- An Independent View of Healthcare & Security
Just wanted to let everyone know that I haven’t decided to stop blogging, despite appearances. I’ve recently put everything else to one side to prioritize finishing the draft of a book on anti-counterfeiting – due to be published by Wiley-Blackwell in the next few months. That’s now done and submitted, so normal blog service will resume soon.
As poor countries get richer, their growing middle classes develop expanding waistlines and increasingly “western” disease patterns. Demand for branded medicines is rising in many developing countries and the drug industry is waking up to the potential for profit growth. They see an opportunity to globalise the same drugs that have been such money-spinners in the west.
Developing economies have also driven cost reduction. The rate of industrialisation has exceeded the growth in labour costs and several countries now now offer cheap, high-quality pharmaceutical manufacturing. Many drug companies have moved production out of the USA and Europe and into low cost countries. The new sales opportunities make this strategy doubly attractive.
Although there is huge commercial potential, the globalization of the western pharmaceutical industry also carries a number of risks which, in my view, have not yet been fully addressed. Two of the key issues lie in the drug development area.
Drugs for Patients not just Shareholders
If the pharmaceutical market is now global, then the output of the drug industry must reflect that shift. Otherwise, pharmaceutical development will become detached from patient needs. In marketing terms, the industry is in danger of being product-driven rather than market-led. The neglect of anti-infectives research is a good example of this.
Advances in healthcare and nutrition over the past hundred years have led to an approximate doubling of average life expectancy worldwide, according to World Health Organisation (WHO) statistics. Most people in rich nations now avoid or survive the infectious, early life illnesses that killed many of their forebears.
The progress in the developing world has not been so clear. Despite the rise of relatively affluent middle classes, there are still millions of poor people who cannot afford even basic medical care. WHO data reveal that the number one killer in low income regions is lower respiratory tract infection and six of the top ten causes of mortality involve infection of some type. Together they cause more than two-thirds of deaths in children under five.
The pharmaceutical industry has developed effective treatments and preventative vaccines for many diseases, but in recent years very few new anti-infective drugs have been developed and few companies are investing in this area. Why not, if there is clearly an urgent unmet medical need?
In high income countries only one of the top ten killers is an infectious disease (leaving aside the fact that some cancers are virally-triggered). Most drug company headquarters are in high income countries, as are most of the people who can afford branded, patented antibiotics. Ironically, they are the least likely to need them.
The relative lack of demand for new antibiotics in the developed markets is only one reason for the lack of research. The real commercial and development issues, which perpetuate under-investment in these major causes of death, are buried deeper in the business model of global pharma and in the conflicting needs of doctors and shareholders.
Most infections can be successfully eradicated with existing cheap generic medicines (assuming the drugs are not fake – see below). Even when powerful new drugs are used, a course of antibiotics usually lasts no more than two weeks or so. Paradoxically, curing the patient is generally a bad thing for sales revenues. The most profitable drugs tend to control chronic symptoms over a long period of time (diabetes drugs, statins, anti-psychotics etc) thus ensuring continued revenue. Even worse, from a drug company point of view, the more effective the antibiotic the lower its sales potential is likely to be. To prevent the rapid emergence of resistance, doctors reserve powerful new anti-infectives for cases where other therapies have failed.
Finding molecules with the necessary selectivity to cure infectious disease without causing unacceptable side effects is a difficult and expensive task, and the payback may not be great in direct revenue terms. The majority of drug companies are publicly traded corporations whose executives have a legal duty to act in the best interests of their shareholders. Antibiotic research is a tough way to make money so until we change the way society prioritizes and rewards biomedical innovation new anti-infectives will remain a rarity.
But are we viewing the issue much too narrowly? The relative neglect of infectious diseases in developing countries is short-sighted and risky as well as unjust. If we ignore the health needs of millions of poor people, we in the west are also endangering our own wellbeing. Global migration, both legal and illicit, allows diseases which originate in poor countries to spread quickly to developed nations. The world is now essentially one disease pool, as recent influenza and SARS epidemics have shown.
