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Category: Regulatory

Have It Your Way

haveityourway

Burger King came out with a slogan of Have It Your Way in 1974. This slogan summed up its difference with its rival McDonald’s. The slogan fits well with the emphasis in pop culture and on individuality. The line makes total sense at a time when self-expression and mass customization are critical elements of culture.

Burger King abandoned the slogan four years later in favor of forgettable themes such as Best Darn Burger (1978), Burger King Town (1986), and The Whopper Says (2001). The company, thirty years later, however realized that the retro culture is in and had gone into a back-to-future mode in its advertising. It returned to Have It Your Way in 2004 in TV ads from Crispin Porter + Borgusky, its former agency.

Research indicated Have It Your Way was still the theme that most resonated despite other campaigns. When you have an ad campaign that is sticky, it is foolish to go against said Russ Klein, the global marketing officer of Burger King. That’s the reason they returned to their earlier slogan.

Here’s a jingle that Burger King produced and used in the 70s in response to McDonald’s Big Mac song. The jingle has been modified several times and reused it. The lyrics proclaimed that Burger King would serve you a customized product (you can have whatever toppings you wanted on a burger, or even plain) living up to its slogan Have It Your Way.

(Chorus) Have it your way, have it your way! Have it your way at Burger King!

Hold the pickles, hold the lettuce;

Special orders don’t upset us.

All we ask is that you let us serve it your way…

We can serve your broiled beef Whopper

Fresh with everything on topper.

Anyway you think is proper; have it your way…

(Chorus) Have it your way, have it your way! At Burger King, eat at Burger King!

Now, Can you think of conceiving a strategy that would make your target customers perceive that they are having their way with your product?

EROOM’s Law of Pharma R & D

Erooms law & moores law

What is  Eroom’s Law?

Turn the famous Moore’s law on its head (spell Moore’s law backwards), voila you’ve the Eroom’s Law!

While the Moore’s Law tells us about the dramatic increase in the computer processing power, Eroom’s law as introduced in another Troubles of Drug Discovery piece in Nature Reviews Drug Discovery, explains the drastic decline in R&D efficiency over the past sixty years.

Moore’s Law

Moore’s Law, which is named after Intel cofounder Gordon E. Moore, who observed that over the history of computing hardware, the number of transistors that can be placed inexpensively on integrated circuits doubles every 18 months to two years. The law is now used in the semiconductor industry to guide long-term planning and to set targets for research and development.

EROOM’s Law

The advances in many of the scientific, technological and managerial factors over the past 60 years should have raised the efficiency of commercial drug research and development. That did not happen. On the contrary, as Eroom’s law indicates the number of new drugs approved per billion US dollars spent on R&D has halved roughly every nine years since 1950. When you adjust for inflation that is a huge eighty-fold drop! The authors in their paper describe Eroom’s law by charting the ever-dwindling number of new drugs to emerge from pharmaceutical research labs against the ever-increasing amount of dollars spent on discovering them.

Erooms law & moores law-2

Jack W. Scannell, Alex Blanckley, Helen Boldon and Brain Warrington identified four primary causes for this drastic drop in R&D productivity in their highly insightful article, Diagnosing the decline in pharmaceutical R&D efficiency in Mach 2012 issue of Nature Reviews Drug Discovery. The four primary causes are:

  1. The ‘Better than the Beatles’ problem, which is our tendency to compete against our greatest hits of the past. Consider for example, how hard it would be to come up with a successful pop song if any new song had to be better than the Beatles. How difficult it would be to create a successor candidate for a successful drug like Lipitor?
  2. The ‘Cautious Regulator’ problem is the progressive lowering of risk tolerance that raises the bar on safety for new drugs, which makes R&D both costlier and harder.
  3. The ‘Throw money at it’ tendency is the tendency to just keep pouring more money and resources into a research project or widely held theory until something sticks. It is like throwing good money after bad.
  4. The ‘Basic Research-Brute Force’ bias, which is the tendency to overestimate the probability that advances in basic research and large scale screening processes will show a molecule safe and effective in clinical trials.

Drug development may never see the equivalent of Moore’s law. The human body is far too complex to lend itself to rapid solutions. Pharmaceutical industry would do well to apply fresh thinking borrow concepts from other fields like social networking.

It is time that the Pharma industry comes out of its return on pharmaceutical R&D is insufficient mindset and takes a contrarian view of its current research and development model. That would start the process of reversing the gloomy math of Eroom’s law.

Indian Pharma’s 2-Billion Dollar Club

Dilip Shanghvi, Late Dr. K. Anji Reddy, G. V. Prasad, K. Satish Reddy, Late Dr. Parvinder Singh, Arun Sawhney

Dilip Shanghvi, Late Dr. K. Anji Reddy, G. V. Prasad, K. Satish Reddy, Late Dr. Parvinder Singh, Arun Sawhney

 

What is a major milestone for an International Specialty Pharma company?

