The ‘Moonshot’: Access To World-Class Cancer Care, For All

Posted on February 8, 2016 by Tapan Ray

As in every year, February the 4^th was celebrated as the ‘World Cancer Day’, across the world, in 2016, as well. Its main objective is to commemorate all the efforts done by the World Health Organization (WHO), the United Nations (UN), including the governmental and nongovernmental health organizations towards formulating a grand strategy to fight against cancer. The strategy is expected to span across cancer prevention, detection and treatment, for all. The key goal of this commendable initiative is to reduce illness and death caused by cancer by 2020, the world over.

The event also encourages to explore various ways to align individuals and groups to do their bit in reducing both the local and the global burden of disease related to cancer.

The last Thursday, the ‘World Cancer Day’ was celebrated in India too, albeit in a low key, as I could fathom, despite its alarmingly ascending trend in the country.

In this context, I would start with my first and a very small example of a sharply contrasting mindset to address the vexing issue of cancer between the largest democracy of the world – India, and the oldest democracy of the globe – America.

The United States (US) this year, like the previous five years on a trot, made this event visible for a large section of people to encourage them to think and act against cancer, in several different ways that they can. The imposing landmark in New York – the magnificent ‘Empire State Building’ was lit in blue and orange, the colors of the ‘Union for International Cancer Control (UICC’), the organizers of this annual event.

A brief recap:

Cancer is now one of the leading causes of death, not just in India, but across the world. Its rate is expected only to go up further in the years ahead, and that too at a brisk pace. Just as the disease is fast spreading across the socioeconomic spectrum, all over, so are the tough access barriers for effective cancer diagnosis, treatment and care, for all, increasing by manifold.

Urgent action is called for in most of the countries of the world by the respective Governments to save precious lives, by effectively overcoming most of these hurdles, soon.

With this backdrop, in this article, I shall explore what is happening on the ground in this direction, at present, drawing examples from the two greatest democracies of the world.

The largest democracy of the world:

Delivering affordable and equitable care for cancer to all, is one of greatest public health challenges of the largest democracy of the world – India. The country is required to face this challenge boldly and squarely, to mitigate the devastating socioeconomic and human costs that this disease is already costing our nation.

This point was reiterated by one of the lead authors of an article published by ‘The Lancet Oncology’ on April 11, 2014. The paper discussed the epidemiology and social context of the growing burden of cancer in India.

According to this paper, around 600,000 – 700,000 deaths in India were caused by cancer in 2012, with more than 1 million new cases of this life threatening disease being diagnosed every year.

Further, the World Health Organization (WHO) also reported that every year, around 145,000 women are diagnosed with breast cancer in India. Unfortunately, around half of them had succumbed to the disease, in 2008.

However, all these numbers should be taken into consideration carefully factoring in very low rates of early-stage detection and poor treatment outcomes in the country.

In this prevailing scenario, cancer is fast becoming a major public health concern in India, with the number of new cancer cases projected to nearly double within the next 20 years.

The average cost of cancer treatment in India:

According to the above ‘Lancet Oncology’ report, in India, the average cost of treating a typical patient with cancer at a government facility would come around US$593. Whereas, the average annual income per person is only U$ 1,219, with 27.5 percent of the population living on or below a daily income level of US$ 0.4.

Besides, most district hospitals, including the regional cancer centers do not have the requisite facilities required to provide quality cancer care to all those patients who need them.

Quoting experts, a newspaper report on June 19, 2014 also stated, around 50 per cent of the diagnosed cancer patients, who also commence their treatments, stop visiting hospitals after two or three cycles of chemotherapy, as they find the cost of treatment is not affordable to them. They also drop out from regular follow-up visits, say the doctors.

Low Government funding for healthcare:

As a result of abysmally poor public funding for healthcare in India, both by the Central and most of the State Governments, the cost of diagnosis and treatment of cancer is increasingly becoming out of pocket, and being catastrophically expensive, going beyond the reach of a large number of patients suffering from this serious ailment.

The socioeconomic impact:

This pathetic public healthcare system in India adversely affects not only the debt ridden poor and middle-class cancer patients, but also the welfare and education of several generations of their respective families.

Thus, cancer has a profound, both social and economic, consequences for the general population in India. This very often leads to family impoverishment and societal inequity, as the study points out.

The oldest democracy of the world:

The oldest democracy of the world – America, is one of the richest countries in the globe, having perhaps the best healthcare facilities and systems. All the latest drugs and diagnostics are also available there. Despite all these, there is a growing inequity in the cancer treatment in America too, with access to quality diagnosis and treatment for cancer patients becoming a major health, economic and political issue for the country.

‘Mayo Clinic Proceedings’ of August 2015, also expressed concern on the high prices of cancer drugs, which are affecting the care of cancer patients and eventually the American health care system.

The report does ring an alarm bell for high cancer care cost for many patients in America. The ‘Proceedings’ highlighted the following reasons, most of which are, quite interestingly, very similar to India:

Cancer will affect 1 in 3 individuals over their lifetime.

Recent trends in insurance coverage put a heavy financial burden on patients, with their out-of-pocket share increasing to 20 percent to 30 percent of the total cost.

In 2014, all new US Food and Drug Administration (US FDA) approved cancer drugs were priced above US$ 120,000 per year of use.

The average annual household gross income in the United States is about US$ 52,000.

For a patient with cancer who needs one cancer drug that costs US$120,000 per year, the out-of-pocket expenses could be as high as US$25,000 to US$ 30,000 – more than half the average household income and possibly more than the median take-home pay for a year.

Thus, cancer patients have to make difficult choices between spending their incomes and liquidating assets on potentially lifesaving therapies or foregoing treatment to provide for family necessities, such as, food, housing and education.

This decision is even more critical for senior citizens who are more frequently affected by cancers and have lower incomes and limited assets.

Because of costs, about 10 to 20 percent of patients with cancer do not take the prescribed treatment or compromise it. It is documented that the greater the out-of-pocket cost for oral cancer therapies, the lower the compliance. This is a structural disincentive for compliance with some of the most effective and transformative drugs in the history of cancer treatment.

Given the rising incidence of cancer in the aging American population, high cancer drug prices will affect millions of Americans and their immediate families, often repeatedly.

General public wants the US Government to act:

‘The Mayo Clinic Proceedings’ findings were vindicated by the October 2015 Kaiser Health Tracking poll, which reported, 76 percent of the public believes that a top priority for the American president and Congress should be making high-cost drugs for chronic conditions affordable. Yet another Kaiser poll found 72 percent of Americans believe drug costs are unreasonable and 74 percent think that pharma companies, in general, care more about profits than people.

General public expectations and belief do not seem to be any different in India too.

I reckon, due to similar reasons in most countries of the world, an urgent action is required from the respective Governments to make cancer diagnosis and treatment affordable to all, sooner than later.

Different responses to the same problem:

Let me reiterate here again, that I am comparing India with America on this issue, not for any other reason, but just to give an example and a feel of how much the promised political intent, made for the benefit of the general population of the country, gets translated into reality in the world’s oldest democracy, as compared to the world’s largest democracy.

In India, despite high sound bytes emanating from various leaders of the principal party in power today, the fragile public healthcare system is still gasping for breath, starved by grossly inadequate resource allocations. This gets reflected on the details of national and state budgetary allocations for healthcare in India.

The delay in finalizing and then putting in place for implementation of the “National Health Policy”, which proposed making health a fundamental right and denial of health an offense, also seems to be of low priority for the national Government, at present. If so, this will indeed be quite contrary to its earlier firm promises on improving healthcare in India.

In the United States, as well, similar promises were made by senior politicians during the last national election campaign. The Presidential candidate for the party, which is now in power, created as much hype with matching sound bytes for healthcare reform in America, while seeking votes.

However, the sharp difference between the two similar situations is, having come to power on November 4, 2008 President Barack Obama, fulfilled his promise with a path breaking healthcare reform in his country. On March 23, 2010 he signed into law the ‘Affordable care Act’. It’s a different matter though, like most political decisions, this one also faced its own share of criticism from the American opposition.

The ‘Moonshot’:

Zeroing in specifically to address the agony of cancer patients in America, President Obama has recently initiated a ‘National Mission’ in this area. He has asked his Vice-President Joe Biden to spearhead this mission and get it done expeditiously. Biden enthusiastically accepted to lead this noble ‘National mission’ for mankind and termed it ‘A Moonshot for Cancer Cure’. The White House also announced a resource commitment of US$1 billion on this effort over the next two years.

In his ‘White House’ Blog Post of January 13, 2016 the Vice-President wrote about this project, very close to the ‘World Cancer Day’, which is basically symbolic, just as the ‘International Day of Yoga’, but this specific American ‘National mission’ against cancer does not appear to be so, by any stretch of imagination.

The key objective of this mission is indeed profound. With is effective implementation, the American Government wants to ensure that ‘the same care provided to patients at the world’s best cancer centers, is available to everyone who needs it.’

Joe Biden admitted, though several cutting-edge areas of research and care, including cancer immunotherapy, genomics, combination therapies and innovations in data and technology are revolutionary, all these are currently trapped in silos, preventing faster progress and greater reach to patients.

It’s not just about developing game-changing treatments. It’s about delivering them to those who need them the most. The community oncologists, who treat more than 75 percent of cancer patients, have more limited access to cutting-edge research and advances, even in America, Vice-President Biden elaborated.

Two key focus areas:

Increase resources, both private and public, to fight cancer.

Break down silos and bring all the cancer fighters to work together, share information, and end cancer, as we know it.

