Tag Archives: Pricing

Pharma & Healthcare: Where The Healers Turn Looters?

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Two news reports of the last week, though no longer shocking, made me think exactly the same way as the headline of this article epitomizes.

These reports are not just two isolated instances, but an integral part of a similar chain of events that I partly addressed in one of my earlier blog posts titled, “Is The Core Purpose of Pharma Business Much Beyond Profit Making?” of November 10, 2014.

With the fist clenching media reports of just the last week, I shall try to dwell upon that in absence of good governance how two of the greatest healers and the medical care givers in the arena of healthcare – the doctors and the hospitals, are being increasingly perceived by the common citizens as nothing less than looters.

The doctors:

A November 21, 2014 report highlights that the Medical Council of India (MCI) has summoned over three hundred doctors from various parts of India, based on an anonymous complaint, for taking lakhs of rupees as bribes from an Ahmedabad based pharmaceutical company. All those 300 doctors have been told to bring copies of their Income Tax returns and bank statements.

Just a year ago, in September 2013, the Chief Vigilance Commissioner reportedly received a letter alleging that doctors were taking bribes from Pharma companies. The complaint was forwarded to the Health ministry. The MCI took over the case in December 2013 and formed a subcommittee to investigate the doctors.

The complaint details that the Ahmedabad-based pharma company has been paying to the doctors not just huge cash, but also gifting them cars and flats, besides sponsoring foreign trips for the family.

In return, the involved doctors are allegedly prescribing that Ahmedabad based pharma company’s products that are priced 15 to 30 percent higher than those of well-established other pharma players.

In addition, according to reports, the doctors would also air on the Television sets placed at their respective clinics, advertisements of the pharma company products against hefty cash or equivalent in kind.

Although, the allegations of unholy nexus between pharma players and the doctors are continuity of a good old saga, the risk taking incentives that it provides to the wrong doers are very significant. The anonymous letter alleged that the concerned pharma company’s profit zoomed from zero to Rs. 400 Crore in a period of just 5 years.

According to available reports, the MCI has already questioned 166 doctors, out of which 7 are senior doctors from Maharashtra, including 3 physicians from Mumbai.

The hospital:

Another report on the subject that appeared yesterday is related to overcharging for an oncology medicine of Novartis – Sandostatin LAR, over the last nine months by the well-known Tata Memorial Hospital of Mumbai.

According to the report, even when Novartis revised the price of Sandostatin LAR from Rs. 65,499 for a 20mg vial to Rs 32,000 during Oct-Dec 2013 and the chemists in the hospital’s vicinity were selling the same vial for Rs 32,000, Tata Memorial continued to sell it at Rs 48,296.

The report also states that patients could have saved much more, if the hospital had prescribed an Octreotide generic of the same strength, Octride Depot 20mg by Sun Pharma with an MRP of Rs 17,800 is sold at Tata Memorial for Rs 12,157, instead of Sandostatin LAR 20mg.

However, the newspaper claims, “DNA was the first to report about the price disparity at the hospital on Nov 5. Tata Memorial Hospital has decided to reimburse cancer patients who were overcharged for a Novartis-branded oncology medicine over the last nine months.”

Interestingly, we get to know only about a few of such instances, only when these are reported either anonymously or by some employees or through rare impartial investigative journalism of international standard.

Treatment of dreaded diseases like Cancer also not spared:

The above hospital case assumes immense importance, as it is related to a dreaded disease and an expensive cancer drug. In real every day life, many such cases of various hues and colors are taking place in India incognito, at the cost of patients.

A scary scenario:

According to the ‘Fact-Sheet 2014′ of the World Health Organization (WHO), cancer cases would rise from 14 million in 2012 to 22 million within the next two decades. It is, therefore, no wonder that cancers figured among the leading causes of over 8.2 million deaths in 2012, worldwide.

A reflection of this scary scenario can also be visualized while analyzing the growth trend of various therapy segments of the global pharmaceutical market.

A recent report of ‘Evaluate Pharma (EP)’ has estimated that the worldwide sales of prescription drugs would reach US$ 1,017 Bn. by 2020 with a Compounded Annual Growth Rate (CAGR) of 5.1 percent between 2013 and 2020.

Interestingly, oncology is set to record the highest sales growth among the major therapy categories with a CAGR of 11.2 percent during this period, accounting for US$ 153.4 Bn. of the global pharmaceutical sales.

High incidence of cancer in India:

A major report published in ‘The Lancet Oncology’ states that in India, around 1 million new cancer cases are diagnosed each year, which is estimated to reach 1.7 million in 2035.

The report also highlights, though deaths from cancer are currently 600,000 -700,000 annually, it is expected to increase to around 1.2 million during this period.

The Lancet Oncology study showed, while incidence of cancer in the Indian population is only about a quarter of that in the United States or Europe, mortality rates among those diagnosed with the disease are much higher.

Experts do indicate that one of the main barriers of cancer care is its high treatment cost that is out of reach for millions of Indians.

Breast cancer is the most common type of cancer, accounting for over 1 in 5 of all deaths from cancer in women, while 40 percent of cancer cases in the country are attributable to tobacco.

Cancer drug price – a global issue to address:

As the targeted therapies have significantly increased their share of global oncology sales, from 11 percent a decade ago to 46 percent last year, increasingly, both the Governments and the payers, almost all over the world, have started feeling quite uncomfortable with the rapidly ascending drug price trend.

In the top cancer markets of the world, such as, the United States and Europe, both the respective governments and also the private insurers have now started playing hardball with the cancer drugs manufacturers.

There are several instances in the developed markets, where the stakeholders, such as, National Institute for Health and Care Excellence (NICE) of the United Kingdom and American Society of Clinical Oncology (ASCO) are expressing their concerns about manufacturers’ charging astronomical prices, even for small improvements in the survival time.

Following examples would give an idea of global sensitivity in this area:

After rejecting Roche’s breast cancer drug Kadcyla as too expensive, NICE reportedly articulated in its statement: “A breast cancer treatment that can cost more than US$151,000 per patient is not effective enough to justify the price the NHS is being asked to pay.”

In October 2012, three doctors at Memorial Sloan-Kettering Cancer Center announced in the New York Times that their hospital wouldn’t be using Zaltrap. These oncologists did not consider the drug worth its price. They questioned, why prescribe the far more expensive Zaltrap? Almost immediately thereafter, coming under intense stakeholder pressure Sanofi reportedly announced 50 percent off on Zaltrap price.

Similarly, ASCO in the United States has reportedly launched an initiative to rate cancer drugs not just on their efficacy and side effects, but prices as well.

Developments in India:

India has already demonstrated its initial concern on this critical issue by granting Compulsory License (CL) to the local player Natco to formulate the generic version of Bayer’s kidney cancer drug Nexavar and make it available to the patients at a fraction of the originator’s price. As rumors are doing the rounds, probably some more patented cancer drugs would come under Government scrutiny to achieve the same end goal.

I indicated in my earlier blog post that the National Pharmaceutical Pricing Authority (NPPA) of India by its notification dated July 10, 2014 has decided to bring, among others, some anticancer drugs too, not featuring in the National List of Essential Medicines 2011 (NLEM 2011), under price control. These prices have already in force.

Not too long ago, the Indian government reportedly contemplated to allow production of cheaper generic versions of breast cancer drug Herceptin in India. Roche – the originator of the drug ultimately surrendered its patent rights in 2013, apprehending that it would lose a legal contest in Indian courts, according to media reports.

Biocon and Mylan thereafter came out with biosimilar version of Herceptin in the country with around 40 percent lesser price.Herceptin,

Hence, affordable pricing of cancer drugs would continue to remain a key pressure point, as it just happened yet again.

The government to intervene again:

According to a media report of the last week, the new government in India is planning to control prices of anti-cancer drugs to address this critical issue.

As the current National List of Essential Medicines (NLEM) does not include many important anti-cancer medication, Tata Memorial Centre of Mumbai has recommended to the government that oncology drugs, such as Trastuzumab, Erlotinib, Irinotecan, Lenalidomide, Capecitabine, All Trans Retinoic Acid (ATRA), Bendamustine, Rituximab, Temozolomide (TMZ), Zoledronic acid, Megestrol acetate and Letrozole, should be added to the NLEM.

As a first step towards this direction the National Pharmaceutical Pricing Authority (NPPA) has invited comments on the same from the pharmaceutical industry and other stakeholders to bring these drugs under price control.

Quoting NPPA the report states, “the recommendations are based on factors such as the ability of the drug to improve the overall survival chances of the patient. The other factors include higher priority to drugs that have the potential to cure a fraction of patients versus those that have been proven to only prolong lives; the number of patients potentially impacted in India based on data from population based cancer registries of the National Cancer Registry Program; the non-availability of alternative medications of the same or other pharmacological class that can act as a reasonable ‘substitute’; and price of the drug to patients and the differential in price between various brands.”

Although this is a welcome move to most of the patients, the pharma industry would certainly not be happy with this development, because of very obvious reasons and is expected to strongly oppose this initiative of the government. Let us wait and watch how this scenario unfolds further.

Conclusion:

In pursuit of the Eldorado to generate more and more wealth, shorn of least concerns for majority of patients, quite a few companies are not sparing even the dreaded diseases, such as cancer, pushing many patients to abject poverty, if not untimely death.

