The Supreme Court on Thursday (Oct 08) directed the Centre to form an expert committee to examine unethical marketing practices in the pharmaceutical industry and recommend a statutory mechanism to regulate them.&nbsp;A bench of Justices Vikram Nath and Sandeep Mehta passed the order while hearing a plea alleging that pharmaceutical companies use various promotional practices to influence healthcare professionals and their drug-prescribing decisions.&nbsp;The petitioners alleged that these practices include direct or indirect monetary benefits, gifts, hospitality, sponsored travel, entertainment and other incentives offered to medical practitioners.<h3>Centre asked to form three-member committee</h3>The Supreme Court noted that the Centre has proposed setting up a three-member committee to examine the issue and suggest an appropriate statutory and regulatory framework for pharmaceutical companies.&nbsp;The bench directed the Union government to constitute the committee, if it has not already done so, within two weeks from the date of the order.&nbsp;The court said the move was necessary in view of the constitutional obligation to protect the right to health and the need for an effective and enforceable system to regulate pharmaceutical marketing practices.&nbsp;Also Read: <a href="https://www.wionews.com/world/musk-doubles-down-on-starlink-india-licence-allegations-rahul-gandhi-says-wait-till-1791480199943">Musk doubles down on Starlink India licence allegations; Rahul Gandhi says ‘wait till...’</a><h3>Panel to examine existing rules, enforcement</h3>The committee will carry out a comprehensive review of issues linked to unethical pharmaceutical marketing practices. It will examine whether the existing laws and regulatory framework are adequate and how effectively the current monitoring, oversight and enforcement mechanisms work.&nbsp;It will also consider measures to improve transparency, accountability and compliance in the pharmaceutical sector.&nbsp;The Supreme Court said the committee should submit recommendations to the Centre on an appropriate statutory and regulatory framework for regulating pharmaceutical marketing practices.&nbsp;The court said its directions are aimed at ensuring effective implementation of the existing framework while helping the Centre develop a suitable regulatory mechanism.

Supreme Court has directed the Centre to form an expert committee within two weeks to examine unethical pharmaceutical marketing practices and recommend an effective statutory and regulatory framework.

The Supreme Court on Thursday (Oct 08) directed the Centre to form an expert committee to examine unethical marketing practices in the pharmaceutical industry and recommend a statutory mechanism to regulate them. A bench of Justices Vikram Nath and Sandeep Mehta passed the order while hearing a plea alleging that pharmaceutical companies use various promotional practices to influence healthcare professionals and their drug-prescribing decisions. The petitioners alleged that these practices include direct or indirect monetary benefits, gifts, hospitality, sponsored travel, entertainment and other incentives offered to medical practitioners. Centre asked to form three-member committee The Supreme Court noted that the Centre has proposed setting up a three-member committee to examine the issue and suggest an appropriate statutory and regulatory framework for pharmaceutical companies. The bench directed the Union government to constitute the committee, if it has not already done so, within two weeks from the date of the order. The court said the move was necessary in view of the constitutional obligation to protect the right to health and the need for an effective and enforceable system to regulate pharmaceutical marketing practices. Also Read: Musk doubles down on Starlink India licence allegations; Rahul Gandhi says ‘wait till...’ Panel to examine existing rules, enforcement The committee will carry out a comprehensive review of issues linked to unethical pharmaceutical marketing practices. It will examine whether the existing laws and regulatory framework are adequate and how effectively the current monitoring, oversight and enforcement mechanisms work. It will also consider measures to improve transparency, accountability and compliance in the pharmaceutical sector. The Supreme Court said the committee should submit recommendations to the Centre on an appropriate statutory and regulatory framework for regulating pharmaceutical marketing practices. The court said its directions are aimed at ensuring effective implementation of the existing framework while helping the Centre develop a suitable regulatory mechanism.

Supreme Court has directed the Centre to form an expert committee within two weeks to examine unethical pharmaceutical marketing practices and recommend an effective statutory and regulatory framework.

SC asks Centre to frame mechanism against unethical pharma marketing practices

Artificial intelligence is becoming an important part of the pharmaceutical sector. It is being used in research, drug development, clinical trials, manufacturing and regulatory work. A McKinsey study estimates that generative AI alone could add between $60 billion and $110 billion each year for drug makers by speeding up discovery, trials and approvals. Another analysis suggests that AI could create as much as $350–410 billion annually by 2025 through innovation in drug development, personalised medicine and marketing.<h2>Research and clinical trials</h2>AI is making an impact in the early stages of drug discovery. It can scan huge chemical and biological datasets, predict how compounds may behave, and suggest new molecular designs. Exscientia’s Centaur system designed a cancer drug candidate that reached human trials in about a year, much faster than traditional methods. DeepMind’s AlphaFold has also advanced the ability to predict protein structures, which helps scientists understand disease targets.&nbsp;AI is also being used in clinical trials. It can analyse medical records and other health data to find trial participants quickly. This helps address a major problem, as around a quarter of trials fail because they cannot recruit enough patients. Insilico Medicine, for example, used AI to identify a new molecule and bring it to trial in only 18 months. IBM Watson Health has been used in oncology to match patients with suitable trials. AI can also monitor data from ongoing studies, flagging safety concerns more quickly than traditional methods.&nbsp;Regulators are beginning to recognise these uses. The US Food and Drug Administration has issued guidance on how AI can support decentralised trials, improving access and patient retention.<h2>Manufacturing and operations</h2>In pharmaceutical manufacturing, AI tools help predict when machines may fail, so companies can carry out maintenance before breakdowns occur. This reduces downtime and ensures continuous production. Machine vision systems are being used to inspect drug batches and it improve speed and accuracy.&nbsp;AI also supports supply chain management. It can forecast demand, manage inventory and monitor shipments in real time. Pfizer has reported that intelligent automation has improved the quality of its cold-chain logistics and reduced costs. Many companies are also testing “digital twins” of their factories, where they run simulations of production lines to spot issues before making changes. Industry surveys show that most pharmaceutical executives expect AI-driven automation to have a major effect on operations within the next five years.<h2>Regulatory submissions</h2>One of the biggest challenges in the sector is regulation. AI is being developed to handle narrow, high-value tasks such as literature reviews, quality checks and document formatting.&nbsp;

