The global market for biosimilar drugs has been forecasted to be worth $2.445 billion this year, according to a new report by British market research specialist Visiongain. The growth represents a 20% increase from last year and accounts for approximately 2% of the overall biologics market. Moreover, the global biosimilars market is expected to experience a steady growth over the next 10 years, driven by worldwide launches of such products, particularly in the EU and US.
The report predicts that the biosimilar monoclonal antibodies (mAbs) and insulin submarkets will see the fastest growth, with these products making up 57% of the global biosimilars market by 2023. Last year itself, South Korean biotech firm Celltrion and Hospira, a US-based pharmaceutical company, submitted regulatory filings to the European Medicines Agency (EMA) seeking for approval of their biosimilar version of the mAb infliximab. Visiongain anticipates that these products will be launched in the EU in 2014.

The mAbs have the strongest R&D pipeline in the biologics market according to the report. In fact, we can expect to see a range of next-generation technologies pushing mAb therapeutics into newer areas such as solid tumours, cardiovascular and neurological disorders.

There is also major growth opportunity for biologics in the treatment of diabetes. New fusion proteins are set to join Novo Nordisk’s insulin degludec (Tresiba), which is a new-generation basal insulin with ultra-long duration of action of more than 42 hours, as well as other novel insulins on the market in the near future.
However, mAbs and insulins are not the only biosimilar submarkets projected to experience growth. Biosimilar erythropoietins and filgrastim products are already available in several developed markets, including the EU and Japan. Despite the limited revenues achieved with biosimilar erythropoietins and filgrastim products compared to their reference biologics, Visiongain believes that the launches of these biosimilar products in the US will drive further growth from 2014 onwards, as will the worldwide introduction of second-generation filgrastim (pegfilgrastim) and epoetin alpha (darbepoetin alpha) biosimilars.

Pharmaceutical industry analyst James Evans commented in a press statement, “Biologics were one, two and three in the top ten drugs of 2012. People talk about the biotech revolution, but biotech is now one of the dominant, established powers in the pharmaceutical industry.” He noted that all the main biotechs have either been acquired by Big Pharma or become major players in their own right.

Evans added that the next big shift would be when biosimilars begin to penetrate the market. “Once the EU’s new regulatory pathway for biosimilars has been established, we can expect the major markets to be inundated with biosimilars and biobetters. The entry barriers for bio-manufacturing and bio-processing have been greatly reduced, and even the suite of technologies that built the mAb market, from phage display to transgenic mice, are now off-patent and accessible to any company that’s interested. And biologics are going to become so prevalent that every major company will be interested in having a stake in that expanding market.”

Richard Lang, a pharmaceutical market analyst at Visiongain, said in another press release that many companies are interested in entering the biosimilars market and have invested in this field, given the simpler route of launching such drugs compared to developing novel biologics. Lang however pointed out that not all biosimilar development programs will be successful. “Biologics and biosimilars are large, complex molecules requiring long and expensive development and manufacturing. The recent release of development guidelines by regulatory agencies in markets worldwide will increase the success rate of biosimilar development.

However, commercializing biosimilars is as challenging as developing them. Companies will need to brand and market their biosimilars in a similar way to novel drugs, engaging key stakeholders such as doctors, health care payers and patients, to achieve high market penetration.”

Emerging markets, particularly China and India, have been leaders in biosimilars, accounting for the majority of global revenues for biosimilars in 2012, whereas the EU, US and Japan made up 20% of the market last year. But for the next 10 years, Visiongain predicts that the developed markets will see faster growth than the emerging markets, driven by patent expiries on blockbuster biologics during 2013 to 2017.

Peter Houston

You know this: digital marketing means you have the potential to get your message in front of more people than ever before; search and social media offer reach on an unparalleled scale. According to global internet analytics firm Comscore, there are 13.7 billion searches conducted on Google every month. With 60% of US consumers saying they looked for health information online in the last year, that’s a lot of potential patients.
The problem is, that reach is available to everyone else from top-10 pharma to your local Deli: We’re all publishers now.

