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Shape of Future Pharma Operations – Emerging A Pragmatic Outlook?

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Just as newer reports come almost every day on safety, efficacy, dosage interval or span of immunity of Covid vaccines, similar reports are also reaching us about the possible future shape of pharma sales and marketing operations. Some hardcore optimists, apparently more from India, still believe that current changes in pharma customer behavior are mostly transient. All business processes will eventually fall in their traditional grooves, as the Covid menace disappears from our lives soon.

No doubt, several studies are also bringing out a number of respondent doctors’ preferences on reverting to F2F engagements, programs and events. Nonetheless, most other experts, including several large global pharma majors, believe that the future shape of business operations won’t be quite the same as the past. There are better ways to be more effective, leveraging the changing environment. Accordingly, they have initiated actions, reimagining the pathway of new operational frontiers. In this article, I shall explore the evolving pragmatic outlook in just two of these action areas:

  • The new and unique role of medical representatives
  • Digital health care solutions as a new growth opportunity

New role of medical representatives:

A recent survey published by Reuters Events Pharma on December 18, 2020, revealed that 30% of the respondents still expect that Medical Reps’ (MR) face-to-face access to HCPs would return to the status quo ante of Covid pandemic restrictions. However, a majority of 70% felt that the old normal is unlikely return as such. The study also brought out that the size and disposition of sales teams are under review by many of pharma players and smaller field forces look likely, as the industry moves on.

My personal experience with the Indian Pharma Industry sources suggests, when a Covid pandemic wave starts finding its peak, the feeling of the above 70% prevails. However, when the same wave climbs down from its peak to a transient trough, a large number of Indian companies and experts tend to feel somewhat akin to what the above 30% expressed in the Reuters Events Pharma survey. The process gets repeated with the emergence of the next wave.

Alongside, as the above survey also finds out, most physicians are no longer expecting – brand-driven high sales pitches, during any MR-Doctor interaction or the engagement process. Instead, they are increasingly looking for insights – in an integrated, personalized and value-driven interactions with the Reps.

Considering this as a trend of over last one year or so, it is likely that MR-doctor interactions will now need to be on digital and omnichannel platforms to deliver a personalized and value driven an experience to the customers. In this environment, the field force may be smaller in size than what it used to be in early 2020 but will have a unique new role to play. This process will come with a new challenge, especially to those inbred companies, who are still undecided about the road ahead for business excellence, in the new normal.

Three new pharma leadership challenges:

Apparently, a large number of domestic drug companies, irrespective of size and scale of operations still feel comfortable to be in the old comfort zone that had propelled the business in a growth trajectory. Most pharma sales and marketing staff members, at several levels, have grown within the industry, consistently delivering high performance.

This situation by itself, as the above research paper revealed, poses three fresh challenges for many companies to make their field-staff ready to play a unique and fresh role in e-marketing. Thus, the three new knots to untie in the virtual world, are the following:

  • Currently, most MRs are not proficient in selling in virtually,
  • They are being led by people who have also never sold virtually,
  • They are being trained by people who also have never sold virtually.

MRs will continue to have a role to play even in the digital world:

To overcome the above challenges, today’s reality prompts new L&D needs of pharma’s new e-environment. And from this perspective, I think, they would need professional domain experts’ hand-holding, at least, in the transition phase of digital marketing. Some companies have initiated this process for greater sales force effectiveness, since 2019. A recent example in this area may be quoted from a report on October 01, 2019.

The article highlights, ‘AstraZeneca sales reps have some new help in the coaching department, resulting improved interactions and better development of sales reps’ strengths. While leaders still manage reps, artificial intelligence—in the form of data generated from thousands of field-coaching forms—now adds machine-learned analysis and advice.’

Thus, it is worth noting that MRs will continue to play an important role, alongside remote digital marketing using omnichannel or multi-channel engagement platforms. The same also came out clearly in the latest study from healthcare consultancy ZoomRx, reported on April 08, 2021, where its findings raised an important question - ‘Did pharma overshoot digital sales rep calls?’ This dilemma was prompted by the study charts reflecting a decline in its effectiveness, during this specific survey period.

Thus, in my opinion, a hybrid business model for better performance will be more effective in the new normal. However, ascertaining the right mix of digital and MR’s in-person interactions, may pose a challenge for many pharma marketers.