To cross the one-billion dollar mark in revenues.

What could be the second major milestone?

To cross the two-billion dollar mark in revenues.

In 2013, there are three Indian Pharma companies that have crossed the coveted two-billion dollar mark in revenues. The latest or the most recent member of this ambitious, hardworking two-billion dollar club is the prodigious Sun Pharma. Lupin with annual revenues of $1.8-billion is knocking on the doors rearing to get in.

Ranbaxy, although has been in the news a lot for wrong reasons recently was the first India-based Pharma company (as it has been acquired by Japanese Pharma major Daichi  in 2008) to cross the $2-billion mark in 2011. Dr. Reddy’s achieved it by December 2012. Sun Pharma did it by March 2013.

Sun Pharma

While it took 27 years for the first $1 billion in revenues for Sun Pharma, the next billion came up very fast in just a matter of three years. Sun Pharma has crossed two milestones. The first one is crossing US $2-billion in revenues. The second one is crossing ₹ 1lakh-crore mark  (around US $ 16 billion) in market capitalization.

Started with just five products in 1983, in thirty years Sun Pharma took giant leaps to cross the coveted 2-billion-dollar mark in revenues in thirty years with twenty-six manufacturing facilities in four continents. Sun Pharma has three-pronged strategy to propel itself into the next orbit: Focus on chronic therapies, differentiation through technically complex products, and speed to market. All these at sensible costs by achieving cost leadership.

Dr. Reddy’s Labs

Dr. Reddy’s defined their purpose as providing affordable and innovative medicines for healthier lives. Their strategy is to achieve this by leveraging industry-leading science and technology, product offering and customer service through operating excellence. Their business model spans three segments: generics, active pharmaceutical ingredients and custom services, and proprietary products.

Ranbaxy

Ranbaxy’s mission is to enrich lives globally, with quality and affordable pharmaceuticals. The company has a ground presence in forty countries and its products are being sold in about 150 countries across the world. Ranbaxy’s strategic focus is threefold: focus on building worldwide branded generics business, leveraging Ranbaxy’s strong presence in emerging markets that are growing rapidly, and to continue to create exclusive and niche opportunities.

Common Thread

What is the common thread that has been running among these three winning Indian Pharma companies? Right from inception they have viewed world as their market. All of them have followed the winning strategy of TEVA, the global leader for the generic industry that has reached uncommon heights.

They have reached the critical mass that is required to fuel their ambitious growth plans through strategic acquisitions of products, facilities and companies to create a beachhead, or augment their presence in the difficult-to-penetrate markets. All of them have upgraded themselves periodically to world class levels in technology, and manufacturing to be globally competitive. They have targeted the US generic market which is the largest and most lucrative in the world. They have aggressively pursued a PARA IV-Challenge route to gain the 180-day exclusivity, which is the dream of any generic company and took considerable risks.

They have been steadily stepping up their R&D capabilities along with substantial increase in investments in creating a research and development infrastructure and the required knowledge base to launch even the drug-discovery programs. All three companies have their own pipelines for abbreviated new drug applications and new molecular entities.

They have also entered into strategic alliances with global Pharma majors for generic alliances in emerging markets. Ranbaxy is a part of Japanese drug major. Sun Pharma has entered into a strategic alliance with Merck. Dr. Reddy’s have entered into a strategic alliance for bio-similars with Merck Serono.

These companies are international and are increasingly acquiring the international character with manufacturing facilities in a number of countries. Over three-fourths to four-fifths of their revenues from international sales. Sales from their domestic sales account for about 26 per cent for Sun Pharma and less than 20 per cent for both Dr. Reddy’s and Ranbaxy.

What is the next milestone for each of these companies?

5-billion dollars in annual revenues? Lupin, the company that is close on heels of these three winning companies has already announced that it is determined to achieve US $5-billion in revenues by 2018. Surely the three frontrunners would like to achieve it before that.

Trials, Errors, and Frauds

Trials and Errors

A trial and error, the dictionary defines as a method of reaching a correct solution or satisfactory result by trying out various means or theories until error is sufficiently reduced or eliminated. There is, therefore, nothing wrong in a trial and error per se provided there is a method and logic to it. When you consider the clinical trials scenario around the world in general and particularly in India, there seem to be more errors than trials.

In a trial and error method of learning, you ask questions, create experiments to answer those questions, and modify your experiments when things go wrong. While you may obtain the best possible solution through this trial and error method, it could take a very long time. The cost of trials and errors is just too high and that makes it (the process) inefficient.

