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‘Fake Drugs Kill More People Each Year Than Terrorism In The Last 40 years’

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In this article, I shall deliberate on ‘fake medicines’ that we may at times land up into buying, without any inkling that instead of curing or managing the ailments, these products can push us into serious health hazards, quite contrary to what we and our doctors hope for.

One may term these substances as ‘Counterfeit’, ‘Fake’, ‘Spurious’ or ‘Sub-standard’ drugs, or in whatever other names one may wish to. The bottom-line is that such products in the guise of drugs could precipitate very serious and life-threatening health crisis for patients. This mindless game has already become both a global and local health menace, though in varying degrees and parameters in different countries.

According to INTERPOL, large sums of money are involved with these transnational criminal enterprises. Fake drug makers, who run this deadly trade undercover, use sophisticated tools and technologies and are well equipped to operate stealthily.

Deploying requisite wherewithal, this growing threat to public health and safety needs to be addressed expeditiously by all concerned and in tandem. Curbing this menace would call for great concerted focus in approach and execution of a fool-proof strategy with military precision.

At this stage, I reckon, we should not clutter the subject by mixing it up with other commercial considerations, such as Intellectual Property (IP) related matter, for which appropriate laws and mechanisms are already in place.

CBI underscores veracity of the problem:

Under the above backdrop, a Central Bureau of Investigation (CBI) Press Release dated June 24, 2015 announced that the First Indo-French Workshop on “Combating Counterfeit Medicine” for Police Officers, Investigators and other officers was held on 23 and 24 June 2015 in New Delhi.

The event was organized in collaboration with the French Embassy; Institute of Research Against Counterfeit Medicines, France; Central Office Against Environmental & Public Health Violations, France and Central Fight Against Harm to the Environment And Public Health (OCLAESP) and was hosted by the CBI. Mr. Anil Sinha, Director, CBI inaugurated the workshop.

‘Fake Drugs Kill More People Each Year than Terrorism’:

In his inaugural address, Mr. Sinha made a startling revelation, when he said, according to an estimate of INTERPOL; fake medicines kill more people in a year than those who have died in the past 40 years as a result of terrorism.

Just a few years ago, INTERPOL reportedly estimated that while more than 65,000 people were killed in over 40 years in transnational terrorist incidents, the estimates of deaths caused by fake medicines range from tens of thousands to hundreds of thousands annually.

Quoting Ronald Noble, the erstwhile Secretary General of INTERPOL another report says, “40 years of terrorism has killed about 65,000 people, while 200,000 people died from the use of counterfeit drugs last year alone, and that’s just in China.”

Both crime and big money are involved in this life-threatening menace. Citing an example the CBI Director said, ‘One illicit online pharmacy network, which was dismantled by US authorities in 2011, managed to earn USD 55 million during two years of operations’.

In India, we have already read about the raids conducted by Mumbai FDA in April 2015 on similar unauthorized online pharmacies in the country. Following this development, the Drug Controller General of India has announced his yet another good intent to look into this issue with the help of a trade organization.

I shall also discuss, very briefly though, about problems associated with online pharmacies related to fake drugs, the world over.

More problems in the developing nations:

The CBI Director also articulated in his address, “Though the ramification of this menace is worldwide, it is more pronounced in developing and under developed nations.”

Sometime back in 2006, a study published by the then International Medical Products Anti-Counterfeiting Task Force (IMPACT) indicated that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand, the problem is less than 1 percent. On the other hand, in the developing nations like parts of Asia, Latin America and Africa more than 30 percent of the medicines are counterfeits.

The above ‘Task Force’ also reported as follows:

“Indian pharmaceutical companies have suggested that in India’s major cities, one in five strips of medicines sold is a fake. They claim a loss in revenue of between 4 percent and 5 percent annually. The industry also estimates that spurious drugs have grown from 10 percent to 20 percent of the total market.”

‘Fake Drugs’ are more in countries with weak regulatory enforcement:

It has been observed that the issue of fake drugs is more common in those countries, where the regulatory enforcement mechanism is weak. India, I reckon, is one such country.

Interestingly, the Ministry of Health in India does not even recognize that fake Drugs are a growing menace in the country. This is vindicated by its latest report of 2009 on this subject.

The above report titled, “Report on Countrywide Survey for Spurious Drugs”, published by CDSCO on behalf of Directorate General of Health Services, Ministry of Health & Family Welfare, Government of India in 2009, concluded as follows:

“In view of above observations and data obtained from the manufacturers, after physical verification of all the drug samples and subsequent chemical analysis report on the representative of samples taken at random, it may be concluded that:

(i)             The extent of spurious drug in retail pharmacy is much below the projections made by various media, WHO, SEARO, and other studies i.e. only 0.046 % (11 samples out of 24,136 samples).

(ii)           Extents of substandard drugs among the branded items are only 0.1 % {Out of two thousand nine hundred seventy six (2976) unsuspected samples, 03 samples do not conform to claim with respect to Assay on chemical analysis}”

It is an irony that the drug regulators in India mostly keep demonstrating an ‘Ostrich Syndrome’ – refusing to acknowledge this menace that is blatantly obvious. They apparently believe that no health hazards due to prevalence of fake drugs exist in the country.

On the other side – many worrying reports:

Though the Government of India tends to wash its hands off on the very existence of this menace with the survey reports as above, following are just a few examples from other reports raising concerns on this critical issue in India:

  • A July 2014 ASSOCHAM report titled, “Fake and Counterfeit Drugs In India –Booming Biz” states that fake drugs constitute US$ 4.25 billion of the total US$ 14-17 billion of domestic pharmaceutical market. If the fake drugs market grows at the current rate of 25 percent, it will cross US$ 10 billion mark by 2017.
  • A May 2012 study published in ‘The Lancet’ reported that over one in three anti-malarial drugs sold in southeast Asia are fake while a third of samples in sub-Saharan Africa failed chemical testing for containing too much or too little of the active ingredient, potentially encouraging drug resistance. Around 7 percent of the drugs tested in India was found to be of poor quality with many being fake. India reportedly records 1.5 million cases of malaria every year.
  • A February 2012 report of ‘The National Initiative against Piracy and Counterfeiting’ of FICCI highlighted that the share of fake/counterfeit medicines is estimated at 15- 20 percent of the total Indian pharmaceutical market.
  • A 2011/12 report of the US Customs and Border Protection highlighted: “India and Pakistan both made it to top 10 source countries this year due to seizures of counterfeit pharmaceuticals. Pharma seizures accounted for 86 percent of the value of IPR seizures from India and 85 percent of the value of IPR seizures from Pakistan.”

DCGI intends to justify his moot point yet again:

In view of all these worrying reports and amid concerns around the quality of medicines being manufactured in India, in January 2015, the Drug Controller General of India (DCGI) proposed carrying out a nation-wide survey using methodology prepared by the Indian Statistical Institute, Hyderabad to assess the prevalence of fake and substandard drugs.

In the 2015 survey, around 42,000 locally made drug samples would be drawn from across the country throughout the rest of this year, which would include 15 therapeutic categories of drugs featuring in the National List of Essential Medicines (NLEM), 2011.

As I mentioned before, according to the DCGI this survey would “tell the world that our drugs are of quality”.

I discussed a similar issue titled, ‘Are We Taking Safe And Effective Medicines‘ in this Blog on November 13, 2013.

‘Fake Drugs’ and Online drug sales:

Before I touch upon this point and at the very outset, let me submit that in this article I shall not discuss on the merits or demerits of online pharmacies and the need of such e-outlets in India.

That said, it is now widely believed, backed by hard data that the Internet is increasingly assuming an attractive niche in the global diffusion of ‘fake drugs’.

Unlike India, some countries already support the business of legal online pharmacies by charting a transparent regulatory mechanism in place. For example in the United States all Internet pharmacies have to be licensed in the country. All their States require this. The general rule is, if an Internet pharmacy is offering to ship drugs into a particular state, they have to be licensed (but not necessarily located) there.

