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Forecast 2015

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As 2014 draws to a close, Express Pharma presents some hopes and predictions from thought leaders as they gaze into their crystal balls


‘We want to believe that the govt will fulfill its promise’

Ranjana Smetacek

The past year has been a year of change and it brought the Indian pharmaceutical industry more than its fair share of challenges. Still, the New Year offers a renewed sense of hope. The new government is beginning to make its presence felt, with creative initiatives like ‘Make in India’ and ‘Swachch Bharat Abhiyan’. Investors, businesses, and the common man – we each want to believe that government will fulfill its promise of good governance, transparent policy-making and corruption-free growth.

A recent pharma conclave in Delhi saw the coming together of the government, regulators, industry leaders and healthcare professionals from across the country. Discussion revolved around the ‘Make, Develop and Innovate in India’ theme and speakers debated India’s role as ‘Pharmacy to the World’. All stakeholders agreed on the need for a collaborative approach to support the nation’s healthcare objectives, they declared unanimously that the time is now.

In 2015, the Organisation of Pharmaceutical Producers of India (OPPI) will continue to focus on some key priorities.

Improved access to quality healthcare: Pro-innovation policies can go hand-in-hand with access to healthcare, for the benefit of our patients. Access to healthcare extends beyond the cost of medicine, to the proximity, quality and functionality of the infrastructure that supports that access. More than affordability, the barrier to access is the inability to pay out-of-pocket and the lack of insurance cover. The promised Universal Health Assurance programme will help benefit patients and increase access.

In a recent assessment of the Indian economy, the Organization for Economic Co-operation and Development (OECD) identified India’s poor health outcomes as one of our major developmental challenges. Today, India has one of the highest disease burdens in the world. We ask the government to prioritise healthcare, strengthen infrastructure and focus on skill development. We seek increased healthcare budgets, from the current one per cent to at least 2.5 per cent over the next two years.

Stronger IP rights: A January 2014 study, by economists Robert Shapiro and Aparna Mathur, predicted that ‘India could well become a global centre for innovative drug development and production, increase the life expectancy of its people, expand output and employment, and achieve considerable cost savings in medical care and government subsidies’ by increasing its IP protection. A stronger IP environment will certainly have a positive impact on the Indian economy and encourage Foreign Direct Investment. In pharma, we need a holistic approach that balances the need for innovation with the necessity for more accessible medicines, within a robust IP environment. We must incentivise innovation for new solutions to treat critical and rare diseases and new medicines to save and improve lives. There are still huge unmet medical needs in cancer, diabetes and mental illness (Parkinson’s and Alzheimer’s remain unconquered) and dengue remains a threat to 40 per cent of the world’s population.

Ethics and the Uniform Code of Pharmaceutical Marketing Practices (UCPMP): Responsible healthcare has to become a norm in India and patients guaranteed safe and quality healthcare. The entire healthcare ecosystem must comply with the highest ethical standards in manufacturing, marketing and prescribing. The formalisation of the UCPMP as a voluntary code, effective January 1, 2015, augurs well indeed. This long-awaited and meaningful step from government will help shape a more ethical healthcare industry.

Clinical trials: As the Indian economy grows, more people will have access to modern medicine. It is in India’s interest to encourage clinical trials, with adequate safeguards. This forms part of the research in the development of new medicines and is a part of the intellectual property. We need policies and regulations that will build confidence among innovators in India. We need a robust and transparent process to conduct clinical trials and obtain regulatory approvals for new drugs, while supporting government’s compensation framework.

Today, India is a brand in pharma. We, the industry, are willing to shoulder our share of responsibility in improving the health of our nation. The stars are aligned and we must seize the day – the time is now!

Ranjana Smetacek, Director General, Organisation of Pharmaceutical Producers of India

‘Need transparency, efficient implementation’

Dr PM Murali

Time flies, as people say. It is now nearly more than a decade that India has been stuttering for want of robust transparent policies for the pharma biotechnology and agri biotechnology sectors. Systematically our policies have driven away robust investment and a research-driven innovation ecosystem to emerge out of India. In the pharma sector clinical trials, custom chemistry, R&D collaborations, multinationals shifting research to India have all suffered seriously due to knee jerk policies of successive governments. The biotech industry has highlighted that this is a $100 billion potential. It is just that nobody seems to be taking note that growing this sector is beneficial for Indians on self-reliance and also paving way for future drugs to emerge from here. Instead of the government bending backwards to roll a red carpet to this industry which is going to cater to the health and well being of the people of this country, we have gone on and on with investor unfriendly policies and announcements. While all our neighbouring countries are offering all sorts of incentives to the industry, we have made it very difficult for new ones to come in and do business.