Artificial intelligence is becoming an important part of the pharmaceutical sector. It is being used in research, drug development, clinical trials, manufacturing and regulatory work. A McKinsey study estimates that generative AI alone could add between $60 billion and $110 billion each year for drug makers by speeding up discovery, trials and approvals. Another analysis suggests that AI could create as much as $350–410 billion annually by 2025 through innovation in drug development, personalised medicine and marketing.<h2>Research and clinical trials</h2>AI is making an impact in the early stages of drug discovery. It can scan huge chemical and biological datasets, predict how compounds may behave, and suggest new molecular designs. Exscientia’s Centaur system designed a cancer drug candidate that reached human trials in about a year, much faster than traditional methods. DeepMind’s AlphaFold has also advanced the ability to predict protein structures, which helps scientists understand disease targets.&nbsp;AI is also being used in clinical trials. It can analyse medical records and other health data to find trial participants quickly. This helps address a major problem, as around a quarter of trials fail because they cannot recruit enough patients. Insilico Medicine, for example, used AI to identify a new molecule and bring it to trial in only 18 months. IBM Watson Health has been used in oncology to match patients with suitable trials. AI can also monitor data from ongoing studies, flagging safety concerns more quickly than traditional methods.&nbsp;Regulators are beginning to recognise these uses. The US Food and Drug Administration has issued guidance on how AI can support decentralised trials, improving access and patient retention.<h2>Manufacturing and operations</h2>In pharmaceutical manufacturing, AI tools help predict when machines may fail, so companies can carry out maintenance before breakdowns occur. This reduces downtime and ensures continuous production. Machine vision systems are being used to inspect drug batches and it improve speed and accuracy.&nbsp;AI also supports supply chain management. It can forecast demand, manage inventory and monitor shipments in real time. Pfizer has reported that intelligent automation has improved the quality of its cold-chain logistics and reduced costs. Many companies are also testing “digital twins” of their factories, where they run simulations of production lines to spot issues before making changes. Industry surveys show that most pharmaceutical executives expect AI-driven automation to have a major effect on operations within the next five years.<h2>Regulatory submissions</h2>One of the biggest challenges in the sector is regulation. AI is being developed to handle narrow, high-value tasks such as literature reviews, quality checks and document formatting.

While talking to WION, Udith Vaidyanathan, Co-founder and CEO of LogicFlo AI, explained, “In regulated industries like biopharma and life sciences, the operating mandate is fundamentally different: precision, auditability, and formal governance are non-negotiable. AI agents here act less like ‘one super-assistant’ and more like a team of specialists, each with its own expertise and rules of engagement, tuned for narrow, high-value tasks such as literature review, QC, or submission formatting. Unlike generative AI, which produces output directly, agents can retrieve relevant documents from secure systems, run automated quality checks and compliance validations, fill in metadata in submission platforms, and notify reviewers, all with a full audit trail of each step. This reduces the cognitive load on experts, allowing them to move from quarterly literature reviews to continuous monitoring, update dossiers on a rolling basis, and produce fully referenced, compliant deliverables in hours instead of weeks.”McKinsey reports that some companies have already cut submission times in half, reducing them to 8-12 weeks from around 24 weeks. This speed matters, as each month saved on a billion-dollar drug can bring an additional $60 million in value.<h2>Compliance and data laws</h2>AI systems in pharma must comply with strict privacy and data protection rules. This means they are built with compliance in mind from the start. Frameworks such as HIPAA in the United States, GDPR in Europe, and GxP standards for good practice guide how the systems are designed.&nbsp;Vaidyanathan said, “In regulated sectors, compliance is a design input from day one, not an afterthought. Frameworks such as HIPAA, GDPR, and GxP define the architecture, shaping how agents are built, what data they can access, and how outputs are governed. This means working within established SOPs, producing outputs with full traceability, operating in secure access-controlled environments, enforcing PHI masking or de-identification by default, and embedding human oversight so that strategic decisions remain with experts. These safeguards ensure outputs can withstand regulatory scrutiny years later, while enabling faster cycles and continuous processes such as near-real-time regulatory submissions, safety monitoring, and evidence generation, where compliance and innovation reinforce each other rather than compete.”&nbsp;The US FDA and the European Medicines Agency have both issued guidance stating that AI systems must be explainable, validated and subject to human oversight. This means public AI tools that cannot meet audit and deletion requirements are not suitable for use in this sector.&nbsp;&nbsp;The pharmaceutical industry is shifting towards AI systems that are tailored to its needs rather than generic tools. These systems are trained on company data and built into existing procedures. They carry out tasks with full audit trails and keep humans in control of strategic decisions.&nbsp;By doing so, they allow experts to focus on interpretation and oversight, while routine work is automated. This approach speeds up drug discovery, regulatory processes and manufacturing while meeting compliance standards. For patients, it may mean faster access to new treatments and safer monitoring once drugs are on the market.

AI is making an impact in the early stages of drug discovery. It can scan huge chemical and biological datasets, predict how compounds may behave, and suggest new molecular designs. 

Artificial intelligence is becoming an important part of the pharmaceutical sector. It is being used in research, drug development, clinical trials, manufacturing and regulatory work. A McKinsey study estimates that generative AI alone could add between $60 billion and $110 billion each year for drug makers by speeding up discovery, trials and approvals. Another analysis suggests that AI could create as much as $350–410 billion annually by 2025 through innovation in drug development, personalised medicine and marketing. Research and clinical trials AI is making an impact in the early stages of drug discovery. It can scan huge chemical and biological datasets, predict how compounds may behave, and suggest new molecular designs. Exscientia’s Centaur system designed a cancer drug candidate that reached human trials in about a year, much faster than traditional methods. DeepMind’s AlphaFold has also advanced the ability to predict protein structures, which helps scientists understand disease targets. AI is also being used in clinical trials. It can analyse medical records and other health data to find trial participants quickly. This helps address a major problem, as around a quarter of trials fail because they cannot recruit enough patients. Insilico Medicine, for example, used AI to identify a new molecule and bring it to trial in only 18 months. IBM Watson Health has been used in oncology to match patients with suitable trials. AI can also monitor data from ongoing studies, flagging safety concerns more quickly than traditional methods. Regulators are beginning to recognise these uses. The US Food and Drug Administration has issued guidance on how AI can support decentralised trials, improving access and patient retention. Manufacturing and operations In pharmaceutical manufacturing, AI tools help predict when machines may fail, so companies can carry out maintenance before breakdowns occur. This reduces downtime and ensures continuous production. Machine vision systems are being used to inspect drug batches and it improve speed and accuracy. AI also supports supply chain management. It can forecast demand, manage inventory and monitor shipments in real time. Pfizer has reported that intelligent automation has improved the quality of its cold-chain logistics and reduced costs. Many companies are also testing “digital twins” of their factories, where they run simulations of production lines to spot issues before making changes. Industry surveys show that most pharmaceutical executives expect AI-driven automation to have a major effect on operations within the next five years. Regulatory submissions One of the biggest challenges in the sector is regulation. AI is being developed to handle narrow, high-value tasks such as literature reviews, quality checks and document formatting.

