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Covid-19 Pushes Pharma To Walk The Talk of ‘Patient-Centricity’

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Echoing many other industries, such as, Fast-Moving Consumer Goods (FMCG), pharmaceutical industry leaders, as well, have been talking about putting their customer at the center stage of strategic decision-making processes. In other businesses this grand intent is generally expressed as, ‘customer oriented’ or ‘customer-focused’, or ‘customer-driven’, besides several other similar expressions.

However, in the pharma industry this popular expression is widely talked about as ‘patient-centricity.’ Nonetheless, it is also generally believed that pharma leaders, weren’t hugely inclined to ‘walk this talk’ – until Covid-19 pandemic struck the world – very hard. In this article, I shall delve into this area, focusing on several aspects of it. Let me begin with, what COVID-19 has taught about pharma’s ‘patient-centricity’ efforts.

What COVID-19 has taught about pharma’s patient-centricity efforts:

A recent study, titled, ‘What COVID-19 has taught us about pharma’s patient centricity efforts,’ published by ZS on July 05, 2020, unravels some interesting findings in this area. Some of those points are as follows:

  • ZS’ mid-2019 ‘Patient Centricity Industry Study’ had found nearly universal agreement about the importance and significance of being patient-centric.
  • But the investment for the same did not match the intent, creating an “optimism gap” where senior leaders think more progress than middle the management.
  • At that time, while 73 percent of participants agreed that ‘patient centricity’ is fundamental to their organization, only 16 percent said they understood their individual role in the organization’s ‘patient centricity’ initiatives.
  • Whereas, during the past few months as the industry responds to Covid-19 pandemic, ‘pharma has demonstrated that it can quickly mobilize to surround and support patients, making the workforce focus on the patient priorities.
  • Over the past three months, organizations were found to look at new ways to engage with patients. For example, patient panels to continually check in and monitor the impact on the patient experience, connecting with patient advocacy groups – to get a pulse on critical needs and leveraging the field force to hear from physicians where their patients need the most help.
  • These companies are also investing now to understand the impact of Coronavirus on the patient and partner with others in the ecosystem.

Some interesting industry initiatives during Covid-19 pandemic:

This  ZS study noted, several pharma companies are showing great flexibility and creativity in tapping into their combined expertise and skills to support patients and the healthcare community, in a time of need. Some of the interesting examples cited in the paper include:

  • Pfizer rolled out a five-point plan, including an R&D SWAT team to support vaccine development.
  • Lilly, Merck and others banded together to help employees with relevant skills, volunteer on the front lines of treatment
  • Several other pharma companies have also joined with the Bill and Melinda Gates Foundation to share data.

I hasten to add, according to this study, some industry leaders did agree that COVID-19 has proven that it’s possible to actually be more patient centric in business operations for better outcomes. However, many pharma players would still need to ‘walk this talk’ and put in hard work with adequate resources in getting there – the study noted.

Could ‘patient-centric pathway lead to post Covid-19 business recovery?

Just lip service on ‘patient-centricity’, as witnessed earlier, is unlikely cut any ice in the new normal, as people start living with the new Coronavirus, in everyday life. Making this more touted, but less practiced concept work on ground in pharma, is expected to be one of the effective pathways for early business recovery, as we move on.

The McKinsey article of May 12, 2020, titled ‘Pharma operations: The path to recovery and the next normal’ has also flagged this issue, alongside a few more. Similar to the findings of the above ZS study, this paper also noted that ‘leaders of operations in the pharmaceutical industry have been historically slow to respond to changing times. Interestingly, during COVID-19 pandemic, many of those leaders were found highly responsive to the new demand of time. They ‘rallied to enable the supply of key medicines across borders, manage workforce safety, and handle evolving government restrictions, while beginning to prepare for new vaccines and therapeutics, it noted.

More importantly, several companies have now put in place crisis-response command centers. These hubs play critical roles to appropriately manage and bring stability in an otherwise unstable time. From this experience, in my view, ‘patient-centricity’ could be an effective pathway to follow for post Covid-19 business recovery. Having said that, let me try to tighten some loose knots of understanding in this specific area, as below. To start with, let us together recapitulate a brief background of evolution of ‘patient-centricity’ concept in the drug industry.

“No decision about me, without me”:

Not so long ago, the National Health Service (NHS) of U.K realized that every patient should be as actively involved in making decisions about their health and health care as they wish to be. Accordingly, in 2012 it released the White Paper - ‘Equity and Excellence: Liberating the NHS,’ setting out the U.K Government’s vision of an NHS that puts patients and the public first, where “no decision about me, without me” is the norm.

