Is India in The Eye of The AMR Storm?

Is India in The Eye of The AMR Storm?

‘With 700,000 people losing battle to antimicrobial resistance (AMR) per year and another 10 million projected to die from it by 2050, AMR alone is killing more people than cancer and road traffic accidents combined together.’ This was highlighted in the Review Article, ‘Antimicrobial resistance in the environment: The Indian scenario,’ published in the Indian Journal of Medical Research (IJMR), on June 03, 2019.

The article further noted, ‘AMR engendered from the environment has largely remained neglected so far,’ which has a snowballing effect. Illustrating the enormity of its impact, the researchers recorded: ‘Economic projections suggest that by 2050, AMR would decrease gross domestic product (GDP) by 2-3.5 percent with a fall in livestock by 3-8 percent, costing USD100 trillion to the world.’

Besides International media, fearsome consequences of AMR are also being highlighted by the Indian media from time to time. For example, on November 21, 2018, a leading national business daily carried an apt headline: ‘India in the firing line of antimicrobial resistance.’ More intensive coverage of such nature for this public menace, would hopefully appeal to the conscience of all those who can meaningfully address this situation, especially the government.

Against this backdrop, I shall explore in this article, whether India is really in the eye of this AMR storm, which is posing an unprecedented threat to many lives, perhaps more in India. 

India is being called the AMR capital of the world: 

Analyzing the emerging research data in this area, India was referred to as ‘the AMR capital of the world,’ in the 2017 Review Article, title ‘Antimicrobial resistance: the next BIG pandemic.’ Curiously, besides umpteen number of published papers documenting this scary development, very few enlightened individuals would dare to push an argument to the contrary. Whereas, besides framing a policy document on AMR,nothing much is changing in India on this score. This is happening, even when it is evidenced that a gamut of the most powerful antibiotics, are not working against many deadly bacteria. Added to it, India still doesn’t have a public database that provides death due to AMR.

Are adequate resources being deployed to fight the menace:

Today one would witness with pride that India’s ‘Chandrayaan 2’ lunar mission is moving towards the Moon’s south polar region, where no country has ever gone before. At the same time, despite AMR threat, India’s budgetary allocation for health in 2018-2019, reportedly, shows a 2.1 percent decrease of the total Union Budget from the 2.4 percent in 2017-2018.

It is interesting to note that India: ‘Despite being the world’s sixth largest economy, public health spending has languished at under 1.5 percent of GDP, one of the lowest rates in the world. For comparison, the United Kingdom shelled out 9.6 percent of its GDP in 2017 on health. The United States’ health expenditure is 18 percent of GDP.’

‘Ayushman Bharat’ and health care infrastructure:

Recently lunched public health program - Ayushman Bharat, although is not a Universal Health Care (UHC) program, it has targeted to cover ‘less than half the population and excluding 700 million people’. While giving a thumbs-up to this initiative, if one looks at the overall health infrastructure in India to make it possible as intended,…continue reading…

The Challenge of Holistic Value Creation With Pharma M&A

The Challenge of Holistic Value Creation With Pharma M&A

Two mega deals, right at the dawn of 2019 gave a flying start to Merger & Acquisition (M&A) activities, in search of inorganic growth, by some large pharma companies. The two biggest ones are Bristol-Myers Squibb’s (BMS) USD 74 billion buyout of Celgene, and AbbVie’s USD 63 billion purchase of Allergan, as announced on January 03, 2019 and June 25, 2019, respectively. However, overall in the second quarter of 2019, there were, reportedly, only 22 deals – ‘the smallest quarterly deal count for at least a decade.’

As a strategic option for greater value creation to drive growth, M&A is being actively considered over a long period of time. The key focus of such value creation for the company remains primarily on enriching the pipeline of New Chemical or Molecular Entities (NCE/NME) for revenue synergy, besides cost synergy. This is understandable. But, for various reasons, alongside, a key question also comes up for debate – is the core purpose of such value creation to drive companies’ growth, primarily with more number new drugs, sustainable? The query assumes greater relevance in the evolving new paradigm. This is because, a basic shift is taking place in the core organizational purpose of value creation.

Thus, it appears, the nature of value creation through M&A would also matter as much. Can it still remain a drug company’s financial health centric, any longer? Should the M&A initiatives also not take under their wings, the value-offerings expected by patients from a drug company – beyond innovative pills? Would a holistic value creation through M&A would now be the name of the game? If so, how?  The discussion of my today’s article will revolve around these questions. Let me initiate the deliberation by recapitulating the key motivation behind M&A initiatives of the drug industry.

