Beyond pricing and patents
Emerging market strategies of Big Pharma have been defined by two Ps: pricing and patents. To this already volatile mix, we now need to add a third P: payments, alluding to the transactions between pharma companies and the medical community. This hydra-headed issue has reared its head from time to time, seems to disappear and then reappear with a vengeance.
But industry observers are predicting that MNC pharma will be forced to re-think their strategies and not just in China. Putting forth some lessons for the industry, Graham Erion, Weiguo (William) He and Matthew Kersten of Davis LLP point to Brazil’s Clean Companies Law, India’s Lokpal Act and Prime Minister Modi’s corruption crackdown as well as many other developing countries instituting and better enforcing their own anti-bribery schemes.
There are lessons for India’s regulators too. GSK’s Statement of Apology to the People of China hints that the company has avoided harsher indictment by promising to continue “to invest in China and supporting China’s scientific development; and by further development of innovative new medicines and vaccines for diseases prevalent in China.” Increasing access through increased manufacturing and price flexibility is another commitment.
As the cover story in our current issue points out (Express Pharma Oct 1-15, 2014), India already has a Uniform Code of Pharmaceutical Marketing Practices (UCPMP) but getting individuals to adhere to it, both pharma industry executives as well as doctors, remains a huge question mark. (Code of conduct: A pill to cure corruption?, pages 26-28).
The problem is that these codes are voluntary and depend on reporting of such practices. No whistleblowers have come forward to report such cases but NDTV recently did an expose and it has also been a topic on Aamir Khan’s Satyamev Jayate, which is due to start its third season shortly. So also, pharma marketing strategies could adopt new technologies to reach doctors but unless these are transparent and ethical, they will fall in the same trap. (Adopting new avenues, pages 29-31)
As we go to press a day after PM Modi’s rock star like reception at New York’s Madison Square Garden, it is fair to say that the pharma industry is waiting to see how he will stand up to pressure on the first two Ps: pricing and patents. Clipping NPPA’s wings might seem like a capitulation on the pricing front and Commerce and Industry Minister Nirmala Sitharaman’s comments on September 8 indicated that the Government was reconsidering its stance on intellectual property rights.
Were these two moves a prelude to setting the stage for dialogue, to signify an open mind? If so, that’s a good sign because there is no alternative but to find common ground. For that, both sides will have to move from their high-moral-ground arguments and explore all options.
For instance, if the US wants increased patent protection, can they give way on pricing and increasing access? One only has to look at Gilead’s collaboration with seven Indian companies for the manufacture and sale of its hepatitis C drug Sovaldi to understand the new-found pragmatism. But even though this deal is a good example of a pharma MNC balancing profits with patients, nations like China and Brazil, with large populations needing this drug, have been left out of the deal.
On the patents front, the re-evaluation of our IP laws could also cheer home-grown companies, as they are working on (or would like to invest in) new drug research and incremental innovations.
So the question is, what are the real pain points? The use of compulsory licensing (CL)? If the Gilead-Sovaldi deal becomes the norm, CL cannot be invoked. Better data protection has been a long standing grouse; could stronger measures on this front convince the global pharma fraternity of our good intentions? Will PM Modi find the right balance between industry and the healthcare needs of our nation?
Viveka Roychowdhury
Editor
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