Indian pharma majors have welcomed and expressed happiness over the blueprint of change on healthcare in US by president elect Barack Obama. The very reason is his plans to lower drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programmes and taking on drug companies that block cheaper generic medicines from the market.
As Indian companies account for around 16 per cent of all pharmaceuticals imported by the US, majority of them being generics and manufactured at US Food and Drug Administration (FDA) approved manufacturing facilities, the Obama's declaration has raised a hope of increased generic exports from India. This has come as a good news just after FDA's September ban on non-branded drugs made by Ranbaxy on concerns of quality and falsifying the data.
Regarding Obama's assertion on taking on drug companies blocking cheaper generic medicines, research based drug industry has rebounded saying that they were justified to use "perfectly lawful" measures to protect investment in research and development.
However, the fact is that innovative industry in the west uses every type of tools to block import of generics into US or Europe, and even their purchases by the World Health Organisation (WHO). This is verified by the warning issued very recently by the European Commission (EC) that it will not hesitate to open antitrust cases against companies that block or delay the entry of cheaper generic medicines into the EU, which has pushed up the medicine bills. Though not accepted publicly, WHO is also under great pressure from companies and industry associations from donating countries to amend its procedures and technical guidelines to marginalise the generic industry.
A clear example of stealthy moves is reflected in a proposal by the International Medical Products Anti-Counterfeiting Taskforce (IMPACT) of the WHO to consider apparent 'trademark violations' as 'counterfeiting' cases. By doing so, WHO was forced to bring a non-health issue, with no direct implication on the safety of a drug, within the ambit of the definition of counterfeit medicine.
Under the new definition, all generics originating from any company, other than the innovator, carry the risk of being labelled as counterfeit. Under this definition, India was openly declared in 2007 as the main source of counterfeit medicines seized in Europe. The Indian drug industry is much disturbed on this, as it feels the move is an indirect way to seriously harm generic drug exporters from the country. Interestingly, recent reports have accused Switzerland, which houses the headquarters of WHO, to be the origin of 40 per cent of EU counterfeit drug seizures, more than the percentage ascribed to India (~34 per cent). Perhaps this exposure may change the mind of WHO to reconsider its own definition of counterfeits.
The WHO is even in a fast-track mode to make its technical guidelines equally stringent to international guidelines, issue newer guidance documents and revise the prequalification process. The guidelines on good manufacturing practices (GMP) for active pharmaceutical ingredients (APIs) and biologicals, and drug stability testing are already in the process of revision, making them almost similar to requirements laid down by the International Conference on Harmonisation (ICH) for new drug substances and products.
Other guidance under revision is on good distribution practices and the procedure for assessing the acceptance of APIs for use in the pharmaceutical products. Also, a document on new approaches to inspection and manufacture and a guideline on technology transfer are under development. In addition, guidance is being developed on the inspection of hormone product manufacturing facilities.
Besides, another guideline on the pharmaceutical development for generics is in its first draft stage. Once finalised, it will tend to block proposals under the WHO's prequalification scheme, unless sufficient pre-formulation and pharmaceutical development data are included in the dossier. The same is not the case with most of the filings at present.
There is also discussion that only those products, which are registered with a stringent regulatory agency, should be given leverage in the prequalification process. This can be a dangerous move. Also, a list is being prepared by the WHO for the comparator products and even the WHO certification scheme is being revised and is to be made tough in the near future. As the developments at the forum of the WHO have wide applicability through its member states, there are all the chances that Indian manufacturers are put to inconvenience in future, for which they need to prepare well in advance.
The WHO is also involved in capacity building of the regulatory mechanism and test laboratories, including running a quality assurance programme for national laboratories in several countries. A small example of outcome of this is blacklisting of 15 Indian pharmaceutical manufacturers in one go by National Agency for Food and Drug Administration and Control (NAFDAC) of Nigeria. The firms were indicted for manufacturing fake drugs, document forgery and other unethical practices. Even in 2003, NAFDAC blacklisted 19 Indian pharmaceutical companies for manufacturing and exporting to the country fake and substandard drugs.
Recently, a bill has been introduced in US senate that would require country-of-origin labelling for active and inactive ingredients for all the prescription and over-the-counter (OTC) pharmaceuticals. The logic behind the bill is Americans right to know where their drugs are produced, which has become important with more drug companies buying ingredients and producing products overseas.
The country-of-origin labelling for active pharmaceutical ingredients had also been proposed in the initial discussion draft of the FDA Globalisation Act, which was issued in April 2008. The new proposal would require country-of-origin labelling not only for the APIs, but also for inactive ingredients and would include both prescription and OTC drug products. So it can be understood that the game of deciding what to buy is going to filter down to a common American, who of course would prefer country made products out of their patriotism.
Overall, the emphasis on the concepts of risk analysis and quality by design (QbD) introduced through ICH guidelines Q8-10 is increasing. As per this the manufacturer must build quality into the product and not control it through finished good testing. This may require computerisation of the whole manufacturing process and placement of on-line tools for analysis (process analytical technologies, PAT).
The FDA has recently awarded a contract to National Institute for Pharmaceutical Technology and Education (NIPTE) to develop design space specifications within QbD. It is claimed that the results of this study, which will be completed through 2010, will potentially serve as the basis for formulating best practices and developing science based guidance documents that can be used by the FDA to evaluate new and generic drug applications. Indian industry must follow this and prepare itself in advance as design space elements require a lot of statistical input, which is absent in our industry at large.
The impurity test requirements that were introduced with the ICH guidelines Q3A-C are being made stringent and have now been extended even to generic drugs. The monographs in USP, EP, BP and even WHO's international pharmacopoeia are being changed very fast to list new impurities or add impurity lists where they do not exist presently. This means paracetamol or any similar drug manufactured by an Indian company for the last 30 years would have to undergo testing through a totally new approach to prove mass balance between the drug content and impurities/degradation products present. This not only requires costly reference standards, but also trained manpower and sophisticated and high-priced instrumentation, which as of now is afforded by select companies in India. If implemented in a similar manner in Indian pharmacopoeia (which cannot be avoided for long with extreme pressure being put by USP and EDQM authorities on Indian government), this lone aspect can wash out total small and medium drug sector in India, unless they are ready with time.
It may not be out of context to say that even the regulatory scene in India is changing fast. The drug control general of India (DCGI) recently announced that the country would have an advanced drug regulatory system in 5 years, and to help the same officials will be sent for training to US FDA and WHO. So India is on the verge of harmonisation with the world, which may be necessary to remain in competition.
These developments are only a few examples of hurdles that are forthcoming. It is expected that major Indian companies may be able to endure many of them due to their inherent strengths and infrastructure. But the same may not be the case for small and medium enterprises (SMEs), which stand a big risk of losing their business, unless they catch up with newer developments, both non-technical and technical levels. In general, the alertness on quality of imported drugs is rising very fast in most parts of the world. So Indian companies need to realise that their products will be under keen quality watch in future even in non-regulated markets, where they had a free cake earlier. Not to say, this is going to be the case also with production meant for domestic consumption.
(The author is Dean of National Institute of Pharmaceutical Education and Research)