Computer simulation of clinical trials has evolved over the past three decades from a simple instructive game to full simulation models yielding pharmacologically sound, realistic trial outcomes. In addition significant advances are being made continuously over the years in our understanding of biology, physiology, and pharmacology. When you take all these into account the errors in clinical trials should be minimized as compared to the period when the understanding and accumulated body of knowledge in these fields was relatively lower than now. Increased knowledge and understanding should logically result in lower error-rates.

Why is it that there is a huge overcast of doubt on the industry-funded trials?  In a study conducted by three researchers from Harvard and Toronto, they observed that 85 per cent of the industry-funded studies were positive as compared to the 50 per cent of the government funded trials.

Glen T. Clark, DDS, MS, and Roseann Mulligan, MS, in their January 2011 Journal of Prosthodontic Research article on Common mistakes encountered in clinical research. Here are the common mistakes novice researchers often make while planning, conducting, and writing a clinical research project. Most of these errors are avoidable.

  1. Failure to carefully examine the literature for similar, prior research
  2. Failure to critically assess the prior literature
  3. Failure to specify the inclusion and exclusion criteria for your subjects
  4. Failure to determine and report the error of your measurement methods
  5. Failure to specify the exact statistical assumptions made in the analysis
  6. Failure to perform sample size analysis before the study begins
  7. Failure to implement adequate bias control measures
  8. Failure to write and stick to a detailed time line
  9. Failure to vigorously recruit and retain subjects
  10. Failure to have a detailed, written and vetted protocol
  11. Failure to examine for normality of the data
  12. Failure to report missing data, dropped subjects and use of an intention to treat analysis

Matter of Concern

While trials and errors are a part parcel of the experimentation process, frauds are not acceptable. An error most often is unintentional whereas a fraud is intentional and deliberate for personal gain. Fraud is a dishonest calculation for advantage. It cannot be tolerated.

It is the increase in fraudulent behavior of Pharma that is a matter of great concern. It spans the entire gamut of product development and marketing. It happens in clinical research and marketing, the two most important areas of pharmaceutical business.

Fraud in Clinical Research

Fraud in medical research has a long and well-documented history. Classic episodes of fraud in contemporary research range from Gregor Mendel’s data on characteristics of garden peas to the whistle blowing of Dr. John Darsee’s, where he was caught faking data in a heart study at Harvard.

There seem to be at least three motives for committing fraud in clinical trials. The number one motive is monetary gain, and enhancement of prestige. Paying the investigators per subject recruited for the trial is a common practice. Therefore, the more subjects recruited, the higher the monetary gains and the investigator’s prestige among peers. The second motive is fabrication of the data essentially to cover up and compensate for laziness, and sloppiness in data collection. Including subjects who would otherwise be excluded is the third motive. Sometimes an investigator may feel that it is in the patient’s best interest to get medical care to be included in the trial irrespective of the exclusion criteria.

The most common fraudulent practices in clinical trials are fabricating missing measurements, falsifying eligibility and not reporting adverse events. Hiding and concealing negative data and publishing only the positive data seems to be on the increase. As recently as in April 2013, a British scientist convicted of scientific fraud for falsifying research data and has been sentenced to three months jail under the UK’s Good Laboratory Practice Regulations.

Fraudulent Behavior

The fraudulent behavior in marketing areas include bribing the doctors, hospitals, regulatory authorities, and government agencies to get prescriptions and sales for their brands and for enhancing prices. Illegal promotion, which is promoting the products for UN-approved conditions is another example of fraudulent behavior.

Recent news out of China raises the doubt again whether one can trust any aspect of pharmaceutical business. Chinese authorities announced that they were investigating Glaxo SmithKline and other Pharma majors for bribing doctors, hospitals and government officials to buy and prescribe their drugs. Glaxo is accused of using a Shanghai travel agency to funnel at least $489 million in bribes.

Gao Feng, a Public Security Ministry official in China said at a July 15 briefing, “I need to remind foreign pharmaceutical companies that, because they occupy a leading position in the industry and reap huge amounts of commercial profits, they should also bear a great responsibility to society and the public. While we don’t expect them to set a moral example, we expect them to obey the law.”

Erica Kelton rightly asks in her Forbes article of July 29, Is Big Pharma Addicted to Fraud? How else can you explain the attitude of Pharma, which has paid more than $30.2 billion in civil and criminal penalties to the US and state governments in the recent past and continues to face more allegations of wrong doing?

Has fraud become too profitable a habit to kick that Pharma is unable to cure its own disease? If Pharma cannot find a cure for its fraudulent behavior it’s time for the regulators worldwide to find a remedy and stop this. It should be on top of their priority list.