One answer might be to encourage not-for-profit research, perhaps by offering tax breaks to drug companies prepared to invest in this area or by granting longer periods of patent exclusivity on “lifestyle” drugs in return for increased development effort on neglected diseases of the poor and the distribution of anti-infectives at very low cost to those who need them. There are some movements in this direction but we need to do more.
History teaches us that infectious disease is never defeated, only kept at bay. New global pandemics could emerge at any time, probably from poor, densely populated countries which cannot help themselves. Climate change may accelerate this process, perhaps allowing malaria back into southern Europe for example. For the sake of patients worldwide, we must retain and enhance the capacity to develop new anti-infective drugs before they are needed.
Real Drugs in the Right Places
A smaller world has led to the emergence of global trade and global crime as well as global disease. Many medicine donation programmes have had unintended consequences: drugs which pharmaceutical companies provide cheaply or free to poor countries but which normally sell at higher prices in developed countries can be stolen and diverted back to these markets very profitably. Corrupt middlemen and criminals make a killing and the poor still don’t receive the medicines they need.
As well as diversion and theft, there is now widespread copying of drugs. Some of these counterfeits are genuine, albeit unauthorised, attempts to produce “generic” versions of effective medicines, often coming from countries which do not recognise the originator’s intellectual property. The pharmaceutical industries of nations such as India and China are no longer just domestic suppliers or sub-contractors for international corporations. They are looking for new outlets for their cheap drugs.
In Africa, many counterfeit drugs are sub-standard and ineffective and often contain dangerous contaminants. The criminals who produce them cynically exploit the illiterate poor who are unable to differentiate between genuine and fake medicines. However, the problem is not confined to Africa, and very sophisticated fake drugs have penetrated the highly-controlled supply chain of many developed nations. Even brand owners sometimes struggle to differentiate their genuine drugs from counterfeit product.
This is where drug development comes in. In the past, it was enough to differentiate a pharmaceutical brand using trademarks: a memorable name, a logo, and the borrowed brand attributes of the company itself. Nowadays, these product elements can be quickly and easily copied. Copies of almost any dosage form can be obtained in bulk on the open market, with as much or as little purity as the buyer wishes to pay for. Packaging can be replicated or simply recycled from hospital waste. Counterfeiting of pharmaceutical products is now a huge parallel industry. Visually at least, the output is often of superb quality. More than one manufacturer has identified counterfeits because the packaging quality was higher than that of their own product.
The legitimate pharmaceutical industry has fought back, but their focus has generally been on the addition of distinctive features to packaging. This has some merit, since it has been tried and tested on bank notes and value documents (passports, cheques etc) around the world. We can think of drug packaging as a value document, since it represents the main way in which the consumer can discern the authenticity and value of the contents. In the same way that central banks have used colour-shifting inks, holograms, watermarks and the like to protect their currency, so some drug companies have added similar features to their packaging.
The problem is that these security measures are mostly retro-fitted onto existing packaging designs, making them easier to locate and to copy, rather than integrated into the design and fabric of the product itself as they are in bank notes. The level of investment in pharmaceutical packaging security is often lower than that needed for adequate protection, and therefore the results have been patchy. This is a non-core business area for drug companies and product security is often still seen as a manufacturing cost. In the relative absence of big counterfeiting incidents in their major western markets, most companies have invested the minimum necessary for legal compliance. This is slowly improving with the emergence of initiatives to “serialise” (add a unique code to) each pack, but other approaches are also needed.
A better way to protect patients is to concentrate on what the drug industry does best: formulating and testing innovative drugs and novel delivery methods. By incorporating unique security features into the products themselves during drug development, and by designing integrated packaging that is harder to copy and (where appropriate) cannot be re-used, the drug companies can make counterfeiting economically unattractive without making their products prohibitively expensive to produce. In the same way that the car industry has incorporated passenger safety into every facet of automobile development and production, the pharmaceutical industry needs to re-evaluate anti-counterfeiting from first principles.
The US Food and Drug Administration (FDA) issued guidance in 2009 on what they term “physical-chemical identifiers” and how they can be incorporated into pharmaceutical products. There are many available ingredients which are “Generally Regarded As Safe” or GRAS in the FDA jargon. Using GRAS substances as markers provides a way of adding safe, traceable components into new pharmaceutical products without huge extra cost. Making the shape and appearance of the pill or capsule more distinctive is another simple option – it is surprising how many products are still produced in standard, easily-copied formats.
