhi Scheme”, launched by the Department of Pharmaceuticals in 2008, was at that time. But, the moot question that comes at the top of mind:  Is it robust enough to work effectively in the present situation? 

Why it may not fetch the desired outcome?

Besides strong support from the State Governments, and other factors as enlisted above, making the doctors prescribe drugs in generic names would be a critical issue to make the “Pradhan Mantri Jan-Aushadhi scheme’ a success, primarily to extend desirable benefits to a sizeable section of both the urban and rural poor. Another relevant question that comes up now, how would the Government ensure that the doctors prescribe drugs in the generic names?

A critical challenge:  

Since, the generic drugs available from ‘Jan Aushadhi’ retail outlets are predominantly prescription medicines, patients would necessarily require a doctor’s physical prescription to buy those products.

Despite some State Government’s circulars to the Government doctors for generic prescription, and the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, that states: “Every physician should, as far as possible, prescribe drugs with generic names and he/she shall ensure that there is a rational prescription and use of drugs”, the doctors, in India, prescribe mostly branded generics. It includes even many of those prescriptions, generated from a large number of the Government hospitals.

The legal hurdle for generic substitution:

In a situation such as this, the only way the JAS can sell more for greater patient access to essential drugs, if the store pharmacists are allowed to substitute a high price branded generic with exactly the same generic molecule that is available in the JAS, without carrying any brand name, but in the same dosage form and strength, just as the branded ones. 

However, this type of substitution would be grossly illegal in India. This is because, the section 65(11)(c) in the Drugs and Cosmetics Rules, 1945 states as follows:

“At the time of dispensing there must be noted on the prescription above the signature of the prescriber the name and address of the seller and the date on which the prescription is dispensed. 20[(11A) No person dispensing a prescription containing substances specified in 21[Schedule H or X] may supply any other preparation, whether containing the same substances or not in lieu thereof.]” 

Thus, I reckon, the most important way to make ‘Jan Aushadhi’ drugs available to patients for greater access, is to legally allow the retailers substituting the higher priced branded generic molecules with their lower priced equivalents, sans any brand name.

A move that did not work:

Moving towards this direction, the Ministry of Health had reportedly submitted a proposal to the Drug Technical Advisory Board (DTAB) to the Drug Controller General of India (DCGI), for consideration.

In this proposal, the Health Ministry reportedly suggested an amendment of Rule 65 of the Drugs and Cosmetics Rules, 1945 to enable the retail chemists substituting a branded drug formulation with its cheaper equivalent, containing the same generic ingredient, in the same strength and the dosage form, with or without a brand name.

However, in the 71st meeting of the DTAB held on May 13, 2016, its members reportedly turned down that proposal of the ministry. DTAB apparently felt that given the structure of the Indian retail pharmaceutical market, the practical impact of this recommendation may be limited.

Conclusion:

Considering all this, just as ‘Pradhan Mantri Jan Aushadhi Yojana’, the likes of ‘Search Medicine Price app’, apparently, are not potentially productive health care related initiatives, if not just one-offs, ‘feel good’ type of schemes for the general population. 

These are not robust enough either, to survive the grueling of reality, impractical for effective implementation, and thus, seriously handicapped to fetch any meaningful benefits for the patients, on the ground.

It is, therefore, still unclear to me, how would the needy patients, and the Indian population at large, could derive any benefit from such bizarre decisions, on so serious a subject as health care.

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.

NCDs: Any Wolf Around, In Sheep’s Clothing? 

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Noncommunicable Diseases (NCDs), such as, cancer, cardiovascular disease, diabetes and chronic respiratory disease, are now the leading cause of death in the world, accounting for 63 percent of annual deaths. Over 80 percent of NCDs occur in lower or middle income countries.

Moreover, wide prevalence of NCDs and inadequate patients’ access to related drugs have a profound negative impact on the economic progress of any country. According to various reports, the increase of around just one year of a country’s average life expectancy, could increase its GDP growth by around four percent.

Since long, the global drug industry has been contributing immensely to discover and bring to the market various amazing medicines to effectively treat a spectrum of NCDs. It is still happening, but with a stark different impact on the majority of the patients, across the world. 

There are many important aspects to NCDs, such as, public and private initiatives in their prevention, continuous screening, proper diagnosis, providing most effective treatment, and population’s lifestyle management for more effective disease control. However, in this article, I shall focus only on modern drug pricing, as one of the key barriers for patients’ access to modern drugs for the treatment of these ailments.