The concept of ‘patient centricity’ in the pharma industry is believed to have grown from the above concept. The core idea of the concept, as defined in a BMJ article is, “Putting the patient first in an open and sustained engagement of the patient to respectfully and compassionately achieve the best experience and outcome for that person and their family”.

The authors envisage, effective implementation of the same would provide an opportunity for drug companies to adopt and use its core facets as reference points for patient engagement, throughout a product life cycle. In tandem, this also flags an important point: Why the concept of ‘patient-centricity’ is mostly talked so ‘passionately’ by almost all drug companies, while very few of them seem keen to ‘walk the talk?’

The key barriers to achieving ‘patient-centricity’:

The key puzzle on ‘Patient centricity: everyone wants it; not everyone gets it’, was well-deliberated by Reuters Events (Pharma), published on December 14, 2024. It pointed out – as an aim ‘patient-centricity’ is all too often overlooked, despite the fact that even several top pharma companies often express their desire to be patient centric organizations; such as:

  • “Inspired by patients, driven by science” (UCB);
  • “Science and patients…the heart of everything we do” (AstraZeneca);
  • “A global integrated healthcare leader focused on patients’ needs” (Sanofi).

Analyzing the overall reasons for the same, the paper articulated: ‘Difficulties in communication with patients, skepticism about their input, and unwillingness to relinquish control are some of the barriers to achieving patient centricity.’ Interestingly, this situation remains generally unchanged even today.

Conclusion:

Meanwhile, as recorded in the morning of September 06, 2020, total Coronavirus cases in India have reached a staggering figure of 4,113,811 with 70,679 deaths, despite every effort taken by the Government. As PTI reported on September 05, 2020: At the current pace, India will overtake Brazil early next week to become the country that has seen the second highest number of cases.’ With this perspective, let us now look at the concept of ‘patient-centricity’ for better treatment outcomes.

As deliberated earlier, just as providing affordable care for all – making ‘patent-centricity’ the centerpiece of the core business strategy for pharma, had remained akin to chasing the ‘Holy Grail’. This happened, despite last so many years one could easily spot inclusion ‘patient-centricity’ even in the corporate vision and mission statements of many drug companies.

As it appears today, the term ‘patient centricity’ remained another cliche, till Covid-19 disrupted the status quo of the old normal? But, will it last long? Only another robust study in the future, I reckon, will be able to confirm it. However, this would mostly depend on whether patients continue sending signals of: “No decision about me, without me,” for better health outcomes.

It’s not a terribly disputed fact, either that various stringent norms in the Covid lockdown period, have prompted many health care consumers switching from their good old health care practices, to the digital or online mode to meet with similar needs. Consequently, they are now becoming more digitally empowered than ever before. In this situation, leveraging AI with expert help, would help implement ‘patient-centricity’ more productively to meet challenges of the new normal.

If done with precision, it would help move even beyond ‘patient-centricity’ in the new normal, with better disease prevention or management and ‘connected healthcare,’ leading to better quality of lives for many. Thus, Covid-19 pandemic – pushing pharma to ‘Walk the Talk’ of ‘patient-centricity,’ if lasts long, could usher in a fundamental change in the health care space. It has demonstrated its huge potential during the ongoing pandemic to ensure patient-friendly, high quality, affordable and universal health care value delivery – for patients’ sake.

By: Tapan J. Ray   

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

3D Printing: An Emerging Game Changer in Pharma Business

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On August 3, 2015, Aprecia Pharmaceuticals in the United States took a game changing step towards a new paradigm of the global pharma business. The Company  announced that for the first time ever, the U.S. Food and Drug Administration (US FDA) approved a ‘Three-Dimensional (3D)’ – printed prescription drug for the oral use of epilepsy patients. Although, 3DP has already been used to manufacture medical devices and prosthetics, in the pharma world, this disruptive innovation was never practiced on the ground, till that magic moment came.

The drug is Spritam® (levetiracetam) used as a prescription adjunctive therapy in the treatment of partial onset seizures, myoclonic seizures and primary generalized tonic-clonic seizures in adults and children with epilepsy.

According to this announcement, Spritam® utilizes Aprecia’s proprietary ZipDose® Technology platform, that uses 3D Printing (3DP) to produce a porous formulation that rapidly disintegrates with a sip of liquid.

The 3DP technology:

3DP technology is broadly defined as a process for making a physical object from a three-dimensional digital model, typically by laying down many successive thin layers of a material.

The originator of this game changing development is the renowned academic institution – ‘The Massachusetts Institute of Technology (MIT)’in the United States. 

