A Rare Strategic Acrobatic Feat in Covid Time

‘Keep nose to the grindstone while lifting eyes to the hills.’ Quite a while ago, all-time global management guru – Peter Drucker used this essential acrobatic feat as an example, for the business strategists. This illustration signifies the criticality of harmonizing decisions affecting both the short and the long-term goals of an organization, for a sustainable business excellence.

In most recent times, the pharma major AstraZeneca that has virtually become one of the household names, for developing a Covid-19 vaccine candidate with the University of Oxford, has performed the above acrobatic feat – with precision. During the prevailing unprecedented health crisis, the Company has unequivocally proven that it remains on course – in achieving its dual objectives, as Drucker had prescribed in his management classic – ‘The Practice of Management.’

It happened in tandem – without getting overwhelmed by the disruptive forced of Covid pandemic, unlike most others. Immediately, the Company focused on an urgent objective of saving the humanity – by developing, manufacturing and delivering a Covid vaccine to the world, in a record time. This was possibly a relatively short-term goal. And closely followed the other – a critical strategic decision for the organization’s long-term sustainable business excellence.

I have discussed before, the Company’s first initiative – developing a Covid vaccine candidate with the University of Oxford. Hence, in this article, I shall focus on two other related areas:

  • Deadly impact of rare diseases in some Covid infected young patients.
  • Why not some large Indian companies also explore similar strategies as demonstrated by AstraZeneca – and the reasons behind the same?

Before going into those areas up front, let me start with a brief description of AstraZeneca’s intent to expand its footprint in the of area of rare diseases, besides immunology area to help treat rare types of cancer.

The acquisition:

On December 12, 2020 AstraZeneca announced that to accelerate its strategic and financial development, the company will acquire Alexion valuing $39 billion. Subject to all statutory approvals, the deal is expected to close in the third quarter of 2021. Interestingly, Alexion’s top brand – Soliris, is the world’s one of the most expensive drugs in the world. It is prescribed to treat a rare – life-threatening blood disease paroxysmal nocturnal hemoglobinuria (PNH). Incidentally, rare diseases have also some significant relevance for Covid infected patients. Let me now recapitulate, some key aspects of rare diseases.

Some key aspects of rare diseases: 

Rare Diseases (RD) – also referred to as Orphan Disease (OD), are diseases affecting a small percentage of the population, and include genetic diseases, rare cancers, infectious tropical diseases and degenerative diseases. There is no universally accepted definition of a rare disease, yet. Different countries define these differently. However, the common considerations in the definitions are, primarily, disease prevalence and to a varying extent – severity and existence of alternative therapeutic options.

Impact of some rare diseases in Covid infected patients: 

Since the beginning of the Covid pandemic, people with underlying diseases, such as, hypertension, diabetes, cardiovascular and kidney disorders, are considered to fall in the high-risk group. They are more likely to have severe disease and complications and need to be extra cautious of the infection. Importantly, it has been recently reported that some rare diseases also increase risk of dying during Covid-19 pandemic at a younger age.

For example, as reported on December 07, 2020, recent studies indicate, rare autoimmune rheumatic diseases increase risk of dying during Covid-19 pandemic for younger patients. The researchers also found that women with rare autoimmune rheumatological diseases (RAIRD) had a greater increase in all-cause mortality rates during the pandemic when compared to men with RAIRD. However, there seems to be an India specific issue also in this situation, as well.

India specific issue for Covid infected patients with some rare diseases:

Some India specific issues on RD, could have a significant adverse impact on Covid infected patients in the country. One such critical issues is the ‘Baseline Knowledge of Rare Diseases in India.’ This fact was well captured in an important survey that was published with the same name, as an original article, in the ‘International Journal of Rare Diseases & Disorders,’ on November 06, 2019.

The study noted, among others:

  • Although, rare diseases have recently received worldwide attention, the developing countries are seriously behind in regard to awareness, drug development, diagnosis, and social services, in this area. India, which has one-third of the world’s rare disease population, has no accurate assessment of the problem.
  • The drugs for ‘Rare Diseases (RD), also called Orphan Drugs (OD)’, often cost exorbitant with difficulties in diagnosis and treatments.
  • Indian policymakers want to find out the number of RD and the extent of the population suffering from them and help provide treatment for them, which is a challenging task with 1.45% GDP health care budget for 1.3 billion people.
  • The health care professionals appear to have some awareness as compared with non-healthcare professionals, but even among health care professionals, only one third had a rudimentary understanding of RD and OD, whereas three-fourths have virtually no knowledge of RD.
  • Forty-three percent of health professionals had not seen rare disease patients, and a large percent of practicing physicians had not seen even one rare disease patient in their entire professional practice.

Thus, it is clear from this survey that the most important issues are awareness and diagnosis, as many rare diseases are not diagnosed or possibly misdiagnosed. Besides, the survey also observed, since 1983, many global companies started developing orphan drugs after the Orphan Drug Act implementation. There is none at this time in India, although in 2017, the Drugs & Cosmetic Act. 1945 has been amended to include “rare diseases and orphan drugs”.

The National Policy on Rare Diseases flagged some of these facts:

The ‘National Policy on Rare Diseases 2020,’ for India, released by the Union Ministry of Health on February 07, 2020, acknowledged many of these important facts. It also said, ‘Considering the limited data available on rare diseases, and in the light of competing health priorities, the focus of the draft policy is on prevention of rare diseases as a priority as identified by experts.’

Interestingly, the first of such policy was prepared by India in 2017 and a committee was appointed to review it in 2028. However, recently published the National Policy on Rare diseases, has also noted one more important point. It noted: ‘Paradoxically, though rare diseases are of low prevalence and individually rare, collectively they affect a considerable proportion of the population in any country, which according to generally accepted international research is – between 6% and 8%.’ Currently, India, reportedly, doesn’t have any registry of rare disease, which has now been entrusted to the Indian Council of Medical Research (ICMR) in the National policy.

Common symptoms can hide underlying rare diseases, leading to misdiagnosis:

The above policy has also noted, rare diseases are characterized by a wide diversity of signs and symptoms that not only, reportedly, vary from disease to disease, but also from patient-to-patient suffering from the same disease. Importantly, relatively common symptoms can hide underlying rare diseases, leading to misdiagnosis.

During Covid treatment, similar circumstances could lead to a serious life-threatening situation. The 2020 RD Policy also reiterates: “Early diagnosis of rare diseases is a challenge owing to multiple factors that include lack of awareness among primary care physicians, lack of adequate screening and diagnostic facilities etc.” That said, yet another key question arises – will developing and marketing such drugs be profitable for the pharma industry?

Will developing such drugs be profitable for the pharma industry?

It is worth noting that the National Policy on Rare Diseases 2020, aims more at lowering the incidence and prevalence of rare diseases based on an integrated and comprehensive prevention strategy, rather than ensuring patient access to affordable treatments. Nonetheless, it also says, within the constraints on resources and competing health care priorities, India will try to enable access to affordable health care to patients of rare diseases which are amenable to one-time treatment. In general, the policy suggests, ‘voluntary crowdfunding for treatment’ of rare diseases.

With this being the prevailing situation in India, even during Covid pandemic, an interesting article – ‘How Orphan Drugs Became a Highly Profitable Industry,’ published in The Scientist, noted some important facts in this area. It highlighted: ‘Government incentives, advances in technology, and an army of patient advocates have spun a successful market—but abuses of the system and exorbitant prices could cause a backlash.’

It also articulated, despite higher costs and less-certain returns, investments in drug development on the rare diseases side appear to ‘be bucking the trend.’ The result of the global focus on RD nowadays is: ‘Firms with marketing authorization for orphan products, are now more profitable than those without.’

This also partly explains the financial rationale behind AstraZeneca’s recent acquisition of Alexion Pharmaceuticals, valuing $39 billion.

