More to rules than the carrot-and-stick approach

Above revenues and reputation, is patient health and safety. If that’s compromised, everything is lost

After all the posturing and speculation, United States Trade Representative’s (USTR) Special 301 Report this year did not downgrade India from the Priority Watch List to the Priority Foreign Country category. But the USTR is keeping up the pressure, by sanctioning an out-of-cycle review (OCR) later this year. India is one of 10 countries on the ‘Priority Watch List’. While 27 countries got the stick and made it to the Watch List this time, Italy and Philippines were awarded a ‘carrot’, becoming the first two to be removed from the Watch List.

Very clearly, the USTR will have an eagle’s eye on the new government on the intellectual property rights (IPR) front. Will the new government be strong enough to stand up to such carrot-and-stick tactics?

The US FDA is also accused of using 483s, warning letters and import alerts as a stick. But here the disciplinary action is supported by extensive suggestions to improve compliance, so industry is coming around to see the long-term benefits of continually upgrading manufacturing systems.

There is also increasing interaction and collaboration between the US FDA, its Indian counterpart, Central Drugs Standards Control Organization (CDSCO) and industry, which I got to see first hand on May 5 in Hyderabad. Officials of the US FDA India office, the CDSCO and the Indian Pharmaceutical Alliance (IPA), conducted the first in a series of workshops meant to get both Indian regulators and industry members up to speed with what the US regulator wants to see as evidence of compliance.

In a recorded message, Howard Sklamberg, Deputy Commissioner, US FDA Global Regulatory Operations and Policy gave hints to what the US FDA considers ‘red flags’ (like for instance, outdated manufacturing systems which would mean that automated systems inspire more confidence).

The US FDA itself is in evolution mode and two of Sklamberg’s posts on the FDA Voice blog give glimpses of this process. Both posts, (dated May 9 and May 12) are about the US FDA morphing from a ‘domestically-focused regulatory agency’ to a ‘globally focused regulator’. The second post also announces a deeper collaboration with the European Commission (EC) and the European Medicines Agency (EMA) to increase exchange of information. Sklamberg’s concluding para in this post mentions ‘strengthening our mutual reliance and capitalising on our shared interests’ and says the initiative ‘signals yet another important step forward for pharmaceutical quality here in the US—and around the world.’

Thus, it is very apparent that as with IPR, the US FDA’s intention is to ‘harmonise’ (read impose?) standards across boundaries and through its counterparts as well. With the highest number of US FDA-registered plants outside the US (523 as of March this year), should India be worried that more sites in the country might face import alerts?

There are two sides to this issue: revenues and reputation. Revenues in 2013 were not hit so badly, as banned facilities accounted for around seven to eight per cent of the total exports to the US and around two per cent of the overall 2013 pharma exports from India, according to an analysis by Chennai-based India Ratings & Research (Ind-Ra).

But what really took a beating was reputation, which is infinitely more difficult to recover. And as Ind-Ra points out, these companies will also face a substantial opportunity loss on account of delayed product introductions and expenditure on corrective actions.

Of course, above both revenues and reputation is patient health and safety. If that’s compromised, everything is lost. In this issue (dated May 16-31, 2014), we are finally successful in giving a voice to patients. On our cover, we have Nidhi Shirol’s story: a teenage girl condemned to life on a ventilator as pharma companies are too wary to include her in a clinical trial.

But we also feature ‘Raj’, who is alive today because he had the courage to join a trial for a cancer drug. We also feature doctors who feel cornered between seemingly irrational rules and their moral obligation towards their patients. While the regulator is right to protect patients, confidentiality is also the fundamental right of any patient signing up for a trial.

We hope that our coverage in this issue takes the discussion forward to a conclusion acceptable to all concerned. The stick is not always the answer.

Viveka Roychowdhury
Editor

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