Tag Archives: UK

Impact of Covid Vaccines’ Possible IP Waiver In India

Posted on by
Reply

Just when Covid 2.0 rages in India with almost 4,000 people died in just 24 hours, scientists warn that Covid 3.0, and further waves are now ‘inevitable, reported Reuters on May 06, 2021. With hospitals running short of beds and oxygen during the onslaught of Covid 2.0, the World Health Organization (WHO) highlighted, ‘India accounted for nearly half the coronavirus cases reported worldwide last week, and a quarter of the deaths.’

The report revealed some more heartrending details: ‘Many people have died in ambulances and car parks waiting for a bed or oxygen, while morgues and crematoriums struggle to deal with a seemingly unstoppable flow of bodies.’

No visible overall improvements with ‘here and now decisions’ or maybe the lack of it, of the National Covid Management Team, is perceptible, just yet. It’s also a matter of further concern that unlike what happened during Covid 1.0, the second wave of the virus, reportedly, ‘started hitting even young adults hard – leaving countless children to fend for themselves.’

Ironically, alongside a rapid surge in infections, India witnesses a sharp decline in Covid vaccination numbers though more people are eligible. The key reasons being supply chain related problems, despite India being one of the largest vaccine producers, globally. In my last article  published in this blog, I broached on finding a possible exit to this covid 2.0 maze in India. However, this article will explore some unprecedented developments of the last week in this area. To give a perspective, let me start by exploring whether the people responsible for Covid Governance in India, grossly misjudged the situation, claiming the ‘endgame’ of Covid-19, too soon.

‘India announced its triumph over Covid-19 early’:

A third Covid-19 wave is inevitable, but the timing could not be predicted, said India’s principal scientific advisor on May 05, 2021. Intriguingly, less than two months back, the national Government announced its triumph over Covid-19. On March 08, 2021, as Covid vaccination process for senior citizens and people above 45 years with comorbidities had just commenced, the Union Health Minister claimed, ‘India is in the endgame of the novel coronavirus pandemic.’ Just about a couple of months later, it sounded akin to a note of hubris for many, which prevailed, by and large, across the nation.

Acknowledging the same, on May 04, 2021, even Uday Kotak, MD&CEO Kotak Mahindra Bank and President CII commented, ‘India announced triumph over Covid-19 early’. He further urged: “We have to do whatever it takes to save lives first, even as we battle for livelihoods. And if our healthcare capacity is currently going through its challenges, we must be ready to curtail non-essential economic activities.” The latest editorial from ‘The Lancet’ also highlighted the same.

India’s Covid 2.0 – “A self-inflicted national catastrophe” – The Lancet 

Yes. The editorial of the latest – May 08, 2021 issue of The Lancet, also reiterated so. It emphasized, ignoring warnings about the risks of super spreader events, the government allowed congregations of millions of people from across India in religious festivals, along with huge political rallies with utter disregard to Covid appropriate behavior. ‘The message that COVID-19 was essentially over also slowed the start of India’s COVID-19 vaccination campaign, which has vaccinated less than 2% of the population.’ India’s national vaccination plan soon fell apart with the government abruptly expanded vaccination to all 18 years, draining supplies, ‘and creating mass confusion and a market for vaccine doses in which states and hospital systems competed.’

The IHME estimates a staggering 1 million deaths from COVID-19 in India by Aug 01, 2021. ‘If that outcome were to happen, Modi’s Government would be responsible for presiding over a self-inflicted national catastrophe. India squandered its early successes in controlling COVID-19. Until April, the government’s COVID-19 task force had not met in months,’ The Lancet editorial revealed.

Besides, India also misjudged the complexities involved in procurement, distribution and for speedy inoculation of affordable Covid vaccines, at least, to its entire adult population. But, before delving into that area, let me highlight an interesting mismatch.

India’s vaccine shortage when Pfizer logs a record vaccine turnover during pandemic:

Two contrasting scenario surfaces – as the world is reeling under unprecedented disruptions caused by successive waves of Covid-19. Witnessing India’s unparalleled healthcare tragedy in Covid 2.0, the W.H.O director general said: “The situation in India is beyond heartbreaking.” Outlining the reason for the same a separate report commented: A ‘complete collapse’ of preventive health: How India’s 2nd COVID wave exploded.

Concomitantly, one reads news items, which bring out, ‘Pfizer eyes $26B in COVID-19 vaccine sales for the year, with $3.5B already in the bag.’ Notably, most vaccine companies received huge public funding much before Covid vaccines were rolled out. For example, ‘The New York Times’ article of July 22, 2020 came with a headline: ‘Pfizer Gets $1.95 Billion to Produce Coronavirus Vaccine by Year’s End.’

The Scientific American also reported on November 18, 2020, ‘For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork.’ It added: ‘Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits.’ That’s exactly, I reckon, is the reality today.

Similarly, Moderna’s COVID-19 vaccine generated $1.73 billion in revenue during the first quarter, as compared to $3.5 billion of Pfizer’s Covid vaccine in the same quarter. Moderna now predicts its vaccine will generate $19.2 billion by year’s end. Interestingly, through its COVID-19 vaccine partnership with the U.S. government, Moderna also received nearly $1 billion in research aid. The Company is now joining a list of other vaccine players to take a supply order from the federal government.

By the same token, Serum Institute of India (SII) – the contract manufacturer of Covishield, developed and owned by Oxford University and AstraZeneca has also received initial advance funding from the governments, prior to its manufacturing.

Was India’s ‘Vaccine Maitri’ a pragmatic step?

Today, India is one such country facing the brunt of Covid vaccine shortage alongside arriving at an affordable price per dose of the same – a part of which is due to ‘unrealistic’ planning, as many experts believe.

For example, on January 20, the Indian government launched Vaccine Maitri – an ambitious program to export the two Indian-made shots – Covishield and Covaxin – to the world. On that exact date, India counted 14,112 fresh cases of Covid-19. Going by a report of May 01, 2021: ‘According to the government’s own submission before the Parliament, more shots were sent out of the country than administered to Indians as of mid-March.’ Many, therefore, wonder, whether this was a pragmatic decision that helped save lives of Indians during Covid pandemic.

An unprecedented development on vaccine IP waiver:

This is regarding IP waivers for Covid vaccines. In my last article, I wrote about it, stating, on October 02, 2021, India and South Africa had proposed at the WTO about an IP waiver for Covid-19 drugs and vaccines to resolve the issues of access and affordability for these products. It was also widely reported: ‘Richer members of the World Trade Organization (WTO) blocked a push by over 80 developing countries to waive patent rights in an effort to boost production of COVID-19 vaccines for poor nations.’

However, on May 05, 2021, a statement of the U.S. Trade Representative said, ‘as the extraordinary circumstances of the pandemic call for extraordinary measures, in its service of ending this pandemic the US also supports the IP waiver for Covid-19 vaccines, although the US administration supports IP protections generally. As expected, Big Pharma lobby groups, including PhRMA, reportedly, have strongly criticized the move.

Let me hasten to add, there is, at least, one exception in this area. Months ago, on October 8, 2020, Moderna said, ‘it won’t enforce its vaccine patents against other companies during the pandemic.’ Without specifying any names, the Company revealed, ‘other Covid-19 vaccines in development might already be using Moderna-patented technology.

The WTO process is expected to begin now, but how long will it take?

As the Reuters report dated May 06, 2021 indicated – with the U.S. backing a proposed waiver of Covid-19 vaccine IP rights, the next stop is for the World Trade Organization to hammer out a deal – a process that could take months. “At a minimum, it’s going to be a month or two,” said a former Trump White House trade official who previously worked at the U.S. trade mission to the WTO in Geneva. The waiver, if happens, could also be significantly narrower in scope and shorter in duration than the one initially proposed by India and South Africa.

The relevance of IP waiver:

Currently, only drug companies which own patents or their authorized manufacturers like SII can produce Covid vaccines. A global decision on patent waiver may encourage the patentees to share the formula and manufacturing technology, instead of reverse engineering, as is done for off-patent small molecules and some biotech drugs.  All companies with requisite resources may legally manufacture Covid vaccines, in that situation, leading to cheaper, and significantly more quantity of generic versions of Covid vaccines. This may help overcoming vaccine shortages, making the vaccines affordable, as well.

Some counter arguments and response:

As I wrote in my last article, the following three critical questions may arise in that scenario:

  • Will IP waiver help solve the immediate issues of vaccine shortages?
  • Can Covid vaccines be reverse engineered by domestic pharma industry without inventors sharing ‘Know-How’?
  • If yes, how long can it take?

The answer to the first question is – it may not help resolve the immediate crisis. But, for a medium to long term solution, there will be an emphatic yes, as Covid-19 fight is expected to be a long-haul one, as experts caution about subsequent waves of rapidly mutating new Coronavirus.

Moreover, Pfizer – BioNTech vaccine took less than a year from ‘mind to market,’ with support from all concerned. This is evident from Pfizer’s Press Release for the launch of Covid vaccine in the United States last year, on December 11, 2020. Thus, an efficient reverse engineering may also take that much time to respond to medium and long-term issues with Covid vaccines, especially in India.

