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Health Care in India: Disrupt The Status Quo

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Over decades, we have been trying to ferret out the unfeigned reasons of failure for India to provide access to reasonably affordable, quality health care to all its citizens, but in vain. The quest to know its rationale becomes more intense, as we get to know, even some developing countries in Asia, Africa and Middle East are taking rapid strides to catch up with the health care standards of the developed countries of the world.

In the last few years many such countries, such as, Thailand, Turkey, Rwanda and Ghana, besides China, have successfully ensured access to quality and affordable healthcare to their citizens through well-structured national initiatives. Governments of economically poorer countries, such as, Sri Lanka and Bangladesh too are making rapid progress in this direction. All these commendable health care initiatives are protecting the most vulnerable populations in their respective countries from getting swept away by extreme poverty.

No more than just assurances:

In India, economic and social costs of public health care infrastructural inadequacy, consequent low access and inefficient delivery mechanism keep going north, unabated, barring a small number of States. Over decades, Union Governments of all political dispensations have been making no more than incoherent promises and that too in bits and pieces on reform in public health care services. As on date, no Union Government has articulated a comprehensive pathway to achieve this goal, in tandem with the States, specifying required time-frames and making commensurate budgetary allocations.

Despite the legacy factor, the incumbent Government as well, has not taken any tangible measure in this direction, just yet, besides giving similar in-coherent assurances. Nor has it clearly articulated that providing access to quality health care for all, at a reasonable cost, is one of its top areas of priority in the widely publicized ‘National Development Agenda’.

Agonizing wait continues:

That the Government is now in the process of drafting a National Health Policy to meet the rising demand for sustainable healthcare across the country, was announced by the Secretary – Health & Family Welfare on September 1, 2014. The first draft of The National Health Policy 2015 was placed in the public domain seeking inputs from the stakeholders in January 2015.

That said, agonizing wait of the patients with unfathomable patience still continues for better days of high quality and affordable health care services in India. Palpable feeling of long standing apathy of the decision makers in this area keep lingering simultaneously.

Two critical admissions:

Besides others, following are the two critical and unambiguous admissions in the draft National Health Policy 2015:

  • “The failure to attain minimum levels of public health expenditure remains the single most important constraint.”
  • “Over 63 million persons are faced with poverty every year due to health care costs alone, it is because there is no financial protection for the vast majority of health care needs.”

In my article of January 12, 2015 published in this Blog, titled “National Health Policy 2015 Needs Wings To Fly ”, I deliberated on the draft National Health Policy 2015.

No commensurate budgetary provisions:

Despite being aware of the above facts, the Union Budget for 2015-16 allocated just below Rs. 30,000 Crore for health care in India, without unveiling any longer term picture in this regard, not even a ‘broad brush’ one.

To give a perspective regarding how meagre is this budgetary allocation on so critical an area, I quickly add that on August 19, 2015, Prime Minister Modi announced an allocation of Rs.1.25 lakh crore for the development of only Bihar, just prior to the state going for the assembly election.

Untenable reason:

The Finance Ministers reasoned in his budget speech that post devolution of resources to the states following the recommendations of the 14th Finance Commission, the states will address the issue of healthcare in their respective geographical jurisditions.

However, it does not make much sense to me, if at all. This is mainly because, though health is a state subject, it is still a very critical national issue with an overall dismal performance of the country against most of the ‘Millennium Development Goals’.

Only a ‘National Health Plan’ funded jointly and adequately by both the center and the States with clear budgetary provisions and executed immaculately against clearly measurable performance parameters with specifically assigned accountabilities, could salvage the disastrous consequences of further neglect in the health care space of the country.

Not just deployment of financial resources:

The core issue, I reckon, is not just inadequate deployment of financial resources, but continuation of lack of effective governance in the Union Ministry of Health, as well. And, this is indeed a deadly combination. It has been pushing a large number of patients in India embracing abject poverty every year, as admitted in the draft National Health Policy 2015 of the incumbent Government, but with no visible rectifying measures, as on date.

Dangling carrots, as it were, to the patients by different Union Governments in shedloads, such as, ‘free medicines for all’, ‘free health insurance for all’, ‘free diagnostics for all” and what not ‘for all’, has been continuing forever, with patients having no other choices but to have patience in plenty and probably in perpetuity.

When Primary Health Care itself is a critical issue… :

In such deteriorating heath care environment, when primary health care still remains a key issue mostly in rural India, yet another interesting and tentative assurance reportedly comes from no less than the Union Minister of Health himself on August 18, 2015, when he said:

“The government is working both in secondary and tertiary medical sector and I believe that we need to work out a module in PPP mode to lessen the healthcare burden of common man.”

Having said that, when it comes to providing healthcare services to the poor and the needy, the Honorable Minister, expressed his vision in a notably interesting way, which is reportedly as follows:

“How will we be able to give the healthcare facility to helpless is one question that is unanswered…. All stakeholders should answer this question. Enhance the teaching, the training should be at much higher, speed, scale and skill and above all there should be better communication.”

Going beyond just allopathic treatment:

To answer the Health Minister’s above question – “How will we be able to give the healthcare facility to helpless”, one of the many important ways for the Government, I reckon, is to make a decisive and robust move much beyond Allopathic treatment, just as what China has done with its ‘traditional medicines’.

The strengths of traditional Indian medicines need to be properly leveraged with requisite intervention of science and technology and supported by effective awareness building campaigns.

Expand the role of ‘Traditional Medicines’:

Treatment with traditional medicines in India for many well-tried common diseases, has the potential to play an important role in providing access to health care for all, at least in the public health care space of the country, where AYUSH (Ayurveda, Yoga, Unani, Siddha and Homoeopathy) needs to be promoted and encouraged, actively.

It is expected that the new National Health Policy 2015 would have a much greater focus on the traditional systems of medicine – AYUSH, for the treatment of many common diseases.

It appears from various reports, AYUSH system that calls for not very sophisticated technological inputs for diagnosis of common diseases and preparation of medicinal substances, could be made an integral part of the entire healthcare spectrum, starting from the primary health centers.

