Tag Archives: of

Centralization of the system of issuing ‘Certificate of Pharmaceutical Product’ (CoPP) by the DCGI is a welcome step.

Posted on by
Reply
The ‘Certificate of Pharmaceutical Product’(CoPP), which is valid for two years, is issued by the drug regulatory authorities to a particular pharmaceutical product. CoPP is accepted as a proof of international quality by Latin America, Africa, CIS and other developing countries.
Why is this decision?

The decision of the Drug Controller General of India (DCGI) to centralize the issue of CoPP stems from a request to this effect made by the World Health Organization (WHO).

It has been reported that WHO in April, 2009 informed the Ministry of Health of the Government of India that the organization takes objection in using WHO logo in the CoPP by the Indian exporters of pharmaceutical products as the WHO formats and guidelines are allegedly not properly adhered to by various local issuing authorities of CoPP, in India. The DCGI indicated that WHO specifically requested India that such an important documentation procedure should be controlled at the central drug regulatory authority level and hence is this decision.

Why is the criticism?

By the states:

However, the state drug authorities have expressed their unhappiness and even challenged the power of the DCGI to effect such changes. They feel that there will be revenue loss to the states for this procedural amendment. In addition, they argue that as the manufacturing license to the exporters are issued by the state drug authorities, the CoPP also is to be issued by the same authority, which they feel is an age old practice and works quite well.

By the exporters:

So far as the exporters are concerned, they feel that with the existing inadequate infrastructure available with the Central Drugs Standard Control Organization (CDSCO), effective implementation of the new system is not possible. This change, they apprehend, would result in unusual delay in issuing the certificate.

The latest status:

On October 13, 2009, the Madras High Court issued a stay order on a petition filed by the Tamil Nadu Drug Inspectors Association, against the directive of centralization of CoPP by the DCGI.

On October 15, 2009 the same Madras High Court acting on a petition of the Federation of South Indian Pharmaceutical Manufacturers Association issued an injunction, which will remain in force until further orders, staying the same order of the DCGI.

On October 20, 2009, Karnataka High Court issued yet another stay order, which will remain effective for a period of four weeks, suspending this new directive on CoPP.

This is the third stay order against the new centralized system of granting CoPP.

Conclusion:

Many stakeholders genuinely feel that this change will help strengthening the regulatory framework of the country and improving confidence level on the high quality standard of generic drugs manufactured in India within the world trading community with a positive impact on pharmaceutical exports. This will also enable the DCGI to provide up-to-date details on CoPP to the international regulators, as and when required. In the previous system, the DCGI feels, it used to be quite challenging to quickly compile such data to respond to any national and international request for the same. In the new system there will be one uniform format and the details of all CoPP with their expiry date will be available in the CDSCO website for greater transparency.

The infrastructural issue including the manpower need of the CDSCO to handle this new initiative is being addressed with adequate speed. Overall, this is indeed a laudable move to ensure uniform high quality standard for the pharmaceutical products made in India. Ministry of Health of the Government of India should be complimented for this important initiative.

By Tapan Ray

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

A brief history of the Indian Patent System from Indian Pharmaceutical Industry perspective, the concerns and opportunities.

Posted on by
Reply
Although a comprehensive Act on Patents and Designs allowing product patents of drugs came into force in India in 1911, the first Patents Act of India was enacted in 1856.This Act gave a head start to the global pharmaceutical companies in this business primarily through imports into India. As a result, in no time the global pharmaceutical companies curved out a sizeable chunk of the Indian pharmaceutical market capturing over 80% of the total domestic consumption of drugs and pharmaceuticals.It has been reported that in 1959 an American Senate Committee headed by Senator Kefauver wrote in its report:

“…in drugs, generally, India ranks amongst the highest priced nations of the world”.

In 1970 the Indian Patents Act was amended abolishing the product patent system, based on ‘Ayyangar Committee report, 1959’, which examined the factors influencing the high prices of the drugs and pharmaceuticals in India and concluded:

“.. high prices resulted from the monopoly control foreign based pharmaceutical companies exercised over the production of drugs.”

The Indian Patent Act of 1970 was, once again, amended under the TRIPS agreement and the Indian Patents Act, 2005 came into force effective January 1, 2005 , re-introducing product patents for the drugs and pharmaceuticals, as a part of the globalization process of the country including the pharmaceutical industry of India.

This is perhaps the testimony of India’s realization that research and development is the bed rock for the progress of pharmaceutical industry in any country in the long run, as this industry, unlike many other industries, relies quite heavily on product patents.

Indian Pharmaceutical Industry to build on its acquired strength:

Reverse engineering with high calibre skills in process chemistry emerged as one of the key strengths of the domestic Indian pharmaceutical industry since 1970. The industry has to build on this strength and move towards ‘incremental innovation model’ of R&D, which is less expensive and more cost effective starting with a known substance, to meet the unmet needs of the patients.