Entry into digital health solutions – an opportunity for growth: 

Before Covid pandemic, digital therapeutics or digital health solutions were not an unknown area for several pharma companies, as a growth booster in the modern world. But, it wasn’t explored so intensively as it is being discussed today, for the same. A recent paper titled, ‘Digital health during COVID-19: lessons from operationalizing new models of care in ophthalmology,’ published in The Lancet on February 01, 2021, vindicates this point.

The paper emphasized, due to Covid pandemic ‘the traditional face-to-face patient–physician care model has had to be re-examined in many countries, with digital technology and new models of care being rapidly deployed to meet the various challenges of the pandemic.’ It further highlighted, these new models incorporate digital health solutions such as telehealth, AI based decision support for triaging, besides clinical care, and home monitoring.

Global pharma majors, such as Novartis, have publicly acknowledged on January 21, 202 that ‘digital innovation looks set to dominate the 2021 healthcare agenda.’ The statement said, COVID-19 was a catalyst for change in healthcare during 2020 and an accelerator for digital health. Similarly, 2021 looks set to continue the revolution – exploiting ‘an explosion of interest, traction and scale’ in the potential for digital solutions. These would not only support remote working, but also keep the very fabric of business, healthcare, education, and essential services in operation.

Other important and recent examples of digital health care solutions: 

Witnessing the COVID-19 pandemic pushing more people toward virtual doctor visits over the last one year, AstraZeneca, as reported on April 06, 2021, is preparing for it in the new normal, through a novel project with Massachusetts General Hospital. The Company is now in the process of establishing and validating its ‘recently launched digital health platform, designed to help patients with chronic illnesses manage their conditions without stepping foot into the academic medical center’s clinic.’

Similarly, several other companies, are also investing to be early entrants with user friendly state of the art technology in this space. Interestingly, many of these ventures were reported during March and April 2021.

Conclusion:

Arthur Miller’s play ‘Death of a Salesman,’ broadly addressed the loss of identity and a man’s inability to accept change within himself and society. Although, the book depicts a larger philosophical perspective of life – many pointed out similar issues in the drug industry perspective, as well.

Nonetheless, many studies have established, pharma MRs have been effectively delivering, since long, the endpoint deliverables, as expected of them – sales. However, the question that still haunts many – can this core process be re-imagined for greater efficiency and effectiveness at a lesser cost, harnessing modern technology. An article, published in the Pharmaphorum on March 11, 2011, has also suggested – ‘in the wake of the COVID-19 pandemic, there is an even greater need to re-examine the rep’s role. How can a field force evolve to deal with current challenges and be future-fit for the way we will be working in the post-pandemic world?’ 

There is no confusion today that MRs’ will have a key role to play in pharma’s digital endeavor. However, the key purpose of having them has evolved during the pandemic. Such as, from being an efficient way to achieve personal communication objectives – to be an orchestrator for physicians to navigate the difficult landscape, providing them a differentiated service. For this purpose, I reckon, a hybrid business model for better performance, will be more effective in the new normal, while quickly adapting to digital transformation. However, arriving at the right mix of digital and MR’s in-person interactions, may pose a challenge for many pharma marketers, as it will be a company-specific need.

Similarly, the criticality of leveraging opportunities to provide remote delivery of digital health care solutions to patients, has also come onto the radar of many pharma players, during this difficult time. Several players have already added this area as a lucrative business expansion platform – many more are expected to follow. Thus, in my view, the fast-evolving data-based trends are now giving a pragmatic shape to future pharma operations – especially on the new and unique role of medical representatives and the relevance of digital health care solutions, as a growth opportunity.

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.

Supreme Court Suspends New Drug Trials in India…Time to Shape Up?

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On September 30, 2013, with a damning stricture to the Drug Regulator, the Supreme Court, in response to a Public Interest Litigation (PIL) filed by the NGO Swasthya Adhikar Manch, stayed approvals for 162 applications for local Clinical Trials (CTs) of new drugs approved by the Drugs Controller General of India (DCGI) earlier.

The apex court of the country granted the DCGI two weeks time to furnish evidence to the court that adequate patients’ safety and other related mechanisms have been put in place for CTs of all New Chemical Entities (NCEs) and New Molecular Entities (NMEs) in the country.

According to reports, during July and August 2013, the DCGI received 1,122 CT applications, out of which, 331 related to approval of global CTs. The New Drug Advisory Committee (NDAC) approved 285 drugs in AIDS, oncology, cardiology, neurology, psychiatry, metabolism and endocrinology therapy areas. Finally, 162 drugs received the green signal from the DCGI. Now all these trials have come to a halt.