Conclusion: 

As of December 20, 2020 morning, India recorded a staggering figure of 10,031,659 of new Coronavirus cases with 145,513 deaths. The country has already crossed 10 million in Covid cases as the vaccine approval remains pending. The threat of subsequent waves for further spread of Covid infection continues to loom large in many states. Meanwhile, many studies indicate that comorbidity should now include rare diseases, as well, especially to prevent deaths in younger patients. From this perspective effective diagnosis and treatment of RD are also coming under spotlights. Curiously, the National Policy on Rare Diseases 2020 focuses more on awareness and prevention of RD rather than access to affordable treatment, particularly in Covid infected patients to save precious younger lives. As I wrote previously and still believe, the ‘National Policy on Rare Diseases’ becomes more meaningful with ‘Orphan Drugs Act.’

Vaccines to prevent Covid infections are also expected to get emergency approval in India, shortly. At lease, some of these being available at affordable prices, including AstraZeneca-Oxford vaccine, according to reports. As recent reports indicate the same company, is also entering into RD therapy areas, through a key acquisition, yet another hope looms large. A hope for availability of relevant RD drugs at an affordable price for Covid infected patients, despite other apprehension, as I wrote before.

That apart, purely from the business management perspective, as well, this rare strategic acrobatic feat of AstraZeneca - ‘Keep nose to the grindstone while lifting eyes to the hills,’ during the Covid crisis, I reckon, is exemplary for the practicing managers.

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.

 

An Interesting demand: No Price Control For OTC Drugs

Since over a decade, some pharma trade organizations operating in India, have been advocating for a separate regulatory policy for ‘Over The Counter (OTC)’ drugs, which can be legally sold without any medical prescriptions. Such a new policy initiative, if taken by the Indian Government, would call for inclusion of a separate Rule and a Schedule in the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945.

In the midst of cacophony related to Intellectual Property (IP) related priority of the industry in multiple areas, OTC drug advocacy took a back-seat, temporarily. Some recent developments indicate, it has again been taken out of the trade associations’ archive, well-dusted, rehashed and re-presented. Today’s key driver is likely to be increasingly stringent drug price control measures of the government. An emphatic demand of the pharma trade associations that OTC drugs should be kept outside drug price control measures, vindicates this point.

In this article, I shall deliberate this issue, especially on raising the same old demand – yet again, and my concerns on the demand of free-pricing for essential OTC drugs, in the Indian context.

OTC drugs – no legal status in India:

Currently, OTC drugs have no legal status in India. However, those drugs which don’t feature under ‘prescription only’ medicines are construed as ‘non-prescription’ drugs and sold over the counter at pharma retail outlets.

Neither is there any concept currently existing in India, which is similar to ‘prescription only to OTC drug switch,’ unlike many developed countries, such as UK, EU and United States. Thus, before proceeding further, let me deliberate on the important point – why is ‘prescription only drug’ to ‘OTC drug’ switch. Let me briefly dwell on this issue, quoting from a neutral source – the World Health Organization (W.H.O).

‘The basic purpose of re-designation of a drug as an OTC product is commercial’:  

The Essential Medicines and Health Products Information Portal – A World Health Organization resource illustrates the point as: After a new drug has been in use as a prescription-only medicine (POM) for an agreed period after licensing – usually five years – and has proved to be safe and effective during that time, regulatory authorities are prepared to consider submissions for re-designating the product where appropriate so that it becomes available for non-prescription “over the counter” (OTC) use.

The article further states: “The basic purpose of re-designation of a drug as an OTC product is frankly commercial; the manufacturer requests the change in the hope that, without the need for a prescription, the sale of the drug will increase. However, the change also has a secondary effect in that the drug will no longer – at least in its OTC form – be primarily funded by a national health system or insurance fund; if he had obtained the drug by private purchase, the patient will pay for it in cash, and this will therefore result in cost savings to the health system.”

Benefits of OTC drugs to patients in the western world:

An article titled, ‘When Rx-to-OTC Switch Medications Become Generic’,published in the U.S. Pharmacist on June 19, 2008, highlights the key benefits of generic OTC drugs to patients, mostly in the western world as follows:

  • Prices for generic OTC versions are lower than those for the branded products.
  • The savings vary from product to product, but they can be as little as 11 percent (some omeprazole generics) to over 75 percent (some loratadine generics).
  • The cost savings can be critical in making self-care decisions.
  • For patients with a chronic, self-treatable medical condition, the addition of a new generic OTC with that indication expands the range of therapeutic options.

Endorsing the point that ‘OTC drug’ cost significantly less than the ‘prescription only drug’ other studies also point out the following:

  • Less lost work time and costs saved by not needing to visit a doctor are important considerations.
  • Growing sophistication and self-reliance among consumers, with increasing interest in and knowledge about appropriate self-medication.
  • Older adults in particular tend to experience increased minor medical problems, such as arthritis, sleeping difficulties, muscle aches and pains, headaches and colds. Thus, as the population ages the demand for non-prescription drugs escalates.

To illustrate the point of greater choice to patients, the article cited an example of allergic rhinitis patients. It pointed out that at one time, such patients had little to choose from other than older (first-generation) antihistamines. When loratadine (Claritin) and cetirizine (Zyrtec) switched from ‘prescription only’ to generic OTC drugs, price-conscious patients got the expanded option to choose from them based on their unique advantages and lower prices.

Benefits of OTC drugs for drug manufacturers:

Several studies concluded the following when it comes to benefits of OTC drugs for the drug manufacturers:

  • When an innovative drug loses patent protection, expanding into OTC segment with the same product can help a lot in the product life-cycle management.
  • Additional revenue with OTC drugs help increasing the concerned company’s both top and the bottom-lines.

Does ‘only prescription drug’ to ‘OTC drug’ switch help Indian patients?

The key benefit that patients derive out of any switch from ‘prescription only drug’ to ‘OTC drug’ switch, has been shown as cheaper price of generic OTC drugs. In India that question doesn’t arise, because an ‘OTC generic drug’ can’t possibly be cheaper than ‘prescription only generic drugs’ of the same molecule. On the contrary, if the demand for putting generic drug outside price control is implemented, it would likely to make ‘OTC generic essential drugs’ more expensive- increasing already high out of pocket (OOP) drug expenses, without benefitting patients, tangibly.

How would OTC drugs help patients in India?

According to reports, pharma trade associations claim that ‘OTC drugs will help Indian patients. Some of the reasons given by them are as follows:

  • Responsible self-medication: Empowers patients to make responsible and wise choices and self-manage their health outcomes.
  • Improves access to medicines: ‘Access to medicines’ in India has long ignored the critical role of the viability of OTC medicine, which could play a critical role in improving access to medicines in India, especially in the remote areas.
  • Help both health system and consumers saving money: OTC medicines save health systems valuable resources and can save consumers time and money.

While the basic purpose of re-designation of a drug as an OTC product is commercial – as articulated in the above article of the W.H.O, it is interesting to note, how it is being camouflaged in India by a trade association. The association demands a brand new OTC drug regulatory policy without any price control, and at the same time says, ‘the patient is at the core of all our activities.’ I wonder how – by increasing the burden of OOP drug expenses for patients? Let me try to fathom it raising some basic questions, in context.

Some basic questions:

While trying to understand each of the above three ‘patient benefits with OTC drugs’, as highlighted by the pharma trade association, I would strive to ferret out the basic questions in this regard, as follows:

  • Responsible self-medication:Fine. But again, won’t it make totally price and promotion deregulated OTC drugs more expensive than the existing equivalents of essential drugs – significantly increasing OOP for patients?
  • Improves access to medicines: Improving drug access comes with increasing affordability, especially in India. With OTC drugs being presumably higher priced than other generic equivalents, how would it improve access? Just to illustrate this point, one pharma trade association has cited examples of the following drugs, for inclusion in the OTC category:

“Paracetamol, Aspirin, Antacids, Topical preparations of certain NSAIDs (Ibuprofen, Diclofenac), Cetirizine, Albendazole, Mebendazole, Povidone‐Iodine preparations, Ranitidine, Ibuprofen (200mg), Normal saline nasal drops, Xymetazoline nasal drops, etc. In addition to all Drugs which are currently under Schedule K.”