Actually we’re not all publishers, we’re all authors. Publishers — certainly in the traditional sense of the word — would never allow most of the content on the Internet out of the slush pile. And it’s the public accessibility of that slush pile that might just provide Pharma with its best opportunity to be heard above the noise.

Content marketing — the art of creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience — is being hailed as the brightest hope for marketers desperate to cut through the Internet’s clutter. So far so good – Pharma has been producing quality, expert-led, evidence-based content for ever.

If you read some of the content marketing blogs you would think these geniuses had just invented the concept. But content marketing has been around almost as long as marketing.

• John Deere, America’s favourite tractor manufacturer, released the first customer magazine in 1895
• Guess what brand of flour my mother-in-law has on her kitchen shelf. Here’s a clue – she swears by her BeRo Flour cookbook first published in 1923 and now in its 40th edition.
• Have you ever wondered why the world’s leading restaurant guide is named after a tyre manufacturer? Back at the turn of the last century Michelin published its first restaurant recommendations to give drivers a good reason to burn more rubber.

What is new is the importance marketers are placing on real value delivered through content. Possibly the biggest reason for this new focus on quality is that Google, the daddy of web search, got tired of people gaming its search algorithms with sub-standard content

To combat SEO tactics that had more to do with keyword stuffing than content quality, Google changed the rules of the game with its Penguin algorithm, introduced this time last year and already headed for its third update. I won’t even begin to pretend to understand how Google’s algorithms work, but I do know they are focusing more and more on the quality and ‘shareability’ of content to improve the search experience and this puts content marketing firmly in the frame.

There’s also the added benefit that, rather than interrupt people with unwanted sales pitches, content marketing offers a non-interruptive approach to customer communication. The ideal is to create a regular stream of valued, trusted content that customers will actively seek out and share.

Pharma’s content-marketing opportunity is to make sure that when a doctor or a patient goes searching for health information — which they are doing more and more — the right content is there waiting for them. When they get exactly what they want, when they want it they’re also happy to pass it on to friends and family. The problem is pharma doesn’t like sharing.

Content marketing principles — valuable content that engages a clearly defined audience – might have been at the heart of pharma’s efforts to help HCPs and patients understand and adopt new treatments for years. Pharma should have a head start in the content marketing race, but it’s firms like Marriot, Old Spice and American Express that are getting noticed for their content marketing efforts, because they love people to share their content

“As a well-oiled content machine that knows how to build relationships, pharma should thrive in this new era,” writes Dr Candice O’Sullivan of Australia’s Wellmark agency on PharmaForum. “Here is an industry well used to the rigours of consistently producing high-quality content — the number one challenge for most content marketers — but finds it virtually impossible to ‘share’.”

O’Sullivan closes by describing Pharma as an industry “too preoccupied by the risks involved to be able to make the most of this opportunity”. Sound familiar?

Peter Houston is former Group Content Director for Advanstar Pharma Science. He is now an independent media consultant and founder of Flipping Pages.

By Susan Haigney.

Pharmaceutical Research and Manufacturers of America (PhRMA) International Vice-President Jay Taylor has expressed the organization’s concerns over the Office of the United States Trade Representative’s (USTR) 2013 Special 301 Report. The Special 301 Report, released in May 2013, is an annual review of the state of intellectual property (IP) rights protection and enforcement in trading partners around the world and reflects the US Administration’s resolve to maintain IP protection worldwide.

Expressing appreciation for USTR’s efforts to ensure IP protection, Taylor expressed dismay that an out-of-cycle review was not granted for India. “The deteriorating protections for patented medicines in India have become increasingly concerning,” Taylor said in a PhRMA blog. “Over the past year, the Government of India has issued several intellectual property decisions that have disproportionately impacted US biopharmaceutical companies and a number of other innovative sectors. The IP regime in India has been structured and applied in ways that prop up local industries to the detriment of US jobs and the worlds patients.”

