Tag Archives: pharmaceutical

Indian Pharmaceutical Market in February 2014 – A Snap Shot

Posted on by
Reply

According to the Retail Audit dated March 2014 of well reputed AIOCD Pharmasofttech AWACS Pvt. Ltd, in the month of February 2014, the Indian Pharmaceutical Market (IPM) registered a turnover of 5902 Crore (around US$ 980 million) growing at 4.5 percent against Rs. 6,227 Crore (around US$1 billion) in January 2014 with a growth of 8.5 percent.

The growth break-up for the month is as follows:

  • -0.2 percent from existing products
  • 3.2 percent from new launches
  • 1.5 percent from price increases

However, the volume growth of 2.6 percent during Dec’13 to Feb’14 quarter has been better than the same for the corresponding period of the previous year, which was 0.2 percent.

February 2014: Impact of DPCO 2013:

  • The products covered under DPCO 2013 de-grew by (-13.6) percent, whereas rest of the products grew by 7.4 percent resulting an overall growth of 4.5 percent for the month
  • The DPCO 2013 portfolio for GSK de-grew by (-30.7) percent and the same for Ranbaxy registered a negative growth of (-25.2) percent, whereas Sun Pharma had the least impact with its DPCO 2013 portfolio de-growing at -6.8 percent.

Top performers in growth within ‘Top 10 Companies’: 

  • Sun Pharma at 18.1 percent
  • Lupin at 9.3 percent
  • Alkem at 6.7 percent

 Monthly growth of Indian Companies against MNCs:

  • Indian companies at 6.9 percent
  • MNCs at (- 1.7) percent

Top growing MNCs for the month:

  • MSD at 17.3 percent
  • AstraZeneca at 15.3 percent
  • Merck Serono at 5.1 percent

Top 5 growing therapy areas for the month:

  • Anti-diabetic at 13.3 percent
  • Dermatological at 12.5 percent
  • Respiratory at 6.2 percent
  • Cardiological at 5.9 percent
  • Gastrointestinal at 5.1 percent

It is worth noting that Anti-infective market de-grew by 0.9 percent during the month.

Top growing brands:

  • Lantus (Sanofi) at 25 percent
  • Monocef (Aristo) at 23 percent (despite de-growth of the therapy area)
  • Glycomet-GP (USV) at 23 percent
  • Skinlite (Zydus Cadila) at 19 percent
  • Aciloc (Cadila Pharmaceuticals) at 15 percent

New Launches:

Total 107 Brands (generic formulations) were launched in February 2014, which justifies why new launches contributed 3.2 percent of the total growth of 4.5 percent for the month.

By: Tapan J. Ray

Kind Courtesy: AIOCD Pharmasofttech AWACS Pvt. Ltd.

 

Is Credibility Erosion of Pharma Accelerating?

Posted on by
Reply

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

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

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

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

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

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

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

Key reasons for acceleration of credibility erosion:

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

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

1. Accelerating credibility erosion due to business malpractices:

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

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

Global:

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

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

India:

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

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

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

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

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

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

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

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

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

Why is the drug price so important?

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

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

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

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

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

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

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

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

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

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

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

Conclusion:

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

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

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

By: Tapan J. Ray

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

A Snap Shot of Indian Pharmaceutical Market in January 2014

Posted on by
Reply

According to the retail audit dated February 2014 of well reputed AIOCD Pharmasofttech AWACS Pvt. Ltd, in January 2014 the Indian Pharmaceutical Market (IPM) registered a turnover of Rs. 6,227 Crore (around US$1 billion) with a growth of 8.5 percent. The growth break-up is as follows:

-       3.5 percent from existing products or volume (Volume growth was 1.6 percent in January 2013)

-       3.4 percent from new launches

-       1.6 percent from price increases

Number of new products (brands) launched in the month:

- 83

Top performers in growth within ‘Top 10 Companies’: 

-       Emcure at 20.9 percent

-       Sun Pharma at 20.1 percent

-       Lupin at 15.4 percent

 Monthly growth of Indian Companies against MNCs:

-       Indian companies at 11.4 percent

-       MNCs at 1.0 percent

Top growing MNCs for the month:

-       Allergan at 35.7 percent

-       MSD at 17.0 percent

-       Merck Serono at 15.0 percent

Top 5 growing therapy areas for the month:

-       Opthalmologicals/Otologicals at 18.0 percent

-       Anti-diabetic at 17.5 percent

-       Dermatologicals at 16.0 percent

-       Gastrointestinal at 10.0 percent

-       Respiratory at 9.8 percent

Top growing brands (branded generics): 

-       Skinlite at 40 percent

-       Telma at 32 percent

-       Glycomet-GP at 31 percent

-       Phensedyl at 25 percent

-       Dexorange at 14 percent

Conclusion:

It appears that the revival of IPM post Drug Price Control Order 2013 has commenced.

‘Herceptin Biosimilars’ Seriously Questioned

Posted on by
Reply

The news struck as an anticlimax, close on the heels of high decibel product launch of ‘Herceptin Biosimilars’ in India, being hyped as the first in the world, bringing much needed relief to many diagnosed breast cancer patients for their economical pricing.

At the same time, this legal challenge has now come as an acid test for the regulator to prove that ‘Caesar’s wife must be above suspicion’ for any new drug approval and especially if it is a complex biosimilar used for the treatment of patients suffering from dreaded diseases, such as, breast cancer.

It’s not patent this time:

Interestingly, this is not a patent infringement case, as Roche has reportedly given-up its patent on Trastuzumab (Herceptin) in India last year.

