Pharmaceutical industry the world over is the most regulated among all industrial segments. This is primarily due to the fact the industry provides products and services, which have a major impact on healthcare outcomes among the world's population. Innovation and R&D driven companies in this sector are responsible for the discovery and development of new drugs either to replace existing drugs with better ones or to introduce new ones for diseases for which no appropriate therapy exists. While safety and effectiveness of new drugs are both important considerations while introducing a new drug, of primary concern is the former. Unsafe products cause irreparable damage to the patients resulting in severe adverse reactions, which sometimes may have even fatal outcomes during treatment.
In spite of utmost care and diligence during the development and clinical evaluation of the drug, tragedies still occur after a drug is approved and introduced in the market. Regulatory agencies are responsible for ensuring that the risks, if not completely eliminated are kept at acceptable levels. Even though the US FDA approvals are accepted globally as the Gold Standard, very often new drugs, even those discovered in USA are first launched in countries outside the USA. It is therefore imperative that all countries have regulatory systems and agencies capable of evaluating all safety and efficacy data generated in animals and humans before approving the drug for human use.
R&D Efforts
The development of new drugs involves expertise and skills in a variety of disciplines, an investment estimated to be around $800 million to $1.2 billion and a time frame of 8-10 years for every single drug reaching the patient. Even after such elaborate efforts there is no guarantee that the drug will be commercially successful in the market or unexpected adverse reactions will not surface, leading to drug withdrawals or even statutory bans. Due to ever-increasing requirements to meet the standards of approvals of new drugs, the number of new drugs reaching the market has considerably reduced. This is despite the fact that the approval system itself has been accelerated due to the user fee system introduced by the FDA. New active substances launched per year hit an all-time low in 2004 with as few as 23 products, 18 new chemical entities and 5 biologicals, compared to 31 in 2003 and 29 in 2002. At the same time, expenses on R&D in recent times have escalated dramatically. In 2003, Pfizer spent $7.1 billion, followed by GlaxoSmithKline (GSK), $4.44 billion and AstraZeneca $3.45 billion representing 18%, 14.9%, and 18.8%, respectively, of their annual sales turnover. In terms of percentage of sales, some companies spent even more than Pfizer and GSK; for example, Amgen the biotech giant spent 21% and Boehringer Ingelheim 20.5% of their human pharmaceutical sales revenues.
The increasing costs of drug research can be attributed to high costs of clinical trials both for ensuring the safety and efficacy of drugs as well as for meeting regulatory standards. The average numbers of trials required as well as the number of patients in each trial have also increased considerably in recent times. Thus, while during the period 1981-1984, the average number of centres used for trials for one drug was 30, and the total number of patients undergoing trials 1,321, the corresponding numbers in 2001-2002 had increased to 68 trials and over 4,200 patients.
US FDA
US FDA has been accepted the world over as the model regulatory agency in terms of its standards and efficiency. Even the FDA, prior to 1962 had no requirements for establishing safety standards before applying for the first human use. It was only after the recommendations of the Kefauver-Harris Committee as a sequel to the thalidomide tragedy, which maimed over 10,000 babies after the mothers had taken the sedative marketed by Chemie Gruenthal that safety data and Investigational New Drug Applications became mandatory. The FDA has not only the responsibility for approving new drugs; it also has to clear the use of generic versions of patented drugs. The legislation, which is an important component of this exercise, is the Hatch-Waxman Act of 1984, which stipulates the conditions for approval of an Abbreviated New Drug Application (ANDA). The Act provides for exclusivity in the market for the first generic manufacturer if it survives the so-called Para IV filing and has no infringement suit against it from the patent holder.
Post marketing surveillance of the drug even after it has been marketed is yet another responsibility of the FDA.
Drug regulatory system in UK
In the UK, the authority responsible for approval of new drugs and ensuring safety and efficacy of medicines and medical devices rests with the Medicines and Healthcare Products Regulatory Agency (MHRA). The committee on safety of medicines established under the Medicines Act advises the UK licensing authority on all aspects of the new product including assessing its safety and efficacy profiles.
European system of drug Regulation
The members of the European Union are given the facility to submit for approval of new drugs, to a centralized agency, which has two members from each of the member countries. The recommendations are then considered and approved or rejected by the regulatory agency of each member country.
Japanese drug regulatory system
Japan follows the pattern of the USFDA in matters related to approval of new drugs. Recently Japan has adopted ICH-GCP guidelines and made the Japanese guidelines consistent with the former's provisions.
Problem of Data Exclusivity
Recently one of the contentious issues related to drug approvals is the use or otherwise by other's proprietary data submitted to regulatory agencies by the innovator. While TRIPS does provide under the Trade Secrets clause (Art. 39.3) for protection against the use of such data by third parties, there is an argument that this clause should be strengthened by a legislation to make it effective. Some countries have legislations in this regard with the protection period ranging from 5 to 10 years. Others argue that it is implicit under Art. 39 of TRIPS and no separate legislation needed. Yet others strongly feel that data exclusivity should not be permitted since it necessitates generation of fresh data, results in avoidable expenditure, which eventually will reflect in the costs of medicines.
GCP-ICH Guidelines
In an attempt to harmonize globally standards for clinical trials in various countries, the ICH-GCP guidelines have been recommended to all parties engaged in clinical evaluation of new drugs. The objectives are to avoid redundant and duplicative clinical trials with the option of pooling the data from various sources, expediting global drug development, expediting availability of new medicines and ensuring uniform standards of safety, efficacy and quality for all products marketed worldwide. Most countries have adopted these guidelines as important components of their regulatory systems.
The Indian pharmaceutical industry is rated as the fourth major producer of bulk drugs and formulations in the world. Around 50% of the country's production is being exported into world markets including the regulated ones. Changes in Government policies have made India very investment-friendly. The new Indian Patents Act 2005 allows product patent protection as well as other terms and conditions consistent with a globally harmonized Patent system as per the requirements under the TRIPS Agreement.
Drug Regulatory Mechanism in India
India has a well defined Drugs and Cosmetics Act 1940 (and rules 1945) on which the regulatory mechanism for all activities of the Indian pharmaceutical industry is based. Considering the rapidly evolving global developments in the area, the Government had appointed a committee under the chairmanship of Dr R A Mashelkar to recommend measures to revamp and modernize the regulatory set-up in the country and evolve a viable and effective system to ensure the availability of quality medicines at affordable costs to the masses. The recommendations of the committee are under the active consideration of the government.
Various areas affecting the production and distribution of healthcare products, which have been left outside the purview of the Drugs and Cosmetics Act (1940) will be brought under the ambit of the new regulatory frame work. These include OTC drugs, biotechnology-based products, food additives and nutraceuticals, products of the Indian systems of medicine, various diagnostic and prophylactic agents and medical devices.
The evolving scenario in India is conducive to the growth of this industry on all fronts from R&D to production and marketing in domestic and international markets. With the advent of the product patent regime under the Indian Patents Act 2005, patented products can be manufactured and/or marketed in India only by the patent holder or his licensee.
This development has encouraged the setting-up by the top dozen companies R&D activities that cater to the discovery and development of new drugs. The new regulatory standards and other legislative measures should encourage investments by the pharmaceutical industry into this important activity and become a global player in this vital area. Hopefully all legislative measures, regulatory control systems and guidelines will help the Indian pharmaceutical industry achieve even greater heights in the global arena in the coming years.
(The author is consultant to the pharma industry. He can be contacted at mdnair@vsnl.com)