Honesty is The Best Policy

Honesty  is  the best Policy

What is the best business policy? Honesty of course. Because the cost of hiding the truth can be very expensive. As high as half-a-billion dollars and more. Consider what happened to Ranbaxy very recently. Its U.S. subsidiary has agreed to pay $500 million in fines and civil penalties for selling adulterated drugs and lying about tests of the medications to federal regulators, the U.S. department of justice said on May 13, 2013.

The prosecutors said that the company agreed to a fine of $150 million as well as an additional $350 million penalty to settle civil claims, that it submitted false statements to Medicaid, Medicare and other government healthcare programs. About $48 million of that penalty will go to Dinesh Thakur, a former Ranbaxy executive, who is the whistleblower in this case for providing information that resulted in a settlement.

While Ranbaxy is not alone in paying the fines for hiding the truth and its unethical behavior, this is the largest financial penalty paid by a generic drug maker in the U.S. for violating the provisions of the Federal Food Drug and Cosmetic Act (FDCA). There are many members of the Big Pharma such as Pfizer, Merck, Glaxo SmithKline, Sanofi Aventis, Eli Lilly, Astra Zeneca, Abbott, Johnson & Johnson, Novartis, and Boehringer Ingelheim, who collectively had paid over $13 billion in fines mostly for illegal uses for indications that were not approved and for hiding safety data since 2009.

Hiding the truth is indeed very expensive not only in monetary terms but also for eroding trust. And erosion of trust is far more expensive. In today’s turbulent times and rampant unethical corporate conduct, Honesty, which was a given as a basic human value in the past, has become a distinctive competitive advantage.

It is not that these companies are not aware of the fundamental fact that honesty is the best policy and that one should not lie. But why did they do it? Greed? Taking the system for granted?

As the world is increasingly becoming more interactive and transparent (transparency is not a choice any longer) companies and individuals would do well if they improve their Trustability. Trustability, advocate Don Peppers and Martha Rogers in their insightful book, Extreme Trust: Honesty as a Competitive Advantage, that consumers will hold the businesses they buy from to a higher standard. They cogently argue that organizations do well to practice or rather move up from trustworthiness to trustability. They expect a company to be proactively trustworthy – that is, to protect their interests by preventing them from making a mistake, overlooking or forgetting something, paying more than they actually need to pay, or even buying more than they need.

What is the best policy for succeeding in life or business? Honesty, most certainly is the best policy!

Image credit: M.S.V.K. Prasad

Evolution or Devolution?

Tablet_disk

Medical Council of India (MCI) and the Indian government are aggressively promoting the use of generic drugs. Pharmabiz wrote in an article titled Medical Council of India asks doctors to prescribe drugs with generic names on May 10, 2013, that the MCI has issued circulars to the deans of all medical colleges, directors of Post Graduate Institutes and presidents of state medical councils to give wide publicity to ensure compliance by doctors to the clause 1.5 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002.

Branded Generics to Generic-Generics?

One hears more often these days that going generics is the way to improve access to medicines. The recent wins of patent cases against a few of the anticancer drugs and an approval of a generic version of an MNC’s anti-diabetic drug have only furthered the case for generics. Is generic prescribing a better option? Which is the logical way or a path for a branded-generics pharmaceutical industry that is poised to evolve into a research-based drug industry in future? Become a generic-generics drug industry? Would that be an evolution or devolution?

Two Assumptions

The popular themes about promotion of generic prescribing is based mainly on two assumptions:

  1. It will reduce prices and improve access of medicines considerably
  2. It will significantly reduce the corrupt prescribing practices

Let us examine the first assumption that generics-prescribing leads to considerable reduction in drug prices. This is more relevant to the highly regulated first-world markets such as the US, Western Europe and Japan where research-based pharmaceutical industry rules the roost. In these patent-protected markets when the patents of drugs expire, a number of generics are introduced bringing down the prices considerably depending upon the generic penetration almost by eighty to ninety per cent of the innovator-drug prices within six months of genericization.

In branded-generic markets like India, where the prices are already at 20 to 30 per cent of the innovator-drug prices a significant price reduction is unlikely to almost ninety per cent of drugs as they are off-patents already. In case of new drugs the government can regulate the prices in a number of ways taking into account the socioeconomic conditions of the patient populations.

Can the generic-prescribing reduce the corrupt prescribing practices? Think for a moment what is the root cause of this problem. When you look at the hierarchy of pharmaceutical products, innovator or brand-name drugs are at the top with the maximum product differentiation, which enables them to command a price premium. Next in the pecking order are value-added generics such as drug delivery products of the same molecule with a perceptible and patentable degree of differentiation, which helps them get some price premium. Branded generics are next in the line with a lesser degree of differentiation in terms of quality perception, availability, customer service , etc. Generic-generics are at the bottom with a commodity status with virtually no differentiation. When there is no product differentiation, gratification rules the strategic roost. That explains but doesn’t justify the unabated corrupt practices by drug manufacturers in wooing the prescribers.