Subsequent Covid-19 waves could be triggered by unpredictable compliance to Covid appropriate behavior of people. W.H.O has also warned: “When personal protective measures are being relaxed, when there are mass gatherings, when there are more contagious variants and the vaccination coverage is still low this can create a perfect storm in any country,”

Conclusion:

‘The pandemic is not a competition between companies and will not end without more-equal distribution of coronavirus vaccines,’ wrote Nature on March 30, 2021. It suggested: ‘It’s time to consider a patent reprieve for COVID vaccines.’

The world needs around 11 billion doses of Coronavirus vaccines to immunize 70% of the global population – assuming two doses per person. Interestingly, around 6 billion doses are meant for high- and upper-middle-income countries, against advance orders. Poorer nations, accounting for 80% of the global population, so far, have access to less than one-third of the available vaccines. ‘Unless manufacturing and supply can be distributed more evenly, researchers forecast that it will be at least another two years before a significant proportion of people in the lowest-income countries are vaccinated’, the paper concluded.

In this situation, I reckon, a temporary IP waiver would help in accelerating the end of the pandemic. It may not help immediately, but certainly in the foreseeable future, as discussed above. It may also call for an efficient and well thought out ‘Hub and Spoke’ distribution model. Simultaneously, of course, similar systems for raw and ancillary materials for vaccine production need to put in place to avoid intermittent shortages. 

As reported on May 08, 2021, India registered a record 4,187 Covid death with 4.01 Lakh new cases, in 24 hours. Capturing the depth of the Indian crisis, ‘India Today’ is coming out with a cover page article in its May 17 issue, with the headline – ‘Covid 2.0 – The Failed State.’ Another article terms India as the ‘Flailing state in Covid storm.’

As I reasoned above, if this unprecedented step of IP waiver for Covid vaccines is finally taken by the WTO, it will significantly help India – along with the world – may not be immediately, but certainly in the foreseeable future. Only adverse impact that the decision could possibly make, is curbing Big Pharma’s unprecedented profit on Covid vaccines, and that too, during a deadly global pandemic.

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.

 

A Tipping Point For Robust Healthcare System In India

Posted on by
Reply

“Given the popular uptake of universal health coverage reforms elsewhere in Asia, the Feb 4 elections may be a tipping point for health in India. For example, in 2012, Joko Widodo was elected Governor of Jakarta. He launched popular UHC reforms in the capital and 2 years later was elected president. In 2016, voters in the USA and UK supported politicians prepared to act on the concerns of the electorate. If health becomes a populist cause in India, rather than a political inconvenience, then the country might finally be liberated to achieve health outcomes commensurate with its economic and technical achievements”, is exactly what appeared in the editorial of The Lancet, titled “Health in India, 2017,” published on January 14, 2017.

The Lancet Editor further reiterated: “Because states have responsibility for health, the elections will raise the importance of access to quality, affordable health care in India, regardless of the electoral outcome. It is a debate that needs to be fostered.”

This is, of course, a ‘top-down’ approach for healthcare, as seen in several countries across the world. However, I have recently deliberated another approach in the same area on – why a ‘bottom-up’ demand is not forthcoming in India, in an article titled ‘Healthcare in India And Hierarchy of Needs’, published in this blog on November 06, 2017.

No one, including any Government, would possibly ever argue – why shouldn’t a robust public healthcare system in a country, including the availability of reasonably affordable drugs, assume as much priority as economic growth and education?

On the contrary, Governments in several other countries, including those with a well-functioning Universal Healthcare (UHC) in place, are trying to ensure even better and greater access to healthcare for all, by various different means. In this article, I shall focus on it, in a holistic way.

Exploring a bottom-up approach:

It is increasingly becoming more evident that a bottom-up approach would help yield greater success in this area, with a win-win outcome. It will involve taking the stakeholders on board in the process of framing and implementing healthcare projects within a given time-frame. The question then arises, why is it still not happening on the ground in India the way it should? Just floating a discussion paper on draft projects and policies, for stakeholders’ inputs, isn’t enough any longer. There is a need to move much beyond that in making these decisions more inclusive.

Various successive Governments may have some justifiable funding related or other pressing issues to offer a robust public healthcare system in India. But, none of these will be an insurmountable barrier, if more number of heads of astute stakeholders are involved in ferreting out an effective and implementable India-specific solution in this area, within a pre-determined timeline.

There are examples of remarkable progress in this direction, by involving stakeholders in charting out a workable pathway, agreed by all, and jointly implemented in a well-calibrated and time bound manner. Equally important is to make this plan known to the public, so that the Government can be held accountable, if it falls short of this promise, or even misses any prescribed timeline.

‘The Accelerated Access Pathway’ initiative:

Let me now draw an interesting example of involving stakeholders by the Government to improve patient access to expensive and innovative drugs. This example comes from a country that is running one of the oldest and most efficient UHC in the world – the United Kingdom.

Despite a robust UHC being in place, the National Health Service (NHS) in England had a perennial problem to make ‘breakthrough’ medicines available early to NHS patients. The British pharma industry reportedly had a long-held complaint that patients in England get a raw deal when it comes to accessing the latest medicines.

According to a reported study by the Association of the British Pharmaceutical Industry (ABPI) and endorsed by the charity Cancer Research UK, average British patients get lower access to leading cancer medicines than their European counterparts.

To resolve this issue effectively, the British Government launched ‘The Accelerated Access Pathway initiative’. Former GSK global CEO Sir Andrew Witty was named as the chairman of this collaborative body. The scheme, launching from April 2018, will see approvals of cutting-edge treatments for conditions like cancer, dementia and diabetes dramatically speeding up. The pathway is expected to get ‘breakthrough’ medicines to NHS patients up to four years earlier, as the report, published in ‘The Telegraph’ on November 3, 2017 indicates.

It is believed that ‘Accelerated Access Collaborative’ initiative would benefit the NHS patients, as well as deliver significant long-term savings for the health service.

Similar initiatives may be effective in India:

Taking collaborative initiatives, such as above, may not be absolutely new in India. However, in a real sense, Indian initiatives are no more than top-down approaches, and not in any way be termed as bottom-up. Moreover, these usually originate in the form of Government discussion papers inviting comments from the stakeholders.

Moreover, in the healthcare policy related arena, there is no subsequent firm resolve by the Government to chart out a clear pathway for its effective implementation, with specific timelines indicated for each step, besides assigning individual accountability for delivering the intended deliverables.

Any such decisive move by the government, keeping all stakeholders engaged is quite rare to come across in our country, as yet. Thus, carefully selected outside expert group suggestions based – the National Health Policies also have met with the same fate, without possibly any exception, thus far.

Two illustrations:

I shall illustrate the above point with two top-of-mind examples. The first one is a report – the ‘High Level Expert Group (HLEG)’ report on ‘Universal Health Coverage (UHC)’ for India, submitted to the erstwhile Planning Commission in November 2011. The other example is of a policy – the National Health Policy (NHP) 2017, which is in place now, based on a report by an expert committee constituted by the Government.

Let me now briefly recapitulate both – one by one, as follows:

The report on ‘Universal Health Coverage (UHC)’ for India

The ‘High Level Expert Group (HLEG)’ on ‘Universal Health Coverage (UHC)’ was constituted by the Planning Commission of India in October 2010, with the mandate of developing a framework for providing easily accessible and affordable health care to all Indians.

While financial protection for healthcare was the principal objective of this initiative, it was recognized that the delivery of UHC also requires the availability of adequate health infrastructure, skilled health workforce, access to affordable drugs and technologies to ensure the entitled level and quality of healthcare is delivered to every citizen.

The report further highlighted, the design and delivery of health programs and services call for efficient management systems as well as active engagement of empowered communities.

The original terms of reference directed the HLEG to address all of these needs of UHC. Since the social determinants of health have a profound influence not only on the health of populations, but also on the ability of individuals to access healthcare, the HLEG decided to include a clear reference to them.

Nevertheless, this report was never acted upon for its effective implementation. Now, with the change in Government, HLEG recommendations for UHC in India seems to have lost its relevance, altogether.

The National Health Policy (NHP) 2017

The new Government that subsequently came to power, decided to start afresh with a brand new and modern National Health Policy in India, replacing the previous one framed 15 years ago in 2002. NHP 2017 promises healthcare in an ‘assured manner’ to all, by addressing the challenges in the changing socioeconomic, epidemiological and technological scenarios. Accordingly, the National Health Policy 2017 was put in place, early this year.

To achieve the objectives, NHP 2017 intends to raise public healthcare expenditure to 2.5 percent of GDP from the current 1.4 percent. Interestingly, no visible signal about the seriousness on implementation of this laudable initiative has reached the public, just yet.

Let’s now wait for the next year’s budget to ascertain whether the policy objective of ‘healthcare in an assured manner to all’ would continue to remain a pipe dream, as happened in earlier budget proposals. It is noteworthy that union budget allocation on health did not go up, at least, in the last 3 years, despite categorical assurances by the ministers on increasing focus on healthcare.

