Transcript The Pricing of Pharmaceutical Products and Price

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: [email protected]
1
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
2
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
3
seminars
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
4
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
5
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
6
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
7
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.
8
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.
9
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
10
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.
11
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.
12
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
13
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 Clark
Pharmaceutical industry sponsorship and research outcome and quality: systematic
review
BMJ, May 2003; 326: 1167 - 1170.
14
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
15
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
16
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
17
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
Rupees 70)
(One Euro = Indian
• Coronary heart disease: 209 days of wage labor
• Prevention of Hepatitis A: 30 days of wage labor
18
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
19
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.
20
Thanks to Dr Anurag Bhargava of JSS Bilaspur for these data, Sep 2007.
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
Discoun Percentage
offered
t in
Margin
to
Rs
of profit
physicians,
for the
in Rs (A-B)
physician
(B)
(A-B)*100/ B
Pentaxi
m
Diphtheria, Tetanus,
acellular pertusis,
inactivated poliomyelitis
vaccine,
Haemophilus influenzae b
conjugate vaccine
2066
1446
620
42.9
Imovax
Poli
o
Inactivated Poliomelitis
vaccine
365
280
85
30.4%
Tripacel
Component pertusis,
Diphtheria and tetanus
1211
762
449
58.9%
21
Okavax Varicella vaccine
1468
986
482
48.9%
Avaxim Hepatitis A Vaccine
80
952
665
287
43.2%
Tetract Diphtheria, Tetanus,
Hib
pertusis,
Haemophilus
influenzae 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
22
2010
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.
23
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
24
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
25
“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.
26
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
27
“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
28
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.
29
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.
30
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.
31
Restoring Competition
• Restoring Lost competition (by preventing collusion and
anti-monopoly laws)
• By ensuring easy entry and exit policies
• By removing trade barriers
32
If Competition does not work?
• Need for Direct Price Regulatory Mechanisms
• Govt guidelines for price-setting
• Laws prohibiting high prices
• Direct price regulation
33
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.
34
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.
35
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]
36
Comparison of Retail MRPs and LOCOST prices
Name of Drug
Use
Albendazole 400 For worms
mg
LOCOST selling Market selling prices
prices per tab (Rs) per tab (Rs)
Rs 1.10
Rs 12 to 20
Amlodipine 5
mg
In high blood pressure and Re 0.25
as antianginal
Rs 1.40 to 5.00
Atenolol 50 mg
In high blood pressure and Re 0.20
as antianginal
Rs 4 to 22
Enalapril 5 mg
In high blood pressure Re 0.30
mild to moderate
Rs 1.60 to Rs 2.30
Fluconazole 150
mg
Fungal Infections in AIDs Rs 3.50
and other conditions
Rs 28 to Rs 32
Cetrizine
Anitallergic
37
Re 0.50 to Rs 3.00
Re 0.20
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!!
38
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
39
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
40
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
41