The fate of the much-hyped mandatory generic prescription plan

Posted by on Aug 8, 2017 in Blog | 2 comments

It appears that the Ministry of Health has put a kibosh on the much-discussed mandatory generic prescription plan after all. Newspaper reports say that they have advised the Prime Minister’s office of a potential scarcity of “quality” medicines should the administration proceed with their plans. The report further says that the Ministry anticipates if “unbranded generics” were procured exclusively by Jan Aushadi stores, in about two years time, we may make a dent in addressing the underlying problem.

This admission by the MoH begs several questions. First, how could the PMO let the Prime Minister make such a public proclamation of a potential scheme without basic understanding of the dynamics that affect the current situation? Doesnt this volte-face damage the PM’s credibility? What lessons does the PMO derive from this fiasco?

Second, in recommending that the supply-chain for Jan Aushadi stores be exclusively “unbranded generics” while at the same time, acknowledging that our supply chain largely consists  of therapeutically unproven and and potentially unsafe medicines, what does the MoH’s recommendation do to Public Health? Are they saying that somehow unbranded generics will all be of good quality and proven therapeutic efficacy in two years? Where is the plan to make that happen?

We can continue to distract the attention of our citizens with phrases like “doctor-big pharma nexus” and “big pharma-chemist nexus”, both of which have some truth to them; but unless we are ready to address the underlying problem, I am willing to bet that even after five years we will still be talking of these same issues.

The underlying problem we refuse to acknowledge is that we do not have a regulatory framework and robust institutions to ensure good quality, affordable medicines in our country. And until that changes, we will continue to debate and argue about these peripheral issues; and nothing will change. Let me illustrate it with a few examples.

Despite the mis-directed rhetoric about “fake-news” and “witch-hunt” in the context of Russian meddling in the US elections last year; no reasonable person, I mean no one (well, other than extreme partisans) questions the ability of the FBI and Special Counsel Robert Muller to get to the bottom of this issue. Have you asked yourself why? Because, successive US administrations across political parties over years have built the institution of the Federal Bureau of Investigation and its reputation as an independent investigative agency. Everyone knows that the FBI will do its job and the guilty will be brought to justice. It is never seen as a “caged-parrot” and that is why, even the most ardent supporters of the current US President cannot take potshots at the agency. Now, ask yourself do you have similar confidence in our institutions? Especially the CDSCO and the MoH? How well has political patronage served us as a nation?

Second, the US FDA has a new Commissioner, someone who has significant ties to the industry and has been a prominent member of a right-wing think tank. After his confirmation, his public actions have been toward addressing the same issues we are dealing with here in India, including access and affordability. If you look at his blog and the actions he has taken in the last two months, they are all based on factual data, like encouraging more competition by making public a list of drugs that have a single manufacturer to reduce drug-shortages.  Scott Gottlieb demonstrates exceptional leadership through his actions and his understanding of the industry guided by the principle of protecting Public Health of the citizens of the US. When was the last time you saw such leadership at the MoH and the CDSCO? And why should we accept any less?

If we are serious about providing affordable, good quality medicines to our citizens, lets us learn from what others are doing that is actually making a difference, not by announcing ill-conceived schemes. Get the right leadership at the MoH and the CDSCO. Overhaul the Drugs and Cosmetics Act and enforce the law of the land and hold manufacturers who make substandard medicine accountable. These are concrete actions that the PMO can take today, without any harebrained schemes.  The million dollar question is, will it?

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The misplaced propaganda about evolving standards

Posted by on Jun 25, 2017 in Blog | 11 comments

When the story about Ranbaxy pleading guilty to seven counts of criminal felony broke in May 2013, the standard response across the Indian pharma industry and the Indian drug regulator CDSCO was that there was nothing wrong with products manufactured by Indian companies and somehow the US regulator was out to get Indian industry because it was under the influence of large Pharma and therefore acting maliciously.  Events of the last four years, which have included detailed Warning Letters documenting outright fraud and Import Alerts have categorically shown what the reality is when it comes to compliance with good manufacturing standards in the Indian pharmaceutical industry when supplying to the US market. Faced with real evidence of actual behavior within the industry when it comes to compliance, the industry seems to have finally accepted the truth. Finally, earlier this year, the Industry Lobby in India, the Indian Pharmaceutical Alliance (IPA) acknowledged that 85% of the drug supply in India has no data supporting therapeutic efficacy. So much for the “foreign-hand conspiracy” theory!