The goal of this initiative is to double the rate of progress by making a decade worth of advances in five years. He also outlined the details that he would follow to get this mission implemented on the ground within the set time frame.

“If there’s one word that defines who we are as Americans…” – Biden

Joe Biden concluded this announcement with his natural statesmanship, sans any drama, by saying: “If there’s one word that defines who we are as Americans, it’s ‘possibility.’ And these are the moments when we show up.”

The good news is, the project ‘Moonshot’, as the American Vice-President calls it, has already started with the full commitment of the American Government and backed to the hilt by none other than President Obama himself. The American President has already demonstrated to the world, from the very commencement of his Presidency, that he is a project implementer per excellence, as head of the Government.

Some key barriers to effective 'cancer care' in India:

Coming back to the Indian context, experts do indicate that one of the main barriers to cancer care, in the largest democracy of the world – India, is primarily lack of enough public facilities for early detection of cancer. Thus, even when it is detected considerable disease progression usually takes place. Moreover, most patients lack access to expensive cancer treatment and are compelled to give up the treatment for this reason. Consequently, as the data reveals, less than 30 percent of patients suffering from cancer in India survive for more than five years after diagnosis, while over two-thirds of cancer related deaths occur among people aged 30 to 69.

According to the data of the Union Ministry of Health, 40 percent of over 300 cancer centers in India do not have adequate facilities for advanced cancer care. It is estimated that the country would need at least 600 additional cancer care centers by 2020 to meet this crying need.

Conclusion:

It appears to me, even meeting this basic need for cancer care will be extremely challenging with frugal public healthcare spending in India. As I said before, it gets well reflected in the successive annual budgetary allocations for the same, both by the Central and most of the State Governments. Added to this, the ‘National Health Policy’, which was first drafted and released in December 2014 by the Ministry of Health for the stakeholders’ comments, is yet to be put in place. The draft policy recommended, among many others, making health a fundamental right of Indian citizens.

According to ‘The World Bank’ report, the public expenditure for health as a percentage of GDP of the oldest democracy of the world is already hovering over 8, against around just 1 of the largest democracy of the world. On top of this, the present American Government has committed, even more resources to usher in a new era of hope for all cancer patients with its latest ‘National Mission’ – ‘A Moonshot for Cancer Cure’.

There is a lot to feel good about it, even as an Indian, as this health mission, termed as ‘‘A Moonshot for Cancer Cure’ by the American Vice-President assures that ‘the same care provided to patients at the world’s best cancer centers, is available to everyone who needs it.’ Its overall benefits could possibly reach even the Indian patients…who knows?

Like 2016, and the previous years, the ‘World Cancer Day’ would come and go with the turn of every calendar year. Hopefully, things will be quite different sometime in future. India would possibly initiate the much awaited health care reform in the country and more specifically effective ‘cancer care’ for all, with requisite budgetary provisions in place. Till then, do the cancer patients in India have any other choice, but to eagerly wait for it, hoping for the best outcome?

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.

Reverberations Around The Proposed New IPR Policy Of India

Posted on February 16, 2015 by Tapan Ray

“If the Obama administration succeeds in forcing India to strengthen its patent laws, the change would harm not only India and other developing countries; it would also enshrine a grossly corrupt and inefficient patent system in the US, in which companies increase their profits by driving out the competition – both at home and abroad. After all, generic drugs from India often provide the lowest-cost option in the US market once patent terms have expired.”

The above sharp, piercing and precise comment did not come from any health activist from India or elsewhere. It came from a team of highly credible academic experts working in the United States.

On February 10, 2015, Nobel Laureate in Economics – Joseph E. Stiglitz, who is also University Professor at Columbia University, former Chairman of President Bill Clinton’s Council of Economic Advisers and Chief Economist of the World Bank, made this comment in an article published in ‘The World Opinion Page’ of ‘Project Syndicate’.

The article is co-authored by Dean Baker, Co-Director of the Center for Economic and Policy Research in Washington DC and Arjun Jayadev, Professor of Economics at the University of Massachusetts, Boston.

The authors arrived at the above conclusion based on some sound arguments. I am highlighting below some of those important ones (may not be in the same order):

A patent that raises the price of a drug a hundred-fold has the same effect on the market as a 10,000 percent tariff.

India’s Patents and Act and policies allow drugs to be sold at a small fraction of the monopoly prices commanded by patent holders. For example, the Hepatitis-C drug Sovaldi is sold for US$84,000 per treatment in the US; Indian manufacturers are able to sell the generic version profitably for less than US$1,000 per treatment.

The threat of competition from Indian generics is partly responsible for major pharmaceutical companies’ decision to make some of their drugs available to the world’s poor at low prices. If the US compels India to tighten its patent rules substantially, so that they resemble US rules more closely, this outcome could be jeopardized.

Multilateral approach, using the World Trade Organization (WTO), has proved less effective than the major multinational pharmaceutical companies hoped, so now they are attempting to achieve this goal through bilateral and regional agreements.

In the view of America’s pharmaceutical industry, TRIPS did not go far enough. The Indian government’s desire to enhance its trade relations with the US thus provides the industry an ideal opportunity to pick up where TRIPS left off, by compelling India to make patents easier to obtain and to reduce the availability of low-cost generics.

In September 2014, during his visit to the US, Indian Prime Minister Narendra Modi agreed to establish a working group to reevaluate the country’s patent policy. The US participants in that group will be led by the Office of the US Trade Representative, which serves the pharmaceutical companies’ interests, rather than, say, the National Academy of Sciences, the National Science Foundation, or the National Institutes of Health.

Any comparable voice in favor of changes in Indian Patents Act?

I don’t seem to have heard or read as strong arguments from as credible sources as Nobel Laureate Joseph E. Stiglitz, Dean Baker and Arjun Jayadev – the authors of the above article, in favor of the changes that American pharma companies want in the Indian Patents Act.

India at the center stage in IPR debate:

In the IPR debate, India is continuously being seen at the center stage for various reasons. The key one being the size, scale and economic efficiency that the home grown Indian pharma players have attained to cater to the needs of a large number of global population, including those residing in the United States and Europe, with a wide range of high quality generic drugs at affordable prices.

Fast evolving scenario:

It is now absolutely clear that being rattled by several refusals of India’s granting product patent to very similar molecules with minor tweaking under section (3d) of the country’s Patents Act, together with the nation’s uprightness in issuing Compulsory License (CL) for an enormously expensive cancer drug reducing its price by over 95 percent, United States now intends to directly intervene into India’s IPR policy environment.

As Nobel Laureate Stiglitz wrote, keen desire of the new dispensation of the Indian government to enhance its trade relations with the US has provided a golden opportunity to American pharma companies and their paid lobbyists to jump into the fray. They have started exerting enormous pressure on their own Government to compel India, at bilateral discussions, dilute its well-balanced Patents Act, ignoring India’s sovereign right to play by the flexibilities as provided by the WTO to protect public health interest in the country.

Both the domestic and international civil society organizations, including public health activists have expressed their serious concerns on this aggressive intent of US and India’s seemingly vulnerable position in this regard.

“The US is pushing India to play by its rules on Intellectual Property, which we know will lead to medicines being priced out of reach for millions of people,” commented the Executive Director of MSF’s Access Campaign, according to media reports.

Non-pharma American Organizations reacted differently:

14 American organizations in a letter to their President Barack Obama dated January 20, 2015, just prior to his visit to India, asked him “to support India’s central role in providing high-quality, low-cost generic medicines -which are essential for health care around the world. Recent U.S. policy stances have sought to topple parts of India’s intellectual property regime that protect public health in order to advance the interests of multinational pharmaceutical corporations in longer, stronger, and broader exclusive patent and related monopoly rights. India’s laws fully comply with the WTO TRIPS Agreement. Millions around the world depend on affordable generic medicines that would disappear if India acceded to these proposals, including many beneficiaries of US-funded programs. Instead of using your trip to promote the narrow interests of one segment of the pharmaceutical industry, we ask you to support the interests of people who need affordable medicines, whether they live in the U.S., in India, in Africa or elsewhere. Our world is safer and healthier because of India’s pro-health stance and we ask you to say so publicly while you are there.”

The letter re-emphasized at the end:

“From Detroit to New Delhi, health is increasingly interconnected. Our world is safer when it is healthier, and it is healthier because India’s laws appropriately balance health and IP.”

An interesting development:

It is interesting to note that after Winter Session of the Indian Parliament, the Modi Government announced a number of important policy changes at the end of December 2014.

Interestingly, one more critical policy – National Intellectual Property Rights (IPR) Policy has been left open for public comments and the final IPR Policy is yet to be announced despite enormous American pressure on India in this regard.

Without any specifics, the first draft of the National IPR policy just states that India will “review and update IP laws, where necessary, and remove anomalies and inconsistencies, if any.” It does emphasize though, the need of “more innovation” in the country, unequivocally and quite justifiably.

I wrote on the draft National IPR Policy in my blog post of January 19, 2015, titled “New “National IPR Policy” of India – A Pharma Perspective”.

Conclusion:

It is generally believed that the National Intellectual Property Rights (IPR) Policy is undoubtedly a positive step to clarify the Government’s stand in maintaining a balanced IP regime in the country that would encourage innovation to add speed to the progress of the nation.

In just 10 years Indian IPR regime has, by and large, attracted enormous global attention mostly for balancing IP and public health interest, admirably. Experts like Nobel laureate Joseph E. Stiglitz sincerely hope that India will not change this course under pressure of any kind or form.