However, if an Internet pharmacy is shipping prescription drugs to individuals in the US from outside the US, that is absolutely illegal.

Some institutions in the US developed an accreditation system for Internet pharmacies. The official seals of these institutions, require to be posted on pharmacies’ website as a warrantee.

It is important to note that these institutions operate only at the national level and due to differences in domestic laws in different countries, it is difficult for any of them to provide customers with reliable information concerning the quality of pharmaceuticals, in general, available online.

Status of online pharmacies in India:

Although online sales of pharmaceuticals are totally illegal in India till date, there seems to be several such pharmacies still operating in the country.

It is generally believed that the impact of the Internet on ‘fake drugs’ business models is real. Thus, enforcement strategies need to be very stringent.

It is precisely for this reason, on April 17, 2015, Maharashtra’s Food and Drugs Administration (FDA) reportedly raided the premises of e-commerce major Snapdeal.com for allegedly selling medicines, including prescription drugs.

Immediately thereafter, the company announced that it has delisted the drugs on its portal and is assisting the FDA in the investigation.

Taking note of the prevailing scenario of illegal online sales of prescription drugs through e-commerce sites in India, DCGI office has reportedly started studying the existing regulations internationally to come out with a set of rules for online pharmacies. Meanwhile, DCGI has reportedly appointed the Federation of Indian Chambers of Commerce and Industry (FICCI) as the nodal agency for consolidating the guidelines.

Be that as it may, experts believe that online sale of drugs should be permitted in India only with strict and well thought out norms, which are enforceable hundred percent, anywhere within the country. Stringent guidance should be formulated in the amendment bill, 2015 of Drugs & Cosmetics Act & Rules, accordingly.

Conclusion:

Keeping this emerging scary scenario in perspective on the menace of fake drugs, the message of the CBI Director in this regard must be noted by the Government with all seriousness…continuing ‘all is well’ signals from the DCGI, not withstanding.

All stakeholders of the pharmaceutical industry must be made aware, on a continuous basis, of the health hazards posed by fake medicines in India.

As the penetration of Internet keeps increasing at a galloping speed in the country, unregulated online sales of ‘fake drugs’ in the guise of ‘licensed medicines’, pose a very real threat to public health and safety. If and when online sales of medicines are legalized, enforcement of all rules and laws in this regards need to be very stringent with exemplary punitive actions prescribed, for even slightest violations.

In tandem, the DCGI and other regulatory and enforcement agencies in the states, healthcare professionals, patients, all pharmaceutical manufacturers, drug distributors, wholesalers and retailers should join hands to play a proactive role in curbing the menace of ‘fake medicines’ that victimize the innocent patients.

No Wolf in sheep’s clothing must be allowed coming anywhere in the near vicinity…at all.

By: Tapan J. Ray

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

 

With Highest Billionaire Wealth Concentration, India Tops Malnutrition Chart in South Asia: “What Future Do You Want?”

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Two recent global research reports, though on different spheres, place India at the top of the respective blocks. However, the take away messages that the studies offer are indeed poles apart in qualitative terms and worth pondering over collectively.

On January 20, 2014, just before the World Economic Forum (WEF) at Davos in Switzerland, Oxfam International released a report warning that by 2016, the world’s wealthiest 1 percent will control almost half of the global assets. Since 2009, the world’s billionaires have seen their share of the asset pie grow from 44 percent to 48 percent.

Before that, a World Bank Report of October 2014 titled, “Addressing Inequality in South Asia”, highlighted that India has the highest billionaire wealth concentration in South Asia.

Billionaire wealth to gross domestic product ratio in India was 12 percent in 2012. This was was higher than other economies with similar development level, namely, Vietnam with its ratio at less than two percent, and China with less than five percent.

This report also clarifies that inequality in South Asia appears to be moderate when looking at standard indicators such as the Gini index, which are based on consumption expenditures per capita. But other pieces of evidence reveal enormous gaps, from extravagant wealth at one end to lack of access to the most basic services at the other.

Stark realities: 

Wealth creation by no means is bad and in fact, is essential for economic growth of any nation, if read in isolation. This is mainly because, as the Oxfam report says, some economic inequality is essential to drive growth and progress, rewarding those with talent, hard earned skills, and the ambition to innovate and take entrepreneurial risks.

Unfortunately, at the same time, as the same World Bank report highlights, the stunted growth of children under fiver years of age, due to malnutrition, has been 60 percent of the total number of children born in the poorest households of India, as compared to 50 per cent in Bangladesh and Nepal.

Moreover, According to UNICEF, every year 1 million children again below the age of five years die due to malnutrition related causes in India. This number is worrisome as it is far higher than the emergency threshold, according to W.H.O classification of the severity of malnutrition.

Highlighting stark inequality in India, the report says, “The net worth of a household that is among the top 10 per cent can support its consumption for more than 23 years, while the net worth of a household in the bottom 10 per cent can support its consumption for less than three months.”

Some poor moved above the poverty line, though grossly inadequate:

According to the same report, from 2004-05 to 2009-10 when India’s GDP registered the highest ever average growth, about 40 percent of poor households moved above the poverty line and around 11 percent of poor population even moved into the middle class. Unfortunately, during the same period around 14 percent of the non-poor population also slipped below the poverty line.

Thus, what needs to be addressed soonest is the issue of vast difference in income between the richest and the poorest leading to an equally huge difference in the access to basic human developmental needs such as, education, healthcare and nutrition.

Adverse impact on expected ‘demographic dividend’ of India:

As legendary Bill Gates said in a recent media interview, “India has got far more kids that are malnourished and whose brains are not developed, way more than any other country. That’s really the crisis.”

If this trend of inequality continues, the ‘demographic dividend’ of India that the country has factored in so intimately in its future GDP growth narrative, could well be no more than a myth.

As US Supreme Court Justice Louis Brandeis once famously said, “We may have democracy, or we may have wealth concentrated in the hands of the few, but we cannot have both.”

The Oxfam report also emphasizes, the extreme levels of wealth concentration occurring today threaten to exclude hundreds of millions of people from realizing the benefits of their talents and hard work.

Social inequality and healthcare challenges:

Health of an individual is as much an integral contituent of the socio-economic factors as it is influenced by a person’s life style and genomic configurations. Important research studies indicate that socio-economic disparities, including the educational status, lead to huge disparity in the space of healthcare.

As stated in another report, ‘About 38 million people in India (which is more than Canada’s population) fall below the poverty line every year due to healthcare expenses, of which 70 percent is on purchase of drugs’.

Thus, reduction of social inequalities ultimately helps to effectively resolve many important healthcare issues. Otherwise, mostly the minority population with adequate access to knowledge, social and monetary power will continue to have necessary resources available to address their healthcare needs, appropriately.

Regular flow of newer and path breaking medicines to cure and effectively treat many diseases has not been able to eliminate either trivial or dreaded diseases alike. Otherwise, despite having effective curative therapy for malaria, typhoid, cholera, diarrhea/dysentery and venereal diseases, why will people still suffer from such illnesses? Similarly, despite having adequate preventive therapy, like vaccines for diphtheria, tuberculosis, hepatitis and measles, our children still suffer from such diseases. All these continue to happen mainly because of socio-economic inequalities related considerations, including poor level of awareness.

A paper titled, “Healthcare and equity in India”, published in The Lancet (February, 2011) identifies key challenges to equity in service delivery, healthcare financing and financial risk protection in India.

These include: 

- Imbalanced resource allocation

- Limited physical access to quality health services and inadequate human resources for health

- High out-of-pocket health expenditures

- High health spending inflation

- Behavioral factors that affect the demand for appropriate healthcare

Research studies vindicate the point:

Following are some research studies, which I am using just as examples to vindicate the above argument on inequality adversely impacting healthcare:

• HIV/AIDs initially struck people across the socio-economic divide. However, people from higher socio-economic strata responded more positively to the disease awareness campaign and at the same time more effective and expensive drugs started becoming available to treat the disease, which everybody cannot afford. As a result, HIV/AIDS are now more prevalent within the lower socio-economic strata of the society.