AI is making an impact in the early stages of drug discovery. It can scan huge chemical and biological datasets, predict how compounds may behave, and suggest new molecular designs.&nbsp;

AI won’t replace pharma scientists but it will redefine their work! Here's why

The global pharmaceutical industry is on high alert as US President Donald Trump renews his threat to impose sweeping 200 per cent tariffs on imported pharmaceutical products. The unprecedented proposal, expected to be formally announced in the coming weeks, would give drug manufacturers just 12 to 18 months to shift production to the United States or face steep import duties. The industry, which has long operated under an exemption from customs duties, now faces a potentially seismic shift in its global supply chain structure.This threat follows the April launch of a Section 232 national security investigation into the pharmaceutical sector and is seen as part of Trump’s broader strategy to bring drug production back to US soil and lower domestic medicine prices. While the administration has indicated that the tariffs would not be implemented immediately, the tight timeline for compliance has sparked concern across the industry. Analysts and economists warn that such measures could disrupt supply chains, raise drug prices for American consumers, and compress profit margins across the board.<h2>Major investment plans may not be enough</h2>In anticipation of the tariffs, several major pharmaceutical companies, including Novartis, Sanofi, Roche, and US-based Eli Lilly and Johnson &amp; Johnson, have announced large-scale investments in US manufacturing. Eli Lilly alone is planning to inject $27 billion into US facilities, while other companies have pledged billions more. However, industry experts suggest that these moves, while significant, are unlikely to meet the demands of Trump’s proposed timeline. Establishing or expanding pharmaceutical manufacturing sites typically takes four to five years due to regulatory, logistical, and operational complexities.Although the administration is expected to offer a grace period of up to 18 months, companies argue that this is not nearly enough time to fully reconfigure manufacturing processes and obtain necessary approvals from the US Food and Drug Administration. Delays in this transition could lead to drug shortages, particularly in treatments that rely heavily on global supply chains or involve active pharmaceutical ingredients sourced from countries like India, China, and Ireland.<h2>Global trade tensions and sectoral fallout</h2>The looming tariff threat comes at a time of heightened global trade tensions, with the pharmaceutical sector increasingly caught in the crossfire. The US remains the largest export market for European drugmakers, accounting for over a third of their non-EU sales and contributing significantly to their trade surpluses. Ireland, a key manufacturing hub hosting 12 of the world’s largest drugmakers, saw pharmaceutical exports to the US skyrocket earlier this year but now faces a potential blow to its trade-dependent economy.Meanwhile, Switzerland and the European Union (EU) continue to negotiate potential carve-outs in their respective trade talks with Washington. The recent US-UK trade deal includes language suggesting preferential treatment for British pharmaceutical products may be considered, contingent on the final findings of the ongoing Section 232 investigation.Despite these diplomatic efforts, the lack of clarity over which companies or products may ultimately be affected is compounding uncertainty across the sector. Many smaller manufacturers and contract firms, which lack the resources to rapidly shift operations or negotiate exemptions, may find themselves particularly vulnerable.<h2>Market reaction and economic implications</h2>While major pharma stocks have remained relatively stable following Trump’s July 8 remarks, some firms with heavy reliance on overseas production saw modest declines. Eli Lilly’s shares dipped over 2 per cent after the announcement, reflecting investor concern about the company’s manufacturing exposure in Ireland. However, shares partially recovered, signalling that markets may be waiting for more concrete policy details before reacting further.Economists caution that a tariff rate as high as 200 per cent would not only inflate drug prices domestically but could also undermine research and development funding, much of which is supported by US pharmaceutical profits. With nearly 75 per cent of global pharma profits generated in the US, any disruption could ripple through global innovation pipelines and delay access to critical medications. As the industry awaits further policy announcements, pharmaceutical companies are engaged in intense scenario planning to navigate a fast-evolving and politically charged trade environment.

In anticipation of the tariffs, several major pharmaceutical companies, including Novartis, Sanofi, Roche, and US-based Eli Lilly and Johnson & Johnson, have announced large-scale investments in US manufacturing. 

The global pharmaceutical industry is on high alert as US President Donald Trump renews his threat to impose sweeping 200 per cent tariffs on imported pharmaceutical products. The unprecedented proposal, expected to be formally announced in the coming weeks, would give drug manufacturers just 12 to 18 months to shift production to the United States or face steep import duties. The industry, which has long operated under an exemption from customs duties, now faces a potentially seismic shift in its global supply chain structure. This threat follows the April launch of a Section 232 national security investigation into the pharmaceutical sector and is seen as part of Trump’s broader strategy to bring drug production back to US soil and lower domestic medicine prices. While the administration has indicated that the tariffs would not be implemented immediately, the tight timeline for compliance has sparked concern across the industry. Analysts and economists warn that such measures could disrupt supply chains, raise drug prices for American consumers, and compress profit margins across the board. Major investment plans may not be enough In anticipation of the tariffs, several major pharmaceutical companies, including Novartis, Sanofi, Roche, and US-based Eli Lilly and Johnson & Johnson, have announced large-scale investments in US manufacturing. Eli Lilly alone is planning to inject $27 billion into US facilities, while other companies have pledged billions more. However, industry experts suggest that these moves, while significant, are unlikely to meet the demands of Trump’s proposed timeline. Establishing or expanding pharmaceutical manufacturing sites typically takes four to five years due to regulatory, logistical, and operational complexities. Although the administration is expected to offer a grace period of up to 18 months, companies argue that this is not nearly enough time to fully reconfigure manufacturing processes and obtain necessary approvals from the US Food and Drug Administration. Delays in this transition could lead to drug shortages, particularly in treatments that rely heavily on global supply chains or involve active pharmaceutical ingredients sourced from countries like India, China, and Ireland. Global trade tensions and sectoral fallout The looming tariff threat comes at a time of heightened global trade tensions, with the pharmaceutical sector increasingly caught in the crossfire. The US remains the largest export market for European drugmakers, accounting for over a third of their non-EU sales and contributing significantly to their trade surpluses. Ireland, a key manufacturing hub hosting 12 of the world’s largest drugmakers, saw pharmaceutical exports to the US skyrocket earlier this year but now faces a potential blow to its trade-dependent economy. Meanwhile, Switzerland and the European Union (EU) continue to negotiate potential carve-outs in their respective trade talks with Washington. The recent US-UK trade deal includes language suggesting preferential treatment for British pharmaceutical products may be considered, contingent on the final findings of the ongoing Section 232 investigation. Despite these diplomatic efforts, the lack of clarity over which companies or products may ultimately be affected is compounding uncertainty across the sector. Many smaller manufacturers and contract firms, which lack the resources to rapidly shift operations or negotiate exemptions, may find themselves particularly vulnerable. Market reaction and economic implications While major pharma stocks have remained relatively stable following Trump’s July 8 remarks, some firms with heavy reliance on overseas production saw modest declines. Eli Lilly’s shares dipped over 2 per cent after the announcement, reflecting investor concern about the company’s manufacturing exposure in Ireland. However, shares partially recovered, signalling that markets may be waiting for more concrete policy details before reacting further. Economists caution that a tariff rate as high as 200 per cent would not only inflate drug prices domestically but could also undermine research and development funding, much of which is supported by US pharmaceutical profits. With nearly 75 per cent of global pharma profits generated in the US, any disruption could ripple through global innovation pipelines and delay access to critical medications. As the industry awaits further policy announcements, pharmaceutical companies are engaged in intense scenario planning to navigate a fast-evolving and politically charged trade environment.