At the same time, the court also directed the Ministry of Health to come out with a plan within 10 weeks to strengthen the regulatory framework for CTs in India based on various suggestions received from the state governments, other stakeholders and experts groups.

A casual approach?

Just to recapitulate, prior to this, on January 3, 2013, against the PIL, the bench of Honorable Justices R.M Lodha and A.R Dave of the Supreme Court reportedly observed that uncontrolled Clinical Trials (CT) are creating ‘havoc’ to human lives causing even deaths to many subjects in India.

In an interim order, the bench directed the Government that CTs could be conducted only under the supervision of the Health Secretary of India. Holding the Government responsible, the bench further observed, “You (Government) have to protect health of citizens of the country. It is your obligation. Deaths must be arrested and illegal trials must be stayed.”

Thereafter, though the Health Secretary of India approved the above 162 CTs, presumably following the above Supreme Court directive, it is an irony that when asked by the Apex Court, the government could not immediately explain precisely what systems and mechanisms have been put in place for proper conduct of these 162 CTs. It sought 2 weeks’ time to justify the action taken by the drug regulator in this regards.

Compromise on patients’ safety continues unabated: 

During another hearing early in October 2013 on a petition filed by the NGO ‘Swasthya Adhikar Manch regarding violations of norms during CTs, the Supreme Court reportedly sought details from the Union Government on the irregularities during the drug trial using Human Papilloma Virus (HPV) vaccines by the Seattle (USA) based organization PATH in Andhra Pradesh and Gujarat states of India.

This intervening application by the NGO was based on the 72nd Parliamentary Standing Committee (PSC) on Health and Family Welfare report dated August 30, 2013, where it was recommended that action should be taken against PATH, state governments of Andhra Pradesh, Gujarat, Indian Council of Medical Research (ICMR) and other government officials including Drug Controller General of India (DCGI) for alleged violations on the subject.

The report highlights, HPV vaccines were given to 14,091 girls in Khammam district of Andhra Pradesh and 10,686 girls in Vadodra, Gujarat. These girls were between age group of 10 and 14, of which seven girls died due to such illegal vaccine trials.

Eventually, these trials were stopped, but only after the matter received media attention.

As per reports, the vaccines were provided by two pharma MNCs – Merck and GlaxoSmithKline through PATH. It also stated as follows:

“Vaccines were given to children irrespective of age in the case of Merck’s Gardasil vaccine. While permission was given to use GSK’s Cervarix vaccine in children of 10 to 14 years, CTs had been conducted on subjects in the age group of 18 to 35 years. Thus the safety and well being of subjects were completely jeopardized.”

No options but to shape-up:

It is worth mentioning, the above PIL had alleged that large scale drug trials being conducted across the country, mainly by the pharma MNC, are using Indian patients as ‘guinea pigs’, as it were. The NGO also told the Supreme Court that several pharmaceutical companies continue to conduct CTs quite indiscriminately, in various states of India, endangering lives of poorly/un-informed trial subjects.

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

Thus, coming under immense pressure from 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.

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.

CT related deaths in India:

As per the Ministry of Health following are the details of deaths related to CTs registered in India from 2008 to August 2012:

Year Total no of deaths CT related deaths Compensation                  paid to patients:
2012 (up to August) 272 12 NA
2011 438 16 16
2010 668 22 22
2009 737 NA NA
2008 288 NA NA

It is estimated that over the last four years, on an average, 10 persons have died every week in India related to CT.

DCGI hauled-up 9 MNCs on patients’ compensation:

It is worth noting, absolutely unacceptable level of compensation, by any standard, are being paid by the concerned companies, including large MNCs, for the lives lost during CTs.

According to another 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, for the first time ever, the then DCGI 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 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.

Prior indictment by 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 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.”

Action just not enough yet:

Acting on the damning stricture by the Supreme Court, the Ministry of Health by a gazette notification of January 30, 2013 made the norms of compensation to patients participating in CTs more stringent. ‘Patient Compensation’ was proposed to include injury or death, even if those are not related to the drugs being tested in the CTs.