• Not very long ago, people across the socio-economic strata used to consume tobacco in many form. However, when tobacco smoking and chewing were medically established as causative factors for lung and oral cancers, those coming predominantly from higher/middle echelon of the society started giving up smoking and chewing of tobacco, as they accepted the medical rationale with their power of knowledge. Unfortunately the same has not happened with the poor people of lower socio-economic status. As a consequence of which, ‘Bidi’ smoking and ‘Gutka’/tobacco chewing have not come down significantly among the population belonging to such class, with more number of them falling victim of lung and oral cancers.

Thus, in future, to meet the unmet needs when more and more sophisticated and high cost disease treatment options will be available, mostly people with higher socio-economic background will be benefitted more due to their education, knowledge, social and monetary power. This widening socio-economic inequality will consequently widen the disparity in the healthcare scenario of the country.

Phelan and Link in their research study on this subject had articulated as under:

“Breakthroughs in medical science can do a lot to improve public health, but history has shown that, more often than not, information about and access to important new interventions are enjoyed primarily by people at the upper end of the socioeconomic ladder. As a result, the wealthy and powerful get healthier, and the gap widens between them and people who are poor and less powerful.”

Recent deliberations at Davos:

In the last two decades, socio-economic inequality in India has been fuelled by rapid, but unequal economic growth of the nation. Though the overall standard of living has been rising, there still remain a large number of populations living in pockets of intense deprivation and abject poverty.

One of the Davos sessions of this year deliberated on “What Future Do You Want?” The session, among others, reportedly felt the important need to ensure people’s well being and put in place effective measures such as a social safety net and universal healthcare.

At the same WEF annual meet at Davos, United Nation’s Secretary General Ban Ki-Moon also reiterated, “All policies must be people centric. We should make a world where nobody is left behind.”

Conclusion:

Assuming the above approach as a sincere realization of the current policy makers and more importantly the powerful influencers of those policies, the key question that comes up is: In which direction would India now chart its course to address this critical issue?

One may possibly hazard a guess on the shape of the future policies to come in India from the BJP party President Amit Shah’s recent address to crème de la crème of Mumbai businessmen in a function organized by a business news channel. In this event Mr. Shah reportedly said to them that the BJP does not agree with their definition of “reforms” and will strive to build a welfare state.

Will this approach of the new political dispensation get reflected in the forthcoming union budget as well, to effectively translate the new National Health Policy of India into reality, at least this time?

I deliberated on the National Health Policy of India in my Blog Post of January 12, 2015, titled “India’s National Health Policy 2015 Needs Wings To Fly”

That said, if it really so happens, a strong signal would go to all stakeholders that India is now well poised to chart on an uncharted frontier to significantly reduce the impact of inequality, particularly in the space of healthcare.

In that process, despite the highest billionaire wealth concentration, India would set a pragmatic course to place itself at the top of the healthcare chart, not just in South Asia, but probably also within the BRIC countries, to expect the least.

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.

New “National IPR Policy” of India – A Pharma Perspective

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Whether under pressure or not, is hardly of any relevance now. What is relevant today is the fact that the new Indian Government, almost in a record time of just around two months, has been able to release a high quality first draft of an important national policy for public discourse.

In October 2014, the Department of Industrial Policy and Promotion (DIPP) constituted a six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan to draft the ‘National IPR Policy’ of India and taking quick strides, on December 19, 2014, released its first draft of 29 pages seeking stakeholders’ comments and suggestions on or before January 30, 2015. A meeting with the stakeholders has now been scheduled on February 5, 2015 to take it forward.

A quick glance at the Draft IPR Policy:

The proposed ‘Mission Statement’ as stated in the draft “National IPR Policy” is:

“To establish a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and to accelerate economic growth, employment and entrepreneurship.”

Specifying its vision, mission and objectives, the draft policy suggests adopting a catchy national slogan to increase IP awareness: ‘Creative India; Innovative India’ and integrating IP with “Smart cities”, “Digital India” and “Make in India” campaigns of the new Government.

The ‘Think Tank’ dwells on the following seven areas:

  • IP Awareness and Promotion
  • Creation of IP
  • Legal and Legislative Framework
  • IP Administration and Management
  • Commercialization of IP
  • Enforcement and Adjudication
  • Human Capital Development

In the policy document, the ‘Think Tank’ has discussed all the above seven areas in detail. However, putting all these in a nutshell, I shall highlight only three of those important areas.

1. To encourage IP, the ‘Think Tank’ proposes to provide statutory incentives, like tax benefits linked to IP creation, for the entire value chain from IP creation to commercialization.

2. For speedy redressal of patent related disputes, specialized patent benches in the high courts of Bombay, Calcutta, Delhi and Madras have been mooted. The draft also proposes creation of regional benches of the IPAB in all five regions where IPOs are already located and at least one designated IP court at the district level.

3. The draft concludes by highlighting that a high level body would monitor the progress of implementation of the National IP Policy, linked with performance indicators, targeted results and deliverables. Annual evaluation of overall working of the National IP Policy and quantification of the results achieved during the period have also been suggested, along with a major review of the policy after 3 years.

Although the National IPR policy cuts across the entire industrial spectrum and domains, in this article I shall deliberate on it solely from the pharmaceutical industry perspective.

Stakeholders’ keen interest in the National IPR Policy – Key reasons:

Despite full support of the domestic pharmaceutical industry, the angst of the pharma MNCs on the well-balanced product patent regime in India has been simmering since its very inception, way back in 2005.

A chronicle of recent events, besides the seven objectives of the IPR policy as enumerated above, created fresh general inquisitiveness on how would this new policy impact the current pharmaceutical patent regime of India, both in favor and also against.

Here below are examples of some of those events:

  • At a Congressional hearing of the United States in July 2013, a Congressman reportedly expressed his anger and called for taking actions against India by saying:

“Like all of you, my blood boils, when I hear that India is revoking and denying patents and granting compulsory licenses for cancer treatments or adopting local content requirements.”

This short video clipping captures the tone and mood of one such hearing of the US lawmakers.

  • On April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘Priority Watch List Country’. Placement of a trading partner on the ‘Priority Watch List’ or ‘Watch List’ indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.
  • It further stated that USTR would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern. An OCR is a tool that USTR uses on adverse IPR issues and for heightened engagement with a trading partner to address and remedy in those areas.
  • “India misuses its own IP system to boost its domestic industries,” commented the US Senator Orrin Hatch while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) of US Chamber of Commerce on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30. The main reasons for the low score in the report were cited as follows:

-       India’s patentability requirements are (allegedly) in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.

-       Non-availability of regulatory data protection

-       Non-availability of patent term restoration

-       The use of Compulsory Licensing (CL) for commercial, non-emergency situations.

Based on this report, US Chamber of Commerce urged USTR to classify India as a “Priority Foreign Country”, a terminology reserved for the worst IP offenders, which could lead to trade sanctions.

  • In the midst of all these, international media reported:

“Prime Minister Narendra Modi got an earful from both constituents and the US drug industry about India’s approach to drug patents during his first visit to the US last month. Three weeks later, there is evidence the government will take a considered approach to the contested issue.”

  • Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma trade associations globally, has reportedly urged the US government to continue to keep its pressure on India in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too. Interestingly, as reported in the media a senior representative of this lobby group would be India when President Obama visits the country later this month.
  • In view of all these concerns, during Prime Minister Narendra Modis’s visit to the United States in September 2014, a high-level Indo-US working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries.
  • Almost immediately after the Prime Minister’s return to India, in October 2014, the Government formed a six-member ‘Think Tank’ to draft ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas. The notification mandated the ‘Think Tank’ to examine the current issues raised by the industry associations, including those that have appeared in the media and give suggestions to the ministry of Commerce and Industry as appropriate.
  • However, the domestic pharma industry of India, many international and national experts together with the local stakeholders continue to strongly argue against any fundamental changes in the prevailing patent regime of India.