Be that as it may, several recent media reports also speculated, around the same time, that Government of India is probably considering putting in place ‘Data Exclusivity’ and ‘Patent Linkage’ through administrative measures, without making any amendments in the Patents Act of the country.

In my subsequent articles in this blog, I shall deliberate on these two contentious issues, keeping the evolving scenario in perspective.

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.

A Patient-Centric State Initiative To Revolutionize Disease Treatment

Posted on February 9, 2015 by Tapan Ray

In his State of the Union address, just before the recent visit to India in January 2015, President Barack Obama articulated the need to develop “Precision Medicine” in his country – a bold, giant and perhaps unprecedented State initiative to remarkably improve effectiveness of disease treatment.

To set the ball rolling, in his budget proposal for the year 2016, President Obama earmarked an amount of US$ 215 million for this purpose. This includes an allocation of US$130 million for the National Institutes of Health (NIH) to create a national research database of about a million American volunteers by studying their genetics together with other relevant factors, such as the environments they live in and the microbes that live in their bodies.

‘Precision Medicine’ initiative is similar to path breaking 13-year and US$3 billion Human Genome Project, that has formed the bedrock of modern genomics, President Obama said. He also expressed hope that the private healthcare sector too, including universities and foundations, will get involved to “lay the foundation” for this new initiative of the Government for the interest of patients.

Why is this approach so relevant in today’s healthcare?

In an article published in the ‘British Medical Journal (BMJ) in October 2012, Richard Smith - an editor of BMJ until 2004 and a Director of the United Health Group’s chronic disease initiative wrote:

“Doctors know that many of the patients they treat with drugs will not benefit. Many patients know that too.”

Dr. Smith also emphasized, for centuries medicine classified diseases by what could be seen, felt, and smelt. Thereafter, medical scientists in this area started defining diseases anatomically, physiologically, and biochemically. Even today, this is by and large the paradigm where most medicines fall.

Smith underscored, because of imprecise diagnosis the treatment also becomes haphazard. There is big variation in how individuals respond to drugs and yet that variation is not usually recorded. The regulators approve drugs based on their average performance even today.

The White House release also reiterates, most medical treatments have been designed for the “average patient.” This “one-size-fits-all-approach,” treatments can be very successful for some patients but not for others.

This calls for broadening the scope of disease treatment – from the conventional and error-prone ‘Disease Oriented’ approach, to relatively more unconventional and better targeted with greater value – ‘Patient-Centric’ ones, wherever needed.

Two current trends:

To address this key deficiency in the effective treatment of several dreaded diseases for many patients, following two are the current trends, as stated by William Pao, M.D., Ph.D., who led Roche’s Oncology Discovery & Translational Area research unit since May 2014:

We now know that on a molecular level every cancer is different – not only between different tumors, but even between different areas within a single tumor! This means that we need to match the right drug to the patient who we know will respond best to the drug, at the right time during the course of treatment.

Patients will have their tumors profiled not only for genetic drivers, but also for predictive immunotherapy markers at different time points in their course of treatment.

Personalized and Precision Medicine:

The above trends in the endeavor of making treatments more patient specific – thus more effective, have thrown open scientific discourse and intense research on ‘Personalized’ and ‘Precision’ medicines.

As Pfizer has described in its website:

Personalized Medicine is a unique approach to medical practice in which the individual aspects of a patient are directly considered to guide treatment planning, including his or her genetic make-up, key biomarkers, prior treatment history, environmental factors and behavioral preferences. This approach can be used to optimize pharmaceutical treatments and overall care.

Whereas, Precision Medicine is an approach to discovering and developing medicines and vaccines that deliver superior outcomes for patients, by integrating clinical and molecular information to understand the biological basis of disease. Precision medicine is the biopharmaceutical research and development paradigm that will help enable more patient-centered clinical practice, including treatment decision-making based on genetic information – an emerging standard now often described as “personalized medicine”.

As President Obama said while announcing the proposal on January 30, 2015, ‘Precision Medicine’ promises delivery of the right treatment at the right time, every time, to the right person.

He also said that the new effort will “bring us closer to curing diseases like cancer and diabetes…and give all of us access to the personalized information we need to keep ourselves and our families healthier.”

‘Precision Medicines’ Dominate Oncology segment:

In the European Society for Medical Oncology (ESMO) 2014 Congress, pharma majors reported their latest advances on precision medicines in the cancer care. Bristol-Myers Squibb, Roche, AstraZeneca, GlaxoSmithKline (GSK), and Merck & Co. were among the companies presented updates of their most promising cancer drugs closer to this area.

According to a large pharma lobby group in the United States – The Pharmaceutical Research and Manufacturers of America (PhRMA):

“Recent advances in diseases such as cancer and cystic fibrosis are delivering on the promise of targeted treatments, and between 12 and 50 percent of all compounds currently being researched by the industry are potential personalized medicines. These advances hold great promise in improving patient outcomes and controlling costs by targeting the right medicines to the right patients.”

‘DCAT Connect’ Report of September 2014 also indicates significant increase in ‘Precision Medicines’ in the pipelines of the leading global pharma companies, which is a key change over the past decade.

In 2013, targeted therapies increased their share of the global oncology market, accounting for 46 percent of total sales, up from 11 percent a decade ago. According to IMS Institute for Healthcare Informatics, the global oncology drug market reached US$ 91 billion in 2013 with CAGR of 5.4 percent from 2008 to 2013.

Taking note of this trend, it appears that in the near future ‘Precision Medicines’ would possibly be the most promising class in the treatment of cancer, particularly in breast cancer, lung cancer and certain types of leukemia. This is mainly because medical scientists are already quite acquainted with the molecular signatures of different types of cancer related tumors.

Medical scientists and researchers are also working on ‘Precision Medicines’ to more effectively address many other diseases, such as, diabetes, cardiovascular and ailments related to several types of infections.

Increasing potential:

Realization of the potential of ‘Precision Medicines’ to improve care and speed the development of new treatments has just only begun to be tapped.

In recent times, scientists and researchers have accelerated efforts to understand more about biomarkers for this purpose. A study conducted by the German Association of Research-Based Pharmaceutical Companies (vfa) indicates that more than 20 percent of clinical trials carried out since 2005 focused not just on agents, but also on biomarkers. Before 1990, only one in twenty clinical trials addressed biomarkers.

According to another report, last year, 20 percent of all new drug approvals in the United States were for “Precision Medicine” treatments. This vindicates, yet again, the immense potential to turn genetic discoveries into innovative disease treatments for patients.

A bold state sponsored research initiative:

State funded, ‘Precision Medicine’ initiative is a bold new step of the American Government to revolutionize improvement in healthcare and treating disease. It is expected to pioneer a new model of patient-powered research that promises to accelerate biomedical discoveries and provide clinicians with new tools, knowledge, and therapies to select which treatments will work best for which patients.

As the White House release reiterates, most medical treatments have been designed for the “average patient.” As a result of this, “one-size-fits-all-approach” treatments can be very successful for some patients but not for others. This is changing with the emergence of ‘Precision Medicine’, an innovative approach to disease prevention and treatment that takes into account individual differences in people’s genes, environments, and lifestyles.

In this process, ‘Precision Medicine’ gives clinicians tools to better understand the complex mechanisms underlying a patient’s health, disease, or condition, and to better predict which treatments will be most effective.

Opposite view:

In an op-ed titled, ‘Moonshot’ Medicine Will Let Us Down, published recently in The New York Times, the author argued with his differing viewpoints.

I am quoting below three of those arguments:

“For most common diseases, hundreds of genetic risk variants with small effects have been identified, and it is hard to develop a clear picture of who is really at risk for what. This was actually one of the major and unexpected findings of the Human Genome Project. In the 1990s and early 2000s, it was thought that a few genetic variants would be found to account for a lot of disease risk. But for widespread diseases like diabetes, heart disease and most cancers, no clear genetic story has emerged for a vast majority of cases.”

“Another unexpected finding of the Human Genome Project was the problem of ‘missing heritability.’ While the statistics suggest that there is a genetic explanation for common conditions and diseases running in families or populations, it turns out that the information on genetic variants doesn’t explain that increased risk.”

“The idea behind the “war on cancer” was that a deep understanding of the basic biology of cancer would let us develop targeted therapies and cure the disease. Unfortunately, although we know far more today than we did 40-plus years ago, the statistics on cancer deaths have remained incredibly stubborn.”

I am sure, you will analyze the above points with the facts that you have at your disposal on this subject to arrive at a logical conclusion.

Current Applications:

Though these are still early days, initial benefits of ‘Precision Medicines’ have been reported in many areas, such as:

Genetic analysis of patients dealing with blood clots: Since 2007, the U.S. Food and Drug Administration has been recommending genotyping for all patients being assessed for therapy involving Warfarin.

Colorectal cancer: For colon cancer patients, the biomarker that predicts how a tumor will respond to certain drugs is a protein encoded by the KRAS gene, which can now be determined through a simple test.

Breast cancer: Women with breast tumors can now be effectively screened to determine which receptors their tumor cells contain.

Cystic fibrosis: In America, patients with a rare form of cystic fibrosis now can choose a drug designed specifically to target the genetic defect causing their illness. Specialized medical centers, such as “individualized medicine centers” at the Mayo Clinic, are also available to the patients for effective treatment.

Ethical issues:

While following this pursuit of excellence of the genetic scientists in the realm of disease treatment, some experts have reportedly raised flags of caution. They strongly feel that DNA code sequencing brings to light a “very real privacy concerns” of individuals.

