Latest Drugwonks' Blog
On Saturday I was a panelist on the highly rated Indian public affairs television program, “The Big Fight.” The topic, the Indian Supreme Court’s ruling against Novartis and Gleevec.
My fellow panelists included an attorney from Ranbaxy, a representative from Novartis, an activist from Doctor’s Without Borders (MSF), a financial journalist, and a representative of the Indian pharmaceutical industry.
And it was, indeed, a big fight.
Expertly moderated by Vikram Chandra (one of India’s most respected journalists), the topics ranged from innovation to access to domestic industrial policy.
Mr. Chandra asked me if big multinational pharmaceutical companies made too much money. My response was that I didn’t know what “too much” meant – but that it was a good thing that most company profits are reinvested in R&D.
What I didn’t have time to say was that, as far as “excess profit” goes, that question is a lot more relevant to Indian drug manufacturers. Their profits last year were much higher than any innovator company. At Dr. Reddy’s net profits are up 88%. At Lupin profits are up 67%. And, at Sun Pharmaceuticals profit after taxes for the last year was 39%.
And while we’re in the pot calling the kettle black department, consider the claim by MSF India that access is the key issue. Really?
Less than 10% of India's CVD patients get even the most common medicines like diuretics and statins. Yet there are 10,500 licensed Indian drug manufacturers producing hundreds of generic anti-hypertensives and other CVD products on the market in India – very few of which reach India’s 45+ million diagnosed CVD patients.
The complete “Big Fight” can be found here.
Perhaps a better way to say that is that the court has upheld the FDA's decision that was countermanded by Secretary Sebelius.
No matter how you look at it, it's dangerous for outside bodies (be they in the Humphrey Buidling or judicial robes) to tell FDA how to handle decisions that must (must!) be based on sound science. And only sound science.
According to a report in BioCentury, Senator Chuck Grassley (R, IA) has asked HHS's Health Resources and Services Administration for information on the agency's oversight of the 340B discount program, which requires manufacturers to give deep discounts on outpatient drugs to hospitals and clinics that provide healthcare to low income and other special populations.
In a letter to Administrator Mary Wakefield, Grassley requested information about whether and what type of data HRSA collects on how much revenue hospitals receive by participating in 340B, as well as how hospitals reinvest this revenue. He noted that data from three North Carolina hospitals show the hospitals are "reaping sizeable 340B discounts on drugs and then turning around and upselling them to fully insured patients" covered by Medicare, Medicaid or private insurance, which he said is "contrary to the purpose of the 340B program." Grassley asked for a response from HRSA by April 22. HRSA said it will respond to Grassley's letter.
Grassley's request comes less than two months after patient and industry groups released a report calling for a Congressional examination of the 340B program, and several months after a group of Congressional Republicans that included Grassley asked for details on HRSA's audits of the eligibility of healthcare entities for the program.
In a response to Grassley's letter, the trade group Safety Net Hospitals for Pharmaceutical Access (SNHPA) said both HRSA and HHS "have specifically acknowledged that Congress intended for hospitals to charge above the 340B acquisition cost" for patients covered by Medicare or private insurance. The group also said federal reports "clearly demonstrate" that hospitals are using revenue from the 340B program to benefit "uninsured, underinsured or otherwise vulnerable" patients.
Gleevec case as reported by NDTV (New Delhi TV). Television segment can be seen here.
Indian drugs will now face backlash, warn analysts in US after Novartis ruling
NDTV | Reported By: Namrata Brar
Has India's Novartis ruling just killed its own innovation dreams? Will India's generic manufacturers now get slammed in their overseas markets?
While India celebrates the Novartis ruling, the United States is condemning it. The USA provides nearly 50 per cent of the profits to big pharma and India's bold decision has sent alarm waves in the lobbyist circles.
The Supreme Court on Monday dismissed Swiss drug-maker Novartis AG's attempt to win patent protection for its cancer drug Glivec, a blow to Western pharmaceutical firms targeting India to drive sales and a victory for local makers of cheap generics.
The decision sets a benchmark for intellectual property cases in India, where many patented drugs are unaffordable for most of its 1.2 billion people, and does not bode well for foreign firms engaged in ongoing disputes in India, including Pfizer Inc and Roche Holding.
"In my opinion, the Supreme Court's decision was not a patent ruling but a domestic economic policy decision," said Peter Pitts, President and Co-Founder of the Center for Medicine in the Public Interest (CMPI) and a former associate commissioner at Food & Drug Administration. "I don't agree that companies will be forced to invest in India at the end of the day because India is too big a market to ignore. If the Supreme Court of India does not understand something as basic as a beta crystal reformulation, then what hope is there for any patent?"
"If the Government of India does not understand the importance of incremental innovation, there are pretty rocky days ahead for the international community and the (Indian) government," Mr Pitts added.
While the Indian pharma market will be among the world's top 10 pharma markets by 2015, topping $20 billion (Rs. 1,08,580 crore), many in the United States feel that its restrictive patent laws will impede its growth.