A perspective of National IPR Policy in view of Pharma MNCs’ concerns:

I shall now focus on four key areas of concern/allegations against India on IPR and in those specific areas what has the draft National IPR Policy enumerated.

- Concern 1: “India’s patentability requirements are in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.”

Draft IPR Policy states: “India recognizes that effective protection of IP rights is essential for making optimal use of the innovative and creative capabilities of its people. India has a long history of IP laws, which have evolved taking into consideration national needs and international commitments. The existing laws were either enacted or revised after the TRIPS Agreement and are fully compliant with it. These laws along with various judicial pronouncements provide a stable and effective legal framework for protection and promotion of IP.”

A recent vindication: Just last week (January 15, 2015), Indian Patent Office’s (IPO’s) rejection of a key patent claim on Hepatitis C drug Sovaldi (sofosbuvir) of Gilead Sciences Inc. further reinforces that India’s patent regime is robust and on course.

Gilead’s patent application was opposed by Hyderabad based Natco Pharma. According to the ruling of the IPO, a new “molecule with minor changes, in addition to the novelty, must show significantly enhanced therapeutic efficacy” when compared with a prior compound. This is essential to be in conformity with the Indian Patents Act 2005. Gilead’s patent application failed to comply with this legal requirement.

Although Sovaldi ((sofosbuvir) carries an international price tag of US$84,000 for just one treatment course, Gilead, probably evaluating the robustness of Sovaldi patent against Indian Patents Act, had already planned to sell this drug in India at a rice of US$ 900 for the same 12 weeks of therapy.

It is envisaged that this new development at the IPO would prompt entry of a good number of generic equivalents of Sovaldi. As a result, the price of sofosbuvir (Sovaldi) formulations would further come down, despite prior licensing agreements of Gilead in India, fetching huge relief to a large number of patients suffering from Hepatitis C Virus, in the country.

However, reacting to this development Gilead has said, “The main patent applications covering sofosbuvir are still pending before the Indian Patent Office…This rejection relates to the patent application covering the metabolites of sofosbuvir. We (Gilead) are pleased that the Patent Office found in favor of the novelty and inventiveness of our claims, but believe their Section 3(d) decision to be improper. Gilead strongly defends its intellectual property. The company will be appealing the decision as well as exploring additional procedural options.”

For more on this subject, please read my blog post of September 22, 2014 titled, “Gilead: Caught Between A Rock And A Hard Place In India”

- Concern 2: “Future negotiations in international forums and with other countries.”

Draft IPR Policy states: “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.”

- Concern 3: “Data Exclusivity or Regulatory Data Protection.”

Draft IPR Policy states: “Protection of undisclosed information not extending to data exclusivity.”

- Concern 4: “Non-availability of patent term restoration, patent linkage, use of compulsory licensing (CL) for commercial, non-emergency situations”.

Draft IPR Policy: Does dwell on these issues.

I discussed a similar subject in my blog post of October 20, 2014 titled, “Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?”

Conclusion: 

Overall, the first draft of the outcome-based model of the National IPR Policy appears to me as fair and balanced, especially considering its approach to the evolving IPR regime within the pharmaceutical industry of India.

The draft policy though touches upon the ‘Utility Model’, intriguingly does not deliberate on ‘Open Source Innovation’ or ‘Open Innovation’.

Be that as it may, the suggested pathway for IPR in India seems to be clear, unambiguous, and transparent. The draft policy understandably has not taken any extreme stance on any aspect of the IP. Nor does it succumb to high voltage power play of the United States and its allies in the IPR space, which, if considered, could go against the public health interest.

It is heartening to note, a high level body would monitor the progress of implementation of the National IPR Policy, which will be linked with performance indicators, targeted results and deliverables. Annual evaluation of the overall working of the policy and the results achieved will also be undertaken. A major review of the policy will be done after 3 years.

That said, pharma MNCs in general, don’t seem to quite agree with this draft policy probably based purely on commercial considerations, shorn of public health interest. It is quite evident, when a senior lobbyist of a powerful American pharma lobby group reportedly commented to Indian media on the draft National IPR Policy as follows:

“Real progress will only be achieved when India demonstrates through policy change that it does indeed value the importance of intellectual property, especially for the innovative treatments and cures of today and tomorrow”.

It appears, India continues to hold its stated ground on IPR with clearly enunciated policy statements. On the other hand MNCs don’t stop playing hardball either. Though these are still early days, the question that floats on the top of mind: Who would blink first?…India? Do you reckon so?

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.

 

Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?

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I discussed in one of my earlier blog posts titled “Has Prime Minister Modi Conceded Ground To America On Patents Over Patients?” of October 6, 2014 that on April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘priority watch list country’.

Special 301 Report and OCR – A brief Background:

According to the Office of USTR, Section 182 of the US Trade Act requires USTR to identify countries that deny adequate and effective protection of IPR or deny fair and equitable market access to US persons who rely on Intellectual Property (IP) protection. The provisions of Section 182 are commonly referred to as the “Special 301” provisions of the US Trade Act.

Those countries that have the ‘most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on relevant US products’ are to be identified as Priority Foreign Countries. In addition, USTR has created a “Priority Watch List” and a “Watch List” under Special 301 provisions. Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.

In the 2014 Special 301 Report, USTR placed India on the Priority Watch List and noted that it would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern.

An OCR is a tool that USTR uses on IPR issues of concern and for heightened engagement with a trading partner to address and remedy such issues.

For the purpose of the OCR of India, USTR had requested written submissions from the public concerning information, views, acts, policies, or practices relevant to evaluating the Government of India’s engagement on IPR issues of concern, in particular those identified in the 2014 Special 301 Report.

The Deadlines for written submissions were as follows:

Friday, October 31, 2014 - Deadline for the public, except foreign governments, to submit written comments.

Friday, November 7, 2014 - Deadline for foreign governments to submit written comments.

India’s earlier response to 2014 Special 301 Report:

On this report, India had responded earlier by saying that the ‘Special 301’ process is nothing but unilateral measures taken by the US to create pressure on countries to increase IPR protection beyond the TRIPS agreement. The Government of India has always maintained that its IPR regime is fully compliant with all international laws.

The issue was raised during PM’s US visit:

According to media reports, Prime Minister Narendra Modi, during his visit to America last month, had faced power packed protests against the drug patent regime in India from both the US drug industry and also the federal government.

The Indo-US joint statement addresses remedial measures:

In view of this concern, Indo-US high-level working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries. TPF has five focus groups: Agriculture, Investment, Innovation and Creativity, Services, and Tariff and Non-Tariff Barriers.

The recent joint statement issued after the talks between Prime Minister Narendra Modi and US President Barack Obama captures the essence of it as follows:

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

Unilateral measures resurface within days after PM’s return from the US:

Almost immediately after Prime Minister Narendra Modi’s return from the US, USTR ‘s fresh offensive with OCR against India’s IP regime, could have an adverse impact on the proposed bilateral dialogue with Washington on this issue.

However, dismissing this unilateral action of America, the Union Commerce Ministry, has reiterated the country’s stand, yet again, as follows:

“As far as we are concerned, all our laws and rules are compliant with our commitments at WTO. A country can’t judge India’s policies using its own yardsticks when there is a multilateral agreement.”

As many would know that several times in the past, India has unambiguously articulated, it may explore the available option of approaching the World Trade Organization (WTO) for the unilateral moves and actions by the US on IPR related issues, as IPR policies require to be discussed in the multilateral forum, such as WTO.

A fresh hurdle in the normalization process:

Many see the latest move of USTR with OCR as a fresh hurdle in the normalization process of a frosty trade and economic relationship between the two countries. More so, when it comes almost immediately after a clear agreement inked between Prime Minister Modi and President Obama in favor of a bilateral engagement on IPR related policies and issues. Let me hasten to add, USTR has now clarified, “The OCR will not revisit India’s designation on the 2014 Priority Watch List.”