A second, more insidious reason, now being propagated by the Indian pharmaceutical industry is that the US regulator is somehow capricious; that its standards for compliance are evolving when it comes to how the US regulator assesses compliance for Indian manufacturing facilities. The underlying insinuation is that somehow the goal posts are being moved, thereby intentionally making it hard for the industry to comply. Nothing can be farther from the truth.

It is true that standards do evolve over time, but the process of adopting new standards is very detailed, thorough and transparent. Unlike in India, in the US, new proposed standards get a lot of attention in trade publications and discussions at meetings such as PDA and ISPE. Take the case of Quality Metrics for Manufacturing. It has been over two and half years of discussions with the industry to get a final draft of the proposed metrics.  The argument advanced by the Indian industry is that somehow the standards to which the industry is held change overnight, or every few months making them hard to comply and therefore be cited for lack of compliance.

The question therefore is, why do those representing industry indulge in such false propaganda? It seems to me that there is a disconnect between what the Indian pharmaceutical industry sees in inspections from what they are designed to do.

An “audit” or an “inspection” is NEVER intended to identify all the deficiencies at any manufacturing location. If you read the standard text in all Warning Letters, it includes the following: ‘Deviations cited in this letter are not intended as an all-inclusive list. You are responsible for investigating these deviations, for determining the causes, for preventing their recurrence, and for preventing other deviations.

Inspections are a snapshot in time, and it is unreasonable to expect that even the most experienced inspectors can identify ALL deficiencies in one or two at the site. On a Pre-Approval Inspection (PAI), the investigators generally look to see that the facility and the batch records are consistent with the NDA/BLA/ANDA submission, and that the laboratory data (particularly lot release and stability) are traceable to raw data. On a routine, periodic cGMP inspection, they have more leeway, the scope is broader and inspectors generally look for areas where other inspections have identified common problems. An example is “test” or “sample” injections in chromatography weren’t even on the inspection radar a decade or so ago; they are now a standard inspection item because they have become more knowledgeable and sophisticated in detecting fraud and many have been trained in forensic procedures recently. If the inspection is “for-cause”, it’s a whole different ball-game. These type of inspections are triggered by a specific concern, and therefore are more focussed on specific aspects of the manufacturing process.

Pre-inspection audits are routinely used by pharmaceutical companies to get an “independent-assessment” of their processes and systems. Many a time, such audits identify areas of concern which are flagged to the management’s attention. What becomes of such notifications is largely driven by the prevailing culture within the company. As the saying goes, “you can fool some people most of the time …”

So, now, let us understand what makes the industry say that the goal-posts are being moved? Indian pharma industry has always seen inspections as the qualifying gate, an event at a point in time, that gives us the ticket to sell our product in the US market. The entire focus is on “passing the inspection”, not necessarily making a quality product.  A cursory Google of news about the industry will throw up umpteen articles focussing on the number of observations on Form 483, or whether an EIR has been issued; keep looking for articles that talk about “continuous improvement”, CAPA and Statistical Quality Control within these companies. Yes, you will find them, but they will be few and far between.

Gone are the days when the US FDA gave the industry a month’s notice to “prepare” for the inspection; the days when someone from the company tagged along with the inspectors because they did not know the local language, and because the facilities were located in remote areas. These factors gave the company’s ability to “control” what they wanted the inspectors to “see”. Plus, the fact that these were overseas trips for the inspectors from the US, in a new country and the inspectors were afflicted with common travel phenomenon “jet-lag” all played into the ability of the company to “direct” the inspection. Post Ranbaxy, the game has changed. The US FDA has permanent inspectorate staff stationed in its office in India. The sooner the Indian pharma industry understands this, the better.