The Indian pharmaceuticals industry should not celebrate too soon. On the surface the ruling might be a win for generics but in the longer term, the Big Pharma could retaliate. The US is the biggest market for Indian generics -- India exports generic drugs worth $11 billion (Rs. 59,825 crore) -- and any setback will hit them hard; the ruling could lower the chances of Indian generics companies winning contracts in the US and elsewhere. The days of Ranbaxy's Lipitor exclusivity will not come easily again.
The even bigger fear is: will innovation flee from India?
Shibani Malhotra, Global Healthcare Analyst at RBC Capital Markets, said, "Foreign investment will certainly reconsider its options... foreign majors who were investing in key partnerships with domestic Indian players, like the Abbot-Piramal deal, might have a change of heart. The idea for the investment was to build infrastructure -- a bigger foothold to launch high value drugs which now will be a difficult proposition. More importantly, what happens to a Biocon when it comes out with a new innovation? It won't want to do business in India, it would rather go to the US. India is killing its own prospects."
"We are disappointed with the decision of the Supreme Court, and remain concerned about the environment for innovation and investment in India," Pfizer said in a statement issued to NDTV.
In the US -- the heart of big pharma lobbying -- there is massive criticism of India's decision. Will companies like Novartis delay cutting edge drugs to the Indian market? May be. Will global pharma foreign direct investment in India rethink its path? May be.
One thing is certain -- the US pharma majors will not take this lying down. They say if India can be protect its generic drug makers, they too will protect their turf. This means Indian generics may be in for a tougher backlash in global markets.
The biggest canard surrounding the Indian Supreme Court’s refusal to grant Novartis a patent for Gleevec is that it will create “access.”
Let’s put the rhetoric aside and look at the facts.
1- The Government of India ranks below sub-Saharan Africa and near the bottom of all 170+ countries included in the WHO World Medicines Report in terms of GDP spend on publicly funded drug programs that serve vulnerable populations.
2- India is one of the few countries in the world that collects more on taxes and tariffs for medicines than it spends on providing medicines to the poor. Broad analysis for 2011 indicates that total annual government expenditure on drugs in India was around $1.15B in comparison to the $1.22B it received in taxation of pharmaceuticals.
3- CIPLA, an Indian generic company that was part of the Gleevec patent case, has nearly $300 million in unpaid fines for overcharging for essential medicines in India.
Make no mistake – the Novartis case wasn’t about access. It was (and is) about domestic industrial policy.
Who will India is send to BIO this year? And how will they address the concerns of jittery investors and prospective partners?
Medical device taxation and New York Times misrepresentation.
In an otherwise misguided editorial condemning the Senate’s bipartisan (79-20) call to repeal the medical device tax, the New York Times writes, “One of the signers was Ms. Warren of Massachusetts ... Ms. Warren wrote that the tax stifles innovation, research and development. That’s a high-minded justification.”
Indeed it is. And she’s right.
India -- a nation known for its innovation in many areas -- has decided that incremental innovation in pharmaceuticals isn't important -- at least when it comes to patent protection.
The Supreme Court of the world’s largest democracy has rejected Novartis’ attempt to patent the cancer treatment Gleevec. But what the India has really rejected is medical innovation. And what activists are applauding as a road to broader patient access is a phony and pyrrhic ruling.
Citing a legal provision in India's 2005 patent law aimed at preventing companies from getting fresh patents for making only minor changes (“evergreening”), India's patent office didn't issue a fresh patent for the medicine because it was not a new medicine but an amended version of its earlier product. But what makes this ruling even more absurd is that Novartis wasn't asking for a patent on an incremental innovation -- their request was for a beta crystal reformulation to make the existing product more stable.
In other words, Gleevec isn’t innovative enough for India.
According to the New York Times, "The court's ruling confirmed that India's criteria for the granting of such patents remain far higher than those in the United States, where patents are so easy to win that one was given in 1999 for a peanut butter-and-jelly sandwich."
That’s a nice anecdote but as the saying goes, the plural of “anecdote” isn’t “data.” What does the Indian decision mean?
It means the Indian court doesn’t understand how pharmaceutical innovation happens – or why it’s relevant. As any medical scientist will tell you, there are few "Eureka!" moments in health research. Progress comes step-by-step, one incremental innovation at a time. Even the smallest innovations are made only after large amounts of very expensive research is done.
Once a lifesaving drug or treatment exists, it’s seductively easy to take it for granted. We sometimes forget the years of toil these things take to develop; the millions spent to bring a new drug or treatment from theory to actuality.
Abraham Lincoln wrote, patents “add the fuel of interest to the passion of genius.”
There is a reason why virtually all the world’s “miracle drugs” have been developed in Western countries. It’s called incentive. Because innovation is honored and protected and inventors are rewarded for their work.
Where there there is no patent protection there is no investment. And where there is no investment there is no innovation.
Minus patent protection, an innovator company can't earn back what it invested in R&D, ergo they can't reinvest their profits in further R&D -- further delaying crucial incremental innovation which is how medical progress is made.
(But large Indian generic manufacturers can make a bundle.)
Not surprisingly, the usual suspects of so-called “civil society” are trumpeting the Indian decision as a victory for patient access. Nonsense. Price isn’t the problem.