What does US want?

The initiatives taken by the USTR, no doubt, are in conformance to the US law, as it requires to identify and prepare a list of trade barriers in the countries with whom the US has trade relations, and with a clear focus on IPR related issues.

Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma associations globally, has reportedly urged the US government to continue to keep its pressure on India, in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too.

It is pretty clear now that to resolve all IP related bilateral issues, the United States wants the Indian Patents Act to be amended as an exact replica of what the American lawmakers have enacted in their country, including evergreening of patents and no compulsory licensing unless there is a national disaster or emergency. They require it, irrespective of whatever happens as a result of lack of access to these new drugs for a vast majority of Indian patients.

Thus, it is understandable, why the Indian government is not surrendering to persistent American bullying.

A series of decisions taken by the Union government of India on both patents and drug pricing is a demonstration of its sincere endeavor to increase access to drugs, as less than 15 percent of 1.2 billion people of the country are currently covered by some sort of health insurance.

Global healthcare NGOs strongly reacted:

The Doctors Without Borders’ (MSF) Access Campaign articulated, “India’s production of affordable medicines is a vital life-line for MSF’s medical humanitarian operations and millions of people in the developing countries.”

It further added, “India’s patent law and practices are favorable to public health, were put in place through a democratic legislative process, and are in line with international trade and intellectual property rules… Every country has the right to set policies that balance private business interests with public health needs.”

MSF reportedly warned Prime Minister Modi that US officials and Big Pharma would continue to try to lobby and pressurize him over India’s current patent regime and urged him, “Don’t back down on drug patents”.

“The world can’t afford to see India’s pharmacy shut down by US commercial interests,” MSF reiterated.

Under US bullying, is India developing cold feet?

In the midst of all these, an international media reported:

“Prime Minister Narendra Modi got an earful from both constituents and the US drug industry about India’s approach to drug patents during his first visit to the US last month. Three weeks later, there is evidence the government will take a considered approach to the contested issue.”

Quoting an Indian media report, the above international publication elaborated, the Department of Industrial Policy and Promotion (DIPP) of India, has delayed a decision on whether to grant a Compulsory License (CL) for Bristol-Myers Squibb’s (BMS) leukemia drug Sprycel. DIPP has sent a letter to the Health Ministry, questioning its rationale for saying there was a “national emergency” when chronic myeloid leukemia affects only 0.001% of the population. The letter asked how much the government is spending on the drug, and pointed out that there is no indication of a growing trend in the disease.

This Indian report commented, if the DIPP had agreed to issue a CL for Sprycel on the recommendation of the Union Ministry of Health, it would have ‘cheered’ the public health activists, but would have adversely impacted Indo-US relations that the Indian Prime Minister wants to avoid for business interests.

A Superficial and baseless interpretation:

In my view, the above comments of the Indian media, which was quoted by the international publications, may be construed as not just superficial, but baseless as well.

This is because, DIPP has become cautious on the CL issue not just now, but at least over a couple years from now (please read: Health Min’s compulsory license proposal hits DIPP hurdle, DIPP seeks details on 3 cancer drugs for compulsory licensing).

This is also not the first time that DIPP has sought clarification from the Ministry of Health on this subject.

Hence, in my view, this particular issue is being unnecessarily sensationalized, which has got nothing to do with hard facts and far from being related to the PM’s visit to America.

Conclusion:

The Indian Parliament amended the Patent Act in 2005, keeping the interest of public health right at the center. The Act provides adequate safeguards, including checks on evergreening of patents and broader framework for CL. All these conform to the Doha Declaration, which categorically states “TRIPS Agreement does not and should not prevent WTO members from taking measures to protect public health”.

For similar reasons, the Indian Act does not provide for ‘evergreening’ of patents. The Supreme Court judgment on Glivec is a case in point. If the Indian patent regime is weak and not TRIPS-compliant, the aggrieved country should approach the dispute settlement body of the WTO for necessary action. Thus, it is intriguing if the US, which took India to WTO over the latter’s solar power policy, is not doing the same for pharma IP. Is it really sure that the allegation that ‘the Indian Patent Act is non-TRIPS compliant’ is a robust one?

There is no denying that innovation is the wheel of progress of any nation and needs to be rewarded and protected. However, there is an equally important need to strike the right balance between patent regimes and safeguarding public health interest. In that sense, the Indian Patents Act occupies a position of strength, not weakness.

Considering all these, unilateral American measures against India for amendment of the country’s Patents Act in sync with theirs, ultimately would prove to be foolhardy.

The high-level working group on IP constituted as a part of the bilateral Trade Policy Forum (TPF), would be the right platform to sort out glitches in this arena, keeping Indian patients’ health interests at the center, and at the same time without jeopardizing justifiable business interests of the innovator companies.

Otherwise in all probability, India would continue to hold its justifiable ground on IPR steadfastly, remaining unfazed under pressures and provocations of any kind.

By: Tapan J. Ray

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

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

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

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

The backdrop:

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

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

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

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

  • To urge the US to challenge India in the WTO dispute settlement body and test whether they are indeed right.
  • Nine years have elapsed since the Indian law came into force; and, while bitterly complaining about its flaws, the USTR has not dared challenge it in the WTO. Nor would it do so now. Why?
  • There is, at best, a minuscule chance that the USTR will win the case.
  • Against this, it must weigh the near certainty of losing the case and the cost associated with such a loss.
  • Once the Indian law officially passes muster with the WTO, the USTR and pharmaceutical lobbies will no longer be able to maintain the fiction that India violates its WTO obligations.
  • Even more importantly, it will open the floodgates to the adoption of the flexibility provisions of the Indian law by other countries.
  • Activists may begin to demand similar flexibilities even within the US laws.

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

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

Examples of some global and local views:

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

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

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

  • Maruti Suzuki, India’s largest car manufacturer, aircraft maker Boeing, global pharma major Abbott and technology leader Honeywell have reportedly just not supported India’s IP regime, but have strongly voiced that IPR regime of India is “very strong” and at par with international standards.
  • The Chairman of the Indian pharma major – Wockhardt also echoes the above sentiment by articulating, “I think Indian government should stay firm on the Patents Act, which we have agreed.”
  • Other domestic pharma trade bodies and stakeholder groups in India expect similar action from the ‘Modi Government’.

Who are against Indian IP regime?

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

Recent stand of India on unilateral US measures:

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

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

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

The Indo-US working group on IP:

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

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

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

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

IP experts’ expressed concerns even in the US:

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

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

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

Professor Baker further said:

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

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

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

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

Has India conceded to American bullying?

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

No change in India’s position on patents:

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

  • There has been no change in India’s stated position on Intellectual Property Rights (IPR).
  • India has reaffirmed that the IPR legal regime in India is fully TRIPS-compliant.
  • A bilateral Innovation and Creativity Focus Group already exists in the Trade Policy Forum (TPF) since 2010. Any IP related issues have to be discussed by the United States only in the TPF. This group consults each other no less than twice a year on improving intellectual property rights protection and enforcement, enhancing awareness of intellectual property rights, fostering innovation and creativity, and increasing collaboration between American and Indian innovators.
  • The Indo-US joint statement issued now merely reiterates whatever has existed in the earlier Trade Policy Forum. IPR issues are critical for both the countries and India has been repeatedly raising the issue of copyright piracy and misappropriation of traditional knowledge with the US.
  • The US agreeing to discuss IPR issues through the bilateral mechanism of the Trade Policy forum is in fact a re-affirmation of India’s stand that issues need bilateral discussion and not unilateral action. The statement on the IPR issue will only strengthen the bilateral institutional mechanism.

Conclusion:

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

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

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

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

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

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

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

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

By: Tapan J. Ray

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.

 

Higher The Healthcare Spend, Better The Healthcare Performance: A Myth?