Countries are assessed for advancement based on the amount of innovation that happens and also how much growth that has been witnessed with respect to the healthcare segment. Drugs and vaccines are essential components of the healthcare and developing them needs 10-15 years of research backed with a $1-2 billion investment. Everytime there is a set back to the ecosystem, the time and costs over run. How will companies bring affordable drugs? While the popular belief is companies try to make money exploiting poor patients, there is no accountability on what faulty policies can do to affordability.

But as always a new government brings in lots of hope to the despaired and dispirited. “Make in India” is the right message to the world and already the Prime Minister has taken the first correct steps in bringing in an urgency into the system. We feel there has to be an even greater urgency in bringing about transparency and efficient implementation to quickly regain lost grounds. The healthcare industry offers tremendous potential to mitigating unemployment by offering jobs all along the value chain. The industry is extremely positive that if the core issues that retards growth of this sector are identified (which the industry has done) and removed (role of the government), then we are likely to see a revolution in affordable healthcare in India.

Dr PM Murali, President, ABLE

‘We can go back to double digit growth in 2015’

S V Veeramani

With a favourable government atmosphere, we feel that we are in for better times for the Indian pharmaceutical industry. A new team has been formed in the Department of Pharmaceuticals. There is greater understanding on the various challenges facing the Indian pharma industry and the stimulus required for its development.

We have started receiving communications from Department of Pharmaceuticals for meetings on various matters related to growth and development of pharma industry. There have been invitations to discuss about APIs, to promote growth of private pharma industry, Task force with other departments, plans to revive public sector undertakings, venture capital fund for financing R&D, industry academy interaction, Jan Aushadhi Yojana, etc.

We understand that the government is likely to come up with a good stimulus package for the API industry. They are also considering funding for the upgradation of SMEs. If these packages come into operation, it can well pave the growth of the pharma industry in India.

On the part of Department of Health and DCG (I), there are moves to simplify the forms and procedures. We understand that the approval formalities for clinical trials will be smoothened up. We are also happy that there will be a considerate view for approval of FDCs which have been used for several years with good benefits to the Indian public.

Hope the Department of Health will also consider the industry’s request for continuance of PET bottles.

With respect to regulations, many Indian pharma companies are in the process of training their technical personnel on quality culture and good compliance. We are sure, that they will meet the expectations of US FDA and other regulatory authorities in the World.

With all this, we are very confident of a bright future for Indian pharma industry in 2015.

Our apprehensions are on the pricing front. We hope that the number of NLEM drugs are not increased substantially to affect the viability of the industry. We also hope that price control and regulations will not disturb the sustainability of the industry to supply medicines to the public without any shortage.

If everything goes well, we feel that we can go back to double digit growth in the Indian pharma industry in 2015.

S V Veeramani, President, IDMA

‘Indian pharma will change, hopefully for the better’

Anil Khanna

Years back, Isaac Asimov said, “Life is pleasant. Death is peaceful. It’s the transition that’s troublesome.” While it may not be a matter of life and death for the Indian pharma industry, it certainly is the transition time and like any transition, it has its pain, as well as gain.

Indian pharma has enjoyed a decadal growth rate of ˜13 per cent, except in 2013, when due to large number of formulations coming under price control, growth rate plummeted by more than half to little over six per cent. For sure, during 2014, companies have been busy regaining their composure and the lost sales, but parallely, they have been trying to answer the vital question – what’s next?

For starters, industry will learn to live with more price control at regular intervals. Same happened in 2014, and will continue in 2015 and beyond. There is absolutely no ambiguity in government thinking on this issue. Even now, only around 15 per cent of the domestic market is under price control, and hence government feels there is scope to ‘do more’ on the issue of price control, which will put further pressure on profitability. This would possibly lead to change in distribution and marketing model, with medicines for at least chronic medicines being supplied directly to consumers. It’s a nascent trend internationally, but being experimented. AstraZeneca started with Arimidex Direct in 2012 to provide its off-patent breast cancer therapy via Express Scripts directly to consumer. Earlier Pfizer had taken this approach for Lipitor (with ‘Lipitor for You’ programme) and Viagra.