Understandably, reacting to this notification, some pharma companies, industry lobby groups and also Clinical Research Organizations (CROs) expressed concerns in areas like:

  • Lack of distinction between study-related injuries and non-study related injuries.
  • Use of placebos in placebo-controlled trials.
  • Lack of any arbitration mechanism in case of disagreement on causality/quantum of compensation and also lack of clarity on who constitutes the Expert Committee and its composition.

In addition, the DCGI requested the stakeholders’ to share their inputs to the independent experts advisory committee chaired by Prof. Ranjit Roy Chaudhury along with six other distinguished members namely, Dr V. P. Kamboj, Dr BT Kaul, Dr Vasantha Muthuswamy, Dr Mira Shiva 
and Dr Uma Tekur, to help formulating policy, guidelines and SOPs for approval of NCEs/NMEs and procedures for CTs, including the conduct of ethics committees, the accreditation of trials sites, inspections of trials sites, the ongoing monitoring of trials and banning of drugs. The Government on February 6, 2013 constituted this Committee.

This decision of the regulator, though under pressure, was praiseworthy. Unfortunately nothing substantially changed on the ground for CTs in India even thereafter, as no substantive action has yet been taken on the above expert committee recommendations.

The report of the experts committee:

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 includes the following:

  • 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. 
  • For speedy clearance of applications, a broad expertise based Technical Review Committee (TRC) will replace 12 New Drug Advisory Committees (NDACs), which are currently functioning for NCE/NME approvals.
  • The TRC would be assisted, as required, by appropriate subject experts selected from the ‘Roster of Experts’.
  • For any Adverse Effects (AEs) or Serious Adverse Effects (SAEs) during a CT, the sponsor investigator will be responsible for providing medical treatment and care to the patient at its/their cost till the resolution of the AEs/SAEs.
  • This is to be provided irrespective of whether the patient is in the control group, placebo group, standard drug treatment group or the test drug administered group.
  • A Special Expert Committee should be set up independent of the Drug Technical Advisory Board (DTAB) to review all drug formulations in the market and identify drugs, which are potentially hazardous and/or of doubtful therapeutic efficacy.
  • A mechanism should be put in place to remove these drugs from the market by the CDSCO at the earliest.

Though some of the above provisions were vigorously objected by the industry during stakeholders’ consultations, the committee in its final report has upheld those recommendations.

The main worry – costs of CTs will go up:

CTs, as we know, are of critical importance for obtaining marketing approval of any new drug and at the same time forms a major cost component in the new drug development process, across the world.

Any savings in this area, both in terms of time and money, will add significantly to the profit margin of the product. In that context, the above suggestions, if implemented to create a safety net for the patients participating in CTs, will make these trials more expensive for the concerned companies with increased liability.

Hence, we hear a hue and cry, especially from the pharma MNCs. This is mainly because, India was, thus far, a low cost CT destination for them with virtually no liability for the drug trial patients. This is because, the poor and ill-informed subjects are left in the lurch by many companies exploiting the gaping holes existing in the fragile CT system of the country. After the intervention of the Supreme Court in this regard, some foreign players have reportedly suspended their CTs in India for reasons best known to them.

Exploitation of CT regulations:

The system of CT in India has created a huge ruckus, as it has long been tainted with widespread malpractices, abuses and misuses by many players, both global and local. The issue is not just of GCP or other CT related standards but more of an ethical mind-set and well-reported rampant exploitation of uninformed patients, especially in case of trial-related injuries or even death.

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.”

Industry reactions:

Very interestingly, there have been a divergent sets of reactions from the industry on this issue.

An influential section in the CT space of the country has reacted, with gross indiscretion, to the most recent SC order banning CTs for NCEs/NMEs till a robust mechanism in India is put in place.

Commenting on the verdict, an industry leader has reportedly said:

“A black day for Indian science and a sad reflection on our judiciary”.

Such comments probably vindicate much talked about crony capitalistic mindset of this class. They do not hesitate a bit to display their scant respect even to the highest judiciary of the country, leave alone their glaring indifference to the important public health interest related issue. All such actions possibly emanate from the intense greed to protect and further the vested interests, not withstanding the gross injustice being meted out to the drug trial subjects as a consequence.

On the other hand, supporting the Supreme Court’s view, The Indian Society for Clinical Research (ISCR) reportedly has said:

“As a professional organization representing clinical research professionals across the stakeholder spectrum, ISCR is fully supportive of the need for a more robust and regulated environment for the conduct of clinical trials in India which ensures the practice of the highest standards of ethics and quality and where patient rights and safety are protected”.