The dosage form itself is only one element of an integrated product, and there is great scope for innovation in drug delivery and integrated packaging. Not all of this innovation need add major costs. Early planning by development teams allows anti-counterfeiting approaches to be integrated with usability, patient adherence and other physical features at little additional expenditure and may even identify process savings.
This new way of thinking needs to be sponsored at board level because it may occasionally run counter to prevailing cost-cutting and “lean” initiatives. For example the manufacturing division – incentivized by management to save money – may decide to use cheap, easily available, industry-standard vials rather than developing or specifying a product-specific design. They reduce direct costs but give the counterfeiters an immediate head start in copying the product. The ultimate cost to the business may be much greater than the saving on materials.
Providing high-quality anti-infectives at a low, uniform global price would help to remove the incentive for criminal activity in this area and would save millions of lives. Designing robust security features into all products during the development phase would serve the needs of patients whilst safeguarding the assets of the drug industry as it globalises.
The pharmaceutical development process could better serve the needs of all patients (not just those of us in the rich world) if we take a more globally-integrated view of disease burden and criminal threats. We should view the development and supply of genuine, effective drugs to treat the diseases of the world’s poor as enlightened self-interest.
Photo: US Army Africa from Flickr
Yesterday, I chaired the online “Walpole Lecture“, a webinar entitled: ’To what extent can pharmaceutical counterfeiting ever be contained?’ Various interesting perspectives on this issue were provided by Marisa Matias MEP, Rapporteur for Counterfeit Medicines at the European Parliament, Janice M. Soreth, Deputy Director at FDA’s Europe Office, Guy Villax, CEO of Hovione and Board member of CEFIC’s European Fine Chemicals Group and of RX-360, and Hans Bijl of Siemens.
The ninety or so attendees got an understanding of what the legislative priorities are in Europe and the USA. No real surprises in the content, but it looks like transatlantic coordination is bearing fruit. One of the interesting parts of the discussion for me was a clarification from Marisa that the amendment to dilute the traceability requirement, that I previously commented was a bad development for patient safety, is to be edited out again. It was apparently only one of many interventions at the draft stage and will be dropped during the legislative clean up process. So it looks like traceability will be at the heart of the regulations, which is critical if we are to make headway quickly in getting to grips with counterfeit drugs.
Guy Villax made the interesting point that the counterfeit API cases that we know about could be the tip of an iceberg. Since some API batches can be composed of multiple originating suppliers , and the bulk product is dispersed so widely, it is hard to trace API. We do not have a mechanism to tally adverse events with fake drugs so our data is almost non-existent. If someone dies and it doesn’t look overly suspicious then the autopsy (if one is conducted) is unlikely to consider fake drugs as a contributing cause.
It was clear from the discussion and the presentations that we have the political will, and we have the tools – now we need to get on with the job of protecting the drug supply.
Photo: Mykl Roventine from Flickr
Product authentication is the aspect of anti-counterfeiting which has received the most attention from regulators and the public, but it is worthwhile examining how we verify that the person requesting a prescription medicine is genuine. This is important because prescription medicines are dangerous in the wrong hands and because in many subsidized healthcare systems access to drugs needs to be controlled in order to keep a lid on costs. Before allowing an individual access to medical products, the answers to the following questions should be known:
Some of these precautions may be impractical in some situations but, by ensuring that healthcare professionals consistently take simple measures to verify their patients’ personal identities and healthcare entitlement, much of the unauthorized acquisition and resale of medicines can be prevented.
Informal transactions and anonymity are the tools of the criminal in all areas of life, and this is equally true with counterfeit or diverted drugs. The problem is exacerbated where the state provides much or all of the funding for prescription drugs, and reimbursement fraud is common where controls are lax. Therefore, to reduce fraud and ensure that only those entitled to free or subsidised medication receive it, some governments have begun issuing medical cards. These are identity cards for the specific purpose of validating personal entitlement to subsidised healthcare. The system in the Republic of Ireland, for example, uses a credit card size format. The Irish system is means-tested (only those on low incomes are entitled to support) and is carefully controlled to ensure that only eligible patients are able to receive subsidised healthcare.