In the generics branded formulations market, going forward, companies will increasingly move up from ‘easy to copy-low value generics’ to ‘difficult to copy-high value generics’. Companies will focus on niche areas like oncology, hormones etc. There would also be increasing trend towards biosimilars. Herceptin biosimilar (CANMAb) by Biocon is one of recent example in this category.

Another interesting trend that is being seen is the emergence of new pharma companies with differentiated product strategies. For instance, a very young company, not even two years old, launched its product range with clear focus on ‘first co-prescribed product’ for selected therapeutic areas. In its first year of operation, it has achieved good success in terms of revenue. Or there is another company, around four-year-old and with revenue of Rs 400 crore, focused significantly on women’s health segment. This company is already among the top 50, while it only operates in the 15 per cent of the overall market. Success of such companies may spawn the launch of more new companies, which will have focused and differentiated product strategies.

On the discovery front, there is an emerging trend of pure-play discovery companies focusing on biologicals. There are young discovery companies, which are doing cutting-edge biologics focused product development work for diseases like diabetes, arthritis etc. Large pharma companies would have no option but to do more work in this area but also develop the required skill set. Just for statistics, last year 40 per cent new drugs approved by US FDA were biologics. Regenerative medicines (based on stem cells) will pick-up momentum. Already there are companies working on treatment for diabetic ulcer, critical limb ischemia, burn cases etc.

In drug exports, pharma companies would continue to face pressure, especially from US FDA. Let’s admit, this issue has been brewing up, and now it is out in open in a big way. The result of this pressure would be that Indian pharma companies would in all likelihood will diversify in their exports market. Today around 37 per cent exports happen to US, with very little in other regions – < 5 per cent to Latin America, around five per cent to Russia. So there would be trend towards companies focusing more in these markets and in MENA region, to hedge any likely risks.

With both healthcare services affordability and accessibility remaining a critical issue, there is likely to be an increased trend towards OTC medicines. Secondly, it has been seen globally, there is a direct co-relation between the GDP growth and the OTC market growth. So with Indian GDP likely to be on an upward trajectory, OTC market should grow at a faster rate and may in fact double to more than $ 6 bn during next three to five years. Increased consumer awareness will also drive this market.

It’s quite likely that other important trends during next year and beyond could be increasing collaboration between MNC & Indian pharma companies, increasing focus on IPR issues and more conflicts on account of this, more FDI in pharma. But one thing is sure that the shape of the Indian pharma industry will change. Hope is that change is for the better.

Anil Khanna, Partner, Tai Pi Advisors

‘Is Indian pharma under seige?’

Dr Gopakumar Nair

Is Indian pharmaceutical industry under siege? By whom? USTR & Big Pharma? US FDA? NPPA? CDSCO? Other regulatory agencies? NGOs? Indian pharma is facing more challenges than opportunities at current times. As the year 2014 is exiting and a New Year is dawning, the Indian generic pharma industry needs to lay down strategies for the future.

On the international front, the first time in many years, quality related issues dominated over intellectual property disputes, even though there appeared to some relation between the two at the core. The offensive came from both the USTR and Big Pharma on TRIPs compliance issues. The US FDA inspections and warnings to Indian manufacturing sites of leading generic pharma companies were at too frequent intervals during the current year.

On the domestic front, the pharma industry was hard-hit by a plethora of issues. Clinical trials and consequent drug approval processes were severely affected by delays and hold-ups. The fixed dose combination (FDC) approvals and re-approvals including issues related to irrational (?) combinations persisted.

Most disconcerting and disturbing negative moves came from National Pharmaceutical Pricing Authority (NPPA) orders for extending the range of price controls beyond the ambit of the Drugs Price Control Order (DPCO). Government, more specifically the NPPA, appears to be not realising that the affordability is secondary to availability. The severe cuts and spreading of the net of controls, led to leading brands with high quality and reliability being replaced by newly introduced brands of companies who could afford to continue to market under low overheads. To add fuel to the fire of stress, IP related litigations were on the increase during the year, making deep dents in the budget of Indian companies.