If the prices of OTC versions of the above drugs are kept more than the prevailing ceiling prices for essential, would it benefit the patients and improve access to these drugs for them?

  • Help both health system and consumers saving money: Doesn’t the same reason hold good for this one too?

One may also justifiably ask, why am I presuming that OTC drug prices will be more than their non-OTC equivalents? My counter question will be, why is the demand for total regulation of price for OTC drugs? In any case, if a non-schedule drug is included in the OTC category, the question of any price control doesn’t arise in any way.

The current status in India:

Unrestricted sale of ‘prescription only drugs’, including all antibiotics and psychotropic drugs, is rampant in India, causing great harm to the Indian population. In tandem with strict enforcement of the drug dispensing rules in India, a separate patient-friendly category of OTC drugs would certainly help significantly. As a concept, there is no question to it. But the devil is in the detail of demand for the same.

Accordingly, in November 2016, the Drugs Consultative Committee (DCC) formed a sub-committee for charting a regulatory pathway for sale of OTC drugs in India, specifying punitive measures for any violation of the same. As I indicated above, currently, any drug that doesn’t not fall under a prescribed schedule could be sold and purchased without a medical prescription. This panel has sought all stakeholders’ comments and suggestions on the same. Some of the responses from pharma trade associations, as requested for, I have deliberated above. Nevertheless, the bottom-line is, nothing tangible in this regard has happened till date.

Conclusion:

As I envisage – if, as and when it happens, it is also likely to have an adverse impact on the sales and profits of many pharma players. This is primarily because, indiscriminate drug use – irrespective of self-medication or irrational prescription, do fetch good sales for them. But it shouldn’t continue any more – for the benefit of patients.

More importantly, the key argument showcased in favor of OTC drugs in India, seems to be a borrowed one – borrowed from a totally different pharma environment of the western world. Out of Pocket drug expenditure for patients, which is already very high in India, shouldn’t be allowed to go further north. Some of the India-specific intents of pharma trade associations also appear blatantly self-serving, such as total deregulation of price and promotion. It rekindles huge concerns, such as:

  • What could possibly be the key intent behind keeping essential OTC drugs outside existing price control?
  • If so, won’t it open yet another floodgate of hoodwinking price regulation of ‘essential drugs’ through crafty manipulations?

It would be a different matter though, if such OTC drugs do not fall under ‘essential drugs’ category.

Thus, in my overall perspective – ‘no price control for OTC drugs’, is an interesting demand of pharma players, but not surprising in any way – at all.

By: Tapan J. Ray   

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

Why Many Successful CEOs Don’t Want to Retire – in Pharma Too?

“On Eve of Retirement, Jack Welch Decides to Stick Around GE a Bit,” reported the Wall Street Journal (WSJ) on October 23, 2000. Nevertheless, even the legendary Jack Welsh was made no exception to GE’s mandatory retirement policy for the CEO at 65. After holding the position of Chairman and CEO of GE for 20 years – with stellar performances, Welsh had to retire on September 07, 2001, as he attained that age.

This happened almost immediately after the US$ 45 billion merger with Honeywell. Welsh spearheaded this initiative, intending to create one of the world’s largest industrial companies, with manufacturing operations in plastics, chemicals and aerospace products, at that time. It’s a different matter altogether that later on, the report onThe Anatomy of the GE-Honeywell Disaster narrated a different reality on the consequences of this acquisition.

The key point to ponder – why many successful CEOs don’t want to easily retire, passing on the baton to a younger generation, unless directly or indirectly compelled by the investors or the regulators. In this article, I shall try to explore this point.

Many older CEOs not eager to head into retirement:

While discussing a similar point, an article titled: “For older CEOs, the issue is knowing when to bow out,” published in the USA Today on April 19, 2016, made some interesting observations. It said: “Just as older employees stay in jobs out of desire or necessity, some of those occupying the C-suite aren’t eager to head into retirement.”

According to a survey done by Korn Ferry among Fortune 500 CEOs, over the past decade:

  • The number of CEOs with age between 65 and 60 years, nearly doubled to 36.
  • Those with age between 70 and 74 increased from 9 to 13.

Korn Ferry also found in another survey that CEOs are the oldest and longest-tenured individuals compared with other prominent C-suite roles. Some of the oldest and famous global CEO names would include, Warren Buffett – 85 years of Berkshire Hathaway and Rupert Murdoch – also aged 85 years and is the Executive Chairman of News Corp. and Twenty-First Century Fox.

A couple of Indian examples of large Indian business conglomerates would include, A. M. Naik (born on June 09, 1942) who served as the Group Executive Chairman of L&T even at the age of 75 and the other – Y.V. Yogeshwar (born on February 04, 1947) was at the helm as the Executive Chairman and Chief Executive Officer at ITC Ltd till February 4, 2017, at the age of 70. More recently, on October 22, 2018, the Reserve Bank of India accorded its approval for reappointment of Mr. Aditya Puri as its MD & CEO of HDFC Bank Ltd. till October 26, 2020 – the date of his attaining age of 70 years.

What’s happening in the pharma industry?

The pharma industry too is no different. For example, Merck & Co’s distinguished top leader – Kenneth Frazier, who turns 65 on December 2019, will stay on as CEO beyond 2019. This was reported on September 26, 2018 stating that Merck has scrapped the policy requiring its CEO to retire at the age of 65. Curiously, this announcement is quite unlike what we witnessed in a similar case with GE where no exception made to the CEO retirement policy even for someone as globally famous as Jack Welsh.

Another recent example from the pharma industry, would possibly include one more celebrated pharma CEO – Abbott’s Miles White. He is currently at 63 and in his 20th year as the Chairman and Chief Executive of Abbott Laboratories. Just as Merck & Co, Abbott also announced that White doesn’t have any plans to leave his position as Chairman and CEO “anytime soon.” This happened, after the appointment of company’s President and Chief Operating Officer (COO), which is the first official No. 2 executive and COO Abbott happening after more than a decade, as reported on October 18, 2018.

A couple of similar examples from India that I gathered from the available data, may include: Pankaj Patel, 67 years (born 1951), the Executive Chairman of Cadila Healthcare and Basudeo Narain Singh,  reportedly 77 years of age, currently the Executive Chairman at Alkem Laboratories Ltd. Let me hasten to add, these names are absolutely illustrative, and not intended to be specific to individuals, in any way.

All publicly listed companies and not privately held:

The companies that I have quoted above, both global and local, are publicly listed companies. Thus, their ownership is dispersed among the general public in many shares of stock, which are freely traded on a stock exchange, or in over the counter markets. In view of this, the general questions come up:

  • Why the incumbent CEO can’t develop a successor from within or even outside the company during his/her tenure spanning over so many years?
  • Is there any other underlying reason for the same? If so, what it is?

Not considering the country-heads of MNCs in India:

Let me admit upfront with all due respect, for the purpose of this discussion, I am not considering the country-heads of pharma MNCs in India. This is mainly because, they don’t fall in the same category as the CEOs of Indian publicly listed pharma companies, having much broader global responsibility, commensurate authority and accountability.

At the most, the country heads of pharma MNCs may be compared with those managers who are in charge of only India, or South Asia operations of the domestic pharma players. Which is why, country heads of MNCs are commonly called ‘General Managers’ – internally, especially by their respective headquarters.

Is mandatory CEO retirement policy a good idea?

There are many studies on whether a mandatory CEO retirement policy is a good idea. I shall quote below one such important study to illustrate the point.