Saying something, and doing something else:

In this context, some large pharma lobby groups pontificate that the drug industry recognizes the economic and social impact of NCDs. Many of them also try to widely publicize, that they are working with various stakeholders, such as, the Governments, other payers and patients’ groups, as an active solution partner in lessening this burden. 

Yes, some of them do actively support some programs, mostly to prevent, screen and diagnose these chronic ailments. There are also instances when they try to showcase some of their occasional and complicated, so called ‘patient access’ programs.

Interestingly, a global major even wanted to reap a rich harvest by highlighting one such initiatives to win a patent litigation in the Supreme Court of India. As many would know, the Apex Court of the country did not take cognizance of its real value to patients, as projected by the concerned company, while dictating its final judgement on the Glivec case.

To many independent experts, these could most probably be part of a grand façade to justify the high drug prices, which most of the patients can’t afford, and also is an attempt to manage their fast eroding overall public image. On the other hand, they ‘religiously’ continue to keep increasing the drug prices arbitrarily, including those of NCDs. I shall dwell on it below.

Impeding patient access to modern drugs:

Despite all these developments, the issue of general affordability of most effective available drugs, even by the payers, such as, many Governments and the health insurance companies, are seriously impeding the patient access to these medicines.

Such exorbitant treatment costs with modern and more effective drugs is creating almost an impregnable barrier for access to these medicines, mostly for those patients incurring Out-of-Pocket (OoP) expenditure on health care. In a situation like this, where the volume sales do not increase significantly, to maintain the business growth the manufacturers of these drugs further hike up their product prices to a jaw dropping level, as perceived by both the patients and the payers.

This overall pricing environment is now posing a major challenge to many even in many developed countries of the world, including the United States.

Even the sky is not the limit:

Today, for a drug price increase not even the sky is the limit. Recently, the Census Bureau, Commerce Department of the United States (US) announced May 2016 sales of merchant wholesalers of various industries in the country. According to this report, the total pharma sales by manufacturers to pharmacies, hospitals, and others in the distribution chain reflected a buoyant increase of a hefty 11.3 percent from a year ago, especially when most other sectors showed sluggishness in growth.

The obvious question, therefore, that comes up, are the Americans now consuming more pharmaceutical products than in the past? The answer, however, is negative, though not very surprising to many.

In that case, is this increase in growth coming primarily from price increases of drugs, which are mostly used for the treatment of chronic ailments? The answer now will be an affirmative one. 

How much price increase is enough?

This question becomes quite relevant, when a large section of even Americans starts raising their voices against high drug price, as it is adversely impacting their access to those drugs. 

If this question is put slightly differently, such as, when Apple Inc. can take an annual price increase of around 10 percent for its iPhones in the Unites States (US), how much drug price increases the pharma companies are possibly taking every year in the same country? This interesting point was deliberated in an article published in The Wall Street Journal (WSJ) on July 14, 2016. 

Price increases driving growth:

According to this article, pharmaceutical prices in the US rose by 9.8 percent from May 2015 through May 2016. This is the second-highest increase among the 20 largest products and services tracked by the Bureau of Labor Statistics’ Producer Price Index, with investment services ranking first.

Majority of pharma companies keeps increasing prices also for a large section drugs used in the treatment of NCDs, which require almost lifelong therapy for the patients to lead a normal and meaningful life.

I am trying to give below a flavor of such drug price increases, both for NCDs and communicable diseases, quoting a few examples from the above WSJ article:

  • Biogen Inc. reported a 15 percent increase to US$ 744.3 million in US sales of its Multiple Sclerosis (MS) drug Tecfidera in the first quarter, primarily due to price increases. The local revenue for Biogen’s other biggest-selling products, Avonex, used in the relapsing form of multiple sclerosis, and Tysabri used in multiple sclerosis and Crohn’s disease, also benefited from higher prices.
  • The sales of Giliead Science’s Truvada, used as a preventive treatment for HIV rose 16 percent in the quarter, on the back of higher prices, and also increased use as a preventive treatment for HIV.
  • Global sales of Amgen Inc.’s anti-inflammatory drug Enbrel rose 24 percent in the first three months of the year, driven primarily by a higher net selling price.
  • US sales for AbbVie Inc.’s anti-inflammatory drug Humira rose 32 percent in the first quarter, due to price increases and higher prescription volume. 
  • Pfizer Inc.’s US price increases and, in some cases greater prescription volume, helped drive higher revenue for nine drugs representing US$2 billion in US revenue.