As a basic preparatory measure to achieve this goal, the rejuvenated ‘Department of AYUSH’ should work, in consultation with the respective domain experts, to chart out an effective and implementable pathway for the development of education and research in Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy systems.

Need to increase focus on AYUSH:

It has been widely reported that the use of herbs to treat various common ailments is almost universal among many societies, as these are quite often more affordable than buying expensive modern allopathic medicines.

According to the World Health Organization, around 80 per cent of the population of some Asian and African countries currently use traditional medicines to address their health care needs.

I thought the same holds good for India, as well.

However, from a very recent and credible survey report, I find that the above impression is not quite true for India. Penetration of traditional AYUSH systems of treatment, even within the rural population of India, is currently abysmally low.

According to NSSO’s (National Sample Survey Office) Household Expenditures on Health Survey, conducted between January and June 2014, usage of Allopathy for “spells of ailment” is unusually high both in urban and rural India, as follows:

Category Allopathy Treatment %
Rural Males 90.6
Rural Females 88.7
Urban Males 90.4
Urban Female 91.0

(Source: NSSO 2014-15)

In the absence of adequate access to safe and cost-effective treatments through public health care infrastructure and delivery systems, be it Allopathic or AYUSH, more number of patients are compelled to seek expensive private healthcare services for their “spells of ailment”, as follows:

Category Private Doctors Private Hospitals
Male 51.3 24.3
Female 49.7 23.9

(Source: NSSO 2014-15)

AYUSH could play an important role to address such issues, appreciably.

An intriguing recent media report:

On August 19, 2015, I read an intriguing media report that highlights the following two points on apparently a ‘recently overhauled draft’ of the National Health Policy 2015, as follows:

  • “The National Democratic Alliance (NDA) government plans to increase public investment in health from 1.04 per cent of GDP (gross domestic product) to 2.5 per cent by 2020, with 70 per cent of this being dedicated to primary health care. This target has been set in the overhauled draft National Health Policy that now emphasizes on substantially ratcheting up government investment in public health care facilities across the country.”
  • “Of the total funds required, the Union government would provide 40 per cent, which could be shored up through a health cess on the lines of an education cess. The cess fund to be used specifically for public health investments could be partly shored up by imposing additional duties on tobacco, alcohol, fatty, salty and sugary products that are considered unhealthy by experts.”

Why is this media report so baffling?

This news really baffled me…a lot, as another more than six month old media report of January 1, 2015 stated just the same on the same two points, exactly quoting the very first draft (not the ‘overhauled’ one) of the National Health Policy 2015 , as follows:

  • “The draft National Health Policy, 2015 has proposed a target of raising public health expenditure to 2.5 % from the present 1.2% of GDP. It also notes that 40% of this would need to come from central expenditure.”
  • “The government is also keen to explore the creation of a health cess on the lines of education cess for raising money needed to fund the expenditure it would entail. Other than general taxation, this cess could mobilize contributions from specific commodity taxes such as the taxes on tobacco, and alcohol, from specific industries and innovative forms of resource mobilization.”

Be that as it may, I would urge you to please read both the old and new original media reports on the same draft National Health Policy 2015 and draw your own conclusions, as you deem appropriate.

No change on the ground:

The media reports, such as above, elaborately detailing a significant increase in the health care expenditure as a percentage of GDP in the so called “overhauled” draft of the National Health Policy 2015, gave me an impression that the status quo, at least, in the public health care expenditure scenario has now been disrupted, which in reality has not, at all.

Such reports make patients continue ‘counting colors in the rainbow’, as it were. They keep expecting that getting access to quality and affordable health care for all would soon become a reality, with the Government thinking afresh to raise the public health care expenditure significantly. In reality, the status quo on the ground continues and it can’t be just wished away.

Deserves ‘Infrastructure Status’:

To achieve the basic health care goals of the nation, the Government would require to set the national priorities right. Health care has to be placed at the top rungs of its ‘National Development Agenda’ just as ‘infrastructure’- disrupting the prevailing status quo.

Considering its critical social and economic impact on the progress of the nation, it is about time that ‘Health Care Sector’ be given the ‘infrastructure status’ in India, not just to give a further boost to the industry, but also to make health care products and services affordable to all.

Conclusion:

Making health a ‘Fundamental Right’ for Indian Citizens, as narrated in the draft National Health Policy (NHP) 2015 of Narendra Modi Government, is indeed profound in its both content and intent. However, inordinate delay in its finalization and commencement of implementation process is rather disturbing.

Overhaul and expansion of public health care infrastructure, services and the effective delivery mechanism, undoubtedly, are very necessary requirements for the length and breadth of the country, excepting a very small number of states, which are doing so well in this area.

That said, the real issue is much more deep seated. As the well-known economist Subir Gokarn wrote in one of his articles that in health care “the consequence of inaction is a vicious circle between morbidity and poverty.”

This ‘vicious circle’ has to be broken, sooner. Many developing countries, including much poorer nations, have successfully demonstrated that access to basic quality healthcare can be provided to all, at an affordable cost.

Well-crafted robust national health care plan and policy, which are integrated with similar initiatives of the States should soon be put in place. Effective implementation of a comprehensive, well-integrated and time-bound health care strategic plan, with requisite budgetary allocations and periodic review, assigning specific accountabilities to individuals, are the needs of the hour. Otherwise, the social and economic consequences of the status quo in the health care space of India, would impede the sustainable growth of the nation, seriously.

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.

What President Obama And Prime Minister Modi Discussed On IPR And Healthcare In India

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During the recent visit of the US President Barack Obama to India from January 25-27, 2015, both the domestic and international media was abuzz with the speculation, whether or not India would concede some ground to America on the prevailing, generally considered, well balanced patent regime in India.

Many expected that the American delegation would succeed in getting some specific assurances from Prime Minister Narendra Modi to follow the line of the US style Intellectual Property Rights (IPR) in India, which would help the American pharma companies to maximize their financial returns in the country.

The assurances from India were expected mainly in areas involving grant of patents even to those pharma products, that do not quality for the same under section 3(d) of the Indian Patents Act 2005, dilution of provisions for Compulsory License (CL) and creation of a new provision for Data Exclusivity in the country, besides a few others.

