Affordability: What does procurement have to do with it?

Posted by on Apr 30, 2017 in Blog | 0 comments

In the last blog, we looked at how we can enable pharmaceutical manufacturers to use quality as a differentiator and empower the citizens of our country to make more informed decisions about the medicines that they purchase. We briefly touched upon access, and I said we will come back to revisit this topic later. Let us now look closely at a few interesting facts about how our public procurement systems work, which is a key determinant of access.

Other than policy related documents on how procurement of medicine “should” work in our country, there has been very little research on its implementation and on-the-ground reality of how it actually does. The best reference I came across is this 2013 study published in the British Medical Journal where the authors from Indian School of Business and Indian Institute of Public Health compared drug procurement among five Indian states. Using information collected through the RTI process among other things, they looked at how Tamil Nadu, Kerala, Odisha, Punjab and Maharashtra implemented their drug procurement policies. The article makes for very interesting reading, and their conclusions are nicely summarized in this poster,

For the purposes of our discussion here, I would like to draw your attention to the following conclusions drawn by the authors followed by my comments inline:

  • Lack of any sophistication in demand estimation and forecasting models. States use previous year’s consumption as the basis, no feedback in the modeling exercise.
    • In today’s complex and dynamic disease burden conditions, clearly we can do better than this. Forecasting is sophisticated science, there is absolutely no reason we shouldnt utilize it in our demand planning.
  • Quality control: Empaneled private labs and/or government labs.  Tamil Nadu has empaneled laboratories to which every sample from each batch is sent for quality testing before distributing to user institutions.  Odisha and Maharashtra do not have any quality testing protocols in place, apart from the supplier s internal quality certificate. Pre-qualification criteria, GMP/WHO-GMP/US-FDA is a requirement for all
    • I have trouble reconciling this fact with what the DCGI and the CDSCO has publicly said, that a large majority of our manufacturing facilities do not conform even to Schedule M, forget WHO-GMP. How then are these states fulfilling this requirement?
  • More than half of the suppliers to Tamil Nadu are from within the state. The same statistic for Kerala is 14%, for Maharashtra 34% and for  Odisha, a surprising 0%! 
    • While it could be a good practice to help develop the local drug manufacturing industry, this also points to political patronage. Although difficult to substantiate, patronage manifests itself in many ways, including shortages, availability and overpayments.
  • There was no observed correlation between price vs. volume but there is a negative correlation between level of quality control and pre-qualification criteria vs. price
    • This is very surprising, particularly the second observation. Clearly, quality is not a differentiator when it comes to public procurement it appears. As far as the first observation goes, doesn’t it defeat the whole purpose of having a consolidated procurement system?
  • Tracking dispatched/delivered drugs: value based to none
    • Again, we can do a whole lot better here. Leakages within the system benefit no one, especially, those toward whom this is targeted. Political patronage plays a key role here.
  • A clear difference in the efficiency of the processes can be seen between the autonomous organizations and the state-run organizations in terms of lead times for payments, quality control and in the usage of IT systems and so on. Autonomy refers to the extent of government involvement in the decisions of the procurement organization; fully autonomous’ implies minimal involvement while government owned indicates a high degree of involvement. The idea of having an autonomous organization in the public sector is to enable it to function more transparently by avoiding the plausible procedural delays and also to enable it to make decisions of contracting and outsourcing that are best suited for the prosperity of the organization.  

The procurement process followed by the central and the state governments is vividly described, with interesting anecdotes in this 2007 Working Paper from the University of Edinburgh, which also makes for very interesting reading.

While this study is limited to just a few states, the observations and conclusions drawn are applicable to all. If access to medicines is a priority for us, several of these obvious gaps in our supply chain need to be better managed.

There are no silver bullets, this is a complex web. Most of the changes needed here are systemic. However, there are a number of things we can do in short order to help. Here are some low hanging fruit that we can adopt to simplify our supply chain:

  • With the advent of GST, one of the key reasons for the existence of the many Clearing & Forwarding (C&F) Agents that dot our drug supply should vanish. These entities existed primarily to address the disparate tax collection systems between the various states and the centre and contributed to the price of the drug at the pharmacy counter.
  • While selecting the provider and negotiating contracts:
    • We should change our approach away from selecting the lowest bidder in government contracts. When it comes to medicines, the lowest cost bidder is not always the best. We want the industry to function, and deliver good quality medicine.
    • Only those formulations which have proven therapeutic efficacy should make the cut. The manufacturer ought to have secured regulatory approval for safety and efficacy prior to qualifying for the bidding process
    • The bidding process should be transparent and automated to make it free of political influence. In all my research, this seems to be a big factor. Because Health is a State subject, individuals in power within the State administration essentially have a carte-blanche when it comes to procurement of medicine. There is virtually no accountability or transparency.