Alleged violations: 

The above media report highlights, in Delhi High Court Roche has sued Biocon of India and its US based generic partner – Mylan along with the Drug Controller General of India (DCGI) related to launch of ‘Herceptin Biosimilar’ versions in India.

The allegation against Biocon and Mylan is that their recently launched drugs are being misrepresented as ‘biosimilar Trastuzumab’ or ‘biosimilar version of Herceptin’ without following the due process in accordance with the ‘Guidelines on Similar Biologics‘, necessary for getting approvals of such drugs in India.

‘Caesar’s wife’ under suspicion too:

The DCGI has also been sued by Roche for giving permission for launch of this product allegedly not in conformance with the above biosimilar guidelines, which were put in place effective August 15, 2012.

Roche reportedly argued that the above guidelines on similar biologics laid down a detailed and structured process for comparison of biosimilar with the original product and all the applications for manufacturing and marketing authorization of biosimilars are necessarily required to follow that prescribed pathway before obtaining marketing approval from the DCGI. Roche has also stated that there is no public record available, in the clinical trial registry India (CTRI) or elsewhere to show that these two players actually conducted phase-I or II clinical trials for the drug.

According to report Roche claims that DCGI has approved the “protocol and design study for testing” of Biocon related to the proposed drug just before the above regulatory guidelines were made effective, predominantly for patients’ health and safety reasons.

Interim restrain of the Delhi High Court:

In response to Roche’s appeal, the Delhi High Court has reportedly restrained Mylan and Biocon from “relying upon” or “referring to Herceptin” or any data relating to it for selling or promoting their respective brands Canmab (Biocon) and Hertaz (Mylan) till the next hearing.

The relevance of ‘Guidelines on Similar Biologics’:

The ‘Guidelines on Similar Biologics’ clearly articulated:

“Since there are several biosimilar drugs under development in India, it is of critical importance to publish a clear regulatory pathway outlining the requirements to ensure comparable safety, efficacy and quality of a similar biologic to an authorized reference biologic.”

Thus for patients’ health and safety interest the above regulatory pathway must be followed, the way these have been prescribed without any scope of cutting corners. This is even more important when so important pharmacovigilance system is almost non-functional in India.

Attempts to dilute the above guidelines from some quarters:

It was earlier reported that strong representations were made to the drug regulator in writing by powerful domestic players in this area urging to dilute the above ‘Guidelines’, otherwise it will be difficult for them to compete with the pharma MNCs.

This argument is ridiculous by any standard and smacks of putting commercial considerations above patients’ health interest.

The key issue:

As I see it, four quick questions that float at the top of my mind are as follows:

  • If the ‘Guidelines on Similar Biologics’ have not been followed either by the applicants or by the DCGI, how would one establish beyond an iota of doubt that these drugs are biosimilar to Trastuzumab, if not ‘Biosimilar to Herceptin’?
  • If these drugs are not proven biosimilar to Trastuzumab, as specified in the ‘Guidelines on Similar Biologics’, how can one use Trastuzumab data for their marketing approvals and the DCGI granting the same?
  • If these drugs were not biosimilars to Trastuzumab, would these be as effective, reliable and safe as Herceptin in the treatment of breast cancer?
  • Further, how are references related to Herceptin being used to promote these drugs both pre and post market launch?

Conclusion:

I guess, predominantly commercial considerations prompted Roche to sue Biocon, Mylan and also the DCGI on ‘Trastuzumab biosimilars’, launched recently in India.

Be that as it may, for the interest of so many diagnosed breast cancer patients in the country, there is crying need for the facts to come out in the open, once and for all. Are these drugs truly Trastuzumab biosimilars with comparable safety, efficacy, quality and reliability of Herceptin?

If the answer comes as yes, there would be a huge sigh of relief from all corners inviting millions of kudos to Biocon and Mylan.

However, if by any chance, the allegations are proved right, I do not have an iota of doubt that the honorable Delhi High Court would ferret out the truth, unmask the perpetrators and give them exemplary punishments for playing with patients’ lives.

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.

FDA ‘Import Bans’: Valuing Drug Supply Chain Security for Patients’ Safety

Posted on by
Reply

To strengthen patients’ health and safety requirements, there is a growing need to first work out and then maintain a robust Drug Supply Chain Security (DSCS) mechanism by the pharmaceutical product manufacturers located anywhere in the world.

It is, therefore, often believed that the broader objective of cGMP encompasses DSCS for the same reason.

Over a period of time DSCS has assumed enormous complexity, as it often extends beyond the geographical territory of a country, spanning across a large number of vendors and vendors’ vendors of different kinds.

A robust DSCS, besides many others, would be able to address effectively, including sourcing of finished goods from third party manufacturers, the following:

  • Health and safety concerns of patients
  • Fraudulent activities leading to drug counterfeiting
  • Stringent global regulatory scrutiny
  • Check on sourcing of unapproved or substandard material

Most common threats to DSCS:

Counterfeit goods are most common threats to DSCS mechanism of any company. According to a report of the World Health Organization (WHO) on the types of counterfeits and their magnitude, such products can be grouped into six categories:

  • Products without active ingredients: 32.1 percent
  • Products with incorrect quantities of active ingredients: 20 percent
  • Products with wrong ingredients: 21.4 percent
  • Products with correct quantities of active ingredients but with fake packaging: 15.6 percent
  • Copies of an original product: 1 percent
  • Products with high levels of impurities and contaminants: 8.5 percent.

Globalization enhances the need of DSCS:

In today’s globalized business environment, the dual need to reducing costs significantly and in tandem minimizing the risks associated with the procurement activities of the business, have compelled many pharma companies to extend their ‘Supply Chain’ related activities spreading across different parts of the globe, instead of just confining to the local space.