Significant increase in both the union and the state governments budgetary allocation for healthcare is necessary. This is because, besides many other intents, NHP 2017 intends to provide free diagnostics, free drugs and free emergency and essential healthcare services in all public hospitals for healthcare access and financial protection to all.

Universal Healthcare is the core point in both:

The core focus of both – the HLEG report and also the NHP 2017, is UHC in India, but with different approaches. When HLEG report was not translated into reality, the 2014 general election in India was widely expected to be the tipping point for a new public healthcare landscape in the country fulfilling this promise. More so, as the public healthcare system is generally in a shamble throughout the country, except in a handful of states.

Just as in the United States, Europe or Japan, “if health becomes a populist cause in India, rather than a political inconvenience, then the country might finally be liberated to achieve health outcomes commensurate with its economic and technical achievements,” as the above Lancet editorial commented.  Giving yet another perspective, I also wrote in my blog post, titled ‘Healthcare in India And Hierarchy of Needs’ on November 06, 2017, why has it not happened in India, as on date.

Conclusion:

What happens, if the Indian Government too adopts a major collaborative approach, such as ‘The Accelerated Access Pathway’ initiatives, involving all stakeholders – including the pharma and device industry leaders to implement UHC in the country – part by part?

The relevant counter question to this should not be – Will that work? Of course, it will, if the Government wants to. On the contrary, it could be a potential ‘Tipping Point’ to create a robust public healthcare landscape in India. Thus, the real question that we should ask ourselves: Why won’t it work, when all stakeholders are on board to pave the pathway for an efficient Universal Healthcare system in India, in a win-win way?

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 Happens To Pharma’s Incredible Ride On The ‘Gravy Train’?

Posted on by
Reply

India continues to be one of the fastest growing pharmaceutical market of the world with its over 40 percent of the total pharmaceutical produce is exported around the world. Over half of the total exports constitute of formulations, and the balance comprises of bulk drugs. India has been consistently maintaining its supremacy in the formulation exports since my salad days.

According to Export Statistics (2014-15) published by the Pharmaceutical Export Promotion Council of India (Pharmexcil), United States (US) is the largest market for the India’s pharmaceutical exports with a share of 27 percent of the total, followed by the United Kingdom (UK), South Africa, Russia, Nigeria, Brazil and Germany.

A red flag raised: 

Up until recently, it has almost been like walking over a bed of roses in this front for Indian pharma exporters. However, it does not seem to be so now, and at least in the foreseeable future, for a number of reasons.

The Press Release of ‘CRISIL Research’ dated May 17, 2016 has also raised a red flag in this area. The report foresees growth in pharma formulations (in US dollar terms) declining sharply to 10-12 percent annually over the next 5 years, as compared with a growth of ~19% seen in the last decade.

This adverse impact will be felt mostly in the US – the largest export destination of India, followed by the UK.

I reckon, there are three basic reasons for this changing scenario, namely, pricing, quality and lesser number of branded small-molecule blockbuster drugs going off patent.

The ride on the ‘gravy train’:

Pharma companies across the world consider that doing business in the US market would provide them a lot of money without facing any head wind, fundamentally driven by the drug pricing freedom in the country, as compared to any other market of the world.

This unfettered freedom of charging a hefty price premium in the largest pharma market of the world, on an ongoing basis, has been a critical factor of attraction for many pharma players to do business in the US, coming from various corners of the globe, including India, just as honey attracts the bees, as it were.

Thus far, it has been an incredible ride on the ‘gravy train’, as it were, for most of them.

However, ongoing activities of a large number of drug companies, dominated by blatant self-serving interests, have now given rise to a strong general demand for the Government to initiate robust remedial measures, soon. The telltale signs of which indicate that this no holds barred pricing freedom may not be available to pharma, even in the US, any longer.

In this article, I shall focus mainly on this point, drawing both global and local examples, as this development has a strong potential to add more to the existing miseries of many Indian drug exporters, of course in tandem with many other large MNCs.

Some recent developments: 

The April 21, 2016 issue of ‘The Financial Times’ quoted Joe Jimenez, the Global Chief Executive (CEO) of Novartis, where he said that pharma companies can no longer count on the “hockey-stick” trajectories for new products in the US. This is primarily due to the aggressive control of the drug expenses by the insurers and other healthcare payers, besides lawmakers and the public at large, of this most lucrative pharma market of the world.

As Jimenez said in the report, yesterday’s business model that pharma companies have followed since long, has now changed, slowing the pace of growth of innovative patented products in the US.

This trend is now heading north, primarily driven by the consolidation among the US insurers and healthcare providers. Consequently, the payers are making effective use of their greater bargaining power over the drug companies, especially to avail new incentives for cost savings, as provided in President Barack Obama’s Affordable Care Act, the article highlights.

To give a feel of it, I am quoting the example of a Novartis drug from the same ‘Financial Times’ article. It states, “Entresto, a treatment for heart failure, launched last year on the back of stellar clinical trial results, has so far sold more quickly in Europe than the US, marking a reversal of usual patterns in the pharma industry.”

A key differentiator in global ranking:

In this emerging scenario, all global companies will be adversely impacted for increasing pricing pressure in the US market.

This factor remaining the same for all the pharma players in the world, one of the key differentiating factors that would now play even more important role, is the richness of the advanced stage R&D pipeline of each innovator company.

For example, according to ‘Evaluate Pharma World Preview 2016, Outlook to 2022’ report, the overall R&D pipeline value of Roche is US$ 43.2 billion, far ahead of the same of Novartis’ US$ 24.1 billion and AstraZeneca’s at US$ 23.2 billion, followed by Eli Lilly, AbbVie, Pfizer, Sanofi, Celgene, Biogen and J&J and in that order. As a result, Roche is expected to overtake Novartis and Pfizer in the ranking by 2022, just when the global pharma industry would possibly cross as US$ 1Trillion mark.

Currently Novartis, though quite a small player in the Indian Pharmaceutical Market (IPM) holding the rank of 23 (AIOCD Pharmasofttech AWACS retail audit report, MAT August 2016), is number three in the global ranking, just ahead of Roche.

Indian generic players to feel the heat:

According to the Reuters report of September 11, 2016, US Department of Justice has sent summons this month to the US arm of Sun Pharma – Taro Pharmaceutical Industries Inc. and its two senior executives seeking information on generic drug prices. In 2010, Sun Pharma acquired a controlling stake in Taro Pharmaceutical Industries.

On September 14, 2016, quoting a September 8, 2016 research done by the brokerage firm IIFL, ‘The Economic Times’ reported that some large Indian generic drug manufacturers, such as, Sun Pharma, Dr. Reddy’s, Lupin, Aurobindo and Glenmark have also hiked the prices of some of their drugs between 150 percent and 800 percent in the US. This invites even more apprehensions in the prevailing scenario.

As I wrote in this Blog on September 12, 2016, the subject of price increases even for generic drugs has also reverberated in the ongoing Presidential campaign in the US.

The Democratic Party’s presidential nominee – Hillary Clinton has already promised, if elected in November 2016, she would constitute an ‘Oversight Panel’ to protect the consumers of her country from hefty price increases for long-available life-saving drugs.

Import bans:

In the midst of all this, import bans of a large number of formulations and bulk drugs by the US-FDA from several manufacturing facilities of Indian drug manufacturers of various scales and sizes, have further compounded the future risk potential of Indian pharma business growth in the US.

As investors are raising concerns, the following comment of the Co-Chairman and Chief Executive of Dr. Reddy’s Laboratories, reported by ‘Financial Express’ on August 24, 2015, well captures the pharma business risks in this area:

“The U.S. market is so big that there is no equivalent alternative. We just have to get stronger in the U.S., resolve our issues, build a pipeline and be more innovative to drive growth.”

However, this still remains a good intent. It is worth noting, for most Indian pharma exporters, the US is the single largest export market, with a stake, as high as nearly half of most of these companies’ annual revenue, and probably much more in profit, both of which are now showing a declining trend.

Price control coming in the UK:

On September 15, 2016, the Department of Health of the United Kingdom (UK) reportedly introduced a new Bill in Parliament to use its statutory power to limit the price of generic medicines where competition in the market fails, and pharma companies charge the NHS unreasonably high prices.

The Bill would also allow the government to apply penalties for non-compliance and to recover any payments owed through the courts following a right of appeal to a tribunal. The penalties can be a single penalty not exceeding £100,000 or a daily penalty not exceeding £10,000.

UK drug regulatory authorities had also announced import bans of APIs and formulations from some manufacturing facilities of a couple of leading Indian drug manufacturers, but on a lesser scale as compared to the USFDA.

Action in EU:

As reported by Bloomberg on July 22, 2016, The European Medicines Agency (EMA) has called for a halt to sales of hundreds of medicines that were tested in India, after an inspection of a research site found “substitution and manipulation” of the study samples. The affected companies include both large Indian and multi-national players.

