66
Issues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: [email protected]

Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

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Page 1: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Issues in Availability and Efficacy of Medicines

Presentation at UPAAM Lucknow July 22 2014

-SSrinivasan LOCOST

Email chinusrinivasanxgmailcom

Acknowledgments

bull Some slides and data are courtesy Dr Samit Sharma IAS Rajasthan and Dr Sakthivel Selvaraj PHFI New Delhi

Why Medicines are a unique commodity

bull Purchase or non-purchase based on price may mean the choice

between life and death

bull The need for medicines is immediate and involuntary

bull Decision as to purchase is made by doctors and pharma

companies

bull Medicines therefore need to be available affordable and

accessible

26-Jul-14 3

Why market cannot decide medicine prices in

India

bull Pharma markets do not work generally ndash in favour of the consumer

bull Because of asymmetry no real decision making power of buyer etc

bull Because buyers and sellers have different bargaining strengths (info

asymmetry)

bull Sellers and doctors decide

bull Buyers (patients) have little or no choice

bull Buyers have to make decision usually under distress

ldquoCompetitionrdquo does not reduce prices

bull Same drug is sold at different prices by the SAME company

too

bull Brand Leader often also the Price Leader (costliest drug is

most sold)

bull Therefore competition does not automatically bring down the

prices (except in the initial stages of generic introduction)

bull In fact more players seems to result in a range of prices

5

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control

bull Exports Rs 70000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd largest by volume 13th by value

bull ldquoPharmacy of the developing worldrdquo

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 2: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Acknowledgments

bull Some slides and data are courtesy Dr Samit Sharma IAS Rajasthan and Dr Sakthivel Selvaraj PHFI New Delhi

Why Medicines are a unique commodity

bull Purchase or non-purchase based on price may mean the choice

between life and death

bull The need for medicines is immediate and involuntary

bull Decision as to purchase is made by doctors and pharma

companies

bull Medicines therefore need to be available affordable and

accessible

26-Jul-14 3

Why market cannot decide medicine prices in

India

bull Pharma markets do not work generally ndash in favour of the consumer

bull Because of asymmetry no real decision making power of buyer etc

bull Because buyers and sellers have different bargaining strengths (info

asymmetry)

bull Sellers and doctors decide

bull Buyers (patients) have little or no choice

bull Buyers have to make decision usually under distress

ldquoCompetitionrdquo does not reduce prices

bull Same drug is sold at different prices by the SAME company

too

bull Brand Leader often also the Price Leader (costliest drug is

most sold)

bull Therefore competition does not automatically bring down the

prices (except in the initial stages of generic introduction)

bull In fact more players seems to result in a range of prices

5

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control

bull Exports Rs 70000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd largest by volume 13th by value

bull ldquoPharmacy of the developing worldrdquo

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 3: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Why Medicines are a unique commodity

bull Purchase or non-purchase based on price may mean the choice

between life and death

bull The need for medicines is immediate and involuntary

bull Decision as to purchase is made by doctors and pharma

companies

bull Medicines therefore need to be available affordable and

accessible

26-Jul-14 3

Why market cannot decide medicine prices in

India

bull Pharma markets do not work generally ndash in favour of the consumer

bull Because of asymmetry no real decision making power of buyer etc

bull Because buyers and sellers have different bargaining strengths (info

asymmetry)

bull Sellers and doctors decide

bull Buyers (patients) have little or no choice

bull Buyers have to make decision usually under distress

ldquoCompetitionrdquo does not reduce prices

bull Same drug is sold at different prices by the SAME company

too

bull Brand Leader often also the Price Leader (costliest drug is

most sold)

bull Therefore competition does not automatically bring down the

prices (except in the initial stages of generic introduction)

bull In fact more players seems to result in a range of prices

5

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control

bull Exports Rs 70000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd largest by volume 13th by value

bull ldquoPharmacy of the developing worldrdquo

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 4: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Why market cannot decide medicine prices in