GeneWatch UK is an organization that investigates how genetic science and technologies will impact on our food, health, agriculture, environment and society. They have been strongly arguing, if genome sequencing is extended to entire population, individuals and their relatives could then be identified and tracked by matching their DNA with the genome stored in the respective health records. This move, as contemplated by them, could “wipe out privacy” with an impact on the society.

Thus, the ethical and social issues in the development of ‘Precision Medicine’ primarily in the area of genetic testing need to be effectively addressed, sooner.

Conclusion:

The quest for moving away from conventional and error-prone ‘Disease Oriented Treatment’ paving the way for unconventional and value added individual patient-specific ones, may soon come to fruition.

Advances in ‘Precision Medicine’ have already led to powerful new discoveries and several new treatments that are tailored to specific characteristics of individuals, such as a person’s genetic makeup, or the genetic profile of an individual’s tumor. This is leading to a transformation in the way the world can treat diseases such as cancer.

Patients with breast, lung, and colorectal cancers, melanomas and leukemia, for instance, should be provided with facilities in specialist hospitals to undergo molecular testing as a part of patient care, enabling physicians to select treatments that improve chances of survival and reduce exposure to adverse effects.

Although, the potential for precision medicine to improve care and speed the development of new treatments has only just begun to be tapped, some skeptics do say that tailoring medical treatments to individual characteristics of each patient is both overly optimistic and cost-prohibitive.

Be that as it may, in the balance of probability the benefits of prudent use of ‘Precision Medicine’ far outweigh the concerns expressed. This evolving new paradigm would help saving not just significant expenses, but also precious time that is usually spent on ‘trial-and-error treatments’, by enabling clinicians to determine quickly which therapies are most likely to succeed.

Though lot many grounds would still need to be covered in this area, the State sponsored ‘Precision Medicine’ initiative of America to revolutionize disease treatment, in my view, is indeed a laudable one, every way.

By: Tapan J. Ray

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

What President Obama And Prime Minister Modi Discussed On IPR And Healthcare In India

Posted on February 2, 2015 by Tapan Ray

During the recent visit of the US President Barack Obama to India from January 25-27, 2015, both the domestic and international media was abuzz with the speculation, whether or not India would concede some ground to America on the prevailing, generally considered, well balanced patent regime in India.

Many expected that the American delegation would succeed in getting some specific assurances from Prime Minister Narendra Modi to follow the line of the US style Intellectual Property Rights (IPR) in India, which would help the American pharma companies to maximize their financial returns in the country.

The assurances from India were expected mainly in areas involving grant of patents even to those pharma products, that do not quality for the same under section 3(d) of the Indian Patents Act 2005, dilution of provisions for Compulsory License (CL) and creation of a new provision for Data Exclusivity in the country, besides a few others.

As everyone noticed, just before the US President’s visit, interested groups both in India and also from abroad intensified lobbying and released op-eds to create pressure on the Indian negotiators, in general, and the Prime Minister Modi in particular.

Terming the Indian Patents Act weak, the lobby groups turned the Indian IPR regime on its head. Playing the role of India’s benefactor, they re-packaged their shrill collective voice into pontificating words while giving interviews to the Indian media by saying: “A strong IPR regime could allow the country (India) to make a major contribution to tackling health challenges, both domestically and around the world.”

Additional US interest in Indian IP regime from TPP perspective:

Exemplary demonstration of India’s resistance to intense external pressure, time and again, for dilution of the IP regime in the country, seems to have become a model to follow for the emerging economies of the world, in general. This trend now gets reflected even among some of the members of the 12-nation Trans-Pacific Partnership (TPP), which is a proposed regional regulatory and investment treaty.

According to reports, TPP members, such as, Brunei, Malaysia, Singapore and Vietnam are negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement. Besides America, other members of the TPP are Australia, Japan and New Zealand, Canada, Chile, Mexico and Peru.

TPP negotiations are generally expected to follow the overall framework of American laws. However, according to media reports, based on the leaked draft of the TPP, the data exclusivity period for biologic medicines has already been negotiated down to 7 years, from 12 years under the US Affordable Care Act.

However, on January 27, 2015, US Senator Orrin Hatch, Chairman of the Senate Finance Committee reportedly said that he would oppose Senate approval of the TPP, if it does not provide 12 years of patent protection for biologics.

The same day, at a hearing before the House Ways and Means Committee, US Trade Representative Mike Froman reportedly reiterated, “The US is insisting on 12 years of IP protections, even though the Obama administration’s budget calls for 7-year exclusivity on biologic meds.”

It is also worth noting that Nobel laureate Joseph E. Stiglitz in an op-ed titled, “Don’t Trade Away Our Health”, published in The New York Times of January 30, 2015 commented as follows:

“TPP could block cheaper generic drugs from the market. Big Pharma’s profits would rise, at the expense of the health of patients and the budgets of consumers and governments.”

Clicking on this short video clip you will be able watch another similar viewpoint on TPP, its general perspective and what it encompasses.

Thus, the closely guarded ‘turf war’ on TPP is now heating up, making negotiations increasingly tougher to arrive at a consensus on the IP rules that would be applicable to pharmaceutical products in this trade initiative. Consequently, the evolving scenario has prompted the interested groups to keenly follow, with hopes, the outcome of Presidents Obama’s recent visit to India, especially in the pharma IP areas. This is because, many emerging economies of the world are now appreciative of the prevailing well-balanced patent regime in India.

After the 12-nation TPP agreement comes into force, probably following the lines of the US IP laws, it is quite possible that India may sometime in future would prefer to be a part of this agreement for greater trade facilitation, as the country comes closer to America…Who knows?

However, in that case the bottomline is, India would have to amend relevant provisions of its Patents Act in conformance with the requirements of mainly the US pharmaceutical companies and the IP laws prevailing in America, as this will be necessary to become a new member of this treaty.

Discussion in the summit meeting:

According to the Joint Statement on the summit meeting released by the White House, President Obama and Prime Minister Modi discussed the following subjects related to IPR and Healthcare in India, as detailed below:

Reaffirmed the importance of providing transparent and predictable policy environments for fostering innovation. Both countries reiterated their interest in sharing information and best practices on IPR issues, and reaffirmed their commitment to stakeholders’ consultations on policy matters concerning intellectual property protection.

Reaffirmed their commitment to the Global Health Security Agenda (GHSA) and announced specific actions at home and abroad to prevent the spread of infectious diseases, including a CDC-Ministry of Health Ebola and GHSA preparedness training, expansion of the India Epidemic Intelligence Service, and development of a roadmap to achieve the objectives of the GHSA within three years.

Committed to multi-sectoral actions countering the emergence and spread of antimicrobial resistance (AMR), and cooperation in training of health workers in preparedness for infectious disease threats. The Leaders agreed to focus science and technology partnerships on countering antibiotic resistant bacteria and promoting the availability, efficacy and quality of therapeutics.

Welcomed further progress in promoting bilateral cooperation on cancer research, prevention, control, and management and agreed to continue to strengthen the engagement between the CDC and India’s National Centre for Disease Control.

Welcomed the upcoming completion of an Environmental Health, Occupational Health and Injury Prevention and Control MoU between the U.S. Centers for Disease Control and Prevention and the Indian Council for Medical Research to further collaborative efforts to improve the health and welfare of both countries’ citizens.

Agreed to expand the India-U.S. Health Initiative into a Healthcare Dialogue with relevant stakeholders to further strengthen bilateral collaboration in health sectors including through capacity building initiatives and by exploring new areas, including affordable healthcare, cost saving mechanisms, distribution barriers, patent quality, health services information technology, and complementary and traditional medicine.

Pledged to encourage dialogue between the U.S. Department of Health and Human Services and its Indian counterparts on traditional medicine.

Pledged to strengthen collaboration, dialogue, and cooperation between the regulatory authorities of the two countries to ensure safety, efficacy, and quality of pharmaceuticals, including generic medicines.

Agreed to accelerate joint leadership of the global Call to Action to end preventable deaths among mothers and children through a third meeting of the 24 participating countries in India in June 2015. As host, India will showcase the power of new partnerships, innovations and systems to more effectively deliver life-saving interventions.

Also lauded the highly successful collaboration on a locally produced vaccine against rotavirus, which will save the lives of an estimated 80,000 children each year in India alone, and pledged to strengthen the cooperation in health research and capacity building through a new phase of the India-U.S. Vaccine Action Program.

As stated earlier, during this summit meeting, US lobbyists were reportedly nurturing a hope that Prime Minister Modi would eventually agree, at least in principle, to jettison section 3(d) on the patentability criteria enshrined in the Indian Patents Act 2005 and significantly water down the country’s Compulsory License (CL) provisions. This expectation increased, when the US President made the investment promise of U$4 billion in India.

That said, from the above points of discussion in the joint statement, it appears that no breakthrough on the part of the US was achieved especially in the IPR space, during the summit.

However, in other areas of bilateral healthcare co-operation, such as, science and technology partnerships in countering antibiotic resistant bacteria; cancer research and traditional medicines; the reaffirmations made by the two leaders are encouraging.

US pressure on IP to continue:

Going by India’s reaffirmation during the summit meeting of its commitment to consultations with America on policy matters related to IPR protection and US Trade Representative Mike Froman’s reported affirmation of the following to the US lawmakers during a Congressional hearing held on January 27, 2015, it is construed by the IP activists that the kettle has possibly started boiling:

- “We have been concerned about the deterioration of the innovation environment in India, and we have engaged with the new government since they came into office in May of last year about our concerns,”

- “We held the first Trade Policy Forum in four years in November. I just returned from India yesterday as a matter of fact … and in all of these areas, we have laid out a work program with the government of India to address these and other outstanding issues.”