At the same time, a new trend is evolving with the emergence of world class outsourcing service providers in the Contract Research And Manufacturing Services (CRAMS) space, especially from the countries like India and China.

Though cost arbitrage both in India and China is a key-motivating factor, the outsourcing services encompass integrated value propositions of high order for the overseas customers, such as, desired quality including cGMP, speed in delivery process and suppliers’ integrity together with overall reliability of end products and services. Nothing in this value chain is mutually exclusive and would be left to chance. More importantly, DSCS  also must go through a set of complex algorithms striking a right balance between all agreed parameters.

Examples of serious DSCS security violations:

Following are a few at random examples of serious DSCS violations globally, at various times in the past:

  • In 1982, seven people in the Chicago area died after ingesting Extra-Strength Tylenol laced with potassium cyanide.
  • In 2007, over 300 people died in Panama of Central America after consuming a cough medication containing diethylene glycol, which was labeled as glycerin. The adulterant diethylene glycol was sourced from China and was relabeled as glycerin by a middleman in Spain, as reported by the media.
  • In March 2008, prompted by around 81 drug related deaths in the United States, the US-FDA announced a large scale recall of Heparin injection, a well-known blood thinner from Baxter Healthcare, suspecting contamination of a raw material sourced from China. Standard technology used by Baxter could not detect the contaminant, which the regulator considered as a deliberate adulteration. The contaminant was eventually identified as an over sulfated derivative of chondroitin sulfate, which costs a fraction of original heparin derivative.

The ‘Heparin tragedy’ raised, possibly for the first time, the need of working out an algorithm to put in place a robust system for DSCS, as stated above. This need has now become more critical as many pharmaceutical players, including those in India, are increasingly outsourcing the API, other ingredients and almost entire logistics from third parties.

The front-runner:

USFDA is globally recognized as the most efficient in this area having a sharp focus on patients’ health and safety interest. However, even a front-runner like this has some manpower related issues to make its global vigilance system almost watertight.  due to In this context, ‘The New York Times’ dated August 15, 2011 reported, despite the fact that US now imports more than 80 percent of APIs and 40 percent of finished drugs mainly from India, China and elsewhere, the agency conducts far fewer foreign inspections as compared to domestic inspections.

The US FDA Commissioner was quoted saying, “Supply chains for many generic drugs often contain dozens of middlemen and are highly susceptible to being infiltrated by falsified drugs.”

In another conference the FDA Commissioner said, “I think people have no idea in this country and around the world about the vulnerability of things that we count on every day and that we have a system that has big gaps in our protective mechanisms.”

Import bans of Indian drugs are related to DSCS:

In India, all may not be fully aware of intense health and safety concerns, as stated above, of the US drug regulator, when reports of repeated ‘import bans’ shake the domestic industry hard. Many even would painstakingly try to invent ‘other reasons’ behind such shameful ‘bans’, which are totally prompted by breach in DSCS going against patients’ interest of the importing country.

Stringent regulatory inspections of Indian manufacturing plants by the US-FDA and UK-MHRA, as reported by the media with great concerns are, therefore, for the same reasons.

The latest in this saga is the Toansa manufacturing facility of Ranbaxy, where USFDA reportedly detected, among others, presence of flies in sample storage room, un-calibrated instruments in its laboratory and non-adherence to sample analysis procedure, prompting yet another ‘import ban’ of drugs made at this facility by the drug regulator of the United States.

Is DSCS in place for all drugs manufactured and consumed in India?

The question therefore floats at the top mind, if for breach of DSCS the drugs manufactured in all those Indian pharma plants, that have faced ‘import bans’ from the US and UK, are unsafe for patients in those countries, how come the medicines manufactured in the same plants for domestic consumption are accepted as safe for the patients in India by the DCGI?

However, the good news is that the DCGI has, at last, taken cognizance of the unfortunate regulatory developments in India and is reportedly planning to initiate a system of sudden inspections of manufacturing facilities of all pharmaceutical players, both domestic and MNCs and would take stringent action against any non-compliance to standards. Let us hope that this is not just a knee-jerk reaction of the Indian drug regulator coming under intense pressure from all corners, the good intent would get translated into reality sooner.

Brinkmanship has failed:

That said, even after witnessing how clumsily the concerned Indian pharma players had prepared themselves for inspections by the overseas drug regulators, many other manufacturers still today continue to take the priority need of DSCS of the importing countries for granted  up until critical situations arise, such as, drug import ban orders by the overseas regulators. The mindset of ‘managing things on the stage’ has not worked. The brinkmanship has miserably failed, repeatedly in so many occasions.

Interestingly, global pharma majors, by and large, have recognized this area as a center piece of their procurement and manufacturing operations and are continuously honing their skills in this domain to avoid any unpleasant surprises on product quality and safety issues leading to loss in business, besides of course quantum damage in reputation and goodwill of the affected companies.

Conclusion: 

Strategic prioritization to maintain DSCS is a relatively a new focus area, which prompts the need to continuously nurturing material suppliers of high reliability and simultaneously explore possibilities of application of newer technologies primarily to avoid any breach in the entire supply chain, right from procurement, manufacturing to end products logistics support.

The process of ensuring a robust DSCS would undoubtedly add to overall cost of operation, especially when the industry is facing a growth challenge in the large developed markets of the world with much higher profit potential.

However, not mitigating the risk of breach in DSCS, could invite a nightmare of unsustainability in the business operations at any given point of time, as has been happening with some pharma majors in India, such as, Ranbaxy and Wockhardt.