According to a PTI report of July 27, 2015, after this incident Pharmexcil estimated that exports worth US$ 1-1.2 billion are likely to be affected, if cancellation of 700 generic drugs by the EU stands.

Conclusion:

All these developments, particularly on pricing and mostly in the US, could have a retarding effect on the business growth trend of a large number of global and local pharma companies.

Focusing nearer home, the evolving scenario in the world’s top pharma market, viewed together with what’s happening in Europe, both on pricing and the data integrity fronts, send a strong cautionary signal to the Indian drug exporters, in general.

Inadequate remedial measures could unleash this pressure to reach a dangerous threshold, impacting sustainable performance of the concerned companies. On the other hand, adequate remedial action, both strategic and operational in nature, could lead to significant cost escalation, with no space available for its neutralization through price increases, gradually squeezing the margin.

As I see it, ease of doing pharma business in these top export markets will no longer be quite the same as in the past. Many believe, pharma industry has invited these measures sans perceptible self-control, over a long period of time.

Is it mostly a self-inflicted injury of the industry players? The drug companies, in general, don’t believe so. Will this change be irreversible?  Only the future could unravel this. However, regarding the possibility of future US Government legislation on drug pricing, it’s now a wait and watch game for the stakeholders. On a shorter time-frame, the ghost in this area, would keep haunting globally, primarily for business in the US market, at least, till the end of this year.

However, for the Indian pharma exporters, pricing appears to be just one among several other critical issues, especially, in the two most lucrative markets of the world. The overall situation in this area, by and large, remains unchanged till today, besides expression of a plethora of good intents.

Thus, pharma analysts’ quest to ferret out an answer to the Gordian knot on the continuity of Indian pharma exporters’ incredible long ride on the ‘gravy train’, has also not been plain sailing, so far. Further mired by the local manufacturers’ prolonging errors of judgement, the status quo ante is expected to still remain elusive, at least, for now.

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. 

“Make in India…Sell Anywhere in The World”: An Indian Pharma Perspective

Posted on by
Reply

In his Independent Day speech from the ramparts of the Red Fort on August 15, 2014, Indian Prime Minister Modi gave a clarion call to all investors of the world, “Come, make in India”, “Come, manufacture in India”, “Sell in any country of the world, but manufacture here”.

The Prime Minister did not stop there. In his inimitable style, following it through on September 25, 2014 he gave an official status to ‘Make in India’ slogan and launched a global campaign.

“My definition of FDI for the people of India is First Develop India. This is also a responsibility for the people of India,” he further clarified.

An Indian perspective:

If I juxtapose this vision of the Prime Minister in the Indian pharmaceutical industry perspective, one finds that many small, medium and large size local domestic manufacturers are currently manufacturing drugs not just for the domestic market, but are also exporting in large quantities to various countries of the world, including, North America, South America and Europe.

The United States (US) is one of the most critical markets for majority of the Indian drug exporters. This transaction was taking place without any major regulatory hitches since quite some time. Unfortunately, over the last few years, mostly the Federal Drug Administration of the US (USFDA) and the United Kingdom (UK)’s Medicines and Healthcare Products Regulatory Agency (MHRA) have started raising serious doubts on the quality of medicines manufactured in India, making a significant impact on the drug exports of the country.

Most of these quality issues are related to ‘Data Integrity’ in the dug manufacturing and its documentation processes.

The impact:

According to industry data, in 2013-14, Indian drug exports registered the slowest growth in nearly the last 15 years. In this fiscal year, pharma exports of the country with a turnover of US$ 14.84 billion grew at a meager 1.2 percent. Pharmexcil attributed its reason to USFDA related regulatory issues and increasing global competition.

US accounts for about 25 percent of India’s pharma exports and its Federal Drug Administration (USFDA) has been expressing, since quite a while, serious concerns on ‘Data Integrity’ at the agency’s  previously approved production facilities of a large number of Indian pharma players.

The issue is causing not just a serious concern to USFDA and some other overseas drug regulatory agencies, but also posing a huge threat to future growth potential of Indian drug exports.

It is worth noting that Indian government had set an objective, in its strategy document, to register a turnover of US$ 25 billion for pharma exports in 2014-15. In all probability, it would fall far short of this target at the end of this fiscal, predominantly for related reasons.

Why is so much of ‘fuss’ on ‘Data Integrity’?

Broadly speaking, ‘Data Integrity’ in pharmaceutical manufacturing ensures that finished products meet pre-established specifications, such as, for purity, potency, stability and sterility. If data integrity is breached in any manner or in absence of credible data, the product becomes of dubious quality in the eyes of drug regulators.

Manufacturing related ‘Data Integrity’ is usually breached, when data from a database is deliberately or otherwise modified or destroyed or even cooked.

Over the last several years, ‘Data Integrity’ related issues in India are attracting enormous attention of both the USFDA and the MHRA, UK. As a result, concerned pharma manufacturing facilities are receiving Import Alerts/Warning Letters from the respective overseas drug regulators, refusing entry of those medicines mostly in the United States and some in the UK.

Recent warning letters:

Just over a year – from May 2013 to July 2014, around a dozen ‘Warning Letters’ have been sent to the Indian drug manufacturers by the USFDA on ‘Data Integrity’ related issue, as follows:

Recent ‘Warning Letter’ issued to: Date of issue
1. Marck Biosciences Ltd. 08. 07. 2014
2. Apotex Pharmachem India Pvt Ltd. 17. 06. 2014
3. Sun Pharmaceutical Industries 07. 05. 2014
4. Canton Laboratories Private Limited 27. 02. 2014
5. USV Limited 06. 02. 2014
6. Wockhardt Limited 25. 11. 2013
7. Agila Specialties Private Limited 09. 09. 2013
8. Posh Chemicals Private Limited 02. 08. 2013
9. Aarti Drugs Limited 30. 07. 2013
10. Wockhardt Limited 18. 07. 2013
11. Fresenius Kabi Oncology Ltd 01. 07. 2013
12. RPG Life Sciences Limited 28. 05. 2013

(Source: RAPS, 19 August 2014)

Another report states that USFDA has, so far, banned at least 36 manufacturing plants in India from selling products in the US.

Importance of US for Indian generic players:

Generic drugs currently contribute over 80 percent of prescriptions written in the US. Around 40 percent of prescriptions and Over The Counter (OTC) drugs that are sold there, come from India. Almost all of these are cheaper generic versions of patent expired drugs. Hence, India’s commercial stake in this area is indeed mind-boggling.

The ‘Data Integrity’ issue is not restricted to just US or UK:

A report quoting researchers led by Roger Bate, an American Enterprise Institute scholar and funded by the The Legatum Institute and the Humanities Research Council of Canada, concluded that many Indian pharma companies follow double manufacturing standards, as they are sending poor quality drugs to Africa compared to the same pills sold in other countries. This study was based on tests of 1,470 samples produced by 17 Indian drug manufacturers.

Besides India, the researchers took drug samples from pharmacies in Africa and middle-income countries, including China, Russia and Brazil.

According to this paper, the researchers found that 17.5 percent of samples of the tuberculosis therapy rifampicin sold in Africa tested substandard, which means the drug has less than 80 percent of the active ingredient than what it should otherwise. Against this number, in India, 7.8 percent of the medicine sampled was found substandard.

Moreover, Almost 9 percent of samples of the widely used antibiotic ciprofloxacin sold in Africa tested substandard, as compared to 3.3 percent in India.

Thorny issues around golden opportunities:

Much reported breach in manufacturing ‘Data Integrity’ detected at the manufacturing sites in India, are throwing fresh doubts on the efficacy and safety profile of generic/branded generic medicines, in general, produced in the country and more importantly, whether they are putting the patients’ health at risk.

A new analysis by the U.S. National Bureau of Economic Research pointed out some thorny issues related to ‘Data Integrity’ of drugs produced by the Indian pharmaceutical companies, which supply around 40 percent of the generic drugs sold in the United States, as stated above.

The researchers examined nearly 1,500 India-made drug samples, collected from 22 cities and found that “up to 10 percent of some medications contained insufficient levels of the key active ingredients or concentrations so low, in fact, that they would not be effective against the diseases they’re designed to treat.”

The report also highlighted that international regulators detected more than 1,600 errors in 15 drug applications submitted by Ranbaxy. The Bureau Officials commented that these pills were “potentially unsafe and illegal to sell.”

Frequent drug recalls by Indian pharma majors:

The above findings came in tandem with a series of drug recalls made recently by the Indian pharma companies in the US.