As everyone noticed, just before the US President’s visit, interested groups both in India and also from abroad intensified lobbying and released op-eds to create pressure on the Indian negotiators, in general, and the Prime Minister Modi in particular.

Terming the Indian Patents Act weak, the lobby groups turned the Indian IPR regime on its head. Playing the role of India’s benefactor, they re-packaged their shrill collective voice into pontificating words while giving interviews to the Indian media by saying: “A strong IPR regime could allow the country (India) to make a major contribution to tackling health challenges, both domestically and around the world.”

Additional US interest in Indian IP regime from TPP perspective:

Exemplary demonstration of India’s resistance to intense external pressure, time and again, for dilution of the IP regime in the country, seems to have become a model to follow for the emerging economies of the world, in general. This trend now gets reflected even among some of the members of the 12-nation Trans-Pacific Partnership (TPP), which is a proposed regional regulatory and investment treaty.

According to reports, TPP members, such as, Brunei, Malaysia, Singapore and Vietnam are negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement. Besides America, other members of the TPP are Australia, Japan and New Zealand, Canada, Chile, Mexico and Peru.

TPP negotiations are generally expected to follow the overall framework of American laws. However, according to media reports, based on the leaked draft of the TPP, the data exclusivity period for biologic medicines has already been negotiated down to 7 years, from 12 years under the US Affordable Care Act.

However, on January 27, 2015, US Senator Orrin Hatch, Chairman of the Senate Finance Committee reportedly said that he would oppose Senate approval of the TPP, if it does not provide 12 years of patent protection for biologics.

The same day, at a hearing before the House Ways and Means Committee, US Trade Representative Mike Froman reportedly reiterated, “The US is insisting on 12 years of IP protections, even though the Obama administration’s budget calls for 7-year exclusivity on biologic meds.”

It is also worth noting that Nobel laureate Joseph E. Stiglitz in an op-ed titled, “Don’t Trade Away Our Health”, published in The New York Times of January 30, 2015 commented as follows:

“TPP could block cheaper generic drugs from the market. Big Pharma’s profits would rise, at the expense of the health of patients and the budgets of consumers and governments.”

Clicking on this short video clip you will be able watch another similar viewpoint on TPP, its general perspective and what it encompasses.

Thus, the closely guarded ‘turf war’ on TPP is now heating up, making negotiations increasingly tougher to arrive at a consensus on the IP rules that would be applicable to pharmaceutical products in this trade initiative. Consequently, the evolving scenario has prompted the interested groups to keenly follow, with hopes, the outcome of Presidents Obama’s recent visit to India, especially in the pharma IP areas. This is because, many emerging economies of the world are now appreciative of the prevailing well-balanced patent regime in India.

After the 12-nation TPP agreement comes into force, probably following the lines of the US IP laws, it is quite possible that India may sometime in future would prefer to be a part of this agreement for greater trade facilitation, as the country comes closer to America…Who knows?

However, in that case the bottomline is, India would have to amend relevant provisions of its Patents Act in conformance with the requirements of mainly the US pharmaceutical companies and the IP laws prevailing in America, as this will be necessary to become a new member of this treaty.

Discussion in the summit meeting:

According to the Joint Statement on the summit meeting released by the White House, President Obama and Prime Minister Modi discussed the following subjects related to IPR and Healthcare in India, as detailed below:

  • Reaffirmed the importance of providing transparent and predictable policy environments for fostering innovation.  Both countries reiterated their interest in sharing information and best practices on IPR issues, and reaffirmed their commitment to stakeholders’ consultations on policy matters concerning intellectual property protection.
  • Reaffirmed their commitment to the Global Health Security Agenda (GHSA) and announced specific actions at home and abroad to prevent the spread of infectious diseases, including a CDC-Ministry of Health Ebola and GHSA preparedness training, expansion of the India Epidemic Intelligence Service, and development of a roadmap to achieve the objectives of the GHSA within three years.
  • Committed to multi-sectoral actions countering the emergence and spread of antimicrobial resistance (AMR), and cooperation in training of health workers in preparedness for infectious disease threats. The Leaders agreed to focus science and technology partnerships on countering antibiotic resistant bacteria and promoting the availability, efficacy and quality of therapeutics.
  • Welcomed further progress in promoting bilateral cooperation on cancer research, prevention, control, and management and agreed to continue to strengthen the engagement between the CDC and India’s National Centre for Disease Control.
  • Welcomed the upcoming completion of an Environmental Health, Occupational Health and Injury Prevention and Control MoU between the U.S. Centers for Disease Control and Prevention and the Indian Council for Medical Research to further collaborative efforts to improve the health and welfare of both countries’ citizens.
  • Agreed to expand the India-U.S. Health Initiative into a Healthcare Dialogue with relevant stakeholders to further strengthen bilateral collaboration in health sectors including through capacity building initiatives and by exploring new areas, including affordable healthcare, cost saving mechanisms, distribution barriers, patent quality, health services information technology, and complementary and traditional medicine.
  • Pledged to encourage dialogue between the U.S. Department of Health and Human Services and its Indian counterparts on traditional medicine.
  • Pledged to strengthen collaboration, dialogue, and cooperation between the regulatory authorities of the two countries to ensure safety, efficacy, and quality of pharmaceuticals, including generic medicines.
  • Agreed to accelerate joint leadership of the global Call to Action to end preventable deaths among mothers and children through a third meeting of the 24 participating countries in India in June 2015.  As host, India will showcase the power of new partnerships, innovations and systems to more effectively deliver life-saving interventions.
  • Also lauded the highly successful collaboration on a locally produced vaccine against rotavirus, which will save the lives of an estimated 80,000 children each year in India alone, and pledged to strengthen the cooperation in health research and capacity building through a new phase of the India-U.S. Vaccine Action Program.

As stated earlier, during this summit meeting, US lobbyists were reportedly nurturing a hope that Prime Minister Modi would eventually agree, at least in principle, to jettison section 3(d) on the patentability criteria enshrined in the Indian Patents Act 2005 and significantly water down the country’s Compulsory License (CL) provisions. This expectation increased, when the US President made the investment promise of U$4 billion in India.

That said, from the above points of discussion in the joint statement, it appears that no breakthrough on the part of the US was achieved especially in the IPR space, during the summit.