ISCR further said, “As in every profession and industry, there will always be players who operate at both ends of the spectrum. While we do not condone any irregularities, we must acknowledge, there are several hundreds of clinical trials taking place in the country in compliance with international and local guidelines. There have been over 40 US FDA clinical trial audits done in India with no critical findings reported. There have also been several European regulatory audits of Indian clinical trial sites, again with no critical findings.”

That said, Indian Parliamentary Standing Committee, had commented on a ‘nexus between the industry and the drug regulator’ for continuation of such sorry state of affairs, since long.

‘Industry-pharma nexus’ in the USA too?

Recently, similar tricky relationship between the regulator and the pharma companies was unearthed again with the later paying hefty fees to attend meetings of a panel that advises the US FDA.

The article highlighted, an investigative report in the ‘Washington Post’ found that pharma companies paid as much as US$ 25,000 to attend sessions convened by a scientific panel on painkillers, and has led to claims that the industry was being given an opportunity to influence federal policy in this area.

Expected Government action:

The Supreme Court is expected to hear the matter on October 24, 2013.

Meanwhile, the Ministry of Health reportedly held meetings with concerned officials to chalk out the strategy before the Court, when this case would come up for hearing after two weeks.

The report says, the Government is planning to place before the court a comprehensive plan with details of the existing mechanism and ongoing efforts like, bringing the the new Drugs and Cosmetic (Amendment) Bill 2013 and incorporation of Prof. Ranjit Roy Chaudhury expert committee recommendations, to plug the loopholes in the new drug trial mechanism of the country. 

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.  If the regulator overlooks this critical factor and some pharmaceutical players keep exploiting the system, judiciary has no option but to effectively intervene in response to PILs, as happened in this particular case too. 

Thus, I reckon, appropriate safety of human subjects participating in CTs and a fairplay in compensation, whenever justified, should be non-negotiable for the indian drug regulator. Despite reactions with indiscretion from a section of the industry, the Supreme Court is absolutely right to direct the DCGI to stop CTs for all NCEs/NMEs until the apex judiciary is satisfied that a robust system is in place for such trials in India. This will ensure, the scientific objectives of the CTs are properly achieved without any compromise on patients’ safety.

Breaking the nexus decisively between a section of the powerful pharmaceutical lobby group and the drug regulator, as highlighted even in the above Parliamentary Committee report, the Ministry of Health should, without any further delay, put in place a robust and transparent CT mechanism in India, come what may.

This well thought-out new system, besides ensuring patients’ safety and fairplay for all, will have the potential to help reaping a rich economic harvest through creation of a meaningful and vibrant CT industry in India, simultaneously benefitting millions of patients, as we move on.

That said, the moot question still remains: Will the drug regulator be able to satisfy the Supreme Court, as the two weeks expire, that appropriate mechanisms are in place to resume smooth conduct of CTs for the new drugs in India?

By: Tapan J. Ray

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

 

First ever ‘Code of Pharma Marketing Practices’ by the Government: A strong signal to “Shape Up”!

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After a protracted debate on the alleged ‘unethical marketing practices’ by the pharmaceutical companies, in May 2011, the Department of Pharmaceuticals (DoP) came out with a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCMP)’ to address this issue squarely and effectively in India.

This decision of the government is the culmination of a series of events, covered widely by the various section of the media, at least, since 2004.

Examples of public/media outcry:

Way back, in its January–March, 2004 issue, ‘Indian Journal of Medical Ethics’ (IJME) in context of marketing practices for ethical pharmaceutical products in India commented: “If the one who decides, does not pay and the one who pays, does not decide and if the one who decides is ‘paid’, will truth stand any chance?” Three year later, in 2007 the situation remained unchanged when IJME (April–June 2007 edition) once again reported: “Misleading information, incentives, unethical trade practices were identified as methods to increase the prescription and sales of drugs. Medical Representatives provide incomplete medical information to influence prescribing practices; they also offer incentives including conference sponsorship. Doctors may also demand incentives, as when doctors’ associations threaten to boycott companies that do not comply with their demands for sponsorship.” Even ‘The Times of India’ reported the following in December 15, 2008: “1. More drugs a doctor prescribes of a specific company, greater are the chances of his/ her winning a car, a high-end fridge or a TV set. 2. Also, drug companies dole out free trips with family to exotic destinations like Turkey or Kenya. 3. In the West, unethical marketing practices attract stiff penalties. 4. In India, there are only vague assurances of self-regulation by the drug industry and reliance on doctors’ ethics”.