Some of the reported recent drug recalls in America, arising out of manufacturing related issues at the facilities of two well-known Indian pharma majors, which are going to merge soon, are as follows:

  • Sun Pharmaceuticals recalled nearly 400,000 bottles of the decongestant cetirizine (Zyrtec) and 251,882 of the antidepressant venlafaxine (Effexor) this May, because the pills failed to dissolve properly. The drugs were distributed by the drug maker’s US subsidiary Caraco Pharmaceutical Laboratories, but were manufactured in India.
  • In the same month – May, Ranbaxy recalled 30,000 packs of the allergy drugs loratadine and pseudo-ephedrine sulphate extended release tablets because of manufacturing defects in packaging.
  • In March, Sun Pharma recalled a batch of a generic diabetes drug bound for the US after an epilepsy drug was found in it. A patient discovered the error after noticing the wrong medication in the drug bottle.
  • Again in March, Ranbaxy recalled nearly 65,000 bottles of the statin drug atorvastatin calcium (Lipitor) after 20-milligram tablets were found in sealed bottles marked 10-milligrams. A pharmacist in the U.S. discovered the mix up.

Indian media reinforces the point:

Indian media (TNN) also reported that there is no quality control even for life-saving generic drugs and the government is apathetic on ensuring that the quality protocol of these drugs is properly observed.

This happens, as the report states, despite government’s efforts to push generic drugs, as they are more affordable. The report gave an example of a life-saving drug, Liposomal Amphotericin B, which is used to treat fungal infections in critically ill patients.

Are all these drugs safe enough for Indian Patients?

Though sounds awkward, it is a fact that India is a country where ‘export quality’ attracts a premium. Unintentionally though, with this attitude, we indirectly accept that Indian product quality for domestic consumption is not as good.

Unfortunately, in the recent years, increasing number of even ‘export quality’ drug manufacturing units in India are being seriously questioned, warned and banned by the overseas drug regulators, such as USFDA and MHRA, UK, just to ensure dug safety for the patients in their respective countries.

Taking all these into consideration, and noting increasing instances of blatant violations of cGMP standards and ‘Data Integrity’ requirements for ‘export quality’ drugs, one perhaps would shudder to think, what could possibly be the level of conformance to cGMP for the drugs manufactured solely for the consumption of local patients in India.

A cause of concern, as generic drugs are more cost effective to patients:

It has been widely recognized globally that the use of generic drugs significantly reduces out-of-pocket expenditure of the patients and also payers’ spending.

The findings of a study conducted by the Researchers from Brigham and Women’s Hospital (BWH), Harvard Medical School and CVS Health has just been published in the Annals of Internal Medicine on September 15, 2014. In this study the researchers investigated whether the use of generic versus brand name statins can play a role in medication adherence and whether or not this leads to improved health outcomes. The study concluded that patients taking generic statins were more likely to adhere to their medication and also had a significantly lower rate of cardiovascular events and death.

In this study, the mean co-payment for the generic statin was US$10, as against US$48 for brand-name statins. It is generally expected that the generic drugs would be of high quality, besides being affordable.

I deliberated on a related subject in one of my earlier blog posts of November 11, 2013 titled, “USFDA” Import Bans’: The Malady Calls For Strong Bitter Pills”.

Conclusion:

According to USFDA data, from 2013 onwards, about 20 drug manufacturing facilities across India attracted ‘Import Alerts’ as against seven from China, two each from Australian, Canadian and Japanese units and one each from South African and German facilities.

Unfortunately, despite intense local and global furore on this subject, Indian drug regulators at the Central Drugs Standard Control Organization (CDSCO), very strangely, do not seem to be much concerned on the ‘Data Integrity’ issue, at least, not just yet.

In my view, ‘Data Integrity’ issues are mostly not related to any technical or other knowledge deficiency. From the “Warning Letters” of the USFDA to respective Indian companies, it appears that these breaches are predominantly caused by falsification or doctoring of critical data. Thus, it basically boils down to a mindset issue, which possibly pans across the Indian pharma industry, irrespective of size of operations of a company.

Indian Prime Minister’s passionate appeal aimed at all investors, including from India, to “Make in India” and “Sell Anywhere in The World”, extends to pharma industry too, both local and global. The drug makers also seem to be aware of it, but the ghost keeps haunting unabated, signaling that the core mindset has remained unchanged despite periodic lip service and public utterances for corrective measures by a number of head honchos.

Any attempt to trivialize this situation, I reckon, could meet with grave consequences, jeopardizing the thriving pharma exports business of India, and in that process would betray the Prime Ministers grand vision for the country that he epitomized with, “Make in India” and “Sell Anywhere in The World”.

By: Tapan J. Ray

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

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

Posted on by
Reply

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

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

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

The study:

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

Per-Capita Healthcare Spend in 2011

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

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

Performance of Healthcare System

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

The basis of ranking:

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

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

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

Holds good in BRIC perspective too:

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

Per capita Healthcare expenditure in 2011: Country Comparison

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

(Source: WHO data)

Taking the United States as an example:

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

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

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

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

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

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

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

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

  • Individual payers negotiate prices with health care providers:

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

Where is the high healthcare spending of US going?

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

High and totally decontrolled drug prices:

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

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

Expensive hospital stays:

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

Conclusion:

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

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

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

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

By: Tapan J. Ray 

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

Is Credibility Erosion of Pharma Accelerating?

Posted on by
Reply

‘Big Pharma’ now seems to be desperately trying to gain the long lost high moral ground by pushing  hard its gigantic image makeover juggernaut, maintaining a strong pitch on the relevance of stringent Intellectual Property Rights (IPR) in the lives of the patients. However, even more alert media, by reporting a number of unethical and fraudulent activities of some of its constituents on the ground, is taking much of the steam out of it. As a result, the pace of erosion of all important pharma credibility is fast accelerating.

Innovation – A critical need for any science-based business:

Innovation, which eventually leads to the issue of IPR, is generally regarded as extremely important to meet the unmet needs of patients in the battle against diseases of all types, especially the dreaded ones. Thus, it has always been considered as the bedrock of the global pharmaceutical industry. As we all know, even the cheaper generic drugs originate from off-patent innovative medicines.

At the same time, it is equally important to realize that just as the pharmaceutical or life-science businesses, innovation is critical for any other science based businesses too, such as IT, Automobile, Aviation, besides many others. Since many centuries, even when there were no ‘Patents Act’ anywhere in the world, leave aside robust ones, pharmaceutical industry has been predominantly growing through innovation and will keep becoming larger and larger through the same process, acrimonious debate over stringent IPR regime not withstanding.

India has also amply demonstrated its belief that innovation needs to be encouraged and protected with a well-balanced Intellectual Property regime in the country, when it became a member of the World Trade Organization and a part of the TRIPS Agreement, as I had discussed in my earlier blog post.

Simultaneously, a recent research report is worth noting, as well. The study reveals, though the pharmaceutical companies in the United States, since mid 2000, have spent around US$ 50 billion every year to discover new drugs, they have very rarely been able to invent something, which can be called significant improvement over already existing ones. This is indeed a matter of great concern, just as a very ‘stringent IP regime’ prompts ‘evergreening’ of patents, adversely impacting the patients’ health interest.

Though innovation is much needed, obscene pricing of many patented drugs is limiting their access to majority of the world population. On top of that, business malpractices net of fines, wherever caught, are adding to the cost of medicines significantly.

Key reasons for acceleration of credibility erosion:

I reckon, following are the three main factors accelerating credibility erosion of pharma in general and Big Pharma in particular:

  1. Large scale reported business malpractices affecting patients’ health interest
  2. Very high prices of patented medicines in general, adversely impacting patients’ access and cost of treatment
  3. Attempts to influence IP laws of many countries for vested interests

1. Accelerating credibility erosion due to business malpractices:

In the pharmaceutical sector across the world, including India, the Marketing and Clinical Trial (CT) practices have still remained very contentious issues, despite many attempts of so called ‘self-regulation’ by the industry associations. Incessant complaints as reported by the media, judicial fines and settlements for fraudulent practices of some important pharma players leave no breather to anyone.

To illustrate the point, let me quote below a few recent examples:

Global:

  • In March 2014, the antitrust regulator of Italy reportedly fined two Swiss drug majors, Novartis and Roche 182.5 million euros (U$ 251 million) for allegedly blocking distribution of Roche’s Avastin cancer drug in favor of a more expensive drug Lucentis that the two companies market jointly for an eye disorder. According to the Italian regulator Avastin costs up to 81 euros, against around 900 euros for Lucentis. Out of the total amount, Novartis would require to pay 92 million euros and Roche 90.5 million euros. Roche’s Genentech unit and Novartis had developed Lucentis. Roche markets the drug in the United States, while Novartis sells it in the rest of the world. Quoting the Italian regulator, the report says that the said practices cost Italy’s health system more than 45 million euros in 2012 alone, with possible future costs of more than 600 million euros a year.
  • Just before this, in the same month of March 2014, it was reported that a German court had fined 28 million euro (US$ 39 million) to the French pharma major Sanofi and convicted two of its former employees on bribery charges. An investigation of those former employees of Sanofi unearthed that they had made illicit payments to get more orders from pharma dealer.
  • In November 2013, Teva Pharmaceutical reportedly said that an internal investigation turned up suspect practices in countries ranging from Latin America to Russia.
  • In May 2013, Sanofi was reportedly fined US$ 52.8 Million by the French competition regulator for trying to limit sales of generic versions of the company’s Plavix.
  • In August 2012, Pfizer Inc. was reportedly fined US$ 60.2 million by the US Securities and Exchange Commission to settle a federal investigation on alleged bribing overseas doctors and other health officials to prescribe medicines.
  • In July 2012, GlaxoSmithKline was reportedly fined US$ 3 bn in the United States after admitting to bribing doctors and encouraging the prescription of unsuitable antidepressants to children. According to the report, the company encouraged sales reps in the US to ‘mis-sell’ three drugs to doctors and lavished hospitality and kickbacks on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California.
  • In April 2012, a judge in Arkansas, US, reportedly fined Johnson & Johnson and a subsidiary more than US$1.2 billion after a jury found that the companies had minimized or concealed the dangers associated with an antipsychotic drug.
  • Not so long ago, after regulatory authorities in China cracked down on GlaxoSmithKline for allegedly bribing of US$490 million to Chinese doctors through travel agencies, whistleblower accusations reverberated spanning across several pharma MNCs, including Sanofi. The company reportedly paid ¥1.7 million (US$277,000) in bribes to 503 doctors around the country, forking over ¥80 to doctors each time a patient bought its products.