However, in other areas of bilateral healthcare co-operation, such as, science and technology partnerships in countering antibiotic resistant bacteria; cancer research and traditional medicines; the reaffirmations made by the two leaders are encouraging.

US pressure on IP to continue:

Going by India’s reaffirmation during the summit meeting of its commitment to consultations with America on policy matters related to IPR protection and US Trade Representative Mike Froman’s reported affirmation of the following to the US lawmakers during a Congressional hearing held on January 27, 2015, it is construed by the IP activists that the kettle has possibly started boiling:

- “We have been concerned about the deterioration of the innovation environment in India, and we have engaged with the new government since they came into office in May of last year about our concerns,”

- “We held the first Trade Policy Forum in four years in November. I just returned from India yesterday as a matter of fact … and in all of these areas, we have laid out a work program with the government of India to address these and other outstanding issues.”

- “We are in the process of providing comments on that draft policy proposal on IPR, and we are committed to continuing to engage with them to underscore areas of work that needs to be done in copyright, in trade secrets as well as in the area of patents,”

- “We’ve got a good dialogue going now with the new government on this issue, and we’re committed to working to achieve concrete progress in this area,”

Media reports also indicate that US pressure on IPR would continue, as they highlight:

“Threatened by free trade of high-quality and affordable medicines, US-based pharmaceutical companies and politicians friendly with the industry are using prominently placed op-eds, large advertisements on Washington, D.C. buses, and letters to President Obama to spread false information -claiming India’s rules are not legal or discourage innovation. The companies have been threatening to withhold investment if India does not adopt weaker patent laws that would extend pharmaceutical monopolies and stymie the country’s generic industry.”

I discussed some of these issues in my blog post of January 19, 2015, titled “New National IPR Policy of India – A Pharma Perspective”.

Conclusion:

Irrespective of whatever the US-India Joint Statement says on IPR, some experts do apprehend that Indian Government may now wilt under continuous intense pressure from the American Government. This is mainly because, India’s Commerce and Industry’s Minister has reportedly sought America’s inputs in the finalization process of the new National IPR policy of the country.

On this score, let me hasten to add that it may not be prudent to read too much into it, as seeking stakeholders’ comments on such matter is a practice that India has been following since long on various issues and policies.

However, at the same time, other groups of experts nurture a quite different viewpoint. They are confident that the nationalist Modi Government, under no circumstances would concede its long nurtured strategic ground on IPR to the US power play.

Emerging countries across the globe are keenly watching this intense game of  ‘Power Chess’, as they plan to emulate India in many of the pharmaceutical IP areas to uphold the public health interest, providing affordable healthcare to all.

These are still early days. Thus, in my view, on January 25, 2015, what President Barack Obama and Prime Minister Narendra Modi discussed on the IPR regime in India may not be as important as what they would eventually decide to agree, disagree or agree to disagree in this area, moving on from here.

Only time would prove…not just who is right, that is pretty obvious to many, but who wilts at the end of the day…and more importantly, why?

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.

In VUCA World: Changing Dynamics of Prescription Generation Process

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The acronym VUCA is often being used to emphasize upon the Volatility, Uncertainty, Complexity and Ambiguity in various situations. The term has been derived from military vocabulary and is being used since 1990s in the business management parlance. VUCA is also considered as a practical code for awareness and readiness.

I find all the elements of VUCA playing an active role in the prescription demand generation space too, as it is based on various assumptions of what will work and what won’t in a fast changing pharmaceuticals business environment. 

The interplay:

Primary interplay in the sustainable prescription demand generation process of today’s digitally empowered VUCA environment, I reckon, could be as follows:

  • Volatility: Fast changing dynamics of medical communication with interfaces made of emerging modern technological tools carrying high risks of rapid obsolescence.
  • Uncertainty: Lack of predictability in assessing outcomes of increasingly expensive product detailing inputs, coupled with too many surprise elements popping-up in the environment almost from nowhere and more frequently.
  • Complexity: Multi-factorial Doctor-Medical Representative (MR) interactions, which get even more complicated with increasing time constraints for effective product detailing to take place.
  • Ambiguity: Difficult to fathom changing needs of the doctors/payors, leading to increasing cause-and-effect confusion by the pharma marketing strategy planners.

Keeping these in view, today I shall deliberate on the ‘Criticality of Optimal Mix of Human and State of Art Digital Interfaces’ for sustainable prescription demand generation in a VUCA environment.

The key influencer – a new study:

A research study published in June 2013, in the ‘American Heart Journal (AHJ)’ establishes that the interaction between physicians and MRs, though essential for  improvement of medical care, is indeed complex. This is mainly because of the apprehension that conflict of interests may affect the doctors’ prescription decision-making process. 

However, the fact comes out, the doctors tend to prescribe more of expensive medical products after interacting with MRs from the concerned manufacturing companies, which, in turn, raises the treatment costs for patients.

Study established MRs influence prescription decision:

This particular AHJ study compared the use of Bare-Metal Stents, Drug-Eluting Stents (DES), and Balloon Catheters according to company presence in the hospital. It concluded that MR presence was associated with increased use of the concerned company’s stents during percutaneous coronary interventions. The effect was more pronounced on the use of DES, and resulted in higher procedural cost of US$ 250 per patient.

In this particular study, it was found that DESs were used in about 56 percent of the cases, when the MRs concerned were at the hospital, against 51 percent when they weren’t there.

Interestingly on such interactions between the MRs and the drug/devices industry two opposite viewpoints emerge.

‘MR-Doctor interaction important‘ – Industry:

Quoting the Associate General Counsel and Director of Legal and Medical Affairs at the Advanced Medical Technology Association, a medical technology trade association, Reuters reported, “interactions between sales representatives and doctors benefit patients and are supported by professional medical organizations.”

‘MR interaction should not influence prescription decision’ – Doctors:

In the same report, the study’s lead author was quoted saying, “We need to evaluate carefully any interactions with medical industry to ensure that we minimize an effect on our decision making process.”