Thus, weighing pros and cons, even if this integrated process adds to the cost of business, the option of not going for DSCS system would be foolhardy. At the same time, other operational measures like, improving order fill rate, more efficient inventory management and better buying, could help negating the adverse cost impact significantly.

That said, the bottom-line is: FDA ‘import bans’ are critical manifestations of not valuing, adequately enough,the DSCS for health and safety of patients, not just of the US and UK, but of our homeland too.

By: Tapan J. Ray

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

 

 

‘Gen Y’: Contemporary Mindset For Pharma Transformation

Posted on by
Reply

Global Pharma industry, for various reasons, is still not adequately aligned with the legitimate needs and expectations of the civil society, which are some of the key purposes for its existence, across the world. Consequently, there seems to be a gradually increasing trust deficit between various governments and the pharma industry. This has been continuing over a long period of time, primarily due to opacity in the business conduct of the industry, spanning across a number of critical areas, especially related to R&D, Clinical Trials, Pricing, and Brand Marketing.

As a result, various stakeholders do not seem to be on the same page, when it comes to important issues and concerns related to patients’ interest.

A key differentiation for pharma consumers:

Ultimate consumers not being the purchase decision makers for prescription medicines, in general, unlike most other products, additionally, the market being highly monopolistic for many critical life-saving patented products, the argument of market force driven drug pricing does not hold much water. Even for branded generics in India, one can find a wide variation in retail prices within the same molecule and the higher priced brands in many cases, intriguingly, enjoy the brand leadership status too.

Thus, for prescription medicines, the following common question is reportedly being very often raised:

“If the one who decides, does not pay and the one who pays, does not decide and if the one who decides is ‘paid’, will truth stand any chance?”

This leads to a key question on one of the many important areas of opacity in the pharma industry, which is:

“If market forces decide product pricing, why do the doctors prescribe a particular company’s higher priced brand more often, instead of available replaceable brands of other pharma companies of equal repute, but with much lesser price?

Need for ‘fresh eyes’: 

It is imperative that such questions need effective resolution, sooner. However, this will require fresh pairs of eyes and not the existing ones.

Noting together various other similar examples, as well, of long unresolved growing discontent, as mentioned above, there is an urgent need for the industry to expedite a radical transformation in those areas with a new and contemporary vision for the interest of all – Pharma Players, the Governments and the Society at large.

‘Baby Boomers’ traditional mindset seems outdated:

Overall mindset of the senior leadership in the pharma sector, right from the country level up to their respective global headquarters, appears to have been insensitive to contemporary societal needs, too much self-serving, lacking innovativeness in problem solving approach, charting in a make- believe world with rigid views and suffering from an ‘Ostrich like Syndrome’, as it were.

One of the reasons of the above ‘Syndrome’ could well be that these leadership positions are still being driven by the ‘Pre-Baby Boomers’, ‘Baby Boomers’ and very few ‘Gen X’, including the one at the helm.  Interestingly, this is quite unlike other science driven sectors such as the ‘Digital Industry’ and their leaders like, Mark Zuckerberg of Facebook. Incidentally, Zuckerberg also tops 2013 charity giving list.

Consequently, the long standing important pharma issues with the outside world, though are much known to all concerned, have still remained mostly unresolved. One of its reasons could possibly be attributed to the traditional mindset of the senior leadership of the industry, predominantly cultivating values of the ‘Baby Boomers’, which override the fast changing societal aspirations, expectations and demands. 

A time for ‘Gen Y’ leadership:

In such a scenario, to trigger a transformation in the pharma industry, the ‘Gen Y’, who reportedly looks at ‘Work’, ‘Life’ and ‘Society’ very differently, quite in tune with the time, as deliberated below, should be put on the saddle of the key leadership positions, sooner.

Handing over the baton should follow a well thought out and structured time-bound process. This is quite feasible, as those of ‘Gen Y’ born in 1983. have become over 30 years old now.

Mindset of ‘Gen Y’ is different and contemporary:

Various studies have clearly shown that the interplay between ‘Work’, ‘Life’ and ‘Society’ has undergone a fundamental change from the era of ‘Baby Boomers’ to Gen Y, as follows:

  • The generation ‘prior to the Baby Boomers’ (born before 1946) worked to live.
  • The ‘Baby Boomers’ (born between 1946 and 1964) live to work, which also becomes a very important part of their social status, identity and pride.
  • ‘Gen X’ (born between 1965 and 1982) works along with other interests and aspirations too, seeking a balance between work and life.
  • ‘Gen Y’ (born between 1983 and 2001) wants work and life to merge. Besides, according to a recent study, around 92 percent of Gen Y believes that business should be measured by more than just profit, having a clear societal focus along with the changing needs and aspirations of the people. As stated above, ‘Gen Y’ like, Mark Zuckerberg has already demonstrated it.

‘Inclusive’ approach of ‘Gen Y’, different from ‘Baby Boomers’:

Leadership behavior, as we know, is predominantly driven by values, which may either be sustainable over a longer period of time or just situation specific, working wonders in a given situation and ineffective when the situation changes. Thus there is a greater need for the organizations to help nurturing and developing leadership behavior, which is sustainable and not just situation specific.

In today’s scenario, to catalyze a transformation in the pharma industry, persons in leadership roles, especially if these are held by ‘Baby Boomers’, need to change the way they usually behave, directly or indirectly, with their colleagues and subordinates, as a typical ‘Gen Y’ person would not be inclined to respond to formal authority, social status or even power.

