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Collusive Behaviour, Medicines and Access

-Collusive Behaviour in Health delivery in India: Need for Effective Regulation

Tuesday, 6th July, 2010, New Delhi - S.Srinivasan

LOCOST, Baroda, India

Email: locost@sify.com

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Main Cause of Collusive Behaviour

Lack of Regulation of

• Privatised Medical Education

• Drug Companies, Pricing and Kinds of Medicines

• Clinical Establishments

• Conflict of Interests among medical professionals

AND

Lack of Access to Quality and Free Govt Healthcare

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Drug Company-Doctor Interface -1

• Face to face visits from drug company representatives• Acceptance of direct gifts of equipment, travel, or

accommodation• Acceptance of indirect gifts, through sponsorship of

software or travel• Attendance at sponsored dinners and social or

recreational events• Attendance at sponsored educational events,

continuing medical education, workshops, or seminars

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Drug Company-Doctor Interface -2

• Attendance at sponsored scientific conferences

• Ownership of stock or equity holdings

• Conducting sponsored research

• Company funding for medical schools, academic chairs, or lecture halls

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Drug Company-Doctor Interface -3

• Company funding for medical schools, academic chairs, or lecture halls

• Membership of sponsored professional societies and associations

• Advising a sponsored disease foundation or patients' group• Involvement with or use of sponsored clinical guidelines

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Drug Company-Doctor Interface -4

• Undertaking paid consultancy work for companies

• Membership of company advisory boards of "thought leaders" or "speakers' bureaux“

• Authoring "ghostwritten" scientific articles

• Medical journals' reliance on drug company advertising, company purchased reprints, and sponsored supplements

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Promotion or Bribe?• Johnson & Johnson which markets epoetin alfa (used in patients of kidney

impairment) generously sponsored some 300 kidney specialists (along with spouses) to attend a 3-hour "scientific conference" in Singapore with stay extended by another 3 days!

• Result: its brand has the highest sale of epoetin alfa.

• Competitor LG Pharma paid for some 200 nephrologists to visit Turkey for holiday.

• Ranbaxy sponsored the visit of some 400 prescribers to Bangkok.

• High value items like air conditioners, cars, music systems are routinely gifted to obliging prescribers.

• Breaking News: Demand Drafts ranging from Rs. 20,000 to 30,000 are being distributed.

• A US multinational company is gifting gold coins. Source: Dr Gulhati

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Capturing KOLs

• Key Opinion Leaders (KOLs) are influential specialists in their fields such as doctors at teaching hospitals, senior consultants, authors etc.

• KOLs endorsement in favour of new products or new uses of old products is a top priority for pharma companies.

• Aggressive, often highly unethical tools are employed to capture KOLs.

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How common are competing interests?

• A quarter of US researchers have received pharmaceutical funding

• Half have received “research related gifts”

• An analysis of 789 articles from major medical journals found that a third of the lead authors had financial interests in their research—patents, shares, or payments for being on advisory boards or working as a director

• Bekelman JE, Li Y, Gross CP. Scope and impact of financial conflicts of interest in biomedical research. A systematic review. JAMA 2003; 289: 454-65.

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How common are competing interests?

• 75 pieces giving views on calcium channel blockers

• 89 authors

• 69 (80%) responded

• 45 (63%) had financial conflicts of interest

• Only 2 of 70 articles disclosed the conflicts of interest

Stelfox HT, Chua G, O'Rourke K, Detsky AS. Conflict of interest in the debate over

calcium channel antagonists. N Engl J Med 1998; 338: 101-105

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Do authors declare conflicts of interest?

• 3642 articles in the five leading general medical journals (Annals of Internal Medicine, BMJ, Lancet, JAMA, and the New England Journal of Medicine)

• Only 52 (1.4%) declared authors' conflicts of interest

• Hussain A, Smith R. Declaring financial competing interests: survey of five general medical journals. BMJ 2001;323:263-4.

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Does conflict of interest matter?

• 11 studies compared the outcome of studies sponsored by industry and those not so sponsored

• In every study those that were sponsored were more likely to have a finding favourable to industry

• When the results were pooled the sponsored studies were almost four times more likely to find results favourable to industry

• Bekelman JE, Li Y, Gross CP. Scope and impact of financial conflicts of interest in biomedical research. A systematic review. JAMA 2003; 289: 454-65.

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Does conflict of interest matter?

• 106 reviews, with 37% concluding that passive smoking was not harmful and the rest that it was.

• Multiple regression analysis controlling for article quality, peer review status, article topic, and year of publication found that the only factor associated with the review's conclusion was whether the author was affiliated with the tobacco industry.

• Only 23% of reviews disclosed the sources of funding for research.