The prices of branded-generics and generic-generics do not vary significantly in branded generic markets such as India. The prices to retailers and hospitals may have hefty discounts, which are not passed on to patients entirely. Patients pay almost the same price while the channel members get increased margins.

Evolution or Devolution?

The modern pharmaceutical industry as we know it today has evolved over many years and contributed significantly in the discovery and development of drugs to cure many diseases that were thought untreatable. The same industry has to develop even the future cures. Therefore, it has to continuously evolve. The evolutionary path for a research-based pharmaceutical industry has been an arduous one. A firm would start off as an API manufacturer or a generic-generic manufacturer and move up the evolutionary road to become a branded-generic manufacturer to international generics manufacturer and further move up to a value-added generics to specialty Pharma and finally to a research-based pharmaceutical industry. The Pharma companies need to generate an investible surplus to move up at every stage. With each forward step during this evolutionary process, the company would be creating and increasing its ability to differentiate itself from the rest of the pack.

Going back to generic-generics is devolution or backward-evolution. De-evolution is the notion that a species can change into a more primitive form over time. In terms of modern biology, the term may be a misnomer for that concept as it presumes that there is a preferred hierarchy of structure and function, and that evolution must mean progress to more advanced organisms. However, in the context of modern pharmaceutical industry and the state and stage at which the Indian pharmaceutical industry is currently positioned going from branded generics to generic-generics instead of  moving towards a research-based pharmaceutical industry is clearly devolution. It is, if not going back to primitive stage it is likely to become primitive tomorrow by standing still at the present stage in its present state, while the rest of the pharmaceutical world is moving forward.

Will There Be a ‘Sunshine’ in India?

Sunrise Act

Paradoxical as it may seem there is no Sunshine (ACT) in India. Not yet. The Times of India article on the Bid to Legalize Pharma Companies’ Sops for Doctors dated April 19, 2013, casts a permanent cloud whether there would ever be an ACT similar to the Sunshine Act of the US governing payments to physicians.

The ever-increasing and seemingly never-ending corrupt practices involving physicians and pharmaceutical industry is difficult imagine. There seems to be a sort of contractual relationship that is mutually rewarding between a number of physicians and some Pharma companies. It could be payments in cash or kind, huge discounts to the pharmacies owned or sponsored by the prescribing physicians or as services that include paid vacations for the family in India or even abroad or expensive to very expensive gifts.

The Ethical Codes are well defined both by the OPPI (Organization of Pharmaceutical Producers of India), the industry organization and the MCI (Medical Council of India), the regulatory body for medical practice and practitioners in India. Both seem to be toothless paper tigers, who cannot ensure compliance from their respective members.

What is alarming, is the lack of any kind of public discussion or outrage at the implication of legitimizing sops to physicians. Already rampant is the systemic disregard for transparency in financial and other interactions between members representing the Pharmaceutical industry and the physician community. The current proposal can only serve as an attempt to legitimize the feeble deterrents to the current questionable practices despite  the OPPI Code and MCI guidelines (details below). It’s not about the Code or guidelines. It is about their implementation. Once the principle of transparency in all transactions replaces the current practice of total concealment, things are most likely to fall in place. In this context, the Physician Payments Sunshine Act in the US and the American Medical Association’s view on CME are worth emulating.

OPPI Code

  1. No financial benefit or benefit-in-kind may be provided or offered to a healthcare professional in exchange for prescribing, recommending, purchasing, supplying or administering products or for a commitment to continue to do so. Nothing may be offered or provided in a manner or on conditions that would have an inappropriate influence on a healthcare professional’s prescribing practices or would influence their professional integrity and autonomy or will compromise patients interest in any manner
  2. Member companies or their representatives shall not give any travel facility inside the country or outside, including rail, air, ship, cruise ticket, paid vacations, etc., to healthcare professionals for self and family members for vacation or for attending conferences, seminars, workshops, CME program etc, as a delegate.
  3. Member companies or their representatives shall not give any travel facility inside the country or outside, including rail, air ship, cruise ticket, paid vacations, etc, to healthcare professionals for self and family members for vacation or for attending conferences, seminars, workshops, CME program, etc., as a delegate.
  4. Member companies shall not provide any hospitality like hotel accommodation to healthcare professionals and family members under any pretext except when they are engaged in advisory capacities as consultants, as researchers, as treating doctors or in any other professional capacity.
  5. No entertainment or other leisure or social activities should be provided or paid for by member companies.
  6. Member companies shall not provide to a medical practitioner any cash or monetary grant for individual purpose in individual capacity under any pretext.
  7. Member companies or their sales people or representatives shall not provide any gift to a medical practitioner.