Later on, the MIT licensed out the patented 3DP technology for its use in many different other fields. Among pharma companies Aprecia Pharmaceuticals obtained the exclusive rights to 3D-printing technology for pharmaceutical purposes in 2007.

A high potential game changer:

In pharma, 3DP could possibly emerge as a game changing and disruptive innovation, sooner than later. It could radically change the traditional and well-established strategic and operational models of pharma business, especially the drug discovery process, manufacturing strategy and even the disease treatment process, paving a faster pathway for the much awaited ‘Personalized Medicines’, in a large scale. 

Lee Cronin, a Professor of Chemistry, Nanoscience and Chemical Complexity at the Glasgow University, says that the 3DP technology could potentially be used to print medicines of many types – cheaply and wherever it is needed. As Professor Cronin says: “What Apple did for music, I’d like to do for the discovery and distribution of prescription drugs.”

3D Printers would also throw open an opportunity of getting any drug tailor made for the individual patient’s needs, such as, exact dosage requirements, size, shape, color and flavor of the pill and also in the most appropriate delivery systems, just as what Aprecia Pharmaceuticals did with Spritam® by using this technology. 

In this article, I shall highlight the game changing impact of 3DP only in the following three areas of pharma business: 

  • The drug discovery process
  • Drug manufacturing strategy
  • Supply Chain effectiveness
A. Impact on drug discovery process:

A December 29, 2015 article titled, “Click chemistry, 3D-printing, and omics: the future of drug development”, published in ‘Oncotarget, Advance Publications 2015’ deliberates on the potential of 3DP in the drug discovery process.

The paper states, Genomics has unambiguously revealed that different types of cancers are just not highly complex, they also differ from patient to patient. Thus, conventional treatment approaches for such diseases fit poorly with genomic reality. It is also very likely that similar type of complexity will eventually be identified in many other life-threatening ailments.

Currently, a large number of patients are taking medications that may not help them, on the contrary could harm some of them. The top ten best-selling drugs in the United States are only effective in between 4 percent and 25 percent of the individuals for whom they are prescribed, the paper observes.

However, developing new drugs and tailoring such therapy to each patient’s complicated problem has still remained a major challenge.

One possible solution to this challenge could be to match patients to existing compounds with the help of an equally complicated modelling technique. Nonetheless, optimization of a complex therapy will eventually require designing compounds for patients using computer modeling and just-in-time production. 3DP shows a very high potential to effectively address this complex issue.

This is primarily because, 3DP is potentially transformative by virtue of its ability to rapidly generate almost limitless numbers of objects that previously required manufacturing facilities. 

It is also now becoming clearer that with 3DP, scientists will be able to print even the biologic materials, such as, tissues, and eventually organs. Thus, in the near future, it is plausible that high-throughput computing may be deployed to design customized drugs, which will reshape medicine, the article highlights.

In his short ‘Ted Talk Video Clip’ (please click on this link), Professor Lee Cronin explains his working on a 3D printer that, instead of objects, is able to print molecules for a new drug. It could throw open an exciting potential of a long-term application of 3DP for printing, our own customized new medicine by using chemical inks.

In a nutshell,  Professor Lee Cronin elucidates in his ‘Ted Talk’, how could the immense potential of 3D printers be leveraged to catalyze the chemical reactions in order to print real drugs, as and when required, according to the requirements of individual patients.

B. Impact on drug manufacturing strategy:

Not just in drug discovery, 3DP would equally be a game changer in pharma manufacturing, the way it is operated today, including the state of the art production facilities.

This could very much happen in tandem with the 3DP drug discovery research, moving towards personalized medicine, and simultaneously making the same 3DP an integral part of the new drug production line.

Moreover, besides the opportunity of getting any drug tailor made for individual patient needs, such as, exact dosage requirements, size, shape, color and flavor of the tablet and also the delivery system, 3DP technology can be most productively used to manufacture high priced low volume and patient-specific orphan drugs for the treatment of critical illnesses.

Even for Active Pharmaceutical Ingredients (API), the power and potential of 3DP technology can be well leveraged. On March 12, 2015 the ‘Howard Hughes Medical Institute (HHMI)’ of the United States announced that HHMI scientists have designed a revolutionary “3D printer” for small molecules that could open the power of customized chemistry to many. 

It further stated, small molecules hold tremendous potential in medicine and technology, but they are difficult to synthesize without proper expertise. The automated “3D printer” designed for small molecules is a way to get around this bottleneck. The new technology has the potential to unlock access to customized molecules in a way that will drive science forward, on many levels. Moreover, the potential for cost-savings with 3DP is huge, improving the drug profitability significantly.