Pharma under one roof?

Pharma, biotech, herbal, neutraceutical, vaccines themselves make a wide range. By another classification, Active Pharmaceutical Ingredients (APIs), formulation dosage forms including parenterals, New Drug Delivery Systems (NDDS), Ayush (Ayurveda etc.), medical devices (implants and equipment), packing materials (capsules, glass, pet etc.) need a variety of expertise to oversee which is clearly lacking in single ministry. The pharma industry has to currently deal with a large number of ministries such as

  1. Pharmaceutical Dept. of Chemicals Ministry – APIs, pricing, infrastructure
  2. Ministry of Health – CDSCO, DGHS, ICMR, Ethics Committee, DCG(I)
  3. State FDAs – Manufacturing and product licences, sales and marketing
  4. Ministry of Commerce – Pharmexcil (international trade)
  5. Ministry of Environment – Bio Diversity Act, Pollution Control, Waste Management & disposal
  6. Dept. of Industrial Policy & Promotion (DIPP) – Patents TMs, Designs, Bilateral Trade Negotiations
  7. Ministry of HRD – Pharma Education, Copyrights
  8. Ministry of Science & Technology – R&D approvals, research project related funding
  9. Dept of Ayush – Ayurveda, herbal, neutraceuticals
  10. Ministry of Industry – MSME, location approvals
  11. Ministry of Finance/Revenue – Customs, Excise (central and state excise), Service Tax
  12. Narcotics Control Dept./NDPS (Dangerous Drugs Department)
  13. Ministry of Labour – Perennial and ongoing dispute with Medical Representatives (FMRI)
  14. Ministry of Transport, Aviation & Shipping
  15. Ethical (?) marketing issues – MCI/IMA – Industry -Codes

The list is endless, many more. While all of this cannot be brought under one umbrella, the best possible is to combine health, pharma department and pharma trade both domestic and international, including pharma and health education under one ministry. This can only be done at the Centre, not at the State level, as the (Indian) Drugs and Cosmetics Act is a concurrent Act.

Significant amendments will be required to Drugs & Cosmetics Act, 1940. It is admitted that such an amendment is long overdue. Lately, the government has come up with strict action against unethical practices in industry-medical profession relationships. It will be interesting to wait and see how and through which agency the government proposes to implement the statutory code and punitive measures, if any for violation thereof.

In conclusion, the entire exercise of bringing all pharma related regulatory and administrative activities under one roof can only succeed, if such a mammoth organisation is headed by a competent authority and is well structured and empowered with human resources, logistics and infrastructure. Very often the solution causes more problems. The phase which Indian pharma industry is currently undergoing is very critical. Quality issues including Good Manufacturing Practice (GMP) need to be utmost priority. Negotiations of Substandard /Spurious /Falsely-labelled/Falsified/Counterfeit FDC (SSFFC) and counterfeit at various global levels including with US and EU need to be handled in the best interest of India. International Conference of Harmonization (ICH) need to be addressed.

On the biotech front, biosimilars need urgent expedited attention. Scaling up fermentation, serums and vaccines, both at research and production levels need urgent attention. Most deliberations lead to one report or another which collects dust in the shelves, thereafter, such a Mashelkar Committee Report and Satwant Reddy Committee Report. Hope the present move will also not land up in the dustbin.

Dr Gopakumar Nair, CEO, Gopakumar Nair Associates

‘The year 2015 will be no different’

Dr Viraj Suvarna

The future isn’t what it used to be (Yogi Berra) More things change, more they remain the same. The year 2015 will be no different. On January 13, the next hearing of the infamous PIL will happen on a non-miscellaneous day in the Supreme Court. Hopefully the Solicitor General of India will give a fitting riposte to the petitioners, the Chief Justice will be satisfied, and will finally allow the impleaders to speak. The stranglehold on clinical trials will be lifted. Clinical research sites and ethics committees will need to be accredited by the Quality Council of India through the National Accreditation Board for Hospitals & Healthcare (NABH). The Common Drug Authority (CDA) Bill will be passed but with it, will come penal provisions for those who abrogate the laws governing the conduct of CTs in India. The amendment to the gazette notification on compensation will be notified. Companies that decided to stop doing clinical trials in India, because of the ambiguity and unethicality of financial inducement that the compensation norms could lead to, will start doing CTs again. Patents will continue to be challenged and the patent holders will take the infringers to court. Compulsory licensing may be promulgated where indicated. Price controls through the expanded national list of essential medicines will continue to plague the industry and a via media has to happen where both parties have to meet mid-way. Innovators will need to ensure maximum access so that patients can experience the value of the innovation through innovative pricing, access and assistance mechanisms.