The product patent regime has given a boost to pharmaceutical R&D in India:

Many medium to large Indian pharmaceutical companies, like Ranbaxy, Dr Reddy’s Lab (DRL) and Glenmark etc. have already started shifting their focus on R&D. The large number of patent applications filed by these companies to the Indian patent offices will vindicate this point. As a result of the new focus, one observes business initiatives like, spinning off the R&D units into a separate company and many R&D driven mergers and acquisitions by these domestic Indian companies.

R&D investments are also being made in traditional chemistry based screening. Moreover, companies like Biocon, Panacea Biotech, and Bharat Biotech etc. have engaged themselves in the space of biotechnology research.

Increasing opportunity to collaborate with the global companies:

Increasingly more and more Indian companies have started collaborating with the global companies in collaborative research and cost efficient process development to leverage their human capital and infrastructural facilities. The collaborative arrangement towards this direction between GSK and Ranbaxy provides a good example.

Contract research and manufacturing:

Some other domestic companies like Divi’s Lab, Suven Pharma, Dishman Pharma, Piramal Healthcare, Shasun Chemicals, Jubilant Organosys etc. are moving into the space of contract research and manufacturing services (CRAMS) establishing world class facilities and collaborating with the global players like, GSK, Pfizer, Merck, Eli Lilly, Bayer, Sanofi Aventis, Novartis etc.

Public-Private Partnership (PPP) in R&D:

Initiatives by the Indian companies in collaborative research with government research institutes like CSIR and NIPER have already commenced, though much lesser in number. Some companies like, Shasun have already derived benefits in the field of biotechnology out of such collaborative research under PPP. It is expected that more such projects will see the light of the day in not too distant future.

Some concerns in the new regime:

Some serious concerns are being raised as the country is in the process of settling down in the new paradigm. The key concern is about the affordability of patented products by those who are currently having access to other modern medicines.

To address such concerns related to public health issues in general, there are already provisions in the TRIPS agreement for price control of patented products.

At the same time, one finds, the government has exempted those patented products from price control, which are domestically produced with indigenous R&D. Many feel that these differential measures will not help improving affordability and access to such patented medicines by the common man.

Keeping prices of essential medicines under the lens of price regulator is more important:

Even over last sixty years of independence, the access to modern medicines in India is meager 35 percent. 65 percent of the nation’s population does not have any access even to off patent essential drugs. In a country like India where there is no adequate social security cover towards healthcare, it will be important to keep the prices of essential medicines for treating common diseases under the close vigil of the drug price regulator.

Will the prices of medicines spiral in the product patent regime of India?

While addressing this question one will need to keep in mind that around 98 percent of drugs, which are generic or branded generic, manufactured in India and costs cheaper than their equivalents available even in our neighbouring countries like Pakistan, Bangladesh and Sri Lanka, will continue to remain unaffected. Hence, it is very unlikely that prices of such medicines will go up significantly because of the new product patent regime in India.

Conclusion:

The key concerns raised in the new product patent regime are that it will further deteriorate the current poor access to modern medicines to a vast majority of the population.

It is undeniable that one of the key reasons for poor access to essential medicines in India is lack of buying power of a large number of both rural and urban poor. This problem gets compounded by the poor public health infrastructure, delivery system and financing system, despite sporadic initiatives taken by the government towards this direction.

To be successful in the new regime by improving access to modern medicines to those who do not have means to satisfy such basic needs, the country should take a rational and holistic approach in this matter. It is high time for all the stakeholders to ponder and flesh-out the real factors, which have been responsible for such a dismal rate of access to modern medicines to a huge 65 percent of the country’s population over decades, even when the product patent law was not in place in the country.

By Tapan Ray

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

Recent efforts to improve the functioning of the WIPO-administered Patent Cooperation Treaty (PCT) is a welcome step for the interest of India.

Posted on by
Reply
As the third largest user among developing countries of the PCT system, India has a particular interest in ensuring that the PCT system supports its innovators and exporters in the most efficient manner possible.
What does PCT system do?

The PCT system allows reliance on international searches and examination in assessing patentability but it does not preclude national examination including decisions on patentability at a national level. In that regard, the Director-General Francis Gurry of WIPO made the following remarks at the opening of the WIPO Assembly on September 22, which clearly states that PCT reform is not a norm setting exercise and is voluntary:

“…I would like to make specific mention of one project, which I believe to be of great significance, the so-called Road Map for the improvement of the functioning of the Patent Cooperation Treaty (PCT), which will come up for consideration in the PCT Assembly during this meeting. This is not a norm-making exercise. The PCT makes it very clear (Article 27(5)) that nothing in it is to be construed as in any way limiting the freedom of each Contracting State to determine its own substantive conditions of patentability. Neither the PCT nor the Road Map in any way affects TRIPs flexibilities. The Road Map is about improving the functioning of a procedural treaty that links together the patent offices of the world. It is about finding ways to increase work-sharing, to decrease unnecessary inefficiencies, to improve the quality of the output of the international patent system and, thereby, to contribute to the management of the unsustainable backlog of 4.2 million unprocessed patent applications in the world. There are many initiatives occurring already in this regard: the Patent Prosecution Highway and work-sharing initiatives in ASEAN, in South America and between the Vancouver Group of Canada, United Kingdom and Australia. The PCT Road Map aims to bring all these initiatives ultimately under the multilateral umbrella of the PCT“.