Payers have started reacting:

Responding to this development, Express Scripts’ National Preferred Formulary (NPF) of the US, which is one of the most widely used drug list in the United States, providing prescription drug coverage guidelines for 25 million Americans, has excluded many drugs from its 2017 list. This exclusion covers some brands, such as, Novo Nordisk’s blockbuster GLP-1 diabetes drug Victoza and two of its top-selling insulins.

Similarly, another large American retail and health care company CVS Health’s 2017 formulary does not feature, among many other drugs, Sanofi’s blockbuster insulin Lantus along with its follow-up Toujeo, making it the largest commercial product ever excluded from a formulary. 

‘The playbook used for a number of years is over’:

In an article of August 04, 2016 titled, “Drug lobby plans a counterattack on prices”, a senior director of the public affairs firm APCO Worldwide, which represents several drug companies, and a former HHS official under President George W. Bush was quoted saying, in the context of pharma companies and their lobby groups that, the reality, the message and the playbook used for a number of years is over. The industry can no longer defend high drug prices by pointing to the pricey research and development that goes into innovative medicines. They have to move on, he added.

Indian scenario:

The Indian scenario is much worse, with OoP expenditure on drugs being around 70 percent of the total treatment cost. It could be even more, if only NCDs are considered. This situation raises a red flag, especially considering the WHO report released on January 20, 2015 that highlights NCDs are estimated to have accounted for 60 per cent of the deaths in India in 2014.

Some of the examples are as follows:

  • An ICMR-INDAIB study, published in September 2011, on diabetes prevalence in India indicate that the epidemic is progressing rapidly across the nation, and has already affected a total of 62.4 million persons in 2011. With proper diagnosis and screening this figure may increase to a dangerous level in India.
  • According to WHO, almost 2.6 million Indians are predicted to die due to coronary heart disease (CHD), which constitutes 54.1 percent of all CVD deaths in India by 2020. 
  • A March 2012 ‘The Lancet’ study found that nearly six lakh Indians die of cancer every year, with 70 percent of these deaths between the ages of 30-69 years.
  • A report titled “Dementia in Asia Pacific Region” released in November 2014, at the 17th Asia Pacific Regional Conference of Alzheimer’s Disease International (ADI) states that by 2050, the number of people in India suffering from dementia will rise to over 12 million.

Carefully assessing the enormous pharma business opportunity, mainly due to increasing health awareness and fast growing per capita income in the country, pharma players operating in India have become very active in the NCD area, in different ways. However, one strategy remains unchanged, which is continuous increase in modern drug prices, even at the cost of volume increase, frequently taking them beyond affordability of a large section of patients in India. 

Indian Government also reacted:

Recognizing, and basically to address this critical problem, just as what has is now happening in other parts of the globe too, the Union Ministry of Health was compelled to take strong measures, especially in the absence of Universal Health Care (UHC) in India. The Government recently revised the National List of Essential Medicines (NLEM) by adding many more modern drugs for NCDs in the list, to facilitate bringing them under the drug price control mechanism of the country.

Many company’s evading drug price control:

The Union Chemicals and Fertilizers minister Mr. Ananth Kumar informed the Rajya Sabha of the Indian Parliament on July 28, 2016 that various drug price regulatory measures taken by the government have helped consumers save Rs 4,988 crore over the last two years.

This saving may well be just on the paper. On the ground, have the consumers been really benefited out of these measures, and if so, to that much extent? 

The answer wouldn’t be too ferret out, when one takes into account the reply of the Minister of State for Chemicals and Fertilizers, Mr. Hansraj Gangaram Ahir to the Lok Sabha of the Parliament on March 08, 2016. The Minister informed the lawmakers that the National Pharmaceutical Pricing Authority (NPPA) is trying to recover a whopping Rs 4,551 crore, including interest, from various pharma companies for overcharging as of February 2016. Out of this total amount, Rs 3,698.32 crore, representing about 82 per cent of the total outstanding amount, is under litigation in various High Courts and Supreme Court spreading across 1,389 cases, the Minister further said.

The question, therefore, arises, how much benefit of the drug price control of essential medicines is actually benefitting the patients, and how much is being evaded by the pharma players?

Price increases driving Indian pharma industry growth:

In India too, a large number of pharma companies are increasing prices, including a large proportion of those drugs, which are used in the treatment of NCDs, requiring almost lifelong therapy for the sufferers to lead a normal and meaningful life.