According to the report, India remains on the Priority Watch List. And with regard to pharmaceuticals and patents, the administration states it has some concerns. “The United States is concerned that the recent decision by India’s Supreme Court with respect to India’s prohibition on patents for certain chemical forms absent a showing of ‘enhanced efficacy’ may have the effect of limiting the patentability of potentially beneficial innovations. Such innovations would include drugs with fewer side effects, decreased toxicity, or improved delivery systems. Moreover, the decision appears to confirm that India’s law creates a special, additional criterion for select technologies, like pharmaceuticals, which could preclude issuance of a patent even if the applicant demonstrates that the invention is new, involves an inventive step, and is capable of industrial application,” the report states.

Taylor also expressed PhRMA’s disappointment that Canada was moved to the Watch List for 2013. “While PhRMA appreciates the fact that USTR raises serious concerns regarding numerous Canadian pharmaceutical IP measures, we are nonetheless disappointed that USTR has changed Canada’s designation despite the fact that no progress has been made on this front. Canadian policies and judicial opinions continue to harm international innovators to the benefit of domestic industries. Canadian regulators have, for example, created a discriminatory right of appeal regime under which Canadian medicine manufacturers challenging the validity of a medicine patent may appeal an adverse decision through an administrative proceeding while innovative international biopharmaceutical companies cannot. We also are concerned that the heightened standard for patentable utility for pharmaceutical patents is inconsistent with Canada’s trade treaty obligations. USTR and the interagency process should push Canada to provide more adequate IP protections.”

The report does express concern regarding rights of appeal in Canada. “With respect to pharmaceuticals, the United States continues to have serious concerns about the availability of rights of appeal in Canada’s administrative process for reviewing regulatory approval of pharmaceutical products and also has serious concerns about the impact of the heightened utility requirements for patents that Canadian courts have been adopting recently.”

Taylor goes on to state support for USTR and the battle for IP protection. “The value of IP protection should not be undermined by discriminatory market access barriers, including discriminatory government pricing and reimbursement policies. We welcome USTR’s recognition of market access barriers faced by US pharmaceutical companies and their efforts to eliminate them in many countries in order to provide for affordable healthcare today and support the innovation that assures improved health care tomorrow.”

The full Special 301 Report, detailing positive and negative findings from countries all over the world, can be found here.

What do you think? Is the US doing enough to protect the IP rights of pharmaceutical companies in today’s international market?

Such reforms are underway in countries far and wide to build real-world evidence on safety and efficacy of new medicines, mainly by way of comparative effectiveness studies against current standards of care. These policy initiatives align with the quandary that cancer physicians face in providing adequate care while faced with the reality of high drug prices for patients. This predicament has recently spawned a constituency of prominent oncologists actively seeking dialogue with drug companies to lower the price on the most expensive treatments, some of which cost over $100,000 annually.

When asked what their primary considerations are in prescribing medicines, 87% said they look at real-world evidence on product safety and effectiveness ‘all the time’ or ‘most of the time’; 94% weighed data on patient quality of life; and 65% assessed figures pointing to product availability and cost. This third consideration showed striking differences across markets, with China highest at 91% and the EU countries at only 50%, highlighting that not all markets are in lockstep in their approach to balancing cost and access.

Differences also surfaced in how oncologists see the implications of health reform on their practices. US doctors cited the highest level with Brazil at the lowest end. The survey warrants further probing to determine how stakeholder dynamics between the four Ps—physicians, payers, policymakers, and patients—will come to shape access parameters in an era of increasingly tough conditions on pricing and rationing of care.

The localized outbreak of measles in the UK is alarming in more ways than one. There can only be sympathy for the victims of this sudden return of a disease that had almost slipped from the perception of an entire generation. In addition to the discomfort — and on occasions serious complications — of the disease itself, there is now a sense of something approaching panic in the region where the incidence is highest. Anguish over the risks is evident in the faces of the parents and young children jostling with adolescents in long queues outside special vaccination centres that have been set up.

