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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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
-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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
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
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)
For more information contact us at
lowcoststdgmailcom
website
wwwlocostindiacom
Ph 91 265 2830009
91 999 877 1064 (Srinivasan)
91 917 300 0787 (Krishna)