C. Impact on 'supply chain' effectiveness: 

Currently, the traditional pharma ‘Supply Chain models’ are primarily based on the following:

  • Efficiency largely with high volume operation
  • Need to drive the cost as low as possible
  • Relatively higher-number of workers
  • The inventory cost
  • The real estate cost, owned directly or indirectly, for the entire ‘Supply Chain’ cycle

3DP technology would enable manufacturers shifting the ‘just in time production and distribution’ processes very close to consumers. Such well spread out and ‘just in time’ drug manufacturing activities catering to varying requirements, from very small to very high, would help reduce the cost of logistics, substantially.

This disruptive innovation will enable even the hospitals to print the required drugs at their own locations with, authorized 3DP file downloads, eliminating the need to keep huge inventory and also protecting patients from counterfeit medicines in the ‘Supply Chain’.

Thus, the bottom-line is, the drug companies will be able to print drugs with 3DP technology on real time demand at a large number of selected locations. This will significantly bring down the finished product inventory, starting from companies’ warehouses and distributors to retail and hospital shelves, to almost zero, making pharma supply chain significantly lean and highly effective.

Additionally, it will enable the pharma companies to manufacture drugs also in all developing countries, resulting in improved access to medicine, at a much lesser cost.

Conclusion:

I believe, this technology has already reached a critical juncture, where it is no longer a matter of conjecture that 3DP would ‘soon’ become a game changer, especially for the drug discovery process, manufacturing strategy and supply chain effectiveness of the pharma business, across the world, including India. Getting a prime mover advantage is vital. 

However, the question still remains: how soon will this ‘soon’ be? 

By: Tapan J. Ray

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

Pharma Innovation Absolutely Critical: But NOT Shorn from Ethics, Propriety, Compliance and Values

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Significant value added innovation is the bedrock of progress of the pharmaceutical industry and is essential for the patients. This is a hard fact.

However, this current buzzword – ‘innovation’ can in no way be shorn from soft business necessities like, ethics, propriety, compliance and values… not just for longer term sustainability of business, but more in the larger interest of patients and patient groups.

Most importantly, ‘ethics, propriety, compliance and values’ are not meant for mere display  in the corporate websites like, any other business showpieces. These should neither be leveraged to create a false positive impression in the minds of the stakeholders with frequent PR blitzkriegs.

The creators of these soft ‘X factors’ are now being increasingly hauled up for gross violations of the same by the Governments in various parts of the world .These are not just legal issues. The net impact of all such acts goes much beyond.

In this article, I shall deliberate on these continuing and annoying issues both in global and local perspectives, quoting relevant examples at random.

The sole purpose of my argument is to drive home that all such repeated gross violations, as reported in the media, go against patients’ interests, directly or indirectly. None of these incidents, in any way, can be negated with stories of great innovations or with any other make of craftily designed shields.

Under increasing scrutiny in the developed world:

Ethics, propriety and business value standards of big pharma, besides various types of legal compliance, are coming under increasing stakeholders’ scrutiny, especially in the developed markets of the world.

Very frequently media reports from across the world, highlight serous indictments of the Government and even judiciary for bribery, corrupt business practices and other unbecoming conduct, aimed at the the global mascot for healthcare.

It is indeed flabbergasting to note that more and more corporates, with all guns blazing at the same time, publicize with equal zest various initiatives being taken by them to uphold high ethical standards and business practices, if not propriety, as the juggernaut keeps on moving forward, unabated.

The scope of ‘ethics and propriety’:

The scope of ‘ethical business conducts, propriety and value standards’ of a company usually encompasses the following, among many others:

  • The employees, suppliers, customers and other stakeholders
  • Caring for the society and environment
  • Fiduciary responsibilities
  • Business and marketing practices
  • R&D activities, including clinical trials
  • Corporate Governance
  • Corporate espionage

That said, such scope should not be restricted to the top management, but must be allowed to percolate downwards in a structured manner, looking beyond the legal and regulatory boundaries.

Statistics of compliance to ‘codes of business ethics and corporate values’ are important to know, but the qualitative change in the ethics and value standards of an organization should always be the most important goal to drive any corporation and the pharmaceutical sector is no exception.

‘Business Ethics and Values’ in the globalized economy:

Globalization of business makes the process of formulating the ‘codes of ethics and values’ indeed very challenging for many organizations in many ways. This is mainly because, the cultural differences at times create a conflict on ethics and values involving different countries.

