Pharma

MNC Pharma Companies & the Indian Market

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“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.

Final thoughts

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.

Indian Pharma – A case of regulatory failure?

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Disclaimer: I work for Novartis, an MNC pharmaceutical player. However, the view expressed in the post are my own, and do not reflect those of my employer.

Indian pharmaceutical companies cannot be judged by American standards. – GN Singh, Drug Controller General of India [source]

If you are looking for one reason for the mess that the Indian pharma industry is in, you do not need to look further than the statement above. This is a statement made by the head of the body responsible for ensuring the quality of drugs manufactured and sold in the country.

As any physician will tell you, one of the prime reasons for them prescribing higher priced brand of generic medicines is that the quality of those brands can be trusted. Call them fake, spurious, or poor quality drugs, it is one of the worst kept secrets of the Indian pharma industry. While the US FDA imposes stringent norms on the quality of drugs sold in US, such enforcement of standards is missing in India. The DGCI is severely understaffed and enforcement of manufacturing norms questionable. Manufacturers often get away using approvals from state FDAs which are even more limited than the DGCI in terms of resources for checking the quality of drugs.

For example, there are 200 brands available for  Metformin 500 mg (a common drug for diabetes) and the price of a strip of 10 tablets varies between Rs. 8 to Rs. 80 per tablet, with an average price of Rs. 17. In fact, brands by reputed manufacturers like USV, Abbott, and Glenmark are available for around the average price of Rs 17. Brands by Emcure and Torrent are available at Rs 12. In fact, most manufacturers have multiple brands at different price points. For example, Cipla has a brand at Rs. 7 and another at Rs. 18. Same drug, same composition. [Source: HealthKart Plus]

While theoretically you should be able to switch medicine brands, as long as they have the same composition and formulation, without change in efficacy, it is not true in practice in India. I have personally heard from a number of physicians that the quality of drugs, especially those supplied to the government, is highly questionable and that they often suggest their patients to procure the drugs from open market as those supplied for free at the hospital may not be efficacious. If the DGCI and state FDAs ensures quality, the price variances would come down and the premium charged by major trusted manufacturers decrease making medicines more affordable.

While a lot of people blame big pharma players and MNCs of having hidden interest in raising quality issues, do we not agree that the problem is not just access to medicines, but access to quality medicines.

Logic vs Emotion

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Surprisingly, this is something that I have discussed with two different people in the last 24 hours.

One thing that an engineering college education does to you is make you very emotionally inadequate. All we can do is think logically, brushing aside all emotions, and makes us quant jocks in real life too.

I was discussing the unfortunate death of Dr YSR Reddy, the AP CM, with a classmate who believed that all this state mourning and shutting down the state for a day was not logical. While I agree with the logic, I am not so much in sync with the emotional aspect of it.

Some people do believe that protocols are unnecessary, and a burden on the state exchequer. While I agree that some protocols are useless, some of them are required. We need to show some respect for people who work for the society and the country. Agreed that not a lot of them do it out of compassion, but who decides that?

The second discussion I had was the validity of Intellectual Property Rights, specially in the Pharmaceutical industry. While I agree that IPRs are an essential part of the industry and required to spur innovation, there is something fundamentally broken with the role they play in the pricing of drugs.

Would you rather not a sell a drug in a nation because you are making a lower profit or would you rather save a life? Isn’t the huge profit margins you make in some nations good enough to subsidize some losses in the less fortunate countries? Also, if a company decides not to sell a drug at an affordable price in a certain country facing an epidemic, is the government flawed in its decision to grant a compulsory license?

I guess these questions have no right answers. See what aspect sways you more and take that way is the right thing to do I guess.

As Captain Teague says in the last edition of Pirate of the Carribean, “It’s not just about living forever, Jackie. The trick is still living with yourself forever.“