The Indian pharmaceutical market is expected to triple to USD 20 billion by 2015 from USD 7.1 billion in 2007 with a CAGR of 12.3%, and move into the world’s top 10 markets. The commercial attractiveness of India as a “market” is a key factor influencing India’s attractiveness as a “clinical trial destination” , says a FICCI-Ernst & Young Report on Compelling Reasons for Doing Clinical Research in India.
The report notes that In 2015, India could be a potential USD 8 billion market for MNCs with patented drugs accounting for nearly 8-10 % of the total market. The reasons are:
The advent of the product patent regime in 2005. The patent infrastructure in the country has been appreciably upgraded over the past few years to support new laws with the addition of patent examiners, decentralization of the filing process and digitization of records. Patent-protected products have the potential to capture up to 8-10 % share of the total market by 2015, implying a market size of USD 2 billion.
The population in the highest income class is expected to grow to 25 million in 2015 from 10 million today, which will drive the affordability of high value patented drugs. MNCs already present are further consolidating their presence in India while new entrants are increasing.
MNCs are increasingly restructuring their operations with global parents increasing their equity stakes in their Indian affiliates. Companies such as BMS and Merck that had exited the Indian market have staged a re-entry . MNCs are acquiring Indian companies to expand their presence, e.g., Daiichi and Ranbaxy.
The FICCI-E&Y report mentions that in addition, India also has a significant cost arbitrage in the conduct of clinical trials, including infrastructure, operational, patient recruitment, drug, manpower , data management and processing costs.
Indian allied service market is growing at a CAGR of 21% as compared to 7.5% globally. The allied services outsourced market in India was estimated to be USD106m (2008) (1), growing at a rate of 21%. Although initially sponsors and CROs were driven to offshore locations due to their cost advantage , the focus has now shifted to the quality of delivery and responsiveness to business uncertainties .
India, due to its proven track record of managing IT/ITES work and growing domain expertise, has emerged as an attractive destination for the entire segment.
The FICCI-E&Y report states that India offers a conducive business environment to meet the emerging requirements of the allied services market . Its cost leadership and system capabilities, coupled with an abundant skilled and English-speaking talent pool, has made it a destination of choice for offshoring allied services
Source: ET Bureau
Sunday, September 27, 2009
Big pharma pays billions in fines for bribing doctors
In what seems to be a case of giving the fox the job of guarding the henhouse, the government has decided to curb the practice of bribing doctors for promoting drugs by allowing pharmaceutical companies to self-regulate rather than have a legislation to tackle the menace.
This is despite the fact that more than a quarter of the members of the Organisation of Pharmaceutical Producers of India (OPPI) — an association mainly of multinationals which is estimated to account for 70% of the drug market in India — are subsidiaries of companies that have been penalized in the US for illegally promoting various drugs through inducements for doctors.
The latest to be penalized is pharma giant Pfizer, which on September 2 shelled out $2.3 billion in one of the biggest healthcare fraud settlements.
The charge against Pfizer was that it promoted drugs for usages not approved by the Food and Drug Administration, by inducing doctors to prescribe the drugs by wining and dining them and sending them for exotic trips.
Another big player, Eli Lilly, was fined $1.42 billion at the beginning of the year for illegally promoting a drug, Zyprexa, by funding continuing medical education of doctors through millions of dollars in grants to push them to prescribe the drugs for unapproved use.
Source: TNN 16 September 2009
This is despite the fact that more than a quarter of the members of the Organisation of Pharmaceutical Producers of India (OPPI) — an association mainly of multinationals which is estimated to account for 70% of the drug market in India — are subsidiaries of companies that have been penalized in the US for illegally promoting various drugs through inducements for doctors.
The latest to be penalized is pharma giant Pfizer, which on September 2 shelled out $2.3 billion in one of the biggest healthcare fraud settlements.