In anticipation of the tariffs, several major pharmaceutical companies, including Novartis, Sanofi, Roche, and US-based Eli Lilly and Johnson &amp; Johnson, have announced large-scale investments in US manufacturing.&nbsp;

Pharmaceutical industry braces for impact as Trump threatens 200% tariffs

In an announcement on May 11, US President Donald Trump revealed plans to sign an executive order that will drastically reduce the cost of prescription drugs for Americans.
The order, set to be signed at 9:00 am (US EST) on May 12, will implement a &ldquo;most favoured nation&rdquo; (MFN) policy, which ties the US price of prescription drugs to the lowest price paid for the same medications by any other country in the world. Trump asserts that this move could cut drug prices by as much as 30 per cent to 80 per cent, offering relief to millions of American consumers who face some of the highest pharmaceutical costs globally.
In a social media post on Truth Social, Trump framed the move as a long-overdue correction to what he described as a rigged system that has burdened US citizens with excessively high drug prices. He explained that, while drug prices in the US are sometimes five to ten times higher than in other nations, American consumers have had little to no recourse.
Trump blamed pharmaceutical companies for using research and development (R&amp;D) costs as a rationale for the pricing disparity, suggesting that these costs were disproportionately &ldquo;borne by the &lsquo;suckers&rsquo; of America, alone&rdquo;.
&ldquo;For many years, the world has wondered why prescription drugs and pharmaceuticals in the United States were so much higher in price than they were in any other nation,&rdquo; Trump said in his social media post. &ldquo;Sometimes being five to ten times more expensive than the same drug, manufactured in the exact same laboratory or plant, by the same company.&rdquo;
The announcement came as a direct challenge to the pharmaceutical industry's lobbying efforts and an ongoing debate over US drug pricing. The industry, led by trade group PhRMA, has consistently argued against government-imposed price controls, claiming they undermine innovation and hurt patients by limiting access to new treatments. Despite this, Trump insisted that the pharmaceutical sector&rsquo;s arguments about the negative impact on innovation were embarrassing and unfounded.
According to Trump, this policy would not only ensure fairness for American consumers but would also bring about global pricing changes, leading to higher prices abroad in order to &ldquo;equalise&rdquo; the global pharmaceutical market.
&ldquo;This is the kind of fairness we&rsquo;ve been fighting for. The United States will finally be treated fairly,&rdquo; Trump said in his post. &ldquo;We will save trillions of dollars, and our citizens&rsquo; healthcare costs will be reduced by numbers never even thought of before.&rdquo;
<h2 dir="ltr">The background</h2>
The policy follows a pattern from Trump&rsquo;s first term, when he sought to tackle drug pricing by introducing a &ldquo;Most Favoured Nation&rdquo; policy that would have linked the prices of certain drugs to those paid by other developed nations. The initiative, which sought to lower the price of drugs administered in doctor&rsquo;s offices, was met with fierce opposition from the pharmaceutical industry and ultimately blocked by federal courts.
The Biden administration chose not to pursue the policy further, opting instead to include drug price negotiations for Medicare under the Inflation Reduction Act of 2022.
Trump&rsquo;s latest announcement appears to build upon his earlier efforts, proposing a more expansive application of MFN pricing that could impact a broader range of drugs.
Despite the anticipated benefits for American consumers, the move has drawn sharp criticism from several quarters, including some senior Republicans and industry leaders.
Trump, however, dismissed these concerns, suggesting that the pharmaceutical industry had long manipulated the system to its benefit and that the costs of R&amp;D were inflated as a means of justifying excessive drug prices. He emphasised that the policy would bring substantial savings to both the federal government and individual consumers, ultimately benefiting American taxpayers.
While the policy&rsquo;s details remain unclear, it is widely expected that the MFN pricing would apply primarily to Medicare, the government health insurance program for seniors. Under the 2020 proposal, which was struck down by courts, Medicare would have paid the lowest price available for certain drugs among a group of 22 peer nations, including France and Japan.
The US pharmaceutical industry, however, strongly opposed the idea of linking US drug prices to those in other countries, arguing that foreign governments impose strict price controls that suppress competition and innovation. Drugmakers contend that higher prices in the US help fund research and the development of new therapies. Critics of the MFN approach argue that it would lead to higher costs in other countries and could result in shortages of certain medications.
The Trump administration&rsquo;s 2020 proposal faced a similar backlash and was eventually blocked by federal courts. However, Trump&rsquo;s team is determined to push the policy forward, citing the benefits to both American taxpayers and patients. Additionally, there is growing pressure within the administration to reduce the overall cost of prescription drugs, which remain one of the largest expenses for US households.
<h2 dir="ltr">Challenges ahead?</h2>
It remains to be seen whether Trump&rsquo;s new executive order will face similar legal challenges as its predecessor or whether it will be implemented without significant opposition. Experts warn that the road ahead could be fraught with legal hurdles, and some analysts remain sceptical about the effectiveness of such a policy.
As the situation unfolds, the debate over drug pricing in the US is likely to intensify, with both sides of the argument preparing for a lengthy legal and political battle. Whether Trump&rsquo;s proposal succeeds in lowering costs for Americans remains uncertain, but one thing is clear: prescription drug prices will be a central issue for the foreseeable future.
For now, Americans are left wondering whether the president&rsquo;s bold claims about cutting drug prices by as much as 80 per cent will materialise into a reality or if they will become yet another point of contention in the ongoing struggle over US healthcare reform.
(With inputs from agencies)

Business & Economy: Trump asserts that this move could cut drug prices by as much as 30 per cent to 80 per cent, offering relief to millions of American consumers.