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It is generally believed, higher the per-capita expenditure of healthcare, better is the overall ‘healthcare performance’ of a nation.

However, this myth has recently been busted by a new study, the take-home message of which would be quite relevant for India too. It flags a very important point, just as too low per-capita expenditure on healthcare fails to deliver an optimal healthcare performance to the target population, higher health expenditure, on the other hand, does not have any linear relationship with commensurately better healthcare performance either.

The question, therefore, comes up: What then would be the optimal per-capita spending on healthcare to offer quality healthcare performance in a country like India?

The study:

According to this recent Commonwealth Fund report , per-capita expenditures on healthcare in 2011 of eleven wealthy nations were as follows:

Per-Capita Healthcare Spend in 2011

Rank Country US $
1. United States 8,508
2. Norway 5,669
3. Switzerland 5,643
4. Netherlands 5,099
5. Canada 4,522
6. Germany 4,495
7. France 4,111
8. Sweden 3,925
9. Australia 3,800
10. United Kingdom 3,405
11. New Zealand 3,182

Against the above spend, the ‘Healthcare Performance’ rankings of the same 11 nations were as under, showing no linear relationship between higher per-capita healthcare expenditure and better healthcare performance:

Performance of Healthcare System

Rank Country
1. United Kingdom
2. Switzerland
3. Sweden
4. Australia
5. Germany
6. Netherlands
7. New Zealand
8. Norway
9. France
10. Canada
11. United States

The basis of ranking:

Interestingly, though the healthcare expenditure of the United States of America at 17.4 percent of Gross Domestic Product (GDP) is the highest in the world, according to this report, America ranks worst among all these nations, namely, France, Australia, Germany, Canada, Sweden, New Zealand, Norway, the Netherlands, Switzerland and the United Kingdom.

The ranking was made based various factors, which include quality of care, access to doctors and equity throughout the country.

The U.K. ranked best, with Switzerland following a close second, though their respective per-capita expenditures on healthcare were much less than the United States.

Holds good in BRIC perspective too:

Coming to the BRIC nations’ perspective, though India’s per-capita healthcare spend has been the lowest among these 4 countries, the following quick example would clearly establish that here also the healthcare performance does not have any linear relationship with the per-capita healthcare spend:

Per capita Healthcare expenditure in 2011: Country Comparison

Country US $ World Rank Physician/1000 people Hospital/1000 people Life expectancy at birth (years)
Brazil 1120.56   41 1.76 2.3 73.4
Russia 806.7   55 4.31 9.6 69.0
India 59.1 152 0.65 0.9 67.08
China 278.02   99 1.82 3.8 73.5

(Source: WHO data)

Taking the United States as an example:

To illustrate the point further, let me take the US details as an example, as it incurs the highest per-capita expenditure on healthcare. When that is the fact, does high healthcare spending of the US help the patients commensurately? 

Going by these reports, it does not appear so, as:

  • The Commonwealth Fund report also states, “Moreover, US patients were the most likely to find it very difficult to get after-hours care without going to an emergency room – 40 percent said it was very difficult, compared with only 15 percent in the Netherlands and Germany, the lowest rates of any country on this measure.”
  • The 2008 Commonwealth Fund survey, of 7,500 chronically ill patients in Australia, Canada, France, Germany, the Netherlands, New Zealand, the UK and the USA, reportedly also found that: “More than half (54 percent) of the US patients did not get recommended care, fill prescriptions, or see a doctor when sick because of costs, compared to 7 percent – 36 percent in other countries. About a third of the US patients – more than in any other country – experienced medical errors or poorly-coordinated care, while 41 percent spent more than US$ 1,000 in the past year on out-of-pocket medical costs, compared with 4 percent in the UK and 8 percent in the Netherlands.”

The study also highlighted the following for the United States with the highest health expenditure:

  • Lesser number of doctors and hospital beds among developed nations:

The US has fewer physicians per 100,000 populations than any of the other countries apart from Japan, and the fewest doctor consultations (3.9 per capita) than any except Sweden. Relative to the other countries in the study, the US also had few hospital beds, short lengths of stay for acute care and few hospital discharges per 1,000 populations.

  • Highest rates of potentially preventable deaths from asthma and amputations due to diabetes:

While the US performs well on breast and colorectal cancer survival rates, it has among the highest rates of potentially preventable deaths from asthma and amputations due to diabetes, and rates that are no better than average for in-hospital deaths from heart attack and stroke.

  • Individual payers negotiate prices with health care providers:

In the US, individual payers negotiate prices with health care providers, a system that leads to complexity – and varying prices for the same goods and services, says the study.

Where is the high healthcare spending of US going?

High health costs in the United States are mostly due to higher prices driven by free-market economy and not quality of care, says the study. Some of the key characteristics of the US healthcare space in the areas under discussion are as follows:

High and totally decontrolled drug prices:

The drug prices are totally decontrolled in the US, unlike most other developed nations, where price negotiations for reimbursed drugs are the common norms.

The above study highlights that US prices for the 30 most commonly-used branded prescription drugs are more than double the prices paid in Australia, France, the Netherlands, New Zealand and the UK, and they are a third higher than in Canada and Germany. In contrast, prices of generic drugs are lower in the US than in any of the other 12 nations due to very high competition. This reinforces the point that any delay in the entry of generics after patent expiry would impact the patients and the payor very adversely

Expensive hospital stays:

US hospital stays are far more expensive than in other countries, at more than US$18,000 per discharge compared with about US$13,000 in Canada and under US$10,000 in Sweden, Australia, New Zealand, France and Germany.

Conclusion:

In 1999, according to a WHO Study, per capita healthcare expenditure in India was just US$ 18.2. The figure rose to US$ 28.7 in year 2004 and US $ 59.1 in 2011, which reflects a double digit Compounded Annual Growth Rate (CAGR) in per capita healthcare expenditure of the country from the 2004 study to 2011. The absolute numbers may be far from adequate; nevertheless, the trend is ascending. This needs to be accelerated, possibly by the new health minister with the prime minister’s direct help and intervention.

There is a lot to learn from the US healthcare model too, especially from its pitfalls and regulatory structure, as deliberated above.

Finally, taking a cue from all these, India should decide at what per-capita spend, with all necessary regulatory measures being firmly in place, the country would be able to ensure quality ‘access’ to healthcare for all its citizens.

Mere comparison of per-capita healthcare spend of each country, I reckon, may not mean much now. India needs to ‘reinvent the wheel’ in this area, as it were, to arrive at its own health expenditure model for quality healthcare service delivery to all in the country. This is more important than ever before, as higher healthcare spends do not necessarily mean commensurately better healthcare performance.

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.

New Clinical Trial Regime Deserves Support, Sans Threats

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Recent Supreme Court intervention compelling the Union Government to enforce stringent regulations both for approval and conduct of Clinical Trials (CT) in India, has unfortunately met with some strong resistance with stronger words. Some of these voices are from credible experienced sources and the shriller ones are mostly from vested interests with dubious credentials. However, it is also a fact that this interim period of process change in CT has resulted in around 50 per cent drop in new drug trials in the country, pharma MNCs being most affected.

Brief background:

The earlier system of CT in India created a huge ruckus as many players, both global and local, reportedly indulged in widespread malpractices, abuse and misuse of the system. The issue was not just of GCP or other CT related standards, but mostly related to ethical mind-set or lack of it and rampant exploitation of uninformed patients/volunteers, especially related to trial-related injuries and death All these are being well covered by the Indian and international media since quite some time.

The Bulletin of the World Health Organization (WHO) in an article titled, “Clinical trials in India: ethical concerns” reported as follows:

“Drug companies are drawn to India for several reasons, including a technically competent workforce, patient availability, low costs and a friendly drug-control system. While good news for India’s economy, the booming clinical trial industry is raising concerns because of a lack of regulation of private trials and the uneven application of requirements for informed consent and proper ethics review.”