Increasingly, many healthcare players across the world are reportedly being forced to pay heavily for ‘unethical behavior and business practices’ by the respective governments. Unfortunately, no such steps are being taken in India, not just yet.

At least on paper, for errant doctors and hospitals there is MCI to take prompt remedial measures. For implementation of Drug Price Control Order (DPCO) there is NPPA, though effectiveness of these two seemingly powerful bodies are far from the expectations of the stakeholders, occasional reported jingoism notwithstanding.

Currently in India, there are no legally binding ‘codes of pharma marketing practices’ in place. Even the Department of Pharmaceutical does not seem to have any legal jurisdiction for taking penal action against the errant pharma players for marketing malpractices or misdemeanor.

In this chaotic scenario, is it not quite challenging to fathom how would the government possibly discourage any healthcare or pharma player from turning looter instead of playing the expected role of a healer, ensuring beyond doubt that there is no wolf in sheep’s clothing?

By: Tapan J. Ray

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

 

 

An Aggressive New Drug Pricing Trend: What It Means To India?

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A new class and an aggressive drug-pricing trend is now evolving in the global pharmaceutical industry, exerting huge financial pressure on the patients and payers, including governments, especially, in the developed nations of the world.

Another aspect of this issue I deliberated in one of my earlier blog posts of August 18, 2014 titled, “Patented Drug Pricing: Relevance To R&D Investments.”

Let me start my deliberation today by citing an example. According to 2013 Drug Trend Report of the pharmacy benefits manager Express Scripts, the United States will spend 1,800 percent more on Hepatitis C Virus (HCV) medications by 2016 than it did last year. This is largely attributed to new Hepatitis C cure with Sovaldi of Gilead, priced at Rs 61,000 (US$ 1,000) per tablet with a three-month course costing around Rs. Million 5.10 (US$ 84,000), when it reportedly costs around U$130 to manufacture a pill.

In a Press Release, Express Scripts stated, “Never before has a drug been priced this high to treat a patient population this large, and the resulting costs will be unsustainable for our country…The burden will fall upon individual patients, state and federal governments, and payers who will have to balance access and affordability in a way they never have had to before.”

The magnitude of impact – an example:

According to another report from the Centers for Medicare and Medicaid of the US, the cost to treat all Americans, who have hepatitis C, with Sovaldi would cost US$227 billion, whereas it currently costs America US$260 billion a year for all drugs bought in the country. According to Express Scripts, no major therapy class has experienced such a hefty increase in spending over the last 21 years.

This gives us a feel of the net impact of the evolving new aggressive drug pricing strategy on the lives of the patients and payers of one of the richest nations of the world.

Three critical parts of the evolving pricing strategy:

In an era, when new drug pricing has come under great scrutiny of the stakeholders globally, this strategy seems to have three critical components as follows:

1. Strategy for the developed countries: Set the launch price as high as possible and generate maximum profit faster from wealthy minority who can afford to pay for the drug.

It helps establishing the base price of the product globally, despite all hue and cries, maintaining a very healthy top and bottom line business performance, amidst ‘Wall Street cheering’.

Implementing this strategy meticulously and with precision, Gilead has reportedly registered US$ 5.8 billion in sales for Sovaldi in the first half of 2014. That too, in the midst of huge global concerns on alleged ‘profiteering’ with an exorbitantly priced HCV drug.

At that time, the company noted on its earnings call that it believes 9,000 people have been cured of HCV so far with Sovaldi, which means that the 6-month turnover of Sovaldi of US$ 5.8 billion was generated just from the treatment of 9000 patients. If we take the total number of HCV infected patients at 150 million globally, this new drug benefited less than one percent of the total number of HCV patients, despite clocking a mind-boggling turnover and profit.

2. Strategy for the developing countries: Create a favorable optic for the stakeholders by lowering the drug price significantly, in percentage term from its base price, earning still a decent profit. However, in reality the discounted price would continue to remain high for a very large number of patients.

Gilead is now in the process of implementing this strategy for 80 developing countries. For these markets, it has already announced a minimum threshold price of US$ 300 a bottle, enough for a month. With three months typically required for a full course and taking into account the currently approved combination with interferon, the total cost per patient would be about US$ 900 for a complete treatment against its usual price of US$ 84,000.

If we convert the discounted treatment cost, it comes down to around Rs. 55,000 from the base price of around Rs. Million 5.10. This discounted price, which is significantly less than the base price of the drug, creates an extremely favorable optic. No one discusses how many Hepatitis C patients would be able to afford even Rs. 55,000, say for example in a country like India? Thus, setting a high base price in the developed market for a new drug could make many in the developing world perceive that the treatment cost of Rs. 55,000 is very reasonable for majority of not so privileged patients.

Under the second strategy, Gilead has targeted mostly the world’s poorest nations, but also included some middle income ones such as Egypt, which has by far the highest prevalence of HCV in the world.

A ‘Financial Times’ report, also states, “At the US price, Gilead will recoup its Sovaldi development investment  . . . in a single year and then stand to make extraordinary profits off the backs of US consumers, who will subsidize the drug for other patients around the globe.”

If other global pharma companies also follow this differential strategy, one for the developed markets and the other for the developing markets, it could be a masterstroke for the Big Pharma. This would help address the criticism that its constituents are facing today for ‘obscene’ pricing of important new life saving drugs, as they target mostly the creamy layer of the society for business performance.

However, many in the United States are also articulating that they understand, the countries getting steep discounts from Gilead have high levels of poverty, but clearly points out that the disease affects lower-income patients in America, as well. To substantiate the point, they reiterate, according to the World Health Organization (WHO) about 150 million people worldwide have HCV, out of which around 2.7 million HCV diagnosed people live in the US. They highlight that currently even less than 25 percent of Americans with chronic HCV have had or are receiving treatment. In Europe, just 3.5 percent of patients of are being treated.

Thus, keeping in view of the increasing number of voices in the developed countries against abnormally high prices of the new drugs, the moot questions that come up are as follows:

  • Is Strategy 1 sustainable for the developed markets?
  • If not, would Strategy 2 for the developing market could ever be broader based?

3. Strategy for Voluntary License (VL) in those countries, where grant of product patent is   doubtful.

Thanks to the Indian patent regime, global companies would possibly consider following this route for all those products that may not be able to pass the ‘Acid Test’ of Section 3(d) of the Indian Patents Act 2005. Gilead has followed this route for Sovaldi and before that for tenofovir (Viread).

In this context, it is worth noting that the Indian patent office has not recognized Sovaldi’s patent for the domestic market, just yet. Thus, following this strategy Gilead announced, “In line with the company’s past approach to its HIV medicines, the company will also offer to license production of this new drug to a number of rival low-cost Indian generic drug companies. They will be offered manufacturing knowhow and allowed to source and competitively price the product at whatever level they choose.”

Accordingly, on September 15, 2014, international media reported that Cipla, Ranbaxy, Strides Arcolab, Mylan, Cadila Healthcare, Hetero labs and Sequent Scientific are likely to sign in-licensing agreements with Gilead to sell low cost versions of Sovaldi in India.

It was also reported that these Indian generic manufacturers would be free to decide their own prices for sofosbuvir, ‘without any mandated floor price’.

Indian companies would require paying 7 per cent of their revenues as royalty to Gilead, which, in turn would ensure full technology transfer to them to produce both the Active Pharmaceutical Ingredients (API) and finished formulations. The generic version of Sovaldi is likely to be available in India in the second or third quarter of 2015, at the earliest.

However, the final decision of the Indian Patent Office on the patent grant for Sovaldi holds the key to future success of similar high-voltage, seemingly benign, VL based game plan of the global pharma majors.

The new trend:

In April 2014, Merck and Co. announced that its two HCV drug candidates had a 98 percent cure rate in a mid-stage trial. In addition, AbbVie is also expected to launch a high-end hepatitis C drug within the next year. The prices for these drugs are yet to be announced.

However, a new report of October 2014 states that USFDA has approved this month a new drug named Harmony, a ledipasvir/sofosbuvir combo formulation, again from Gilead for curative treatment of chronic HCV genotype 1 infection in adults. Harmony, which is called the son of Sovaldi, would cost a hopping US$ 94,500 for a 12-week regimen, as against US$ 84,000 for Sovaldi.

Hence, I reckon, similar aggressive pricing strategy for new drugs would gain momentum in the coming years and at the same time.

Is this pricing model sustainable?

Though Gilead pricing model for patented drugs works out better than what is prevailing today in India, the question that comes up yet again, whether the new model is sustainable for various reasons as mentioned above or would it be followed by majority of the global drug innovators?

In a situation like this, what then could be a sustainable solution in India?

The desirable pathway:

A transparent government mechanism for patented drugs pricing, as followed by many countries in the world, would be quite meaningful in India. The Department of Pharmaceuticals (DoP) of the Government of India could play a constructive role in this area, as already provided in the Drug Policy 2012 of the country.

This measure assumes greater urgency, as the astronomical prices of patented drugs, especially for life-threatening illnesses, such as cancer, have become a subject of great concern in India too, just as it has become a critical issue across the world.

DoP is in inactive mode:

It is not difficult to fathom that CL for all patented life-saving drugs would not be a sustainable measure for all time to come. Thus, the need for a robust mechanism of price negotiation for patented drugs was highlighted in the Drug Policy 2012.