In an announcement on May 11, US President Donald Trump revealed plans to sign an executive order that will drastically reduce the cost of prescription drugs for Americans. The order, set to be signed at 9:00 am (US EST) on May 12, will implement a “most favoured nation” (MFN) policy, which ties the US price of prescription drugs to the lowest price paid for the same medications by any other country in the world. Trump asserts that this move could cut drug prices by as much as 30 per cent to 80 per cent, offering relief to millions of American consumers who face some of the highest pharmaceutical costs globally. In a social media post on Truth Social, Trump framed the move as a long-overdue correction to what he described as a rigged system that has burdened US citizens with excessively high drug prices. He explained that, while drug prices in the US are sometimes five to ten times higher than in other nations, American consumers have had little to no recourse. Trump blamed pharmaceutical companies for using research and development (R&D) costs as a rationale for the pricing disparity, suggesting that these costs were disproportionately “borne by the ‘suckers’ of America, alone”. “For many years, the world has wondered why prescription drugs and pharmaceuticals in the United States were so much higher in price than they were in any other nation,” Trump said in his social media post. “Sometimes being five to ten times more expensive than the same drug, manufactured in the exact same laboratory or plant, by the same company.” The announcement came as a direct challenge to the pharmaceutical industry's lobbying efforts and an ongoing debate over US drug pricing. The industry, led by trade group PhRMA, has consistently argued against government-imposed price controls, claiming they undermine innovation and hurt patients by limiting access to new treatments. Despite this, Trump insisted that the pharmaceutical sector’s arguments about the negative impact on innovation were embarrassing and unfounded. According to Trump, this policy would not only ensure fairness for American consumers but would also bring about global pricing changes, leading to higher prices abroad in order to “equalise” the global pharmaceutical market. “This is the kind of fairness we’ve been fighting for. The United States will finally be treated fairly,” Trump said in his post. “We will save trillions of dollars, and our citizens’ healthcare costs will be reduced by numbers never even thought of before.” The background The policy follows a pattern from Trump’s first term, when he sought to tackle drug pricing by introducing a “Most Favoured Nation” policy that would have linked the prices of certain drugs to those paid by other developed nations. The initiative, which sought to lower the price of drugs administered in doctor’s offices, was met with fierce opposition from the pharmaceutical industry and ultimately blocked by federal courts. The Biden administration chose not to pursue the policy further, opting instead to include drug price negotiations for Medicare under the Inflation Reduction Act of 2022. Trump’s latest announcement appears to build upon his earlier efforts, proposing a more expansive application of MFN pricing that could impact a broader range of drugs. Despite the anticipated benefits for American consumers, the move has drawn sharp criticism from several quarters, including some senior Republicans and industry leaders. Trump, however, dismissed these concerns, suggesting that the pharmaceutical industry had long manipulated the system to its benefit and that the costs of R&D were inflated as a means of justifying excessive drug prices. He emphasised that the policy would bring substantial savings to both the federal government and individual consumers, ultimately benefiting American taxpayers. While the policy’s details remain unclear, it is widely expected that the MFN pricing would apply primarily to Medicare, the government health insurance program for seniors. Under the 2020 proposal, which was struck down by courts, Medicare would have paid the lowest price available for certain drugs among a group of 22 peer nations, including France and Japan. The US pharmaceutical industry, however, strongly opposed the idea of linking US drug prices to those in other countries, arguing that foreign governments impose strict price controls that suppress competition and innovation. Drugmakers contend that higher prices in the US help fund research and the development of new therapies. Critics of the MFN approach argue that it would lead to higher costs in other countries and could result in shortages of certain medications. The Trump administration’s 2020 proposal faced a similar backlash and was eventually blocked by federal courts. However, Trump’s team is determined to push the policy forward, citing the benefits to both American taxpayers and patients. Additionally, there is growing pressure within the administration to reduce the overall cost of prescription drugs, which remain one of the largest expenses for US households. Challenges ahead? It remains to be seen whether Trump’s new executive order will face similar legal challenges as its predecessor or whether it will be implemented without significant opposition. Experts warn that the road ahead could be fraught with legal hurdles, and some analysts remain sceptical about the effectiveness of such a policy. As the situation unfolds, the debate over drug pricing in the US is likely to intensify, with both sides of the argument preparing for a lengthy legal and political battle. Whether Trump’s proposal succeeds in lowering costs for Americans remains uncertain, but one thing is clear: prescription drug prices will be a central issue for the foreseeable future. For now, Americans are left wondering whether the president’s bold claims about cutting drug prices by as much as 80 per cent will materialise into a reality or if they will become yet another point of contention in the ongoing struggle over US healthcare reform. (With inputs from agencies)

Donald Trump plans major move to cut drug prices by up to 80%

Indian competitors are gaining from the pharmaceutical industry's efforts to reduce its dependency on Chinese suppliers of medications for clinical trials and early-stage manufacturing. Due to the low cost and quick turnaround times provided by contract drugmakers, China has been the go-to destination for a variety of pharmaceutical research and manufacturing services for almost 20 years.

Indian drug manufacturers benefit from 'big pharma' amid tensions with China

The public investment fund, or pif, is making groundbreaking strides toward diversifying the nation's economy, in a bid to reduce reliance on oil sales. The PIF has announced the launch of Lifera, which is aimed at revolutionizing the pharmaceutical industry. Lifera, created by the PIF, aims to attract local and international pharmaceutical and biotech companies to invest in drug manufacturing

Saudi Arabia's sovereign wealth fund enters pharmaceutical

The cross-country intellectual property rights (IPRs) wars are back and this time it’s being fought in the East.&nbsp;

From last week’s RCEP conversations in Singapore, it seems like Japan and South Korea are pushing other Asian countries like India and China to accede to stricter IPR norms.&nbsp;

Public health activists are concerned about this resulting in raising prices of medicines, given that patent term extensions and stricter data exclusivity requirements could expand the monopoly power of patent holders.&nbsp;

In fact, the current World Bank chief economist, Pinelopi Goldberg and co-authors in a 2006 paper on fluoroquinolones market in India, had estimated potential adverse welfare consequences with stronger IPR and TRIPs. But taking a call on these new IPR discussions could be more nuanced and may require fresh thought.&nbsp;

First, it is worth pondering why one needs a regional trade agreement over and above TRIPs (which India currently conforms with) to strengthen IPR protection. It could be because policies like compulsory licensing, restrictions against greening patents and price controls have been effectively used by India to counter stronger patents post-Trips since 2005.&nbsp;

Could it also be that other countries are getting inspired by India thereby creating a globally-revealed weak IPR world when one considers economies like South Africa, Brazil and Thailand? Amy Kapczynski has written about such a patent 2.0 world earlier being engineered in India.&nbsp;

That said, might it be also true that weak IPR is being used by countries like India as an excuse for its dithering public health institutions and infrastructure?&nbsp;

Prices of medicines may rise with stronger IPR in India (though recent research by Mark Duggan and co-authors find only a modest 3-6 per cent increase in average prices of drugs in India post-TRIPs), but then so long as one has provisions for healthcare financing, this rise should not, in theory, be an issue.&nbsp;

Neither should it be an issue if diseases are detected earlier using better primary healthcare infrastructure, which can also enable keeping a share of pharmaceuticals to overall healthcare expenditure, at a realistic minimum.&nbsp;

While the US spends something like 12-15 per cent on this metric, anecdotal estimates suggest that India’s pharmaceutical spending is an order of magnitude higher, that too it’s out of pocket spending on drugs and healthcare, and this is a real welfare concern as research by Manoj Mohanan has shown.&nbsp;

Policy makers alone, however, cannot resolve the problem of IPR and prices of medicines. Innovator firms need to be responsible too, adopting differential pricing schemes and assuring transparently that their lobbying with their respective country regulators for the regional strengthening of IPR, comes from a genuine long-run access to quality healthcare argument that overrides rent-seeking interests.&nbsp;

As prior research by this author has shown in the context of oral-antidiabetics market in India and Merck’s drug Januvia, sometimes, differential pricing by firms could generate better welfare consequences relative to a world of price controls or compulsory licensing, an outcome that is hard to ignore for modern innovator pharmaceutical firms, be that a Takeda or Otsuka in the East or a Merck or Bristol Myers from the West.