The bottom-line, though the debate continues:

This debate will keep continuing even in the years ahead. Be that as it may, the key fact that emerges out of the above study is, MRs do play a critical role in the prescription decision-making process of the doctors, especially for expensive medical products . Consequently, the pharmaceutical companies will prefer maintaining such ‘influencing’ roles of MRs to boost revenues of their respective brands.

This process assumes even greater importance in a VUCA world, as situation specific more frequent human interventions, strongly backed by state of art technological supports, would need to be effectively deployed for generation of sustainable prescription demand to excel in business.

The X-Factor:

However, one of the most challenging issues even in a VUCA situation is that pharma players continue and will continue to target the same sets of prolific prescribers for any given class of products in pursuit of success. As a result, time being so limited, very often even after waiting for hours MRs may not be able to meet the key prescribers.

Moreover, as and when the meeting takes place, it may well get restricted to just a very brief discussion due to the X Factor – paucity of the doctors’ time. Thus, delivering an effective product message in such a short time becomes increasingly challenging. Further, the difficulty in arresting un-interrupted attention of the busy practitioners due to X-Factor when they are with patients, compounds the problem.

Pivotal role of state of art technological tools:

The effectiveness of connection between respective brands of different drug makers and the doctors can be greatly facilitated with the application of state of art technology and modern internet based tools in varying proportions, as the sales and marketing communication strategy would dictate.

This area is emerging as a crafty game, which calls for wide-scale application of analytics.

Traditional strategies not enough:

In a VUCA world, while traditional face-to-face product detailing to doctors may continue to be the primary means for prescription demand generation, experimentation with a good number of new Internet based initiatives has already been started, as I discussed in my earlier article.

Hence, the concepts of digital marketing and e-detailing are gaining ground fast. Such initiatives of augmented digital communication of key marketing messages to doctors, would also help driving the key customers’ traffic to respective product Websites of the concerned companies for more detailed and convincing medical treatment solutions, as and when required by the busy doctors.

Types of digital interventions:

These digital interventions may include:

  • Highly targeted brand specific e-mailing responding to pre-identified needs of individual doctors
  • Sample ordering as per requirements of doctors
  • Live online product presentations at a time convenient to individual doctors
  • Quick and need-based problem solution centric online chats 24×7
  • Strategic usage of social media, backed by a robust pre-decided key output measuring matrix

However, the mix of each of these digital applications will need to be carefully worked out as robust supporting measures to key prescription demand generation activities, spearheaded by the MRs. 

MRs to remain as ‘Spearheads’:

In my view, MRs would still remain the frontline force in the emerging world (dis)order, may be lesser in number, for sustainable prescription demand generation process. Therefore, there is an urgent need to take them on board upfront and train suitably to make the modern digital interfaces successful as powerful differentiating support tools.

Technology based training on digital marketing and e-detailing as empowering initiatives, demonstrating tangible benefits that such high tech-interventions can offer in the overall sales performance of MRs, would play a critical role. Such efforts would, in turn, immensely help making digital augmentation strategies for pharma detailing successful, in the long run.

MR involvement is critical:

In my view, to be successful in a VUCA environment with all these endeavors, however tech-intensives those may be, there will be a critical need to make the MRs understand and learn the process. In tandem, it is equally important to actively engage them in the execution of the integrated medical communication strategy of the concerned companies.

Keeping this perspective in mind, I guess, it will be quite apt to quote Ben Franklyn, one of the Founding Fathers of the United States and a leading author, printer, political theorist, politician, scientist, musician, inventor and economist, all in one, who once wrote:

“Tell me and I forget, 

 Teach me and I remember,

 Involve me and I learn”

Thus, MRs would continue to have a critical role to play in the demand generation process for prescription medicines. However, they must be properly trained to be able to provide the types of knowledge and information that the doctors may not have ready access from elsewhere.

The entire process would, at the same time, require massive technological interventions, not incremental in nature but radical in scope and dimensions, and at a much wider scale than what we have been attempting today.

Challenges in India:

The very concept of VUCA in the changing dynamics of sustainable prescription demand generation, brings to the fore the issue of quality of MRs in India.

Currently there is a wide, both inter and intra company, variation in the educational qualifications, relevant product and disease area knowledge, professional conduct and ethical standards between MRs in our country.

Employability of MR in a VUCA world:

Just when we talk about augmented digital interfaces in medical communications, there exists a huge challenge in the country to strike a right balance between the level/quality of sales pitch generated by the MRs for a brand.

At times, many of them may not be properly armed with requisite scientific knowledge, and the basic norms of professional conduct/ ethical standards, while rendering their services.

They may not also be able to handle the sophisticated technological tools with quick application of minds. Hence, the subject of employability of MR in a VUCA world needs to be addressed afresh in India.

‘One size fits all’ strategies:

To make it happen, the pharmaceutical players would require to jettison, ‘one size fits all’ types of strategies in a VUCA world.

In tandem, pharma marketing strategists will need to be intimately conversant with a relatively difficult process of cerebral gymnastics to help formulating individual key prescriber-centric communication strategies, where MRs can play a key role with optimal digital interventions.

This is possible, if supported by the respective employers creating an environment of empowerment, backed by requisite product training, technological tools, modern behavioral inputs and above all by making investments to create of a large sustainable emotional capital for longer term  business excellence.

Conclusion:

All the elements of VUCA would keep playing very critical roles in sustainable prescription demand generation process in the years to come, more than ever before.

There is a critical need to understand the interplay between each of these dynamics on an ongoing basis to make strategic modifications quickly, whenever required. This is important, as the prowess to introduce right changes at right times will differentiate men from the boys in this ultimate ball game of the pharma industry. 

To succeed in a VUCA environment, pharmaceutical companies may choose to predominantly focus on harnessing their technological expertise. 

However, to face the waves of virtually unpredictable continuous change, only technology based efforts, I reckon, are less likely to fructify. Unless, these high- tech interventions are spearheaded by time-specific fast enough and intelligent skilled human responses in form of MRs. 

Having said that, it would be foolhardy to even think of completely taming VUCA with whatever human and technological wherewithal that any pharma player may be able to garner to achieve its goals. It is, in fact, a matter of relativity in managing VUCA in a given situation at a given time. 