Then there are lessons we can draw from how the US is handling drug shortages. Driven primarily by the regulatory observations and actions against pharmaceutical manufacturers based in India, the US public health system has also been at the receiving end of shortages of some life saving drugs. The way in which the system responded to these challenges and the remedies that they have put in place is instructive to us as a country. For more information on how they did it, you can read it here.

As you can see, affordable medicines is a noble objective which can be achieved. But it needs us to understand why we are where we are and chart out a roadmap to our goal in a thoughtful and deliberate manner.

Guidelines from the MCI for example, which were reiterated last week, show how poorly these institutions understand the ground reality of how our drug supply chain works. We should refrain from offering such simplistic platitudes and focus our effort toward developing a better understanding how how the system works today, where systemic issues such as the ones highlighted here prevent efficiencies and therefore result in lack of access.


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A step toward affordability

Posted by on Apr 29, 2017 in Blog | 0 comments

In this series of blog posts, I have described the challenges with the proposed simplistic approach to make drugs affordable, including the nomenclature we use, the factors confounding the problem and the difficulties we face with the proposed solution in the long term. Since this is a problem we created with decades of neglect of our healthcare systems, it is going to take at least half of that time to undo the damage we have caused.

In this post, we propose a small step which empowers the patient to make the right choices for herself. Prashant Reddy, who helped me with my PIL and I wrote an opinion about this in a recent op-ed. The conversation on affordability has been hijacked (and rightfully so) by two specific issues. Access and Quality. A cursory scan of the reporting on this topic for the last week will show anecdotes of lack of access in many cases. While that is an important aspect of this solution, for now, lets focus on quality and we will come back to access another time.

One approach to allaying the fears about quality of drug supply is to enable the patient to verify that the medicine he is dispensed has been checked for therapeutic efficacy.  We already have such a tool in the Clinical Trial Registry of India (CTRI).  The idea behind establishing this database was similar to what the US does to promote transparency, make manufacturers register their planned clinical studies. This accomplishes two objectives. If the study fails, the pharma company cannot hide the data forever.  Pharmaceutical companies were notorious for publishing positive studies and not disclosing studies that failed. This addresses that issue. Someone can look up the study registration and ask the company to publish what it found at a future date. Second, it provides an effective platform for patients seeking experimental therapy to enroll into clinical studies. Now, let us see how we can use this tool in the current context.

The Indian Pharmaceutical Alliance (IPA) has argued that their products have been tested for efficacy and safety against their innovator counterparts. Their argument is that the rest of the (unbranded) drug supply has never been; therefore, it may not be effective therapeutically. Let us ask them to provide these BE studies and their respective study reports to CDSCO. Let the CDSCO verify that they have in fact conducted proper BE studies on their product and if so, allow these member IPA companies to register these studies retrospectively with the CTRI. For every study that the CDSCO verifies as properly done, let it issue some kind of logo or an image to the manufacturer, which can be printed on the packaging that both the pharmacist at the dispensing counter and the patient can easily read. Presence of such a logo will confirm that this specific formulation has been verified for therapeutic efficacy. For those manufacturers who fall into what the IPA says supply the remainder of the drug supply, the presumption is that they have never conducted clinical studies. If they have, let them follow the same process; if they have not, let them register new studies in the CTRI and conduct these studies and secure such a logo.

This is a simple and cost effective approach to addressing the issue of quality. It inspires confidence in us, the citizens that someone has checked and verified the formulation we are being dispensed. It addresses a key issue among the medical fraternity. And most importantly, this can be implemented quickly. The IPA says their products are equivalent, lets start there. We will at least know that 15% of our drug supply has been verified as therapeutically effective to begin with. This approach provides a powerful differentiator to those companies that actually invest in building quality systems. It empowers the patient to make informed choices.

Now, the only drawback to this approach is the integrity of the regulator, CDSCO. History shows that it has not always acted in public interest. There needs to be some independent oversight of this process to ensure that when it evaluates retrospective studies from any manufacturer, whether a member of the IPA or an unbranded one, it does it based only on Science and not other influencing factors.

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Generic prescriptions: Do we want a nanny state?