It is also worth noting here that there is evolution happening in the bio-pharmaceutical world, with an increased emphasis on biologics, biosimilars, personalised medicines and genomics.&nbsp;

These new technologies may require incentives for further innovation and to the extent short run, weak IPR creates adverse inducements, societies even in the developing world might be losing out on the next big medical manna from discovery hot spots of the world.&nbsp;

In addition, for countries like India and China trying to encourage life science start-ups based on science, this is especially critical, since not only will strong IPR attract global venture capital funding, but an absence of it may also result in a flight of entrepreneurs to strong IPR locations like Singapore.&nbsp;

At the end, while theoretical arguments for stronger IPR is well rooted in its potential to create long-run incentives for innovation thereby enhancing human welfare, it is also true that empirical findings on this question have been mixed.&nbsp;

In Japan, for example, Lee Branstetter and Mariko Sakakibara fail to find that the 1988 Japanese IPR reforms (increasing scope of patents) resulted in an increase in either R&amp;D spending or innovative output in a sample of Japanese firms.&nbsp;

No one is doubting the welfare effects of medical innovation, however. As the 2018 Nobel Laureate in economics William Nordhaus presciently pointed out in his provocatively titled “The Health of Nations” paper, advances in human welfare generated by better medical science over the past half-century have been equal in value to consumption increases from all other sources put together.&nbsp;

Other scholars like Daren Acemoglu and Samuel Johnson extend this line of thought with their 2007 work on antibiotics innovation for economic growth, while Jenny Lanjouw, Iain Cockburn and Mark Schankerman demonstrated in their 2016 paper the cross-country disincentives to entry for innovative products with weaker IPR.&nbsp;

Frank Lichtenberg, meanwhile, has shown the positive effects of new drug launches on American longevity and medical expenditure between 1990 and 2003. So the arguments and evidence seem to be there for provisioning towards long-run incentives for innovation with stronger IPR.

Maybe then the time has come for societies to co-create with firms a Patents 1.5 world? Policy makers can incentivise innovation through a split patent system conditional on the burden of disease leveraging on mechanisms like patent review vouchers or advanced market commitments to incentivize life-science innovation with one size may not fit all approach.&nbsp;

Firms meanwhile also need to show the willingness to price pharmaceutical products responsibly to enhance access to quality and innovative medicines. That may be a way forward to the emerging eastern IPR wars leading to peace coming out of the November 2018 Singapore RCEP discussions.&nbsp;

(This article was originally published on DNA. Read the <a href="https://www.dnaindia.com/analysis/column-the-west-is-not-the-best-2687037">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

The cross-country intellectual property rights (IPRs) wars are back and this time it’s being fought in the East. From last week’s RCEP conversations in Singapore, it seems like Japan and South Korea are pushing other Asian countries like India and China to accede to stricter IPR norms.

The cross-country intellectual property rights (IPRs) wars are back and this time it’s being fought in the East. From last week’s RCEP conversations in Singapore, it seems like Japan and South Korea are pushing other Asian countries like India and China to accede to stricter IPR norms. Public health activists are concerned about this resulting in raising prices of medicines, given that patent term extensions and stricter data exclusivity requirements could expand the monopoly power of patent holders. In fact, the current World Bank chief economist, Pinelopi Goldberg and co-authors in a 2006 paper on fluoroquinolones market in India, had estimated potential adverse welfare consequences with stronger IPR and TRIPs. But taking a call on these new IPR discussions could be more nuanced and may require fresh thought. First, it is worth pondering why one needs a regional trade agreement over and above TRIPs (which India currently conforms with) to strengthen IPR protection. It could be because policies like compulsory licensing, restrictions against greening patents and price controls have been effectively used by India to counter stronger patents post-Trips since 2005. Could it also be that other countries are getting inspired by India thereby creating a globally-revealed weak IPR world when one considers economies like South Africa, Brazil and Thailand? Amy Kapczynski has written about such a patent 2.0 world earlier being engineered in India. That said, might it be also true that weak IPR is being used by countries like India as an excuse for its dithering public health institutions and infrastructure? Prices of medicines may rise with stronger IPR in India (though recent research by Mark Duggan and co-authors find only a modest 3-6 per cent increase in average prices of drugs in India post-TRIPs), but then so long as one has provisions for healthcare financing, this rise should not, in theory, be an issue. Neither should it be an issue if diseases are detected earlier using better primary healthcare infrastructure, which can also enable keeping a share of pharmaceuticals to overall healthcare expenditure, at a realistic minimum. While the US spends something like 12-15 per cent on this metric, anecdotal estimates suggest that India’s pharmaceutical spending is an order of magnitude higher, that too it’s out of pocket spending on drugs and healthcare, and this is a real welfare concern as research by Manoj Mohanan has shown. Policy makers alone, however, cannot resolve the problem of IPR and prices of medicines. Innovator firms need to be responsible too, adopting differential pricing schemes and assuring transparently that their lobbying with their respective country regulators for the regional strengthening of IPR, comes from a genuine long-run access to quality healthcare argument that overrides rent-seeking interests. As prior research by this author has shown in the context of oral-antidiabetics market in India and Merck’s drug Januvia, sometimes, differential pricing by firms could generate better welfare consequences relative to a world of price controls or compulsory licensing, an outcome that is hard to ignore for modern innovator pharmaceutical firms, be that a Takeda or Otsuka in the East or a Merck or Bristol Myers from the West. It is also worth noting here that there is evolution happening in the bio-pharmaceutical world, with an increased emphasis on biologics, biosimilars, personalised medicines and genomics. These new technologies may require incentives for further innovation and to the extent short run, weak IPR creates adverse inducements, societies even in the developing world might be losing out on the next big medical manna from discovery hot spots of the world. In addition, for countries like India and China trying to encourage life science start-ups based on science, this is especially critical, since not only will strong IPR attract global venture capital funding, but an absence of it may also result in a flight of entrepreneurs to strong IPR locations like Singapore. At the end, while theoretical arguments for stronger IPR is well rooted in its potential to create long-run incentives for innovation thereby enhancing human welfare, it is also true that empirical findings on this question have been mixed. In Japan, for example, Lee Branstetter and Mariko Sakakibara fail to find that the 1988 Japanese IPR reforms (increasing scope of patents) resulted in an increase in either R&D spending or innovative output in a sample of Japanese firms. No one is doubting the welfare effects of medical innovation, however. As the 2018 Nobel Laureate in economics William Nordhaus presciently pointed out in his provocatively titled “The Health of Nations” paper, advances in human welfare generated by better medical science over the past half-century have been equal in value to consumption increases from all other sources put together. Other scholars like Daren Acemoglu and Samuel Johnson extend this line of thought with their 2007 work on antibiotics innovation for economic growth, while Jenny Lanjouw, Iain Cockburn and Mark Schankerman demonstrated in their 2016 paper the cross-country disincentives to entry for innovative products with weaker IPR. Frank Lichtenberg, meanwhile, has shown the positive effects of new drug launches on American longevity and medical expenditure between 1990 and 2003. So the arguments and evidence seem to be there for provisioning towards long-run incentives for innovation with stronger IPR. Maybe then the time has come for societies to co-create with firms a Patents 1.5 world? Policy makers can incentivise innovation through a split patent system conditional on the burden of disease leveraging on mechanisms like patent review vouchers or advanced market commitments to incentivize life-science innovation with one size may not fit all approach. Firms meanwhile also need to show the willingness to price pharmaceutical products responsibly to enhance access to quality and innovative medicines. That may be a way forward to the emerging eastern IPR wars leading to peace coming out of the November 2018 Singapore RCEP discussions. (This article was originally published on DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Cross-country IPR wars are back

Indonesia today began re-inoculating children who received fake vaccines in a major drug counterfeiting scandal that has sparked protests from concerned parents. 
 