Thus I believe, there is, on the contrary, a need to leverage a VUCA environment, for creation of an ‘Optimal Mix of Human and State of Art Digital Interfaces’ in the product detailing process with a high sense of urgency. This would be critical to gain cutting edge advantages for generation of increased prescription demand in a sustainable way.

For the pharmaceutical marketing strategists, this new ball game would obviously not be a piece of cake either, as the key success factors would involve the right mindset of first unlearning and then relearning the process on an ongoing basis, virtually in all time to come

With this perspective, I conclude by quoting the famous American writer and futurist Alvin Toffler, who once said,

“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

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.

 

‘e-detailing’: The Future of Pharmaceutical Sales?

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Pharmaceutical product detailing to doctors by Medical Representatives (MRs) is believed to fetch the single largest return on marketing investments by the pharmaceutical companies globally, as on date.

At the same time, the pharma players, across the world, are increasingly experiencing that the costs of product detailing by the MRs to the doctors are not now quite commensurate to the desired return in terms of financial results, despite bringing in many new skills and other productivity improvement measures on a regular basis.

Thus, to make such interaction between the MRs and the doctors more productive and cost efficient, increasingly the global pharmaceutical industry has been exploring various models and methods with numerous state-of-art digital Internet based applications. Some pharmaceutical companies, especially, from the western world, have already started putting such innovation into practice.

Waning productivity of traditional detailing:

This is quite apparent now that due to changing market dynamics and increasingly busy schedules of the doctors, the productivity of traditional product detailing is fast waning. As a result, pharmaceutical companies are encountering huge challenges in the process of generating prescription demand for their respective products by taking commensurate share of mind of the Physicians.

This is mainly because, the number of patients is also now fast increasing and the doctors are trying to see these large numbers of patients within their limited available time. As a result each patient is getting lesser doctors’ time, while the doctors are trying to provide optimal patient care in each patient visit. At the same time, other obligations of various kinds also overcrowd physicians’ time.

As a result, increasing number of MRs, which has almost double in the past decade, is now fiercely competing to get a share of lesser and lesser available time of the doctors. Added to this, increasing inflow of new doctors not being in line with the increasing inflow of patients is making the situation even worse.

As stated earlier, significant expenditure that the pharma companies have been incurring towards product detailing, many of them feel, is not resulting into desired top and bottom line growth for the organization, any more. Even good numbers of important specialist doctors do not seem to value this traditional MR product detailing process any longer, mainly due to immense time pressure on them and also due to their easy access to other modern product information gathering tools.

What is happening today:

Today, keeping the core concept of traditional detailing unchanged a few, especially large pharmaceutical companies in India, have introduced a number of digital interventions to eliminate some important manual processes that MRs used to follow earlier like, call planning, access to other relevant information electronically, instant reporting etc. 

Such incremental improvements in the traditional detailing model, though helpful to the MRs, do not seem to be just good enough to produce desired business results in today’s highly competitive environment. The time calls for radical technological interventions.

A new report on the trend: 

According to a new study of CMI Communication Media research report, about half of physicians restrict visits from MRs in one way or another.

It reported, just half of cancer specialists (oncologists) saying that they would interact about new products with MRs, while 47% of them indicated email as a preference.

Surveys found the oncologists being the most restrictive specialists, with only 19% allowing MRs without restrictions. On the other hand, 20% of them would not see MRs at all, with the 40% in the middle either requiring appointments or limiting visits to particular hours of the day or week.

‘e-Detailing’:

The well known consulting company Mckinsey & Company in a paper titled, ‘Making sense of e-detailing in Japan’s pharmaceutical sector’ has defined e-detailing as follows:

“e-detailing or electronic detailing refers to interacting with physicians virtually rather than physically. It often takes place through a company’s own website or through a physician portal coupled with email- driven promotions and attached explanatory videos offering up-to-date pharmaceutical product information.”

Thus, in ‘e-detailing’ Internet-based communications applications are used to provide customized services to the doctors, in many times to complement the activities of MRs.

‘e-detailing’ is now evolving as a modern technological innovation in the field of communication between MRs and doctors. It is intended to be highly customized, very interactive, more effective, quite flexible and at the same cost-efficient too. Live analytics that ‘e-detailing’ would provide instantly could be of immense use in the strategizing process of pharmaceutical marketing.

Cost effectiveness of ‘e-detailing’:

In the same paper, as mentioned above, to highlight the cost advantages of ‘e-detailing’, McKinsey & company, from its Japan experience, has reported as follows:

“While accurate, apples-to-apples data is hard to come by, we estimate each    e-detail costs between 500 and 750 Yen, depending on the scope 
of audience and the sophistication 
of content. An MR costs 7,000 Yen 
to 12,000 Yen, depending on sector, region, and hospital vs clinic The ROI (return on investment) for MR detail is in the range up to ~20x, versus ~4-6x for e-detail. In other words, the cost structure allows for sustained ROI
 for e-detailing—even when extending reach beyond the top prescribing quintiles of physicians.”

In  the Japanese context, Mckinsey & Consulting further states:

“Right now, e-detailing in Japan is more often used at the beginning of a product’s lifecycle (i.e. to win attention during product launches) or at the end (i.e. to sell established products). These are what we call ‘stay in the race’ practices; necessary, but not sufficient.”

Perceived advantages of ‘e-detailing’:

The traditional way of detailing through ‘Visual Aids’ may not be good enough today when the available time with the doctor has come down drastically.  Just providing, by and large, the usual ‘one size fits all’ types of data/information to the doctors is gradually proving to be not effective and efficient enough to generate expected outcome. There is a dire need for helping these busy doctors to get access to drug information they value and trust at a time of their need and convenience.

Thus, the process of medical detailing should be made highly flexible depending on whatever time is chosen by each doctor to satisfy his/her specific needs.

In such an environment ‘e-detailing’, as discussed above, would help creating customized, more impressive, self-guided by doctors and more focused presentations with significant reduction in the detailing cost/ product with improved productivity.

Moreover, ‘e-detailing’ would:

  • Make expensive printed promotional aids redundant
  • Eliminate time required and cost involved to deliver such material
  • Have the flexibility of change at any time
  • Ordering of just required samples online, eliminating wastage

Fast increasingly number of doctors using computers and the Internet for professional purposes, especially in the urban areas, would facilitate this process.

