Take the latest scandal unfolding in China. The Chinese police has accused GSK executives of using travel agencies as fronts for funneling bribes to Chinese doctors and officials in return for using GSK products. These practices hiked up GSK’s sales in China but the country’s officials are concerned that they also raised the price of medicines in the country. GSK executives in China have since confessed to bribery and tax violations.
And GSK is only just the tip of the iceberg. The Chinese police have information that points to similar money transfers made by other MNC pharma companies in China, signalling that everyone was using the same modus operandi.
It is no different in India with Novartis India executives being accused of using their incentives to buy Galvus, Novartis’ medication for diabetes, thus artificially inflating sales numbers to meet their targets.
But such practices are routine among domestic companies as well; some would say bribing to boost sales is standard operating procedure across industry sectors. And to the charge that China is targeting overseas players, one could argue that almost every MNC pharma company has been pulled up and fined by regulators in Western markets for similar offenses.
It seems that patients are the losers either way. If it’s a generic, they need to worry about the quality and safety of the product. If it’s an MNC brand, then they wonder if it was solely clinical outcomes that dictated the choice of brand.
Given this scenario, it is no wonder that the pharma and healthcare sectors are probably the least trusted today. It is ironic that these sectors deal with life and death, where trust is the cornerstone.
There is no doubt that whistle-blowers have played a very important role in most of these scams, tipping off regulators on where to look for irregularities. Yes, whistle-blowers get a share of the spoils but should this diminish their halo? It is equally true that the odds are weighed heavily against whistle-blowers especially in the pharma industry, where Omerta (code of silence) holds strong and whistle-blowers are discredited and isolated. Thus there is a strong argument that the means justifies the ends, for the greater common good.
The greater common good of Ranbaxy paying fines to the US FDA is that India’s regulatory authorities were also forced to review their own practices. Will we ever have our own regulators crack down like China? Both are desirable emerging markets, trying to extract the best deal for their populations. It is an unfair comparison, given the fact that the political systems in the two nations are poles apart but surely we can at least implement fully the reforms already under way?
For instance, one of the stories in this issue, ‘Fair chance’, reviews the proposal to hike patent application fees and a surcharge on hard copy filings. Obviously the attempt is to encourage e-filings but as the article points out, will the authorities strengthen the infrastructure to support these changes?
True, India’s legal system is doing its bit to keep medicines affordable by stonewalling patents on key medicines like Glivec, etc. Clinical trial regulations like the compensation guidelines for injuries/ deaths during trials are being reviewed but the pace of reform is much too slow for industry, particularly because regulations often take time to bear fruit.
For instance, the US was the first country to pass an Orphan Drug Act in 1983 but it took three decades for the few pharma companies who took a chance on these drugs to see decent revenues, spurring further interest in this field. Another story in this issue, ‘The rise of orphans’ takes a look at how the US, followed by Singapore, Japan, Australia and the EU have put in place incentives to coax pharma companies to research cures for rare diseases affecting smaller populations. Patients suffering from such disease conditions got a new lease of life while industry discovered a different class of blockbusters.
Will regulations in India spur or choke the industry? We need to start now if we want to see the results in a few decades. Too much hangs in the balance to leave this to chance.
Viveka Roychowdhury
Editor