For ‘Gen Y’, as studies indicate, much important ‘Innovation’ agenda would not be restricted to just products and services, they would explore more innovative ways of doing business, making it more inclusive for all.

They would not focus on ‘Excellence’ only at the place of work, mainly for career progression and increased remuneration. ‘Excellence’ for the ‘Gen Y’, would extend to social and personal lives, as work and life merge for them. 

Unlike ‘Baby Boomers’ and for that matter even ‘Gen X’, the terminologies like. ‘Socialistic’ or ‘Nationalistic’ are not bad words for ‘Gen Y’, only used for making condescending remarks, as the new generation would ensure that the purpose of ‘Work’, ‘Life’ and ‘Society’ flow in the same direction, seamlessly.

Conclusion: 

At least the ‘Baby Boomers’, born approximately between 1946 and 1956, who live to work making it a very important part of their social identity and are still holding the key pharma leadership positions, should decide to gradually fade away, instead of pulling all available levers and tricks to keep hanging-on to the job. This is absolutely essential to create enough room for the ‘Gen X’ and ‘Gen Y’ to take charge for much needed transformation in the pharma industry, 

The eternal tricks of many ‘Baby Boomers’ to keep the ‘Gen X’ and ‘Gen Y’ waiting under their wings and thus making them impatient, could ultimately prove to be self-defeating, if not demeaning, affecting both individual and corporate performance.

I reckon, given an opportunity in a systematic manner, sooner, the ‘Gen X’ and ‘Gen Y’ with their contemporary mindsets, would catalyze a meaningful transformation within the pharma industry ushering in much needed transparency for patients’ interest, aligning it well with the healthcare needs, aspirations and demands of the society and thereby, effectively bridging the trust deficit.

This is not just a wish. At least one younger top global pharma leader, probably belonging to ‘Gen X’, has started demonstrating the refreshing mindset of a change agent to the pharma world at large. As growing numbers of such pathfinders start taking charge, much awaited metamorphosis of the industry would help creating a glorious image that the sector so deserves for its otherwise yeomen contribution in the battle against diseases, the world over.

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.

 

No More Payment for Prescriptions: Pharma at A Crossroads?

Posted on by
Reply
  • “ARE there different and more effective ways of operating than perhaps the ways we as an industry have been operating over the last 30, 40 years?”
  • “TRY and make sure we stay in step with how the world is changing.”

Those are some introspective outlooks of Sir Andrew Witty – the Chief Executive of GlaxoSmithKline (GSK) related to much contentious pharmaceutical prescription generation processes now being practiced by the drug industry in general, across the world.

The ‘Grand Strategy’ to effectively address these issues, in all probability, was still on the drawing board, when Sir Andrew reportedly announced on December 16, 2013 that GSK:

  • Will no longer pay healthcare professionals to speak on its behalf about its products or the diseases they treat to audiences who can prescribe or influence prescribing.
  • Will stop tying compensation of sales representatives to number of prescriptions the doctors write.
  • Will stop providing financial support to doctors to attend medical conferences.

These iconoclastic intents, apparently moulded in the cast of ethics and values and quite possibly an outcome of various unpleasant experiences, including in China, is expected to take shape worldwide by 2016, as the report indicates.

Acknowledgment of unbefitting global practices:

Reacting to this announcement, some renowned experts, as quoted in the above report, said, “It’s a modest acknowledgment of the fact that learning from a doctor who is paid by a drug company to give a talk about its products isn’t the best way for doctors to learn about those products.”

The world envisages a refreshing change:

A December 11 article in the Journal of American Medical Association (JAMA) stated that there exists a serious financial ‘Conflict of Interest (COI)’ in the relationship between many Academic Medical Centers (AMCs) and the drug and medical device industries spanning across a wide range of activities, including:

  • Promotional speakers
  • Industry-funded ‘Continuing Medical Education (CME)’ programs
  • Free access of sales representatives to its faculty, trainees and staff
  • The composition of purchasing and formulary committees

Such types of relationships between doctors and the pharmaceutical companies across the world, including in India, as studies revealed, have been custom crafted with the sole purpose of influencing prescription behavior of doctors towards more profitable costlier drugs, many of which offer no superior value as compared to already available cheaper generic alternatives.

Cracking the nexus is imperative:

Yet another report says, “Ghost-writing scandals, retracted journal papers, off-label marketing settlements, and a few high-profile faculty dust-ups triggered new restrictions at some schools.”

To address this pressing issue of COI, cracking the Doctor-Industry alleged nexus, which is adversely impacting the patients’ health interest, is absolutely imperative. An expert task force convened by the ‘Pew Charitable Trusts’ in 2012, made recommendations in 15 areas to protect the integrity of medical education/training and the practice of medicine within AMCs.

Some of those key recommendations involving relationships of medical profession with pharmaceutical companies are as follows:

  • No gifts or meals of any value
  • Disclosure of all industry relationships to institutions
  • No industry funded speaking engagement
  • No industry supported Continuing Medical Education (CME)
  • No participation at industry-sponsored lectures and promotional or educational events
  • No meeting with pharmaceutical sales representative
  • No industry-supported clinical fellowships
  • No ghostwriting and honorary authorship
  • No ‘Consulting Relationship’ for product marketing purpose

The above report also comments, “if medical schools follow new advice from a Pew Charitable Trusts task force, ‘No Reps Allowed’ signs will soon be on the door of every academic medical center in the United States.”