The fact that inspectors have now gotten smarter, come prepared with knowledge and forensic training in detecting fraud appears to the honchos at these companies as “moving the goal post”.  Just because during the last visit, inspectors did not look in the trash-bin where the shredded raw data was discarded or at the entry log which showed that people who signed off on the cleaning validation never actually present on that day the document was signed doesn’t mean that this time they wont. Requirements for “Data Integrity” were always in the “Predicate-Rules” of Code of Federal Regulations, it’s just that the inspection team last time did not pay attention to these fraudulent behavior because they assumed the integrity of scientific process, something which is taken for granted across the world. Now they know better. The investigation led by Office of Criminal Investigations (OCI) at the US FDA as a part of the investigation into Ranbaxy’s fraudulent practices educated the inspectorate on the “reality” of how inspections are managed by the Indian pharma industry.

We are so focussed on managing the inspection to ensure a “successful” outcome that we have lost sight of what the inspection is intended to do in the first place. Ask those who are responsible for these inspections and how large a bonus is tied to their objective of successfully “passing” a US FDA inspection. This is the reason why, even after three and sometimes four years from the time were first inspected, some of these companies continue to face punitive regulatory actions even today. And this, is what is meant by the industry when they claim that the US FDA is changing regulations and that is the reason why the Indian industry fails to comply.

A significant contributor to the industry’s nonchalant attitude toward inspections is the dysfunction at our own regulator, the CDSCO. If our regulator had its act together, and played a constructive role in ensuring the industry was held to proper standards to begin with, pharma companies would have never gotten away with doing the kind of things that we find in almost all the warning letters issued. Lab supervisors would have never “encouraged” scientists to “test-samples-into-compliance”, destroy raw data if the results did not match their expectations, make-up Certificates of Analysis or run a second set of samples to produce “desirable” results.  These were acceptable actions during most CDSCO inspections. Inspections from CDSCO were more about “managing” the inspector than ensuring compliance with Schedule M. More importantly, the same Lab Managers and Directors would have stood-up to the C-Suite and told them that handling the workload with half the staff isn’t possible; you cannot extract blood from a stone. Sadly, it was much easier to buy our way out of inspections conducted by our local regulator and that became the norm. Because we have had  an incompetent and corrupt regulator for decades as the Parliamentary Standing Committee Report says, this behavior has become so ingrained in our industry. Decades of this behavior manifests itself in how we view inspections, a ticket to making money by selling our product, whatever its quality may be.

So the next time you hear someone in the industry talk about moving goal-posts as the reason why they are cited for compliance failure, ask them some pointed questions. Ask them to show you the specific regulation in the CFR which has changed without public comment. Ask them when it was changed and more importantly, what it is that they did before the change that they claim was made.

Ideas and concepts expressed in this blog were the result of a discussion with Barbara Unger, who consults in the area of cGMP and Regulatory compliance. I wish to thank her for her insights.

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National List of Essential Medicines and Price Caps

Posted by on May 4, 2017 in Blog | 0 comments

It has been widely reported that an RSS Affiliate (Swadeshi Jagran Manch) has taken issue with the recommendation of the Niti Ayog to delink the Drug Price Control Order (DPCO) from the National List of Essential Medicines (NLEM).

In order to understand if this recommendation makes sense, we need to first understand why a NLEM and a DPCO exist in the first place.

The reason for a NLEM is simple. The World Health Organization (WHO) defines an Essential Medical List as “Essential medicines are intended to be available within the context of functioning health systems at all times in adequate amounts, in the appropriate dosage forms, with assured quality, and at a price the individual and the community can afford.” It further says “National lists of essential medicines usually relate closely to national guidelines for clinical health care practice which are used for the training and supervision of health workers.”