The DoP first took up the issue for consideration in 2007 by forming a committee. After about six years from that date, the committee produced a contentious report, which had hardly any takers.

Today, despite the new government’s initiative to inject requisite energy within the bureaucracy, administrative lethargy and lack of sense of urgency still lingers with the DoP, impeding progress in this important subject any further.

Intense lobbying on this issue by vested interests from across the world has further pushed the envelope in the back burner. Recent report indicates, the envelope has since been retrieved for a fresh look with fresh eyes, as a new minister is now on the saddle of the department.

According to reports, a new inter-ministerial committee was also formed by the DoP under the chairmanship of one of its Joint Secretaries, to suggest a 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).

Unfortunately, nothing tangible has been made known to the stakeholders on this matter, just yet. I sincerely hope that the new government expedites the process now.

Three critical factors to consider:

While arriving at the patented products price in India, three critical factors should be made note of, as follows:

  • The discussion should start with the prices adjusted on the Purchasing Power Parity factor for India.
  • Any price must have a direct relationship with the per capita income of the population of the country.
  • Details of other public healthcare measures that the government would undertake, by increasing its healthcare spends as a percentage of GDP, should also be clearly articulated.

Conclusion:

The evolving and aggressive new product-pricing trend has three following clearly identifiable facets:

One, the base price of the drugs would be established at a very high level to help increase both the turnover and profit of the companies significantly and quickly. This measure would consequently make the drug bills of the developed world even more expensive, which could limit healthcare access wherever co-payment exists or the expenditures are Out of Pocket (OoP) in nature.

Two, against intense global criticism for aggressive drug pricing strategy, to create a favorable optic, the concerned companies would launch these products at a deep discount on the base price in the developing world. However, the net price would still remain high in absolute terms, considering per capita income in those countries.

Three, for many of these new products, Section 3(d) of the Indian Patents 2005 would place India at an advantage. Thus, in absence of evergreening type of product patents, to salvage the situation, many of these companies would prefer to offer Voluntary License (VL) to Indian generic manufacturers under specific terms and conditions. However, such VL may not have any potential value, if IPO refuses to grant patents to those products, which would fall under the above section. In that case, generic competition would further bring down the prices.

No doubt, the above pricing model for patented drugs works out better than what is prevailing today in India. However, the question that comes up, whether the new model is sustainable or would be followed by majority of the global drug innovators in the same way? Considering all these, it does not seem to be the most desirable situation. Moreover, the current patent regime is a deterrent mostly to evergreening of patents.

Thus, the Indian government should play a more specific and proactive role in this game by first putting in place and then effectively implementing a country specific mechanism to tame the spiraling patented drug prices in India, for the interest of patients.

The world has taken serious note of this fast evolving aggressive new drug-pricing trend, as different countries are in the process of addressing the issue in various country-specific ways. Unfortunately, the DoP still remains in a deep slumber, having failed once to half-heartedly put a clumsy mechanism in place to address the issue.

As India is now under a new political regime, let us sincerely hope, the new minister in charge succeeds to make it happen, sooner, reducing vulnerability of a vast majority of patients during many life threatening ailments and…of course, in tandem, ensuring justifiable profit margin for the innovator drug companies…the evolving aggressive new drug pricing trend notwithstanding.

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.

Does Drug Pricing Freedom Benefit Patients in A Free-Market Economy?

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A 2010 USFDA update titled ‘Generic Competition and Drug Prices’ highlighted that generic competition is intimately associated with lower drug prices, and the entry of the second generic competitor is associated with the largest price reduction.

The agency found that on an average, the first generic competitor prices its product only slightly lower than the brand-name manufacturer. However, the appearance of a second generic manufacturer reduces the average generic price to nearly half the brand name price. As additional generic manufacturers market the product, the prices continue to fall, but more slowly. For products that attract a large number of generic manufacturers, the average generic price falls to 20 percent of the branded price or even lower.

USFDA came to this conclusion based on an analysis of IMS retail sales data for single-ingredient brand name and generic drug products sold in the United States from 1999 through 2004.

Thus, the scope of any significant price increase, especially under cutthroat competition in the generic space of the US, used to be considered almost impractical until recently.

The ‘Myth’ busted:

Just over four years down the line, a ‘Press Release’ of the Committee on Oversight and Government Reform shattered this myth, when on October 2, 2014, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Senator Bernard Sanders, Chairman of the Subcommittee on Primary Health and Aging, Senate Committee on Health, Education, Labor and Pensions, sent letters to 14 drug manufacturers, which reportedly include India’s Sun Pharma, Dr. Reddy’s Laboratories and Zydus Cadila, requesting for detail information about the escalating prices for generic drugs that they have started charging.

The letters:

The complete letters written to each of the 14 drug manufactures are linked below:

Actavis plc

Apotex Corp.

Dr. Reddy’s Laboratories

Endo International plc

Global Pharmaceuticals

Heritage Pharmaceuticals Inc.

Lannett Company, Inc.

Marathon Pharmaceuticals, LLC

Mylan Inc.

PAR Pharmaceuticals Companies Inc.

Sun Pharmaceutical Industries, Inc

Teva Pharmaceutical Industries Ltd.

West-Ward Pharmaceutical Corp.

Zydus Pharmaceuticals USA Inc.

Summary findings of apparently ‘obscene’ price hike:

The following statements of Rep. Cummings and Senator Sanders capture the core sentiment of the probe:

“When you see how much the prices of these drugs have increased just over the past year, it’s staggering, and we want to know why,” Cummings said.

“Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs. We’ve got to get to the bottom of these enormous price increases,” Sanders added.

In the above letters, Cummings and Sanders quoted data from the Healthcare Supply Chain Association on recent purchases of 10 generic drugs by group purchasing organizations over the past two years.  For example:

  • Albuterol Sulfate used to treat asthma and other lung conditions, increased 4,014 percent for a 100’s bottle of 2 mg tablets.
  • Doxycycline Hyclate, an antibiotic used to treat a variety of infections, increased 8,281 percent for a 500’s bottle of 100 mg tablets.
  • Glycopyrrolate, used to prevent irregular heartbeats during surgery, increased 2,728 percent for a box of 10 of 0.2 mg/mL, 20 mL vials.

Click here for a table of price increases for the ten drugs examined.

The information sought by lawmakers:

The Lawmakers requested the companies to provide detail relevant information from 2012 to the present, including:

  • Total gross revenues from sales of the drugs,
  • Prices paid for the drugs,
  • Factors that contributed to decisions to increase prices,
  • The identity of company officials responsible for setting drug prices.

The trigger factor:

This probe by the US lawmakers was triggered by the National Community Pharmacists Association (NCPA) 2013 survey of drug prices. Subsequently in 2014, the NCPA had requested the US Senate to investigate into staggering increases of 390 – 8200 percent in the procurement prices of ten generic drugs, in just one year.

Immediate financial impact:

Reacting to this news, in the early afternoon on October 8, 2014, the scrip of Sun Pharma reportedly declined by 3.91 percent to Rs 804.10 and Dr. Reddy’s Laboratories slipped by 3.29 percent to Rs 2,996.90 while Cadila Healthcare was down by 1.84 percent to Rs 1,313.85 on the Bombay Stock Exchange (BSE).

It is too early to speculate on the ultimate outcome of this probe. However, it may not be prudent to rule out the possibility of a far-reaching consequence, besides levying of commensurate penalties to the respective drug manufacturers.

India too acted upon, but withdrew hastily:

For products falling outside Drug Price Control Order 2013 (DPCO), which account for around 82 percent of the total Indian Pharmaceutical Market (IPM) and are eligible for free pricing, India has a similar, yet slightly different problem.

The National Pharmaceutical Pricing Authority (NPPA) had addressed this issue recently, but was compelled to withdraw its internal guidelines on the subject rather hastily, coincidentally just prior to Prime Minister Modi’s visit to America. Pharma industry and its lobbyists had projected this move of NPPA as a regressive step in the free pricing space.

The above measure of the NPPA was related to arbitrary and wide price variation within the same non-schedule drug molecules, manufactured by different pharma companies. This was important, as unlike many other non-drug products, patients buy medicines based on what the doctors’ prescribe for them. Moreover, patients undergoing medical treatment or their relatives usually have no inkling about the availability of lesser price equivalents of the same molecule/molecules as recommended by their doctors.

For example, Glimeperide, an anti-diabetic drug, sold by the market leader at ₹133 for a pack of 10 tablets, despite other equivalent brands being available at or below ₹40 or the MRP for a pack of 10 tablets (40 mg) of Telmisartan, used to treat hypertension varies from a low of ₹25 to as high as ₹385.

More volume sales of many of these high price drugs, despite availability of their low price equivalents, manufactured by equally well reputed companies, are primarily driven by various differentiated activities of the pharma companies to influence the doctors in favor of their respective products, as believed by many. Such type of free market encouraging free drug pricing, devoid of any possibility for the patients to exercise informed choices on the medicine price, defeats its core purpose.

Thus, absurd price variation within the same formulation of the same product molecules, even after accounting for all imaginable reasons for the price differences, was construed by the NPPA as ‘market failure’, as consumers cannot use their choice in product selection.  In a market situation like this, intervention of the government is warranted for the sake of public health interest.