All these are not new phenomena. For example, In the area of Clinical Trial, an investigation by the German magazine Der Spiegel reportedly uncovered in May, 2013 that erstwhile international conglomerates such as Bayer, Hoechst (now belongs to Sanofi), Roche, Schering (now belongs to Bayer) and Sandoz (now belongs to Novartis) carried out more than 600 tests on over 50,000 patients, mostly without their knowledge, at hospitals and clinics in the former Communist state. The companies were said to have paid the regime the equivalent of €400,000 per test.

India:

Compared to the actions now being taken by the law enforcers overseas, India has shown a rather lackadaisical attitude in these areas, as on date. It is astonishing that unlike even China, no pharmaceutical company has been investigated thoroughly and hauled up by the government for alleged bribery and other serious allegations of corrupt practices.

However, frequent reporting by Indian media has now triggered a debate in the country on the subject. It has been reported that a related Public Interest Litigation (PIL) is now pending before the Supreme Court for hearing in the near future. It is worth noting that in 2010, ‘The Parliamentary Standing Committee on Health’ also had expressed its deep concern by stating that the “evil practice” of inducement of doctors by the pharma companies is continuing unabated as the revised guidelines of the Medical Council of India (MCI) have no jurisdiction over the pharma industry. The Government, so far, has shown no active interest in this area, either.

In an article titled, “Healthcare industry is a rip-off”, published in a leading business daily of India, states as follows:

“Unethical drug promotion is an emerging threat for society. The Government provides few checks and balances on drug promotion.”

In the drug manufacturing quality area, USFDA and MHRA (UK) has recently announced a number of ‘Import Bans’ for drugs manufactured in some facilities of Ranbaxy and Wockhardt, as those medicines could compromise with the drug safety concerns of the patients in the US and UK. Even as recent as in late March 2014, the USFDA has reportedly issued a warning letter to another domestic drug maker USV Ltd on data integrity-related violations in good manufacturing practices occurred at the company’s Mumbai facility. This is indeed a cause of added concern.

Similarly, in the Clinical Trial area of India, responding to a PIL, the Supreme Court of the country and separately the Parliamentary Standing Committee also had indicted the drug regulator. The Committee in its report had even mentioned about a nexus existing between the drug regulator and the industry in this area.

2. Accelerating credibility erosion due to high patented drugs pricing:

On this subject, another March 2014 report brings to the fore the problems associated with access to affordable newer medicines, which goes far beyond India, covering even the wealthiest economies of the world.

The report re-emphasizes that the monthly costs of many cancer drugs now exceed US$ 10,000 to even US$ 30,000. Recently Gilead Sciences fixed the price of a breakthrough drug for hepatitis C at US$ 84,000 for a 12- week treatment, inviting the wrath of many, across the world.

Why is the drug price so important?

The issue of pricing of patented drugs is now a cause of concern even in the developed countries of the world, though the subject is more critical in India. According to a 2012 study of IMS Consulting Group, drugs are the biggest component of expenditure in the total Out Of Pocket (OOP) spend on healthcare, as follows:

Items Outpatient/Outside Hospital (%) Inpatient/Hospitalization (%)
Medicines 63 43
Consultation/Surgery - 23
Diagnostics 17 16
Minor surgeries 01 -
Private Consultation 14 -
Room Charge - 14
Others 05 04

Probably for the same reason, recently German legislators have reportedly voted to continue until the end of 2017 the price freeze on reimbursed drugs, which was introduced in August 2010 and originally set to expire at end of 2013.

However in India, only some sporadic measures, like the Drug Price Control Order (DPCO 2013) for essential drugs featuring in the National List of Essential Medicines (NLEM 2011), that covers just around 18 percent of the total domestic pharmaceutical market, have been taken. On top of this, unlike many other countries, there is no negotiation on price fixation for high cost patented drugs.

If caught, insignificant fine as compared to total profit accrued, has no impact:

Many stakeholders, therefore, question the business practices of especially those players who get exposed, as they are caught and fined by the judiciary and the regulatory authorities.

Do such companies prioritize high profits ahead of patients’ lives, creating a situation for only those with deep pockets or a good health insurance cover to have access to the patented medicines, and the rest of the world goes without?

It is also no surprise that highly secretive and well hyped so called “Patient Access Programs” of many of these companies, are considered by many no more than a sham and a façade to justify the high prices.

3. Accelerating credibility erosion due to unreasonable IP related demands:

Despite some well-justified measures taken by countries like, India in the IP area, the US and to a great extent extent Europe and Japan, continuously pressured by the powerful pharma lobby groups, are still pushing hard to broaden the IP protections around the globe through various Free Trade Agreements (FTAs). At the same time, Big Pharma lobbyists are reportedly trying to compel various governments to enact IP laws, which would suit their business interest at the cost of patients.

Fortunately, many stakeholders, including media, have started raising their voices against such strong-arm tactics, further fueling the credibility erosion of Big Pharma.

Conclusion:

In the midst of all these, patients are indeed caught in a precarious situation, sandwiched between unethical practices of many large pharma players and very high prices of the available life saving patented medicines, beyond the reach of majority of the global population.

That said, accelerating credibility erosion of pharma in general and the Big Pharma in particular could possibly lead to a stage, where it will indeed be challenging for them to win hearts and minds of the stakeholders without vulgar display or surreptitious use of the money power.

To avoid all these, saner voices that are now being heard within the Big Pharma constituents should hopefully prevail, creating a win-win situation for all, not by using fear of sanctions as the key in various interactions, not even raising the so called ‘trump card of innovation’ at the drop of a hat and definitely by jettisoning long nurtured repulsive arrogance together with much reported skulduggery, 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.

A Potential Game Changer For Pharma R&D

Posted on by
Reply

The ghost of ‘Patent Cliff’ has been haunting the ‘Big Pharma’ since quite some time. This situation has been further aggravated by cost containment pressures of various Governments both in the developed and the emerging markets together with contentious issues on Intellectual Property Rights (IPR).

The ‘dream run’ that the innovator companies enjoyed in launching patented products so frequently and making many those blockbuster drugs of billions of dollars, is no longer a reality.

According to the findings of ‘Pharmaceutical R&D returns performance’ by Deloitte and Thomson Reuters of December 2012, the R&D Internal Rate of Return (IRR) of leading pharmaceutical companies had fallen to 7.2 percent in 2012 from 7.7 percent in 2011.

Many would, therefore, tend to believe that the paradigm is changing significantly. The new paradigm in the brand new millennium throws some obnoxious challenges, including some related to IPR, triggering a process of churning in the global pharma industry. Some astute CEOs of ‘Big Pharma’, having a deep introspection, are bracing for restructuring, not just in the business processes, but also in the process of organizational behavior, mindset, ethics and values. Unfortunately, there are many who seem to believe that this giant wheel of change can be put on the reverse gear again with might.

A new PPP initiative in pharma research:

This trying situation calls for collaborative initiatives to achieve both knowledge and cost synergies for a quantum leap in harnessing R&D output.

One such big laudable initiative has come to the fore recently in this arena. Having experienced something like the ‘law of diminishing return’ in pursuit of high resource intensive R&D projects aimed at critical disease areas such as Alzheimer’s, 10 big global pharma majors reportedly decided in February 2014 to team up with the National Institutes of Health (NIH) of the United States in a ‘game changing’ initiative to identify disease-related molecules and biological processes that could lead to future medicines.

This Public Private Partnership (PPP) for a five-year period has been named as “Accelerating Medicines Partnership (AMP)”. According to the report, this US federal government-backed initiative would hasten the discovery of new drugs in cost effective manner focusing first on Alzheimer’s disease, Type 2 diabetes, and two autoimmune disorders: rheumatoid arthritis and lupus. The group considered these four disease areas among the largest public-health threats, although the span of the project would gradually expand to other diseases depending on the initial outcome of this project.