For this purpose, many business organizations prefer to interact with the cultural and religious leaders in the foreign countries, mainly to ascertain what really drives culturally diverse people to act in certain ways.

With the wealth of knowledge of the local customs and people, the cultural and religious leaders can help an organization to unify the code of ethics and values of the globalized business.

Such leaders can also help identifying the ‘common meeting ground of minds’ from a specific country perspective, after carefully assessing the cultural differences, which are difficult to resolve in the near term.

The ‘common meeting ground of minds’ within a given society, thus worked out, could form the bedrock to initiate further steps to strengthen global business standards of ethics and values of an organization.

OECD with USA started early enacting ‘Foreign Corrupt Practices Act (FCPA)’: 

To prevent bribery and corrupt practices, especially in a foreign land, in 1997, along with 33 other countries belonging to the ‘Organization for Economic Co-operation and Development (OECD)’, the United States Congress enacted a law against the bribery of foreign officials, which is known as ‘Foreign Corrupt Practices Act (FCPA)’.

This Act marked the early beginnings of ethical compliance program in the United States and disallows the US companies from paying, offering to pay or authorizing to pay money or anything of value either directly or through third parties or middlemen. FCPA currently has significant impact on the way American companies are required to run their business, especially in the foreign land.

A dichotomy exists with ‘Grease Payment’:

OECD classified ‘Grease payment’ as “facilitating one, if it is paid to government employees to speed up an administrative process where the outcome is already pre-determined.”

In the FCPA of the US, ‘Grease Payment’, has been defined as “a payment to a foreign official, political party or party official for ‘routine governmental action,’ such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official’s action, only its timing.”

Many observers opine, ‘Grease Payments’ is an absolute dichotomy to the overall US policy for ethical standards and against corruption.

Currently besides US, only Canada, Australia, New Zealand and South Korea are the countries that permit ‘Grease payments’.

Notwithstanding, the governments of the US and four other countries allow companies to keep doing business without undue delay by making ‘Grease Payments’ to the lower government officials, such payments are considered illegal in most other countries, in which they are paid, including India.

In India such a business practice is viewed as bribery, which is not only perceived as unethical and immoral, but also a criminal offense under the law of the land. Even otherwise, right or wrong, ‘Grease Payments’ are viewed by a vast majority of the population as a morally questionable standard of ‘business conduct’.

Many companies are setting-up the ethical business standards globally:

While visiting the website of especially the large global and local companies, one finds that all these companies, barring a very few exceptions, have already put in place a comprehensive ‘code of business ethics and values’. Some of these companies have also put in place dedicated code compliance officers across the globe.

‘Practice as you preach’:

Despite all these commendable initiatives towards establishing corporate codes of business ethics and values, the moot question that keeps haunting many times and again: “Do all these companies ‘practice what they preach’ in real life?”

Instances are too many for breach in ethics, propriety and value standards:

The media is now increasingly reporting such instances of violations both locally and globally.

Some Indian examples: (At random, not in a chronological order)

Criminal drug regulatory manipulation:

One of India’s top pharma players reportedly will pay a record fine of US$ 500 million in the US for lying to officials and selling badly made generic drugs.

The company has pleaded guilty to improper manufacturing, storing and testing of drugs, closing a year long civil and criminal investigation into the matter.

Compensation for deaths related to Clinical Trials not paid:

In 2011 the Drug Controller General of India (DCGI) reportedly summoned nine pharma companies on June 6 to question them on the amount of compensation they have decided to pay the ‘victims of their clinical trials’, which is a mandatory part of any clinical trial, or else all other trials of these nine companies going on at that time or yet to start, will not be allowed.

Clinical Trial is another area of pharmaceutical business, especially in the Indian context, where more often than not, issues related to ethics and values are being raised. In an article titled, ‘Clinical trials in India: ethical concerns’ published by the World Health Organization (WHO) following observations have been made:

“The latest developments in India reflect a concerted effort on the part of the global public health community to push clinical trials issues to the fore in the wake of several high-profile cases in which pharmaceutical companies were shown to be withholding information from regulators.”

Alleged marketing malpractices:

In 2010, the Parliamentary Standing committee on Health reportedly expressed concern that the “evil practice” of inducement of doctors by the pharma players continues.

Congress MP Jyoti Mirdha sent a bunch of photocopies of air tickets to Prime Minister Manmohan Singh to claim that doctors and their families were ‘beating the scorching Indian summer’ with a trip to England and Scotland, courtesy a pharmaceutical company.

30 family members of 11 doctors from all over the country reportedly enjoyed the hospitality of the concerned company.