I hope, the Supreme Court of India would take note of this situation, in its next hearing.

A critical Question:

Based on ‘The New York Times’ report, I twitted (#@tapan_ray) on October 8, 2014 as follows:

“It happens in the US too? Government Demands Reasons For Rising Generic Drugs Costs, Otherwise Industry To Face New Regulation. http://nyti.ms/1vMi4No”

Subsequently, on October 9, 2014, Indian media flashed headlines like:

  • “Sun, Dr Reddy’s, Zydus Cadila named in US Congress price probe” or
  • “Sun Pharmaceutical Industries, Dr. Reddy’s face US action on price hikes up to 8,000 percent”

In this scenario, where prices of some generic drugs sky rocket by 390 to 8,200 percent just in a year, the following basic question comes up for all stakeholders to ponder:

Does free pricing of drugs, even in free markets, work at all to protect patients’ health interest?

Conclusion:

In my view, quite unlike most other products, pricing freedom for medicines does not work in a free market due to a number of factors, even where intense competition exists from equivalent products placed in different price bands. This is mainly because, despite availability of lower price equivalents of the same or similar drugs, patients cannot exercise their pricing choice even within the same molecule, in any way, and is totally bound by what is prescribed by the doctors. This happens in India too and in all those countries where product substitution is illegal.

Moreover, it is an open secret that the pharma players heavily influence most of the heavy prescribers in their choice of drugs following various means. As a result, in many cases highest priced products become the category leader too, despite availability of lower price equivalents from equally reputed companies. This scenario makes many people believe that in a stable market situation drug prices skyrocket primarily due to dubious business practices giving rise to gross market manipulation

I reckon, just on drug pricing issue, many pharma players, both global and local, are inviting much avoidable business risks, not just in the developing markets such as India, but also in the largest free market economy of the world – the United States… or wherever opportunities for free drug pricing exist, irrespective of what it means to the patients. This mindset needs an urgent introspection, as the past would possibly not be replicated in the future.

Expectations from the civil society are now high that governments, both in the developing and also in the developed world, would keep a careful vigil to ensure that the process of earning a decent profit by the pharma players does not transgress into a limitless fetish for profiteering under any facade, pushing majority of patients succumb to life threatening ailments without having access to appropriate medicines. This defeats even the very purpose of drug innovation, as its access gets highly restricted mostly to the creamy layer of the society.

Many would consider this situation as grossly devoid of equity, unfair, unjust and in no away be allowed to continue. It is not an issue of taking moral high grounds either or scoring brownie points in a debate, but more importantly a critical ingredient to uphold ethics and values in pharma business, while re-creating its well-deserved public image, as it takes rapid strides towards inclusive growth.

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.

Gilead: Caught Between A Rock And A Hard Place In India

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I had mentioned in my blog post of August 4, 2014, titled “Hepatitis C: A Silent, Deadly Disease: Treatment beyond reach of Most Indians” that in line with Gilead’s past approach to its HIV medicines, the company would offer to license production of sofosbuvir (brand name Sovaldi) to a number of rival low-cost Indian generic drug companies. They will be offered manufacturing knowhow, allowed to source and competitively price the product at whatever level they choose.

Sovaldi (sofosbuvir) is a once-a-day patented drug of Gilead for cure of chronic hepatitis C infection in most patients. Sovaldi has been priced at Rs 60,000 (US$ 1,000) per tablet in the developed markets with a three-month course costing Rs1.8 Crore (US$ 84,000), when it reportedly costs around U$130 to manufacture a tablet. This treatment cost is being considered very high even for many Americans and Europeans.

Gilead has also announced that it has set a minimum threshold price for Sovaldi of US$ 300 (Rs.18,000) a bottle, enough for a month. With three months typically required for a full course and taking into account the currently approved combination with interferon, the total cost of Sovaldi per patient would be about US$ 900 (Rs.54,000) for a complete treatment against its usual price of US$ 84,000 (Rs1.8 Crore). The company would offer this price to at least 80 countries.

Breaking-news in India:

On September 15, 2014, International media reported that Cipla, Ranbaxy, Strides Arcolab, Mylan, Cadila Healthcare, Hetero labs and Sequent Scientific are likely to sign in-licensing agreements with Gilead to sell low cost versions of Sovaldi in India.

It was also reported that these Indian generic manufacturers would be free to decide their own prices for sofosbuvir, ‘without any mandated floor price’.

Indian companies would require paying 7 per cent of their revenues as royalty to Gilead, which, in turn would ensure full technology transfer to them to produce both the Active Pharmaceutical Ingredients (API) and finished formulations. The generic version of Sovaldi is likely to be available in India in the second or third quarter of 2015, at the earliest.

Another reason of Gilead’s selecting the Indian generic manufacturers could possibly be, that of much of the global supply of generic finished formulations is manufactured in India, especially for the developing countries of the world.

Patent status, broad strategy and the possibility:

It is worth noting here that the Indian Patent Office (IPO) has not recognized Sovaldi’s (sofosbuvir) patent for the domestic market, just yet. This patent application has been opposed on the ground that it is an “old science, known compound.”

It is interesting that the Indian Pharmaceutical Association (IPA) and others, such as, Delhi Network of Positive People and Natco have reportedly opposed Sovaldi’s (sofosbuvir) patent application. If the patent for this drug does not come through, low priced generic versions of Sovaldi, without any licensing agreement with Gilead, would possibly capture the Indian market.

Conversely, due to unaffordable price of Sovaldi for most of the Hepatitis C patients, even if a patent is granted for this drug in India, the sword of Compulsory License (CL) on the ground of ‘reasonably affordable price’ looms large on this product.

To negate the possibility of any CL, in the best-case scenario of a patent grant, Gilead seems to have decided to enter into licensing agreement with seven other Indian generic manufacturers to create a sense of adequate competition in the market, as many believe.

However, if the IPO considers sofosbuvir not patentable in India, it would indeed be a double whammy for Gilead. Without any patent protection, all these in licensing agreements may also fall flat on the face, paving the way of greater access of much lesser priced generic sofosbuvir to patients, as indicated above.

The action replay:

If we flash back to the year 2006, we shall see that Gilead had followed exactly the same strategy for another of its patented product tenofovir, used in the treatment of HIV/AIDS.

1. Voluntary license:

At that time also Gilead announced that it is offering non-exclusive, voluntary licenses to generic manufacturers in India for the local Indian market, along with provision for those manufacturers to export tenofovir formulations to 97 other developing countries, as identified by Gilead.

Gilead did sign a voluntary licensing agreement with Ranbaxy for tenofovir in 2006.

The arrangement was somewhat like this. Gilead would charge a royalty of 5 percent on the access price of US$ 200 a year for the drug. Any company that signs a manufacturing agreement with Gilead to manufacture API of tenofovir would be able to sell them only to those generic manufacturers that have voluntary license agreements with Gilead.

Interestingly, by that time Cipla had started selling one of the two versions of tenofovir, not licensed by Gilead. Cipla’s generic version was named Tenvir, available at a price of US$ 700 per person per year in India, against Gilead’s tenofovir (Viread) price of US$ 5,718 per patient per year in the developed Markets. Gilead’s target price for tenofovir in India was US$ 200 per month, as stated above.

2. Patent challenge:

Like sofosbuvir (Sovaldi), Gilead had filed a patent application for tenofovir (Viread) in India at that time. However, the ‘Indian Network for People Living with HIV/AIDs’ challenged this patent application on similar grounds.

3. Patent grant refused:

In September 2009, IPO refused the grant of patent for tenofovir to Gilead, citing specific reasons  for its non-conformance to the Indian Patents Act 2005. As a result, the voluntary license agreements that Gilead had already signed with the Indian generic manufacturers were in jeopardy.

Current status:

In 2014, while planning the launch strategy of sofosbuvir (Sovaldi) for India, Gilead seems to have mimicked the ‘Action Replay’ of 2006 involving tenofovir, at least, in the first two stages, as detailed above. Only the patent status of sofosbuvir from the IPO is now awaited. If IPO refuses patent grant for sofosbuvir, Gilead’s fate in India with sofosbuvir could exactly be the same as tenofovir, almost frame by frame.

Gilead and the two top players in India:

Very briefly, I would deliberate below the strategic stance taken by two top generic players in india, from 2006 to 2014, in entering into voluntary licensing agreements with Gilead  for two of its big products, as I understand.

Ranbaxy:

In my view, the stand of Ranbaxy in Gilead’s India strategy of voluntary licensing in the last eight years has remained unchanged. It involves both sofosbuvir and tenofovir.Thus, there has been a clear consistency in approach on the part of Ranbaxy on this issue.

Cipla:

Conversely, an apparent shift in Cipla’s strategic position during this period has become a bone of contention to many. For tenofovir, Cipla did not sign any voluntary license agreement with Gilead. On the contrary, it came out with its own version of this product, that too much before IPO refused to grant patent for this drug.

However, unlike 2006, Cipla decided to sign a voluntary license agreement with Gilead for sofosbuvir (Sovaldi) in 2014, though no patent has yet been granted for this product in India.

Has Cipla changed its position on drug patent?

I find in various reports that this contentious issue keeps coming up every now and then today. Some die-hards have expressed disappointments. Others articulated that the new dispensation in Cipla management, has decided to take a different stance in such matter altogether.