But there is a more general reason for concern. The background to this sudden recrudescence is well known. Urban myths about the risks of the MMR vaccine were given prominence more than a decade ago in a campaign by a local newspaper in the area where the most cases have been registered. The result was wide refusal of the MMR vaccination across the region. The subsequent clear rebuttal of the myth never received equivalent publicity — such is often the nature of the media. “Titanic sinks!” is a story. “Titanic doesn’t sink” isn’t.

Consequently, the ill-founded conclusions from the pseudo-research that lay behind the perception of risk remained as the accepted wisdom among a large swathe of the population over many years. Bolstered by the apparent absence of measles, there was even a small sense of triumph: “We were right to avoid the risks of vaccination — because the vaccination is anyway unnecessary. There is no measles,” ran the logic…

…until recently.

Emergency clinics and modern treatment techniques will probably manage to bring the outbreak under control over the coming weeks and months. But it is a wake-up call, not just to parents hesitant about the merits of immunization programmes, but to everyone involved in healthcare planning and healthcare provision. Because the circumstances in which urban myths can flourish have gone through a revolution since that local paper spread ignorant pseudo-science in the valleys of South Wales.

The entire communication game is changing. It has always been changing — but most of the time slowly. More recently, it’s been changing faster. And now it’s changing very fast, out of all recognition. That’s an earthquake for everyone involved in every aspect of healthcare communication.

There was a time, thousands of years ago, when most information came from the person with the loudest voice. But gradually technology took over. And in the last couple of centuries these technologies tended to concentrate the power of communication into very few hands – consolidating a system in which a few people at the top told everyone at the bottom what the people at the top wanted them to know.

Over the same period, the healthcare business moved on, leaving behind the vestiges of witchdoctors and barbers. The new healthcare establishment tended to dominate communication too — leading to a culture in which the doctor told the patient what the doctor chose to tell the patient, and prescribed the treatment he or she chose — perhaps influenced by the drug industry, and perhaps even by research … but most patients never saw much of that.

More recently, after years of patient docility, another trend started to emerge, principally among patients, who wondered if they were getting the best deal from being at the bottom of this top-down approach. The effect was a small rise over the last 50 years in activism — and even skepticism and distrust.

Then technology took another step forward — a giant leap for mankind. The internet. Communication — all types of communication — moved into a different dimension. The monopoly of authority over communication started to crumble.

Now, no single powerful voice can dictate unchallenged to everyone else. Everyone else can, if they wish, communicate among themselves, changing the balance, dethroning the former authorities.

From the perspective of democracy, this is unquestionably a good thing. From the perspective of healthcare communication, it raises as many questions as it answers. Of course researchers, regulators, drug firms and doctors can make use of the new technology in their own work — and are doing so in many cases with transformational consequences. But their voices are only some of the voices among so many others. There is much to be said for patients, consumers, customers, even the public, acquiring a new status in healthcare information and discussion. Patients, consumers, customers, the public, can no longer be taken for granted.  The paternalistic top-down approach has been more or less neutralised by the rise in technology and the rise of — for want of a better expression — people power.

It would be foolish to suggest that everyone who has traditionally been at the top until now — doctors, researchers, drug firms — is necessarily wrong. Importantly, it would be equally foolish to suggest that everyone else is always right. It is flying in the face of common sense to contend that all healthcare issues are best solved by a form of popular democracy. This can go right, or it can go wrong. In some instances, a majority can come up with an answer that looks right, but isn’t. Vox populi is not necessarily vox dei — as the UK measles outbreak demonstrates. If patients or the public have the right to question the traditional sources of information, they also have a duty to maintain a similar degree of healthy skepticism about all sources of information — including from other patients or consumers or customers or the public. The web 2.0 and the smart phone are not the weapons of a coup d’état. They are merely the tools to permit a better debate.

You’d be forgiven for missing it with the vast array of new agencies and the policy documents, guidance, consultations and ‘engagement’ activity they’re doing on in the ‘new’ NHS in England, but on the 4th April NHS England (formerly the NHS Commissioning Board) set out 15 commissioning policies in 250 pages.  They’re important, as they set out the approach NHS England will take when they’re spending some £20 billion plus worth of services.  Not only that, the new Clinical Commissioning Groups (CCGs) who are responsible for the rest of the over £100billion budget of the NHS in England, are likely to take a leaf out of NHS England’s book when they look at investment and dis-investment themselves. 