Some drug companies have also started to develop longer-term relationships with their consumers, using similar methods. The aim is to get more information about their patients, and thus enable greater control over who is using their drugs and where they are getting them from. The quid pro quo usually takes the form of a price reduction to the consumer. Such schemes often involve product-specific payment cards, which the patient can present to the pharmacist in order to receive approved discounts on his medication, financed by the drug company. Consumers in many markets are already comfortable with the loyalty card concept and these pharmaceutical schemes seem to be proving successful.
The added benefit of a closer relationship between patient and drug company is that it can improve the likelihood that the patient takes the required medication correctly and for the correct time period. It provides a mechanism to remind them to take their medication as prescribed – so-called “compliance”, also known by the less loaded term “adherence” – and to come back at regular intervals for repeat prescriptions (known as “persistence”). By increasing adherence and persistence in this way, additional health benefits can be realised, particularly for chronic, largely asymptomatic conditions such as diabetes, hypertension, and hypercholesterolaemia. The reduction in hospitalisation rates may also offset the cost of the extra drugs to the state, the insurer or the patient. Critics would say that these “loyalty cards” are purely profit-driven schemes which put too much sensitive patient information into the hands of drug companies, but with appropriate safeguards a closer link between patient and manufacturer has the potential to provide financial and product security benefits to both sides as well as improving patient health.
Counterfeit drugs can never be tolerated, and we must continue to use the full force of the law to stamp them out. However, in my opinion, the most effective long-term approach for society and drug companies to use when dealing with counterfeits is one of demand reduction. We can do this by education, relationship development, imaginative product marketing and providing real service benefits to customers. This may require regulatory flexibility as well. The more that legitimate products can be sustainably differentiated from the competition (whether legitimate or counterfeit) the easier it is to defend their market position and therefore by extension to reduce the threat from fakes. The gradual move towards the delivery of pharmaceutical healthcare as a continual service, rather than an intermittently-purchased product, will make it harder for counterfeiters to infiltrate and subvert the medical system.
Photo: Thanks to jimbowen0306 from Flickr
*If patient safety is the driver, then any counterfeit ingested substance is equally hazardous - regardless of its price or sales volume.
**In a moving situation, what was counterfeited last year is not a good guide to what will be targeted next.
***Neither is the severity of the condition to be treated. Many incidents have involved things like Panadol, a common painkiller for headaches.
The opportunity exists to implement a strong-minded Directive that puts patients first, is fair to all parties and provides clear, shared responsibilities. I hope the politicians don’t screw it up.
A new report from the International Policy Network punctures the carefully constructed myth that India does not have a problem with fake drugs. To quote the Exec Summary:
“The report [based on a survey done by the Liberty Institute, Delhi] shows that 7 per cent of drugs purchased from wholesale traders were substandard, half of which contained no active ingredients whatsoever. During interviews with pharmacists 92 per cent said they have been offered substandard or spurious drugs for cheaper prices, while a quarter had been asked for bribes. Such corruption raises doubts over the effectiveness of imposing more regulation on the industry.”
Recent attempts by India and other governments to discredit World Health Organisation anti-counterfeiting initiatives should be seen against a backdrop of chronic graft and corruption that extends into the Indian medical establishment. The Indian pharmaceutical industry is now a key player on the worldwide stage, particularly in low cost generics, but the efforts of reputable companies to establish a global reputation for quality at affordable prices are being undermined by the activities of counterfeiters determined to make a fast buck. These people are hiding behind the legitimate Indian drug industry and using its international reach to infiltrate fake drugs into developing countries. Those who have travelled in Africa will recognise that India controls much of the pharmaceutical trade there, especially in Anglophone countries. Customs officials privately acknowledge that much of the trade in fake drugs comes through the same channels.