In my view, no tectonic shift has taken place in Cipla’s position on the drug patent issue, just yet.

The owner of Cipla, the legendary Dr.Yusuf Hamied has always been saying: ‘I Am Not Against Patents … I Am Against Monopolies’

He has also reportedly been quoted saying: “About 70 per cent of the patented drugs sold worldwide are not invented by the owning companies”.

He had urged the government, instead of having to fight for CL for expensive lifesaving medicines by the generic drug makers, where voluntary licenses are not forthcoming, the government needs to pass a law giving the generic players “automatic license of rights” for such drugs, making these medicines affordable and thereby improving access to patients. In return, the local generic manufacturers would pay 4 percent royalty on net sales to patent holders. He was also very candid in articulating, if Big Pharma would come into the developing markets, like India, with reasonable prices, Cipla would not come out against it.

According to Dr. Hamied, “When you are in healthcare, you are saving lives. You have to have a humanitarian approach. You have to take into account what it costs to make and what people can pay.”

Considering all these, I reckon, the core value of Cipla and its stand on patents have not changed much, if at all, for the following reasons:

  • The voluntary license agreement of Cipla with Gilead for sofosbuvir (Sovaldi) along with six other generic manufacturers of India, unlike tenofovir, still vindicates its strong opposition to drug monopoly, respecting product patents.
  • Cipla along with manufacturing of sofosbuvir, maintains its right to market the product at a price that it considers affordable for the patients in India.

Conclusion:

Indian Patents Act 2005 has the requisite teeth to tame the most aggressive and ruthless players in drug pricing even for the most feared diseases of the world, such as, HIV/AIDS, cancer, Hepatitis C and others.

Many global drug companies, resourceful international pharma lobby groups and governments in the developed world are opposing this commendable Act, tooth and nail, generating enormous international political pressure and even chasing it in the highest court of law in India, but in vain. Glivec case is just one example.

Some pharma majors of the world seem to be attempting to overcome this Act, which serves as the legal gatekeeper for the patients’ interest in India. Their strategy includes not just voluntary licenses, but also not so transparent, though well hyped, ‘Patient Access Programs’ and the so called ‘flexible pricing’, mostly when the concerned companies are able to sense that the product patents could fail to pass the scrutiny of the Indian Patents Act 2005.

It has happened once with even Gilead in 2006. The drug was tenofovir. Following the same old strategy of voluntary licenses and relatively lower pricing, especially when its drug patent is pending with IPO post patent challenges, Gilead intends to launch Sovaldi in India now.

Carrying the baggage of its past in India, Gilead seems to have been caught between a rock and the hard place with sofosbuvir (Sovaldi) launch in the country. On the one hand, the risk of uncertain outcome of its patent application and on the other, the risk of CL for exorbitant high price of the drug, if the patent is granted by the IPO. Probably considering all these, the company decided to repeat its 2006 tenofovir strategy of voluntary licenses, yet again in 2014, for Sovaldi in India.

As of today, Sovaldi strategy of Gilead in India appears to be progressing in the same direction as tenofovir, the way I see it. However, the final decision of IPO on the grant of its patent holds the key to future success of similar high-voltage, seemingly benign, marketing warfare of pharma majors of the world.

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.

Patented Drug Pricing: Relevance To R&D Investments

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The costs of most of the new life saving drugs, used in the treatment of dreaded diseases such as cancer, have now started going north at a brisk pace, more than ever before.

From the global pharma industry perspective, the standard answer to this disturbing phenomenon has remained unchanged over a period of time. It continues to argue; with the same old emphasis and much challenged details that the high drug price is due to rapidly escalating R&D expenses.

However, experts have reasons to believe that irrespective of R&D costs, the companies stretch the new drug prices to the farthest edge to maximize profits. Generation of highest possible revenue for the product is the goal. Passing on the benefits of the new drug to a large number of patients does not matter, at all.

How credible is the industry argument?

In this context, let me take the example of Hepatitis C drug – Sovaldi of Gilead. Many now know that for each patient Sovaldi costs US$ 30,000 a month and US$ 84,000 for a treatment course.

According to an article published in Forbes, one health executive estimated that the annual price tag for Sovaldi could reach US$ 300 Billion because so many people have Hepatitis C infection worldwide.  This mindboggling amount is more than all spending on all drugs in the United States, currently.  A more realistic number might be between US$7 Billion and $12 Billion a year.  Even that amount is roughly five times the amount Gilead spends each year on research.

Like Sovaldi, in many other instances too, industry argument of recovering high R&D investment through product pricing would fall flat on its face.

Need to put all the cards on the table:

The distinguished author underscores in his article the expected responsibilities of the experts in this area to ask the global pharma industry to connect the dots for all us between:

  • The societal goals they aim to achieve
  • The costs they incur on R&D
  • The profits they should reasonably be earning.

Public investments in R&D:

Another article titled, “Putting Price On Life”, argues that R&D projects are mainly initiated in the public sphere through tax-funded research. Unfortunately, patients do not derive any benefit of these public investments in terms of reduction in prices for the related drugs. On the contrary, they effectively pay for these new products twice – once through tax-funded research and then paying full purchase price of the same drug.

Additionally, industry corners the praise for the work done by others in tax-funded research, while at the same time making R&D less risky, as public funded research groups carry out most of the initial risk prone and breakthrough innovation.

The article also highlights that global pharma companies receive other tax credits over billions of dollars for their expenditure on R&D. However, the R&D figures that are produced are not adjusted to take into account the tax credits, thereby inflating costs and the prices of drugs.

All these tax credits significantly lower the private costs of doing the R&D in the United States, increasing the private returns. Interestingly, there does not seem to be any public information regarding who gets the tax credit and what the credit is used for, while the government does not retain any rights in the R&D.

Does pharma R&D always create novel drugs?

According to a report, US-FDA approved 667 new drugs from 2000 to 2007. Out of these only 75 (11 percent) were innovative molecules having much superior therapeutic profile than the available drugs. However, more than 80 percent of 667 approved molecules were not found to be better than those, which are already available in the market.

Thus, the question that very often being raised by many is, why so much money is spent on discovery and development of ‘me-too’ drugs, and thereafter on aggressive marketing for their prescription generation? This is important, as the patients pay for the entire cost of such drugs including the profit, after being prescribed by the doctors?

Should Pharma R&D move away from its traditional models?

The critical point to ponder today, should the pharmaceutical R&D now move from its traditional comfort zone of expensive one company initiative to a much less charted frontier of sharing drug discovery involving many players? If this approach gains acceptance sooner, it could lead to significant increase in R&D productivity at a much lesser cost, benefiting the patients at large.

Finding the right pathway in this direction is more important today than ever before, as the R&D productivity of the global pharmaceutical industry, in general, keeps going south and that too at a faster pace.

Current IPR mechanism failing to deliver:

Current mechanism of Intellectual Property Rights (IPR), especially in the pharmaceutical space, undoubtedly facilitates spiraling high drug prices with no respite to patients and payers, as access to these drugs gets severely restricted to the privileged few, denying ‘right to life’ to many.

Moreover, the current global ‘Pharma Patent System’ does not differentiate between qualities of innovations. The system extends equal incentives for pricing the drugs as high as possible, even if those offer little advantages to patients. Fortunately, this loophole has been plugged in the Indian Patents Act 2005, to a large extent.

That said, there is no well-structured incentive available to develop clinically superior drugs with public funding, even in India, so that prices could be significantly lower with equally lesser risks to the companies too.

Conclusion:

Current pricing system of patented medicines is even more intriguing, as these have no direct or indirect co-relationship with R&D expenditures incurred by the respective players. On the contrary, drug prices allegedly go up due to other avoidable high expenditures, such as, physicians’ gratification oriented marketing, which includes even reported bribing, high profile political lobbying and private jet setting key executives lifestyle with exorbitant compensation packages, besides others.

To effectively address this issue, besides public R&D funding, there has been a number of suggestions for creation of a win-win pathway like, creation of “Health Impact Fund’. There are other inclusive, sustainable and cost effective R&D models too, such as ‘Open Innovation’ and ‘Accelerating Medicines Partnership (AMP)’, to choose from.

A recent HBR Article titled “A Social Brain Is a Smarter Brain” also highlighted, “Open innovation projects (where organizations facing tricky problems invite outsiders to take a crack at solving them) always present cognitive challenges, of course. But they also force new, boundary-spanning human interactions and fresh perspective taking. They require people to reach out to other people, and thus foster social interaction.” This articulation further reinforces the relevance of a new, contemporary and inclusive drug innovation model for greater patient access with reasonable affordability.

Be that as it may, ‘Patented Drug Pricing’ does not seem to have any relevance to a company’s investments towards R&D. On the contrary, the companies charge the maximum price that they could possibly handle to maximize profits on these life saving medicines.

In an environment of indifference like this, it is the responsibility of other stakeholders, especially the government, to ensure, by invoking all available measures, that life saving medications for dreaded diseases such as cancer, can get to those who need them the most, come what may.

Is the ever-alert new Government listening?

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.

“Kickbacks And Bribes Oil Every Part of India’s Healthcare Machinery” – A National Shame?