PCT is not a substantive treaty:

The PCT is not a substantive treaty and it will not become one. By mixing up the different work streams of WIPO–some of which are substantive and some of which, like the PCT, are technical and administrative, some vested interests seek to create confusion. It is difficult to understand why such people would want to defeat a project that will permit Indian high-tech companies to leverage India’s strong educational and legal infrastructure to compete effectively in the global economy of the twenty-first century.

PCT has important ramifications:

The proposed changes in the PCT have indeed important ramifications for countries like India, as they represent the greater opportunities that the PCT changes will provide Indian commercial interests through an improved international patent search and examination process.

In many technological sectors, including pharmaceuticals, Indian innovators are finding that, indeed, strong intellectual property protection both in India and abroad is critical to the success of their business models. As a result they are becoming users of the PCT system. Opposition to the current WIPO efforts to improve the PCT system, I reckon, would deny Indian innovators these opportunities.

Indian innovators have a stake in WIPO PCT reform:

Indian innovators also have an important stake in “WIPO PCT Reform”. It is, therefore, very much in the interest of the Government of India that such reform succeeds now that it has reached elite status in the international intellectual property regime.

Just last year, the Indian Patent Office (IPO) became one of only fifteen national patent offices to be recognized as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) by WIPO. As an ISA, the Indian Patent Office now approves or establishes the title and conducts international searches. Scepticism of a group of vested interests on this much desirable “WIPO PCT Reform” could set back the international recognition that India has deservedly gained from being the only English speaking country in the Asian region to be recognized as an ISA and IPEA.

Conclusion:

I would, therefore, expect our Government to continue its support for efforts such as “WIPO PCT Reform” that seek to facilitate India’s further integration into the international economy while at the same time protecting Indian national interests.

By Tapan Ray

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

The relevance of the Indian version of the Bayh-Dole Act – the country needs all stakeholders’ open debate on the proposed bill.

Posted on by
Reply
The Bayh-Dole Act is an American legislation, which was originally sponsored by two US senators named Birch Bayh and Bob Dole. This Act deals with Intellectual Property (IP) arising out of US government funding. Bayh-Dole Act is also known as University and Small Business Patent Procedure Act. In December 12, 1980 this was enacted into a law by the US Congress.
What it does:
Under this Act, IP rights over government funded inventions for further development, license to other parties or direct commercialization are transferred to the universities and small businesses operating with government contracts. The government though retains its right to license the invention to any third party without any consent from the IP right owner or the licensee, if it feels that on a reasonable basis the public is being denied of the benefits of the invention.

The Indian version of the Bayh-Dole Act:

The Utilization of the Public Funded Intellectual Property Bill 2008, which has been formulated in line with the US Bayh-Dole Act, has already been approved by the Union Cabinet of India. This bill ensures both utilization and protection of the IP arising out of government funded research initiatives. Currently government funded academic institutions and research institutes cannot commercialize the inventions.

The proposed bill will not only allow them to patent such inventions but will also reward the inventors and the institutes with a share of its commercialization proceeds as per specific guidelines.
The bill has attracted a mixed response from the stake holders.

The relevance of Bayh-Dole Act in India:

Relevance of Indian version of the Bayh-Doll Bill in the post product patent regime in India is
significant. The core concept of the bill encourages innovation and ensures protection of patents and other forms of IP rights of the government funded R&D outcomes, where the owner of the intellectual property will be the government grant receipients or the government.

This bill is expected to offer to various research institutions, universities, small businesses and non-profit organizations, the IP rights on their inventions, resulted from the government funding. Overall environment towards innovation within the country is expected to get a boost in that process.

Is the ownership and protection of R&D a real remedy to make government academic institutions and universities self sustainable?

This is certainly not the only remedy, but an important one. This process will have significant potential to effectively facilitate technology transfer from government funded research laboratories or universities to the user industry to make these establishments self-sustainable.

What are the main implications of the bill if enacted in its current form?

Although the fine prints of the bill are not yet clearly known, the bill in its current form raises more questions than answers. Some of the concerns with the bill in its current form are as follows:

- This law could effectively transfer the decision making process about
publications of the research papers from the researchers and academia to
the bureaucrats in the government establishments, making the R&D
environment quite stifling for the researchers and the initiative
counterproductive.

- Academia at times will be compelled to incur significant expenditures
towards different types of IPR related litigation, which could have been
otherwise productively spent by these institutions towards research
initiatives.

- The learning and research may get transformed into another kind of
businesses activity, as such a law could change the research focus on to
the issues, which will be of greater commercial interest to various
industries and will offer immediate financial benefits to the
institutions. As a result vital non-commercial research, which could be of
critical interest to the nation as such, may take a back seat.