The exorbitant treatment cost for many NCDs, with the modern and more effective drugs, is seriously impeding the patient access. As a cascading effect, the manufacturers of these drugs are further jacking up their prices to a much higher level for achieving their business growth objectives. This is very similar to what is happening also in the developed countries, including the US. 

That price increases are primarily driving the growth of the Indian Pharmaceutical Market (IPM) is vindicated by the following table, which has been compiled from the monthly retail audit reports of the well-reputed organization AIOCD Pharmasofttech AWACS Private Limited:

IPM growth through price increases versus volume (July 2015 to June 2016):

Growth % Jun 16 May April Mar Feb Jan 16 Dec 15 Nov Oct Sept Aug July 15
Price 3.8 5.0 4.5 5.1 5.4 5.1 5.2 1.0 13.2 9.9 13.2 12.9
Volume -0.6 -4.4 3.2 -5.3 3.7 1.3 2.8 5.0 5.5 1.4 1.6 3.3

Source: Monthly Retail Audit of AIOCD Pharmasofttech AWACS Pvt. Ltd

Conclusion:

Around the world, arbitrary drug price increases almost on a continuous basis, including in the low inflation countries that may now include India, has sparked-off a raging global debate. Even the Presidential nominees for the forthcoming general election in the United States are taking keen interest on the subject.

As highlighted in a recent issue of the magazine Politico, powerful pharma lobby groups are also gearing up to spend hundreds of millions of dollars to counter this ‘threat’, as perceived by them.

A number of hectic activities in this area, apparently, have started in India too, mainly to divert the focus of the stakeholders from arbitrary drug price increases to other important areas such as, NCDs. This usually happens by making the vested interests eulogizing how much good work these pharma companies are doing in this particular area, only to serve the patients’ health interest. 

Many global pharma players seem to still believe that the same old message from the same old playbook would work even today, at least in India, to defend high drug prices on the contentious ground of pricey R&D that goes into innovative medicines. I reckon, almost gone are those days, even in India.

NCDs need to be fought, unitedly, with effective public, private initiatives and without any self-serving agenda of any participants. The issue needs to deliberated not in the five-star hotels, neither in front of a captive audience, nor with an intent of getting favorable media coverage, but on the real ground, along the general population, both in the urban and the hinterlands of India.

These initiatives would appear praiseworthy to many, when the ultimate aim of any stakeholder, including the doctors and the pharma players, won’t be to make the consumers consume more of high priced medicines, in many cases even by selling their frugal assets. The key aim, I believe, should be to facilitate prevention, screening, diagnosis and treatment with affordable modern medicines, and finally to help manage the ailments well, through the rest of the life of any sufferers.

In the battle against NCDs, it is also important to know well and segregate, if there is any wolf around, in sheep’s clothing.

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.

Drugs & Devices: Chasing Never-Enough Profit And Price Control

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On July 20, 2016, the Union Ministry of Health of India announced the addition of Coronary Stents to the National List of Essential Medicines (NLEM) 2015 with immediate effect, bringing them under the Drug Price Control Order.

Reacting sharply to this development, the medical device industry commented, with an undertone of threat, that this price cap could stop manufacturers from introducing technologically advanced stents in India.

However, without contributing to any further knee-jerk reaction, let me try to analyze in this article, whether the never-enough profit motive of the imported stent manufacturer prompted the Government to resort to price control for these life saving devices.

The use of stent:

In the treatment of coronary artery diseases, cardiac stents are now widely preferred in India, just as many other countries of the world. These are small expandable tubes, usually made of metal mesh, and are used to treat narrowed or weakened arteries in the body. 

One of its most extensive usages is in patients with Coronary Heart Disease (CHD), caused by the buildup of plaque, where stents are used to open narrowed arteries and help reduce the symptoms, such as, chest pain or angina, or to help treat a heart attack. This procedure of a percutaneous coronary intervention (PCI) is called angioplasty. 

According to the report of an experts’ sub-committee formed by the Government in October 2015, around 25 percent of deaths in India is attributed to Cardio Vascular Disease (CVD). Coronary Artery disease (CAD) is the commonest CVD accounting for 90-95 percent of all CVD cases and related deaths.

However, for a large majority of the Indian population, the cost of angioplasty is prohibitively high. A patient may have to shell out anywhere between around Rs. 60,000 and Rs. 150,000 for a stent coated with drugs, called Drug Eluting Stent (DES), to curb restenosis, according to published reports.

