Creating ‘Shared Value’ in Pharma – The Way Forward

Creating ‘Shared Value’ in Pharma – The Way Forward

Many Pharmaceutical companies, both global and local, are struggling with a plethora of critical challenges. With the industry reputation diving south successful navigation through this headwind has become an onerous task, more than ever before.

Under this backdrop, the article, titled “Creating Shared Value” of Michael Porter and Mark Kramer, published in the Harvard Business Review (HBR) in its January – February 2011 issue, becomes very relevant to analyze the situation.

The paper says: “Companies are widely thought to be prospering at the expense of their communities. Trust in business has fallen to new lows, leading government officials to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle. A big part of the problem lies with companies themselves, which remain trapped in an outdated, narrow approach to value creation.”

The authors also articulated that pharma players, generally focus on optimizing short-term financial performance, overlooking the greatest unmet needs in the market as well as broader influences on their long-term success. They questioned: “Why else would companies ignore the well-being of their customers and the economic distress of the communities in which they produce and sell?”

Porter and Kramer advised the companies to bring business and society back together – redefining their purpose as creating “shared values”. It means generating economic value in a way that also produces value for society by addressing its challenges.In this article, I shall explore in this area.

Not CSR or Philanthropy, its engaging business as business, for social progress:

Creation of “Shared values” for a business is quite different from “Philanthropy” or “Corporate Social Responsivity (CSR)”.…continue reading…

Making Drug Pricing Transparent May Work Better Than Price Control

Making Drug Pricing Transparent May Work Better Than Price Control

“Now, one-fourth of the Indian pharma market to be under price control.” This possibility was reported by some national dailies, on July 03, 2018. The new methodology of drug price control could be anything – ranging from earlier ‘cost-based’ model to the current ‘market-based’ one – to even the new pharmaceutical index, as proposed by the Government ‘think tank’ – Niti Aayog. This gives an indication of acceptance by the policy makers that none of the price control mechanisms have worked as intended, till the last 48 years. Otherwise, why are such changes taking place?

On the other hand, the drug pricing models of the pharma industry, are also not working. Drug pricing related issues, directly or indirectly, continue driving pharma reputation down south. Strong negative vibes on the industry continues, despite a vigorous and expensive advocacy of the industry trade associations, primarily positioning the need to encourage ‘drug innovation’ right at the front. No perceptible impact of this pharma strategy on the policy makers is still visible, besides a few spoon-fed media editorials – as many believe. The saga continues. The pricing focus keeps remaining solely on a company’s financial interest. How far the price of a drug can be stretched to benefit the company, is the point to ponder. Why aren’t the basis and rationale of drug pricing made transparent, voluntarily? In this article, I shall discuss on this contentious issue.

Current pricing approach becoming counterproductive: 

The good news is, of late, some global drug majors apparently have been compelled to realize that this approach is gradually becoming more and more counterproductive, inviting more drastic measures from many Governments.…continue reading…

Unbridled Box Office Power Helps Reduce Cancer Drug Prices

Unbridled Box Office Power Helps Reduce Cancer Drug Prices

Unbridling box office power in the healthcare space has just commenced. A Chinese social comedy film named ‘Dying to Survive’, released onJuly 05, 2018, sparked off public concern on high priced cancer drugs in China.The film depictsa real-life, heart wrecking story of a leukemia patient’s struggle for survival by asking a drug dealer to smuggle illegal cheap drugs from India into China. The medicine trader later finds his redemption, and becomes a hero saving more patients – as the China Internet Information Center in Beijing reported.

Consequently, reacting to public outcry for cheaper cancer drugs in China, the country’s all-powerful health insurance administration is, reportedly, aiming to deepen discounts on cancer drugs, which are already on its National Reimbursement Drug List (NRDL). The effort – as the report says, would use public bidding and procurement, specifically for cancer therapies. Meanwhile, officials will start enlistment negotiations for treatments not yet included on the coverage list.

Nearer home, responding to a similar public concern, although not a film-induced one, Indian Government announced a major relief for cancer patients. In March 2017, the National Pharmaceutical Pricing Authority (NPPA) slashed prices of some cancer drugs by up to 86 percent, as reported in the media. For example, the price of AstraZeneca’s lung cancer drug – was brought down from Rs 29,259, to Rs 3,977. This could well be an off the cuff approach. Nevertheless, the Chairman of NPPA assured that more cancer drugs will soon come under price control. That said, if with such degree of price reduction, all the above brands can still survive, it may not be difficult for many to fathom what factor really drives the cancer drug pricing models of the drug makers? …continue reading

Blockchain: A Game Changer For Safe Medicines

Blockchain: A Game Changer For Safe Medicines

‘Your medicine box may have fake drugs’ was the March 18, 2018 headline of a popular pan Indian news daily. Just the year before, the 2017 report of the World Health Organization (WHO), also flagged that around 10.5 percent of all medicines in low-and middle-income countries, including India are substandard or fake. Even prior to this, another news headline of February 15, 2016 highlighted: ‘1 In 7 Indian Drugs Revealed As Substandard.’ These reports paint a scary situation for consumers of medicine in India, especially when the same incidence is just around one percent in the high-income countries of the world. Nevertheless, getting into a protracted discussion to prove the veracity of this issue, may not yield much, either. Some may even term these as efforts to ‘sensationalizing’ the situation.

That said, the good news is, the Government Think Tank Niti Aayog and also the Drug Technical Advisory Board (DTAB) of India,are reportedly contemplating to combat this menace with cutting-edge technology. In this article, I shall dwell on this threat, starting with its profound impact, not just on human health, but also on the economic and the socioeconomic space of India.

Why is it so important?

The most obvious fallout of this hazard is of course borne by the consuming patient.  The other two critical impact areas has also been well captured by the World Health Organization (WHO) in its 2017 study, titled ‘A study on the public health and socioeconomic impact of substandard and falsified medical products’.…continue reading

Pharma Brand Building: Criticality of Enhancing End-To-End Customer Experience

Pharma Brand Building: Criticality of Enhancing End-To-End Customer Experience

In today’s fast-changing world, the types of medicines being developed, the way technology contributes to health, and how the value of health care is calculated, are all undergoing a metamorphosis. A wave of cell and gene therapies are bending the definition of what constitutes a drug, both clinically, and in terms of expectations of outcomes, duration of treatment and costs. Global health is poised to meet a series of key turning points, and changes seen in 2018 will mark the key inflections that drive the outlook for the next five years and beyond.

These are examples of key observations, as captured in the March 13, 2018 research report, titled: “2018 and Beyond: Outlook and Turning Points,” of the IQVIA Institute (previously IMS Institute). Arising out of these, the report envisages the following key impacts on the pharma industry in the next five years – from 2018 to 2022:

• Patent expiry impact will be 37 percent larger than the prior five years, including both small molecule and biologics.
• New medicines’ growth will be slower in 2018 – 2022 than the period from 2013 -2017.
• Net price levels for branded drugs will rise modestly in the United States at 2–5% per year but will fall in other developed markets.
• Volume for existing branded and generic medicines will remain slow, with the ongoing shifts towards newer medicines over time.
• To increase access to medicinesGovernment and other payers to focus on addressing outstanding healthcare disparities or to invest in approaches to address system inefficiencies.

Such a situation, would obviously impede performance and productivity of many pharma players – both research-based and also the generic ones, across the world, including India.…continue reading