Not the first of its kind:

AMP is not the first PPP initiative of its kind. The Biomarkers Consortium was also another initiative, not quite the same though, of a major public-private biomedical research partnership managed by the Foundation for the NIH with broad participation from a variety of stakeholders, including government, industry, academia, patient advocacy groups and other not-for-profit private sector organizations.

Open innovation strategy of GlaxoSmithKline (GSK) to discover innovative drugs for malaria is yet another example, where GSK collaborated with the European Bioinformatics Institute and U.S. National Library of Medicine to make details of the molecule available to the researchers free of cost with an initial investment of US$ 8 million to set up the research facility in Spain, involving around 60 scientists from across the world to work in this facility. 

Nearer home, ‘Open Source Drug Discovery (OSDD)’ project of the Council of Scientific and Industrial Research (CSIR) is a now a global platform to address the neglected tropical diseases like, tuberculosis, malaria, leishmaniasis by the best research brains of the world working together for a common cause.

Challenges in going solo:

In this context, it is worth mentioning that the CEO of Sanofi, Chris Viehbacher reportedly said in an interview on April 15, 2013 that his company “Won’t push hard to find an Alzheimer’s treatment because the science isn’t advanced enough to justify the costs to develop a drug. Therefore, Sanofi definitely won’t commit major resources seeking to discover an Alzheimer’s therapy.” He further stated, “I think we have to do a lot more basic science work to understand what’s going on. We really, at best, partially understand the cause of the disease. It’s hard to come up with meaningful targets.”

The above report also mentioned that the first Alzheimer’s drugs, should they prove successful, would lead to a market worth US$ 20 billion as estimated in 2012.

Long desired OSDD model:

The new AMP R&D model in the United States seems to have derived its impetus from the “open-source” wave that has swept the software industry. Keeping that spirit unchanged, in this particular ‘open source’ model too, the participants would share all scientific findings with the public and anyone would be able to use these results freely for their own research initiatives.

The collaborators of this PPP project are expected to gain a better understanding of how each disease type works, and thereafter could make use of that collaborative knowledge to discover appropriate new molecules for the target disease areas.

AMP is also expected to arrive at methods to measure a disease progression and its response to treatment much more precisely. This will enable the pharma participants getting more targets right and early, thereby reducing the high cost of failures. Just to cite an example, there have been reportedly 101 failures since 1998 in late-stage clinical trials by Pfizer, J&J and Elan Corp.

Commendable initiative in the uncharted frontier:

The ‘open source’ AMP initiative of ‘Big Pharma’ in the uncharted frontier is indeed very unusual, as the innovative drug companies are believed to be not just quite secretive about the science that they are engaged in, but also near obsessive in pursuing and clinging-on to the Intellectual Property Rights (IPR) through patents for each innovative steps related to potential new drugs.

It is worth noting that like any OSDD model, this PPP agreement also denies the participating players from using any discovery for their own drug research up until the project makes all data public on that discovery.

However, as soon as the project results will be made public, fierce competition is expected all around to develop money-spinning winning drugs.

Participating companies:

Ten pharma companies participating in AMP are reportedly, AbbVie, Biogen Idec, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Eli Lilly, Merck & Co., Pfizer, Sanofi and Takeda. It is good to find within the participants some staunch business rivals. According to a report, a number of foundations, including the American Diabetes Association and the Alzheimer’s Association have also agreed to get involved in the project.

Some key non-participants:

For various different reasons some key pharma majors, such as, Amgen, Roche and AstraZeneca have decided not to participate in AMP.

AMP project and cost:

AMP reportedly has reportedly articulated its intent to: “Map molecular paths that each disease follows and to identify key points that could be targets for treatment. In Type 2 diabetes, for instance, researchers hope to catalog the genetic changes that raise or lower a person’s risk for developing the disease. It also will seek novel methods to measure each disease’s course while assessing if a potential drug is working. Being able to measure a disease’s progress in that way, could speed drug development by raising a company’s confidence that an experimental drug is working, or let it more quickly end a project if a drug isn’t working.”

The participating companies and the NIH have jointly agreed that the AMP would put together a research system on cost sharing basis by pooling the brightest minds who are experts on each disease, along with the best drug discovery laboratories, relevant data and samples from clinical trials to decipher the diseases in ways, which none of these pharma players has been able to achieve just yet on its own.

To achieve all these, the total cost has been estimated at roughly just US$ 230 million, as compared to US$135 billion that the global drug industry claims to spend in a year on R&D.

This should also be seen in context of a study of December 2012 carried out by the Office of Health Economics (OHE), UK with a grant from AstraZeneca, which estimated that the cost of developing new medicine has risen by ten times from US$100 million in the 1970s to as high as US$ 1.9 billion in 2011.

As a head honcho of a global pharma biggie had put it earlier, a large part of these R&D expenses are the costs of failure, as stated above.

Criticism:

As usual, criticism followed even for this path-breaking project. Critics have already started questioning the rationale of the choice of the above four disease areas, with an exception perhaps for Alzheimer’s and wondered whether the participating players are making use of the federal fund to push hard the envelope of their respective commercial intents.

Another new collaborative approach: 

In another recently announced collaborative initiative, though not of the same kind, where Merck & Co has reportedly entered three separate collaboration agreements to evaluate an immunotherapy cancer treatment that is part of a promising new class of experimental drugs that unleash the body’s immune system to target cancer cells.

Conclusion:

There could still be some hiccups in the process of effective implementation of the AMP project. Hope, all these, if any, will be amicably sorted out by the participants of stature for the benefits of all.

Be that as it may, ‘open source’ model of drug discovery, as believed by many, would be most appropriate in the current scenario to improve not only profit, but also to promote more innovative approaches in the drug discovery process.

On May 12, 2011, in an International Seminar held in New Delhi, the former President of India Dr. A.P.J. Abdul Kalam highlighted the need for the scientists, researchers and academics to get effectively engaged in ‘open source’ philosophy by pooling talent, patents, knowledge and resources for specific R&D initiatives from across the world for newer and innovative drugs.

According to available reports, one of the key advantages of the ‘open source’ model would be substantial reduction in the high cost of failures of R&D projects, which coupled with significant saving in time would immensely reduce ‘mind-to-market’ span of innovative drugs in various disease areas, making these medicines affordable to many more patients.

Thus, PPP initiatives in pharmaceutical R&D, such as AMP, are expected to have immense potential to create a win-win situation for all stakeholders, harvesting substantial benefits both for the pharmaceutical innovators and the patients, across the world.

By: Tapan J. Ray

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

 

 

 

 

USFDA ‘Import Bans’: The Malady Calls For Strong Bitter Pills

Posted on by
Reply

It is a matter of pride that Indian pharmaceutical industry is the second largest exporter of drugs and pharmaceuticals globally, generating revenue of around US$ 13 billion in 2012 with a growth of 30 percent (Source: Pharmexcil).

Though sounds awkward, it is a reality that India is a country where ‘export quality’ attracts a premium. Unintentionally though, with this attitude, we indirectly accept that Indian product quality for domestic consumption is not as good.

‘Export quality’ being questioned seriously:

Unfortunately today, increasing number of even ‘export quality’ drug manufacturing units in India are being seriously questioned by the regulators of mainly United States (US) and the United Kingdom (UK) on the current Good Manufacturing Practices (cGMP) being followed by these companies. In many instances their inspections are culminating into ‘Import Bans’ by the respective countries to ensure dug safety for the patients.

Are drugs for domestic consumption safe?

Despite intense local and global furore on this subject, Indian drug regulators at the Central Drugs Standard Control Organization (CDSCO), very strangely, do not seem to be much concerned on this critical issue, at least, not just yet. Our drug regulators seem to act only when they are specifically directed by the Supreme Court of the country.

A recent major incident is yet another example to vindicate the point. In this case, according to media reports of November 2013, the Drug Controller General of India (DCGI) has ordered the Indian pharma major Sun Pharmaceuticals to suspend clinical research activities at its Mumbai based bio-analytical laboratory, after discovering that the company does not have the requisite approval from the central government for operating the laboratory. The DCGI has decided not to accept future applications and will not process existing new drug filings that Sun Pharma has made from the Mumbai laboratory until the company gets an approval.

Considering the blatant violations of cGMP standards that are increasingly coming to the fore related to ‘export quality’ of drugs in India, after inspections by the foreign drug regulators, one perhaps would shudder to think, what could possibly be the level of conformance to cGMP for the drugs manufactured in India solely for the local patients.

This question comes up as the record of scrutiny on adherence to cGMP by the Indian drug regulators is rather lackadaisical. The fact that no such warnings, as are being issued by the foreign regulators, came from their local counterpart, reinforces this doubt.

USFDA ‘Import Bans’:

Be that as it may, in this article let me deliberate on this particular drug regulatory issue as is being raised by the USFDA and others.

It is important to note that in 2013 till date, USFDA issued ‘Import Alerts/Bans’ against 20 manufacturing facilities of the Indian pharmaceutical exporters, sowing seeds of serious doubts about the overall drug manufacturing standards in India.