Even for most Government staff, the cost of angioplasty could well be several times more than their maximum reimbursable limit fixed for angioplasty. Thus, only around 3 out of 1000 needy coronary heart disease patients are treated with angioplasty in India, as compared to 32 in the United States.

An opportunity to shape up:

Despite DES being notified as drugs under the Drugs and Cosmetics Act, 1940, the coronary stents did not feature in the National List of Essential Medicines (NLEM) prior to the above notification, and therefore, were not covered by the Drug Price Control Order (DPCO), so far.

For a long time, this situation offered an important opportunity to the imported stent manufacturers to shape up with responsible pricing…but did they?

Why is angioplasty cost so high?

While trying to find out a credible answer to the above question, the following details on DES of Abbott Healthcare are worth looking at. This information was sourced from a Maharashtra FDA report, and referenced by Rema Nagarajan in her article published in the Times of India on September 25, 2014 to highlight why is DES so expensive for patients in India.

Although, pricing details are of 2014, nevertheless, it gives a flavor of the prevailing situation:

Cost Break-Up/Unit Cost per Unit (Rs.)
DES imported into India at 40,710
Sold to Distributor Sinocare at 73,440
Distributor Sold to Hinduja Hospital 1,10,000
Patient charged 1,20,000 (threefold increase of import price)

(Source: Maharashtra FDA report)

The saga of ‘Market driven pricing’:

Both the drug and the device companies apparently make valiant efforts to package such ‘arbitrary’ pricing as so called ‘Market Driven’ ones, though such price tags keep crippling many cardiac patients financially too. Ironically, the saga still continues.

Taking advantage of the free-pricing environment in India for Coronary Stents, to attain market dominance many global majors, possibly believe that they can print any Maximum Retail Price (MRP) on their import cost. It was happening even when the Government does not levy any customs duty on stents. Do these companies ignore its optics too? Who knows? 

Like most drugs, market forces do not play any significant role in the medical device pricing too, globally.

In June 2013, a research study published in the ‘American Heart Journal (AHJ)’, compared the use of Bare-Metal Stents (BMS), Drug-Eluting Stents (DES), and Balloon Catheters according to company presence in the hospital. It concluded that Medical Representative (MR) presence was associated with increased use of the concerned company’s stents during percutaneous coronary interventions. The effect was more pronounced with the use of DES, and resulted in the higher procedural cost of US$ 250 per patient.

In this particular study, it was found that DESs were used in about 56 percent of the cases, when the MRs concerned were at the hospital, against 51 percent when they weren’t there.

The situation is not terribly different in India too, where also the medical choices are often influenced by the drugs and device makers through, much discussed, dubious means.

The market:

According to a market research report of ‘Future Market Insights (FMI)’ dated May 09, 2016, the coronary stent market of India was of US$ 481 million in 2015, and by the end of 2016 is expected to reach at US$ 531 growing at a CAGR of 14.0 percent over the forecast period of 2016 – 2026.

This study segmented the market on the basis of the following product types:

  • Drug Eluting Stent (DES)
  • Bare Metal Stent (BMS)
  • Bioresorbable stent (BVS) 

DES segment is expected to exhibit the highest growth and the BMS segment a stable growth, during the forecast period. This is mainly attributed to the emergence of new and more effective stents in the market, the report highlights. 

The market is dominated by the imported stents. Abbott, Medtronics, Meril Lifesciences and Boston Scientific, hold together around 60 percent share of the Indian market.

In India, nine of the 11 domestic stent manufacturers are located in Surat and Vapi of Gujarat. These stents are picking up the market share currently hovering around 30 percent, costing even less than half, as compared to the imported ones.

The Government stepped in:

When the industry did not seem to shape up, despite the regulatory opportunity available to keep the stents out of the NLEM, the media started writing about it, strongly and quite frequently. These were intended to bring some sanity into the imported and advanced Coronary Stent pricing system. Still nothing changed, and the Government had to step in.

Ultimately, in October 2015, the Union Ministry of Health constituted a sub-committee of expert cardiologists under the chairmanship of Prof. Y.K. Gupta, Head of the department of pharmacology, All India Institute of Medical Sciences (AIIMS). The mandate of this sub-committee was to examine the issues relating to the essentiality of coronary stents, and recommend whether the coronary stents should be included in the NLEM.

Accordingly, after a series of in-depth discussion with various stakeholders, which included stent manufacturers and the patient groups, the sub-committee recommended the inclusion of two categories of coronary stents, namely the DES and BMS in the NLEM. This suggestion was in response to “the enormous need of percutaneous coronary intervention, or angioplasty with stent.”