‘Should Older CEOs Be Forced to Retire?’ That’s the title of an article, published in the Harvard Business Review (HBR) on February 15, 2016. The author found that more than a third of S&P 500 firms have a mandatory retirement policy for their CEOs. The aim is to drive out executives who are past their prime. In the overall perspective, the HBR article is in sync with the idea.

Referring to a research paper recently published in the Journal of Empirical Finance, the above article highlighted some important findings of the researchers, as below:

  • Older CEOs were less “active,” as measured by a mix of hiring, firing, mergers, joint ventures, and more.
  • Mandatory retirement helped firms avoid the declining performance associated with older CEOs.
  • The negative correlation between CEO age and firm performance disappeared in companies with mandatory CEO retirement policies.
  • Mandatory retirement seemed to be helping firms with older CEOs to avoid the under-performance trap.
  • Length of CEOs’ executive experience plays a great role in a company’s financial success.
  • When there are two CEO candidates, both having requisite experience of equal number of years, the data suggests the younger one should be preferred.
  • Conversely, when there are two CEO candidates of the same age, bet on the one who’s been with the firm longer.

Should CEO retire at the peak of his/her golden era? 

This issue seems to be a contentious one. Be that as it may, about one third of S&P 500 firms have mandatory retirement policies for their CEOs. The goal is to systematically let go of leaders who are past their peak performance years.

An article published in The Washington Post on September 27, 2018 came with a headline: ‘Fewer companies are forcing CEOs to retire when they hit their golden years.’ It observed: ‘Sometimes a mandatory retirement age is lifted to give the current chief executive a little more time on the job, potentially clearing the way for a successor to prepare. For instance, in June 2017, manufacturing giant 3M said its board of directors was waiving the mandatory retirement age of 65 for its then-CEO, Inge Thulin, and then named a successor, chief operating officer Michael Roman, earlier this year.’

While retirement norms may be shifting, there’s seems to be a trend of indirect pressure on companies to add younger executives and directors to the board. This is primarily prompted by a growing demand for digital insights and technology experience in the CEO position – commented another article published in the Los Angeles Times on September 28, 2018. It also reported, many experts on corporate governance and executive succession believe that rescinding its policy requiring the CEO to retire at the age of 65, Merck & Co, ‘added to a long downward trend in the companies that have mandatory retirement ages for their top executives.’

Conclusion:

Regardless of whether a mandatory CEO retirement policy is a good idea or not, the aging high performing CEO’s desire to continue with the job for an indefinite period, has some downsides. It could thwart aspiration of similar high performing younger direct reports of the CEO. They include especially those who are ready to take charge and catapult the organization to a greater height of success, sooner.

A CEO’s desire to continue with the job, even after a generally accepted age of retirement, could also adversely impact a well-charted succession planning process for the top position. A time-bound succession plan is essential not only for a natural and smooth transition in the CEO position of an organization, but also to address any unforeseen emergency, such as a ‘drop dead like situation.’

Further, if there is no mandatory CEO retirement policy, or even rescinding it when there is one for a high a performing CEO, why there should be such policy for other C-suite, or many other important leadership positions of the same organization, with similar performance records?

One of the reasons behind a high performing aging CEO or an Executive Chairman not wanting to retire may also include the intent of the Board members to play safe. Nevertheless, it is a complicated and contentious issue. Regardless of whatever reasons lead to such a situation, the point to ponder is: What signal does it send to other high performing leaders? Does it convey, even the CEO is governed by similar policies as applied to other leaders of the corporation? Or, it smacks of a a discretionary corporate culture of governance? There is a need to ferret out a robust answer to this question – for a long-term sustainable success of any organization, including pharma.

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.

‘One Indian, One Health Record’: Is EHR A Tentative Intent?

The ongoing march of technology, at a scorching pace, transforming our everyday personal – working and social lives. This is palpable. In tandem, it is also making traditional processes of doing successful business less and less productive, over a period of time. The same is more than visible in the healthcare space too. One such field – although not so widely discussed just yet, is maintaining Electronic Health Record (EHR). This is so important for both patients and healthcare providers to ensure significantly better treatment outcomes at a lesser cost, and reducing disease burden of disease too, in that endeavor.

EHR being a systematic, ongoing process of maintaining health records of every individual, help provide prompt, effective and safe health care for all. It helps immensely whenever the person visits a doctor either in private clinics or in any health center for treatment of any disease condition, or even for preventive measures.

Health profession bodies in various countries have articulated what should get included in the health record of individuals. Let me draw an example from one of the BRICS nations. The Health Profession Council of South Africa (HPCSA) defines health records as “any relevant record made by a health care practitioner at the time of, or subsequent to, a consultation and/or examination or the application of health management”. Since, over any person’s lifetime a massive health data gets generated, the current trend is to capture and store such medical data electronically and is, therefore, called ‘Electronic Health Record’ or EHR.

Laudably, India also formally notified its detail intent to make EHR system work in the country. In this article, I shall deliberate on what is the current status of EHR in India, and the key barriers that need to be overcome to make the process gain momentum, in the days ahead.

What EHR can do:

Before zeroing on to India specific initiative on EHR, let me recapitulate what it entails, quoting from a credible global source. According to Health IT- the official website of the National Coordinator for Health Information Technology, U.S. Department of Health and Human Services, being real-time- patient-centered records, EHRs make health information available instantly, “whenever and wherever it is needed”. As this process brings together in one place everything about a patient’s health, EHRs can:

  • Contain information about a patient’s medical history, diagnoses, medications, immunization dates, allergies, radiology images, and lab and test results
  • Offer access to evidence-based tools that providers can use in making decisions about a patient’s care
  • Automate and streamline provider’s workflow
  • Increase organization and accuracy of patient information
  • Support key market changes in payer requirements and consumer expectations

Let me reiterate at this point, a person’ EHR can bring together all health information from all the doctors visited at private clinics, hospital, health centers, school and workplace clinics, pharmacies and diagnostic facilities. In many countries, EHRs can be created, managed, and consulted by authorized providers and staff across more than one health care organization. This process has been followed, though in a very limited way, in India, as well.

EHR initiative in India:

In sync with Prime Minister Narendra Modi’s Digital India initiative, India reconfirmed its EHR initiative, just as ‘Aadhar’. By a notification, it explained how a cloud-based hospital application system will receive real-time health data of all individuals generated during any clinical encounter or events. Interestingly, EHR standards were first notified by the Indian government in 2013.

Be that as it may, with a fresh vow to popularize EHR in the country, especially among the health care providers, the Ministry of Health and Family Welfares revised the 2013 EHR standards and notified the same on December 30, 2016. A paper titled ‘EHR Adoption in India: Potential and the Challenges’, published in the Indian Journal of Science and Technology in September 2016, presents some interesting findings. Some of these are as follows:

  • Adoption of EHR has been significantly less in India as compared to other developed nations. This is despite the government’s enhancing the budget to US$ 19.2 billion for HIT for its greater acceptance and influence returns.
  • The reason may be attributed to the fact that EHR is not yet mandatory in India. (In my personal view, this is quite unlike what was Aadhar, for a plethora of government and private services, till the Supreme Court verdict came.)
  • In many countries implementation of EHR in the health care system is working very well, benefiting both healthcare providers and the patients, immensely.

The key barriers: 

The above paper identified the following as the key barriers to EHR implementation in India:

  • Legacy System: Most of the patient records are paper based documents. It’s challenging to convert the paper-based records to an electronic format.
  • Cost: High cost of implementation.
  • Policy: Absence of coordinated policy of Government. Lack of clarity in the existing policies of HIT.
  • Funding: Current actual funding of the government for HIT is grossly inadequate, besides lack of well-trained medical informatics professionals.
  • Standards: Most systems don’t adhere to standards, besides usage of multiple local languages by patients and staff.
  • Computer Literacy: Low Computer literacy among government staff and private hospital community, and lack of adequate system training on proper usage of the HER.
  • Coordination and Infrastructure: Lack of coordination and supporting infrastructure (including the hardware and software) among both public and private sector hospitals.
  • Privacy Concerns: Privacy concern on the confidentiality of patient health record needs to be properly addressed.