India

bull Pharma markets do not work generally ndash in favour of the consumer

bull Because of asymmetry no real decision making power of buyer etc

bull Because buyers and sellers have different bargaining strengths (info

asymmetry)

bull Sellers and doctors decide

bull Buyers (patients) have little or no choice

bull Buyers have to make decision usually under distress

ldquoCompetitionrdquo does not reduce prices

bull Same drug is sold at different prices by the SAME company

too

bull Brand Leader often also the Price Leader (costliest drug is

most sold)

bull Therefore competition does not automatically bring down the

prices (except in the initial stages of generic introduction)

bull In fact more players seems to result in a range of prices

5

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control

bull Exports Rs 70000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd largest by volume 13th by value

bull ldquoPharmacy of the developing worldrdquo

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 5: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

ldquoCompetitionrdquo does not reduce prices

bull Same drug is sold at different prices by the SAME company

too

bull Brand Leader often also the Price Leader (costliest drug is

most sold)

bull Therefore competition does not automatically bring down the

prices (except in the initial stages of generic introduction)

bull In fact more players seems to result in a range of prices

5

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control

bull Exports Rs 70000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd largest by volume 13th by value

bull ldquoPharmacy of the developing worldrdquo

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 6: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control

bull Exports Rs 70000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd largest by volume 13th by value

bull ldquoPharmacy of the developing worldrdquo

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 7: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

India Poverty Amidst Plenty

bull Medicines are overpriced and unaffordable in India

bull Medicines constitute 50 to 80 percent of health care

costs in India

bull Health care is the second-most leading cause of rural indebtedness after

dowry

bull No universal health insurance in India

bull Crumbling public health system

bull the first choice of patients is a private practitioner which means more out of

pocket expenditures apart for loss of wages etc

bull In Tamil Nadu 70 of inpatients go to pvt sector

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 8: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Share of drugs in Out-of-pocket expenditure ()

00

100

200

300

400

500

600

700

800

900

Rural Urban Total

Drugs as a share of OOP

1993-94

2004-05

2011-12

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 9: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

FDCs and Irrational Medicines

bull Nowhere in the world there are 100000 brands (of generics)

bull A study by LOCOST (2012) says 50 of the top-selling 300 medicines

(IMS 2009) are not in the National List of Essential Medicines 2011

bull Many unnecessary drugs including medicines of uncertain efficacy safety

such as ginseng liver extract Vitamin E and nimesulide irrational

combinations of antibiotics which lack therapeutic justification

bull Many irrational FDCs - only 65 of the top selling 300 are rational

(LOCOST 2012)

bull Need for clear criteria for weeding out irrational and useless medicines

9

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 10: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

10

Some other reasons for poor access to the right medicine at affordable prices

bull Aggressive Drug Promotion by drug companies

bull Inducements to doctors

bull Overunder prescribing by doctors

bull Cut Practice

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 11: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

ldquoMCI corrupt clinical trials body a snake pitrdquo Harsh VardhanIndian Express| New Delhi | July 18 2014

bull ldquoAs a doctor and former health minister I am more aware than anybody

else of the corruption that is eating into the entrails of every aspect of

governance including the health system Within days of assuming office I

had remarked that the Medical Council of India is a corrupt organisationhellip

There is corruption in the approval of drugs The Central Drugs Standard

Controls Organisation which is supposed to oversee clinical trials is

another snake pit of vested interestsrdquo

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 12: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

ldquoCorruption ruins the doctor-patient relationship in IndiardquoDavid Berger in BMJ 2014 348 (Published 08 May 2014)

bull ldquoKickbacks and bribes oil every part of the countryrsquos healthcare machinery writes

David Berger If Indiarsquos authorities cannot make improvements international

agencies should actrdquo

bull ldquoLack of trust in doctors and the costs associated with going to see them mean

many patients rely on pharmacists who seem to have a similar lack of ethics

selling inappropriate drugs over the counter at exorbitant prices to people who

often have to borrow the money to pay for themrdquo

bull ldquoMany Indian doctors have huge expertise and many are honourable and treat

their patients well but as a group doctors have a poor reputation Until the

profession is prepared to tackle this head-on and acknowledge the corrosive

effects of its corruption then the doctor-patient relationship will continue to lie in

tattersrdquo

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 13: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

ldquoCorruption medicinersquos dirty open secretrdquoBMJ 2014 348 (Published 25 June 2014)