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“Corruption ruins the doctor-patient relationship in India” - highlights an article published in the well-reputed British Medical Journal (BMJ) on 08 May 2014. The author David Berger wrote, “Kickbacks and bribes oil every part of the country’s healthcare machinery and if India’s authorities cannot make improvements, international agencies should act.”

The author reiterated the much known facts that the latest in technological medicine is available only to those people who can pay for its high price. However, the vast majority of the population has little or no access to healthcare, and whatever access they have is mostly limited to substandard government care or to quacks, which seem to operate with near impunity. He further points out that “Corruption is rife at all levels, from the richest to the poorest”. It is a common complaint both from the poor and the middle class that they don’t trust their doctors from the core of hearts. They don’t trust them to be competent or to be honest, and live in fear of having to consult them, which results in high levels of doctor shopping.

Dr. Berger also deliberated on the widespread corruption in the pharmaceutical industry, with doctors bribed to prescribe particular drugs. Common stories usually doing the rounds that the decision makers in the hospitals are being given top of the range cars and other inducements when their hospitals sign contracts to prescribe particular expensive drugs preferentially.

The article does not fail to mention that many Indian doctors do have huge expertise, are honorable and treat their patients well. However, as a group, doctors generally have a poor reputation.

Until the profession along with the pharma industry is prepared to tackle this malady head-on and acknowledge the corrosive effects of medical corruption, the doctor-patient relationship will continue to lie in tatters, the paper says.

The saga continues through decades – unabated:

The above worrying situation in the space of medical treatment in India refuses to die down and continues since decades.

The article published in the British Medical Journal (BMJ) over a decade ago, on January 04, 2003 vindicates this point, when it brings to the fore, “Health care is among the most corrupt services in India”.

This article was based on a survey released by the India office of the international non-governmental organization ‘Transparency International’. At that time, it ranked India as one of the 30 most corrupt countries in the world. The study covered 10 sectors with a direct bearing on people’s lives, where the respondents rated the police as the most corrupt sector, closely followed by healthcare.

Medical Council of India (MCI) is responsible for enforcing the regulations on medical profession. Unfortunately, the MCI itself is riddled with corruption, fueled by the vested interests. As the first BMJ article indicates,   Subsequently, there has been controversy over the surprise removal, on the day India was declared polio-free, of the health secretary Keshav Desirajus, possibly in response to his resistance to moves to reappoint Desai to the reconstituted MCI.

Another point to ponder: Quality of Doctor – MR interactions

It is a well-established fact that the ethics, values and belief in pharmaceutical sales and marketing are primarily derived from the ethics, values and belief of the concerned organization.  Field staff systems, compliance, accountability, belief, value and culture also flow from these fundamentals. Thus, considering the comments made in the BMJ on the pharma companies, in general, let me now also deliberate on the desired roles of the Medical Representatives (MR) in this area.

It is well known that MRs of the pharma players exert significant influence on the prescribing practices of the doctors and changing their prescribing patterns too. At the same time, this is also equally true that for a vast majority of, especially, the General Practitioners (GPs), MRs are the key source of information for various drugs. In tandem, several research studies also indicate that doctors, by and large, believe that pharma companies unduly influence them.

Theoretically, MRs should be properly trained to convey to the target doctors the overall profile – the efficacy, safety, utility, precautions and contra-indications of their respective products. Interestingly, the MRs are trained by the respective pharma companies primarily to alter the prescribing habits of the target doctors with information heavily biased in favor of their own drugs.

As a result, range of safety, precautions and contra-indications of the products are seldom discussed, if not totally avoided, putting patients at risks by creating an unwarranted product bias, especially among GPs, who depend mainly on MRs for product information. Thus, the quality of product communication is mainly focused on benefits rather than holistic – covering all intrinsic merits/demerits of the respective brands in a professional manner.

Considering the importance of detailing in delivering the complete product information primarily to the GPs, there is a critical need for the pharma companies to train and equip the MRs with a complete detailing message and yet be successful in winning the doctors’ support.

This issue also needs to be properly addressed for the interest of patients.

“Means” to achieve the goal need to change: 

Globally, including India, many pharma players have not been questioned, as yet, just not on the means of their meeting the financial goals, but also the practices they follow for the doctors. These often include classifying the physicians based on the value of their prescriptions for the specific products. Accordingly, MRs are trained to adopt the respective companies’ prescribed ‘means’ to influence those doctors for creating a desirable prescription demand. These wide array of so-called ‘means’, as many argue, lead to alleged ‘bribery’/’kickbacks’ and other malpractices both at the doctors’ and also at the pharma companies’ end.

To address this issue, after the Chinese episode, GlaxoSmithKline (GSK) has reportedly announced that by the start of 2016 it will stop paying doctors to speak on its behalf or to attend conferences, to end undue influence on prescribers.

The announcement also indicated that GSK has planned to remove individual sales targets from its sales force. This means that MRs would no longer be paid according to the number of prescriptions they solicited from the doctors met by them.

Instead, GSK introduced a new performance related scheme that will reward the MRs for their technical knowledge, the quality of the service they deliver to support improved care of patients, and the overall performance of GSK’s business. The scheme is expected to start in some countries effective January 2014 and be in place globally by early 2015.

Further, GSK underscored that the latest changes were “designed to bring greater clarity and confidence that whenever we talk to a doctor, nurse, or other prescriber, it is patients’ interests that always come first.”

This is indeed a refreshing development for others to imbibe, even in India.

Capturing an Indian Example:

Just to cite an example, a couple of years ago Reuters in an article titled “In India, gift-giving drives drug makers’ marketing” reported that a coffee maker, cookware and vacuum cleaner, were among the many gifts for doctors listed in an Abbott Healthcare sales-strategy guide for the second quarter of 2011 in India, a copy of which was reviewed by Reuters.

It is interesting to note from the report, even for an antibiotic like Nupod (Cefpodoxime), doctors who pledge to prescribe Abbott’s branded drugs, or who’ve already prescribed certain amounts, can expect some of these items in return, the report mentioned.

Since decades, media reports have highlighted many more of such instances. Unfortunately, the concerned government authorities in India refused to wake-up from the deep slumber, despite the alleged ruckus spreading like a wild fire.

Self-regulation by the industry ineffective:

This menace, though more intense in India, is certainly not confined to the shores of this country. As we all know, many constituents of Big Pharma have already been implicated in the mega pharma bribery scandal in China.

Many international pharmaceutical trade associations, which are primarily the lobbying bodies, are the strong votaries of self-regulations by the industry. They have also created many documents in these regards since quite some time and displayed those in their respective websites. However, despite all these the ground reality is, the charted path of well-hyped self-regulation by the industry to stop this malaise is not working.

The following are just a few recent examples to help fathom the enormity of the problem and also to vindicate the above point:

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing of overseas doctors and other health officials to prescribe medicines.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.

Pricing is also another important area where the issue of both ethics and compliance to drug regulations come in. The key question continues to remain, whether the essential drugs, besides the patented ones, are priced in a manner that they can serve the needs of majority of patients in India. I have deliberated a part of this important issue in my earlier blog post titled “Is The New Market Based Pricing Model Fundamentally Flawed?”

There are many more of such examples.

Stakeholders’ anguish:

Deep anguish of the stakeholders over this issue is now being increasingly reverberated on every passing day in India, as it were. It had also drawn the attention of the patients’ groups, NGOs, media, Government, Planning Commission and even the Parliament.

The Department Related Parliamentary Standing Committee on Health and Family Welfare in its 58th Report strongly indicted the Department of Pharmaceuticals (DoP) on this score. It observed that the DoP should take prompt action in making the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ mandatory so that effective checks and balances could be brought-in on ‘huge promotional costs and the resultant add-on impact on medicine prices’.

Despite deplorable inaction by the erstwhile Government on the subject, frequent reporting by Indian media has triggered a national debate on this issue. A related Public Interest Litigation (PIL) is also now pending before the Supreme Court for hearing in the near future. Its judicial verdict is expected to usher in a breath of fresh air around a rather stifling environment for the patients.

Let us now wait and see what action the new minister of the Modi Government takes on this issue.

A prescription for change:

Very recently, Dr. Samiran Nundy, Chairman of the Department of Surgical Gastroenterology and Organ Transplantation at Sir Ganga Ram Hospital and Editor-in-Chief of the Journal of Current Medicine Research and Practice, has reportedly exposed the widespread (mal) practices of doctors in India taking cuts for referrals and prescribing unnecessary drugs, investigations and procedures for profit.

Dr. Nundy suggested that to begin with, “The Medical Council of India (MCI), currently an exclusive club of doctors, has to be reconstituted. Half the members must be lay people like teachers, social workers and patient groups like the General Medical Council in Britain where, if a doctor is found to be corrupt, he is booted out by the council.”

Conclusion:

Efforts are now being made in India by some stakeholders to declare all malpractices related to pharma industry illegal through enactment of appropriate robust laws and regulations, attracting exemplary punishments to the perpetrators.

However, enforcement of MCI Guidelines for the doctors and initiatives towards enactment of suitable laws/regulations for the pharma industry, like for example, the ‘Physician Payments Sunshine Act’ of the United States, have so far been muted by the vested interests.

If the new Modi government too, does not swing into visible action forthwith, this saga of international disrepute, corruption and collusion in the healthcare space of India would continue in India, albeit with increasing vigor and probably in perpetuity. This would, undoubtedly, sacrifice the interest of patients at the altar of excessive greed and want of the vested interests.