The charge against Pfizer was that it promoted drugs for usages not approved by the Food and Drug Administration, by inducing doctors to prescribe the drugs by wining and dining them and sending them for exotic trips.
Another big player, Eli Lilly, was fined $1.42 billion at the beginning of the year for illegally promoting a drug, Zyprexa, by funding continuing medical education of doctors through millions of dollars in grants to push them to prescribe the drugs for unapproved use.
Source: TNN 16 September 2009
Wednesday, September 16, 2009
Pharma “has now reached three tipping points”
Healthcare is currently out of balance and so therefore is the pharmaceutical industry, as its fortunes are driven by healthcare systems, virtually all of which are now restructuring, says a new report.
There is a danger that the current pharmaceutical model may become irrelevant in the context of twenty-first-century global health needs, warns the report, from experts at management consultants AT Kearney, who believe that the industry has now reached not one but three interconnected tipping points, concerning what it sells, to whom and how it must be organised.
The first tipping point relates to the move from therapies to service models. The pharmaceutical sales model has always assumed that prescribing doctors are the primary decision-makers, and that prescribing decisions are based solely on their perception of patient need, say the report’s authors, Jonathan Anscombe and Michael Thomas. But now, increasingly, the doctor is being constrained or influenced by formularies, guidelines, IT systems and financial mechanisms, driven by payers and regulators or by provider organisations responding to payer costs and political pressures.
Payers’ priorities vary considerably, but their growing influence is changing the traditional assumption that volume is not elastic to price. Bodies such as the National Institute for Health and Clinical Excellence (NICE) define where a drug is used in the care pathway based on clinical cost-effectiveness, and often relegate expensive drugs to second-, third- or even fourth-line treatments even if they have high efficacy as a first-line treatment. Also, more and more, drugs’ usage moves from treatment to prevention as they decline in cost.
For payers, the availability of marginally more effective but much more expensive treatments is far from compelling, especially given that with many drugs, patients simply fail to take them as directed. What would, however, be compelling for payers is a service model that enables therapies to be administered with high compliance and can be proven to result in fewer admissions, the authors suggest. It would be even more compelling if this could be demonstrated in the payer’s specific care system and target population - positioning a therapy in this context dramatically increases its value, they say.
The second tipping point concerns the US market which, although still dominating the industry, is failing and will continue to do so - whatever the outcome of President Barack Obama’s health reform plans – as mechanisms to limit access to medicines based on cost-effectiveness inevitably spread.
At the same time, healthcare demand is shifting rapidly towards the developing world. The incidence of developed-world diseases is increasing dramatically in emerging markets, and most of them are moving towards some form of comprehensively funded healthcare system, as soon as they can afford it. However, they will not be prepared to pay western-style prices.
The industry must view emerging markets in a new light, not just as an opportunity for lowering R&D costs or demonstrating market commitment but as a source of low-price, breakthrough innovation, the authors advise. If the global pharmaceutical industry does not respond to these challenges, then local companies surely will, they warn.
The third tipping point relates to the fact that the traditional model of a globally integrated pharmaceutical industry is becoming too large, unwieldy and unfocused. Successful drugmakers of the future will shift from being R&D- to market-driven, and their challenge will be to decide on which therapy areas they should focus.
The shift towards mass-market solutions also introduces a dramatically different dynamic to the supply chain, where costs become a key profit driver, and there will be further emergence and consolidation of highly-efficient outsource manufacturers, the authors predict. Managing contractual relationships with these providers will become a core competence for pharma, and a major driver of profitability, they add.
Shifts in distribution strategies will also accelerate, and the current move from wholesale distribution towards direct-to-pharmacy will shift again to direct-to-patient, they forecast.
The authors conclude that several different types of pharmaceutical companies, all with different competencies, will operate in the space currently occupied by integrated firms. For example, value-delivery companies will focus on specific therapies in certain countries and gear value propositions in response to local market needs, while health innovatorss will develop and leverage technologies in as many applications as possible to gain a return on investment at a reasonable cost, and supply-chain firms will focus on optimising operating efficiencies. The truly connected pharmaceutical company will have to decide which of these functions it wishes to deliver, and which firms it needs to partner with to deliver other services, they say.