That’s a 2016 report, what’s happening in 2018?

One may justifiably comment and ask – the above details are of 2016, what is happening today – in 2018?

Even after 2 years since then, EHR still remains at a nascent stage in India, with the keep barriers refusing to get dislodged. The July 16, 2018 media headline – ‘Adoption of e-medical records facing infra hurdles’ clarifies it. It says: “The government is facing serious challenges in its efforts to adopt an electronic health record (EHR) system.” This news report quotes the latest report prepared by the ministry of electronics and information technology (MeitY), titled ‘Adoption of Electronic Health Records: A Roadmap for India’.

This paper highlights that the government is still facing serious challenges in adopting (EHR) system for every Indian’s medical record that can be accessed by doctors and hospitals – transforming the speed, quality and cost of healthcare in India.  Intriguingly, the challenges, continue to range from infrastructure creation, policy and regulations, standards and interoperability to research and development.

The report also emphasized: “With more than 75 percent of outpatients and more than 60 percent of inpatients in India being treated in private health care facilities, it is necessary for the government to bring these establishments on-board for using EHR. In view of the size of the country, there is a need to take a Free and Open Source Software (FOSS) approach to make good quality software available to hospitals and individual practitioners.”

EHR in the United Staes and other countries:

According to the ASHP National Survey of Pharmacy Practice in Hospital Settings: Prescribing and Transcribing – 2016, ninety-nine percent of hospitals across the United States now use EHR systems, compared to about 31 percent in 2003. Computerized prescriber-order-entry (CPOE) systems with clinical decision support are used by 96 percent of hospitals.

As indicated in the above September 2016 article of the published in the Indian Journal of Science and Technology the EHR implementation rate in China is 96 percent, Brazil – 92 percent, France – 85 percent, and even in Russia the same is at 93 percent.

EHR, in various form is working in many other countries of the world. Let me cite an example from nearer home. As captured in the Accenture paper titled “Singapore’s Journey to Build a National Electronic Health Record System,” Singapore government has articulated the essence of EHR with its vision that is easy to understand and remember by all – “One Singaporean, One Health Record.” To improve health care quality for all residents, increase patient safety, lower health care costs and develop more effective health policies, Singapore’s MOH created this vision that enables patient health records to be shared across the nation’s healthcare ecosystem.

Conclusion:

Borrowing the concept of Singapore, I reckon, EHR should also mean to all Indians: “One Indian, One Health Record.” I fully agree that this process isn’t easy. Many barriers require to be overcome in pursuit of this pathway – successfully. No country found this process easy, neither it is expected in India.

That said, the key question is, can India do it successfully in a relatively short period of time? My answer undoubtedly will be an emphatic yes. This is because India has the world-class IT service providers, such as Infosys, TCS and Wipro, to name a few. It means, India has the capability. Does India have the financial resources, as well? Going by the incumbent government notification on the implementation of the revised EHR standards in India, together with what it says about the country’s economic robustness – I would again say – yes, the country possibly has the financial resources too.

It seems very much possible, also considering what the last two successive governments could conceptualize, structure and implement – a massive project of similar nature and magnitude for all Indians – ‘Aadhar’. When ‘Aadhar’ could so quickly be linked with all services – provided virtually by all public and private organizations, why can’t EHR be linked with all health records of every Indian, backed by appropriate infrastructure, human resources, laws and policies?

If a new law is required for addressing privacy and ownership concerns on health data generated for all, so be it! Doesn’t this initiative need to be visible to all – just as ‘Aadhar’ project, with a priority tag attached to it?

Thus, from the perspective of ‘One Indian, One Health Record’, government notification on EHR standards in 2013, and then revising and notifying the same in 2016, appears to be no more than a tentative intent. It has been happening to several important public health care initiatives for long, and continues to happen even today.

By: Tapan J. Ray

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

Pharma Policy Execution Gap Limits Access To Affordable Medicines?

“The cost of new drugs is putting increasing pressure on people in both rich and poor countries”- was eloquently expressed in an article, titled “Why do new medicines cost so much, and what can we do about it?”. This was published by “The Guardian” on April 09, 2018.

Almost synchronically, expressing concern on this issue, the World Health Organization (W.H.O) advised the world leaders ‘to take bold new approaches’ for increasing access to medicines for all. A UN high-level panel on ‘access to medicines’ spent almost a year deliberating over related issues. The panel members were from pharma companies, as well as civil society and academics. The final report coming in September, backed de-linkage of the costs of R&D from the eventual price of the drug. Notably, the author who is also the health editor of the above publication, feels that any positive outcome in this direction is unlikely to materialize soon.

The majority of big pharma constituents, with the possible exception of GSK, whose then chief executive Sir Andrew Witty was unenthusiastic about the UN report. Probably because, it supported governments’ right to invoke ‘a get-out’ from the World Trade Organization’s TRIPS agreement. This is to bypass drug patents and make cheaper versions of the respective generic equivalents, in the interests of public health, in accordance with the 2001 Doha declaration. However, the author is hopeful that, “as happened with AIDS, each new crisis over access to medicines – whether concerning a common liver disease or a rare cancer, and particularly over the antibiotics that are under threat and vital to all our lives – is likely to put pressure on companies to find ways to bring the costs of medicines down.”

Stakeholder pressure for increasing access to medicines continues. Even in smaller developed countries, such as Switzerland, a section of the public demands that “Swiss authorities must act to make lifesaving drugs more affordable by introducing compulsory licensing.” Or, one can now see reports saying,“Irish patients are being denied access to nine drugs that are widely available across Europe, largely, on cost grounds.”

Nevertheless, regardless of mounting pressure for drawing a reasonable symmetry between cost of, especially new drugs and their improved access to patients, ongoing status-quo continues. In this article, I shall dwell on this concern from the Indian perspective, focusing on an agonizingly stark implementation-gap related to the current Indian pharma pricing policy.

Under pressure, pharma now recognizes the need for affordable drugs:

Coming under intense pressure of patients and other stakeholders, even the largest trade association of Big Pharma has recently changed its stance on this issue, though clearly sharking any responsibility for the same. It just recognized the need for affordable medicines for improved patient access to treatments by saying: “Too often patients have to fight to access breakthrough medicines that are revolutionizing how we fight disease.” It also accepted the fact that “many Americans are struggling to afford their medicines.”

“We can improve patient access and affordability by moving toward a system that prioritizes results for patients. Biopharmaceutical companies are working with insurers to develop innovative and flexible ways to pay for medicines that focus on results, lower out-of-pocket costs and enable patients to access the right treatments the first time” – it added.

What it really means: 

What it really means ‘treatment outcomes-based drug pricing’ or ‘value-based drug pricing (VBP)’. In other words, a situation where drug prices are set in line with their real and demonstrated clinical and economic value to patients, against other available products. This model will also ensure that patients’ money doesn’t get wasted from drugs that aren’t effective on them. The VBP model is, thus, significantly different from product pricing, based on ‘undisclosed’ cost of ongoing innovation for new drugs.

Is this Big Pharma’s new way to change optics?

The intent for imbibing VBP, as expressed by the above pharma association, throws open the door for discussion of its core intent. Is the intention real, or another Big Pharma way of changing general optics on the sensitive issue of new drug pricing? This doubt creeps in from the findings of some important studies on this issue. One such is an interesting paper, titled “Pricing for Survival” from KPMG. The analysis highlighted very limited application of VBP concept, and also why it is not yet viable – despite the hype being created around it.