By a notification on July 20, 2016, the Ministry of Health announced that the sub-committee has submitted its report to the Government, and after thorough examination of the report, its recommendations have been accepted for implementation with immediate effect.

This decision of the Government is expected to set the stage for the National Pharmaceutical Pricing Authority (NPPA) to work out ceiling prices, which are expected to be 40 percent to 70 percent less than the current prices for these stents.

Conclusion:

For the last several years, many stakeholders, including the media and the Government, have been expressing grave concern over the exorbitant prices of the Coronary Stents.

Earlier in 2015, following a petition, even the Delhi High Court directed the Government to monitor the prices of stents in the market.

Indian drug price regulator, the NPPA, and some state FDAs too flagged the point that although locally manufactured stents are much cheaper, doctors and hospitals continue to use the imported ones, for various commercial and other reasons. As a result, the situation remained the same, adversely affecting the health of a large number of cardiovascular patients in India.

The last week’s decision of the Indian Government for inclusion of coronary stents in the NLEM, needs to be viewed under the backdrop of steep increase in the incidence of CHD in India. It clearly poses a significant public health hazard, where the cost of stents becomes a key treatment barrier for the majority of the patients incurring out-of-pocket health expenditure.

Price control of drugs and devices may not be the best way to improve their access to the most of the Indian population. Nevertheless, considering the high out-of-pocket expenditure for health care in the country, instead of behaving responsibly, doesn’t the drug and the device makers’ mindless chase after ‘never-enough profit’ objectives, often prompt the imposition of regulatory price control?

The fact that many global drug and device manufacturers, even after posting over 30 percent standalone net profit growth in India, continue cribbing incessantly about the stifling Regulatory and Intellectual Property Right (IPR) environment in the country, vindicates the above point well, possibly beyond any reasonable doubt.

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.

 

 

Nutraceuticals: Make The Fragile Regulatory Space Robust, Soon

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In the space between drugs and nutrition, there is an intriguing ‘gray area’ with significant business relevance, especially in India.

In a related publication, A.T. Kearney – a leading global management consulting firm has elaborated it as below:

“At one end of this natural nutrition spectrum, are functional foods and beverages as well as dietary supplements, aimed primarily at maintaining health. On the other – more medical end of the spectrum, are products aimed at people with special nutritional needs. In the middle, is an emerging gray area of products that have a physiological effect to reduce known risk factors, such as high cholesterol, or appear to slow or prevent the progression of common diseases such as diabetes, dementia or age related muscle loss.”

Falling in the middle of the spectrum, a large number of Nutraceuticals clearly blur the line between food and drugs, in many cases. In India, there is no clearly defined legal and regulatory status for such Nutraceuticals, just yet.

Why a robust regulation required for Nutraceuticals? 

The scholarly article of S.H. Zeisel (Professor of Nutrition, University of North Carolina at Chapel Hill Nutrition) titled, “Regulation of Nutraceuticals,” Science 5435, 1853–1855 (1999) highlighted that in many cases when the dosages of food supplements exceed those of a normal diet, there could well be a drug-like bioactivity of a nutrient.

An example of the nutrient tryptophan may suffice to illustrate this point briefly. At higher dosage tryptophan can exhibit drug-like activity, as it is the precursor of serotonin, which is extensively used to treat insomnia. Many of such points are yet to draw the regulators’ attention in India as much as it should, as yet.

Marketing drugs as ‘food supplements’?

Marketing drugs as food supplements to evade Drug Price Control Order (DPCO) by some pharma players, of all sizes and scale of operation, is not an uncommon practice in India. The National Pharmaceutical Pricing Authority (NPPA), reportedly, pointed it out sometime around 2009.

Not just for pricing reason, but more importantly for consumers’ health and safety, the Central Drugs Standard Control Organization (CDSCO) should address this issue now with a greater sense of urgency, as the market for Nutraceuticals and health supplements is reportedly growing at a brisk pace today. According to a Frost & Sullivan report, the total Indian Nutraceuticals market in 2015 was expected around US $ 5 billion. 

In the absence of any clear and robust regulatory guidelines, most Nutraceutical products, with a spectrum of therapeutic claims, are virtually self-categorized as food supplements, which are not covered under the Drugs and Cosmetics Acts in India.