This new government, as most people believe, has both the will and wherewithal to hold this raging mad bull of pharma malpractices by the horn, ensuring a great relief and long awaited justice for all.

By: Tapan J. Ray

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

The New Government To Ponder: Is “Market Based Drug Pricing Policy” An ill Conceived One?

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According to a recent media report, Mr. Ananth Kumar, the new minister of Chemicals and Fertilizers has recently made a statement, as follows:

“… As far as branded medicines of multinational pharmaceutical companies are concerned, we will talk to all of them and try to bring down prices of essential drugs for poor by 25-40 per cent… The pharmaceutical industry is very important for the health of the country, he added…our main mission will be to ensure the availability of all necessary medicines at affordable prices, especially for poor across the country.”

This statement assumes great significance for the Indian Pharmaceutical Industry and simultaneously rekindles hope for many patients, as the minister expressed intent that the new government wants to revisit the current drug price control system of India.

However, why did the minister in his above statement single out MNCs for discussion, is not very clear, just yet. Most probably, this is due to much published reports that branded generics from MNCs, which are outside price control, usually cost more than others, for whatever may be the reasons. Anyway, that could be the topic of another discussion in this blog.

The backdrop of DPCO 2013:

After a protracted negotiation and lobbying by the Indian Pharma Industry and others with the then UPA II Government, a well sought after paradigm shift took place in the drug price control regime of India.

In the new “National Pharmaceutical Pricing Policy 2012”, the span of price control was changed from bulk-drug based to all drug formulations falling under the ‘National List of Essential Medicines 2011 (NLEM 2011)’. The methodology of price control was also radically modified from the cost-based to market based one. Accordingly the new Drug Price Control Order (DPCO 2013) was notified on May 15, 2013.

The decision to have new drug policy was taken as a last minute sprint, as it were, primarily driven by the immense pressure generated by the Supreme Court on the UPA II Government for pussyfooting this important issue over almost a decade.

Hurried action after prolonged inaction:

The last Drug Policy of India was announced in 2002, which was subsequently challenged by a Public Interest Litigation (PIL) in the Karnataka High Court on the ground of being inflationary in nature. The Honorable Court by its order dated November 12, 2002 issued a stay on the implementation of the Policy.

This judgment was challenged by the Government in the Supreme Court, which vacated the stay vide its order dated March 10, 2003 and ordered as follows:

“We suspend the operation of the order to the extent it directs that the Policy dated February 15, 2002 shall not be implemented. However we direct that the petitioner shall consider and formulate appropriate criteria for ensuring essential and lifesaving drugs not to fall out of the price control and further directed to review drugs, which are essential and lifesaving in nature till 2nd May, 2003”.

As a result, DPCO 1995 continued to remain in operation pending formulation of a new drug policy as directed by the honorable court, since then.

Unfortunately, the then government did not show any urgency to come out with a new drug policy, even thereafter, for about a decade.

Fortunately, in the recent years, coming under intense judicial scrutiny and pressure due to a PIL on the subject before the Supreme Court of India, the then Government was compelled to come out with the New National Pharmaceutical Pricing Policy 2012 (NPPP 2012), rather hurriedly, effective December 7, 2012.

That was the ‘grand beginning’ of a new paradigm of ‘market-based’ drug price control regime in India.

Hype and rapid disillusionment:

Many stakeholders, barring some NGOs, felt at that time that DPCO 2013 could be a win-win strategy for both the industry and patients, as it would apparently be less intrusive for the pharma players.

Along side, through ‘Public Relations’ overdrive, hype was created by vested interests to generate a feeling that the drug prices are coming down by 30-40 percent, as a result of the new market-based price control regime.

That could well be true for a handful of drugs, but the fact is that the industry was adversely impacted by around 2.3 percent and the span of price control came down from 20 percent of the just pervious DPCO 1995 to 18 percent in DPCO 2013, not impacting the industry as much as it was hyped before.

Realization of these facts was just enough for the public disillusionment to set in.

Questions started popping-up almost immediately:

Unfortunately, many key questions started popping-up just at the very onset of its implementation process. Besides many others, some basic questions raised on DPCO 2013, a good number of which went into litigations and/or departmental reviews, are as follows:

  • Implementability of new ‘Ceiling Prices (CP)’ for market stocks within 45 days of notification by the respective companies.
  • Criteria of calculation of 1 percent market share for brands.
  • How would already existing different drug delivery systems of the same drug substance be considered to work out a common CP?
  • How reliable is the IMS Data, based on which CP calculation would be done by the NPPA?
  • What will happen to those NLEM 2011 drugs for which IMS does not provide any information?

Erstwhile Finance Ministry wanted to continue with cost plus formula:

When the new draft National Pharmaceutical Pricing Policy (NPPP) had gone for comments from various ministries of UPA II Government, the key recommendations of the then Ministry of Finance were reportedly as follows:

  • The proposal to limit the NPPP to control prices of only formulations leaving aside bulk drugs is not supported.
  • Top priced brands in many therapy areas are also the brand leaders. As a result, high prices of such drugs while calculating the ceiling prices would push up prices of many low priced drugs significantly.
  • The current system, which is a cost plus system is adequate to cover all legitimate costs for a manufacturer, particularly when the costing is being done annually and should be continued.
  • The same cost plus system should also apply to other formulations where additional therapeutic elements will be added. Related incremental cost in those cases can be considered to determine the ceiling price of combination formulations.
  • The Maximum Retail Prices (MRP) for all NLEM 2011 drugs may be fixed by the NPPA accordingly and the pharmaceutical companies would be free to price these NLEM products at any level below the MRP.
  • Annual indexation of price with WPI is not supported. The cost analysis should determine the quantum of increase.
  • Data related to prices and market shares should be collected from sources other than IMS even for drugs covered by them. The methodology to be followed by NPPA for evaluating IMS data and for collecting the data for medicines from other sources should be included in the NPPP.
  • A phased movement towards 100 percent generic manufacturing, as recommended by the Ministry of Health (MoH), for all drugs under the NLEM should be considered.

Current imbroglio over ceiling price fixation:

A recent media report highlighted that even almost 15 months after the announcement of DPCO 2013, National Pharmaceutical Pricing Authority (NPPA) fails to fix prices of 111 scheduled formulations due to scanty available information.

According to this report, though NPPA has revised prices of over 400 formulations out of around 652 as per DPCO 2013, it has now come out with a list of 103 formulations for which prices could not be fixed due to insufficient information. Besides, it could not fix the prices of eight more formulations, as the NLEM 2011 did not provide required information, such as, strength, route of administration and dosage form.

Thus, it appears that required price control of essential drugs as per DPCO 2013 is in a limbo today because of serious implementability issues, over and above its other (de)merits, as discussed above.

The fundamental question:

The fundamental question that is now being raised by many is, whether from patients point of new there was any need to change from ‘Cost Based Price Control (CBPC)’ to the new ‘Market Based Price Control (MBPC)’ system?

As a result, a Public Interest Litigation (PIL) is still pending before the Supreme Court challenging DPCO 2013.

This judicial scrutiny could put the MBPC concept in jeopardy, placing the pharma price control system back to CBPC mode, unless the new government takes a pre-emptive strategic move well before hand.

The New Minister’s recent statement rekindles hope for action:

There are now more reasons to justify why the new Minister Mr. Ananth Kumar should revisit MBPC mechanism, sooner. As I wrote in one of my earlier blog post that “The New ‘Market Based Pricing Model’ is Fundamentally Flawed”.

Conclusion:

From the statements of the new Minister of Chemicals and Fertilizers herein, and also the new Health Minister, as quoted in my last blog post, it appears that the Department of Pharmaceuticals (DoP) would continue to remain with the Ministry of Chemicals and Fertilizers, at least for some more time. This is quite contrary to the general expectations that DoP would be a part of the Ministry of Health in the new regime.

That said, besides full implementability of DPCO 2013 for all essential drugs, the Ceiling Price (CP) calculation methodology also appears to be fundamentally flawed, its misuse and abuse by some pharma players, as highlighted in my earlier blog post, have also been a subject of great concern and consumer aghast.

With this rapidly evolving scenario, unless the new minister Ananth Kumar steps in to sort out the conundrum with deft handling, unlike his almost defunct predecessor in UPA II, or till the Supreme Court intervenes responding to the PIL on DPCO 2013 related issues, the growing dissatisfaction of the affected section of stakeholders and the constraints of the NPPA would continue to linger, poor patients being the ultimate sufferers.

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.

 

Is The New ‘Market Based Pricing’ Model Fundamentally Flawed?

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After a long wait of close to two decades, when the Drug Price Control Order 2013 (DPCO 2013) followed the National Pharmaceutical Pricing Policy 2012 (NPPP 2012) last year, it appeared that the new pharma price control regime is more acceptable to the industry than the previous, resulting in better over all implementation and compliance.

However, just within a year, the reality seems to be quite different. Not only the Ceiling Price (CP) calculation process of the National Pharmaceutical Pricing Authority (NPPA) based on DPCO 2013 appears to be fundamentally flawed, its misuse and abuse by some pharma players have also been the subject of great concern and consumer aghast.