MNC pharma associations showcase voluntary ‘Codes of Marketing Practices’: 

Most of the global pharma associations have and showcase self-regulating ‘Codes of Pharmaceutical Marketing Practices’. However, the above GSK decision and hefty fines that are being levied to many large global companies almost regularly in different countries for marketing ‘malpractices’, prompt a specific question: Do these well-hyped ‘Codes’ really work on the ground or are merely expressions of good intent captured in attractive templates and released in the cyberspace for image building?

Global status overview:

In this context an updated article of December 11, 2013 states that Medical Faculty, Department Chairs and Deans continue to sit on the Board of Directors of many drug companies. At the same time, many pharma players support programs of various medical schools and teaching hospitals through financial grants.  Company sales representatives also enjoy free access to hospital doctors to promote their products.

In most states of the United States, doctors are required to take accredited CMEs. The pharmaceutical industry provides a substantial part of billions of dollars that are spent on the CME annually, using this support as marketing tools. This practice is rampant even in India.

The above article also highlights incidences of lawsuits related to ‘monetary persuasion’ offered to doctors. In one such incidence, two patients reportedly fitted with faulty hips manufactured by Stryker Orthopedics discovered that the manufacturer paid their surgeon between US$ 225,000 and US$ 250,000 for “consultation services,” and between US$ 25,000 and US$ 50,000 for other services.

However, since August 2013, ‘Physician Payment Sunshine Act’ of the United States demands full disclosure of gifts and payments made to doctors by the pharma players and allied businesses. Effective March 31, 2014, all companies must report these details to the Centers for Medicare & Medicaid Services (CMS), or else would face punitive fines as high as US$1 million per year. CMS would publish records of these payments to a public website by September 31, 2014. India needs to take a lesson from this Act to help upholding ethics and values in the healthcare system of the country.

Overview of status in India:

As reported by both International and National media, similar situation prevails in India too.

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 medical profession of India. The notification specified stricter regulations for doctors in areas, among others, gifts, travel facilities/ hospitality, including Continuing Medical Education (CME), cash or monetary grants, medical research, maintaining professional Autonomy, affiliation and endorsement in their relationship with the ‘pharmaceutical and allied health sector industry’.

However, inability of the Indian regulator to get these guidelines effectively implemented and monitored, has drawn sharp flak from other stakeholders, as many third party private vendors are reportedly coming up as buffers between the industry and the physicians to facilitate the ongoing illegal financial transactions, hoodwinking the entire purpose, blatantly.

Moreover, it is difficult to fathom, why even four years down the line, the Department of Pharmaceuticals of the Government of India is yet to implement its much hyped ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for the entire pharmaceutical industry in India. 

Learning from other self-regulatory ‘Codes of Pharma Marketing Practices’, in my view, a law like, ‘Physician Payment Sunshine Act’ of the United States, demanding public disclosure of gifts and all other payments made to doctors by the pharma players and allied businesses, would be much desirable and more meaningful in India.

Conclusion:

Research studies do highlight that young medical graduates passing out from institutions enforcing gift bans and following other practices, as mentioned above, are less likely to prescribe expensive brands having effective cheaper alternatives.

The decision of GSK of not making payments to any doctor, either for participating or speaking in seminars/conferences, to influence prescription decision in favor of its brands is indeed bold and laudable. This enunciation, if implemented in letter and spirit, could trigger a paradigm shift in the the prescription demand generation process for pharmaceuticals brands.

However, this pragmatic vow may fall short of stemming the rot in other critical areas of pharma business. One such recent example is reported clinical data fabrication in a large Japanese study for Diovan (Valsatran) of Novartis AG. Had patient records been used in their entirety, the Kyoto Heart Study paper, as the report indicates, would have had a different conclusion.

That said, if all in the drug industry, at least, ‘walk the line’ as is being demarcated   by GSK, a fascinating cerebral marketing warfare to gain top of mind brand recall of the target doctors through well strategized value delivery systems would ultimately prevail, separating men from the boys.

Thus, the moot point to ponder now:

Would other pharma players too jettison the decades old unethical practices of ‘paying to doctors for prescriptions’, directly or indirectly, just for the heck of maintaing ethics, values and upholding patients’ interest?

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.

 

‘Big Pharma’ Prowls Falter: Triggers Off Yet Another Critical Debate

Posted on by
Reply

The ‘Big Pharma’ prowls faltered yet again exposing the ‘fault line’ to all, when the GSK global head honcho, a pharma icon in his own right, Sir Andrew Witty supported the pharmaceutical policy of India, while in the country earlier this month. This support is quite in contrary to arrogant displeasure being expressed by his MNC counterparts against the pharma regime in India up until now.

Sir Andrew reportedly spoke against the usual pharma MNC practices of charging very high prices for patented medicines during an interview and said that multinationals need to look at things from India’s perspective. 

The above comment, when analyzed especially in context of one of the recent actions of Big Pharma MNCs complaining in writing to President Obama against India’s prevailing pharmaceutical regime, the fault line gets clearly visible.

In this context, a recent report captured the anger and desperation of Big Pharma. This hostility vindicates the general apprehensions in India that MNCs are once again pushing for a stringent patent regime in the country, against the general health interest of Indian patients for access to affordable newer medicines.

Quoting US Chamber of Commerce’s Global Intellectual Property Center another report reconfirmed the impatient prowl of the mighty lobby group in the corridors of power. This piece states, “Recent policy and judicial decisions (Glivec judgment and Nexavar) that invalidate intellectual property rights, which have been increasing in India, cast a daunting shadow over its otherwise promising business climate.” 

The ‘fault line’, thus surfaced, triggers off yet another critical debate, especially related to the slugfest on a stringent pharmaceutical product patent regime in India, as follows:

“Does Stricter IPR Regime Spur Pharma Innovation?”