The sequence of events post USFDA inspection: 

Let us now very briefly deliberate on the different steps that are usually followed by the USFDA before the outcomes of the inspections culminate into ‘Import Alerts’ or bans.

After inspections, depending on the nature of findings, following steps are usually taken by the USFDA:

  • Issue of ‘Form 483’
  • The ‘Warning letter’
  • ‘Import Alert’

Revisiting the steps: 

Let me now quickly re-visit each of the above action steps of the USFDA.

‘Form 483’: 

At the conclusion of any USFDA inspection, if the inspecting team observes any conditions that in their judgment may constitute violations of the Food, Drug and Cosmetic (FD&C) and other related Acts, a Form 483 is issued to the concerned company, notifying the firm management of objectionable conditions found during inspection.

Companies are encouraged to respond to the Form 483 in writing with their corrective action plan and then implement those corrective measures expeditiously. USFDA considers all these information appropriately and then determines what further action, if any, is appropriate to protect public health in their country.

The ‘Warning Letter’:

The ‘Warning Letter’ is a document usually originating from the Form 483 observations and results from multiple lacking responses to Form 483 requiring quick attention and action. It may be noted that higher-level USFDA agency officials and not the investigator issue the ‘Warning Letters’.

‘Import Alert/ Ban’:

‘Import Alerts’ are issued whenever USFDA determines that it already has sufficient evidence to conclude that concerned products appear to be adulterated, misbranded, or unapproved. As a result, USFDA automatically detains these products at the border, costing the related companies a lot of money. The concerned company’s manufacturing unit remains on the import alert till it complies with USFDA cGMP.

What happens normally?

Most of the USFDA plant inspections are restricted to issue of Form 483 observations and the concerned company’s taking appropriate measures accordingly. However, at times, ‘Warning Letters’ are issued,  which are also mostly addressed by companies to the regulator’s satisfaction.

Import Bans are avoidable: 

Considering the above steps, it is worth noting that there is a significant window of opportunity available to any manufacturing facility to conform to the USFDA requirements by taking appropriate steps, as necessary, unless otherwise the practices are basically fraudulent in nature.

The concern:

Currently, there is a great concern in the country due to increasing frequency of ‘Import Alerts’.  As per USFDA data, in 2013 to date, about 20 drug manufacturing facilities across India attracted ‘Import Alerts’ as against seven from China, two each from Australian, Canadian and Japanese units and one each from South African and German facilities.

The matter assumes greater significance, as India is the second-largest supplier of pharmaceuticals to the United States. In 2012, pharmaceutical exports from India to the US reportedly rose 32 percent to US$ 4.2 billion. Today, India accounts for about 40 percent of generic and Over-The-Counter (OTC) drugs and 10 percent of finished dosages used in the US.

Ranbaxy cases: ‘Lying’ and ‘fraud’ allegations: 

In September 2013, after the latest USFDA action on the Mohali manufacturing facility of Ranbaxy, all three plants in India of the company that are dedicated to the US market have been barred from shipping drugs to the United States. The magnitude of this import ban reportedly impacts more than 40 percent of the company’s sales. However, Ranbaxy has a total of eight production facilities across India.

This ‘Import Alert’ was prompted by the inspection findings of the USFDA that the Mohali factory of Ranbaxy had not met with the cGMP.

Other two plants of Ranbaxy’s located at Dewas and Paonta Sahib faced the same import alerts in 2008, and are still barred from making drug shipments to the US.

The import ban on he Mohali manufacturing facility of Ranbaxy comes after the company pleaded guilty in May 2013 to the felony (criminal) charges in the US related to drug safety and agreed to pay a record US$ 500 million in fines.

In addition, the company also faced federal criminal charges that it sold batches of drugs that were improperly manufactured, stored and tested. Ranbaxy also admitted to lying to the USFDA about how it tested drugs at the above two Indian manufacturing facilities.

Heavy consequential damages with delayed launch of generic Diovan:

The ‘Import Alert’ of the USFDA against Mohali plant of Ranbaxy, has resulted in delayed introduction of a cheaper generic version of Diovan, the blockbuster antihypertensive drug of Novartis AG, after it went off patent.

It is worth noting that Ranbaxy had the exclusive right to sell a generic version of Diovan from September 21, 2012. 

Gain of Novartis:

This delay will help Novartis AG to generate an extra one-year’s sales for Diovan. This is expected to be around US$ 1 billion, only in the US. This development prompted Novartis in July this year to raise its profit and sales forecasts accordingly.

Wockhardt cases: Non-compliance of cGMP

Following Ranbaxy saga, USFDA inspection of Chikalthana plant of Wockhardt in Maharashtra detected major quality violations. Second time this year USFDA noted 16 violations of cGMP in the company’s facility. Earlier, in July 2013, the Agency issued a ‘Warning Letter’ and ‘Import Alert’ banning the products manufactured at the company’s Waluj pharmaceutical production facility.

Moreover, in September 2013, Medicines and Healthcare Products Regulatory Agency (MHRA) had pulled the GMP certificate of the company’s unit based in Nani Daman, after an inspection conducted by the UK regulator showed poor manufacturing standards. 

Again, in October 2013, the MHRA withdrew its cGMP certificate for the Chikalthana plant of Wockhardt. This move would ban import of drugs into the UK, manufactured in this particular plant of the company.

However, MHRA has now decided to issue a restricted certificate, meaning Wockhardt will be able to supply only “critical” products from these facilities. This was reportedly done, as the UK health regulator wants to avert shortage of certain drugs essential for maintaining public health. The impact of the withdrawal of cGMP certificate on existing business of the company can only be ascertained once Wockhardt receives further communications from the MHRA.

Earlier in July 2013, MHRA had reportedly also imposed an import alert on the company’s plant at Waluj in Maharashtra and issued a precautionary recall for sixteen medicines made in this unit.

RPG Life Sciences cases: allegedly ‘Adulterated’ products: 

In June 2013, USFDA reportedly issued a ‘Warning Letter’ to RPG Life Sciences for serious violation of cGMP in their manufacturing plants located at Ankleshwar and Navi Mumbai.

USFDA investigators had mentioned that “These violations cause your Active Pharmaceutical Ingredients (APIs) and drug products to be adulterated …the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with cGMP.”

Strides Arcolab case: Non Compliance of cGMP

In September 2013, Strides Arcolab announced that its sterile injectable drug unit – Agila Specialties (now with Mylan) had received a warning letter from the USFDA after its inspection by the regulator in June 2013. However, Strides Arcolab management said, “the company was committed to work collaboratively and expeditiously with the USFDA to resolve concerns cited in the warning letter in the shortest possible time.”

USV case: allegation of ‘data fudging’: 

Recently, USFDA reportedly accused Mumbai-based drug major USV of fudging the data.

After an inspection of USV’s Mumbai laboratory in June 2013, the US drug regulator said the company’s “drug product test method validation data is falsified”. The USFDA has also reprimanded USV for not training its staff in cGMP.

Probable consequences: 

USFDA import bans and a similar measure by the UKMHRA would lead to the following consequences:

  • Significant revenue losses by the companies involved, till the concerned regulators accept their remedial actions related to cGMP.
  • Increasing global apprehensions about the quality of Indian drugs.
  • Possibility of other foreign drug regulators tightening their belts to be absolutely sure about cGMP followed by the Indian drug manufacturers, making drug exports from India more difficult.
  • Huge opportunity cost for not being able to take advantage from ‘first to launch’ generic versions of off patent blockbuster drugs, such as from Diovan of Novartis AG.
  • Indian patients, including doctors and hospitals, may also become apprehensive about the general quality of drugs made by Indian Pharma Industry, as has already happened in a smaller dimension in the past.
  • Opposition groups of Indian Pharma may use this opportunity to further their vested interests and try to marginalize the Indian drug exporters. 
  • MNCs operating in India could indirectly campaign on such drug quality issues to reap a rich harvest out of the prevailing situation.
  • Unfounded ‘foreign conspiracy theory’ may start gaining ground, prompting the Indian companies moaning much, rather than taking tangible remedial measures on the ground to effectively come out of this self created mess.

Conclusion: 

Repeated cGMP violations made by the Indian drug exporters, as enunciated by the USFDA, have now become a malady, as it were. This can be corrected, only if the reality is accepted without attempting for justifications and then swallowing strong bitter pills, sooner.

Thereafter, the domestic pharma industry, which has globally demonstrated its proven capability of manufacturing quality medicines at affordable prices for a large number of patients around the world and for a long time, will require to tighten belts for strict conformance to cGMP norms, as prescribed by the regulators. This will require great tenacity and unrelenting mindset of the Indian Pharma to tide over the crisis.

Any attempt to trivialize the situation, as indicated above, could meet with grave consequences, jeopardizing the thriving pharma exports business of India.

That said, any fraud or negligence in the drug quality standards, for whatever reasons or wherever these may take place, should be considered as fraud on patients and the perpetrators must be brought to justice forthwith by the DCGI, with exemplary punitive measures.

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.