Source: Lynne Taylor in Pharmatimes
There is a danger that the current pharmaceutical model may become irrelevant in the context of twenty-first-century global health needs, warns the report, from experts at management consultants AT Kearney, who believe that the industry has now reached not one but three interconnected tipping points, concerning what it sells, to whom and how it must be organised.
The first tipping point relates to the move from therapies to service models. The pharmaceutical sales model has always assumed that prescribing doctors are the primary decision-makers, and that prescribing decisions are based solely on their perception of patient need, say the report’s authors, Jonathan Anscombe and Michael Thomas. But now, increasingly, the doctor is being constrained or influenced by formularies, guidelines, IT systems and financial mechanisms, driven by payers and regulators or by provider organisations responding to payer costs and political pressures.
Payers’ priorities vary considerably, but their growing influence is changing the traditional assumption that volume is not elastic to price. Bodies such as the National Institute for Health and Clinical Excellence (NICE) define where a drug is used in the care pathway based on clinical cost-effectiveness, and often relegate expensive drugs to second-, third- or even fourth-line treatments even if they have high efficacy as a first-line treatment. Also, more and more, drugs’ usage moves from treatment to prevention as they decline in cost.
For payers, the availability of marginally more effective but much more expensive treatments is far from compelling, especially given that with many drugs, patients simply fail to take them as directed. What would, however, be compelling for payers is a service model that enables therapies to be administered with high compliance and can be proven to result in fewer admissions, the authors suggest. It would be even more compelling if this could be demonstrated in the payer’s specific care system and target population - positioning a therapy in this context dramatically increases its value, they say.
The second tipping point concerns the US market which, although still dominating the industry, is failing and will continue to do so - whatever the outcome of President Barack Obama’s health reform plans – as mechanisms to limit access to medicines based on cost-effectiveness inevitably spread.
At the same time, healthcare demand is shifting rapidly towards the developing world. The incidence of developed-world diseases is increasing dramatically in emerging markets, and most of them are moving towards some form of comprehensively funded healthcare system, as soon as they can afford it. However, they will not be prepared to pay western-style prices.
The industry must view emerging markets in a new light, not just as an opportunity for lowering R&D costs or demonstrating market commitment but as a source of low-price, breakthrough innovation, the authors advise. If the global pharmaceutical industry does not respond to these challenges, then local companies surely will, they warn.
The third tipping point relates to the fact that the traditional model of a globally integrated pharmaceutical industry is becoming too large, unwieldy and unfocused. Successful drugmakers of the future will shift from being R&D- to market-driven, and their challenge will be to decide on which therapy areas they should focus.
The shift towards mass-market solutions also introduces a dramatically different dynamic to the supply chain, where costs become a key profit driver, and there will be further emergence and consolidation of highly-efficient outsource manufacturers, the authors predict. Managing contractual relationships with these providers will become a core competence for pharma, and a major driver of profitability, they add.
Shifts in distribution strategies will also accelerate, and the current move from wholesale distribution towards direct-to-pharmacy will shift again to direct-to-patient, they forecast.
The authors conclude that several different types of pharmaceutical companies, all with different competencies, will operate in the space currently occupied by integrated firms. For example, value-delivery companies will focus on specific therapies in certain countries and gear value propositions in response to local market needs, while health innovatorss will develop and leverage technologies in as many applications as possible to gain a return on investment at a reasonable cost, and supply-chain firms will focus on optimising operating efficiencies. The truly connected pharmaceutical company will have to decide which of these functions it wishes to deliver, and which firms it needs to partner with to deliver other services, they say.