MCI Guidelines

  1. No gifts from pharmaceutical or allied healthcare industry
  2. No junkets inside the country or abroad from pharmaceutical or allied healthcare industry
  3. No cash or money grants. Funding for medical research, study etc, only through approved institutions under specified guidelines
  4. Allowed medical research projects funded by pharmaceutical and allied healthcare industries on certain grounds including due permission from competent authorities
  5. To maintain professional autonomy

Penalties Quantified by MCI

  1. Gifts worth ₹1,000 – 5,000: Censure on traveling abroad for work or studies
  2. Gifts between ₹ 5,000 – 10,000: Name to be struck off medical register for three months, plus censure
  3. Gifts between ₹ 10,000 – 50,000: Suspension from practice for six months, plus censure
  4. Gifts worth ₹50,000 – 100,000: License suspension for a year
  5. Gifts worth over ₹100,000: Suspension for more than a year

Less than a year ago, when the Congress, MP, Jyoti Mirdha stirred up the hornet’s nest of physician payments by Pharma through a letter to the Prime Minister, the 45 Parliamentary  Standing Committee report recommended that appropriate regulations be added to the drugs and cosmetics rules to prohibit the pharmaceutical manufacturers from offering such freebies that are prohibited under MCI rules.

The government seems to be backpedalling the decision of ban on the gifts and sponsorships of physicians by Pharma companies to day giving to the pressure of respective lobbies. The reason for such a round-about-turn? The department of pharmaceuticals explains in a letter: Most of the hospitals / institutions in India do not have any provisions to send doctors to congresses and conferences. Appropriate support from pharmaceutical and allied healthcare industries will enable the Indian doctors to get access to the latest developments in medical research, which in turn will enable them to improve the level of patient care in India.

AMA (American Medical Association) on CME 

Compare this with what the American Medical Association’s Journal, Virtual Mentor, said about CME (Continuing Medical Education): Industry support of CME activities should be limited to contributions to a central fund that would disburse the money to programs accredited by the Accreditation Council for Continuing Medical Education. Only CME activities that are entirely free of direct pharmaceutical industry funding should qualify as education. The best solution would be that the education of physicians be funded by physicians, not by a third party, whose profits are directly related to prescribing behavior.

Brinda Karat, a member of Rajya Sabha said in this context: It is absolutely shocking. This is not what was told to Parliament about bringing about reforms to put an end to the practice of Pharma companies bribing the doctors. We will definitely be taking this up in Parliament.

What is even more disturbing is the process of concealment instead of disclosure of such payments. Even after making the payments to physicians by Pharma companies taxable from the earlier tax-deductible status as marketing expenditure, it does not deter anyone from doing it. What is needed is transparency. Disclosure. Disclosure of the amounts paid and for the purpose for which they paid. Once that information is made public, it would probably bring in the necessary change through social pressure, albeit gradually.

Sunshine ACT in the US

Two Senators – The Republican Senator from Iowa, Charles Grassley and Herb Kohl, the Democratic Senator from Wisconsin introduced the Physician Payments Sunshine Act to bring transparency to the pharmaceutical industry in the US. The Act will change the face of drug research and development by enhancing transparency between drug makers, physicians and the public. Here are the major requirements of the Sunshine ACT.

  1. Pharma companies need to make the information available for the public regarding all payments made to the physicians giving details such as: the name of the physician, or the teaching hospital along with address; the amount value of the payment or other transfer value; the national provider identifier for the physicians; the dates on which the payment is made; a description of the form of the payment or the transfer value – cash or cash equivalent in kind, items or services; stock or stock option or any other ownership interest, dividend, profit or other return on investment; a description of the nature of payment or other transfer value as – consulting fees; compensation for services other than consulting such as honorarium, gift, entertainment, food and beverage, travel and lodging, education, research, charitable contribution, royalty or license, current or prospective ownership or investment interest, direct compensation for serving as faculty or as a speaker for a medical education program, grant etc. Pfizer has been reporting all its payments to physicians from 2010.
  2. By 2013, pharmaceutical and device manufacturers in the US must report all gifts and payments greater than $10 made to physicians and hospitals. If the gifts or payments valued are less than $10 but exceed $100 annually should also be reported. Failure to submit the required information result in fines: $1,000 to $10,000 for each payment not fully reported with a cap of $150,000. Any applicable manufacturer that knowingly fails to accurately and completely submit required information in a timely manner is subject to pay a penalty of between $10,000 and $100,000 for each payment that is not reported with a cap of $1,000,000. The database will go live by September 2014.