Currently in the country, Nutraceuticals and functional foods are covered under the definition of ‘food’ as per Section 22 of Food Safety & Standards Act (FSSA), 2006. These food products have been categorized as Non-Standardized/Special Food Products. Accordingly, Food Safety and Standards Authority (FSSAI) of India have described Nutraceuticals as:

“Naturally occurring chemical compound having a physiological benefit or provide protection against chronic disease, isolated and purified from food or non-food source.”

Though categorized as nutritional supplement, the product packs of such Nutraceuticals usually do not carry any “FSSAI’ logo, which signifies conformance to the food safety standards of India, for the benefit of consumers.

Recommendations are many, but no comprehensive action yet:  

To give an example, many Nutraceuticals contain vitamins in varying quantity. However, most of these products seem to carefully avoid Schedule V guidelines for vitamin content to avoid being categorized as drugs, and thereby coming under strict regulatory requirements. Self-categorizing these products as ‘food supplement’, helps bypassing this issue, as on date.

Such ongoing practices related to Nutraceuticals need to be viewed keeping in perspective, some of the recent key recommendations made by the Drugs Technical Advisory Board (DTAB) of the CDSCO, on Schedule V related formulations.

The minutes of the 70th. meeting of the Drugs Technical Advisory Board (DTAB) held on August 18, 2015, recorded the acceptance of the report of its sub-committee on vitamins, which recommended, among others, some of the following guidelines:

  • Ingredients which are covered under the range as prescribed under schedule “V” of the Drugs and Cosmetics Rules for Tablets, capsules, granules are 18 classified as a drug, while those powders like Farex, Oats and Cereal fortified vitamins are exempted from the provisions of chapter IV under schedule K of Drugs and Cosmetics Rules.
  • Ingredients which fall below the range as prescribed under schedule “V” shall be classified as food. However, if there is a claim for treatment, mitigation or prevention of any diseases or disorder, then it will be classified as a drug. 
  • Ingredients which are within Recommended Daily Allowance (RDA) levels, but fall under the range as prescribed under schedule V Drugs and Cosmetics Rules shall be classified under drug as it is already mentioned in the rules. 
  • Products containing ingredients which are neither covered under Schedule V nor fall within RDA, these can be classified as unprovable products under Drugs and Cosmetics Rules, unless otherwise specifically permitted by the Licensing Authorities of drugs based on major purpose of the item (like food/drug).
  • Whenever there are additional ingredients than those given in schedule V, including some of herbal ingredients, a separate and conscious view has to be taken about the safety and efficacy of the drug
  • Any product containing herbal ingredients shall be dealt with by the food or drug authority based on the above principles. 

The same subcommittee, on June 12, 2015, after discussing each of some specified products, with a claim of falling in non-drug category, as per directions of the Hon’ble High Court of Patna, recommended categorization of some of the well-known brands brands, such as, Revital (Ranbaxy) and A to Z capsules (Alkem) as drugs. The sub-committee report was then uploaded in the CDSCO website for stakeholders’ comment.

Could there be ‘irrational FDC ban’ like an issue with Nutraceuticals?

The answer to this question is anybody’s guess at this point of time. However, such a possibility can be just wished away either.

This lurking fear stems from the recent notification of FSSAI dated March 30, 2016, which states as follows:

“It has been decided that till the standards of Nutraceuticals, food supplements and health supplements are finally notified, the enforcement activities against such food business operators may be restricted to testing of these products with respect to requirements given in the draft notification on such products of September 9, 2015″.

However, it clarifies that the companies will get an exemption, if such products were available in the market before the Food Safety and Standards Act came into effect in 2011, or if product approval was pending on August 19, 2015.

The key objective of the above September 9, 2015, FSSAI draft notification was to ensure that Nutraceuticals, health and food supplements and other such products are not sold as medicines with therapeutic claims. Thus, asking the industry players to send their suggestions and objections to the proposal, this draft notification indicates, among others, that all such products should: 

  • Adhere to the proposed permissible limits of various minerals, vitamins, plant or botanical-based ingredients, among others.
  • Adhere to the proposed list of food additives used in all these categories of products, besides labelling norms, every package must carry the words “Food” or “Health Supplement” and prominently display “Not for Medicinal Use” on the label. 
  • Give a disclaimer on the package that the food or health supplement should not be used as a substitute for a varied diet.
  • Clearly indicate on the label that “this product is not intended to diagnose, treat, cure or prevent any disease”, besides information on recommended dosages, among others.

As this notification is expected to cover all products, which are marketed as food supplements, many Nutraceuticals manufacturers, reportedly, fear that it could effectively mean a ban on virtually all those brands, self-categorized as food or nutritional supplement, and launched post 2011.