President Joko Widodo attended a health clinic in Jakarta at which 36 children were given fresh booster vaccines, vowing the process would continue until all youngsters affected had received new shots. 
 
The health ministry said the first stage of re-inoculation would take place at four hospitals and clinics on the main island of Java where children had been identified as having received fake vaccines. 
 
Police last month smashed a criminal syndicate accused of selling fake vaccines for more than a decade to health clinics across Indonesia, a vast archipelago of 255 million people. 
 
Twenty-three people, including midwives and doctors, have been arrested for alleged involvement in the scheme and vaccines have been confiscated from dozens of health centres across the country. 
 
One of the midwives at the clinic visited by Widodo on Monday is suspected of involvement in the scam, the president said. 
 
The scandal sparked panic and anger among Indonesian families, who last week rallied outside hospitals demanding answers about their children&#39;s health. 
 
Widodo urged concerned parents to remain calm and give authorities time as they assess the scale of the problem, suggesting reforms could be needed in future to protect the community. 
 
&quot;This gives us all momentum to improve governance around the pharmaceutical industry regarding the manufacture and distribution of medicines, including vaccines,&quot; Widodo told reporters. 
 
&quot;Our goal is for the entire community to receive good health care.&quot; 
 
The syndicate, which police said operated for more than a decade, manufactured and distributed fake boosters for diseases including tuberculosis, hepatitis B and tetanus. 
 
The scandal was brought to light after a major pharmaceutical company alerted Indonesian authorities that some of its products had been counterfeited. 
 
(AFP)

The first stage would take place at four Java hospitals and clinics, where children had received fake vaccines

Indonesia today began re-inoculating children who received fake vaccines in a major drug counterfeiting scandal that has sparked protests from concerned parents. President Joko Widodo attended a health clinic in Jakarta at which 36 children were given fresh booster vaccines, vowing the process would continue until all youngsters affected had received new shots. The health ministry said the first stage of re-inoculation would take place at four hospitals and clinics on the main island of Java where children had been identified as having received fake vaccines. Police last month smashed a criminal syndicate accused of selling fake vaccines for more than a decade to health clinics across Indonesia, a vast archipelago of 255 million people. Twenty-three people, including midwives and doctors, have been arrested for alleged involvement in the scheme and vaccines have been confiscated from dozens of health centres across the country. One of the midwives at the clinic visited by Widodo on Monday is suspected of involvement in the scam, the president said. The scandal sparked panic and anger among Indonesian families, who last week rallied outside hospitals demanding answers about their children's health. Widodo urged concerned parents to remain calm and give authorities time as they assess the scale of the problem, suggesting reforms could be needed in future to protect the community. "This gives us all momentum to improve governance around the pharmaceutical industry regarding the manufacture and distribution of medicines, including vaccines," Widodo told reporters. "Our goal is for the entire community to receive good health care." The syndicate, which police said operated for more than a decade, manufactured and distributed fake boosters for diseases including tuberculosis, hepatitis B and tetanus. The scandal was brought to light after a major pharmaceutical company alerted Indonesian authorities that some of its products had been counterfeited. (AFP)

Indonesia re-vaccinates children amid fake drug scandal

Global pressure on health spending is forcing the $1 trillion-a-year pharmaceutical industry to look for new ways to price its products: charging based on how much they improve patients&#39; health, rather than how many pills or vials are sold. 
 
In the United States, both parties are promising fresh action on drug prices whoever wins the White House. In Europe, economies are stalled, squeezing state health budgets. And in China and other Asian markets, governments are getting tougher with suppliers. 
 
Pricing drugs based on clinical outcomes is one way to ensure that limited funds bring the most benefits to patients now and pay for the most promising medical advances in future. Some experiments in pricing have already been made. 
 
But shifting the overall industry to a new model requires improvements in data collection and a change in thinking, say drug pricing experts. 
 
&quot;Eventually, we are going to get there,&quot; said Kurt Kessler, managing principal at ZS Associates in Zurich, which advises companies on sales and marketing strategies. &quot;But it is a long, tough slog because it&#39;s difficult to get the right data and agree on what the right outcomes are to measure.&quot; 
 
In the past, governments and insurers made room in their budgets for new drugs by switching to cheap generics as patents expired on older drugs. But today generics already account for nearly nine out of every 10 prescriptions in key markets like the United States, and fewer big drugs are going off patent. 
 
That leaves little headroom for pricey new medicines for cancer and other hard-to-treat diseases, even as they come to market in growing numbers. The US Food and Drug Administration has already approved 16 new drugs this year. 
 
Investors got a wake-up call on the issue last Friday when $10 billion was lopped off the market value of Novo Nordisk as the world&#39;s biggest diabetes firm warned of falling US prices. 
 
Pharmacy benefit managers administering US health plans are pushing back hard by excluding some drugs deemed too expensive - including Novo&rsquo;s - leading to a crunch in areas like diabetes, a disease that now accounts for 12 per cent of global healthcare spending. 
 
The Danish group has an unusually high exposure to the US market, but it is not alone in signaling tough times ahead. 
 
The chief executives of Novartis, Eli Lilly and GlaxoSmithKline have all warned recently that pricing will become increasingly challenging across the board. 
 
Accounting for 40 per cent of global drug sales, the fate of the US market is front and center in the minds of drug company executives, some of whom privately admit to preparing for a &quot;confrontational&quot; period in relations with politicians. 
 
Both Hillary Clinton and Donald Trump have suggested new measures to curb prices, including allowing imports from lower-cost countries, while individual US states, starting with Vermont, are working on transparency legislation that would require firms to disclose costs to justify drug prices. 
 
Novartis CEO Joe Jimenez believes drugmakers must develop value-for-money pricing models, like the performance-based deal the Swiss drugmaker recently struck with two US insurers for its new heart failure drug. 
 
Under that deal, payments for Novartis&#39; Entresto pill are to be calculated in future based on the proven reduction in the proportion of the insurers&#39; patients admitted to hospital for heart failure, not on the number of pills they consume. 
 
The aim is a flexible pricing system that rebates healthcare providers when a drug doesn&rsquo;t work as planned and charges more when it works well. 
 