Global innovator companies strongly argue that stringent Intellectual Property Rights (IPR) and stricter enforcement of IP laws have strong link with fostering innovation leading to a robust economic growth for any nation.

However, another group of thought leaders opine just the opposite. They argue that strong IPR and IP laws have little, if any, to do with fostering innovation and economic growth, as there are no robust research findings to drive home the above point.

It has been noticed that the MNC lobby groups quite often very cleverly use their magic word ‘innovation’ on a slightest pretext with an underlying desire of having a ‘very strict patent regime’ in India. Thus they seem to be trying to mislead the common man, as if India is against innovation.

Comment of the Chairman of National Innovation Council of India:

On September 15, 2012, while delivering his keynote address in a pharmaceutical industry function, Dr. Sam Pitroda, the Chicago based Indian, creator of the telecom revolution in India, Chairman of the National innovation Council and the Advisor to the Prime Minister on Public Information, Infrastructure & Innovations, made a profound comment for all concerned to ponder, as follows:

“Everyone wants to copy the American model of development.  I feel that this model is not scalable, sustainable, desirable and workable.  We have to find an Indian Model of development which focuses on affordability, scalability and sustainability.”

Recent Indian stand:

On March 5, 2013, the Government of India made a profound statement on the subject of ‘Innovation and Small and Medium Enterprises (SMEs)’ at the TRIPS Council meeting covering the following points:

  • There is no direct correlation between IP and Innovation even for the Small and Medium Industries.
  • The technological progress even in the developed world had been achieved not through IP protection but through focused governmental interventions.
  • The proponents of this Agenda Item have reached the present stage of technological development by focusing solely on the development of their own domestic industry without caring for the IPRs of the foreigners or the right holders.
  • After achieving a high level of development, they are now attempting to perpetuate their hold on their technologies by making a push towards a ‘TRIPS plus’ regime.
  • Their agenda is not to create an environment where developing countries progress technologically, but to block their progress through stringent IP regime.
  • It is essential that the flexibilities provided by the TRIPS Agreement need to be secured at any cost, if the people in the developing countries are to enjoy the benefits of innovations.

A Wharton Professor’s view:

As the Wharton professor of Healthcare Management Mark V. Pauly has been quoted saying that the link between patent protection and innovation has never been definitely proven.

However, Pauly reportedly is aware that the innovator global pharma companies do say, ‘If you don’t allow us to reap the benefits of our R&D expenditure, we won’t put as much into it, and we won’t invent as many great things’.

However, the Wharton Professor counters it by saying, “The problem is that nobody really knows how much less innovation there would be if there were less patent protection. We just don’t know what the numbers are.”

The above report says, according to Pauly, the onus to prove that patent protection matters should be on the drug industry itself.

He argues, “Rather than always just insisting you should never limit intellectual property protection, they really ought to develop some evidence to show that without that protection, there would be an impact on the rate of adoption of new products. Everybody has an opinion, but nobody knows the facts.“

A French Professor’s view:

In another WIPO seminar held on June 18, 2013, Margaret Kyle, a Professor at the Toulouse School of Economics and the Université de Toulouse I in France, reportedly presented preliminary findings of a study.

This paper explored in detail the impact of World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in various areas related to the speed of launch, price, and volume of sales of drugs across countries and across different drug products.

In this study, as the above report states, Kyle analyzed the trade-off between the dynamic and static effects of Intellectual Property Rights (IPRs).

The dynamic effect of IPRs was considered as an incentive for innovation based on the general belief that patent protection, through granting market exclusivity, incentivizes companies to invest in the research and development (R&D) to develop new drugs.

On the other hand, the static effect of IPRs in the short term is that granting market exclusivity often leads to innovator companies pricing their products at levels, which will be unaffordable by a large number of patients, especially in lower-income countries.

Kyle explained that the results implied as follows:

  • IPRs are neither necessary nor sufficient to launch new pharmaceutical products.
  • The existence of a product patent does not always inhibit generic imitation, nor does the lack of such a patent necessarily deter an originator from making a product available in a given market.

Other eminent voices:

While highlighting that TRIPS-Plus intellectual property protection is passed by some developing countries in order to implement FTA obligations, another recent paper presents the following examples in support of the argument that there no correlation between strong IP laws and fostering innovation:

  • UK Commission on Intellectual Property Rights. Integrating Intellectual Property Rights and Development Policy. 2002. (Link)

“…Strong IP rights alone provide neither the necessary nor sufficient incentives for firms to invest in particular countries… The evidence that foreign investment is positively associated with IP protection in most developing countries is lacking.”

  • Robert L. Ostergard., Jr. “Policy Beyond Assumptions: Intellectual Property Rights and Economic Growth.” Chapter 2 of The Development Dilemma: The Political Economy of Intellectual Property Rights in the International System.  LFB Scholarly Publishing, New York. 2003

“…No consistent evidence emerged to show that IPR contributed significantly to economic growth cross-nationally.  Furthermore, when the nations are split into developed and developing countries, results to suggest otherwise did not emerge.”

  • Carsten Fink and Keith Maskus. “Why We Study Intellectual Property and What We Have Learned.” Chapter one of Intellectual Property and Development: Lessons from Economic Research. 2005. (Link)

“Existing research suggests that countries that strengthen their IPR are unlikely to experience a sudden boost in inflows of FDI.  At the same time, the empirical evidence does point to a positive role for IPRs in stimulating formal technology transfer.”

“Developing countries should carefully assess whether the economic benefits of such rules outweigh their costs. They also need to take into account the costs of administering and enforcing a reformed IPR system”

“We still know relatively little about the way technology diffuses internationally.”