Department of Pharmaceuticals reportedly roped in the Revenue Department under Finance Ministry to work out methods to link the money trail to offending companies.

Some global examples: (At random, not in a chronological order)

United States Government sues a Swiss pharma major for alleged multi-million dollar kickbacks:

The United States Government very recently reportedly announced its second civil fraud lawsuit against a Swiss drug major accusing the company of paying multimillion-dollar kickbacks to doctors in exchange for prescribing its drugs.

Fraud fines: 

Two largest drug makers of the world reportedly paid US$ 8 billion in fraud fines for repeatedly defrauding Medicare and Medicaid in the USA over the past decade.

Denigrating generics:

Another global pharma major reportedly has been recently fined US$ 52.8 million for denigrating generic copies.

Drug overcharging: 

Another global drug major reportedly stirred an ethics scandal and paid US$ 499 million towards overcharging the US government for medicines.

Bribing doctors:

  • A top global pharma player reportedly paid total US$ 60.2 million to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines. 
  • Another European pharma group reportedly was fined US$ 3bn after admitting bribing doctors and encouraging the prescription of unsuitable antidepressants to children.

 Concealment of important facts:

A judge in USA reportedly ordered a large pharma company to pay more than $1.2 billion in fines after a jury found that the company had minimized or concealed the dangers associated with an antipsychotic drug.

Off-label marketing:

  • A Swiss pharma major reportedly agreed to pay US$ 422.5 million to resolve an investigation into alleged off-label promotion of a drug, as well as civil allegations relating to five other products.
  • The U.S. Justice Department reportedly hit an American drug major with a US$ 322 million penalty for illegally promoting a drug before it received approval by the Food and Drug Administration for that condition.

Other illegal marketing practices:

Yet another European pharma group was reportedly fined USD 34 million by a court in the United States for illegal marketing practices for its medicine.

‘Illegal’ Clinical Trials: 

It was revealed on May 17, 2013 that global pharmaceutical companies reportedly paid millions of pounds to former communist East Germany to use more that 50,000 patients in state-run hospitals as unwitting guinea pigs for drug tests in which several people died.

All these are some random examples of alleged malpractices associated with ‘ethics, propriety, compliance and values’ in the pharma world, both local and global.

Middle and lower management becomes the ‘fall guy’: 

It is interesting to note that whenever, such incidents take place, the fingers are usually pointed towards the middle or lower management cadre of the corporations concerned for violations and non-compliance.

Corporate or top management ownership of such seemingly deplorable incidents still remains confined within a ‘black box’ and probably a distant reality.

Public perception is not encouraging:

In the pharmaceutical sector all over the world, many business practices have still remained very contentious, despite many well-publicized attempts of self-regulation by the industry. The flow of complaints for alleged unethical business practices have not slowed down either, across the world, even after so many years of self-regulation, penalty and severe indictments.

Government apathy in India:

Nearer home, the Government apathy, despite being pressured by the respective Parliamentary Committees and sometimes including judiciary in repose to Public Interest Litigations (PIL), has indeed been appalling, thus far.

The Department of Pharmaceuticals of the Government of India has already circulated a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for stakeholders to comment on it. The final UCPMP, when it comes into force, if not implemented by the pharmaceutical players in its ‘letter and spirit’, may attract government’s ire in form of strong doses of regulatory measures. However, the moot question remains, will the UCPMP come at all?

Similar issues are there in drug regulatory areas falling under the Ministry of Health, especially in the clinical trial area. In this matter, very fortunately Supreme Court has intervened against a Public Interest Litigation (PIL). Thus, one can expect to witness some tangible steps being taken in this area, sooner than later.

Walking the talk:

The need to formulate and more importantly effectively implement ‘Codes of Business Ethics & Values’ should gain increasing relevance in the globalized business environment, including in India.

It appears from the media reports, many companies across the world are increasingly resorting to ‘unethical behavior, impropriety and business malpractices’ due to intense pressure for business performance, as demanded primarily by the stock markets.

There is no global consensus, as yet, on what is ethically and morally acceptable ‘Business Ethics and Values’ across the world. However, even if these are implemented in a country-specific way, the most challenging obstacle to overcome by the corporates would still remain ‘walking the talk’ and owning responsibility at the top.

Conclusion:

Pharmaceutical innovation will continue to remain the launch pad for the industry growth in the battle against diseases of all types, forms and severity. However, that alone should in no way deserve to receive encouragement from any corner shorn from Ethics, Propriety, Compliance and Values.