Until India gets a grip on its own regulatory systems and puts truly independent, unbiased and unannounced inspections (of factories, distributors, pharmacies and exporters) at the heart of its strategy, it will never get to grips with fake drugs. Its carefully choreographed and pre-advised government “crackdowns” only produce bogus statistics that purport to show ridiculously low levels of fake drugs. The criminals have plenty of time to hide the evidence. These figures may make the government look good but they hide the real damage done to millions of ordinary Indians and many more poor people overseas. Focusing on rigorous quality inspection, whatever the intellectual property issues, can only benefit the emerging Indian drug industry. Drug quality and safety, as well as commercial freedom, should be the guiding principle of India’s export strategy.
The issue of certification of pharmacy websites comes up again in this report in Securing Pharma. A Russian website, posing as Canadian, was ripping off the logo of the Pharmaceutical Group of the European Union (PGEU), 
Logo schemes are worthless unless backed up by rigorous checks and policing. Copying and pasting a “certified” logo from a genuine site onto a rogue site could be done by a five-year-old.
The broader ”parallel universe” issue is a potential vulnerability of phone, text and web-based verification systems and is a subject I’ve touched on before.
Consumers naturally assume that website verification credentials are real, but in many cases they can be faked even more easily than the goods themselves. This creates a parallel universe where everything is wrong but the framework is logical within itself: product carries “official” verification logo, logo leads to “official” website, website assures authenticity of product, everyone is happy. The entire thing is parallel to the real world, like the Star Trek plot with two Spocks but in this case there is no way to tell which one is the badass. The same problem exists with schemes for authentication of serial numbers by verification hotlines and/or text messaging.
The US VIPPS scheme for accreditation of online pharmacies is heavily policed and checks are made before and after acceptance onto the scheme. Therefore only a small number of pharmacies make the grade and are accredited. In order to avoid the false security of bogus accreditation, all such website verification schemes will need to be similarly strict. This means detailed investigation of each site by the accrediting body, and mystery shopper spot checks. Consumers should always cross check the online pharmacy’s “credentials” on the website of the governing body that they claim to be authorised by.
Photos: PGEU certificate from Securing Pharma, Good Spock Bad Spock from Dave Riedel at Flickr
The Royal Pharmaceutical Society of Great Britain says that UK drug shortages are still a problem. Despite having one of the best state-funded healthcare systems anywhere in the world, apparently, and certainly one of the most expensive, UK patients can’t always get hold of the drugs they need. As reported in Pharma Times, the 37 scarce drugs (as of mid-May) include some used in specialist care, such as Novartis’ cancer therapy Glivec (imatinib), but also surprisingly common drugs such as Merck Sharp & Dohme’s diabetes pill Januvia (sitagliptin), and Eli Lilly’s antipsychotic Zyprexa (olanzapine).
It has been estimated that around 40 million pounds (around 60 million dollars) worth of medicines destined for the UK National Health Service are being diverted abroad every month. Exporters are engaging in what is euphemistically called Parallel Trade. The weak pound and the UK’s relatively low drug prices, stipulated in the Pharmaceutical Price Regulation Scheme are partly to blame. It is profitable to buy drugs under the UK purchasing scheme, then export them to countries in the Euro zone where the price is higher. The previous Labour government held an emergency summit in March to discuss the issue (I asked to attend but was denied access) but there is not much they can do. The activity is legal under the Treaty of Rome, which enshrines the principle of free trade in Europe. While sterling is cheap versus the Euro, there is money to be made and traders will continue selling drugs abroad.
Furthermore, it is perfectly permissible for traders to unbox a blister product from the manufacturer’s carton, change the Patient Information Leaflet to one appropriate for the destination country, re-box in a plain white box, and re-sell. Any security features on the original carton are lost, so the whole parallel trade process currently provides a disincentive to product security investment by drug companies in Europe. Less security equals more risk of counterfeit drugs entering the system, often contaminated with anything from brick dust to road paint.
Parallel traders and their industry associations have argued that their activities represent a necessary balancing activity to equalise demand and supply across Europe. You would almost think that they were charities, such is the self-righteous nonsense you sometimes hear. Sorry guys, but no. This is a purely profit-driven arbitrage activity made possible by non-uniform pricing and a legal loophole in EU treaties. When the currencies and prices swing the other way, so will the flow of parallel trade in drugs. There will be a glut of cheap drugs in the UK and some other countries will go short.