Medicines in focus
The policies arguably focus on medicines (although other technologies would also be covered, such as devices); ranging from Individual Funding Requests (IFR), funding of NICE guidance, and funding medicines for those patients taking part in and/or following the closure of clinical trials.  Only 6 of the 15 documents are more general, and even then medicines feature as part of the overall package of services and treatments that NHS England will be considering.

Setting the tone
The documents set the tone for how NHS England will approach decisions to invest or even cut services.  Key themes include:

• Value for money dominates. The documents mention whether something is affordable, affordability, value for money, and cost effective/ness no less than 98 times.  The first line of their overarching guidance notes their ‘fixed budget’. NHS England will also take a ‘take it or leave it’ approach to guidance because it’s just too expensive to implement all NICE guidance, let alone guidance from others like the Royal Colleges. NHS England will follow guidance for technologies positively appraised by NICE, because that is a legal requirement.  And price negotiation is listed as an ‘option’ when “useful treatments which are not cost effective or not affordable although they are clinically-effective.” NHS England do say other criterion will apply, but reading the policies it’s hard to see how much they could sway decisions.

• Tough scrutiny when considering investing in new services and treatments. NHS England only want to invest in those services and treatments that are ‘of proven cost effectiveness’.  If that’s missing, then funding will be linked with research to fill that gap.  Business cases and the evidence they draw on need to be viewed with ‘confidence’ by NHS England, suggesting little tolerance of uncertainty.  Those who can’t deliver that to NHS England are unlikely to get the funding that they want.

• Strict rules. NHS England will be strict about requests for funding that may come in via the IFR route for example; clinicians must get the Trust management to sign off on the application and NHS England won’t consider it unless all the i’s have been dotted, and the t’s crossed.  The ‘rule of rescue’ is simply ruled out too.  And if there are more than 5 patients who are alike with treatment costing more than £100,000 (or perhaps £150,000 as both figures are mentioned), no IFR funding will flow; instead it will be considered as part of the usual approach to funding new services.  NHS England is also clear that it will not necessarily be the one to pick up funding of medicines after clinical trials or pay for unproven or experimental treatments.  That’s for those who initiated the trial to do, or at least make it clear to patients what will happen once the trial ends.

• Constrained support for R&D. NHS England say that commissioner support for R&D is ‘highly desirable’ but should be seen in the context of ‘constraints’.  Not exactly a sign that NHS England will be committing much to R&D in the future.

‘Interim’ policies
The NHS England commissioning policies just published are not the last word though.  All of them are marked ‘interim’ and will be subject to further discussion. What that means though isn’t clear (who will they be talking to, and will they listen?), and what could happen is that these simply become the de facto commissioning approaches at the centre of the new NHS in England.

Leela Barham is an independent health economist. You can contact her on: leels@btinternet.com

While provinces in Canada select drugs for reimbursement, the PMPRB establishes the economic benchmark value of medicines once they enter the market. The NPDUIS serves to add an extra layer of analysis to help the Board keep up with trends in where the private sector is investing its development dollars. “The purpose is partly general information, partly to inform payers of what’s coming up. In a few years, these will be the drugs facing review for reimbursement. So for public payers, it can be used as a planning tool, “explains Bernard Lachapelle, President of The JBL Group.

The NPDUIS takes clear aim at novel high cost targets. 37 of the 135 drugs screened in its report are biologics. This compares with no biologics reported in the last installment, in 2011. Biologics, as well as drugs in therapeutic categories with high utilization rates(such as cardiovascular) and areas where cost of medicines are particularly high ( i.e. cancer) were carefully scrutinized in comparison with other medicines, as these are all drugs that can significantly affect drug plans and drive costs.