Urgent need for change:

In today’s India, the degree of commercialization of the noble healthcare services has reached its nadir, sacrificing the ethics and etiquette both in medical and pharmaceutical marketing practices at the altar of unlimited greed and want.

As a result of fast degradation of ethical standards and most of the noble values  in the healthcare space, the patients in general have started losing faith and trust both on the medical profession and the pharmaceutical industry, by and large. Health related multifaceted compulsions do not allow them, either to avoid such a situation or even raise a strong voice of protest against the vested interests.

Growing discontentment of the patients in both the private and public healthcare space in the country, is being regularly and very rightly highlighted by the media, including reputed medical journals like, ‘The Lancet’ to help arrest this moral and ethical decay with some tangible proactive measures.

MCI took the first step:

In a situation like this, steps taken by the ‘Medical Council of India (MCI)’ in 2009 for the Medical Profession/ Healthcare Practitioners (HCP) deserves kudos from all corners. It is now up to the HCP to properly abide by the new regulations on their professional conduct, etiquette and ethics. The pharmaceutical industry of India should naturally be a party towards conformance of such regulations, in every possible way.

Quite likely, based on the media outcry, the Department of Pharmaceuticals (DoP), also mooted the idea of a self-regulatory UCMP for the entire pharmaceutical industry of India almost around the same time of 2009. However, as was reported, due to lack of consensus within the pharmaceutical industry, the DoP supposedly could not make the said UCMP operational at that time.

A brand new code from the DoP:

Meanwhile in May 2011, the Department of Pharmaceuticals (DoP) released a draft ‘Uniform Code of Marketing Practices’ for the Pharmaceutical Industry of India for comments by the stakeholders. The preamble of the document states as follows:

“This is a voluntary code of Marketing Practices for Indian Pharmaceutical Industry, for the present and its implementation will be reviewed after a period of six months from the date of its coming into force and if it is found that it has not been implemented effectively by the Pharma Associations/Companies, the Government would consider making it a statutory code.”

Some Key features of the DoP Code:

  1. All promotional material must be consistent with the requirements of this Code.
  2. Brand names of products of other companies must not be used for comparison without prior consent of the concerned companies.
  3. Paid or arranged publication of promotional material in journals must not resemble editorial matter.
  4. The names or photographs of healthcare professionals must not be used in promotional material.
  5. Audio-visual material must be accompanied by all appropriate printed material to ensure compliance of the Code.
  6. Samples should be provided directly to prescribing authority and be limited to prescribed dosages for three patients and in response to a signed and dated request from the recipient. Each sample pack shall not be larger than the smallest pack presented in the market.
  7. Medical and Educational events for doctors should be organized in the appropriate venue in India and all expenses must be incurred only for the events held in India.
  8. Outline of a detailed Complaint Lodging and Redressal mechanism (Committee for Code of Pharma Marketing) to ensure compliance of the marketing code.

Overall quality of the DoP marketing code:

  • The overall document is well written, balanced and fair. The DoP should indeed be commended on the great work that they have done in putting all details of pharmaceutical marketing practices together in this document in a very comprehensive manner.
  • This unified Code does not seem to pose any major extra restrictions to the pharmaceutical companies as compared to the MCI guidelines. All concerned should welcome the DoP decision that the same standards will now be applied to all small, mid-sized and large companies, equally. The main focus of the DoP should be in ensuring that all companies across the pharmaceutical industry follow the same standards in their marketing practices and interactions with the HCP.
  • The draft code of the DoP also states that companies must maintain a detailed record of expenditures incurred on these events. It is not quite clear though, as to what extent and detail the pharmaceutical companies are expected to keep these records and how long?  It is also not clear whether these records have to be maintained on file and supplied to the DoP only on specific request for the same or those details are expected to be disclosed on a regular basis to the regulator.
  • The draft indicates that associations must upload full details of received complaints onto their websites. Although this provision could help making the system more transparent, the DoP should clearly articulate the details about the specific information that will require to be disclosed in cases of any proven breach of the code.
  • It is interesting to note in the draft code states that media reports and published letters indicating that a company may have breached the Code will be treated as a complaint.