Therefore, clearly, a functioning healthcare system in a country like ours needs to ensure some medicines, which our medical community considers as essential should be available at all times. It is important to note that this is not a static list; depending upon the need of the hour, this list changes. For example, when the avian-flu epidemic hit, Oseltamivir (Tamiflu) was added to this list because of its public-health impact, until we got a handle on that disease.

Now let us understand why we need price controls. In functioning markets, where the consumer demand drives price, controls are redundant. However, as I have argued in the past, healthcare is not a perfect market. The consumer (patient) is often ill-informed about the choices she is prescribed and therefore, regulation is needed to protect the consumer. The question here is whether we apply control across the board or use it as a selective tool to ensure there is no price gouging.

We have used the DPCO as a broad corrective measure to counter inefficiencies in our healthcare system. In an ideal situation, all things being equal (especially the quality of our drug supply), and external influence is minimized (over-the-top promotional practices), natural market forces should drive the price to the point of affordability. Price of medicine will reach some sort of an equilibrium assuming there are more than a few manufacturers who supply the product to the market. Historically, this doesn’t happen because the system is opaque and often skewed. Therefore, the knee-jerk reaction is to impose external controls, which are often counter-productive to achieve the goal of affordability.

Our country needs a viable and thriving pharmaceutical industry; and external controls typically do not foster its health. We need our industry to manufacture good quality product, which works as specified and provides therapeutic benefit. The industry has to make a profit and create value for its shareholders. An across-the-board implementation of price controls is counter-productive to this goal.

The problems that challenge affordability are somewhere else. They are in our regulatory framework, our ability to enforce the law as it is written today and our dysfunctional institutions which are responsible for the implementation of our healthcare policy.

Price controls are necessary when there is no competition. If a particular manufacturer has monopoly on a life saving product, price-caps are justified. But using this method when there are a myriad of manufacturers who are expected to make the same product and compete on price is not good for our healthcare system. Clearly, not all things are equal when it comes to medicines in India. There are grades of quality, and I have adequately written about this earlier. We need to fix that and allow the market to determine who survives and who doesn’t.

In markets for essential medicines, competition will ensure low prices; but we have to accept that prices may be higher than the capped price, because caps, set too low compromise the ability of legitimate manufacturers to make a good quality product. Going back to the WHO definition of EML, a key criteria, good quality, is compromised if the price cap is set too low. For example, in 2011, prior to the introduction of the National Pharmaceutical Pricing Policy, 27 of the 74 drugs under price control were discontinued by the industry because it was unprofitable for them to make. As recently as 2013, wholesalers and retailers temporarily stopped buying stocks of essential medicines with unviable margins leading to a shortage of medicines in the market. How does this help us protect public health?

The larger issue that needs addressing is strengthening our institutions and making governance transparent and accountable. It has been reported that the administration is considering consolidating bureaucracy across multiple ministries to simplify implementation of policy objectives. There is absolutely no reason why Ministry of Commerce and Industry, Ministry of Health & Family Welfare and Ministry of Chemicals & Fertilizers all have to have a say. Improving standards of governance and accountability requires qualified administrators; especially people who have background and experience in public health be hired, empowered and made accountable to the citizens of this country. And finally, bringing our outdated healthcare law on par with globally accepted standards for quality should be a key objective.

DPCO is a tool that we need to use sparingly, not broadly. There are good reasons where price caps make sense, but using is across the board is not helpful. We need to enable market forces to function, and use the regulatory and the legal justice system to hold people who distort the market dynamics publicly accountable. Using it to cover up dysfunction and inefficiencies in our systems is not a sound solution. Price caps are not appropriate for medicines on the EML; we should enable the market to drive affordability. Specialty medicines with monopoly producers is where price caps are most effective, or at least a threat of a negotiated price so that gouging does not occur.

The recommendations of the Niti Ayog seem to be in the right direction for the country. Delinking the EML from DPCO makes sense; price caps may be warranted in certain cases and an EML is required, but competition will ensure low enough prices and hopefully of good quality if we get fix our systems and get our institutions working properly. Let us not make the same mistake we made before; take knee-jerk actions to address a short-term problem and compromise what we need for the country in the long term.

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