Of seven drugs mentioned since the last report that have been granted marketing rights by Health Canada, five of them have retained prices within guidelines set by the PMPRB; the drug Pirfenidone is subject to investigation; and one drug had yet to be sold as of March. All the compounds considered in the NPDUIS review are at the later stage Phase III in clinical trials. Other criteria set by the reviewers include drugs that can be used to treat life-threatening conditions, rare diseases and other areas of unmet need, or if they could potentially change clinical practice in a therapeutic area, such as medicines with novel mechanisms of action or new indications. Above all, the drugs must demonstrate one of the following: improved efficacy versus existing drugs, impacts on patient health such as increased life-expectancy or quality of life; new or redefined outcomes; or an improved safety profile.

But while PMPRB and NPDUIS have managed to aggregate these promising late-phase drugs and define how they can change therapeutic landscapes within Canada, Lachapelle points out the report renders no judgment around the cost concerns of the country’s provinces, which ultimately boil down to the question: “What are the long-term budgetary impacts of the introduction of those drugs? All the report talks about is efficacy and safety, so beyond the regulatory standpoint people are left to draw their own conclusions.” The new report suggests the federal government has the expertise to help render some basic conclusions about where the provinces might efficiently spend tax dollars on medicines provided to the public through subsidized benefit programs.  Whether the provinces are interested in applying this expertise – and thus institutionalizing a bigger federal oversight role in drug spending – remains to be seen.

By Leela Barham.

England’s Cancer Drugs Fund (CDF) could be in its final financial year, after running in full since April 2011.  The fund covers the cost of cancer treatments either when NICE has said ‘no’, or hasn’t yet come to a view.  Companies can’t circumvent NICE though; if a company was invited to submit to NICE and refused, it’ll be refused CDF funding for its product too.  The CDF is supposed to be a ‘bridge’ to Value-Based Pricing (VBP), due to be implemented in January 2014.

Why was a fund needed?
The Fund was driven by a heady mix of a desire by the Conservatives to grab votes in the last General Election in 2010, strong political lobbying and perceived weaknesses in how England makes it’s decisions on which products to recommend for use.  The latter really means that many expensive but potentially beneficial products were simply not being recommended by NICE.

Stats illustrate this with NICE saying no in more than a third of recommendations in 87 technology appraisals of cancer medicines since the year 2000.  But that also hides the distinction between ‘recommended’ and ‘optimized’; where optimized means restricted to use in specified circumstances, so not all of the remaining two thirds are recommended to all patients.  Such stats are important; so too are the processes that lead to recommendations being made.  The concerns are many, but for cancer centre on:

• Whether tools like the EQ 5D actually pick up on what matters for those with cancer
• How people in real life trade quality and length of life versus how economic models assume they do
• Whose values count, patients, or the public or even some combination

What did the fund buy?
Up to December 2011 the fund made around 10,000 treatments available to patients, covering 34 products.  Commentators now suggest that it’s now over 28,000 patients who have benefitted.

Too much £?
The Fund is small though, starting with £50 million and now £200million a year.  It amounts to very little when compared with the £5.1 billion spend on cancer by the NHS in 2010/11. Worryingly though, there are reports that not all the money was actually spent last year. It’s not clear if that’s because there isn’t unmet need or if everyone was just overly cautious and didn’t want to bust the budget.

Move to a national approach
Change is abound in the English NHS as a result of the Health and Social Act (2012) and the CDF has not escaped reform either.  The fund is now the responsibility of NHS England, the new national agency tasked with spending some £20billion and overseeing the Clinical Commissioning Groups who will spend the rest of the over £100billion NHS budget. There’s a single approach to making decisions, and there’s a single list of products that will be funded.  That’s quite a change from the regional approach taken up to now, with 10 funds previously in operation across England.  That may be good for some; it’s less likely that there will be a different view depending on where a patient lives.  That may also be bad for others; if a companies drug doesn’t get on the national list, it has no hope to get on a list anywhere else.

And the list is more restrictive now; 28 products versus the 34 reported available under the regional approach.  There is some scope for variation from the list though, with clinicians able to ask for funding for treatments for individuals with rare cancers. Decisions on whether or not to fund these will rest with 4 panels spread across England, but they’ll have to use the same process.