Anita Jain India editor Samiran Nundy dean Kamran Abbasi international editor

bull ldquoThe United States hellip lost between $82bn and $272bn in 2011 to medical

embezzlement mostly related to its health insurance systemrdquo

bull ldquoPatients everywhere are harmed when money is diverted to doctorsrsquo

pockets and away from priority services ldquo

bull ldquoYet this complex challenge is one that medical professionals have failed

to deal with either by choosing to enrich themselves turning a blind eye

or considering it too difficult

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 14: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

14

Pricing Anomalies of Indiarsquos Drugs

bull Overpricing

bull Profit margins can be up to 4000

percent

bull Different brands of same drug sell

at vastly different prices

bull Most drugs out of Govt price

regulation

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 15: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Government Expenditure on Drugs ()States 2008-09 (Actuals) 2009-10 (RE) 2010-11 (BE)

Assam 57 56 50

Bihar 63 59 70

Gujarat 65 49 76

Haryana 86 68 55

Kerala 106 104 125

Maharashtra 96 52 52

Madhya Pradesh 91 101 93

Punjab 11 10 10

Rajasthan 30 19 15

Uttar Pradesh 69 48 53

Jharkhand 29 23 34

West Bengal 92 68 68

Andhra Pradesh 73 68 100

Karnataka 80 72 63

Tamil Nadu 112 93 122

Himachal Pradesh 45 23 19

J amp K 65 52 43

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 16: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

-20

00

20

40

60

80

100

120

140

160

180

200

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

2004-0

5

2005-0

6

2006-0

7

2007-0

8

2008-0

9

Pharmaceuticals Chemicals Food amp BeveragesMachinery Transport Equipments

Profitability of Pharmaceutical Industry (Profit Before Tax as of Sales)

16

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 17: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Indiarsquos Pharma Industry

bull Total Sale Rs 73000 cr within India (Mar 2013 IMS)

bull Out of which Rs 13000-14000 cr is under price control (18 )

bull Exports Rs 80000 cr

bull Unbranded generics Rs 7000 cr

bull 3rd in (10 in global sales) terms of volume and 14th (15) in terms of value

bull ldquoPharmacy of the developing worldrdquo

bull It is among the top Five producers of bulk drugs in the world

bull After USA (169) India has the highest number of ANDA approved (132) plants in

US in the year 2007

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 18: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Indian pharmaceutical market

bull Nominal rate of growth in 2012 11

bull If we take out inflation real growth rate was 7

bull The total number of brands in the pharma market

in India in 2012 was 62345

bull The brands launched after 2005 had a combined

market share of 30 in 2012

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 19: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

bull Indiarsquos domestic drug market Rs 75 000 cr

bull Branded generics dominate representing 70 to 80 of the generic drug market

bull Generic Generics Rs 7000 cr

bull Patented drugs make up approximately 8 of total market sales in India Rs 6000 cr

bull 90 percent of Indian drugs mkt is out of patent

Breakup by brands patented etc

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 20: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

year

sales value

(Rs Crore)

market

share ()

sales value

(Rs Crore)

market

share ()

Grand

Total

2008 282523673 7111 1147998325 2889 3973235

2009 332514892 7092 1363319387 2908 4688468

2010 390217219 7108 1587593171 2892 5489765

2011 452418422 7072 1872981207 2928 6397165

2012 507062069 7117 2053979898 2883 7124601

Indian firms MNC

The market share of MNCs and Indian firms remained constant for the period 2008-12

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 21: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Top10 MNCs and Indian companies

bull The top 10 MNCs accounted for 26 of the

total sales value in 2012 Whereas the top 10

India companies accounted for 32 of the

sales

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 22: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Breakup of Sales Combinations vsPlain

Total Sales Combinations Plain Total

Covered under NLEM 2011DPCO 2013

Rs 1900 cr Rs 11197 cr Rs 13097 cr (18 )

Not covered under NLEM 2011DPCO 2013

Rs 31866 cr Rs 26283 cr Rs 58149 cr (82 )

Total Rs 33766 cr (47 )

Rs 37480 cr (53 )