Posted by on Apr 26, 2017 in Blog | 0 comments

In my last two blogs, I have tried to outline the complexity of the problem when it comes to affordability of medicines in India. In this post, lets take a look at a few factors that confound the solution space if our goal is to create an affordable healthcare system for the country.

The genesis of this entire discussion stems from the prevailing perception that doctors somehow, under the influence of pharmaceutical companies, nudge poor patients toward more expensive branded medicines when cheaper, unbranded alternatives, which work as well as the branded drugs do exist.

In a 2017 Social Science & Medicine article, authors Chirantan Chatterjee & Ajay Bhaskarabhatla  show that in cardiovascular medicines, 129 million scripts (8.1% of the total) in the 2008-2011 period were irrational, meaning there was no good scientific reason for these 129 million prescriptions. Another study published in 2013 says that most physicians were unaware of the active pharmacological ingredients (APIs) of 20% these irrational drugs.  CDSCO’s own expert committee report from last year showed that a large majority of the 1000 odd irrational medicines it evaluated had no scientific basis. Clearly, these irrational drugs do exist and are being prescribed by our medical fraternity. The question is why? To what extent do we hold the practitioners accountable when they prescribe these drugs (most of which are promoted extensively, and therefore more expensive) or the regulator who allowed these drugs to get to the market in the first place? Whose interests was the regulator protecting when it allowed these companies to market them? Certainly, not the citizens of this country.

In 2007, I co-founded and ran a company named Sciformix  where we hired recent medical graduates to conduct analysis of Adverse Events and prepare reports for regulators in US, EU and Canada. My observation from those days was that these recent medical graduates had very little knowledge of pharmacology, phramcokinetics and pharmacodynamics, which is a required part of the medical education curriculum. Concepts such as dose-response, average retention time, maximum concentration of the drug in the body etc were alien to them. On average, we had to invest about a year in retraining them in basic medicine before they became productive. This speaks to the quality of education we impart to our doctors. Therefore, I am not surprised that the study referred to above found that about a fifth of our medical fraternity doesnt know what the active ingredients are in the medicines that they are prescribing. I am sure that with clinical experience, these folks do develop a better understanding of drugs are metabolized in our bodies.

The role of the industry in influencing the medical fraternity into prescribing their “latest and greatest” products was something we already discussed.

The flip side of the argument is that we all do not metabolize drugs in the same manner. Our physiology, our life-style choices and our metabolism all play a key role in how effective a particular drug is to treat an ailment. For this discussion, let us take the extreme case of narrow therapeutic index drugs. Two years ago, I was the co-author on a peer-reviewed paper that discussed how Levothyroxine,  Budeprion, and Methylphenidate behave very differently depending upon the formulation. Despite being approved as bioequivalent, we found subtle and significant differences in therapeutic response to these drugs primarily based on the way they were formulated. Experienced clinicians know what to look for in our vitals and properly titrate the dosage or  switch it to a different formulation based on their observations in the best interest of the patient.

So this begs the question whether we want to take away the freedom of our physicians to determine which formulation is best suited to our unique physiology based on their clinical experience? Do we want to throw the baby out with the bath-water?

Clearly, there are some (well, around 20%) bad apples, that the data shows. However, to prevent these bad apples from prescribing these expensive, irrational drugs, do we want to mandate the whole medical fraternity to write prescriptions for “generic” knowing well these variations exist among formulations and are thoroughly documented? And I am not even bringing substandard drugs into the discussion yet, which we know are a large percentage of our drug supply, thanks to the US FDA and even the CDSCO, which acknowledged last year that approximately 10% of the supply procured by government funded facilities were substandard. That is a whole another ball of wax. Is this what we want our policy makers to do? Let us pause and consider this for a moment.

Let us stop deluding ourselves that the solution to our problem is as simple as mandating doctors to write “generic” prescriptions. We created this problem with decades of complacency and inaction and cannot expect it to disappear overnight. This needs thoughtful, data-based analysis, a long term vision and a lot of perseverance to look at the facts and then make a realistic and implementable policy.

Speaking of the medical fraternity, I was amused by their response to this issue. Conversations on Twitter center around the word “should” in the way they advise their members to write prescriptions. I do have a basic question for the MCI though. Knowing that 85% of the drug supply has never been tested for therapeutic efficacy in our country, how do you justify issuing the guideline you did with the hippocratic oath that you took when you obtained a licensed to practice medicine? I guess no one asked them that!


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