Balancing pharmaceutical innovation with Ethics, Propriety, Compliance and Values, I reckon, will in turn help striking a right balance, to a considerable extent, between pharmaceutical innovation and public health interest for everyones’ satisfaction, mostly the patients.

Being equipped with the wherewithal to bring new drugs for the global population and being the fundamental source of growth momentum for the generic drug industry of the world, the innovator companies are expected to lead by setting examples in this area too. After all, as the saying goes:

“Caesar’s wife ought to be above suspicion. ‥Caesar himself ought to be so too”.

By: Tapan J. Ray

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

 

 

Business Ethics, Values and Compliance: Walking the Talk

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Wish you and your family all happiness, prosperity, peace and good health in the brand new year 2012

Business Ethics, Values and Compliance: Walking the Talk

Ethical business conduct and value standards, especially of medium, large to very large corporations are coming under increasing stakeholders’ scrutiny and being severely criticized for non-compliance in many instances. At the same time, more and more corporate initiatives are being taken towards this direction by both the global and local companies with special emphasis to combat bribery/ corrupt business practices and contribute to social justice and environmental protection.

The scope of ‘ethical business conducts and value standards’ of a company usually encompasses the following, among many others:

  1. The employees, suppliers, customers and other stakeholders
  2. Caring for the society and environment
  3. Fiduciary responsibilities
  4. Business and marketing practices
  5. R&D activities, including clinical trials
  6. Corporate Governance
  7. Corporate espionage

That said, codes of ethical conduct, corporate values and their compliance should not only get limited to the top management, but must get percolated downwards, looking beyond the legal and regulatory boundaries.

Statistics of compliance to codes of business ethics and corporate values are important to know, but the qualitative change in the ethics and value standards of an organization should always be the most important goal to drive any business corporation and the pharmaceutical sector is no exception.

Business Ethics and Values in the globalized economy:

Globalization of business makes the process of formulating the codes of ethics and values indeed very challenging for many organizations. This is mainly because of the fact that the cultural differences at times create a conflict on ethics and values involving different countries.

For this purpose, many business organizations prefer to interact with the cultural and religious leaders in the foreign countries, mainly to ascertain what really drives culturally diverse people to act in certain ways.

With the wealth of knowledge of the local customs and people, the cultural and religious leaders can help an organization to unify the code of ethics and values of the globalized business.Such leaders can also help identifying the ‘common meeting ground of minds’ from a specific country perspective, after carefully assessing the cultural differences, which are difficult to resolve in the near term.

The ‘common meeting ground of minds’, thus worked out, could form the bedrock to initiate further steps to strengthen global business standards of ethics and values of an organization.

OECD with USA started early enacting ‘Foreign Corrupt Practices Act (FCPA)’:

To prevent bribery and corrupt practices, especially in a foreign land, in 1997, along with 33 other countries belonging to the ‘Organization for Economic Co-operation and Development (OECD)’, the United States Congress enacted a law against the bribery of foreign officials, which is known as ‘Foreign Corrupt Practices Act (FCPA)’.

This Act marked the early beginnings of ethical compliance program in the United States and disallows the US companies from paying, offering to pay or authorizing to pay money or anything of value either directly or through third parties or middlemen. FCPA currently has significant impact on the way American companies are required to run their business, especially in the foreign land.

But a dichotomy exists in the US for ‘Grease Payment’:

‘Grease payment’ is classified by OECD as “a facilitating one if it is paid to government employees to speed up an administrative process where the outcome is already pre-determined.”

In the FCPA of the US ‘grease payment’, has been defined as “a payment to a foreign official, political party or party official for ‘routine governmental action,’ such as processing papers, issuing permits, and other actions of an official, in order to expedite performance of duties of non-discretionary nature, i.e., which they are already bound to perform. The payment is not intended to influence the outcome of the official’s action, only its timing.”

Considering all these ‘grease payments’ seem to be an absolute dichotomy to the overall US policy for ethical standards and against corruption.

Currently besides US, only Canada, Australia, New Zealand and South Korea are the countries that permit ‘Grease payments’.

Notwithstanding the fact that the governments of the US and four other countries allow companies to keep doing business without undue delay by making ‘grease payments’ to the lower government officials, such payments are considered as illegal in most other countries, if not all, in which they are paid, including India.

In India such a business practice is viewed as bribery, which is not only perceived as unethical and immoral, but also a criminal offense under the law of the land. Even otherwise, ‘grease payments’ are viewed by a vast majority of the population as a morally questionable standard of ‘business conduct’.

Many companies are setting-up the ethical business standards globally:

While visiting the website of especially the large global and local companies, one finds that all these companies barring a very few exceptions have already put in place a comprehensive ‘code of business ethics and values’. Some of these companies have also put in place dedicated code compliance officers across the globe.