Europe in vanguard 
 
Europe is in the vanguard of such moves. Britain agreed an early performance-based deal for a Johnson &amp; Johnson blood cancer drug back in 2007 and Italy also uses patient data to pay for cancer drugs based on actual patient responses. 
 
GSK CEO Andrew Witty sees this outcomes-based approach slowly becoming the norm in more disease areas and geographies. 
 
&quot;Whoever wins the election in the US, and also in Europe, we will see those conversations play out over the next few years,&quot; he told Reuters. &quot;I am not particularly expecting anything dramatic in 2017. I would say it is worth keeping an eye open for evolution of change, probably in &rsquo;18 and &rsquo;19.&quot; 
 
The pharmaceutical industry&#39;s European trade association is already discussing ways to shift to outcomes pricing, following price curbs in Germany that have caused some companies to pull products off the market, and effective rationing in Britain, where strict cost-effectiveness rules apply. 
 
Authorities in Asia&#39;s two biggest markets, China and Japan, are also intervening in new ways to cap runaway costs. 
 
Dani Saurymper, manager of the AXA Framlington Health fund, believes the issue is going to move up the agenda for investors, not least with the arrival of gene and cell therapies. These could cure diseases like haemophilia and certain cancers, but at a cost of hundreds of thousands or even $1 million a patient. 
 
&quot;Pay for performance is going to become much more relevant,&quot; he said. 
 
Still, the obstacles are formidable. Drug companies and healthcare providers will need to work together to develop systems that capture and prove a medicine&#39;s clinical value, ideally using computerized systems that are only just emerging. 
 
There are also potential legal pitfalls, given the need to establish clear-cut clinical outcomes for patients and determine how much of an effect should be attributed to the medicine or other healthcare inputs. 
 
&quot;Overall, it is the right direction but there are many practical difficulties,&quot; said Helen Roberts, a specialist in healthcare at law firm BonelliErede. &quot;There may well be legal challenges if there is disagreement as to whether an outcome has actually been achieved.&quot; 
 
(Reuters)

Global pressure on health spending is forcing the $1 trillion-a-year pharmaceutical industry to look for new ways to price its products

Global pressure on health spending is forcing the $1 trillion-a-year pharmaceutical industry to look for new ways to price its products: charging based on how much they improve patients' health, rather than how many pills or vials are sold. In the United States, both parties are promising fresh action on drug prices whoever wins the White House. In Europe, economies are stalled, squeezing state health budgets. And in China and other Asian markets, governments are getting tougher with suppliers. Pricing drugs based on clinical outcomes is one way to ensure that limited funds bring the most benefits to patients now and pay for the most promising medical advances in future. Some experiments in pricing have already been made. But shifting the overall industry to a new model requires improvements in data collection and a change in thinking, say drug pricing experts. "Eventually, we are going to get there," said Kurt Kessler, managing principal at ZS Associates in Zurich, which advises companies on sales and marketing strategies. "But it is a long, tough slog because it's difficult to get the right data and agree on what the right outcomes are to measure." In the past, governments and insurers made room in their budgets for new drugs by switching to cheap generics as patents expired on older drugs. But today generics already account for nearly nine out of every 10 prescriptions in key markets like the United States, and fewer big drugs are going off patent. That leaves little headroom for pricey new medicines for cancer and other hard-to-treat diseases, even as they come to market in growing numbers. The US Food and Drug Administration has already approved 16 new drugs this year. Investors got a wake-up call on the issue last Friday when $10 billion was lopped off the market value of Novo Nordisk as the world's biggest diabetes firm warned of falling US prices. Pharmacy benefit managers administering US health plans are pushing back hard by excluding some drugs deemed too expensive - including Novo’s - leading to a crunch in areas like diabetes, a disease that now accounts for 12 per cent of global healthcare spending. The Danish group has an unusually high exposure to the US market, but it is not alone in signaling tough times ahead. The chief executives of Novartis, Eli Lilly and GlaxoSmithKline have all warned recently that pricing will become increasingly challenging across the board. Accounting for 40 per cent of global drug sales, the fate of the US market is front and center in the minds of drug company executives, some of whom privately admit to preparing for a "confrontational" period in relations with politicians. Both Hillary Clinton and Donald Trump have suggested new measures to curb prices, including allowing imports from lower-cost countries, while individual US states, starting with Vermont, are working on transparency legislation that would require firms to disclose costs to justify drug prices. Novartis CEO Joe Jimenez believes drugmakers must develop value-for-money pricing models, like the performance-based deal the Swiss drugmaker recently struck with two US insurers for its new heart failure drug. Under that deal, payments for Novartis' Entresto pill are to be calculated in future based on the proven reduction in the proportion of the insurers' patients admitted to hospital for heart failure, not on the number of pills they consume. The aim is a flexible pricing system that rebates healthcare providers when a drug doesn’t work as planned and charges more when it works well. Europe in vanguard Europe is in the vanguard of such moves. Britain agreed an early performance-based deal for a Johnson & Johnson blood cancer drug back in 2007 and Italy also uses patient data to pay for cancer drugs based on actual patient responses. GSK CEO Andrew Witty sees this outcomes-based approach slowly becoming the norm in more disease areas and geographies. "Whoever wins the election in the US, and also in Europe, we will see those conversations play out over the next few years," he told Reuters. "I am not particularly expecting anything dramatic in 2017. I would say it is worth keeping an eye open for evolution of change, probably in ’18 and ’19." The pharmaceutical industry's European trade association is already discussing ways to shift to outcomes pricing, following price curbs in Germany that have caused some companies to pull products off the market, and effective rationing in Britain, where strict cost-effectiveness rules apply. Authorities in Asia's two biggest markets, China and Japan, are also intervening in new ways to cap runaway costs. Dani Saurymper, manager of the AXA Framlington Health fund, believes the issue is going to move up the agenda for investors, not least with the arrival of gene and cell therapies. These could cure diseases like haemophilia and certain cancers, but at a cost of hundreds of thousands or even $1 million a patient. "Pay for performance is going to become much more relevant," he said. Still, the obstacles are formidable. Drug companies and healthcare providers will need to work together to develop systems that capture and prove a medicine's clinical value, ideally using computerized systems that are only just emerging. There are also potential legal pitfalls, given the need to establish clear-cut clinical outcomes for patients and determine how much of an effect should be attributed to the medicine or other healthcare inputs. "Overall, it is the right direction but there are many practical difficulties," said Helen Roberts, a specialist in healthcare at law firm BonelliErede. "There may well be legal challenges if there is disagreement as to whether an outcome has actually been achieved." (Reuters)

Future of drug pricing: Paying for benefits not per pill

pharmaceutical-industry

Pharmaceutical Industry, News on Pharmaceutical Industry, stories on Pharmaceutical Industry, articles on Pharmaceutical Industry, Pharmaceutical Industry stories at Wion, Pharmaceutical Industry news, Pharmaceutical Industry latest news