It is worth noting, remembering, reflecting and practicing what Dr. Jeremy A. Lazarus, President, American Medical Association, wrote in an online communique as reported on February 4, 2013: The AMA will carefully review the new Physician Payment Sunshine Act Rule. Physician’s relationships with the pharmaceutical industry should be transparent and focused on benefits to patients.

Will there be a Sunshine Act-like legislation governing the payments to physicians by Pharma in India? There was at least a hope that someday there might be. But not now. Not after this bid to legalize Pharma companies’ sops for doctors.

Another Patent War?

Close on the hells of the Supreme Court’s rejection of Glivec’s patent of the Swiss drug major, Novartis another patent, another international drug major, Merck Sharp and Dohme (Merck) moved the Delhi High Court against Mumbai-based Glenmark Pharmaceuticals, alleging violation of its patent for blockbuster anti-diabetes drugs Januvia and Janumet.

Glenmark recently launched its low-cost version of the drug has maintained that it launched Zita and Zita-Met, the branded-generic versions of Merck’s Januvia and Janumet after due diligence and research. Glenmark says that its product is non-infringing. Glenmark should certainly know that as the company itself aspires to become a research-based, global integrated pharmaceutical company. The company has launched its own drug discovery program about nine years ago and has received a total of about US $250 million in out-licensing deals with leading multinational drug companies such as Sanofi-Aventis, Lilly, Forest Labs and Teijin Pharma. Glenmark has considerable stakes in research and development and a rapidly progressing company.

An MSD spokes person spoke to Business Standard, “ We are disappointed with Glenmark’s decision to introduce products that directly infringe upon our intellectual property rights (IPR). We believe our patents for Januvia and Janumet are valid and enforceable and will vigorously defend those.”

Patent wars till now have largely been restricted to exorbitantly priced lifesaving drugs for cancer and HIV. Now they seem to be extending to the chronic therapeutic segments like diabetes. This is likely to change the marketing dynamics of the rapidly growing US $13 billion Indian pharmaceutical market.

The key issue in this case is the price difference between the innovator drug and Glenmark’s branded-generic version as they put it is only about 30 per cent less, whereas in case of Glivec the price difference is a staggering 97 per cent.  This is because Merck followed an India-specific responsible pricing by pricing at a fifth of its US price when it launched Januvia and Janumet in 2008. A thirty per cent difference is not uncommon in India between a branded-generic and a generic-generic formulation and in some cases between two branded generic formulations.

Merck’s point of view clearly echoes the Research-based pharmaceutical industry when it said to the Business Standard, “Strong IPR protection is essential for growing India’s innovative capacity and economic growth. As an innovative pharma company, protection of our IPR is vital to ensuring we continue to assume the tremendous monetary risks associated with the discovery of innovative medicines.”

Product or Patient?

The Supreme Court of India’s rejection of the Glivec patent of the Swiss drug major, Novartis again hardened the debate and polarized the Pharma world into two opposing groups just about when they have been forming alliances with each other albeit as marriages of convenience.

The Supreme Court of India’s decision in the Novartis case is not a denial of intellectual property rights. It is a rejection of ever-greening of patents by tweaking an existing drug or known therapy with minor modifications just adequate to get a patent without offering substantial improvement in patient outcomes.

And yet, it has become a rather sensational debating issue of product or patient for many during the past three days. When you ask a question such as product or patient the answer is obvious as no one can deny the need for access of medicines to the needy.

When you make it a debating issue, what you get is opposing arguments one against the other. Because a debate by definition is a formal discussion on a particular topic in a public meeting or legislative assembly, in which opposing arguments are put forward.

Product or Patient? It is not a simple question of either or. The question can be made even more sensational. Profits or Patients? Again, the answer is obvious. Pause for a moment and think that if there are no profits, how would anyone create products over the long term, particularly when the risk is much higher in pharmaceutical R&D and innovation? Governments and universities across the world have been reducing or stopping funding basic research, which they used to do a few decades ago due to increasing economic pressures. Patients across the world, and more so in the third world find it difficult to buy medicines at the ever-escalating prices.

Instead of the binary approach to decision making, is it possible to find a neutral ground and arrive at win-win solution? While it may not be easy, it should not be impossible.

The Innovator drug companies can have a differential pricing for the third-world countries, but then they are worried of parallel imports. An increase in the royalty rate by generic manufacturers at reduced prices can also be thought of. There can be authorized-generics type of arrangements or alliances between innovator companies and the low-cost generic manufacturers can also be considered. The list of possibilities can go on once stop taking the opposing stands.