If it happens, the saga of ban of a large number of irrational Fixed-Dose Combinations (FDCs) of drugs, that includes some top-selling pharma brands and is now sub judice, could get extended to the Nutraceuticals sector too. 

Nonetheless, the bottom-line is that a robust mechanism to effectively regulate and monitor Nutraceuticals in India, is yet to see the light of the day. 

Crazy marketing of Nutraceuticals: 

Despite regulatory and marketing restrictions to the therapeutic claims for this category of drugs, Nutraceuticals are mostly promoted to the doctors, just as any other ethical pharma products in India.

Consequently, these are widely prescribed by the medical profession, not just as nutritional supplements, but also for the treatment of disease conditions, ranging from obesity to arthritis, osteoporosis, cardiovascular conditions, diabetes, anti-lipid, gastrointestinal conditions, dementia, age-related muscle loss, pain management and even for fertility. All these are generally based on off-label therapeutic claims of the respective manufacturers.

Being advertised in the mass media too:

To illustrate this point, I would give an example of a well known brand in India. As I see from the Government records, i.e. from the minutes of the 68th meeting of the DTAB sub-committee held on June 12, 2015 that it had recommended Revital’s (Ranbaxy) categorization under drug.

As we all know that, as per drugs and Cosmetics Act of India, drugs cannot be advertised in the mass media, except Schedule K drugs, such as Aspirin and paracetamol. In that sense, I find it difficult to fathom, how is Revital then, which highlights a naturally occurring substance fortified with vitamins and minerals, advertised even on the Television, along with a top celebrity endorsement?

A recent notification on phytochemicals:

As I mentioned in my article in this Blog on December 21, 2015, titled “Nutraceuticals: A Major regulatory Step That Was Long Overdue”, partly responding to the growing demand for regulatory intervention in this important matter, on November 30, 2015, by a gazette notification, the Government of India included phytopharmaceutical drugs under a separate definition in the Drugs & Cosmetics (Eighth Amendment) Rules, 2015, effective that date.

This regulatory action followed the rapidly growing use of these drugs in India, which includes purified and standardized fraction with defined minimum four bio-active or phytochemical compounds.

On the ground, this significant regulatory measure would require the pharma players to submit the specified data on phytopharmaceutical drugs, along with necessary applications for conduct clinical trial or import or manufacture of these products in the country. 

However, this is no more than half-measure in this direction. Hopefully, this will be followed by final action on the DTAB recommendations on vitamins, and final notification of FSSAI on standards of Nutraceuticals, food and health supplements. A well-integrated action of the CDSCO and FSSAI, would possibly help to contain the unregulated proliferation of various types of Nutraceutical products coming into the Indian market, prescribed by the doctors and consumed by the people, sans any scientific evidence based efficacy, safety and quality standards.

Manufacturers’ business interest also can’t just be ignored:

While there is a pressing need to enforce regulatory discipline for claimed efficacy, safety and high quality standards for the Nutraceuticals to protect consumers’ health interest, commercial interest of such drug manufacturers can’t also just be ignored. If that happens, it will be unfair.

Thus, one of the ways to encourage the manufacturers to expand this market, I reckon, could well be categorizing the Nutraceuticals offering health benefits, under a separate category altogether, which will be kept out of any form of drug price control.

Conclusion:

The manufacturers of Nutraceuticals still keep charting in a very relaxed regulatory space. Currently, there is no robust and transparent process in place to standardize and scientifically evaluate safety and efficacy of these products on an ongoing basis. This scenario should not be allowed to continue, any longer.

Appropriate control of standardized Nutraceutical manufacturing, regular monitoring of the same and scientific evidence-based marketing approval process of all such products, therefore, require to be well-well regulated. The requirement for stringent conformance to the set cGMP standards would ensure desired safety, efficacy and high quality of nutraceutical products for the consumers.

The recent decisions of the Union ministry of Ayush for setting up a structured regulatory framework, within the CDSCO, for all Ayush drugs and to allow marketing of any new Ayurvedic medicine only after successful completion of clinical trials to ensure its safety and efficacy, are indeed encouraging.

Just as Ayurvedic products, all Nutraceuticals, not being essential medicines, should always be kept outside price control in any form. It should happen in tandem with the Government’s taking a bold step to make the prevailing fragile regulatory space for the Nutraceuticals a robust one, creating a win-win situation for all. 

By: Tapan J. Ray

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