Conclusion:

The country will therefore need an extensive public debate on this bill, which has not taken place, as yet. The loose knots of the bill need to be tightened and the concerns of the stakeholders need to be adequately addressed before its enactment into a law.

By Tapan Ray

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

How have the ‘Drug Policies’ of India fared against the set objectives?

Posted on by
Reply
Indian Pharmaceutical Industry has by now established itself as one of the most important knowledge based industry of the nation with significant sets of differential advantages. It has earned global recognition as a low cost producer and global supplier of generic drugs. The domestic industry today meets almost the entire demand for pharmaceutical products of the country. This happened, as many would consider, primarily due to the pragmatic decision of the government to abolish the product patent during the growth stage of the Indian pharmaceutical industry, in the early 70’s.
In global perspective India is still a small market in terms of value turnover:

Having achieved all these, one should keep in mind that despite being the second largest country in terms of population, domestic Indian pharmaceutical market recorded a turnover of just U.S$ 7.8 billion in 2008, which is significantly lower than any smaller country of the developed world.

This is primarily because India is a low priced generic pharmaceuticals market. McKinsey forecasts that by 2015 the industry will record a turnover of U.S$ 20 billion. The key drivers of growth are forecasted to be the following:

1. Overall rising income level, particularly of the middle class.

2. Increase in life-style related diseases.

3. Change in demographic pattern with increase in life expectancy.

4. Greater penetration in the rural markets.

5. Increasing penetration of health insurance.

6. Increase in government expenditure towards healthcare.

A quick snapshot of ‘Drug Policy’ changes:

With the initiation of globalization process in 1991, many significant steps have been taken by the government for the pharmaceutical industry of India.

Along with reduction in the span of price control of drugs, reservation of some drugs for the public sector was withdrawn and private sector was allowed to manufacture all types of drugs. Although industrial licensing for pharmaceuticals was abolished, for bulk drugs the system is still in force. Foreign investments through automatic route was first raised to 74 percent and then to 100 percent.

The product patent regime with the introduction of the Patents Act 2005 ushered in a paradigm shift in the pharmaceutical landscape of India. Almost simultaneously, on in-house research and development, the facility of weighted deduction of 150 percent (though inadequate) to cover expenditure towards R&D, patent filing, regulatory approvals and clinical trials was a welcome step. These steps, howsoever good, were considered to be not good enough by a large section within the pharmaceutical industry of India.

The need for some more key changes:

The reform initiatives as enunciated in the successive drug policies were considered by the pharmaceutical industry as far from satisfactory. In the era of globalization, where market forces play a dominant role to control prices including of essential commodities like, food grains, the rigors of stringent price control on pharmaceuticals need to have a relook urgently. This was re-inforced even in the ‘National Economic Survey Report of 2009′.

Moreover, considering the new product patent regime is well in place since January 2005, to foster and encourage innovation within the country, there is an immediate need to take robust fiscal measures and offer attractive financial incentives for indigenous pharmaceutical R&D initiatives.

Simultaneous reform measures are warranted in the health insurance sector:

It is worth mentioning, effective penetration of health insurance being one of the key growth drivers of the Indian pharmaceutical industry, adequate and immediate reform measures in this area is necessary to respond to the need of a robust healthcare financing model for all strata of the society. This should work in tandem with the new drug policy measures.

The health insurance sector is growing, but not to the extent that it should. Health insurance premiums had grown to around U.S$ 800 million as on 2007 and are expected to reach around U.S$ 4.5 billion by 2013. Entry of more private health insurance players along with a reformed health insurance regulatory policy, is expected to expedite the growth rate of this important sector further.

Achievements against each key objective areas of the drug policy, thus far:

In the Drug Policy 1986 the basic objectives of policies relating to drugs were clearly enunciated. But the question is: have the objectives of the successive drug policies yielded the desirable outcome? Let us have a reality check as follows:

1. Objective: To ensure abundant availability of medicines at reasonable price and quality for mass consumption.

Reality: 65 percent of the population of the country still do not have access to modern medicines

2. Objective: To strengthen the domestic capability for cost effective, quality production and exports of pharmaceuticals by reducing trade barriers in the pharmaceutical sector.

Reality: The country has been able to make good progress in this area.

3. Objective: To strengthen the system of quality control over drug and pharmaceutical production and distribution.

Reality: The quality of all medicines produced in the country against valid manufacturing license still raises a big concern. Even the government of India while purchasing medicines for its own ‘Jan Ausadhi’ outlets, restricts purchases of medicines only upto a certain category of pharmaceutical manufacturers, for product quality reasons.

4. Objective: To encourage R&D in the pharmaceutical industry in a manner compatible with the country’s need and with particular focus on diseases endemic or relevant to India by creating conducive environment.

Reality: Nothing worth mentioning has been done in this area.

5. Objective: To create an incentive framework for the pharmaceutical industry, which promotes new investment into the industry and encourage introduction of new technology and new drugs?

Reality: Again nothing significant has been done by the government in this area.