Boehringer Ingelheim (BI) will need to position itself as BI India, poised to help the government shoulder the quadruple burden of stroke, diabetes, cancer and heart disease. In India, For India, and then the World or Reverse innovation. In the spirit of competitive collaboration, we can ‘transcelerate’ the number of appropriate patients who should be on the right products, in an ethical, quality conscious and compliant way. What we do for a living makes life worth living. Health will become a status symbol.

Dr Viraj Suvarna, Medical Director, Boehringer Ingelheim

‘The sector will significantly outperform the Sensex’

Sarabjit K Nangra

During 2014, the major trends that were visible in Indian pharmaceutical industry has been M&A activities, NPPA 2014 and continued USFDA import alerts. Amongst all these challenges, the sector continued to perform well on the bourses, on back of the robust earnings growth momentum during the period.

Amongst the key developments the Sun–Ranbaxy Labs merger, was a significant M&A activity in India after Piramal Healthcare formulation business take over by Abbott labs (in terms of the overall consolidation of the Indian formulation industry). After this merger, Sun Pharmaceuticals has consolidated its position in the US generic markets also and strengthen its position in the ROW markets, where its presence has lower compared to its peers. Thus after the merger, the combined entity would be more diversified with US, ROW and India contributing 47 per cent, 31 per cent and 22 per cent of sales (FY2014) respectively.

In terms of market share, the combination of Sun Pharma and Ranbaxy creates the fifth-largest specialty generics company in the world (just behind Teva, Sandoz, Activas and Mylan), the largest pharma company in India with a market share of 9.2 per cent with a sales of $1.1 billion, and ahead of Abbott which has a market share of 6.5 per cent (which is a huge gap in the highly fragmented Indian market). In terms of asset base, the combined entity will have operations in 65 countries, 47 manufacturing facilities across five continents, and a significant platform of specialty and generic products marketed globally, including ~700 ANDAs.

On the drug regulatory front, the NPPA 2014, made its pricing policy transparent by inking its pricing formula, though in near-term some hiccups were noticed, which the government rectified by revoking the provision which allowed NPPA to put drugs under the pricing control even if there is an inter brand price differentials. On the, US front, the US FDA continued to have a strong vigil on the Indian companies good manufacturing practices. Amongst the noticeable ones units of Sun Pharma, which got an import alert and 483 respectively along with IPCA Labs, which also got the 483, while some of the units like that of Indoco Remedies, was able to come out of the US FDA import ban.

Going into FY2015, we expect the companies to post robust growth during the period. On the earnings front, for the current quarter, the companies are expected to post a top line growth of 15-20 per cent, with both domestic and exports posting robust growth during the period. Most of the companies in our coverage have started posting robust growth in the domestic markets during the last quarter, which was earlier reeling under the adverse impact of the new NPPA 2014 order.

On the net profit front, barring few companies, the sector is likely to post a 15-20 per cent net profit growth during the period. One near-term concern looming on the sector is the current volatility in the currency market, on back of weakness especially in the emerging markets. However, in our view the same in unlikely to have that great impact on the earnings of the companies or impact, could be more company specific. The reason behind the same is the the developed markets like the US and Europe, are showing economic strength and hence will remain in the position of strength in the near term, thus will compensate for the weakness in the Emerging Market (EM) currency weakness. Thus, with ~70 per cent of exports to the US and Europe, and around ~10 per cent to the EM we don’t expect any major impact on the earnings of the company.

Over a longer period of time, i.e, over the next two years, significant number of drugs are going off patent, along with higher share of generic drugs will aid the export-oriented companies should do very well. Even on the domestic front, they will continue to keep a strong pace by growing at close 15 per cent, thus firing from all engines. On the back of this, the sector will significantly outperform Sensex over long run.