Obvious by its omission is the fact that about 99% of all the Gleevec in India is given for free. Patents have not prevented access. In fact, when you examine the WHO’s model Essential Drug List, very few of the 400 or so drugs deemed essential are new or patented or were ever patented in the world’s poorest countries. In category after category, from aspirin to Zithromax, in almost every case and in almost every country, these medicines have always been (or have been for many years) in the public domain. That is, the medicine is fully open to legal and legitimate generic manufacture. And yet there still isn't broad patient access.
If we allow our emotions (and sloppy reporting) to trump reason, we’ll end up with a lot less innovation.
And fewer lifesaving drugs to take for granted.
Join me, Jim DiBiasi (Partner, 3D Communications), Tony Russo (Chairman and CEO Russo Partners), Howard Yuwen (Executive Director, Regulatory Affairs, Alexixon, and moderator David Schull (President, Russo Partners) for a must attend panel discussion:
Thriving, Not Just Surviving: FDA Advisory Committee Meetings
2:30 PM - 3:30 PM on Monday, Apr 22, 2013
Location Building: N426A
Description
For many biotech executives, the term "FDA advisory committee meeting" evokes feelings of fear, even among those with historical experience. Instead of tackling Advisory Committee (Ad Com) hearings as times of opportunity in which their companies can thrive, too many executives are focused on survival. Yet, the fate of their drugs in development can rest heavily on the decisions the FDA's outside advisors. In this dialogue, biopharma executives and industry experts review lessons learned from past experiences, as well as what best practices participants can apply to get ready for and succeed in the advisory committee environment.
Learning Objectives:
- Discuss the integration needed for medical/regulatory affairs for Ad Com success
- Identify necessary and beneficial steps to prepare your company for Ad Com interaction
- Examine lessons learned from a recent case study
Ability Level: Advanced
Learning Objectives:
- Discuss the integration needed for medical/regulatory affairs for Ad Com success
- Identify necessary and beneficial steps to prepare your company for Ad Com interaction
- Examine lessons learned from a recent case study
Government (aka “academic”) detailers calling on physicians in Utah will now have to play by the same rules as pharmaceutical representatives. Governor Gary Herbert has just signed into law H.B. 120 (“Information on Pharmaceutical Products”), a bill that “amends the Division of Occupational and Professional Licensing Act related to commercial and academic detailing for prescription drugs.”
This bill “creates standards for providing educational information to health care providers about prescription drugs” and “expands the application of federal regulations that apply to a pharmaceutical manufacturer's drug representatives to other health care providers who make educational statements about a prescription drug.”
Specifically, “An academic detailer and a commercial detailer who educate another health care provider about prescription drugs through written or oral educational material is subject to federal regulations regarding:
(i) false and misleading advertising in 21 C.F.R., Part 201 (2007);
(ii) prescription drug advertising in 21 C.F.R., Part 202 (2007); and
(iii) the federal Office of the Inspector General's Compliance Program Guidance for Pharmaceutical Manufacturers issued in April 2003, as amended.”
Utah, land of the Bonneville Salt Flats, isn’t passing judgment on academic detailing; they’re just leveling the playing field. Unlike the AAMC (which believes that Uncle Sam isn’t subject to conflict of interest when it comes to the sharing of medical information), the Beehive State has their eyes open. Detailing is Detailing is Detailing.
The Information on Pharmaceutical Products Act makes the common sense point that, without public scrutiny there is no guarantee that government-sponsored detailing will present information that is unbiased, peer-reviewed, and aligned with the existing evidence base. Without clear guidelines, there is nothing to prevent government detailers from using their outreach to advocate instead of educate.
Previous government detailing efforts have often focused on demonstrating their own value by highlighting the cost effectiveness of initiatives through savings generated from the increased utilization of generics and other low cost therapies.
Asked another way – how can an “academic detailing” program funded by our nation’s largest payer (Uncle Sam) be considered neutral? Just like detailing programs run by pharmaceutical companies, there is an inherent “interest.” And that’s okay – as long as that “interest” is transparent.
Fairness is the proper yardstick. The general lack of rules or oversight stands in stark contrast to the extreme scrutiny with which industry “detailers” are subject in their interactions with physicians. Starting with the Federal Food, Drug, and Cosmetic Act of 1938, and continuing through the 2010 FDA “Bad Ad Program,” the federal government has imposed a number of regulations on industry’s ability to promote their products and distribute information about their drugs to physicians and consumers. Rightfully so.
And now the government’s detailers must play by the same rules – at least in Utah.
It’s a good first step.
Government-funded detailers should be held to the same standard as industry representatives in every state. This simple, common sense step would ensure providers are receiving accurate, unbiased information on the best treatment options available to improve patient care.
A number of unanswered questions remain. For example, if government detailers stray into off-label conversations, to whom does FDA’s Office of Prescription Drug Promotion send a letter? Whom does the Department of Justice investigate? Who pays the fine?
That’s a good point of departure for a conversation between AHRQ and the FDA – both agencies within the US Department of Health and Human Services.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