Conclusion:

The role and objectives of the drug policy should help accelerating the all-round inclusive growth of the Indian pharmaceutical industry and make it a force to reckon with in the global pharmaceutical industry. The drug policy is surely not formulated only to implement rigorous price control of drugs. The policy formulates other key objectives to contribute significantly towards achieving the healthcare objectives of the nation, working closely with other related ministries of the government.

Unfortunately, it has not been able to keep pace with the globalization process of the country as compared to the other industries, also dealing with the essential commodities. The amended Indian Patents Act came into force in India in 2005. The drug policy of India, for various reasons, has not been able to articulate, as yet, specific measures to encourage innovation, giving a new thrust to the pharmaceutical R&D space of the nation.

By Tapan Ray

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

Emerging markets and a robust oncology portfolio expected to be the future growth engine of the global pharmaceutical industry… but not without associated pricing pressures.

Posted on by
Reply
When the growth rate of the developed markets of the global pharmaceutical industry started slowing down along with the declining R&D productivity, the emerging markets were identified as the new ‘El-Dorado’ by the global players. At the same time, new launch of anti-cancer drugs, more in number, started giving additional thrust to the growth engine of the industry, at least in the developed markets and for the ‘creamy layers’ of the emerging markets of the world. As cancer is being considered as one of the terminal illnesses, the cancer patients from all over the world, would like to have their anti-cancer medications, at any cost, even if it means just marginal prolongation of life with a huge debt burden.According to a recent study done by the Cancer Research, UK, despite significant decline in the overall global pharmaceutical R&D productivity over a period of time, in a relative yardstick, newer anti-cancer drugs have started coming up to the global market with a much greater frequency than ever before. ‘Pharmacy Europe’reports that 18 percent, against a previous estimate of 5 percent of 974 anti-cancer drugs will see the light of the day in the global market place, passing through stringent regulatory requirements. This is happening mainly because of sharper understanding of the basic biology of the disease by the research scientists.Another study reports that between 1995 and 2007 such knowledge has helped the scientists to molecularly target ‘kinase inhibitors’, which are much less toxic and offers much better side effect profile. Well known anti-cancer drug Herceptin of Roche is one of the many outcomes of molecularly targeted research.

Price of Anti-cancer drugs:

Although in the battle against the much dreaded disease cancer, the newer drugs which are now coming to the market, are quite expensive. Even in the developed markets the healthcare providers are feeling the heat of the cost pressure of such medications, which would in turn impact the treatment decisions. Probably because of this reason, to help the oncologists to appropriately discuss the treatment cost of anti-cancer drugs with the patients, the American Society of Clinical Oncology recently has formed a task force for the same.

The issue is now being fiercely debated even in the developed markets of the world:

In the developed markets of the world, for expensive cancer medications, the patients are required to bear the high cost of co-payment, which may run equivalent to thousands of U.S dollars. Many patients are finding it difficult to arrange for such high co-payments.

Thus, it has been reported that even the National Institute of Health and Clinical Excellence (NICE), UK considers some anti-cancer drugs not cost-effective enough for inclusion in the NHS formulary, sparking another set of raging debate.

‘The New England Journal of Medicine’ in one of its recent articles with detail analysis, expressed its concern over sharp increase in the price of anti-cancer medications, specifically.

Is the global pharmaceutical industry in a ‘gold rush’ to get into the oncology business?

Recently ‘The New York Times’ reported some interesting details. One such was on the global sales of anti-cancer drugs. The paper reports that in 1998 only 12 anti-cancer drugs featured within the top 200 drugs, ranked in terms of global value turnover of each. In that year Taxol was the only anti-cancer drug to achieve the blockbuster status with a value turnover of U.S$ 1 billion.

However, in 2008, within top 200 top selling drugs, 23 were for cancer with three in the top ten, clocking a global turnover of over U.S$ 1 billion each. 20 out of 126 drugs recording a sales turnover over U.S$ billion each, were for cancer, impressive commercial growth story of which is far from over now.

How to address this issue?

Experts are now deliberating upon to explore the possibility of creating a ‘comparative effectiveness center’ for anti-cancer drugs. This center will be entrusted with the responsibility to find out the most cost effective and best suited anti-cancer drugs that will be suitable for a particular patient, eliminating the possibility of wasteful expenses, if any, with the new drugs, just because of their newness and some additional features, which may not be relevant to a particular patient. If several drugs are found to be working equally well on a patient, most cost effective medication will be recommended to the particular individual.

Some new anti-cancer medications are of ‘me-too’ type:

‘The Journal of National Cancer Institute’ reports that some high price anti-cancer drugs are almost of ‘me too’ type, which can at best prolong the life of a patient by a few months or even weeks. To give an example the journal indicated, ‘Erbitux for instance, prolongs survival in lung cancer patients by 1.2 months… at a cost of U.S$ 80, 000 for an 18 – week course of treatment.’

However, the manufacturer of the drug later told ‘The Wall Street Journal’ (WSJ), ‘U.S.$ 80,000 is like a sticker price, but the street price is closer to U.S$ 10,000 per month” i.e around U.S$ 45,000 for 18 week course of treatment.