A key motivation behind the M&A initiatives in the drug industry:

While recapitulating one of the key motivations behind pharma M&As, let me refer to some interesting and recent studies, such as, the 2019 paper of McKinsey titled, ‘What’s behind the pharmaceutical sector’s M&A push.’ It also acknowledges, the use of M&A to bolster drug innovation is unlikely to change any time soon.

That many drug companies actively pursue the M&A option as a game changer for inorganic growth, is vindicated by the recent big deals, as quoted above. Since early 2000 and before, the companies that made the biggest deals to create new value synergies with, have been paying heavy deal premium to enrich their new product pipelines. Quite often it includes several new and emerging classes of drugs, as acquisition targets.

This also gets corroborated in the Press Release of the 2019 BMS deal, which says: ‘The transaction will create a leading focused specialty biopharma company well positioned to address the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease through high-value innovative medicines and leading scientific capabilities.’

Lesser yield of traditional pharma M&A than the broader market:

This was emphasized in the June 06, 2019 article, published in The Washington Post, titled ‘Big Pharma Has to Bet Big on M&A. Investors Don’t.’ The analysis found, the returns from the big pharma deals ‘don’t look as good compared to the broader market’, although for very patient investors many of these have resulted in longer-term gains. To illustrate this point, the paper pointed out: ‘Of the eight biopharma deals worth more than USD 40 billion that closed in the last 20 years, only one delivered better returns than the S&P 500 five years after it closed.’

Naming Merck & Co..’s USD 47 billion acquisition of Schering-Plough Corp. in 2009, the researcher justified: ‘That deal is arguably something of an accidental winner. Long-term success didn’t come from any of the products that Merck targeted in the merger; instead, an afterthought of an antibody that was initially set to be sold off became Keytruda, a cancer drug that’s projected to generate USD 15 billion in sales in 2021.’

Innovative product launches no longer a holistic value-creation for patients: 

Thus, unlike yesteryears, enriching new and innovative product pipeline through M&A won’t serve the key purpose of value-creation for patients to treat deadly diseases in a holistic way. The primary reason for the same was articulated in the Deloitte Paper titled, ‘Disruptive M&A: Are you ready to define your future?’ The article emphasized: ‘The confluence of technological change, shifting customer preferences, and convergence across sectors is redesigning how products and services are developed, delivered, and consumed.’

Thus, mere acquisitions of innovative product portfolios, intended to provide better treatment choices for patients, may not meet the holistic needs of consumers’ while going through the disease treatment process. In depth understanding of such preferences with all associated nuances, is absolutely essential in today’s complex business scenario. Which is why, it calls for avant-garde type or ‘disruptive M&As’, that can help alter the business growth trajectories, making the disrupted company disrupt the competitive space, being game changers of the industry.

Calls for avant-garde type or disruptive pharma M&As:

Today, it’s crucial for any drug company to create a unique treatment experience for patients. This is emerging as a pivotal factor for the success of a brand.

Even most innovative products will need to be…continue reading…

Deadly Climate Change Impact On Human Health: How Prepared Is India?

Deadly Climate Change Impact On Human Health: How Prepared Is India?

It’s not uncommon to find many people, including heads of countries, expressing their serious apprehensions in public, about the scary impact of climate change. Just the last year, on November 26, 2018, BBC News captured one of such incidences with the astonishing headline: “Trump on climate change report: I don’t believe it.” The findings of this report have underscored, ‘unchecked global warming would wreak havoc on the US economy.’

Similarly, a few years ago, on September 05, 2014,CNN News 18 quoted Prime Minister Narendra Modi as saying: “Climate has not changed. We have changed. Our habits have changed,’ while answering to a question on climate change. Regardless of the outcome of any split-hair analysis of the rationale behind such statements from the world leaders, such public discourse could trivialize the possible catastrophic impact of climate change on the planet earth.

Be that as it may, that climate change is taking place, carrying all its ill-effects, is real now, without any ambiguity. There is also widespread consensus among the members of the United Nations that ‘the Earth is warming at a rate unprecedented during post hunter-gatherer human existence.’

It is worth noting that way back in 2001, the ‘Third Assessment Report of the Intergovernmental Panel on Climate Change’, further recorded: “There is new and stronger evidence that most of the warming observed over the last 50 years is likely to be attributable to human activities”, most importantly the release of greenhouse gases from fossil fuels.

Several ‘International Agreements’, including the Paris Agreement on Climate Change - all supported by hard scientific data, have called for immediate, quantifiable measures in each country to address the ‘wide-ranging environmental threats, such as ozone depletion and long-range transboundary air pollution.’ Against this backdrop, in this article, I shall focus on the dreadful effect of climate change in the proliferation of a wide-variety of ailments, especially infectious diseases, within a few decades. While doing so, let me first have a quick recap on what is ‘Climate Change’, in a simple language.