Earlier system did not work: 

Just to give a perspective, according to a report quoting the Drug Controller General of India (DCGI), 25 people died in clinical trials conducted by 9 pharma MNCs, in 2010. Unfortunately, families of just five of these victims received” compensation for trial related deaths, which ranged from an abysmal Rs 1.5 lakh (US$ 2,500) to Rs 3 lakh (US$ 5,000) to the families of the diseased.

This report also highlighted that arising out of this critical negligence, the then DCGI, for the first time ever, was compelled to summon the concerned nine pharma MNCs on June 6, 2011 to question them on this issue and give a clear directive to pay up the mandatory compensation for deaths related to CTs by June 20, 2011, or else all CTs of these nine MNCs, which were ongoing at that time or yet to start, will not be allowed.

The 9 pharma MNCs summoned by the DCGI to pay up the mandatory compensation for deaths related to CTs were reported in the media as Wyeth, Quintiles, Eli Lilly, Amgen, Bayer, Bristol-Myers Squibb (BMS), Sanofi, PPD and Pfizer.

The report also indicated that after this ultimatum, all the 9 MNCs had paid compensation to the concerned families of the patients, who died related to the CTs. However, the situation did not change much even thereafter.

Indictment of Indian Parliamentary Committee:

On May 8, 2012, the department related ‘Parliamentary Standing Committee (PSC)’ on Health and Family Welfare presented its 59th Report on the functioning of the Indian Drug Regulator – the Central Drugs Standard Control Organization (CDSCO) in both the houses of the Parliament.

The report made the following scathing remarks on Central Drugs Standard Control Organization (CDSCO) under its point 2.2:

“The Committee is of the firm opinion that most of the ills besetting the system of drugs regulation in India are mainly due to the skewed priorities and perceptions of CDSCO. For decades together it has been according primacy to the propagation and facilitation of the drugs industry, due to which, unfortunately, the interest of the biggest stakeholder i.e. the consumer has never been ensured.”

Catalytic change with tough norms:

The intervention of the apex court heralded the beginning of a catalytic changing process in the CT environment of India. The court intervention was in response to a Public Interest Litigation (PIL) filed by the NGO Swasthya Adhikar Manch calling for robust measures in the procedural guidelines for drug trials in the country.

In an affidavit to the Court, the Government admitted that between 2005 and 2012, 2,644 people died during CTs of 475 New Chemical Entities (NCEs)/New Molecular Entities (NMEs), with serious adverse events related deaths taking 80 lives.

Accordingly, changes have been/are being made mostly in accordance with the recommendations of Professor Ranjit Roy Chaudhury Experts Committee that was constituted specifically for this purpose by the Union Ministry of Health.

Prof. Ranjit Roy Chaudhury experts committee in its 99-page report has reportedly recommended some radical changes in the CT space of India. Among others, the report also includes:

  • Setting up of a Central Accreditation Council (CAC) to oversee the accreditation of institutes, clinical investigators and ethics committees for CTs in the country.
  • Only those trials, which will be conducted at centers meeting these requirements, be considered for approval by the DCGI.

All modifications in the procedural norms and guidelines for CTs are expected to protect not just the interest of the country in this area, but would also ensure due justice to the volunteers participating in those trials.

The DCGI has now also put in place some tough norms to make the concerned players liable for the death of, or injury to, any drug trial subject. These guidelines were not so specific and stringent in the past. There are enough instances that CT in India, until recently, had exploited poor volunteers enormously, many of which reportedly did not have any inkling that the efficacy and safety of the drugs that they were administering were still undergoing tests and that too on them.

With those radical changes to the rules of the Drugs and Cosmetics Act, 1940, pertaining to CT, it is now absolutely mandatory for the principal investigator of the pharmaceutical company, unlike in the past, to reveal the contract between the subject and the company to the DCGI. Besides, much reported process of videography of informed consent ensuring full knowledge of the participant has already been made mandatory. Further, any death during the process of CT would now necessarily have to be reported to the DCGI within 24 hours.

A report quoting the Union Minister of Health has highlighted that, “Earlier, the informed consent of the persons on which the trials had been conducted was often manipulated by the companies to the disadvantage of the subjects,”

Reaction to change:

With the Government of India tightening the norms of CT, the drug trial process and the rules are undergoing a metamorphosis with increased liability and costs to the pharma players and Contract Research Organizations (CROs). The reaction has been moderate to rather belligerent from some corners. One such player reportedly has publicly expressed annoyance by saying: “The situation is becoming more and more difficult in India. Several programs have been stalled and we have also moved the trials offshore, to ensure the work on the development does not stop.”

There were couple of similar comments or threats, whatever one may call these, in the past, but the moves of the Government continued to be in the right direction with the intervention of the Supreme Court.

No reverse gear:

Thus, coming under immense pressure from the Indian Parliament, the civil society and now the scrutiny of the Supreme Court for so many CT related deaths and consequential patients’ compensation issues, the Government does not seem to have any other options left now but to bring US$ 500 million CT segment of the country, which is expected to cross a turnover of US$ 1 Billion by 2016, under stringent regulations. Thus any move in the reverse gear under any threat, as mentioned above, appears unlikely now.

Experts believe that the growth of the CT segment in India is driven mainly by the MNCs for easy availability of a large treatment naive patient population with varying disease pattern and demographic profile at a very low cost, as compared to many other countries across the world.

Conclusion: 

While the importance of CTs to ensure better and more effective treatment for millions of patients in India is immense, it should not be allowed at the cost of patients’ safety, under any garb…not even under any open threat of shifting CTs outside India.

If the DCGI loosens the rope in this critical area and even inadvertently allows some pharmaceutical players keep exploiting the system just to keep the CT costs down only for commercial considerations, judiciary has no option but to effectively intervene in response to PILs, as happened in this particular case too.

The new system, besides ensuring patients’/volunteers’ safety, justice, fairplay and good discipline for all, will have the potential to help reaping a rich economic harvest through creation of a meaningful and vibrant CT industry in India in the long run, simultaneously benefitting millions of patients, as we move on. However, the DCGI should ensure to add reasonable speed to the entire CT approval process, diligently.

Taking all these into consideration, let all concerned support the new CT regime in India, sans any threats…veiled or otherwise.

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.

 

Access to Medicine: Losing Track in Cacophony

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Indian Healthcare space is by and large an arena, where perceptions prevail over the changing reality in many important areas. Consequently, fierce discourse in those areas mostly gives rise to a cacophony of ‘Your Perceptions Against Mine’.

It is intriguing, why even in some well-hyped research studies of recent times, multiple interpretations are made not based on specific analytics-based numbers, but around critical data gaps and then the vital ‘conclusion’ is craftily packaged in a particular way to reinforce a set of perceptions and view points.

Serious discourse on ‘Access to Medicine’ in India often falls in these data crevasses, resulting nothing more than abject cynicism and expert sermons sans accountability from all quarters. Suggestions for precise quantification of magnitude of the problem, so far as ‘Access to Medicine’ is concerned, and then measuring the same periodically for sustainable corrective measures, obviously fade away in the din of multiple shrill voices, heavily loaded with self-perceptions attempting to score favorable brownie points.

A quantifiable number on overall ‘access to medicines’ remains illusive:

A quantifiable recent number on overall ‘Access to Modern Medicines’ in India, which could well form the base to measure progress of the country in this critical area subsequently, still remains illusive.

It is an irony, no one seems to know today what is the current ‘Access to Modern Medicines’ in India, in real term.

A recent study too goes around it, but NOT into it:

A 2012 industry sponsored study carried out by IMS Consulting, instead of giving just one number for overall ‘Access to Modern Medicines’ in India, went around it by reiterating the obvious that ‘access’ has 4 dimensions such as, Physical Reach, Availability/Capacity, Quality/Functionality and Affordability.

That is fine. No issue. However, the much sought after number of overall ‘Access to Modern Medicines’ still remained illusory in this study too. Interestingly, there are no numbers available to public for each of the above 4 important dimensions either. Thus the cacophony got shriller.