Conclusion:

Even in the developed countries, the heated debate on expensive new drugs, especially, in the oncology segment is brewing up and may assume a significant proportion in not too distant future. India being one of the promising emerging markets for the global pharmaceutical industry, willy nilly will get caught in this debate, possibly with a force multiplier effect, sooner than later.

By Tapan Ray

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

The Indian and Global Pharmaceutical Industry – A brief perspective to meet the challenge of change

Posted on by
Reply
A. INDIAN PHARMACEUTICAL INDUSTRY PERSPECTIVE:
January 1, 2005 ushered in a paradigm shift in the Indian Pharmaceutical Industry with the new product patent regime. Future of the industry, thereafter, will never be the same again as what we have been witnessing since 1970.

Gradually India, which was synonymous to cheaper copycat generic versions of products patented in most of the developed and emerging pharmaceutical markets of the world, is expected to transit through a relatively ‘lull period’ for a shorter duration, before it starts helping to establish India as a force to reckon with, in the pharmaceutical research and development (R&D) space of the world. We have seen some glimpses of the era to come by through initial basic research initiatives of companies like, Ranbaxy, Dr. Reddy’s Laboratories (DRL), Piramal Life Science and Glenmark. All such companies are gradually transforming their R&D focus from reverse-engineering to developing new chemical/molecular entity (NCE/NME) or novel drug delivery systems (NDDS).

Opportunities during the paradigm shift:

The low cost base, large English speaking technical talent pool and development of world class R&D facilities of the country will play the role of catalysts in this fast changing process and throw open many new vistas of opportunities for the industry to cash on.

At the same time, generic companies will play even more important global role than ever before. Many of them will no longer remain a local branded generic or generic player, they will open their wings to fly down to the important global destinations. Some others will collaborate with multi-national pharmaceutical companies (MNCs) in their contract research and manufacturing services (CRAMS) initiatives. For others, the domestic pharmaceutical market will still remain big and lucrative enough to grow their business.

However, those companies, which will not be able to effectively combat the ‘challenge of rapid changes’ will either perish or be gobbled-up by the big fishes in the consolidation process of the local and global pharmaceutical industry.

Some perspectives:

Though the domestic Indian pharmaceutical industry caters to around 70% of the requirements of pharmaceuticals of the nation, is highly fragmented. The industry manufactures 8% of the global production being the fourth largest producer of pharmaceuticals in terms of volume and employs over half a million people, mostly by around 300 large to medium sized companies in their local and global operations. Although around 6000 companies are engaged in manufacturing, many of them are third party manufacturers. Small manufacturers, who do not conform to ‘Schedule M’ requirements of the Drugs & Cosmetics Act will face or have already started facing trying times.

In terms of value, at present, India with around U.S 7.8 billion turnover, shares just around 2% of the global market with 14th in ranking. McKinsey forecasts that by 2015 India will record a turnover of U.S$ 20 billion and will improve its rank in the global pharma league table to 10th.

Key markets of the domestic Indian companies:

Although India still remains one of the major markets of the domestic Indian pharmaceutical companies, many of them have already established their business in the US, Europe, Latin America, Russian Federation, Africa, Middle East, South East Asia and even in Japan and Australia.

Contribution of India business of different Indian pharmaceutical companies to their global business varies based on their respective business strategies, from 63% of Zydus Cadila to around 16% of DRL, in 2007-08.

US market followed by Europe, is the main revenue earner for most of the large Indian companies. For example Ranbaxy generated around 27% and 20% of their global turnover from the US and Europe, respectively in 2008.

However, for some other companies like Wockhardt, Europe is a more important market than USA. Wockhardt generated around 54% of their global turnover from Europe, in 2007.

Global market entry strategy:

Different Indian companies adopted different market entry and expansion strategies in their globalization process. However, these have been mostly driven mergers and acquisitions.

Is the Indian pharmaceutical industry facing a dire need for an image makeover?

Despite significant contribution of the Indian pharmaceutical industry to provide relatively cheaper generic medicines to address a wide array of ailments of a vast majority of the population, the image of the industry to its stakeholders or even to public at large, is far from satisfactory.

There are some key perceptual reasons for the same. Some of these are as follows:

1. Pharmaceutical industry is making exorbitant profits at the cost of the basic healthcare needs of the common man.

This perception gets further strengthened when, for example, the National Pharmaceutical Pricing Authority (NPPA) demands crores of rupees from many pharmaceutical companies for overcharging to the patients and notices are served even attaching their properties to recover these dues.

2. The quality of all medicines is not reliable.

This gets vindicated when, for example, the government for its ‘Jan Aushadhi’ program refuses to buy from certain groups of licensed pharmaceutical manufacturers, predominantly on product quality parameters.

3. Some questions, do the pharmaceutical manufacturers in India manufacture medicines following the highest quality norms?

To answer to this question some people argue; if so, why will Indian manufacturers need stringent manufacturing quality certification of the drug regulators of the developed markets to export medicines in the those countries? Why the manufacturing quality certification given to these exporters by the Indian drug regulator is not accepted in those countries?