Key success factor:

Experts believe, besides developing an effective and user-friendly tool for e-detailing, the important success factor for such initiative by a pharmaceutical company would well depend on:

  • Well planned integration of ‘e-detailing’ into the Customer Relationship Management (CRM) strategy
  • Deep understanding of physician segments
  • Efficient application of ‘e-detailing’ to support marketing goals.

The challenges:

Though there are many benefits for ‘e-detailing’, it throws some challenges too, as follows:

  • Still many doctors continue to prefer the personal touch of the MRs in traditional detailing
  • Some doctors do give prescription support to a company based on their good relationship with the concerned MRs
  • Despite hectic schedule, many busy doctors continue to take time out to interact with such MRs.

Though such relationships do not develop with all MRs, this challenge needs to be effectively overcome to make ‘e-detailing’ successful wherever possible, probably by creating an optimal mix of traditional and ‘e-detailing’.

A recent initiative:

Recent media reports highlight one such innovation, among many others. Pfizer has reportedly come out with an interesting innovation in the field of medical detailing to the primary care doctors.  This new service of the company ‘Ask Pfizer’ claims that it can provide promotional product information to the doctors at a time convenient to them. Thus the ‘digital medical representatives’ of Pfizer leave the decision as to whether they want to see them and if so, when.

‘Ask Pfizer’, featuring in the website called ‘Pfizerline’ of the company says that the system is:

  • Simple
  • Flexible
  • Convenient
  • Calls can be arranged to suit the doctors’ busy practice schedule
  • Online meeting room provides a rich multi-media interaction where the doctor can see trained country-specific’ digital representative making product presentations and also discuss the relevant subjects with them.

Pfizer is advertising this new service called ‘digital detailing’ on the British Medical Journal (BMJ) website aiming, reportedly, at the UK doctors.

This initiative is indeed innovative, as it creates an environment of direct marketing in an indirect way with the help of simple Internet applications like Skype.

Conclusion:

Like many other industries, in the pharmaceutical industry too, across the world, communication of relevant information in an interesting way is of utmost importance. Here also. Indian pharmaceutical industry is no exception.

Since ages, the pharma players in India, in general, have been continuing to follow the traditional model of product detailing, hoping to generate more and more prescriptions from the doctors by deploying a larger and larger contingent of MRs, who highlight superiority of their respective products over competition.

Some may argue, there is nothing wrong in this model, but question would arise, is it still as productive as it used to be? This is mainly because, the doctors are now giving lesser and lesser time to the MRs.

Those pharmaceutical companies of the country who sincerely believe that innovative use of technology in the digital world of today may considerably help addressing this issue, at least in the urban areas, would possibly get a head start, as they delve into the future for business excellence in this area.

With e-detailing they will be able to provide an interesting communication option to the top-prescribers having a very busy schedule for top of mind recalls of their respective brands, leading hopefully to increase in prescription generation.

It is worth noting, though ‘e-detailing’ is emerging as an important innovation in the field of product detailing, there are still some questions that need to be answered. Some of these questions could be as follows:

  • Would many doctors prefer to schedule time for this purpose after a busy day’s schedule?
  • Would the information overload from other sources not keep them away from seeking more information through such a process?

Taking all these into consideration, the question that we need to answer:             Is ‘e-detailing’ the future of pharmaceutical sales, also 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.

The traditional ‘Business Models’ of R&D focused Global Pharmaceutical majors are undergoing a metamorphosis

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Mounting pressure on the P&L account, as the products go off patent:

Patented new products are the prime growth driver of the research based pharmaceutical companies of the world. Since last few years, because of various reasons, the number of launch of such products has been greatly reduced. To add fuel to the fire, 2010-12 will witness patent expiries of many blockbuster drugs, depleting the growth potential of the most of the research based pharmaceutical companies.

The existing model of growth engine needs a relook:

The blockbuster model of growth engine of the innovator companies effectively relies on a limited number of ‘winning horses’ to achieve the business goal and meeting the Wall Street expectations. In 2007, depleting pipeline of the blockbuster drugs hit a new low in the developed markets of the world. It is estimated that around U.S. $ 140 billion of annual turnover from blockbuster drugs will get almost shaves off due to patent expiry by the year 2016. IMS reports that in 2010 more than U.S. $ 30 billion will be adversely impacted because of patent expiry. Another set of blockbuster drugs with similar value turnover will go off patent the year after i.e. 2011. It will not be out of context to mention, that last year around U.S. $ 27 billion worth of patented drugs had gone off-patent.

Decline in R&D productivity is not related to investments:

The decline in R&D productivity has not been due to lack of investments. It has been reported that between 1993-2004, R&D expenditure by the pharmaceutical industry rose from U.S.$ 16 billion to around U.S.$ 40 billion. However, during the same period the number of applications for New Chemical Entities (NCEs) filed annually to the U.S. FDA grew by just 7%.

Total global expenditure for pharmaceutical R&D was reported to have reached U.S. $ 70 billion in 2007 and is expected to be around U.S. 90 billion in year 2010. 75% of this expenditure was incurred by the U.S alone. It is interesting to note that only 22 NMEs received marketing approval by the US FDA during this period against 53 in 1996, when R&D expenditure was almost less than half of what was incurred in 2007 towards R&D.

Be that as it may, the pressure on the P&L (Profit and Loss) accounts of these companies is indeed mounting.

The silver linings:

However, there seem to be following two silver linings in the present scenario, as reported by IMS:

1. Number of Phase I and Phase II drugs in the pipeline is increasing.

2. R&D applications for clinical trials in the U.S. rose by 11.6% to a record high of 662 last year.

Significant growth of generic pharmaceuticals is expected in near future, far surpassing the patented products growth:

Patent expiry of so many blockbusters during this period will fuel the growth of generic pharmaceutical business, especially in the large developed markets of the world. The market exclusivity for 180 days being given to the first applicant with a paragraph 4 certification in the U.S. is, indeed, a very strong incentive, especially for the generic companies of India.

Healthcare reform of March/April 2010 in the USA is expected to give a further boost to this trend.