• Barnes DE, Bero LA. Why review articles on the health effects of passive smoking reach different conclusions. JAMA 1998; 279: 1566-1570

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Sponsored research

• A systematic review found 30 studies that compared research funded by drug companies research funded by other sources

• Company sponsored research more likely to be published

• Studies sponsored by pharmaceutical companies were more likely to have outcomes favouring the sponsor than were studies with other sponsors (odds ratio 4.05; 95% confidence interval 2.98 to 5.51; 18 comparisons)

• None of the 13 studies that analysed methods reported that studies funded by industry was of poorer quality

• Joel Lexchin, Lisa A Bero, Benjamin Djulbegovic, and Otavio ClarkPharmaceutical industry sponsorship and research outcome and quality: systematic reviewBMJ, May 2003; 326: 1167 - 1170.

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What proportion of trials in the five major general journals are funded by industry?

• 75% in Annals of Internal Medicine, Lancet, JAMA, and NEJM

• 30%in BMJ

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Reasons for Not getting the Rt Medicine at the Rt

Time • Overpricing of Drugs

• No assured access to free universal health care

• Prevalence of Irrational Drugs and too many fixed dose combinations

• Irrational prescriptions and practices by Doctors

• No prescription audit, medical audit, etc.

• Poor adherence to Std TT Guidelines

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Other major reasons for poor access to the right

medicine at affordable prices

• Aggressive Drug Promotion by drug companies

• Inducements to doctors

• Over/under prescribing by doctors

• Cut Practice

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Are India’s “low-priced” drugs affordable in India?

• Affordable for whom?

• Cost of drugs for multi-drug resistant TB (maintenance phase) is equivalent to 737 days of daily wage of a wage laborer in India

• Daily wages is Rs 60/- average (One Euro = Indian Rupees 70)

• Coronary heart disease: 209 days of wage labor

• Prevention of Hepatitis A: 30 days of wage labor

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Pricing Anomalies of India’s Drugs  • Overpricing

• Profit margins can be up to 4000 percent

• Different brands of same drug sell at vastly different prices

• Most drugs out of Govt price regulation

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Cost of Treatment with Biotechnology-based Drugs

• Abciximab (antianginal, Eli Lily): Rs. 39,480 for a 60 kg man per day

• Epoeitin alfa (Wepox/Wockhardt, Treatment of anemia of chronic

renal failure): Rs. 10,200 for 8 weeks for a 60 kg man AND

• Rs. 1912 to 11475 per week for a 60 kg man thereafter

• Interferon alpha-2a (Roferan-A/Nicholas Piramal)used in types of leukemia: Initial therapy costs of Rs. 43,552- Rs 1,30,656 then maintenance therapy costs of Rs. 1,06,158- Rs.3,18,474 (6-18 months tt cost)

• Etanercept (Enbrel/Wyeth) –in severe arthiritis: Rs. 18,131 per week of therapy which has to be taken long term.

Thanks to Dr Anurag Bhargava of JSS Bilaspur for these data, Sep 2007.

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Difference in a vaccine’s MRP and the price at which it is offered to physicians

Vaccine Constituent vaccines MRP, in Rs 2008

(A)

Price offered

tophysicians,

in Rs (B)

Discount in

Rs

(A-B)

Percentage Margin of profit

for the physician

(A-B)*100/ B

Pentaxim

Diphtheria, Tetanus, acellular pertusis,

inactivated poliomyelitis vaccine,

Haemophilus influenzae b conjugate vaccine

2066 1446 620 42.9

Imovax Polio

Inactivated Poliomelitis vaccine

365 280 85 30.4%

Tripacel Component pertusis, Diphtheria and tetanus

toxoids

1211 762 449 58.9%

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Okavax Varicella vaccine 1468 986 482 48.9%

Avaxim 80

Hepatitis A Vaccine 952 665 287 43.2%

TetractHib

Diphtheria, Tetanus, pertusis, Haemophilusinfluenzae b conjugate vaccine

504 305 199 65.2%

ActHib Haemophilus influenzae b conjugate vaccine

426 251 175 69.7%

Source: Rakesh Lodha , Anurag Bhargava . “Financial incentives and the prescription of newer vaccines by doctors in India.” Indian Journal of Medical Ethics Vol VII No 1 January - March 2010

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What is Wrong with India’s Drug Situation?

• Drug costs are about 40-80 percent of the health care costs

• Health care is the second most common reason for rural indebtedness.

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What is Wrong with India’s Drug Situation? –2

• There are more than 20,000 drug formulations available in the Indian market.

• A great many are irrational and unscientific.

• Too many combination drugs

• 62 percent of top-selling 300 drugs are not in the National List of Essential Medicines!

• Poor regulation by drug authorities; corruption and inefficiency

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Market Characteristics: Competition does not

reduce prices!

• Many players

• But prices of drugs have not come down

• Same drug is sold at different prices by different companies

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“Competition” does not reduce prices!