According to KPMG, “there were 25 drugs engaged in various types of VBP with payers in the fragmented United States market as of September 2017. The problem is, these models appear to be limited in applicability to disease states with more standardized protocols and dominated by drug therapies with single indications – notably osteoporosis, diabetes and hepatitis C.” To date, VBP models seem to be facing several constraints, such as it is appealing mostly to payers that are fully integrated with healthcare delivery i.e., closed-loop payer-provider health systems or integrated delivery networks.

“The takeaway is, when it comes to specialty and orphan drugs, outcomes-based pricing simply faces too many barriers at present” – the article elaborated. Be that as it may, let me now explore the relevance of VBP in India.

Any relevance of VBP in India?

VBP has been tried in a health care environment where payers and drug companies are two critical players for access to affordable medicines, as we see in the KPMG study. Under any value-based pricing agreements for pharmaceuticals, both payers and pharma companies agree to link payment for a medicine to the value achieved, rather than volume.

Whereas, in the Indian healthcare scenario, as we are experiencing today, payers are mostly individuals.  Despite various well-publicized health schemes, expenditure on health, including drugs, remains by and large ‘out of pocket (OoP)’ – for a large Indian population. Hence, copying western framework for implementation VBP in India, would call for scores of ‘pharma – individual payer agreements.’ This would be a daunting task, if not impractical, to even try it out.

In this context, let me touch upon the Ayushman Bharat scheme that was launched by the Prime Minister on September 23, 2018, but just in one of the 29 states of India – Jharkhand. If, or as and when it will cover the entire country, the scheme is expected to bring 107.4 million families and more than 550 million people under health insurance coverage. However, the work seems to be still in progress.

There are three financing models for this scheme – insurance model, trust model and hybrid model – and the 19 states that have come on board for the scheme’s implementation in the country, have chosen a trust model, according to the Union Health Minister. The minister also reiterated: “Things are still unfolding. Only when the letters reach the beneficiaries will they understand and react.”

Nevertheless, the Union Health Minister himself, just like his counterparts in the previous governments, exhibited confidence that the country is “moving towards universal health cover with Ayushman Bharat scheme,” – as was the headline of the above media report.

Going by the past and current outcomes of several such government schemes in the country, and what the minister himself articulated on September 17, 2018, a large section of the Indian population still remains  apprehensive on the fast pan-India rollout and overall success of this ambitious health scheme. Hence, at this stage, I reckon, it may not be relevant to discuss the application of VBP model on Ayushman Bharat project. I wrote about such apprehensions in this Blog on June 18, 2018.

Having said that, VBP still remains relevant when we look at the government’s intent captured in the National Pharmaceutical Pricing Policy (NPPP) 2012,’ as I shall discuss below.

VBP and the policy implementation gap:

For making the point clearer, let me keep the Ayushman Bharat scheme aside because of its associated uncertainties. Even in the current health care environment of high OoP expenditure on drugs, especially on high priced new drugs, if one tries to make use of the VBP model, it is very much possible.

This is because, the National Pharmaceutical Pricing Policy 2012, under point 4 (XV) on ‘Patented Drugs, categorically states:  “There is a separate Committee constituted by the Government order dated February 01, 2007 for finalizing the pricing of Patented Drugs, and decisions on pricing of patented drugs would be taken based on the recommendations of the Committee.”

Curiously, even 6 years down the line, no meaningful decision has been taken on patented drug pricing in India by the successive governments. As I wrote in this Blog on December 12, 2016, Price Negotiation For Patented Drugs: Still A Policy Paralysis.

Parliamentary Standing Committee intervenes:

Six years after the constitution of the committee by the Department of Pharmaceutical (DoP), the long-awaited report was eventually submitted with a vague formula for pricing patented drugs in India. Intriguingly,the issue remained as such, until the Parliamentary Standing Committee’s August 2016 report was placed before the parliament. It strongly criticized the DoP’s efforts to recommend measures in regulating prices of life-saving patented drugs, despite government assurances for the same.

On September 23, 2016, media reported: “Upbraided by the parliamentary standing committee for its gross negligence and lackadaisical attitude, the department of pharmaceuticals has set about seeking suggestions from different ministries on price regulation of patented drugs.”

According to reports, a new inter-ministerial committee was formed thereafter, under the chairmanship of one of the Joint Secretaries of the DoP to suggest a new mechanism to fix prices of patented drugs in the country.
The other members of the committee are Joint Secretary – Department of Industrial Policy and Promotion (DIPP); Joint Secretary – Ministry of Health and Family Welfare; and Member Secretary – National Pharmaceutical Pricing Authority (NPPA). But, the saga continues – at the cost of patients’ health interest.

Conclusion:

As it appears, there still lies a clear opportunity for Indian drug pricing policy makers introduce VBP concept for patented drugs in the country. Following this model, the prices of new and innovative drugs under patents can be set in line with their real and demonstrated clinical and economic value to patients, over the available existing products. Health Technology Assessment (HTA), for example, could be an effective tool in this process.

Additionally, the VBP model could also minimize, if not eliminate the risk of patients paying a high a price for new drugs coming through incremental innovation, adding too little clinical and economic value over existing drugs. There may, of course, be some teething trouble or even important issues in arriving at consensus on value-metrics for VBP. But, this can be sorted out through meaningful engagement with concerned parties.

Strikingly, even after 6 years since the NPPP 2012 was announced, nothing tangible has been made known to stakeholders on the execution of ‘patented drug pricing policy’ in India. An avoidable policy execution gap continues, limiting access to affordable new medicines to a vast majority of the Indian population, even today.

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.

Why MNC Pharma Still Moans Over Indian IP Ecosystem?

Improving patient access to expensive drugs, paving the way for entry of their cheaper generic equivalents, post patent expiry, and avoiding evergreening, is assuming priority a priority focus area in many countries. The United States is no exception, in this area. The Keynote Address of Scott Gottlieb, Commissioner of Food and Drug at the 2018 Food and Drug Law Institute Annual Conference inWashington, DC by, on May 3, 2018, confirms this. Where, in sharp contrast with what the MNC Pharma players and their trade associations propagated, the US-FDA commissioner himself admitted by saying, “Let’s face it. Right now, we don’t have a truly free market when it comes to drug pricing, and in too many cases, that’s driving prices to unaffordable levels for some patients.”

Does US talk differently outside the country?

At least, it appears so to many. For example, in April 2018, the Office of the United States Trade Representative (USTR) released its 2018 Special 301 Report. In this exercise, the USPTO names the country’s trading partners for not adequately protecting and enforcing Intellectual Property (IP) rights or otherwise deny market access to U.S. innovators that rely on the protection of their IP rights.’ Accordingly, U.S. trading partners are asked to address IP-related challenges, with a special focus on the countries identified on the Watch List (WL) and Priority Watch List (PWL).

In 2018, just as the past years, India continues to feature, along with 11 other countries, on the PWL, for the so called longstanding challenges in its IP framework and lack of sufficient measurable improvements that have negatively affected U.S. right holders over the past year.

From Patient access to affordable drugs to Market access for Expensive Drugs: 

Curiously, the USTR Report highlights its concerns not just related to IP, but also on market access barriers for patented drugs and medical devices, irrespective of a country’s socioeconomic compulsion. Nevertheless, comparing it to what the US-FDA Commissioner articulated above, one gets an impression, while the US priority is improving patient access to affordable drugs for Americans, it changes to supporting MNC pharma to improve market access for expensive patented drugs, outside its shores.

Insisting others to improve global IP Index while the same for the US slides:

In the context of the 2018 report, the U.S. Trade Representative, reportedly said, “the ideas and creativity of American entrepreneurs’ fuel economic growth and employ millions of hardworking Americans.” However, on a closer look at the U.S. Chamber of Commerce’s annual Global IP Index for 2018, a contrasting fact surfaces, quite clearly. It shows, America, which once was at the very top of the overall IP Index score, is no longer so – in 2018, the world rank of the US in offering patent protection to innovators, dropped to 12thposition from its 10thglobal ranking in 2017. Does it mean, what the US is asking its trading partners to follow, it is unable to hold its own ground against similar parameters, any longer.