Pressure on traditional Marketing strategies:
The marketing expenditure for pharmaceutical of the global pharmaceutical companies as reported by Scrip is U.S. $ 57.5 billion. However, an industry association reported that research based pharmaceutical companies in the U.S. spent $ 29.4 billion on R&D and $ 27.7 billion on promotional activities.

New Product Differentiation could be a big issue:

Products in R&D pipeline could face problems of ‘differentiation’ in terms of value offering to the patients, once they are launched. This issue is expected to surface especially with products in the oncology disease area. IMS Health reports that about 55 oncology projects are now in Phase III and 8 in the pre-registration stage. Thus about 50 new oncology products are expected to hit the market by end 2010. Many experts anticipate that there may not be significant brand differentiation between the brands of the ‘same basket’, leading to cut-throat competition and further pressure on expenditure towards marketing of brands.

The changing business strategy of global pharmaceutical companies during this trying time:

In this trying time, the global pharmaceutical companies are resorting to an interesting strategy, combing both old and the new ones. I shall touch upon the following seven strategies:

1. Mergers and Acquisitions (M&A):
Mega M&A strategies are still being actively followed by some large Pharmaceutical companies mainly to enrich R&D pipeline and achieve both revenue and cost synergies.
However, some of these large global companies have started realizing that ‘powerhouses’ created through past mega mergers and acquisitions have now become too large to manage effectively for various reasons. Mismatch between two different organization cultures also throws a great challenge to obtain desired output, many a times. Moreover, the merged R&D set up could become too large to manage, impacting the R&D productivity very adversely.

2. Extension of the Product Life Cycle and Effective Product Life Cycle Management:
Many global pharmaceutical companies are now engaged in ‘product life cycle management’ of their existing products by extending the ‘product life cycle’, effectively. In that process they are trying to maximize the brand value of these products in the international markets. For example, AstraZeneca has developed once daily treatment with their anti-psychotic drug Seroquel XR. This extended-release formulation of the same drug will help patients avoid 5 to 7-day titration required with the immediate-release version.
Towards similar initiative, Pfizer has also recently set up a dedicated “Established Product Business Unit” within worldwide pharmaceutical operations, to hasten business growth in the international markets.

3. OTC Switch:
Prescription to ‘Over the Counter’ (OTC) switch is another business strategy that many innovator companies are now imbibing, at a much larger scale.

This strategy is helping many global pharmaceutical companies, especially in the Europe and the U.S to expand the indication of the drugs and thereby widening the patients base.

Recent prescription to OTC switches will include products like, Losec (AstraZeneca), Xenical (Roche), Zocor (Merck), etc.

4. Emerging of Preventive Therapy, like Vaccines:
Many large global companies, like GSK, Sanofi Aventis and Merck are getting attracted by the emerging opportunities in the fast developing vaccines market. This trend has been triggered primarily by heightened awareness and greater focus on preventive medicines almost all over the world. It is estimated that in 2011, the vaccines market will grow from U.S.$ 13 billion to U.S.$ 30 billion registering a growth of 18% each year during this period. PricewaterhouseCoopers (PwC) estimates vaccine market to be U.S. $ 42 billion by year 2015 based on data of 245 pure vaccines and 11 combination vaccines currently under clinical development. It is interesting to note that 90 of these are therapeutic vaccines for cancer.

5. Entry into highly contentious market of Biosimilar drugs:
The Generic Pharmaceutical Association (GPhA) has estimated that it is possible to save US$ 10 billion – 108 billion over a period of 10 years with biosimilars in the top 12 categories of biological drugs. Some of these biological are already off patent and for others the patents will expire shortly.
Only a few biosimilar drugs have reached the global markets as on date because of their regulatory restrictions in most of the developed markets of the world. Even those biosimilar drugs, which have since been launched in Europe like, human growth hormone (HGH) Somatropin and Epoetin alfa for anemia, are yet to make a mark in the market place.

IMS Health reports that Omnitrope (somatropin) of Sandoz, the first biosimilar drug launched in the developed world, has registered less than 1% of the U.S. $ 831 million HGH market in Europe. Moreover, the launch of 3 more biosimilar versions of epoetin alfa in 2007, made almost negligible impact in the market. Such a low acceptance of biosimilars in the western world, so far, could well be due to lingering safety concern of the medical profession with such types of drugs.

Currently, Japan and USA are working on formal guidelines for biosimilar drugs, whereas Health Canada has already issued draft regulatory guidelines for their approval in Canada.

In April 2010, Reliance Life Science has already announced its intent to enter into the Biosimilar market of the EU in not too distant future.

6. Entry into Generic Markets:

Some large global pharmaceutical companies have already made a firm commitment to the generics market. Novartis paved the way for other innovator companies to follow this uncharted frontier, as a global business strategy. Last year the generic business of Novartis (under Sandoz) recorded 19% of their overall net sales, with turnover from generics registering U.S$ 7.2 billion growing at 20%.

Keen business interest of Sanofi Aventis to acquire Zentiva, the generic pharmaceutical company of Czechoslovakia; it’s very recent acquisition of the generic pharmaceutical company Laboratorios Kendrick of Mexico and Shantha Biotech in India and acquisition of Ranbaxy Laboratories of India by Daiichi Sankyo, will vindicate this point.

Pfizer has also maintained its generics presence with Greenstone in the U.S. and is using the company to launch generic versions of its own off patent products such as Diflucan (fluconazole) and Neurontin (gabapentin).

7. Collaboration with the Indian Companies:

Another emerging trend is the collaboration of MNCs with the Indian pharmaceutical companies to market generics in the global market, like, Pfizer with Aurobindo and Claris, GSK with Dr. Reddy’s Laboratories (DRL), Astra Zeneca with Torrent. I guess that similar trend will continue, in future, as well.

Conclusion:
Another ‘new pharmaceutical sales and marketing model’ is gradually emerging in the global markets. This model emphasizes partnership by bundling medicines with services. The key success factor, in this model, will depend on which company will offer better value with an integrated mix of medicines with services. PwC indicates that in this ‘new pharmaceutical marketing model’, besides required medicines, the expertise of a company to effectively deliver some key services like, patient monitoring and disease management could well be the cutting edge for future success.

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.