These are not earth-shaking ideas by any means. However, when you take opposing stands and take a battle line approach, the seemingly simple and almost obvious solutions too can be difficult to arrive at. One can miss the woods for trees.

The End of R&D in India?

The battle lines between the Big Pharma and Generic Companies are getting distinct by the day, as the turf war is escalating and extending form hitherto restricted areas such as exorbitantly priced lifesaving drugs for cancer and HIV to other chronic ailments like diabetes. What affect it will have on the rapidly growing pharmacy of the world, that is the US $13-billion-large Indian pharma market is not clear, but it may not going to be positive.

Two of the most recent cases on two successive days amplify the point of view of Indian Patent law clearly. One is yesterday’s rejection of Glivec patent to Novartis the International drug major, and the other is today’s report in Times of India of Glenmark’s launch of a more affordable version of the US-based Merck’s blockbuster anti-diabetes drug Januvia.

Rejection of Glivec’s Patent by Supreme Court of India

Pharma Times today, reported that in a landmark case, the Supreme Court of India has rejected Novartis’ application to patent an updated version of its cancer drug Glivec (imatinib), ruling that the product fails the tests of invention and patentability requirements of India’s patent law. “This decision now makes it clear that patents on medicines that we desperately need are less likely,” said MSF (Medicines Sans Frontiers) International president Dr. Unni Karunakara.

“The Glivec decision sets a precedent that would prevent international drug makers from obtaining fresh patents in India on updated versions of existing drugs. Patents will be given only for genuine inventions, and repetitive patents will not be given for minor tweaks to an existing drug, said Pratibha Singh, a lawyer for Indian drug maker Cipla, which makes a generic version of Glivec reported Pharma Times.

Glenmark’s Launch of Zita and Zita-Met  

Glenmark’s launch of Zita and Zita-Met, branded generic versions of Januvia, the Merck’s blockbuster anti-diabetic drug could also throw up a different patent challenge and it remains to be seen whether it would also take the compulsory license route used in case of anticancer drugs. The only difference is that the cost savings for patients in case of Glenmark’s anti-diabetic drugs is only 30 per cent or ₹ 5,000 a year, whereas in case of anticancer drugs it is quite substantial at US$ 2,600 a year for a generic version of Glivec as opposed to US $70,000 a year for the branded version.

An MSD India official has asserted that they will vigorously defend the patents of their anti-diabetic drugs, Januvia and Janumet as their patents are valid and enforceable. Furthermore, MSD has a comprehensive strategy for India, where there are over 65-million people with type 2 diabetes, to help address the challenge of reducing disease burden and to increase access to our medicines, including India-specific responsible pricing for these products.

Research-Based Pharma Responds

“We’ll continue to build our business, but we will be cautious in investments in R&D and innovation in India. And until the climate for intellectual property and the ecosystem is fully in place, I don’t think any investment in R&D will take place here,” Ranjit Shahani, Novartis India Chief told Bloomberg.

“Henceforth multinational pharma companies are likely to want their patents are first recognized in India before launch of patented products,” Ameet Hariani, a prominent attorney told Reuters.

Chip Davis, the executive vice president of advocacy at the Pharmaceutical Research and Manufacturers of America said in an interview to New York Times “ It really is in our view another example of what I would characterize as a deteriorating innovation environment in India. The Indian government and the Indian courts have come down on the side that doesn’t recognize the value of innovation and the value of strong intellectual property, which we believe is essential.”

The UK Outlook to Innovation and R&D

Contrast the current Indian scenario with the UK, where R&D has been languishing for quite sometime. Bio-industry Association has been able to persuade the government and herald the arrival of the patent box effective today and got a lower rate of corporate taxation. What is more, the government has also announced an above-the-line R&D tax credit of 10% offer. The outcome? GSK decided to invest a half-billion pounds in a new manufacturing facility and Astra Zeneca too committed an equally large sum to create a new R&D center in Cambridge.

Outlook for Indian Pharmaceutical Industry

What would be the outlook for Indian pharma industry that has been growing not only in India but also internationally at breakneck speed? What would happen to the research alliances and CRAMS opportunities? Would the perceived inadequate intellectual property protection discourage the research-based pharmaceutical industry and dissuade them from forging further alliances and affect its growth? Would there be any road blocks and access issues to highly regulated markets?

The initial responses of the multinational sector indicates clearly that they would think twice before investing in R&D and innovation in India.

The battle lines are clear and distinct. Which ever side you’re on this patent flight, the next few years should offer a clear example of the Rewards and Penalties associated with each strategy of a stronger or weaker IPR protection.

Will it mean an end of the road for R&D in India or a new road to Indigenous innovation?