Will VBP fix the problems that led to the fund in the first place?
The answer at the moment is that no-one really knows.  The details of VBP are not yet known, and maybe not even worked out.  The uncertainty that this creates is leading to widespread concerns, and headlines and concerning stats like:

Cancer Drugs Fund: Patients to Lose Out….6,427 patients every year could be denied access to the medicines

Drugs fund axe ‘will hit 16,000 cancer patients’ as experts claim access to medication will be worst in Europe

One thing is for certain though; the success or otherwise of VBP will be measured in access to cancer medicines.

Leela Barham is an economic consultant. She can be contacted via her site or at leels@btinternet.com

On April 1, India’s Supreme Court denied an appeal challenging the rejection of a patent for Novartis’s cancer drug, Glivec. The drug is a life-saving medicine for certain forms of cancer, patented in nearly 40 other countries — including many which are not noted for the strength of their intellectual property rights, such as China, Russia, and Taiwan.

Critics of the IP system have hailed this decision as a victory for patients and as likely to improve access to the medicine. In fact, the majority of patients currently taking Glivec in India will continue to receive the drug free of charge through corporate Oncology Access programmes. Yet the consequences of the ruling are damaging for India’s economy as well as for the process of creating other life-saving treatments which future patients may need.

Even before the current ruling on Glivec, India already had a low level of intellectual property protection, and not just for pharmaceuticals. A country’s IP environment is important for trade, investment and economic development. Indeed, a growing body of academic and policy research now emphasises the link between economic growth, technology transfer and stronger IPRs. OECD research, for example, has found strong links between IPRs and FDI, R&D and economic expansion. And IPRs have particular importance to the field of biomedical research, so the Indian Supreme Court’s decision is now likely to make the country a less attractive prospect for future bio-medical investment.

According to research conducted by Pugatch Consilium and published in Scientific American, India demonstrates a limited ability to compete with other countries for biopharmaceutical investment, based on a range of measures including scientific capabilities and infrastructure, clinical environment, manufacturing and logistics, regulatory framework, healthcare financing and overall market conditions. As compared to Denmark, the most competitive country surveyed (scoring 83.2), India scores only 67.3 points on the index, putting it below Israel and Poland.

A complementary piece of research shows that strong IPRs encourage pharmaceutical R&D and investment as measured by clinical trials. Based on a study published in the Journal of Biotechnology, India already has one of the lowest levels of clinical trials per capita, falling below South Africa, the Philippines, China, and Chile and well below the UK and USA. This is likely to worsen as a result of the Supreme Court decision, which weakens India’s IPR environment still further.

The simple equation promoted by activists that high prices on patented drugs deny the poor access to medicines provides a morally compelling soundbite but the reality is that weakening IPRs, as India is now doing, will not help alleviate that poverty and nor will it help India to create the medicines of the future. Instead, India’s latest decision and others like it, will only make April fools of us all.

Patenting is a political act. Technical details of patent law aside, the Glivec ruling highlights the most contested issue in medicine today:  what constitutes true innovation in an age where scientific advances are transforming the very definition of a drug?  This is a question that extends far beyond patent law into basic value judgments like how society should spend limited resources on medical technologies, in a way that balances patient access with the economic incentives needed to seed their development in the first place.  The external demand for value – the pressure to prove it beyond doubt – is driving every aspect of the pharma supply chain today.  Seeking to raise the bar around the basic patenting criteria of novelty, non-obviousness and an innovative step, as the Glivec decision just did, is but one expression of this broader challenge facing the industry.

India has made a choice — on Industrial Policy grounds.  What is interesting about the 112-page Court judgment is not the cursory review of whether Glivec’s chemical reactant composition delivered an “enhancement of known efficacy” – a requirement for recognition as a patentable innovation – but the emphasis it places on broader issues of policy and economics.  The ruling quotes approvingly from the academic literature that “rules and regulations of the patent system are not governed by civil or common law but by the interest of the national economy.”  More than a third of the text traces the rise of the domestic drug industry, noting that “development of the bulk drugs sector is the most important achievement of the pharmaceutical industry in India,” an outcome it said was made possible by the absence of full patent protection for pharmaceuticals prior to completion of the country’s accession to the WTO TRIPS agreement in 2005.