Should IP laws ignore country’s socioeconomic reality? 

MNC Pharma often articulated, it doesn’t generally fall within its areas of concern, and is the Government responsibility. However, an affirmative answer, echoes from many independent sources on this issue. No wonder, some astute and credible voices, such as an article titled “U.S. IP Policy Spins Out of Control in the 2018 Special 301 Report”, published by the Electronic Frontier Foundation on May 01, 2018, termed 2018 Special 301 Report – ‘A Tired, Repetitive Report.’ It reiterates in no ambiguous term: ‘The report maintains the line that there is only one adequate and effective level of IP protection and enforcement that every country should adhere to, regardless of its social and economic circumstances or its international legal obligations.

The ever-expanding MNC Pharma list of concerns on Indian IP laws:

The areas of MNC Pharma concern, related to Indian IP laws, continues to grow even in 2018. The letter dated February 8, 2018 of the Intellectual Property Owners Association, Washington, DC to the USTR, makes these areas rather clear. I shall quote below some major pharma related ones, from this ever-expanding list:

  • Additional Patentability Criteria – section 3 (d): The law makes it difficult for them to secure patent protection for certain types of pharma inventions.
  • TADF (Technology Acquisition and Development Fund)is empowered to request Compulsory Licensing (CL) from the Government:Section 4.4 of India’s National Manufacturing Policy discusses the use of CL to help domestic companies access the latest patented green technology.This helps in situations when a patent holder is unwilling to license, either at all or “at reasonable rates,” or when an invention is not being “worked” within India.
  • India’s National Competition Policyrequires IP owners to grant access to “essential facilities” on “agreed and nondiscriminatory terms” without reservation. They are not comfortable with it.
  • Regulatory Data Protection: The Indian Regulatory Authority relies on test data submitted by originators to another country when granting marketing approval to follow-on pharma products. It discourages them to develop new medicines that could meet unmet medical needs.
  • Requirement of local working of patents: The Controller of Patents is empowered to require patent holders and any licensees to provide details on how the invention is being worked in India. Statements of the Working, (Form 27),must be provided annually.Failure to provide the requested information is punishable by fine or imprisonment. It makes pharma patent holders facing the risk of CL, if they fail to “work” their inventions in India within three years of the respective patent grant.
  • Disclosure of Foreign Filings: Section 8 of India’s Patent Act requires disclosure and regular updates on foreign applications that are substantially “the same or substantially the same invention.” They feel it is irrelevant today.

Pharma MNCs’ self-serving tirade is insensitive to Indian patient interest:

Continuing its tirade against some developed and developing countries, such as India, the US drug manufacturers lobby group – Pharmaceutical Research and Manufacturers of America (PhRMA) has urged the office of the US Trade Representative (USTR) to take immediate action to address serious market access and intellectual property (IP) barriers in 19 overseas markets, including India, reports reported The Pharma Letter on February 28, 2018. It will be interesting to watch and note the level active and passive participation of India based stakeholders of this powerful US lobby group, as well.

Government of India holds its ground… but the saga continues:

India Government’s stand in this regard, including 2018 Special 301 Report, has been well articulated in its report released on January 24, 2018, titled “Intellectual Property Rights Regime in India – An Overview”, released by the Department of Industrial Policy and Promotion Ministry of Commerce and Industry (DIPP). The paper also includes asummary of some of the main recommendations, as captured in the September 2016 Report of the High-Level Panel on Access to Medicines, constituted by the Secretary-General Ban Ki-Moon of the United Nations in November 2015.  Some of these observations are as follows:

  • WTO members must make full use of the TRIPS flexibilities as confirmed by the Doha Declaration to promote access to health technologies when necessary.
  • WTO members should make full use of the policy space available in Article 27 of the TRIPS agreement by adopting and applying rigorous definitions of invention and patentability that are in the interests of public health of the country and its inhabitants. This includes amending laws to curtail the evergreening of patents and awarding patents only when genuine innovation has occurred.
  • Governments should adopt and implement legislation that facilitates the issuance of Compulsory Licenses (CL). The use of CL should be based on the provisions found in the Doha Declaration and the grounds for the issuance left to the discretion of the governments.
  • WTO members should revise the paragraph 6 decision in order to find a solution that enables a swift and expedient export of pharmaceutical products produced under compulsory license.
  • Governments and the private sector must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO Members to use TRIPS flexibilities.
  • Governments engaged in bilateral and regional trade and investment treaties should ensure that these agreements do not include provisions that interfere with their obligations to fulfill the rights to health.

The DIPP report includes two important quotes, among several others, as follows:

Joseph Stiglitz, Nobel Prize for Economics (2001) – an American Citizen:

-       “If patent rights are too strong and maintained for too long, they prevent access to knowledge, the most important input in the innovation process. In the US, there is growing recognition that the balance has been too far tilted towards patent protection in general (not just in medicine).”

-       “Greater IP protection for medicines would, we fear, limit access to life-saving drugs and seriously undermine the very capable indigenous generics industry that has been critical for people’s well-being in not only India but other developing countries as well”.

Bernie Sanders, an American Citizen and Senior U.S. Senator:

-      “Access to health care is a human right, and that includes access to safe and affordable prescription drugs. It is time to enact prescription drug policies that work for everyone, not just the CEOs of the pharmaceutical industry.”

-      “Healthcare must be recognized as a right, not a privilege. Every man, woman and child in our country should be able to access the health care they need regardless of their income.”

Conclusion:

Why is then this orchestrated moaning and accompanying pressure for making Indian IP laws more stringent, which apparently continues under the façade of ‘innovation at risk’, which isn’t so – in any case. But, cleverly marketed high priced ‘me too’ drugs with molecular tweaking do impact patient access. So is the practice of delaying off-patent generic drugs entry, surreptitiously. Instead, why not encourage Voluntary Licensing (VL) of patented drugs against a mutually agreed fee, for achieving greater market access to the developing countries, like India?

Whatever intense advocacy is done by the vested interests to change Indian patent laws in favor of MNC pharma, the intense efforts so far, I reckon, have been akin to running on a treadmill – without moving an inch from where they were, since and even prior to 2005. The moaning of MNC Pharma on the Indian IP ecosystem, as I see it, will continue, as no Indian Government will wish to take any risk in this area. It appears irreversible and is likely to remain so, for a long time to come. The time demands from all concerned to be part of the solution, and not continue to be a part of the problem, especially by trying to tamper with the IP ecosystem of the country.

By: Tapan J. Ray

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

A Tipping Point For Robust Healthcare System In India

“Given the popular uptake of universal health coverage reforms elsewhere in Asia, the Feb 4 elections may be a tipping point for health in India. For example, in 2012, Joko Widodo was elected Governor of Jakarta. He launched popular UHC reforms in the capital and 2 years later was elected president. In 2016, voters in the USA and UK supported politicians prepared to act on the concerns of the electorate. If health becomes a populist cause in India, rather than a political inconvenience, then the country might finally be liberated to achieve health outcomes commensurate with its economic and technical achievements”, is exactly what appeared in the editorial of The Lancet, titled “Health in India, 2017,” published on January 14, 2017.

The Lancet Editor further reiterated: “Because states have responsibility for health, the elections will raise the importance of access to quality, affordable health care in India, regardless of the electoral outcome. It is a debate that needs to be fostered.”

This is, of course, a ‘top-down’ approach for healthcare, as seen in several countries across the world. However, I have recently deliberated another approach in the same area on – why a ‘bottom-up’ demand is not forthcoming in India, in an article titled ‘Healthcare in India And Hierarchy of Needs’, published in this blog on November 06, 2017.