• Same drug is sold at different prices by the SAME company too!

• Brand Leader often also the Price Leader (costliest drug is most sold).

• Therefore competition does not automatically bring down the prices.

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

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Why market cannot decide medicine prices in

India?

• Because buyers and sellers have different bargaining strengths (info asymmetry)

• Sellers and doctors decide

• Buyers (patients) have little or no choice

• Buyers have to make decision usually under distress

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“Free” Market?

• Drug prices are fixed as to what the perceived target market for the brand can take.

• Markets are distorted by unfair and unethical marketing practices of drug companies

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Two approaches to regulatory mechanisms

• Indirect price regulatory mechanisms that try to create the conditions that result in lower medicine prices.

• Direct price regulatory mechanisms that aim directly to change medicine prices.

• In practice, a combination of indirect and direct mechanisms is often used, and is likely to vary from country to country.

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INTRODUCING COMPETITION WHEN PRODUCTS

ARE UNDER PATENT

Three key ways to “force” suppliers of patented medicines to compete with cheaper alternatives. These are:

• compulsory licensing;

• revoking a patent; and

• parallel importation.

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Introducing Competition after Patent Expiry

• Ensuring that the registration process runs smoothly and efficiently, with a fast-track drug regulatory process for essential medicines.

•        Starting and completing the drug registration process during the life of the patent, so that generic alternatives are already registered and can therefore be sold immediately when the patent expires.

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Restoring Competition

• Restoring Lost competition (by preventing collusion and anti-monopoly laws)

• By ensuring easy entry and exit policies

• By removing trade barriers

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If Competition does not work?

• Need for Direct Price Regulatory Mechanisms

• Govt guidelines for price-setting

• Laws prohibiting high prices

• Direct price regulation

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Price Regulation in Other Countries

• There is no free market pricing in drugs even in the so-called free market economy countries.

• Except in the USA, where drugs are costliest!

• Free market does not come cheap –in medicines.

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Price Regulation in Other Countries

•    U.K : Pharmaceutical Price Regulation Scheme (PPRS) http://www.doh.gov.uk/pprs/index.htm)

• Canada: Patented Medicines Prices Review Board• France: Transparency Commission and Economic Committee on

Medicines• Egypt: All drugs under price control• Italy: Restricted wholesale margins• Germany: Reference pricing system • And some system of price monitoring and price regulation

prevails in Japan, Netherlands, China, Indonesia, Colombia and so on. In some of these countries drug pricing is tied with national health system reimbursements and or insurance schemes.

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Tender Prices a Fraction of Retail Prices!

• Govt tender prices fraction of retail prices

• For example: Albendazole 1.89 percent of market price!

• Amylodipine: 6.13 percent of market price!

• See www.tnmsc.com for tender prices of a good, transparent govt procurement agency

[ See also: Srinivasan, S. “How Many Aspirins to the Rupee? Runaway Drug Prices”, Economic and Political Weekly, February 27-March 5, 1999]

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Comparison of Retail MRPs and LOCOST prices

Name of Drug Use LOCOST selling prices per tab (Rs)

Market selling prices per tab (Rs)

Albendazole 400 mg

For worms Rs 1.10 Rs 12 to 20

Amlodipine 5 mg

In high blood pressure and as antianginal

Re 0.25 Rs 1.40 to 5.00

Atenolol 50 mg In high blood pressure and as antianginal

Re 0.20 Rs 4 to 22

Enalapril 5 mg In high blood pressure mild to moderate

Re 0.30 Rs 1.60 to Rs 2.30

Fluconazole 150 mg

Fungal Infections in AIDs and other conditions

Rs 3.50 Rs 28 to Rs 32

Cetrizine Anitallergic Re 0.20 Re 0.50 to Rs 3.00

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It is indeed possible

• The experiences of TN, Delhi State, Chittorgarh District shows low priced good quality medicines can be available in the public sector.

• There has been no shortage

• Not only that it makes sense to set up shops at retail level to make available at these prices!

• Nothing is stopping us except political will!!

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What Needs to be Done?

• Clear understanding for the need for active government regulation

• Medicines and health cannot be left to the market and drug lobbies

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What else to be done? -1

• Only rational drugs as per WHO list to be allowed –all others to be weeded out

• Drugs to be marketed only by INN names

• Strict price and profit regulation

• Opening up of minutes of regulatory body meetings

• Deterrent punishment for corruption, quality and unethical marketing

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What else to be done? -2

• Mandatory disclosure of conflict of interests • Ban on drug company sponsorships of professional conferences

• Public access to all documents on basis of which new drugs allowed to be marketed

• Bold policy on issuing CLs on drugs important for India’s health security and people’s health

• No privatization of medical/dental/pharmacy education