- “We are in the process of providing comments on that draft policy proposal on IPR, and we are committed to continuing to engage with them to underscore areas of work that needs to be done in copyright, in trade secrets as well as in the area of patents,”

- “We’ve got a good dialogue going now with the new government on this issue, and we’re committed to working to achieve concrete progress in this area,”

Media reports also indicate that US pressure on IPR would continue, as they highlight:

“Threatened by free trade of high-quality and affordable medicines, US-based pharmaceutical companies and politicians friendly with the industry are using prominently placed op-eds, large advertisements on Washington, D.C. buses, and letters to President Obama to spread false information -claiming India’s rules are not legal or discourage innovation. The companies have been threatening to withhold investment if India does not adopt weaker patent laws that would extend pharmaceutical monopolies and stymie the country’s generic industry.”

I discussed some of these issues in my blog post of January 19, 2015, titled “New National IPR Policy of India – A Pharma Perspective”.

Conclusion:

Irrespective of whatever the US-India Joint Statement says on IPR, some experts do apprehend that Indian Government may now wilt under continuous intense pressure from the American Government. This is mainly because, India’s Commerce and Industry’s Minister has reportedly sought America’s inputs in the finalization process of the new National IPR policy of the country.

On this score, let me hasten to add that it may not be prudent to read too much into it, as seeking stakeholders’ comments on such matter is a practice that India has been following since long on various issues and policies.

However, at the same time, other groups of experts nurture a quite different viewpoint. They are confident that the nationalist Modi Government, under no circumstances would concede its long nurtured strategic ground on IPR to the US power play.

Emerging countries across the globe are keenly watching this intense game of ‘Power Chess’, as they plan to emulate India in many of the pharmaceutical IP areas to uphold the public health interest, providing affordable healthcare to all.

These are still early days. Thus, in my view, on January 25, 2015, what President Barack Obama and Prime Minister Narendra Modi discussed on the IPR regime in India may not be as important as what they would eventually decide to agree, disagree or agree to disagree in this area, moving on from here.

Only time would prove…not just who is right, that is pretty obvious to many, but who wilts at the end of the day…and more importantly, why?

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.

Has Prime Minister Modi Conceded Ground To America On Patents Over Patients?

Posted on October 6, 2014 by Tapan Ray

Unprecedented high profile engagement of the Indian Prime Minister with various interested groups during his recent visit to the United States under equally unprecedented media glare, has invited overwhelmingly more kudos than brickbats, from across the world.

However, in the context of upholding patients’ health interest in India, a lurking fear did creep in, immediately after his visit to the United States. This was related to whether or not demonstrably tough minded Prime Minister Modi has yielded to enormous pressure created by all powerful American drug lobby against the current Intellectual Property (IP) regime in India.

The backdrop:

This apprehension started bothering many as the Prime Minister appeared to have moved away from a much-reiterated stand of India that any IP related issue would be discussed only in a multi-lateral forum.

That India’s Patents Act is TRIP’s compliant, has been categorically endorsed by a vast majority of international and national experts, including, a key intellectual belonging to Prime Minister Modi’s ‘Think -Tank’ – Arvind Panagariya, Professor of Economics at Columbia University, USA.

Subsequent to my blog post of February 5, 2014, an article dated March 4, 2014 titled “India Must Call The US’ Bluff On Patents” penned by Panagariya stated as follows:

“Critics of the Indian patent law chastise it for flouting its international obligations under the TRIPS Agreement. When confronted with these critics, my (Arvind Panagariya) response has been to advise them:

To urge the US to challenge India in the WTO dispute settlement body and test whether they are indeed right.

Nine years have elapsed since the Indian law came into force; and, while bitterly complaining about its flaws, the USTR has not dared challenge it in the WTO. Nor would it do so now. Why?

There is, at best, a minuscule chance that the USTR will win the case.

Against this, it must weigh the near certainty of losing the case and the cost associated with such a loss.

Once the Indian law officially passes muster with the WTO, the USTR and pharmaceutical lobbies will no longer be able to maintain the fiction that India violates its WTO obligations.

Even more importantly, it will open the floodgates to the adoption of the flexibility provisions of the Indian law by other countries.

Activists may begin to demand similar flexibilities even within the US laws.

On possible actions against India under the ‘Special 301’ provision of the US trade law, Professor Arvind Panagariya argues:

“Ironically, this provision itself was ruled inconsistent with the WTO rules in 1999 and the US is forbidden from taking any action under it in violation of its WTO obligations. This would mean that it couldn’t link the elimination of tariff preferences on imports from India to TRIPS violation by the latter. The withdrawal of preferences would, therefore, constitute an unprovoked unilateral action, placing India on firm footing for its retaliatory action.”

Examples of some global and local views:

On this score, a large number of business experts from all over the world have expressed their views, recently. Some examples are as follows:

The former Chairman of Microsoft India reportedly advised the new ‘Modi Regime’ as follows:

“While the new government must work hard to make India more business friendly, it must not cave in to pressure on other vital matters. For instance, on intellectual property protection, there is enormous pressure from global pharmaceutical companies for India to provide stronger patent protection and end compulsory licensing. These are difficult constraints for a country where 800 million people earn less than US$ 2 per day.”

Maruti Suzuki, India’s largest car manufacturer, aircraft maker Boeing, global pharma major Abbott and technology leader Honeywell have reportedly just not supported India’s IP regime, but have strongly voiced that IPR regime of India is “very strong” and at par with international standards.

The Chairman of the Indian pharma major – Wockhardt also echoes the above sentiment by articulating, “I think Indian government should stay firm on the Patents Act, which we have agreed.”

Other domestic pharma trade bodies and stakeholder groups in India expect similar action from the ‘Modi Government’.

Who are against Indian IP regime?

By and large, American pharma sector and their well-paid lobbyists representing drug multinationals are the strongest critics of Indian Patents Act 2005. They allege that Indian IP law discriminate against US companies and violates global norms, severely affecting their investments in India.

Recent stand of India on unilateral US measures:

Just to recapitulate, on April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘priority watch list country’.

On this report, India responded by saying that the ‘Special 301’ process is nothing but unilateral measures taken by the US under their Trade Act 1974, to create pressure on countries to increase IPR protection beyond the TRIPS agreement.

The Government of India has always maintained that its IPR regime is fully compliant with all international laws.

The Indo-US working group on IP:

The Indo-US high-level working group on IP would be constituted as part of the Trade Policy Forum (TPF). The US-India TPF is the principal trade dialogue body between the countries. It has five focus groups: Agriculture, Investment, Innovation and Creativity, Services, and Tariff and Non-Tariff Barriers.

The recent joint statement issued after talks between Prime Minister Narendra Modi and US President Barack Obama states:

“Agreeing on the need to foster innovation in a manner that promotes economic growth and job creation, the leaders committed to establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-making and technical-level meetings as part of the TPF.”

This part of the Indo-US joint statement on IPR created almost a furore not just in India, but in other parts of the world too, interpreting that Prime Minister Modi has conceded ground to America on patents over patients.

IP experts’ expressed concerns even in the US:

Commenting on this specific move by the Obama Administration to push India on issues related to IP, even the independent American healthcare experts expressed grave concern.

Professor Brook K. Baker from the Northeastern University School of Law has reportedly said:

“This working group will give the US a dedicated forum to continue to pressure India to adopt TRIPS-plus IP measures, including repeal of Section 3(d) of the India Patents Act, adoption of data exclusivity/monopolies, patent term extensions, and restrictions on the use of compulsory licenses”.

Professor Baker further said:

“The US, in particular, will work to eliminate local working requirements that India is seeking to use to promote its own technological development…. The fact that this working group will have ‘decision-making’ powers is particularly problematic as it places the US fox in the Indian chicken coop.”

“FDI and innovation are also always rhetorically tied to strong IPRs despite inclusive evidence that typically shows that most low and middle-income countries do not benefit economically from IP maximization, since they are net importers of IP goods. It is also because the path to technological development is ordinarily through copying and incremental innovation – development tools that are severely undermined by IP monopoly rights and their related restrictive licensing agreements,” Baker elaborated.

Jamie Love, Director, Knowledge Ecology International, an NGO working on knowledge governance also reportedly said:

“It is very clearly going to be used to pressure India to expand liberal grants of drug patents in India, and to block or restrain the use of compulsory licenses on drug patents.”

Has India conceded to American bullying?

On this backdrop, during Indian Prime Minister’s interaction with the President of the United States and his aids, it was reportedly decided to set up a high-level working group on IP, as a part of the TPF, to sort out contentious issues which have been hampering investments. This was interpreted by many experts that India has conceded to American bullying, as it apparently deviated from its earlier firm stand that the country would discuss IP issues only in multilateral forum such as the World Trade Organization (WTO).

No change in India’s position on patents:

Taking note of this humongous misunderstanding, on October 4, 2014, the Union Ministry of Commerce in an official clarification reiterated that during Prime Minister Modi’s visit to America:

There has been no change in India’s stated position on Intellectual Property Rights (IPR).

India has reaffirmed that the IPR legal regime in India is fully TRIPS-compliant.

A bilateral Innovation and Creativity Focus Group already exists in the Trade Policy Forum (TPF) since 2010. Any IP related issues have to be discussed by the United States only in the TPF. This group consults each other no less than twice a year on improving intellectual property rights protection and enforcement, enhancing awareness of intellectual property rights, fostering innovation and creativity, and increasing collaboration between American and Indian innovators.