Our top picks in the sector currently are Dr Reddys Laboratories, IPCA labs and Dishman Pharma. Apart from these stocks, the companies, where investors can create wealth if invested from long-term perspective of two to three years are Lupin, Cadila, Cipla, Wockhardt and Glaxo Pharmaceuticals.

Sarabjit K Nangra, VP Research – Pharma, Angel Broking

‘Govt should create an ecosystem that encourages R&D’

Glenn Saldanha

2014 has been a challenging and eventful year for the global pharma industry; marked by acquisitions, increased government intervention on the sector, slowdown in product approvals across markets and more complex regulatory requirements.

US, the world’s largest market for pharmaceuticals is witnessing a slowdown in product approvals and channel consolidation which is impacting overall sales for the industry. We however, feel that the pace of approvals should hasten in the coming months of the New Year, thereby helping companies record improved growth rates.

In the last couple of years, the Indian pharma industry has also seen a deceleration in growth rates (from healthy double digits a few years back to single digits today) due to factors like increasing competition and regulatory headwinds. But I feel companies with a differentiated product portfolio and strong emphasis on brand building will continue to do well in the coming year and outperform the industry growth rates.

On the other hand, the resurgence of LatAm markets like Mexico and Venezuela in 2014 has come as a big boost for companies like Glenmark, which has a strong presence in the region. The growth in these countries has been driven by new product approvals and some severe shortages in these markets. Although challenges still persist in Brazil, the largest market in the region, I believe LatAm will be a key growth driver for pharma companies in the coming years. Besides, certain emerging markets in Asia and Africa are also expected to do well in the future.

As regards, the focus areas for companies in 2015 and beyond, the foremost emphasis should be on continually building R&D capabilities needed to drive innovation. This is particularly required for countries like India, which unfortunately leads the world in terms of share of disease burden. Hence, innovation leading to new drugs is critical if we are to address the unmet medical need in the country. The government should also create an ecosystem that encourages innovative R&D in the pharma space in the form of tax incentives, regulations and grants for various research projects in the sector. The events of the last couple of years have underlined the importance of quality and compliance in the pharma industry. Therefore it goes without saying that organisations need to continually take steps to ensure compliance at all times.

Glenn Saldanha, Chairman and Managing Director, Glenmark pharma

‘Hope that the New Year will bring good opportunities’

Dr Manu Chaudhary

With the New Year approaching, the milieu is filled with new hopes, excitement, new promises, better prospects and opportunities for a progressive future. It is the best time of the year to reflect and evaluate the past and work towards a better and streamlined future. The recent past was a mixed bag for the pharma industry as a whole wherein the industry saw many ups and downs, be it in terms of renowned mergers, global awareness on antimicrobial resistance, new recommendations for NLEM2011 policy or stringent laws on clinical trials, introduction of audio-visual consents of patients for clinical trials and so on.

The Indian pharma industry operates in a very competitive environment and the road to success is full of hurdles in terms of the regulatory and pricing issues, stringent laws on research and development, clinical trials, poor funding on R&D in pharma and so on. Given the initiatives promised and taken by the new Indian Government and concerned pharma authorities, we expect certain changes for the betterment of this industry.

We are hopeful that the New Year would bring good opportunities and healthy environment to this industry to add on to its growth pace. We expect the government to diligently consider the list of drugs of NLEM 2011 and fix the ceiling prices of the products not just for the benefit of general public but also for ensuring good quality standard products because quality has a price and must be paid by consumer. The same also applies to all government tenders where prices go down on an Y-O-Y basis irrespective of minimum price order. There must be a lower sealing cap on the tender amount to maintain the quality of drugs in government supplies.

Apart from this, as a part of this industry and as a research-driven company, we expect our government to consider the importance and requirement of research in pharma and take initiative to support the companies for bringing out revolutionary products for the critical medical problems in the existing times. R&D is a key area that can help stand apart in this highly fragmented industry and bring accolades from across the globe. In this dynamic pharma industry, growth and success comes through a perfect multi-pronged strategic and systematic blend of R&D coupled with right mix of marketing techniques and talent pool. It is the only and best foot forward to establish yourself in this industry and offer innovative solutions to the mankind which are within the reach of a common man.

