-The Economic Times
It's not just the drug regulator, where a parliamentary panel has alleged corruption, failing in its job. Drug regulation across entities that dot this broad landscape is in poor health and ineffective.
In May, when a Parliamentary panel, during a routine examination of healthcare regulatory bodies, alleged corruption in the approval of new drugs, it was merely pointing out one symptom. Such symptoms pervade the entire drug regulation landscape, which is made up of many entities, each one with its own set of shortcomings and conflicts.
Here's a small sample. The drug regulator stands accused of colluding with pharma companies to allow medicines to enter the market untested.
It hasn't had a permanent head for the last eight months, and has just 125 drug inspectors against its need of 1,375. Another department has been unable to craft a new policy for pricing drugs for nine years now. The Medical Council of India, which regulates the country's 700,000 doctors, has not cancelled a single licence for unethical practices... At the heart of this declining condition is control.
The healthcare landscape is divided between two central ministries: health and, chemicals and fertilisers. If the health ministry's mandate is affordable healthcare, the chemicals and fertilisers one essentially deals with industry issues. Both ministries further house entities that look after some sub-set of drug regulation; and since each entity essentially works alone and is characterised by bureaucratic sloth, conflict is an inevitable side-effect.
"There are clearly interested groups," says LC Goyal, who was the additional secretary, ministry of health, till last week. Kiran Mazumdar-Shaw , chairman of Biocon, India's largest biotech firm, is critical of the multiplicity of regulators. "The present regulatory structure is suboptimal . It is one ministry too many," she says.
"There are too many bodies and there is evidently a lack of coordination," admits Goyal, adding that change will require the government to assign priority and commitment.
CORRUPTION AND CALLOUSNESS
Matters became ugly when the Parliamentary standing committee on health and family welfare said there was a "nexus between drug companies and regulatory officials" in clearing new drugs.
It said the Drug Controller General of India (DCGI) approved 31 new drugs between January 2008 and October 2010 despite mandatory clinical trials on patients in India not being conducted. The panel further alleged that medical opinions on the drugs were written by the "invisible hands of manufacturers and experts merely signed them".
One of the examples outlined in its report was that of a drug called Clevudine, made by Pharmasset, a subsidiary of the $8.1 billion Gilead Sciences. The report points out how three experts in Delhi, Gulbarga and Kolkata wrote identical letters of recommendation to market the drug without clinical trials in India.
"There is huge money involved," says CM Gulhati, who edits Monthly Index of Medical Specialities, a monthly medical journal. The report named prominent companies like Novartis India, Sun Pharma and GSK. Says Ranjit Shahani, vice-chairman & managing director, Novartis India: "We firmly believe that all Novartis products mentioned in the report were approved by the Indian regulatory authorities within the local rules." Industry players say there are many nuances.
Calling the findings "incorrect and one-sided" , Swati Piramal, vice-chairperson of Piramal Life Sciences, says the DCGI's processes are out of step with the times, and that it doesn't have people or infrastructure to make quick decisions. She points out that regulators in developed markets respond to an application in 28 days; if they don't , the application is deemed to be approved. "In India, it takes six to eight months," she adds.
"These are all patented drugs, and the clock is ticking and precious marketing exclusivity is being wasted. If there are three such stages, we are talking about a two-year delay." Part of the reason for the delay is DCGI staffing, the handling of which by the government has been nothing short of callous. Since 1999, the highest DCGI post has been on deputation. Its last two occupants have been on three-month contracts. The DCGI has only 10% of the drug inspectors it needs.
"Today, you need surgery and you are trying to give medicines," says Goyal on trying to fix the staffing gap. GN Singh, the current head of DCGI, did not respond to phone calls and emails. Even the current lot of drug inspectors, says Piramal, are "not qualified enough" .
"The problem is also due to corruption. You can't do business straightway," adds DG Shah, secretary-general of the Indian Pharmaceutical Alliance, a grouping of big Indian pharma companies.
Differences between regulatory entities are another reason for delays in decisionmaking . The worst offender in this context is the department of pharma (DoP). Housed in the ministry of chemicals, the DoP essentially takes up issues relevant to the pharma industry.
Policy decisions have been on the DoP's table way longer than they should have. This pile includes a new pricing policy for 'essential drugs' , another policy for pricing patented drugs, a draft code on marketing practices and a Rs 2,000 crore venture fund for the industry.
The most important of these is the new drug pricing policy, called the National Pharmaceutical Pricing Policy, 2011. The current policy, formulated in 1995, is implemented by the National Pharmaceutical Pricing Authority of India (NPPA), which comes under the DoP. The NPPA essentially does two things.
One, it fixes the prices of essential drugsin this case, defined as medicines made using 74 listed chemical ingredients, making up 18-20 % of the Rs 62,000 crore market for retail drugs-so that they are affordable to the masses.
Two, it ensures companies don't increase prices of drugs that are outside the ambit of price control beyond 10% in 12 months. The NPPA is struggling to fulfil its mandate in an effective manner. Companies circumvent price regulation for their drugs by using derived ingredients that are outside the list of 74 ingredients.
According to NPPA, about 90% of its Rs 2,462 crore outstanding claims against pharma companies for alleged excess pricing are in the courts. And its attempt to bring derivatives of the 74 ingredients under price control is also lying in the Supreme Court.
Shah of the IPA feels the issues in drug pricing and drug approvals are a "reaction to over-regulation" . "If you try to control them from every way possible, companies will try to find a way out," he says.
CONFLICT OF INTEREST
The DoP started work on this new policy in 2002. Till 2009, the policy was bounced around in consultations and government panels. The Supreme Court intervened in 2009, and asked the DoP to fast-track the policy. On this fasttrack , the policy has hit another roadblock: inter-department conflict.
The DoP, under the ministry of chemicals, has proposed the maximum retail price (MRP) of a drug under price control should be the average of the top three brands in that segment. The ministry of health, whose inputs also go into the policy, rejected DoP's pricing mechanism, saying it was against consumer interests.
Instead, it recommended a cost-plus approach to pricing. The policy is currently with a group of ministers (GoM). The health ministry also wants the NPPA, which is currently under the DoP, to come under its ambit.
"DoP's mandate is to ensure industry's growth is sustained," says Goyal, the former additional secretary. "DoP going to the extent of pricing essential drugs is in direct conflict with its other mandate." The DoP too favours a unified regulator, but it wants that to be that entity, says a former DoP secretary, not wanting to be identified. Mazumdar-Shaw of Biocon goes a step further. "I don't see what role the ministry of chemicals has to play," she says.
"Drug regulation and drug pricing must be coordinated by the same ministry." She suggests a onestop regulatory entity that functions autonomously like a department and is headed by a person at the level of a secretary.
In November 2011, one of the recommendations made by a high-level committee on universal health coverage for India had recommended transferring DoP to the ministry of health. Goyal, however, says having a "unified body is neither necessary nor feasible" .
"Growth of the industry is not the mandate of the health ministry," he says. "Only NPPA should come under the health ministry." This is but one arm of a wider debate on the malaise in drug regulation.
"The rot is not beyond repairs if the government makes a serious effort to fix the problem," says S Srinivasan, managing trustee of LOCOST, a Baroda-based charitable trust that works to make low-cost drugs available to the poor. "They have enough powers to do that if they use that authority and common sense."