The Indo-US joint statement issued now merely reiterates whatever has existed in the earlier Trade Policy Forum. IPR issues are critical for both the countries and India has been repeatedly raising the issue of copyright piracy and misappropriation of traditional knowledge with the US.

The US agreeing to discuss IPR issues through the bilateral mechanism of the Trade Policy forum is in fact a re-affirmation of India’s stand that issues need bilateral discussion and not unilateral action. The statement on the IPR issue will only strengthen the bilateral institutional mechanism.

Conclusion:

Most part of the above statement is indeed quite consistent to what happened even immediately before the Modi regime.

In September 2013, the Commerce Secretary and India’s Chief trade Negotiator, Rajeev Kher, while terming the decision by the US Trade Representative for not labeling India with its worst offender tag in IP as a ‘very sensible decision’, strongly defended India’s right to overrule patents in special cases to provide access to affordable innovative medicines to its 1.2 billion people.

Moreover, many recent judicial verdicts have vindicated that a strong and balanced patent regime of the country not just secures the bonafide rights of the patentee, but at the same time ensures genuine needs of the public and in case of pharma of the ailing patients.

The Indian Supreme Court judgment on Glivec of Novartis in the recent past, have re-established, beyond an iota of doubt, that to secure and enforce patents rights of genuine inventions, other than evergreening, India provides a very transparent IP framework.

Taking all these into consideration, it seems unlikely to me that Prime Minister Modi, who is a self-confessed nationalist and holds India’s interest first, would in any way compromise with the country’s TRIPS compliant patent regime, sacrificing millions of Indian patients’ health interest at the altar of American business needs.

The above official clarification by the Union Ministry of Commerce is expected to tame the fire of this raging debate to a great extent. However, the grave concern expressed in the following lines by the independent healthcare experts, such as Professor Baker, on the high-level IP working group, cannot just be wished away:

“The fact that this working group will have ‘decision-making’ powers is particularly problematic as it places the US fox in the Indian chicken coop.”

That said, from your government Mr. Prime Minister “Yeh Dil Maange Much More”.

By: Tapan J. Ray

Big Pharma Demands Transparency, Keeping their ‘Black-Boxes’ Tight and Safe?

Posted on October 28, 2013 by Tapan Ray

Pharmaceutical Industry across the globe wants absolute transparency in all government laws, policies, guidelines, transactions and overall governance. They also expect the trade environment should be predictable, non-manipulative and business-friendly. These expectations are indeed well justified and deserve whole-hearted support from all concerned.

However, when similar expectations of transparency are voiced by stakeholders in the Big Pharma business operations, that will have direct or indirect impact on public health interests, one would mostly encounter a well guarded, mammoth and impregnable ‘Black Box’, wearing a ‘Top Secret’ label, with all relevant information kept inside.

Such areas of stakeholders’ interests on Big Pharma could well be related to details, like for example:

Actual break-up of R&D expense details,
Transparency in all clinical trials data for experts review,
Patented products’ pricing rationale,
Enormous total costs of lobbying and related expenses at the global level,
Marketing spend on doctors and other decision makers, directly or indirectly, just to name a few.

Mounting curiosity:

Continuation of such opaque practices for a long time, in turn, sparks the curiosity of the intelligentsia to know more in details, especially, about the areas as stated above.

Various research studies are now coming up, with huge revelations and strong findings in these areas. All of these together indicate, it is about time for the global pharma to also demonstrate transparency in their respective business practices and corporate governances, without further delay.

If it does not happen, probably respective governments in various countries will start acting on these areas of opaque self-serving pharma business practices, with the enactment and more importantly, stricter enforcement of requisite laws and policies. President Obama Administration in the United States has already initiated some important actions in these areas with proposals and laws, like for example, the “Physicians Payment Sunshine Act’ .

The ‘Power Game’:

An interesting article of May 3, 2013 highlighted that the global pharmaceutical industry exerts incredible influence over the prescription medicines across the globe. This power, as many will know, flows from robust political contacts and influences over various important government agencies administrating the entire healthcare system, executed immaculately by expensive lobbying and PR campaigns by their globally integrated trade bodies.

Similar powerful influences also get extended to doctors and the people who matter to further their interests. These well crafted plans are reportedly executed through sponsored or paid opinion-modifying articles, ‘advertorials’, DTC advertisements (wherever legally permitted) and well-organized, seemingly third party, speeches to push the envelopes further.

Most probably, keeping such ongoing practices in mind and coming under intense media pressure, the Medical Council of India (MCI) on December 10, 2009 amended the “Indian Medical Council (Professional Conduct, Etiquette and Ethics), Regulations 2002″ for the doctors in India. Unfortunately, its implementation on the ground is rather tardy.

The above article also stated, “In fact, in the United States the industry contributes heavily to the annual budget of the U.S. Food and Drug Administration (FDA), which is charged with regulating drugs and devices made by those same companies.”

Avoidable Expenditures:

The paper indicates that in the United States alone the industry associations:

Have 1,100-plus paid lobbyists on Capitol Hill,
Allocated US$ 188 million annual lobbying budget
Doles out around US$ 14 million to political candidates every year

The report also comments, ‘Drug companies spend substantially more on marketing than they do on research and development.’

Influencing opinion against patients’ interest?

The article in the ‘drugwatch’ also states:

“Doctors are persuaded by the pharma companies to attach their names (ghost writing), against financial considerations, to favorable article on a particular drug ensuring that it is published in a well reputable medical journal.”

The author continues that ‘Ghost writings’ are being used to promote numerous drugs to influence concerned stakeholders.

In 1998, a study of the prestigious New England Journal of Medicine found that ‘out of 75 published articles, nearly half were written by authors with financial conflicts. And, worse than this, only two of the articles disclosed interests.’

Richard Smith, former editor of the British Medical Journal, was quoted saying, “All journals are bought – or at least cleverly used – by the pharmaceutical industry.”

Striking facts:

Following are some striking facts as reported in the article, as mentioned above:

“Advertising instead of research: For every US$ 1 spent on “basic research,” Big Pharma spends US$ 19 on promotions and advertising.

Distribution of free drug samples: The United States has 1 pharmaceutical sales representative for every 5 office-based physicians.

Sponsorship of symposiums and medical conventions: Drug and medical device makers spend lavishly on doctors, including covering meals, travel, seminars and conventions that may look more like vacations.”

Pressure on publications:

The paper highlights that large global pharma majors may even pull its advertisements out, if the concerned medical journal will question the accuracy of an ad. Such types of threats have very serious effects on these journals in running their businesses without getting lucrative advertisement dollars from the drug manufacturers.

Making drugs looking good:

The same article highlights:

“Quite often the academics and scientists are hired hands who supply human subjects and collect data according to the instructions from their corporate employers. Sponsors keep the data, analyze, write the papers and decide whether and when and where to submit them for publication. Drug companies have discovered ways to stage-manage trials to produce predetermined outcomes that will put their products in the best light.”

With this strategy even a bad drug can allegedly be made looking good by doing many things, like for example:

Comparing them to a placebo
Comparing them to a competitor’s medication in the wrong strength
Pairing them with a drug that is known to work well
Shortening a trial before any bad results surface
Testing in groups too small to provide valid evidence

Pay-for-delay deals:

A recent report titled, “Top twenty pay-for-delay drugs: How Industry pay-off delay generics” highlights that ‘Pay-for-delay deals’ have forced patients in the United States to pay an average of 10 times more than necessary for at least 20 blockbuster drugs.

Key findings of the analysis on the impact of pay-for-delay deals are as follows:

This practice has held back generic medicines used by patients with a wide range of serious or chronic conditions, ranging from cancer and heart disease, to depression and bacterial infection.

These payoffs have delayed generic drugs for five years, on average, and as long as nine years.

These brand-name drugs cost 10 times more than their generic equivalents, on average, and as much as 33 times more.

These patented drug companies have made an estimated US$ 98 billion in total sales of these drugs while the generic versions were delayed.

Citing example, the paper says, a pay-for-delay deal kept a generic version of the breast cancer drug Tamoxifen off the US market for nine years, while Pfizer made $7.4 billion in sales of its cholesterol-lowering drug Lipitor (atorvastatin) in 2012 alone.

The point to ponder yet again is, why such practices are being surreptitiously carried out for years sacrificing patients’ interest and without the regulators’ strong interventions, in general?

French Government has initiated a probe:

The French Competition Authority is reportedly expected to publish a report on the findings of its inquiry, initiated in February 2013, into the costs and pricing of medicines in France. The report will also look at whether industry practices are interfering with the market entry of generic drugs, including distribution arrangements between drug manufacturers, wholesalers and pharmacists.

An appreciable initiative in America, but why not in India?

There is still a simmering hope. As indicated above, President Obama’s Affordable Care Act reportedly requires that from September 2013, pharmaceutical companies will need to collect data and openly report information on payments, investment interests, ownership and items of value given to doctors and hospitals. Very unfortunately, the Department of Pharmaceuticals of the Government of India has not taken any such steps, as yet, despite the situation turning grave in the country.

The power of pharma lobby in the US:

According to a recent NYT report, in the United States, government health programs are forbidden from rejecting new drugs on cost grounds.

When the issue of drug prices came up as part of President Obama’s ‘Affordable Care Act’ debate, it was summarily rejected in Congress. Simultaneously, a move toward comparative-effectiveness studies, putting rival drugs or treatments through trials to determine which work better, was also decried.