Rs 71246 cr

Source IMS TSA Dec 12 MAT as per affidavit filed by DOP in SC Nov 2013

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 23: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Decreasing List of Drugs under Price Control

bull 1979-87 The Drug Price Control Order (DPCO) list of drugs under price control contains 347 drugs

bull 1987 -95 The DPCO list is pruned to 142 drugs by the Ministry of Chemicals and Fertilisers

bull 1995 -2013 The DPCO list is further pruned to 74 drugs

bull 1996 The UOI releases the first National Essential Drugs List

bull Draft PP 2002 reduces to 40 drugs or so

23

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 24: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

DPCO 1995 Ceiling Price Formula

Retail Price = (MC + CC + PM + PC) X (1+MAPE100) + ED

bull MC denotes material cost including drug cost and other pharmaceutical aids

bull CC indicates conversion costbull PM means packing material cost of formulationbull PC connotes packing of shipmentbull MAPE denotes Maximum Allowable Post-Manufacturing

Expenses which includes trade margin bull ED indicates excise duty

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 25: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

DPCO 2013

bull All 348 drugs in NLEM 2011 under price control

bull Ceiling price simple avg price of prices of brands with more than 1

mkt share

bull Touches 18 of the mkt of Rs 72000 crores

bull Leaves most FDCS and other formulations untouched

bull Escape hatches combinations non-standard dosages

bull Most ceiling prices are still in the range of 200 to 4700 margin

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 26: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Ceiling Price Mechanism Mkt Based Pricing (MBP)

bull Simple average of the brands with one percent market share

bull Applies to specified 348 drugs and their 600+ dosages in the

NLEM 2011

bull Drugs outside the NLEM are not in price control

26-Jul-14 26

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 27: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

26-Jul-14 27

Name of Drug strength

and Use

Atorvastatin tabs 10mg

Blood cholesterol lowering

agent

Cetrizine tabs 10mg tabs

Antiallergic

Albendazole tabs 400 mg

To treat worm infestation

1 Simple Avg Ceiling price

(as per DPCO 2013)

591 181 912

2 Market leader price 753 288 1402

3 Market leading brand

Company

Storves Ranbax Cetzine GSK Zentel GSK

4 TNMSC Price 2012-13 21 09 575

5 DPCO 2013 Ceiling Price

Mkt Leader Price

068 054 056

6 DPCO 2013 Ceiling Price

TNMSC Price x 100

2814 2011 1578

Illusion of Price ControlPrices in Rupees per 10 tabs

Source LOCOST NPPA and DOP

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 28: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Market Profile of Anti diabetics

Name of DrugSubject

In NLEM

Under Price Regulation

In Rs crores Percent

Total Antidiabeticsmkt

70 out 70 percent out 4502 100

Glibenclamide Yes Yes 1651 037

Metformin Yes Yes 267 593

Metformin and combinations

90 out 90 Out 2278 5059

Insulins Yes Yes 117667 2614

Glimipiride and combinations

No No 1448 3216

Glucagon Yes Yes 262 006

Source of data Pharma Trac Oct 2012

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 29: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Paracetamol Market

MAT Oct 12 No of

Formulations

Single

Ingredient

52773 cr 2052 358 1165

Paracetamol 500

mg

128 cr 49

Combinations 204349 cr 7948 2714 8835

Total 257122 cr 3072

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 30: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

DPCO 2013 Market Under Control

DOP estimates the value of medicines under price control is Rs 13097 crore or 18 of the Indian pharmaceutical market (based on 2012 sales reported by IMS Health)

MISSING DATA

Data is not available in IMS for ~25 (140 formulations) of all formulations coming under price control

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 31: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Percent of Sales of Drug Categories not Covered by DPCO 2013

bull Over all 82 bull antidiabetics (86) bull antimalarials (88) bull anti-infectives (63) bull anti-TB (81) bull blood related (99 ) bull cardiac (71 ) bull derma (90) bull gastrointestinal (85)bull gynaec (86) bull hepatoprotecives (100)

bull HIV related (73 ) bull hormones (56) bull neuroCNS (82) bull opthalotologicals (94) bull sex stimulantsrejuvenators

(99)bull painanalgesics (90) bull respiratory (94) bull stomatologicals (100) bull vitaminsmineralsnutrients

(99) bull vaccines (68)