Nowhere in this whole process does the patient appear, except when they have to miss doses to make their medication last until they can refill their prescription, or when they can’t start cancer treatment for another two weeks until the drug comes into stock.
Photo: Ian Ransley Design & Illustration from Flickr
The World Health Organisation’s 63rd annual World Health Assembly is meeting in Geneva this week. This afternoon there is consideration of Counterfeit medical products in a three hour session that also includes: Prevention and control of noncommunicable diseases and Strategies to reduce the harmful use of alcohol. That’s a fairly busy afternoon to cure three big world health problems. I make that around an hour each. The report of the group working on counterfeits is to be reported and presumably adopted.
The report notes that there were concerted attempts last year to kick this issue into the long grass: “During the discussion of the subject by the Board in January 2009 and the debates on other matters in the Sixty-second World Health Assembly, concerns were raised about the use of the term“counterfeit medicines. Subsequently, the Director-General invited Member States and Associate Members to provide information about their use of this term and/or equivalent in national legislation. Commonly used language includes the terms: falsified, spurious, fake and substandard.”
Apparently, 55 Member States and the European Commission have so far provided answers. There has been continuing pressure from developing countries to remove intellectual property (IP) from consideration by WHO’s anti-counterfeiting group IMPACT and indeed to have IMPACT removed from WHO and moved to the world IP organisation WIPO. This is an attempt to downplay the health threat from unauthorised generics, which are often produced in countries such as India and China and shipped to developing countries. Although there is a legitimate case to be made that poor countries should not be prevented from accessing patented medicines, such unauthorised copies are also great cover for counterfeiters. Luckily the WHO has held firm. Counterfeit medicines are a huge health issue and not simply an IP infringement. WHO has compromised by moving the IMPACT group slightly more arms-length but has retained its remit within WHO and indeed increased its resources.
Lets hope that the WHA does more than just “note” the report and that concerted international backing for IMPACT is reiterated.
Whilst other industries are now learning to converse with their customer in a two-way dialogue, the medical community is still usually stuck on “transmit” mode. Doctor knows best, and will tell you what he thinks you need to know – but only when he thinks you need to know it. There is often a big hole where the patient’s views should be. The customer’s opinion on the best course of treatment is not often sought and, if given, is probably not noted. To make matters worse, old-fashioned bureaucracy still cripples the medical systems of the UK and many other countries and stifles the more progressive doctors.
It doesn’t need to be this way. Mobile and internet technology has brought speed of thought and rapid response to most other areas of life. Many people are comfortable with giving and receiving information by text messaging, email and online. Lots of us handle our personal banking by computer or over the phone, and the banking industry has responded by reducing its cost base and providing the same services with fewer branches. New technology doesn’t need to mean increased costs.
Instead of embracing the future and changing its business model accordingly, the medical industry is still largely bolting on the new mobile technologies to the underlying nineteenth century paternalistic profession, with predictable results. Expensive, unwieldy and user-unfriendly mechanisms often duplicate the existing processes rather than changing the way the healthcare industry works.
There are existing, widely-used software tools which, with some modifications, could enable better patient / doctor interactions. We don’t need to design whole new edifices of bespoke software. The key tactic for successful medical informatics businesses will be to adapt to what patients are already using in their everyday lives, without inventing clunky and costly new systems. Let patients have more control over the information, with the tools they are used to. After all, it is their data, not the doctor’s or the government’s. By all means, add the necessary security tools to maintain the confidentiality of sensitive data, but only do the minimum. Let’s allow the patient to drive the process and let’s keep it as simple as possible.
Companies such as Patients Know Best are showing the way by putting the patient at the centre of the medical information flow and giving them a secure portal to access their confidential medical records. In fifty years, people will be amazed at how archaic the medical profession remained well into the twenty-first century, but I hope that by then things will finally have changed. Medicine is a B2C business, not a special case, and no longer has any excuse for poor or untimely customer care.
Photo: jurvetson