The eternal ‘Cat and Mouse’ game continues:

Probably there would be many instances of pharmaceutical companies dodging the DPCO 2013. However, FDA, Maharashtra, has unearthed the following two instances, so far:

1. Favorable consumer expectations with well-hyped DPCO 2013 received a body blow for the first time, when the general public came to know through media reports, that too after almost a year, that GlaxoSmithKline (GSK) Consumer Healthcare having launched its new ‘Crocin Advance’ 500 mg with a higher price of Rs 30 for a strip of 15 tablets, has planned to gradually withdraw its conventional price controlled Crocin 500 mg brand costing around Rs 14 for a strip of 15 tablets to the patients . GSK Consumer Healthcare claims that Crocin Advance is a new drug and therefore should be outside price control.

According to IMS Health data, ‘Crocin Advance’ is currently the fifth largest brand among top Paracetamol branded generics, clocking a sales turnover of Rs 10.3 Crore during the last 12 months ending in February 2014.

2. The second instance of evading DPCO 2013 has also been reported by the media. In this case some other pharmaceutical companies have reportedly started selling the anti-lipid drug Atorvastatin in dosage forms of 20 mg and 40 mg, which are outside price control, instead of its price controlled 10 mg dosage form. Quoting the Maharashtra FDA, the report states: “Atorvastatin may face a similar kind of action from the state FDA as other overpriced brands of drugs as this drug has been overpriced five to 10 times more than the DPCO price. This kind of overcharging is a subject for investigation. Atorvastatin of 40 mg dosage is generally recommended for senior citizens.”

Tip of an Iceberg?

All these seem to be just the tip of an iceberg related to evasion of DPCO 2013 by some pharma black ships, raising costs of essential medicines for the patients. Ironically, what is happening now is an exact replica of the same old strategy that many pharma players got involved into to avoid price control under earlier DPCO 1995. Continuation of the same act of deceit with DPCO 2013 confirms that the ‘cat and mouse game’ to avoid price control is eternal in India, in the absence of any strong and exemplary deterrent.

Better late than never:

When Maharashtra FDA brought it to the notice of National Pharmaceutical Pricing Authority (NPPA), the later asked GSK to immediately reduce the market price of ‘Crocin Advance’, as there is no proven additional therapeutic efficacy for the product. The price regulator also sought confirmation of the action taken by the company in this regard. Additionally, GSK Consumer Healthcare now faces consequential punitive measures from the NPPA for price overcharging. This action on the part of NPPA, in all probability, would get lost in the quagmire of litigation, as usually happens in India.

Be that as it may, I expect NPPA taking similar action for Atorvastatin too and increasing its vigil for such scant respect on patient-centric laws and policies of the country.

A brief recapitulation:

Just to recapitulate, DPCO 2013 has been fundamentally different from its ‘predecessor’ DPCO 1995, mainly on the following two counts:

1. Methodology of Price Control:

This has changed from earlier ‘Cost Based Pricing (CBP)’ to ‘Market Based Pricing (MBP)’ based on simple average of all products having 1 percent or more market share.

2. Span of Price Control:

In DPCO 1995, all formulations of 74 bulk drugs, selected based on specified criteria, were under cost based price control, covering over 1700 formulations. Whereas, in DPCO 2013 all essential drugs as mentioned in the National List of Essential Medicines 2011 (NLEM 2011) come under price control applying the above new methodology of MBP. DPCO 2013 brings around 652 formulations of 348 drugs under 27 therapeutic segments of the NLEM 2011, under price control.

Significant benefits of DPCO 2013 to the industry:

DPCO 2013 offers following three key advantages to the industry, both in the short and longer term:

  • MBP methodology in DPCO 2013 is considered by the industry as more transparent and less ‘intrusive’ than CBP methodology.
  • Span of price control with DPCO 2013 came down to 18 percent of the total pharmaceutical market covering around 610 formulations, as against 20 percent in DPCO 1995 covering over 1700 formulations.
  • Opportunity for automatic annual price increase for controlled formulations based on WPI, which was not there in DPCO 1995, is now available to the industry. Thus, in keeping with the relevant provision of DPCO 2013, NPPA has recently allowed the drug companies to increase the Maximum Retail Price (MRP) of the price controlled medicines, contributing 18 percent of the total market, by 6.32 percent effective April 1, 2014, while prices of balance 82 percent of drugs, that are outside price control, can go up by 10 percent every year.

Check on essential drugs going out of market:

Interestingly, DPCO 2013 has tried to prevent any possibility of an essential drug going out of the market without the knowledge of NPPA by incorporating the following provision in the order:

“Any manufacturer of scheduled formulation, intending to discontinue any scheduled formulation from the market shall issue a public notice and also intimate the Government in Form-IV of schedule-II of this order in this regard at least six month prior to the intended date of discontinuation and the Government may, in public interest, direct the manufacturer of the scheduled formulation to continue with required level of production or import for a period not exceeding one year, from the intended date of such discontinuation within a period of sixty days of receipt of such intimation.”

However, it is still not clear, whether or not GSK Consumer Healthcare had followed this stipulated provision for price controlled conventional Crocin formulations. At least, I do not remember having come across any such public notice, as yet.

Key concerns expressed with DPCO 2013:

The MBP methodology seems to be unique to India as CBP is more common in countries that follow drug price control. Hence the following concerns were expressed with DPCO 2013.

  • Reduction in drug prices with market-based pricing methodology is significantly less than the cost based ones. Hence, consumers will be much less benefitted with the new system.
  • Earlier cost based pricing system was not more transparent only because a large section from the industry reportedly did not co-operate with the NPPA in providing cost details, as required by them.
  • Serious apprehensions have been expressed about the quality of outsourced market data lacking adequate confidence level across the board, which now forms the basis of CP calculations.
  • Additionally, outsourced data would provide details only of around 480 out of 652 NLEM formulations. How will the data for remaining products be obtained and with what level of accuracy?

It is, therefore, believed now by many that DPCO 2013 is more of an outcome of a successful lobbying efforts of the pharmaceutical industry in India, rather than a robust pricing policy supported by a flawless methodology for CP calculations.

DPCO 2013 faces challenge in the Supreme Court:

As a result of the above apprehensions, a Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing challenging DPCO 2013.

Ground Zero of the quality of outsourced market data:

While assessing from the ‘Ground Zero’, keeping aside instances of hoodwinking DPCO 2013 with tweaked formulations, the core issue of the quality of outsourced market data forming the bedrock of CP calculation by the NPPA, undoubtedly becomes more fundamental, creating huge discomfort for many pharma players .

Unlike DPCO 1995, where NPPA used to calculate the CP based on its own audits, data provided by the concerned companies and from many other reliable market sources, the calculations to arrive at the CP for DPCO 2013 products are based predominantly on data outsourced from IMS Health, if not solely.

IMS data does not always capture correct brand prices:

As stated above, many leading pharmaceutical companies are now reportedly pointing out repeatedly that the CP fixation by the NPPA is not accurate, as the IMS Health data does not represent the real prices in many cases.

This is not a new issue either. I have been hearing similar complaints since ages in different forum, wearing different hats and also from various other reliable industry sources. Moreover, NPPA and the Department of Pharmaceuticals (DoP) have indicated several times in the past that IMS data do not capture the requisite details as needed for over 100 products featured in NLEM 2011.

According to Pharmabiz of April 2, 2014, some of the companies expressing the above apprehensions are Sun Pharma, Unichem Labs, Panacea Biotec, Win-Medicare, Albert David, Baxter (India), Indi Pharma and Gland Pharma.

Responding to such widespread complaints, the DoP has directed NPPA to revalidate the IMS data, now being used for CP calculations, for all notified medicines. Accordingly, NPPA has sought the relevant details from respective companies. However, till such data validation takes place, pharma players must comply with all CPs, as notified by the NPPA from time to time.

Difficulty in data validation:

In my view, it would not be easy for the NPPA to revalidate the IMS data due to the following reasons:

  • Those companies, whose prices are showing higher than the current ones in the IMS Health data, may not report to NPPA, as that could ultimately affect them adversely.
  • Pharma companies’ response, in general, to requests from NPPA for furnishing cost and price related information has traditionally been much less than encouraging.

The logjam to continue:

With this evolving scenario, I reckon, till the Supreme Court intervenes responding to the PIL on DPCO 2013 related issues, the dissatisfaction of the industry and the constraints of the NPPA would continue, patients being the primary sufferers.

Conclusion:

Despite the reported concern expressed in the 2014 National Trade Estimate (NTE) Report on Foreign Trade Barriers over the Indian drug price control mechanisms as a deterrent to foreign investments, government price control for essential medicines in India is here to stay for a long haul, to uphold the patients’ health interest.

That said, the final verdict of the Supreme Court related to the PIL on the NPPP 2012, based on which DPCO 2013 has been worked out, is yet to come. Any unfavorable decision of the Honorable Court on the subject may push both the NPPP 2012 and DPCO 2013 back to square one, yet again.

In this backdrop, considering the key fundamental flaw in the CP calculation process of DPCO 2013 with associated loud hiccups as evidenced by the GSK Consumer Healthcare episode and others, would a well-considered verdict of the Supreme Court on the subject be more desirable for greater access to more affordable essential drugs by the patients in India?

By: Tapan J. Ray

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