No one, including any Government, would possibly ever argue – why shouldn’t a robust public healthcare system in a country, including the availability of reasonably affordable drugs, assume as much priority as economic growth and education?

On the contrary, Governments in several other countries, including those with a well-functioning Universal Healthcare (UHC) in place, are trying to ensure even better and greater access to healthcare for all, by various different means. In this article, I shall focus on it, in a holistic way.

Exploring a bottom-up approach:

It is increasingly becoming more evident that a bottom-up approach would help yield greater success in this area, with a win-win outcome. It will involve taking the stakeholders on board in the process of framing and implementing healthcare projects within a given time-frame. The question then arises, why is it still not happening on the ground in India the way it should? Just floating a discussion paper on draft projects and policies, for stakeholders’ inputs, isn’t enough any longer. There is a need to move much beyond that in making these decisions more inclusive.

Various successive Governments may have some justifiable funding related or other pressing issues to offer a robust public healthcare system in India. But, none of these will be an insurmountable barrier, if more number of heads of astute stakeholders are involved in ferreting out an effective and implementable India-specific solution in this area, within a pre-determined timeline.

There are examples of remarkable progress in this direction, by involving stakeholders in charting out a workable pathway, agreed by all, and jointly implemented in a well-calibrated and time bound manner. Equally important is to make this plan known to the public, so that the Government can be held accountable, if it falls short of this promise, or even misses any prescribed timeline.

‘The Accelerated Access Pathway’ initiative:

Let me now draw an interesting example of involving stakeholders by the Government to improve patient access to expensive and innovative drugs. This example comes from a country that is running one of the oldest and most efficient UHC in the world – the United Kingdom.

Despite a robust UHC being in place, the National Health Service (NHS) in England had a perennial problem to make ‘breakthrough’ medicines available early to NHS patients. The British pharma industry reportedly had a long-held complaint that patients in England get a raw deal when it comes to accessing the latest medicines.

According to a reported study by the Association of the British Pharmaceutical Industry (ABPI) and endorsed by the charity Cancer Research UK, average British patients get lower access to leading cancer medicines than their European counterparts.

To resolve this issue effectively, the British Government launched ‘The Accelerated Access Pathway initiative’. Former GSK global CEO Sir Andrew Witty was named as the chairman of this collaborative body. The scheme, launching from April 2018, will see approvals of cutting-edge treatments for conditions like cancer, dementia and diabetes dramatically speeding up. The pathway is expected to get ‘breakthrough’ medicines to NHS patients up to four years earlier, as the report, published in ‘The Telegraph’ on November 3, 2017 indicates.

It is believed that ‘Accelerated Access Collaborative’ initiative would benefit the NHS patients, as well as deliver significant long-term savings for the health service.

Similar initiatives may be effective in India:

Taking collaborative initiatives, such as above, may not be absolutely new in India. However, in a real sense, Indian initiatives are no more than top-down approaches, and not in any way be termed as bottom-up. Moreover, these usually originate in the form of Government discussion papers inviting comments from the stakeholders.

Moreover, in the healthcare policy related arena, there is no subsequent firm resolve by the Government to chart out a clear pathway for its effective implementation, with specific timelines indicated for each step, besides assigning individual accountability for delivering the intended deliverables.

Any such decisive move by the government, keeping all stakeholders engaged is quite rare to come across in our country, as yet. Thus, carefully selected outside expert group suggestions based – the National Health Policies also have met with the same fate, without possibly any exception, thus far.

Two illustrations:

I shall illustrate the above point with two top-of-mind examples. The first one is a report – the ‘High Level Expert Group (HLEG)’ report on ‘Universal Health Coverage (UHC)’ for India, submitted to the erstwhile Planning Commission in November 2011. The other example is of a policy – the National Health Policy (NHP) 2017, which is in place now, based on a report by an expert committee constituted by the Government.

Let me now briefly recapitulate both – one by one, as follows:

The report on ‘Universal Health Coverage (UHC)’ for India

The ‘High Level Expert Group (HLEG)’ on ‘Universal Health Coverage (UHC)’ was constituted by the Planning Commission of India in October 2010, with the mandate of developing a framework for providing easily accessible and affordable health care to all Indians.

While financial protection for healthcare was the principal objective of this initiative, it was recognized that the delivery of UHC also requires the availability of adequate health infrastructure, skilled health workforce, access to affordable drugs and technologies to ensure the entitled level and quality of healthcare is delivered to every citizen.

The report further highlighted, the design and delivery of health programs and services call for efficient management systems as well as active engagement of empowered communities.

The original terms of reference directed the HLEG to address all of these needs of UHC. Since the social determinants of health have a profound influence not only on the health of populations, but also on the ability of individuals to access healthcare, the HLEG decided to include a clear reference to them.

Nevertheless, this report was never acted upon for its effective implementation. Now, with the change in Government, HLEG recommendations for UHC in India seems to have lost its relevance, altogether.

The National Health Policy (NHP) 2017

The new Government that subsequently came to power, decided to start afresh with a brand new and modern National Health Policy in India, replacing the previous one framed 15 years ago in 2002. NHP 2017 promises healthcare in an ‘assured manner’ to all, by addressing the challenges in the changing socioeconomic, epidemiological and technological scenarios. Accordingly, the National Health Policy 2017 was put in place, early this year.

To achieve the objectives, NHP 2017 intends to raise public healthcare expenditure to 2.5 percent of GDP from the current 1.4 percent. Interestingly, no visible signal about the seriousness on implementation of this laudable initiative has reached the public, just yet.

Let’s now wait for the next year’s budget to ascertain whether the policy objective of ‘healthcare in an assured manner to all’ would continue to remain a pipe dream, as happened in earlier budget proposals. It is noteworthy that union budget allocation on health did not go up, at least, in the last 3 years, despite categorical assurances by the ministers on increasing focus on healthcare.

Significant increase in both the union and the state governments budgetary allocation for healthcare is necessary. This is because, besides many other intents, NHP 2017 intends to provide free diagnostics, free drugs and free emergency and essential healthcare services in all public hospitals for healthcare access and financial protection to all.

Universal Healthcare is the core point in both:

The core focus of both – the HLEG report and also the NHP 2017, is UHC in India, but with different approaches. When HLEG report was not translated into reality, the 2014 general election in India was widely expected to be the tipping point for a new public healthcare landscape in the country fulfilling this promise. More so, as the public healthcare system is generally in a shamble throughout the country, except in a handful of states.

Just as in the United States, Europe or Japan, “if health becomes a populist cause in India, rather than a political inconvenience, then the country might finally be liberated to achieve health outcomes commensurate with its economic and technical achievements,” as the above Lancet editorial commented.  Giving yet another perspective, I also wrote in my blog post, titled ‘Healthcare in India And Hierarchy of Needs’ on November 06, 2017, why has it not happened in India, as on date.

Conclusion:

What happens, if the Indian Government too adopts a major collaborative approach, such as ‘The Accelerated Access Pathway’ initiatives, involving all stakeholders – including the pharma and device industry leaders to implement UHC in the country – part by part?

The relevant counter question to this should not be – Will that work? Of course, it will, if the Government wants to. On the contrary, it could be a potential ‘Tipping Point’ to create a robust public healthcare landscape in India. Thus, the real question that we should ask ourselves: Why won’t it work, when all stakeholders are on board to pave the pathway for an efficient Universal Healthcare system in India, in a win-win way?

By: Tapan J. Ray 

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

Drug Price Control And National Health Security

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

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

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

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

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

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

A course correction without flagging the new course:

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

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

Would better availability guarantee greater patient access to drugs?

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

The silo mentality won’t work:

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

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

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

Is the key pharma policy goal anywhere near its target?

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

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

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

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

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

Drug price regulations aren’t irrelevant either:

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

Drug price regulation in the UHC countries:

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

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

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

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

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

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

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

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

Conclusion:

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

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

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

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

By: Tapan J. Ray 

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