The report highlights, the mere suggestion of the US government throwing its weight around on drug prices stirs up talk of ‘socialism’. The pharma lobby doesn’t have to look far for support in fighting that idea. In the US, the so-called ‘free market’ is trusted to regulate drug prices, despite the reality that the healthcare market is far from transparent, ‘with byzantine pricing mechanisms and costs that vary wildly region-by-region, pharmacy by pharmacy and even patient-by-patient’.

The usual supply/demand/pricing relationships do not apply to drug prices at the consumer level in the US too, just as it has been proved in India.

A large part of creation of this environment is attributed to pharmaceutical and other health-products firms, who reportedly spent a total of US$ 250 million on lobbying last year.

Big Pharma keeps failing credibility tests:

This happened very recently, when The Guardian in July 2013 reported, the pharmaceutical industry has “mobilized” an army of patient groups to lobby against plans to force companies to publish secret documents on drug trials. This is related to the news that the European Medicines Agency (EMA) could force drug companies to publish all Clinical Trial (CT) results in a public database.

The above report says, while some pharma players agreed to share data, important global pharma industry associations have resisted this plan of the EMA. The report continues, a leaked letter from two large pharma trade associations, the Pharmaceutical Research and Manufacturers of America (PhRMA) of the United States and the European Federation of Pharmaceutical Industries and Associations (EFPIA), have drawn out a strategy to combat calls by drug regulators to force companies to publish all CT results.

The strategy reportedly shows how patient groups, many of which receive some or all of their funding from drugs companies, have been drawn into this battle by these Big Pharma lobby groups.

The e-mail reportedly seen by ‘The Guardian’ was from Richard Bergström, Director General of EFPIA, addressed to directors and legal counsel at Roche, Merck, Pfizer, GSK, AstraZeneca, Eli Lilly, Novartis and many smaller companies.

The e-mail leaked by an employee of a pharma company describes a four-pronged campaign that starts with “mobilizing patient groups to express concern about the risk to public health by non-scientific re-use of data”.

Translated, as ‘The Guardian’ reported, “that means patient groups go into bat for the industry by raising fears that if full results from drug trials are published, the information might be misinterpreted and cause a health scare.”

This appears to be another classic case of vested interests working against patients’ interests.

Global lobbying started taking the center stage in India too:

With the above back-drop and lobbying scandals reportedly being surfaced in many other countries, it is about time that India puts its acts together with India-specific stricter disclosure policies, including R&D, Clinical Trials (CTs), Patented Products Pricing, Marketing Practices and Trade Lobbying.

Interestingly, to influence Government policies India’s top lobbying spenders in 2012 (US$ million) were reported as follows:

1	US Chamber of Commerce	136.3
2	National Association of Realtors	41.5
3	Blue Cross / Blue Shield	22.5
4	General Electric	21.1
5	American Hospital Association	19.2
6	National Cable & Telecom. Association	18.9
7	Pharmaceutical Research & Mfrs. of America (PhRMA)	18.5
8	Google	18.2
9	Northrop Grumman	17.5
10	AT&T	17.4
11	American Medical Association	16.5
12	Boeing	15.6

Source: The Center for Responsive Politics (Economic Times, June 4, 2013)

According to the latest lobbying disclosure reports filed with the US Senate and the House of Representatives, at least two dozen American companies and industry associations are reportedly lobbying hard with the US lawmakers on issues in India, which include:

Intellectual Property (IP)
Patent
Market access

Another recent report comments as follows:

“The US Chamber of Commerce has become a portal for dubious reports that claim India’s intellectual property regime is worse than China’s. Such “research” by paid lobbyists and disseminated through the halls of US Congress…”

Hefty fines for illegal practices, yet Black Box remains tight and safe:

In December 2010, Healthcare advocacy group Public Citizen published a report that, for the first time, documented all major financial settlements and court judgments between pharmaceutical manufacturers and the federal and state governments of the United States since 1991.

It says, almost US$ 20 billion was paid out by the pharmaceutical industry to settle allegations of numerous violations, including illegal, off-label marketing and the deliberate overcharging of taxpayer-funded health programs, such as Medicare and Medicaid.

Three-fourths of the settlements and accompanying financial penalties had occurred in just the five-year period prior to 2010. There has been no indication that this upward trend is subsiding.

10 Largest Settlements and Judgments on Big Pharma mis governance:
(Period: Nov. 2, 1010 – July 18, 2012)

	Company	Amount US$ Million	Year	Reasons
1.	GlaxoSmithKline	3, 000	2012	Unlawful promotion, kickbacks, concealing study data, overcharging government health programs
2.	Abbott	1,500	2012	Unlawful promotion, kickbacks
3.	Johnson & Johnson	1,200	2012	Unlawful promotion
4.	Merck	950	2011	Unlawful promotion
5.	Ranbaxy	500	2012	Poor manufacturing practices, falsifying data on FDA applications.
6.	Johnson & Johnson	327	2011	Unlawful promotion
7.	Boehringer Ingelheim	280	2011	Overcharging government health programs
8.	Mylan’s Dey Pharma unit	280	2010	Overcharging government health programs
9.	Elan	203	2010	Unlawful promotion, kickbacks
10.	Johnson & Johnson	158	2012	Unlawful promotion

Conclusion:

All such expenditures, including expensive lobbying and court settlement charges for illegal business practices, as mentioned above, I reckon, are wasteful and avoidable. These are mostly outcomes of self serving measures, shorn of public health interest,

If all these costs are eliminated and actual R&D expenses are reflected, in a transparent manner, there could be significant reduction in the costs of newer innovative drugs, extending their access to billions of patients, across the world.

Thus to help evaluating the innovative drugs with greater transparency, there is an urgent need for the Big Pharma to set examples by voluntarily disclosing the secrets hidden within the ‘Black Boxes’, as deliberated above. These disclosures should be made to the independent experts and the respective Governments under appropriate statutes.

Expectations of transparency in Governance should not, therefore, be restricted just to Government laws, policies and decisions, the industry should reciprocate it too, in equal measures.

To be patient-centric, transparency in governance needs to be a two-way traffic, where pharma industry should volunteer to be an integral part, sooner than later. Otherwise it may be too late for them to avoid harsh interventions of the respective regulators, as the intense pressure from intelligentsia, civil society and media, keep mounting.

That said, the question lingers:

When the ‘Big Pharma is rightly demanding transparency in all areas of public discourse, why are they so reluctant in making their intriguing ‘Black Boxes’ transparent, that too only in areas of public health interest, for fair experts review?

By: Tapan J. Ray

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

Posted on March 18, 2013 by Tapan Ray

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

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

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

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

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

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

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

Countries started taking steps with disclosure norms:

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

USA

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

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

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

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

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

France:

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

Netherlands:

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

UK:

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

Australia and Slovakia:

Similar requirements also exist in Australia and Slovakia.

Japan:

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

India still remains far behind:

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

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

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

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

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

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

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

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

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

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

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

Ministry of Finance fires the first salvo:

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

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

The High Court upheld the CBDT order:

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

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

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

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

Current situation in America post ‘Sunshine Act’:

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

Low awareness level of the ‘Sunshine Act’:

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

The ground reality:

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

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

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

Spin-off benefits of the Law:

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

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

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

Such Laws could be more impactful in India:

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

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

An interesting survey in India:

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

Two-third of the respondents felt that the implementation of the UCPMP would change the manner in which pharma products are currently marketed in India.

More than 50% of the respondents are of the opinion that the UCPMP may lead to manipulation in recording of actual sampling activity.

Over 50% of the respondents indicated that the effectiveness of the code would be very low in the absence of legislative support provided to the UCPMP committee.

90% of the respondents felt that pharma companies in India should focus on building a robust internal controls system to ensure compliance with the UCPMP.

72% of the respondents felt that the MCI was not stringently enforcing its medical ethics guidelines.

36% of the respondents felt that the MCI’s guidelines would have an impact on the overall sales of pharma companies.

The Planning Commission of India expresses its anguish:

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

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

The Ministry of Health may now intervene:

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

Conclusion:

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

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

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

By: Tapan J Ray

Obama Wins: ‘Obamacare’ stays on course… and what it means to India?

Posted on November 12, 2012 by Tapan Ray

Re-election of President Barrack Obama for another four year term, no doubt, sends a clear signal to all concerned that full implementation of the ‘Patient Protection and Affordable Care Act’ of America, which is also known to many as ‘Obamacare’, will keep staying on course powered by passionate and unflagging enthusiasm of the head of state of the most powerful nation of the world. More so, when it has passed this year even the strict scrutiny of the Supreme Court of the country.

Re-elected President will now have no apprehension that this Act will be repealed, as many predicted a Mitt Romney win could mean a reversal or at least a slower adoption of the new healthcare reform process in the U.S.

That said, it is also clear, although President Obama will get another four years in the White House, Republicans will control the ‘House of Representatives’ and the Democrats will control the ‘Senate’, making the job of the re-elected President indeed tougher. Moreover, much anticipated ‘fiscal cliff’ of the country could pose even a greater challenge to fully fund the ‘Affordable Care Act’, the way it has been crafted by the U.S government.

‘Obamacare’:

Let us now have a brief and a quick review of the ‘Obamacare’.

After getting elected for the first four year term as the President of the U.S, Barrack Obama championed enactment of the historic healthcare reform legislation – ‘Patient Protection and Affordable Care Act’ fulfilling his election campaign pledge deftly to ensure healthcare for all American. The center piece of this legislation was aimed at providing health insurance benefits to another around 34 million poor and uninsured Americans.