Source: Lynne Taylor in Pharmatimes
Monday, September 14, 2009
Pharma Evolution
In the year 754, Arabian pharmacists opened in Baghdad what was to be the first known drugstore in the world. Soon thereafter many more drugstores would pop up here and there throughout Europe and by the 19th century, these drugstores spread to North America and evolved into bigger drugstores and eventually into pharmaceutical companies.
The discoveries of penicillin and insulin brought great excitement to pharmaceutical companies during the 1920’s and 1930’s and led to mass distribution of these medicines. During the 1950’s, huge growth in the industry took place with the development of sophisticated manufacturing processes. New drugs were continually being researched and produced and several years after the second world war, the demand for drugs like the first oral contraceptive was phenomenal in the 1960’s. This new drug, “The Pill”, was pretty much responsible for ending the baby boomer era.
This time period also ushered demands for drugs like heart medications and high-blood pressure medicines. Another popular item on society’s drug shopping list during this time period was the MAO Inhibitors, Thorazine and Haldol along with tranquilizers. These new drugs brought about a revolution in the use of psychiatric medications. Valium became the most widely prescribed drug in history from 1963 onward, at least, until public controversy about patients becoming addicted to it began to stifle its use. Then there was the Thalidomide tragedy during the 1960’s, a new tranquilizer used by pregnant women that caused severe birth defects. With the introduction of new marketing techniques like the internet and other medias during the 1990‘s, drug purchases became possible directly from drug producers by consumers and as a result, drug advertisements on radio and television began to flood the market.
In 1997, the FDA relaxed the previously stiffer requirements that drug producers thoroughly explain the side effects and adverse reactions of drugs in their advertisements, which greatly accelerated pharmaceutical sales. The next big seller was the much sought after antidepressants, especially Prozac. Today, there are more than 200 major pharmaceutical companies researching and producing a constant flow of drugs onto the market. One thing that helps keep the flow going is the fact that doctors will many times receive incentives to prescribe medications. If you find that hard to believe, you should know that the president of the American Psychiatric Association recently admitted that in general, it is rather common for psychiatrists to accept bribes and kickbacks from drug companies to push their products. Another common complaint against pharmaceutical companies is disease mongering or the act of encouraging medical professionals to create new disorders that will require new medications.
Billions of dollars are invested in expensive medications, while very little interest exists in investing in treatments for sicknesses in countries with little or no money to spend on drugs such as malaria in Africa. A private consulting firm known as Bain & Company reported that the cost of discovering, developing and marketing each new drug was nearly $1.7 billion in 2003. In order to save money, pharmaceutical companies will sometimes re-formulate an existing drug, give it a new name and release it as something “new and improved” to people who are desperate to improve their health. The cost of producing these types of drugs are less than $200 million, a big savings by comparison. The world spent $643 billion on prescription drugs in 2006. Pfizer's pill for cholesterol, Lipitor presently tops the list as best-selling drug in the world. With annual sales of $12.9 billion, this drug has been at the top for five years in a row. In the United States, 3.4 billion total drug prescriptions are written every year with new blockbuster drugs to be released in the near future.
A big part of pharmaceutical companies success is that they commonly spend a huge amount of money on advertising and marketing. In the US, drug companies spend $19 billion a year on marketing campaigns. Besides marketing, pharmaceutical companies hire sales representatives to speak directly to physicians while they are at work in their offices and clinics, encouraging them to write prescriptions and leaving with them bundles of samples and other gifts. Drug companies spend $5 billion a year sending these drug reps to visit doctor’s offices. They also hire thousands of lobbyists to influence politicians in the direction of leniency toward drug manufacturing laws and stricter policies against frivolous drug lawsuits. Drug companies spent $855 million in the 8-year period of 1998 to 2006 on lobbying activities. Lawsuits against pharmaceutical companies are being filed on a daily basis for drugs they produced that have serious side effects, like heart attack, stroke, paralysis and even death. Drug making is big business, with some sad consequences at times.
Source: Suzanne Leavitt in examiner.com
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