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 32: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Market Under Controlbull FDCs may provide an escape route to avoid price control

o FDCs not falling under control account for 45 of the total market

bull COMBINATIONS - 94 (Rs 31866 crore) do not come under price control

bull PLAIN FORMULATIONS - 70 (Rs 26283 crore) are outside price control

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 33: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Price Control in Selected Therapeutic Categories

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 34: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Market ldquoShrinkagerdquo due to DPCO 2013

bull Sales of 2073 brands of some 250 NLEM drugs in 370 dosages Rs 11234 cr sales

bull No of brands that would actually have their sales shrunk ndash at constant volumes 978 brands (with sales of Rs 6492 cr)

bull Actual Shrinkage Rs 1281 cr

bull Actual loss to companies a fraction of that

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 35: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

26-Jul-14 35

Percent Reduction with respect

to Maximum Price (Col 2) or

Market Leader Price (Col 3)

No of drugs having atleast 1

market share whose prices are

reduced with respect to

Maximum Price

No of drugs having atleast 1

market share whose prices are

reduced with respect to Market

Leader Price (by sales)

(1) (2) (3)

0 lt= 5 16 27

5 lt= 10 26 35

10 lt= 15 34 28

15 lt= 20 34 28

20 lt= 25 49 42

25 lt= 30 33 17

30 lt= 35 23 16

35 lt= 40 29 16

gt 40 94 36

No of drugs whose DPCO

2013 Simple Average Ceiling

Price is Greater Than or

Equal to Market Leader

Price

94

TOTAL 338 339

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 36: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Some more Facts on the ldquoPrice Controlrdquo

bull Average reduction with respect to market leader 619

bull Average reduction with respect to highest price (or ldquoprice leaderrdquo) 30

bull No of cases where ceiling price is higher than the market leader 94 out of 339 or

28

bull No of cases where the price reduction of the ceiling price is less than 10 wrt the

market leader 64 out of 339 or 19

bull That is about 47 of the 339 notified ceiling prices exhibit less than 10 decrease

and 28 of the notified ceiling prices are greater than than or equal to the market

leader

Source PHFIISID opcit and LOCOST et al Data source for Analysis

httpwwwnppaindianicinindex1html

bull26-Jul-14 36

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 37: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Generic = Brand

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 38: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Equivalence of Generic Drugs and Brand Name Drugs

bull The study evaluated the results of 38 published clinical

trials that compared cardiovascular generic drugs to their brand

name counterparts

bull and no evidence was found that branded cardiac drugs worked any

better than generic heart drugs

Source Kesselheim et al Clinical equivalence of generic and brand name drugs used in cardiovascular disease

a systematic review and meta-analysis JAMA 2008300(21)2514-2526

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 39: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Generic and Innovator Drugs

Comparing generic and innovator drugs a review of 12 years of

bioequivalence data from the United States Food and Drug Administration

bull Davit BM Nwakama PE Buehler GJ Conner DP Haidar SH Patel DT Yang Y Yu LX

Woodcock J Ann Pharmacother 2009 Oct43(10)1583-97 doi 101345aph1M141 Epub

2009 Sep 23

bull CONCLUSIONS

bull The criteria used to evaluate generic drug bioequivalence studies support the FDAs

objective of approving generic drug formulations that are therapeutically equivalent

to their innovator counterparts

bull The average difference in pharmacodynamics between generic and brand-name

products was about 4 in nearly 98 of the studies reviewed the properties of

generic products differed from those of the brand-name product by less than

10rdquo

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 40: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Generic Drugs Problems

bull Quality

bull Bioequivalencebioavailability issues

bull At present Bioequivalence of generics is only a problem of some 40 medicines like warfarin digoxin carbamezipine

bull In general in vitro BA tests (like dissolution) plus compliance with IP parameters is considered good enough

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 41: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Bioequivalence Curves

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 42: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

When Bioequivalence Study is Required

bull Drug indicated for Serious disease requiring assured therapeutic

response

bull Drug having narrow therapeutic index

bull Drug with Non-Linear Pharmacokinetics

bull Documented Evidence of BA problems

bull Unfavorable Physicochemical Properties

ndash BCS (Biopharmaceutics Classification System) Classification

BCS-1- High Solubility and high permeability

BCS-2- Low Solubility and high permeability

BCS-3- High Solubility and low Permeability

BCS-4- Low Solubility and Low Permeability

Bioequivalence study not required for drug falling under BCS-1 3

43

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 43: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Unbranded Generic Name Drugs are Cheaper than Branded