Moreover, when medicines are imported into India, we accept the quality norms of the drug regulators of the developed countries.

4. Some sections of the media highlight the alleged malpractices by the Indian pharmaceutical companies to promote their mediciness to the medical profession. Such alleged high expenditure towards product promotion is considered by many as avoidable wasteful expenses, the benefit of which can easily be passed on to the patients.

Indian pharmaceutical industry is yet to develop a uniform code of marketing practices, which will be applicable to all the pharmaceutical companies across the board and implement the same effectively, to address such allegations.

Multinational Companies – friends or foes?

To partly salvage the situation, at the same time, one notices open attempts are being made to project the multinational drug companies as demons, the exploiters with a suspicious agenda of thwarting the growth of the domestic companies. In such a scenario, it is indeed perplexing, when one sees the names of the Indian companies at the top of the NPPA lists who allegedly overcharged maximum amount of money to the common man.

What the industry should do jointly:

Under such sad circumstances, the entire industry should come together, take a hard look on itself first and extend its helping hands in public private partnership (PPP) initiatives for the benefit of the civil society.

Such PPP may not necessarily be charitable. It could focus on developing a robust healthcare financing model with industry expertise, for implementation with the government involvement for all strata of society. Or, for example, the industry should come out with a plan, which the US Pharmaceutical trade association – PhRMA has recently proposed to the Obama administration voluntarily on their ‘Medicare’ program, for the senior citizens of America.

For image makeover the name of the game is actual ‘demonstration’ of the good intent and NOT ‘pontification’ of what others should do, highlighting the identified loopholes in the government machineries.

B. GLOBAL PHARMACEUTICAL INDUSTRY PERSPECTIVE:

In the midst of the global financial meltdown, beginning 2009, no one is still able to fathom what impact, if at all, will it leave on to the global pharmaceutical industry.

In the most populous country of the world – China, in April 2009, the government unfolded the blueprints of new healthcare reform measures, covering the entire nation.

Similarly, in the oldest democracy and the richest country of the world – United States of America, President Barak Obama administration expressed their resolve to address important healthcare related issues, as an integral part of the economic reform of the country.

In other developed markets of the world like Europe and Japan intense cost containment pressure is in turn creating significant pricing pressure on pharmaceuticals, triggering the demand of greater use of cheaper generic formulations.

Financial meltdown though eroded the market capitalization of most of the companies; the growth of the global pharmaceutical industry remained unabated till 2008, albeit at a slower pace though. Many markets of the world witnessed a faster generic switch, fuelling higher volume growth of the generic segment of the industry.

Some perspectives:

In 2008 the global pharmaceutical market size was of U.S$ 780 billion, which is expected to grow to U.S$ 937 billion in 2012 registering a 5 year CAGR of around 5.5%. Sales worth U.S$ 253 billion came from just 100 blockbuster drugs, contributing around one third of the global pharmaceutical market.

USA with a retail revenue turnover of U.S$ 206 is the largest market of the world, though currently showing a sharp decline in its growth rate. The growth rate of the US is expected to drop further along with the patent expiry of other blockbuster drugs.

Just three countries of Europe, U.K, France and Germany contributed to 50% of pharmaceutical sales of entire Europe.

Doctors’ are no longer the sole decision maker to prescribe a medicinal product:

Just like in the US, one witnesses a change in the role of the medical professionals as a key decision maker to prescribe medicines for the patients in Europe, as well. More and more, payors like health insurance companies, NHS are assuming that role.

A shift from small molecule pharmaceuticals to large molecule biotech products:

As small molecule pharmaceuticals are coming under intense pricing pressure, the focus of new drug launches is shifting towards more expensive large molecule biotech drugs with much higher margins of profit increasing the treatment cost further.

The brighter side:

Growing middle class population with higher disposable income together with increase spending of the government towards healthcare, in most of these countries, are making the pharmaceutical industry grow at a much faster pace in the emerging markets like, Brazil, Venezuela, Russia, China, India, Turkey, Mexico and Korea. However, the revenue and profit earned by the global companies from the developed markets are still far more than the emerging markets of the world.

Access to healthcare still remains a global issue:

Despite so much of progress of the global pharmaceutical industry, access to healthcare still remains an issue, besides others, even in some of the developed markets of the world. The waiting period of a patient just to get an appointment of the doctor is increasing fast. Even in the US about 47 million of US citizens still are not covered by insurance, besides many more of them who remain underinsured.

Global pharmaceutical industry is still considered a part of the problem:

Despite meeting the unmet needs of the patients through intensive research and development initiatives and various global access programs for the needy and the downtrodden, the civil society all over the world, including in the developed countries, still believes that the pharmaceutical industry is a part of the global healthcare problems, though relatively more in the developing and the least developed economies of the world. These perceptions are mainly due to high costs of patented drugs, high research expenditure for low value added drugs and seemingly unethical marketing practices of the industry across the board with varying degree.

