“Is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product.” ~ Marijn Dekkers, Bayer Chief Executive Officer
The global pharma industry’s reputation is getting worse, and is only slightly better than health insurers. Statements, like the one above, do not help.
This statement, made by none less than the CEO of a major MNC pharmaceutical player, while being incredibly insensitive, is also alarmingly honest.
At ~$12bn and double digit growth the Indian pharma market seems incredibly attractive. However, according to industry estimates, only about 1-2% of this market is accounted for by patented products, which is what most MNC players are interested in.
Pricing is the key issue
A large part of the patented drug market is contributed by the DPP-IV inhibitors, anti-diabetes drugs, and they continue to grow rapidly. One of the key reason for the quick uptake and growth of this class of molecules is their pricing. Priced at around Rs 50 per day, they are priced at around 60-70% of their price in Europe. While it seems high at a first glance, they still appear affordable for a large number of middle class consumer in terms of daily cost. However, industry insiders mention that the price impacts long term compliance and most patients drop-off therapy in a few months, in the largely self pay Indian market.
Contrast this with the price of Sprycel (dasatinib) promoted by Bristol-Myers Squibb. The drug is being considered for a compulsory license by the government. The drug is priced at Rs 1.65 Lacs a month, less than a third of its price in the US – well within the PPP price. At this price and despite the generous access program that the company has, a very small part of the Indian population, including the author, would be able to afford the drug.
India is facing a double whammy of not having reduced its load of acute illnesses while still facing growth of chronic diseases including CVDs and cancers. It is this disease burden which when combined with the pricing that scares a lot of policy makers.
Lack of transparency doesn’t help
A large part of the dissatisfaction of the MNC players is driven by the unilateral actions of the government and any clarity of thinking on the part of the government. The compulsory license of dasatinib is a case-in-point. Compulsory licenses are generally granted under Section 92 of the 1970 Patents Act for “public health crises, relating to Acquired Immuno Deficiency Syndrome, Human Immuno Deficiency Virus, tuberculosis, malaria or other epidemics“. First, I do not believe that CML is a public emergency or their is an epidemic of CML. Second, Sprycel is not the drug of choice for first line treatment of CML. Gleevec (another litigated upon drug) is the standard of care and is widely available at affordable prices. Hence, a compulsory license for the drug does not make much sense.
On this regard, it would be wise of the government to lay out its method of evaluating drugs for compulsory license and the framework being used.
Gilead recently announced its plan to license its Hep-C wonder drug, Solvaldi (Sofosbuvir), (priced at $1000 per pill) to Indian generic manufacturers for ensuring affordable access to the drug. The unilateral and proactive move by the company is sure to be cited by many as perhaps one of the way to go.
As George Merck once said, “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”
Disclaimer: I have worked at BMS India earlier, and currently work for Novartis. The views are my own and do not reflect those of my employers.
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