It’s happening in the West, and is equally widespread in the Eastern part of the globe too, though in different ways and forms, as both the national and international media have been reporting, consistently. The phenomenon is all pervasive, and directed towards stalling almost all possible future laws and policies that a large section of the pharma industry sees as a potential apocalypse for their business models.
It has a wide reach and covers, for example, the policy-decision makers or possible policy-decision makers in the near future, other policy influencers, many hospitals, and the final interface with the patients – the prescription decision makers.
Although, it affects health care as a whole, in this article I shall focus just on the pharma industry.
Looking West:
While looking at the West, I would cite a recent example from the United States. It’s yet another déjà vu for the western pharma industry.
On August 26, 2016, ‘The Los Angeles Times’ in an article titled, “Drug companies spend millions to keep charging high prices” stated, “Of roughly US$ 250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount – about US$ 70 million – has been contributed by deep-pocketed drug companies to defeat the state’s Drug Price Relief Act.”
The Drug Price Relief Act of California, is aimed at making prescription drugs more affordable for people in Medi-Cal and other state programs by requiring that California pays no more than what’s paid for the same drugs by the Department of Veterans Affairs of the United States. It would, in other words, protect state taxpayers from being ripped off.
The report also quoted Michael Weinstein, President of the AIDS Healthcare Foundation saying that industry donations to crush the Drug Price Relief Act “will top US$ 100 million by the election, I’m quite certain of it.” He further added, “They see this as the apocalypse for their business model.”
Looking East:
While citing a related example from the eastern part of the globe, I shall draw one from nearer home – India, as China has already been much discussed on this matter. This particular media report on a wide-spread pharma industry practice, though took place in a different form, as compared to the United States, belongs to the same genre, and captures yet another déjà vu involving the pharma players operating in the eastern world, similar to what’s happening in the west.
India:
On August 30, 2016 a report published in ‘The Economic Times’ titled, “Pharma cos offer freebies to doctors, violate code: MP” quoted a serious allegation of a Rajya Sabha Member of the Parliament on this issue. The MP claims, he has evidence of four drug companies’ recently bribing doctors across India to push their products. These four companies include both large Indian and multinational pharma players, and two out of these four features, among the top five companies of the Indian Pharma Market (IPM).
The lawmaker further said, “I am waiting for the minister’s response on this issue. Nothing has come so far. We also have the names of the doctors who have taken bribes, which we will release eventually,”
Another September 06, 2016 report, published by the same business daily in India, categorically mentioned that TOI has documents to establish that one of these companies took hundreds of doctors from across India to places like Vancouver, Amsterdam, Oslo, Venice, New York, Boston, Brussels and Moscow. The documents reportedly include email exchanges between the company executives, city-wise lists of doctors with ‘legacy codes’, names of spouses, passport copies and visa copies, and show how the company has spent several millions of rupees in taking doctors and sometimes even their spouses, ostensibly to attend medical conferences.
Other NGOs have also reportedly submitted proof of the same to the Government for remedial measures in India, against such gross ongoing unethical practices in pharma marketing.
It is worth mentioning here that all these expenses are part of the marketing budget of a company and the sum total of which is built into the ‘retail price to the patients’ of the respective drugs, even in India.
Two broad processes for the same goal:
Thus it emerges, very broadly, there are two key processes followed by many in the pharma industry to achieve the same goal of increasing profit. These are as follows:
- Marketing malpractices in various forms to influence prescription decision
- Arbitrary increase of drug prices, for both branded and generic medicines
The justification:
Many global pharma majors still keep justifying, though the number of its believers is fast dwindling, that the high new drug prices have a linear relationship with the cost of new drug innovation. Even for argument’s sake one nods in favor, the critical question that needs to be answered is, if this is the basic or primary axle on which the wheel of innovation moves, won’t affordability and access to drugs for a significant number of the population be seriously compromised?
If not, why is this furor, across the world, is fast assuming a snowballing effect? Why are even the generic drug prices going up steeply even in the United States, where some of the largest Indian drug manufacturers are being questioned for the same by the competent authorities of the country?
I deliberated on a similar subject in my article titled, “The Next Frontier: Frugal Innovation For High-Tech Drugs”, published in this Blog on May 20, 2016.
Marketing malpractices:
Laws are fast catching up to book the offenders resorting to pharma marketing malpractices in most of the countries of the world, including China. This is vindicated by the fact that global pharma players are now paying billions of dollars a fine, in various countries, especially in the West.
Just as no criminal law can totally eliminate any crime, anywhere in the world, despite a heavy dent in pharma’s reputation related to this area, many companies still continue to indulge in such malpractices, blatantly, and even with some brazenness.
India:
Unfortunately, in India, the inertia to catch the bull by the horn and lack of governance in this regard continues, making patients pay a heavy price. As the above media report indicates, both MNCs and the local players indulge into this deplorable activity almost without any inhibition. As many industry watchers believe, some companies have started hiring these services through professional third parties just to create a facade for taking the high moral ground, as and when required, both with the government and also other stakeholders.
Initiating a step in this direction, on December 12, 2014, the DoP announced details of the ‘Uniform Code of Pharmaceutical Marketing Practices (UCPMP)’, which became effective across the country from January 1, 2015. The communique also said that the code would be voluntarily adopted and complied with by the pharma industry in India for a period of six months from the effective date, and its compliance would be reviewed thereafter on the basis of the inputs received.
UCPMP, though not a panacea, was aimed at containing pharma marketing malpractices in India. However, as happened with any other voluntary pharma marketing code, be it of a global drug major or their trade associations, similar non-compliances were detected even by the DoP with voluntary UCPMP. This gross disregard to the code, apparently prompted the DoP contemplating to make the UCPMP mandatory, with legal implications for non-compliance, which could possibly lead to revocation of marketing licenses.
In this context, it is worth recapitulating that the Union Minister of Chemicals and Fertilizer – Mr. Ananth Kumar, in his reply in the Indian Parliament, to a ‘Lok Sabha Starred Question No: 238’ on the UCPMP based on the inputs received, also had admitted:
“The Government had announced Uniform Code for Pharmaceutical Practices (UCPMP) which was to be adopted voluntarily w.e.f. 1st January, 2015 for a period of six months and has last been extended up to 30.06.2016. After reviewing the same it was found that the voluntary code was not working as expected. The Government consulted the stakeholders, including NGO’s / Civil Society members and after examining their suggestions it is now looking into the viability of making the Code Statutory.”................
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