The global scenario:

Just like in India, a public debate has started since quite some time in the US, as well, on allegedly huge sum of money being paid by the pharmaceutical companies to the physicians on various items including free drug samples, professional advice, speaking in seminars, reimbursement of their traveling and entertainment expenses etc. All these, many believe, are done to adversely influence their rational prescription decisions for the patients.

‘The New England Journal of Medicine’, April 26, 2007 reported that virtually, all doctors in the US take freebies from drug companies, and a third take money for lecturing, and signing patients up for trials. The study conducted on 3167 physicians in six specialties (anesthesiology, cardiology, family practice, general surgery, internal medicine and pediatrics) reported that 94% of the physicians had ‘some type of relationship with the pharmaceutical industry’, and 83% of these relationships involved receiving food at the workplace and 78% receiving free drug samples. 35% of the physicians received re-reimbursement for cost associated with professional meetings or Continuing Medical Education (CME). And the more influential a doctor was, the greater the likelihood that he or she would be benefiting from a drug company’s largess. As a result of strict regulatory measures, the situation in the US has presumably started changing now.

However, such issues are not related only to physicians. ‘Scrip’ dated February 6, 2009 published an article titled: “marketing malpractices: an unnecessary burden to bear”. The article commented: “Marketing practices that seem to be a throwback to a different age continue to haunt the industry. Over the past few months, some truly large sums have been used to resolve allegations in the US of marketing and promotional malpractices by various companies. These were usually involving the promotion of off-label uses for medicines. One can only hope that lessons have been learnt and the industry moves on.” “As the sums involved in settling these cases of marketing malpractices have become progressively larger, and if companies do not become careful even now, such incidents will not only affect their reputation but financial performance too.”

Fierce ongoing debate:

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into the public debate, it appears that there is a good possibility of making disclosure of all such payments made to the physicians by the pharmaceutical companies’ mandatory by the Obama administration, as a part of the new US healthcare reform process.

Examples of global voluntary measures:

Eli Lilly, the first pharmaceutical company to announce such disclosure voluntarily around September 2008, has already uploaded its physician payment details on its website. US pharmaceutical major Merck has also followed suit and so are Pfizer and GSK. However, the effective date of their first disclosure details is not yet known.

Meanwhile, Cleveland Clinic and the medical school of the University of Pennsylvania, US are also in the process of disclosing details of payments made by the Pharmaceutical companies to their research personnel and the physicians.

Similarly in the U.K the Royal College of Physicians has reportedly to have called for a ban on gifts to the physicians and support to medical training, by the pharmaceutical companies. Very recently the states like Minnesota, New York and New Jersey in the US disclosed their intent to bring in somewhat MCI like regulations for the practicing physicians of those states.

Transparency: Australia sets an example: The Australian Competition and Consumer Commission (ACCC) has decided to grant authorization for five years to Medicines Australia’s 16th edition of its Code of Conduct. The Code sets standards for the marketing and promotion of prescription pharmaceutical products in Australia. The Code provides, among other measures, a standard to address potential conflicts of interest from unrestricted relationships between pharmaceutical companies and the HCPs, which may harm the consumers through inappropriate prescriptions. The Code also prohibits the pharmaceutical companies from providing entertainment and extravagant hospitality to HCPs with the requirement that all benefits provided by companies should be able to successfully withstand public and professional scrutiny. “The requirement for public disclosure was imposed by the ACCC as a condition of authorization of the previous version of Medicines Australia’s Code and was confirmed on appeal by the Australian Competition Tribunal.” Edition 16 of the Code fully incorporates the public reporting requirements.

Conclusion:

Currently in the US, both in Senate and the House of Congress two draft bills on  ‘The Physician Payment Sunshine Act’ are pending. It appears quite likely that Obama Administration, with the help of this new law, will make the disclosure of payments to physicians by the pharmaceutical companies mandatory.

It appears, India has taken an extra step forward towards this direction as compared to the Obama administration in the USA. The amended MCI regulations for the HCPs coupled with the draft code of the DoP for the entire pharmaceutical industry should make the financial transactional relationship between the physicians and the pharmaceutical industry in India absolutely clean and transparent.

It should be kept in mind by all concerned that the draft code very categorically warns, in case the voluntary code of Marketing Practices is not implemented effectively, the Government would seriously consider making it statutory for the entire pharmaceutical industry of India…quite a strong signal indeed for ‘Shaping Up’!