So this year, we would expect the Indian Government and the concerned authorities to focus on building and boosting systems to promote Indian research products usage in government hospitals and tenders to boost in-house R&D companies. This will boost Indian low-cost innovative solutions in form of new drugs meant for fighting the deadly menace of antimicrobial resistance and oncology and help them come up as a better and affordable alternative to high cost imported medicines.

Further, the government must devise systems to fast track regulatory approvals for clinical trials and marketing. A delay in dealing with regulatory approvals not only is a loss of market but sometimes a good drug is not accessible to public in times of emergency needs like Ebola/ bird flu/ antimicrobial resistance/ stress etc.

The government must make GMP compulsory for herbal manufacturers and give more clarity on certain regulations related to herbal drugs. This will not only boost Indian ayurvedic products acceptance in international market, but will help improve the quality of herbal medicine at par with international standards.

Every year, thousands of students pass out with M.Pharma /Ph.D/M.D degrees with some research projects, most of which do not reach the market ever. If the government makes at least 25 per cent of these research projects industry sponsored, this will not only lower the cost of R&D but the way to commercialisation of academic research will be increased significantly.

We at Venus, on the other end would be welcoming New Year with new marketing projects for fulfilling our mission and vision to take our blockbuster products globally and cater to the needs of mankind.

Dr Manu Chaudhary, Joint Managing Director and Director, Research, Venus Medicine Research Centre

‘Clinical research in 2015: The ghost of Christmas past, present and yet to come’

Abhijeet Das

The past two years have been difficult for clinical research in India, akin to the grim dreams out of the pages of Dickens. With introduction of regulations with no parallels in the world, the stakeholders have been left baffled in their attempts to come to terms with this new regime. The genesis of the transformation can be traced to the sub judice (since early 2012) proceedings of ‘Swasthya Adhikar Manch, Indore & Anr. vs. Union of India & Ors.’ (Swasthya Adhikar Manch Case).

Alishan Naqvee

In the aforementioned proceedings the petitioners (including Swasthya Adhikar Manch, Indore) have alleged glaring and shocking irregularities in the whole process and administration of clinical research in India. While going into the details of the petition would not be relevant to the present discussion, it would not be out of place to mention here that some of the inferences and arguments put forth therein represent a highly myopic assessment of the whole clinical research process in India. The ensuing judicial scrutiny has resulted in a backlash that the life sciences and healthcare sector have been reeling under since the early 2013. It is pertinent to mention here that, the industry is not an absolute victim, as it waited, watched and did nothing, till disaster actually struck.

After drawing some criticism from the Apex Court along with adverse media coverage, the Government went into overdrive in January 2013, notifying amendments to the existing provisions in the Drugs and Cosmetics Rules, 1945 (Rules) in addition to certain orders applicable to the clinical research stakeholders. Some of the key revisions/additions to the legal framework vis-à-vis clinical research, since then are:

  • In case of injury (or death, as the case may be) to the patients in a clinical research, the sponsor of the clinical research, i.e., the pharmaceutical company or the institution or the academician (who initiates the clinical research):
    (a) would be liable to bear the expenses for the medical management for the injury, for as long as required, irrespective of the cause thereof; and
    (b) would be is liable to pay financial compensation (over and above the expenses incurred for medical management) for an injury (or death, as the case may be) related to the clinical research (related injury/death
  • An injury or death of a patient is considered a related injury/ death, if the same is resultant of:
    (a) adverse effect of the drug/devise under research;
    (b) violation of the approved protocol, scientific misconduct or negligence by the sponsor or his representative or the doctor (investigator);
    (c) failure of the drug/devise under research to have the intended therapeutic effect;
    (d) use of placebo in a placebo-controlled clinical research;
    (e) adverse effects due to concomitant medication excluding standard care, necessitated as part of approved protocol;
    (f) injury to a child in-utero because of participation of parent in clinical research; and
    (g) any procedures involved in the clinical research.
  • The ‘provisionally final’ compensation formula was introduced providing for compensations for related injury/death, ranging from Rs 4,00,000 (Rs four lakh only) to Rs 73,60,000 (Rs  seventy three lakh and sixty thousand only). Recently, on December 15, 2014, the CDSCO has notified the final compensation formula to determine the quantum of compensation in the cases of related Injury (other than deaths).
  • Mandatory registration along with provisions for suspension or cancellation, of the ethics committees which accord approvals to the clinical research along with the layout for its composition.
  • Mandatory audio-video recording of the informed consent process in clinical research.
  • The number of clinical research that a doctor (as investigator) can participate in, is limited to three.