Climate Change – a quick recap:

According to the United Nations, ‘Climate Change is the defining issue of our time and we are at a defining moment. From shifting weather patterns that threaten food production, to rising sea levels that increase the risk of catastrophic flooding, the impacts of climate change are global in scope and unprecedented in scale. Without drastic action today, adapting to these impacts in the future will be more difficult and costly.’

It’s important to note, although, the planet Earth’s climate is constantly changing over geological time, the current period of warming is occurring more rapidly than many past events. Scientists are concerned that the natural fluctuation or variance, is being overtaken by a rapid human-induced warming, as they emit more greenhouse gases. As these gases get trapped in the atmosphere, more heat is retained that has serious implications for the stability of the planet’s climate, even impacting human health with grave consequences. The World Health Organization (W.H.O) has also warned that the health of millions could be threatened by increases in malaria, waterborne disease and malnutrition.

Its impact human health:

The direct and indirect impact of climate change on human health is profound. Before I go into the specifics, let me indicate some of the direct ones, as captured by the Center for Health and the Global Environment (CHanGE), University of Washington. This is sans any charts and maps, unlike the usual practice:

• Increasing temperatures are causing poor air quality that can affect the heart and worsen cardiovascular disease.

• Increasing exposure to pollen, molds, and air pollution, all of which can worsen allergies and other lung diseases, such as asthma. 
  …continue reading…

Self-made Barriers To Business Transparency Impacting Drug Access

Self-made Barriers To Business Transparency Impacting Drug Access

A recently published book on pharma industry tried to expose the deceit behind many generic-drug manufacturing—and the consequent risks to global health. This publication is described as an ‘explosive narrative investigation of the generic drug boom that reveals fraud and life-threatening dangers on a global scale.’ However, I reckon, this is just a part of the story, and its huge adverse impact on public health flows generally from the following facts:

• Greater use of generic drugs is hailed as one of the most important public-health developments of the twenty-first century.
• Today, almost 90 percent of global pharma market, in volume terms, is comprised of generics.
• These are mostly manufactured in China and India.
• The drug regulators continuously assure patients and doctors that generic drugs are identical to their brand-name counterparts, just less expensive.

No question, such deceit, blatant fraud and data manipulation – seriously affecting drug quality of generic medicines, shake the very purpose of making affordable drugs accessible to many. But, simultaneously, lack of transparency – right across the various functions of a pharma business, is also making a host of modern life-saving drugs unaffordable and inaccessible to even more patients. Although, both are despicable acts, but the latter one is not discussed as much.

Thus, in this article, I shall dwell on the second one – how attempts for pharma business ‘transparency’ for expanded drug access to patients, getting repeatedly foiled, especially in light of what happened on May 28, 2019, in the 72nd World Health Assembly (WHA).

Does pharma want low business transparency to continue?

Despite so many encouraging initiatives being taken in the pharma industry over a period of time, gross lack of transparency in its business continues, since long, despite this is being a raging issue. The obvious question, therefore, remains: Does pharma want low business transparency to continue? Thus, to give a perspective to this pertinent point, I shall quote two important observations, appeared in ‘MIMS Today’ – the first one on April 17, 2017, and the other came a year before that, on November 20, 2016, as follows:

• “A market cannot function when purchasers have limited information and, in the case of prescription drugs, pricing is a black box. Prices for drugs are clearly rising at rates that far exceed inflation and the level of any rebates or discounts offered by manufacturers,” experts opined. They further said, to hold the industry accountable, Access to Medicine Foundation (AMF)’ regularly compiles an index to rank the progress made by each large drug maker in the area of business transparency. Curiously, they concluded, ‘the number and quality of evaluations for the effectiveness of these programs are lacking.’

• “Lack of transparency of drug makers was also identified. Their policy positions, political contributions, marketing activities and memberships in associations and the associated financial support provided and board seats held were all analyzed. And only then, the ‘AMF’ reached a consensus that transparency remains low in all areas. The analysts further added, ‘there is a lack of transparency and rigor in monitoring and evaluating the access-to-medicines initiatives as well as the link between prices and development costs. Thus, ‘greater transparency from manufacturers to disclose R&D costs for drugs and evaluation of the initiatives’ is imperative.

Despite key policy makers’ favoring transparency, it remains elusive:

To illustrate this point, let me draw a recent example from the United States.

Alex M. Azar II, who is currently the Secretary of Health and Human Services of the United States, also served as president of Eli Lilly USA. LLC from 2012 to 2017 supports the need of business transparency in the pharma industry. Last year, he also emphasized:

“Putting patients in charge of this information is a key priority.…continue reading…