Conclusion:

The pharmaceutical industry, the ultimate savior in the battle against disease, is now passing through a critical phase both locally and globally and both in terms of its image and capacity to deliver newer medicines ensuring their affordable access, the reason of which may vary from country to country.

Be that as it may, the industry has been making significant contribution to the humanity to meet the ever increasing unmet needs of the patients. However, expectations of the stakeholders are also growing and justifiably so. There is no time for the industry, in general, to ponder much now or rest on the past laurels. It is about time to walk the never ending extra mile, for the global patients’ sake.

By Tapan Ray

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

Concerted action by all stakeholders on counterfeit medicines is the need of the hour.

Posted on by
Reply
The concern of some section of the stakeholders that IPR is being extended to the definition of counterfeit medicines, in my view, is misplaced. As even in India, ‘misbranding’ though an integral part of IPR, is considered as a public health issue and is an offence under Section 17 of the Drugs and Cosmetics Acts, 1940.Currently, the magnitude of this problem is anybody’s guess. Earlier a study sponsored by the World Health Organization (WHO) and conducted by SEARPharm reported that only 0.3% drugs were spurious and 3% of drugs were counterfeits. To scientifically assess the magnitude of this problem the Drugs Controller General of India (DCGI) India, for the first time ever, has initiated a study with 61 popular brands from nine therapeutic categories for testing 24000 samples. The study is expected to cost Rs.50 million and is expected to be published, soon.However, on the above study, Pharmabiz dated August 26, 2009 has reported the following:

“The Union Health Ministry’s ambitious nationwide survey to get an authentic estimate of spurious drugs in the country found no significant amount of spurious drugs in the pharmaceutical market. Among the 24,000 samples collected by the government for the survey, only around 10 were found to be spurious, it is reliably learnt.”

India being a part of ‘International Medical Products Anti-Counterfeiting Taskforce’ (IMPACT), established under WHO in 2006, decided to work together to combat the growing menace of counterfeit medicines. The Drugs Controller General of India (DCGI) was reported to have several discussions with the convenor of the IMPACT to effectively address the issue.

A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand the problem is less than 1%. On the other hand, in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits. In South East Asia, estimated prevalence of counterfeit Artesunate for malaria is 33-53%.

It appears that in all those countries where access to modern medicines is poor, incidences of counterfeit medicines, ranging from anti-malarial, anti-hypertensive, anti-tubercular, anti-retroviral to cardiovascular and other life saving and life style drugs, are higher.

Apprehensions from some section of the generic pharmaceutical industry that attempts are being made by the interested groups to bring generic drugs under the purview of counterfeit medicines, is unfounded. Why should there be any such threat at all, when the world is witnessing the global pharmaceutical companies scaling up their generic business operations?

Incidence like recent detention in transit of DRL shipment of the generic version of Losartan in the Netherlands or a consignment of Amoxicillin at the Frankfurt airport on the ground of patent infringement cannot be considered as attempts of MNCs to brand Indian generic pharmaceuticals as counterfeit medicines. These drugs violated valid patents held in those countries prompting the local authorities to enforce the law of the land by detaining those consignments. India also has been detaining similar consignments for Nepal whenever those transit consignments violated the intellectual property laws of India. It will, therefore, be not fair to expect Netherlands or Germany to follow a different set of rules for goods in transit, when Indian law itself defines ‘imports’ covering goods in ‘transit’. Thus Government of India should take up this issue on a bilateral platform with the European Union (EU) for a desirable resolution to the problem. Meanwhile, to ensure that pharmaceuticals exports from India do not get adversely affected, Indian pharmaceutical exporters should ensure, till such issues are bilaterally resolved, that their export consignments for third countries transit through non EU routes.

Further, the incidence of fake drugs seized recently with made in India label and originating from China is indeed a fraudulent and criminal action of some irresponsible people who bring disgrace to humanity. Such incidences must be strongly condemned and be taken up by the Government India with the Chinese authorities effectively, to stop recurrence of such criminal activities in future.

The sales of counterfeit medicines across the world as estimated by the ‘Centre for Medicine in Public Interest’ will reach US$75 billion by end of 2010. This is an increase of over 90% as compared to 2005. A report from the WHO’s Executive Board in its 124th session indicated that the detection of counterfeit medicines in 2007 had increased to more than 1,500. This reflects an increase of around 20% over 2006 and ten times more compared to year 2000.

WHO indicated that in 2005-06 the volume of counterfeit drug seizures included 2.7 million articles and the main countries where these articles originated from India: 31%, UAE: 31% and China: 20%.

Enough data are available to establish that counterfeit drugs are posing a growing menace to the humanity. All stakeholders should join hands to address this public health issue, leaving aside petty commercial interests, be it generic pharmaceutical companies or research based pharmaceutical companies, across the world and India is no exception. Otherwise, thugs and criminals who are involved in this illicit trade of manufacturing and distributing counterfeit medicines at the cost of the innocent patients, will keep remaing almost scot free, forever.

By Tapan Ray

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