The key highlight of this Act is that it will compel the insurers to extend insurance to even those with any pre-existing illness and impose stringent criteria on expenditure towards medical treatment to cut healthcare costs.

‘Patient Protection and Affordable Care Act’ is expected to cost around US $940 billion over 10 years to the U.S Government. To partly recover this cost, Obama administration had already proposed new fees to the healthcare and pharmaceutical companies along with a new tax for the high income groups.

Thus, so far as the new path-breaking healthcare reform process in the US is concerned, President Obama has ‘walked the talk’ and even ‘talked the walk’.

‘Obamacare’: the key features:

Cost	US$ 940 billion over 10 years. Expected to reduce projected federal budget deficits by US$ 143 billion by 2019
Coverage	95% people would gain coverage, leaving 22 million uninsured
Timeline	Most provisions would take effect in 2014
Sources ofFunding:New Taxes	• Tax on high-income earners• Tax on “Cadillac” health plans• 10 year industry fees imposed on:1. Insurance Companies 2. Medical Device Manufacturers 3. Drug Makers
IndividualResponsibility	Penalty: People without coverage would pay a fine of $ 95 in 2014, which would rise to US$ 695 or 2.5% of income, whichever is higher by 2016.
EmployerResponsibility	Penalty: Raises the fee that employers must pay if they do not provide insurance to US$2,000 per employee. Also, exempts companies from paying the fee for the first 30 employees.
Employer Subsidies	Small businesses can immediately apply for tax credits of upto 35% of their contributions toward employee health insurance premia. Beginning 2014, these tax credits will cover 50% of contributions toward employee premia.
Fraud and Abuse	Deterrence / Civil and Criminal Penalties: Penalties increased to US$ 50,000 for each false statement or misrepresentation.

‘Medicare’ plan of America:

According to the explanation of the program given by Medicare, it is a prescription drug benefit program. Under this program, senior citizens purchase medicines from the pharmacies. The first U.S$ 295 will have to be paid by them. Thereafter, the plan covers 75 percent of the purchases of medicines till the total reaches U.S$ 2,700. Then after paying all costs towards medicines ‘out of pocket’ till it reaches U.S $ 4,350, patients make a small co-payment for each drug until the end of the year.

Some arguments in favor of the Act:

The following are some arguments in favor of the Act:

More security to the lives of so many Americans
Will protect against worst practices of insurance companies
Will give chance to uninsured and small businesses choose an affordable plan from a more competitive market
Every insurance plan will cover preventive care
Reduce cost of premium because of intense competition and regulations
Would bring down the deficit by US$ 1 trillion.

Some arguments against the Act:

At the time of the enactment of the new law, following were some arguments against ‘Obamacare’:

Goes against popular wisdom
Complex – difficult to implement
Expensive
Appeasement to Insurance Companies
A ‘Political Suicide’

Immediate impact of the Act on US Pharmaceutical Companies:

Following were the reported immediate impact of the Act and reaction of the U.S Pharmaceutical Industry in 2009-10:

Overall adverse impact on sales & profit due to higher rebates on drugs sold through “Medicaid” Program
50% discount for patients in “Medicare” part D Program
J&J, Eli Lilly, Abbott, Amgen and Gilead gave guidance on adverse impact on 2010 performance
Companies with high US sales dependency like, Forest, King, Cephalon, Amgen and Shire were expected to be the biggest losers
Bayer, Sanofi, Novartis and Roche were expected to have lesser impact

US Pharmaceutical Industry pledged US $ 80 billion towards healthcare reform of the nation:

Despite adverse financial impact as indicated above, it was reported that the U.S Pharmaceutical and Biotech Companies had at that time offered to spend US $ 80 billion to help the senior citizens of America to be able to afford medicines through a proposed overhaul of the healthcare system of the country.

This was a voluntary pledge by the U.S pharmaceutical industry to reduce what it will charge the federal government over the next 10 years.

Though many experts had said, without this gesture the adverse financial impact on the U.S pharmaceutical companies would have been much more.

US citizens’ support:

Despite some skepticism around, a leading U.S daily reported that American citizens overwhelmingly support substantial changes in the country’s healthcare system and are strongly behind a government run insurance plan to compete with private insurers.

According to a New York Times/CBS News poll, majority of Americans would be willing to pay higher taxes so that every individual could have health insurance. The survey also highlighted that Americans, by and large, feel that the government could do a better job of holding down healthcare costs as compared to the private sector.

Current American healthcare: High quality – high cost

85 percent of respondents in the above survey at that time indicated that the country’s healthcare system should be completely overhauled and rebuilt. The poll also showed that American citizens are far more unsatisfied with the cost of healthcare rather than its quality.

President Obama has been repeatedly emphasizing the need to reduce costs of healthcare and always believed that the healthcare legislation is absolutely vital to American economic recovery. 86 percent of those polled in the survey opined that the rising costs of healthcare pose a serious economic threat to the country.

Another interesting study:

Another study conducted by the ‘George Washington University School of Public Health and Health Services’ reported that as a part of the new healthcare reform initiative in the U.S, if the health centers are expanded to cover from the current 19 million to 20 million patients, the country can save US$ 212 billion from 2010 to 2019 against a cost of US$ 38.8 billion that the government would have incurred to build the centers. This is happening because of lower overall medical expenses for these patients.

Impact on Indian generic business:

‘Obamacare’ was always considered to make a positive impact on India in general and the domestic Indian pharmaceutical players in particular, because of the following reasons:

U.S is the largest generics pharmaceutical market of the world
The Act promotes use of generic drugs boosting the growth opportunity of the market further
India produces around 20 percent of the global requirement for generic drugs by volume
Indian companies account for over 35 percent of the ANDAs as more and more branded drugs are going off-patent

However there is also a flipside to it, as follows:

Increase in demand will attract more number of generic players to compete
Will attract more MNCs in generic business having stronger marketing muscle power
Intense cost competition
Severe pressure on margin

Impact on Indian Bio-similar Drug Business:

Though a pathway for entry of biosimilar drugs is now in place in the U.S, 12 year ‘Data Exclusivity (DE)’ could pose to be a serious market access barrier for such products. However, some experts believe, since biosimilar opportunity in U.S comes in 2015, many such drugs developed in India will cross 12 year exclusivity period by then.

Keeping an eye on this emerging opportunity many U.S biotech companies are now looking for low cost bio-manufacturing destinations, like India.

Impact on Indian BPO opportunities:

The following are the expected positive impact on the ‘Business Process Outsourcing (BPO)’ opportunities in India:

Around 35 million more Americans coming under insurance cover would mean as many new enrollment and transactions
Will require more customer support services, as the healthcare reform makes digitized records mandatory in the country
Currently less than 30 percent physicians in the U.S have Electronic Health Records (EHRs)
Conversion of archival data into compatible formats (data entry, validation, maintenance) is a must now
Online submission of applications through payors’ portal has commenced
High volume claim adjudication is expected to follow

However, here also there is a flipside to this opportunity due to the following reasons:

‘Regulatory’ and ‘Privacy’ concerns related to patients’ records
Detail knowledge of medical procedures and codes
Variation between the states within USA

Expected Volume of BPO Business:

The U.S Government is likely to spend around US$ 15-20 billion on healthcare technology services alone and bulk of the business is quite likely to come to India, unless President Obama finally decides to discourage outsourcing opportunities through domestic tax measures.

Current situation:

Currently the size of India’s outsourcing industry is estimated to around US$ 70 billion, telecom, banking, financial and other customer services being the main BPO demand from the U.S. Healthcare BPO now represents reportedly only around 5 percent of the total business, though with an ascending growth trend.

Sensing the emerging opportunity, various call centers, medical record transcribers and software developers among others, have already started building commensurate capacities. India’s big outsourcing firms are also expanding their operations in the US.

Interestingly, it has been reported that ‘Obamacare’ could probably be India’s biggest BPO bonanza yet – bigger than even Y2K.

Closer home:

Closer home, during the new U.S healthcare reform initiative, Indian Prime Minister Dr. Manmohan Singh reiterated in his speech delivered at the 30th Convocation of PGIMER, Chandigarh on November 3, 2009, the dire need of the country to strike a right balance between preventive and curative healthcare for the common man. The Prime Minister articulated his thoughts as follows:

“ We must also recognize that a hospital centered curative approach to health care has proved to be excessively costly even in the advanced rich developed countries. The debate on health sector reforms going on in the U.S is indicative of what I have mentioned just now. A more balanced approach would be to lay due emphasis on preventive health care”.

However, the Prime Minister of India has not walked the talk, not just yet.

Conclusion:

When the world believes that comprehensive healthcare reform measures to provide access to affordable, high quality healthcare services covering the entire population of the country is fundamental to economic progress of any nation, the government of India seems to be keeping its ‘Universal Health Coverage’ initiative still on the drawing board, engulfed by controversies, debates and posturing by different key elements.

If and when the ‘Universal Health Coverage’ initiative will see the light of the day in India, all stakeholders including the pharmaceutical industry will hopefully come forward with their own slice of contribution, just as what happened in the U.S, to ensure access to affordable high quality healthcare to all the citizens of the country.

Be that as it may, a photo-finish win, as it were, of Barrack Obama for the second four year term as the President of the United States, assures all that ‘Obamacare’ stays on course for the Americans, extending its significant spin-off benefits to India and well deserving a ‘thumbs-up’ from the stakeholders of the country .

By: Tapan J Ray

PILMAN

A Tapan Ray Website

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