A finding writ backwards.  The Court’s reasoning is rooted in a complacent approach to the dynamics of market growth and social change, to wit: reproducing other people’s drugs is a business model that works for India; preservation of the generic sector’s license to operate has been in India’s economic interest since confederation, and patent law should simply mirror that commitment.  Left unsaid is whether a court of law is competent to make such assumptions on the basis of past history when the Indian industry itself is undergoing a significant shift toward greater global engagement, with innovation – in process as well as products — emerging as an equally attractive alternative to copying.  India’s burgeoning, up-from-nothing CRO sector is one domestic constituency unlikely to plot new growth from the Court’s arguments. Another likely casualty is the rich infrastructure that surrounds modern drug innovation, from clinical trials, subsidies to academic teaching hospitals, to advanced manufacturing and improvements in supply chain technology.  Much of this investment is likely to continue to transit to more predictable host countries – like China.

No alms for the poor.  Nothing in the Court ruling suggests that the plight of those without access to essential medicines will improve. The decision simply maintains the status quo for Indian generic producers, most of who manufacture primarily for export – because the money is better abroad than at home. As the world’s largest exporter of bulk drugs, Indian producers bear some responsibility for a recent World Health Organization [WHO] survey that found prices for even the lowest-priced generic products sold through the private sector were at least nine to as much as 29 times higher than the agreed international organization reference price, in most WHO regions.  Even in the public sector, provision of essential generic medicines covers only about 42 per cent of the potential target population in developing countries.  Access to medicines is complex – it is a cliché that bears truth. Generic production, particularly for profit, will not by itself deliver what the Court ruling claims is the commitment underlying India’s patent law to “provide drug access to the rest of the world.”

Regional trade is the next phase in the activist war on patents. The Glivec case has shredded much of what was left of the industry’s multilateral IP agenda, a decline that started with CEO acquiescence to the November 2001 WTO Doha Ministerial Declaration on TRIPS and Public Health.  The Declaration, whose principles are embedded in the 2005 Indian patent law, limited the scope of drug patents where public health considerations intervene and thus had the effect of inhibiting enforcement of relevant TRIPS provisions.  In response, big Pharma has moved aggressively to shore up IP protection in key regional trade negotiations, including the pending Trans Pacific Partnership [TPP].  As in any political negotiation involving countries at different stages of development, the high profile given to the Glivec case has put the industry on the defensive in its drive for more uniformity in the standard of protection.  Operating on multiple fronts, activist groups intend to promote the Indian model of “IP flexibility” to allow for compulsory licensing, patent linkage, open pre-grant opposition and a low bar on data protection.

Industry strategy needs a re-think. The Glivec case suggests there is not much heft left to big Pharma’s reliance on insider lobbying and technical expertise to defeat the anti-patent access lobby and governments who apply IP as a discriminatory trade barrier.   Recovery must start with a better message. If what the industry describes as India’s patent “theft” can be justified by activists as providing more access to the poor, then most observers will say it is a vice that is easy to live with — especially when the top five big Pharma patent holders are currently sitting on an idle cash pile of nearly $70 billion.

Work underway in Africa to highlight how IP promotes civic engagement and job-creating entrepreneurship can break the perception that patent rights are a zero sum game, an instrument of power that hoards knowledge rather than liberates it.  More pressure on governments to sit down and negotiate structurally sound tiered pricing arrangements, with proper safeguards, can obviate the need to misapply patent law for pricing and cost containment purposes. Creative use of licensing can be a “win win,” with many examples evident in the HIV space. It’s also worth explaining how the science of drug discovery is changing, where companies – big and small – must collaborate to mitigate the risks from the evolution of knowledge as a “floating asset.”    Patents are a force multiplier – it’s the best solution to the “tragedy of the commons” that plagues many well-meaning drug development initiatives by taking too long to consummate and that often yield little actual value to patients.

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