The lacunae in some of these stipulations mandated under the new regime are apparent to everyone even remotely associated with clinical research in India. For instance, medical management for research patients is a noble idea, but the same may incentivise the patient to enrol in the study, thus making the enrolment unethical. Further, in spite of the fact that clinical research is undertaken to study the effectiveness of a particular drug, under the regulations if the same fails to have the desired effect, resulting in any injury/death to the patient; the sponsor would be liable to pay compensation. The aforesaid oversight by the regulators, were also compounded by the compensation formula, which has burdened the sponsor with liability in case of injury/death in the said circumstances, over and above medical management (which is irrespective of the injury being related or unrelated to the clinical research).

The aforesaid revisions have left clinical researchers in a frenzy to adapt and translate the regulatory requirements into the day to day conduct of clinical research in India. While the stakeholders were clearly hampered under the ambiguity and uncertainty of the new regulatory regime, the Central Drugs Standard Control Organization (CDSCO) was also quick to close its doors to the countless questions raised by the stakeholders. In terms of an office order, the CDSCO has mandated all queries of the stakeholders to come through the state licensing authority and not directly.

Separately, in August 2013, the Drugs and Cosmetics (Amendment) Bill, 2013 (Bill) was introduced in the Rajya Sabha, which envisaged an overhaul of the complete regulatory framework concerning clinical research. The Bill provided for the establishment of a Central Drugs Authority to replace the CDSCO, which would be in charge of registering all clinical research in India. Further, the Bill brought under its domain devices and cosmetics, which are to a large extent not included in the extant framework for clinical research, and amongst other things laid out the framework for the constitution and powers of ethics committees. One of the key features (and fear) of the Bill was the introduction of criminal/ penal punishments (sometime going upto 10 years of imprisonment) along with minimum monetary penalties for most offences stipulated therein. It is pertinent to note that the Bill is presently ‘pending’ in the Rajya Sabha.

In April 2014, the government notified the Drugs and Cosmetics (Third Amendment) Draft Rules, 2014 (Draft Rules), which had signs of offering a respite to this shackled sphere. Amongst other things the Draft Rules provided for:

  • Free medical management to be provided to the patient for as long as required or till such time it is established that the injury is not related to the clinical research, whichever is earlier.
  • In case of related injury/ death arising out of, failure of the drug/ device under research to have the intended therapeutic effect or, a placebo controlled trial; the obligation of the sponsor to compensate would be limited to cases where the standard care, though available, was not to be provided to the patient.
  • The Draft Rules also relaxed certain reporting time frames introduced under this new regime, which where proving difficult to comply with.

Since April, the sector has been waiting with bated breath for the aforementioned revisions to take effect. However, the same has not been forthcoming. This would not have been an absolute solution, but certainly would have been a welcome relief from the continuous battering that clinical research participants in India have been under.

In the last couple of years, things have taken a turn for the worse vis-à-vis clinical research in India. The uncertainty surrounding the Swasthya Adhikar Manch Case and the subsequent scrutiny that the regulators have come under, has resulted in an onslaught of regulations being dealt on the life sciences and healthcare sector, specifically in the field of clinical research. While, regulation is always welcome and over regulation is acceptable (amid protest), the one thing that is a death trap to any sector, is uncertainty and ambiguity in regulations. This is the case applicable to clinical research at the moment, and unless there’s some stability on this front, India would most
certainly end up denying its citizens advanced healthcare, which it so obviously requires.

At the present time, we do not and cannot know what the year 2015 holds for clinical research in India. That being said, the ending of the proceedings in the Swasthya Adhikar Manch Case would most certainly be welcomed by the stakeholders. This might allow the regulators to turn their attention on some of the aforementioned oversights in the extant regulations. If addressed adequately, the modified regulations would go a long way in getting clinical research in the country back on its feet.

(Disclosure: Alishan Naqvee has represented ISCR in the Supreme Court in the Swasthya Adhikar Manch Case)

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