However, it is important to ensure that the persons who are appointed either as the ‘Watch Dogs’ for such commendable initiatives or to head any committee on the subject, are individuals with squeaky clean record of adherence to the ‘Code of Ethics and Values’. Otherwise, the entire exercise may be perceived as making a mockery of the whole purpose.

Despite all these commendable initiatives towards establishing a corporate codes of business ethics and values, the moot question that haunts many time and again: “Are all these companies ‘walking the talk’?”

Otherwise, why does one read news items like ‘Dirty Secrets In Soap Prices’ as appeared in the ‘Wall Street Journal’ dated December 9, 2011 reporting that P&G, Colgate and Henkel have been fined $484 million by the French Government for ‘Price Fixing’ of laundry soap.

Or why do we see reports like one in the “Fierce Pharma’ dated October 5, 2010 stating that in the US eleven pharmaceutical companies have paid a total of over $6 billion to the government in 22 months for unethical marketing practices Or a ‘Bloomberg’ report dated January 17, 2011 with the headline, “Glaxo Sees $3.5 Billion Charge Related to Avandia Claims, Sales Practices.”

Or…

It is perhaps a sheer coincidence that whenever, such incidents take place, the fingers are usually pointed towards the middle or lower management cadre of the corporations concerned for non-compliance. The Corporate or top management ownership of such seemingly avoidable incidents still remains a distant reality.

Public perception of ethical standards of Pharmaceutical companies is not encouraging:

In the pharmaceutical sector all over the world, the marketing practices have still remained a very contentious issue despite many attempts of self-regulation by the industry. The flow of complaints for alleged unethical business practices have not slowed down significantly, across the world, even after so many years of self-regulation.

Nearer home, the Department of Pharmaceuticals of the Government of India has already circulated a draft ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’ for stakeholders to comment on it. The final UCPMP, when it comes into force, if not implemented by the pharmaceutical players in its ‘letter and spirit’, may attract government’s ire in form of strong doses of regulatory measures.

A study on the UCPMP:

Ernst & Young released the key findings of a survey report on the UCPMP in September, 2011 titled ‘Pharmaceutical marketing: ethical and responsible conduct’, which are as follows:

  • Around two-third of the respondents felt that the implementation of the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) drafted by the Department of Pharmaceuticals, would change the manner in which the pharma products are currently marketed in India
  • More than 50% of the respondents are of the opinion that UCPMP guidelines may lead to manipulation in recording of actual sampling activity
  • More than 50% of the respondents indicated that the effectiveness of the code will be very low in the absence of legislative support provided to the UCPMP committee
  • Majority of the respondents (90%) felt that pharma companies in India should focus on building a robust internal controls system for ensuring compliance with the UCPMP
  • Around 72% of the respondents felt that the MCI was not stringently enforcing its medical ethics guidelines
  • Only 36% of the respondents felt that the MCI’s guidelines would have an impact on the overall sales of the pharma companies

Thus the quality of implementation of self-regulatory ‘Code of Marketing Practices’ is not only attracting heavy criticism from the stakeholders in many countries in the world, including India, but also indicating a trust deficit between the industry and the civil society in general.

Clinical Trials in India: Ethics and values

Clinical Trial is another area of pharmaceutical business, especially in the Indian context, where more often than not, issues related to ethics and values are being raised. In an article titled, ‘Clinical trials in India: ethical concerns’ published by the World Health Organization (WHO) following observations have been made:

“The latest developments in India reflect a concerted effort on the part of the global public health community to push clinical trials issues to the fore in the wake of several high-profile cases in which pharmaceutical companies were shown to be withholding information from regulators.”

Similarly ‘Times of India’ in its June 6, 2011 issue reported, “Clinical trials claimed 25 lives in 2010, only 5 paid compensation.”

Conclusion:

The need to formulate ‘Codes of Business Ethics & Values’ and even more importantly their compliance are gaining increasing importance and relevance in the globalized business environment. Unfortunately, at the same time, many companies across the world are being increasingly forced to come to terms with the heavy costs and consequences of ‘unethical behavior and business practices’ by the respective governments, perhaps arising out of intense pressure for the business performance.

There is no global consensus, as yet, on what is ethically and morally acceptable ‘Business Ethics and Values’ across the world. However, even if it these are implemented in a country-specific way, the most challenging obstacle to overcome by the corporates would still remain ‘walking the talk’ and owning the responsibility.

The million dollar question thus emerges ‘How to make it happen?’

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.