Drugs

bull Cheaper does not mean lower quality

bull Generic manufacturers are able to sell their products for lower prices

because they are not required to pay for costly advertising marketing and

promotion

bull In addition multiple generic generic companies are often approved to

market a single product this creates competition in the market place often

resulting in lower prices

bull

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 44: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Case Studies

bull Public Health System

ndash Govts of Tamil Nadu Kerala Rajasthan Gujarat

ndash Jan Aushadhi Jeevandhara Scheme

bull Not for profit sector

ndash LOCOST Vadodara

ndash CMSI Chennai

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 45: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Some features of TNMSCTamil Nadu Medical Services Corporation

bull260 drugs in its EDL (2011-12)

bullSurgicals 75 items sutures 113 items

bull21 fast moving drugs account for 80 of procurement budget

bulllsquoSpecialityrdquo drugs 292 (2010-11) - 10 drugs account for 856

bullOne drug ndash Temozolamide caps - 52

bullCAT scan and X Ray centres

bull21 of popln utilization in 2001-02 (currently 40 )

bullServices top to bottom level of care

bullDrugs are free

(Source partly Maulin RChokshi TN Drug Procurement Model Nov 2008 WHO-SEARO)

46

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 46: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

TNMSC Scan Centers

bull At present 45 nos of single slice CT scan centers in the Government Hospitals all over the State (min 1 CT scanner in each dist) and 4 slice CT scanners one each at Govt General Hospital Chennai ICH amp Govt Hospital for Children Chennai are in operation

bull 45 scan centers

Category Plain With Contrast

Inpatients Rs 350- Rs 550-

Outpatients Rs 500- Rs 700-

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 47: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

TNMSC Other Supportive Services

bull MRI scan centers in 9 govt hospitals Rs 2500 (plain) Contrast Rs 1500 extra

bull Lithotripsy

bull Regional diagnostic centers

bull Sale counter at Chennai for Cyclosporin Cap USP 2 Cyclosporin Oral Solution USP 3 Anti Snake Venom Serum IP 4 Human Insulin (Short acting) 5 Human Insulin (Intermediate acting)

bull Lab Services

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 48: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

25 warehouses

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 49: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Inside Warehouse at Sivagangai

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 50: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

STORAGE

STORAGE

34 District Drug Warehouses for proper storage

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 51: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

QC

QUALITY ASSURANCE

bullAll drugs received are stored in quarantine areabullSample are sent to QC cell at RMSC head officebullSamples are coded amp sent to empanelled labsbullExamination of samples is carried out as per pharmacopeiasbullIf sample is found ldquoas of standard qualityrdquo then only drugs are issued to hospitals

Video ndash QC Lab

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 52: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Some Comparisons Medicine Name Strength Ceiling price of Govt

April 2014

LOCOST price July

2014

Albendazole tabs 400 mg 9920 1425

Amlodipine tabs 5 mg 3010 375

Atenolol tabs (for 14) 50 mg 3080 455

Atorvastatin tabs 10 mg 6490 925

Cephalexin caps 500 mg 12390 3400

Cetrizine tabs 10 mg 1920 215

Diclofenac tabs 50 mg 2000 300

Enalapril maleate tabs 5 mg 3150 425

Flucanozole caps 150 mg 25310 2900

Metformin tabs 500 mg 1660 425

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 53: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

A positive side effect Generics advertised by pvt pharmacists

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 54: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Rs 2750

Manufactureris

Cipla for all the

three brands

One brandedamp

Two generic

Rs 3930 Rs 3150MRP for 10 tabs

Purchase price for 10 tabs

Rs 202 Rs 2370 Rs 227

GenericGeneric Branded

To search low cost branded drugs please visit wwwrmscnicin wwwrmsccoin

or wwwtnmsccom

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 55: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Quality and Unbranded Generics

bull All unbranded generics undergo quality tests as per IP

bull In addition you can get them tested

bull Even branded generics fail regularly

bull Over and beyond this quality is a matter of perception of

prescribers and patients

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 56: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Necessities For