  • Keith Mascus. “Incorporating a Globalized Intellectual Property Rights Regime Into an Economic Development Strategy.”  Ch. 15 of Intellectual Property, Growth and Trade. (ed. Mascus). Elsevier.  2008.

“Middle income countries must strike a complicated balance between promoting domestic learning and diffusion, through limited IP protection, and gaining greater access to international technologies through a strong regime… it makes little sense for these nations to adopt the strongly protectionist IP standards that exist in the U.S., the EU and other developed economies.  Rather, they should take advantage of the remaining policy space provided by the TRIPS Agreement.”

“It is questionable whether the poorest countries should devote significant development resources to legal reforms and enforcement of IPR.”

  • Kamal Saggi. “Intellectual Property Rights and International Technology Transfer via Trade and Foreign Direct Investment. Ch. 13 of Intellectual Property, Growth and Trade. (ed. Mascus). Elsevier.  2008.

“Overall, it is fair to say that the existing empirical evidence regarding the overall technology-transfer impacts of increased IPR protection in developing countries is inconclusive at this stage.  What is not yet clear is whether sufficient information flows will be induced to procure significant dynamic gains in those countries through more learning and local innovation.”

  • Alexander Koff, Laura Baughman, Joseph Francois and Christine McDaniel. “Study on the Economic Impact of ‘TRIPS-Plus’ Free Trade Agreements.”  International Intellectual Property Institute and the U.S. Patent and Trademark Office. August 2011.

“TRIPS-Plus IPRs viewed as ‘important, but not essential’ for attracting investment. Many other factors matter like, taxes, human capital, clustering, etc.”

Patients versus Patents:

Another recent  article on this subject states as follows:

“Compulsory licensing and stricter patentability standards allow domestic manufacturers to produce lower-cost versions of patented NCD medications and break into lucrative therapeutic areas, such as oncology, in which multinational drug firms are heavily invested.”

The paper clearly highlights, “If patients are pitted against patents, international support for IP protection—upon which drug firms and many other developed country industries now heavily rely—will again diminish.”

Yet another article published in The New England Journal of Medicine, July 17, 2013 states:

“Patents are government-granted monopolies. As monopolies, they can drive the prices of drugs up dramatically. For example, in 2000, when only patented antiretroviral drugs for Human Immunodeficiency Virus (HIV) infection were widely available, they cost approximately $10,000 per person per year, even in very poor countries. Today, these same medicines cost $150 or less if they are purchased from Indian generics companies…. patents cause especially acute problems for access to medicines in developing countries – not only because of low incomes but also because insurance and price-control systems are often absent or inadequate.” 

A WHO Report:

To chart the way forward at the backdrop of ongoing global debate elated to the relationship between intellectual property rights, innovation and public health, the World Health Assembly decided in May 2003 to give an independent Commission the task of analyzing this key issue. Accordingly, the Director-General of WHO established the Commission in February 2004. This report titled, “Public health, innovation and intellectual property rights” was published in 2006 and articulated that neither innovation nor access depend on just intellectual property rights and highlighted, among others, the following:

  • Intellectual property rights have an important role to play in stimulating innovation in health-care products in countries where financial and technological capacities exist, and in relation to products for which profitable markets exist.
  • In developing countries, the fact that a patent can be obtained may contribute nothing or little to innovation if the market is too small or scientific and technological capability inadequate.
  • In the absence of effective differential and discounted prices, patents may contribute to increasing the price of medicines needed by poor people in those countries.
  • Although the balance of costs and benefits of patents will vary between countries, according to their level of development and scientific and technological infrastructure, the flexibility built into the TRIPS agreement allows countries to find a balance more appropriate to the circumstances of each country.

India – now the most attractive global investment destination:

Trashing the anger and displeasure of pharma MNCs, as per the latest international survey, India reportedly has emerged as the most attractive global investment destination followed by Brazil and China. It is worth noting that even recently, during April- June period of 2013, with a capital inflow of around US$ 1 billion, the pharma sector became the brightest star in the FDI landscape of India.

Conclusion:

In the Indian context, a 2013 paper titled, “Intellectual Property Protection and Health Innovation: Concerns for India” published by Center for WTO Studies highlights that the regime change in the patent system has not been very supportive for improving access to medicines in India. It reiterates, it has not been established yet that a stricter patent regime in the developing countries like India, has helped health innovation and access to medicines at economically viable prices.

The paper recommends, although India is trying to incorporate all the flexibilities under TRIPS in its Patents Act, the ‘Indian Policy Makers’ should not give in to the pressure of western powers to make IPR more stringent in the country.

In the backdrop of arrogance exhibited by Big Pharma MNCs, in general, against Indian policies and judicial verdicts on this subject, the comments made by Sir Andrew on the issue, as deliberated above, are indeed profound and far reaching. However, it clearly exposes the fault line in the collective mindset of pharma MNCs, without any ambiguity.

I shall not be surprised either, if clever attempts are made now by the MNC lobby groups to negate or trivialize the profoundness of this visionary statement not just in India, but beyond its shores, as well.

Further, as stated above recent emergence of India as the most attractive global investment destination with pharma leading the deck is a point worth noting, more in the context of policy and statutes that India has decided to follow.

Be that as it may, it is beyond the scope of any doubt that innovation or for that matter encouraging innovation still remains the wheel of progress of any nation.

However, have we garnered enough evidence yet, to establish that stringent IPR regime with absolute pricing freedom would lead to fostering more innovation leading to well-being of people of the developing countries, like India?

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.