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.

Abbott – Piramal deal: the way future is expected to shape up

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In my view, these are still very early days for such acquisitions of large domestic Indian pharmaceutical companies by the Global Pharma majors to gain momentum in the country. However, there is no doubt that in the near future, we shall rather witness more strategic collaborations between Indian and Global pharmaceutical companies, especially in the generic space.

Squeezing margin due to cut-throat domestic and international competition may affect future valuation of the domestic companies:

I reckon, the number of such high profile mergers and acquisitions will significantly increase, as and when the valuation of domestic Indian companies appears quite attractive to the global pharma majors. This could happen, as the domestic players face more cut-throat competition both in Indian and international markets, squeezing their profit margin.
Abbott possibly has a well-structured game plan for seemingly high valuation of the deal:
Having said that let me point out, during Ranbaxy-Daiichi Sankyo deal, analysts felt that the valuation of the deal was quite high. US $ 3.7 billion Abbott – Piramal deal has far exceeded even that valuation. Does this deal not make any business sense? I do not think so. Abbott is a financially savvy seasoned player in the M&A space. It is very unlikely that they will enter into any deal, which will not have any strategic and financial business sense.

Big ticket Indian Pharma deals:

So far India has seen four such major deals starting from Ranbaxy – Daiichi Sankyo, Dabur Pharma – Fresenius, Matrix – Myalan and Orchid – Hospira, besides some global collaborative arrangements, such as, Pfizer with Aurobindo/Claris/Strides GSK with DRL, AsraZeneca with Torrent and again Abbott with Zydus Cadila.

Key drivers for these deals:

Such acquisitions and collaborations will be driven by following eight key factors:

1. R&D pipelines of the global innovative companies are drying up
2. Many blockbuster drugs will go off-patent in the near future
3. Cost containment pressure in the western world exerting pressure on the bottom lines
of the global pharma majors
4. Increasing demand of generics in high growth emerging and developing markets
5. The new Healthcare Reform in the US will promote increased usage of generic drugs.
6. The fact that India already produces 20% of the global requirement for generic drugs
increases the attractiveness.
7. The fact of domestic Indian companies account for 35% of ANDAs highlights the future
potential of the respective companies.
8. Highest number of US-FDA approved plants, next to the US, is located in India.

A strategic move by Abbott:

As announced by Abbott from its headquarter in Chicago that Abbott in India will increase its sales four times to around Rs. 11,000 Crores by 2020 with the acquisition of 350 brands of ‘Piramal Healthcare’ business.

Facing the stark reality of a ‘patent Cliff’, cost containment pressures especially in the US and EU, low single digit growth rate of the developed markets and high growth of branded generic dominated emerging markets, Abbott has taken a new global initiative aimed at the emerging markets with the creation of its global ‘Established Products’ Business’. This initiative started with worth US $ 6.2 billion acquisition of branded generic business of Solvay Pharma, which has a sizeable presence in the EU markets.
Recently announced licensing agreement of Abbott with Zydus Cadila to market 24 products initially in 15 emerging markets of the world is another step towards this direction.

Advantage Abbott India:

The asset based acquisition of ‘Piramal Healthcare’ by Abbott will help its Indian arm to increase its domestic market penetration, significantly, both for branded generic and patented products in urban, semi-urban and rural markets spearheaded by around 7000 strong sales force. This strategy perhaps will also help Abbott in India distancing itself from the number 2, in the Indian Pharma league table, probably with a handsome margin.

Global players want a risk-cover with the generic business and minimize tough competition:

Like Abbott, it is quite likely that other major global players are also planning to reduce their business risks by expanding the business from mainly high risk and expensive R&D intensive patented products to a more predictable and rapidly expanding branded generic business.

Will such move have any significant effect on competition?

Such M&A initiatives may seemingly minimize the cut throat competition from large generic players from India. However, I do not envisage any significant impact on over all competition between the generic players for such moves, as their will be mounting competition from more number of new entrants and emerging players, entry barrier in Indian generic pharmaceutical market being quite low.

Conclusion:

In the globalized economy where the ‘world is flat’ such types of business consolidation initiatives are inevitable. The domestic Indian companies across the industry are also in the prowl for suitable global targets, which are at times of world class ‘Crown Jewels’ like Arcelor, Chorus or Jaguar/Land Rover. Pharmaceutical industry is, therefore, no exception.

By Tapan Ray

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