MAKING MEDICINES AFFORDABLE

bull Generic prescribing

bull Adoption of essential drugs list

bull Standard Treatment Guidelines

bull Centralized drug procurement open tender system

bull Distribution of Low cost drugs through Govt drug counters

bull Public awareness and demand generation

58

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 57: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

HLEG Recommendations

bull Scale Up Public Spending on Drugs (04 GDP)

ndash Expected to reduce OOP

bull Strengthen Public Procurement System

ndash Supply quality generic drugs and enforce rational use

ndash Centralised Procurement amp Decentralised Distribution System

ndash Warehouses at every district level

ndash Retail outlets can be set up (or contracted-in) atleast one at every block level

and 4-5 at district headquarters

ndash Drug supply to such stores linked to centralized procurement at state level so

that drugs are of equal quality amp costs are minimized by removing

intermediaries

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 58: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

How much does medicines for all cost

bull Rs 250 crores TNMSC medicine budget per year approx

bull Under assumptions of about 30 percent of those ill using public health services

bull It costs around Rs 1000 cr max for free medicines for all ndashpvt and public sector in TN

bull For all of Indiarsquos 128 cr population this will be Rs 18000 cr

bull Assumption is that these are at TNMSC prices which are very low 3 to 40 times cheaper than market prices

60

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 59: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

What are the Barriers to Access to Medicines in Public Health Systems

bull None except in the mind

bull Failure of imagination

bull In this case it does not even take much imagination

bull As the homework has already been done in 2-3 states of India

bull Resistance from pharma and medical lobbies need to be negotiated

61

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 60: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Biosimilars

bull Indiarsquos ldquoaffordablerdquo biosimilars in the therapeutic category anti EGFR insulin Glargine Filgastrim EPO ndashAlpha and Rituximab Anti-CD-20 which indicate a price difference of 50 per cent to 80 per cent across categories wrt innovator biologics

bull But they are still overpriced

bull Eg Rituximab market price is Rs 50000 TNMSC quotation recd is Rs 12000

bull Question of how similar are biosimilars to reference biologics is still to be settled

bull Need to also estimate what are the real costs of biologics

bull 43 of the drug budget for the USrsquo Medicare Part B is consumed by 6 biologic drugs

bull Other wise this is another looming public health disaster

bull Only salvation lies in progress in technology so that 100 replication of biosimilars becomes more of a reality and costs come down

bull Patent issues in biosimilars in India 12 year data exclusivity in US

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 61: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

Emerging trends

bull Takeover of Indian companies

bull Tying up of major India pharma companies with big pharma through medicines patent pool voluntary licensing contract manufacturing or part ownership thru brownfield route

bull Ciplarsquos marketing arrangement with Merck

bull There will not be any Indian cos to implement the CLs if awarded

bull Reluctance in GOI to use CL provisions

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 62: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

64

Systemic Changes Required in the Run Up to

Medicines for all (say by 2020)

bull Right to medicine and health needs to be legislated as a fundamental human right

bull All essential drugs shld be under price control

bull All irrational medicines should be removed

bull Only rational drugs shld be marketedapproved in India

bull Govt use CL on essential drugs under patent

bull Easy takeover of Indian Pharma companies should be stopped

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 63: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

A Strategy for the Future

bull Increase seeding of new entrepreneurs in pharma as the old ones are

getting co-opted by big pharma

bull Govt capability of manufactureworking the CLs as in Thailand

bull Strengthening of MSMEs so as to supply to the govt sector for medicines

for all

estimated at Rs 18000 cr at TNMSC prices

bull Battling USUSITC pressures at the WTO Dispute Settlement Body

bull No TRIPS Plus measures in bilateral FTA clauses

bull No arbitration clauses in agreements with with private companies

bull No treatment of markets and IP as ldquoinvestmentrdquo

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)

Page 64: Issues in Availability and Efficacy of Medicines - CIPSIssues in Availability and Efficacy of Medicines Presentation at UPAAM, Lucknow, July 22, 2014 -S.Srinivasan, LOCOST Email: chinusrinivasan.x@gmail

For more information contact us at

email

lowcoststdgmailcom

website

wwwlocostindiacom

Ph 91 265 2830009

91 999 877 1064 (Srinivasan)

91 917 300 0787 (Krishna)