Clutching on to ‘Dinosaurian data’ in modern times:

Against the above backdrop, like many others, both local and global, even the honorable President of India on January 16, 2013, while addressing the ASSOCHAM 10th Knowledge Millennium Summit, quoted the ‘World Medicines Situation of 2004 report’, the base year of which is reportedly 1999. This study indicated, ‘only 35% of the population of India, against 53% in Africa and 85% in China has access to modern medicines’.

Thus in the absence of any recently updated number, the ‘Dinosaurian data’ of 1999 (published in 2004) is being considered relevant by many even in 2013, including the esteemed industry body that probably provided those irrelevant data to the president of India’s office for his speech, at the beginning of this year.

Importance of capturing today’s ‘Access’ data to provide ‘Healthcare to all’:

There should not be even an iota of doubt that the above reported scenario has changed quite significantly, at least, during the last decade in India, making the 1999 (published in 2004) ‘Access to Medicines’ numbers irrelevant, having no sense whatsoever in 2013.

To drive home this point, I shall now focus on just three sets of parameters, besides many others, to vindicate my comment on ‘dinosaurian data’. These parameters are as follows:

  1. Compounded Annual Growth Rate (CAGR) in per-capita expenditure on healthcare from 2006-11
  2. Compounded Annual Growth Rate (CAGR) of the domestic pharmaceutical industry in this period
  3. Quantum of increase in use of public healthcare facilities

1. Per capita Healthcare expenditure from 2006-11:

Year US $
1999 18.2
2004 28.7
2006 33.0
2007 39.9
2008 42.7
2009 43.6
2010 51.4
2011 59.1

(Source WHO Data)

The above table vey clearly highlights that in 1999, the base year of the above study, per capita healthcare expenditure in India was just US$ 18.2. The figure rose to US$ 28.7 in year 2004, when that study was published. The number reached to US $ 59.1 in 2011. This reflects a double digit Compounded Annual Growth Rate (CAGR) in per capita healthcare expenditure of the country from the 2004 study to 2011.

No doubt, this number is still much less than many other countries. Nevertheless, in 2013, per capita healthcare expenditure in India will be even more, indicating significant increase in ‘Access’ as compared to 2004.

2. Growth of domestic pharmaceutical market: 

According to the PwC – CII report titled “India Pharma Inc.: Gearing up for the next level of growth”, the domestic drug market has been clocking a CAGR of more than 15 percent over the last five years. Thus, high growth of the Indian Pharmaceutical Market (IPM) since the last decade, both from the urban and the rural areas, would certainly signal towards significant increase in the domestic consumption of medicines. Moreover, fast growing rural and semi-urban markets would also clearly support the argument in favor of increasing ‘Access to Modern Medicines’ in India.

A back of the envelope calculation:

Improvement in access as compared to what ‘World Medicines Situation of 2004 report’ had highlighted, may not have a linear relationship to the volume growth of the industry during this period. However, a large part of this growth could indeed be attributed to increase in overall consumption of drugs, leading to improvement in access to medicines in India.

For example, out of the reported 15 percent CAGR of the IPM, if one attributes just 8 percent volume growth/year to increased access to drugs, a back of the envelope calculation would indicate that during last nine years over the base year of 2004, the access to medicines has improved at least to 70 percent of the population, if not more, and has NOT remained just at 35 percent, as many tend to establish a point or two by quoting the above dated report.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend, as evidenced in the honorable President of India’s speech in 2013, as quoted above. Official communications of the government also keep quoting the outdated statistics stating that 65 percent of the population of India does not have ‘Access to Modern Medicines’ even today.

Be that as it may, around 30 percent of Indian population would still perhaps not have ‘Access to Medicines’ in India. This issue needs immediate attention of the policy makers and can possibly be achieved through effective implementation of a holistic public health policy model like, ‘Universal Health Care (UHC)’.

3. Increase in use of public healthcare facilities:

According to a study done by the IMS Consulting Group in 2012, in rural India, which constitutes around 70 percent of the total 1.2 billion populations of India, usage of Government facilities for Out Patient (OP) care has increased from 22 percent in 2004 to 29 percent in 2012, mainly due to the impact of National Rural Health Mission (NRHM). This increase will have significant impact in reducing ‘Out of pocket (OoP)’ healthcare expenses of the rural poor.

Overall impact on some key health indicators: 

The same 2012 study of IMS Consulting highlights that an objective and comprehensive assessment of healthcare access in India was last undertaken in 2004, through a survey performed by the National Survey Sample Organization (NSSO). 
The survey reported on multiple parameters related to healthcare, including morbidity in broad age groups, immunization status, episodes of outpatient/ inpatient treatment across geography/ income segments together with expenditure on treatment. These measures, the study indicates, were taken collectively to indicate the status of healthcare access.

According to this report, the Government of India had undertaken multiple programs to improve healthcare access. These programs have addressed numerous issues, in varying proportion, that are linked to healthcare access, including lack of infrastructure, high cost of treatment, and the quality and availability of treatment. Some of these programs have been enormously successful: for example, India is a polio-free country today, the study reinforces.

The study also highlights significant progress in some basic healthcare indicators. The examples cited are as follows:

  • Maternal mortality rate has decreased by ~50 percent, and was reported at 200 deaths per 100,000 live births in the year 2010 as compared to 390 a decade ago. A few states such as Tamil Nadu, Maharashtra, and Kerala have already achieved the Millennium Development Goal (MDG) of a maternal mortality ratio less than 109 maternal death per 100,000 live births, with multiple other states close to achieving this target.
  • Infant mortality rate has decreased by greater than 25 percent over the period 2000–2009, and was reported at 50 deaths per 1,000 live births. Correspondingly, the under-5 child mortality rate (U5MR) has decreased by similar percentage levels, and was reported at 64 deaths per 1,000 live births. While U5MR for urban India has achieved the MDG target of 42 the same for rural of 71 is significantly lagging the target level.
  • Immunization coverage has increased significantly, for example diphtheria-tetanus-pertussis immunization among 1 year olds has increased from 60% to 70%, and the Hepatitis B coverage has increased from 68% in 2005 to 91% in 2010.
  • National programs have successfully improved detection and cure rates for tuberculosis and leprosy.

No direct relationship established between healthcare spend and outcomes:

Though India’s per-capita healthcare spend has been lowest among the usually compared BRIC countries, the following quick example would clearly establish that the healthcare outcomes do not have a linear relationship with the per-capita healthcare spend either:

Per capita Healthcare expenditure in 2011: Country Comparison

Country US $ World Rank Physician/1000 people Hospital/1000 people Life expectancy at birth (years)
Brazil 1120.56   41 1.76 2.3 73.4
Russia 806.7   55 4.31 9.6 69.0
India 59.1 152 0.65 0.9 67.08
China 278.02   99 1.82 3.8 73.5 

(Source: WHO data)

Thus, taking a cue from these numbers, India should decide at what percapita spend the country would possibly be able to ensure quality ‘access’ to healthcare for 100 percent of its population. Mere, comparison of percapita spend of each country, I reckon, may thus not mean much.

Conclusion:

The moot point, I reckon, is that, to measure progress in any sphere of activity, one will need to have a robust well-derived base point. Thereafter, progress needs to be monitored and quantified periodically from one point to the next.

So far as the access to healthcare in general and medicines in particular are concerned, it becomes difficult to fathom why is this basic approach still not being considered to measure progress in ‘Access’ and its rate in India.

As a result, discussions among the stakeholders do not take place around those updated numbers, either. Instead, what we hear is a high decibel cacophony of perceptions, at times groping around various dimensions of ‘Access’ and that too without quantification of each, as stated above.  This makes the task all the more complicated in pursuit of providing ‘Healthcare to All’ in India.

That said, the question to ponder now:

Does any one know what is the current ‘Access to Modern Medicines’ number in India and at what rate the progress is being made in that direction to achieve ‘Health for All’ objective of the country?

By: Tapan J. Ray

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